New South Wales Supreme Court CITATION : Moss v GIO Holdings Limited [1999] NSWSC 23 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : 2839/89 HEARING DATE(S) : 05/02/99 JUDGMENT DATE : 5 February 1999 PARTIES : Christopher Stephen Moss (p) GIO Holdings Limited (d) JUDGMENT OF : Master McLaughlin COUNSEL : C. Hodgekiss (p) G. Rich (d) SOLICITORS : CATCHWORDS : CASES CITED : The State of Queensland v J L Holdings Pty Limited (1997) 189 CLR 146 DECISION : See paragraphs 20 and 25 - 7 - SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MASTER McLAUGHLIN Friday, 5 February 1999 2839/89 CHRISTOPHER STEPHEN MOSS -v- GIO HOLDINGS PTY LIMITED JUDGMENT 1 MASTER: By Notice of Motion filed on 31 August 1998 the defendant, GIO Holdings Pty Limited (now known as GIO Finance Limited), seeks an order that leave be granted to it to file an Amended Defence in the form of the document which is annexed to that Notice of Motion. In the alternative, the defendant seeks leave to withdraw its admission to the allegations contained in paragraph 3 of the Statement of Claim and to substitute for such admission the Amended Defence which is annexed to the Notice of Motion. 2 The substantive proceedings were instituted by the filing on 31 May 1989 of a Statement of Claim by the plaintiff, Christopher Stephen Moss. Essentially, that Statement of Claim asserts that there had been an agreement between the plaintiff and the defendant for the defendant to lend money to the plaintiff for the purpose of conducting the development of a commercial site at Port Macquarie and that in consequence of the ultimate failure of the defendant to lend that money the plaintiff suffered loss. 3 The defendant filed a Defence to that Statement of Claim on 22 August 1989. Subsequently, particulars of the Statement of Claim were provided by the plaintiff and discovery was made by the defendant. It will be appreciated that that discovery was made on the issues which emerged from the pleadings as they then stood and presently stand. 4 There has been a considerable delay by both parties in the conduct of the present proceedings. That delay is attributable, at least in part, to the fact that for a period from 24 June 1994 until 26 March 1996, the plaintiff was bankrupt. The bankruptcy was annulled on that latter date. That bankruptcy does not entirely explain, however, the delays on the part of the plaintiff and, further, does not go very far to explain the delays on the part of the defendant. One can only assume that the defendant was content to allow the matter to remain more or less in abeyance and not to press to have the matter brought on for hearing, or to have the proceedings dismissed for want of prosecution. 5 On 8 December 1997, the present solicitors for the defendant were retained by the defendant in the proceedings. There had also, at an earlier stage, been a change in the solicitors representing the plaintiff. It would appear that it is essentially as a result of the change in the legal representation of the defendant that the defendant now desires to amend its Defence and has brought the present application for that purpose. 6 It has been submitted on behalf of the defendant that the practical effect of the filing of the proposed Amended Defence is not to change in any substantive way the issues which have already emerged upon the proceedings as they presently stand; but rather that any possible ambiguity which might appear on those pleadings be removed, and that the Defence would clearly assert not that a binding agreement had come into existence between the parties, but that there only had ever been a conditional agreement between the parties which, as is asserted by the defendant in the Amended Defence, did not ever come to fruition as a binding agreement because, so it is asserted, the conditions were not fulfilled by the plaintiff. 7 The plaintiff opposes leave being granted to the defendant to file the Amended Defence. The plaintiff rightly points to the fact that the present Defence has remained on foot for a period from 22 August 1989 until the present time and that the present application was made precisely nine years after the filing of the Defence. 8 The plaintiff points to the fact that the discovery which has been made by the defendant has been made upon the issues which have emerged on the pleadings as they presently stand and points to the fact that over a period of ten years the recollection of witnesses, indeed the availability of witnesses, can be affected, and, to the extent that the issues may be altered, there could arise other problems of evidence, in relation, for example, to documentary evidence. 9 It must be appreciated that the liberal use of the power to amend is one of the hallmarks of the modern judicial system and that, generally speaking, amendments ought be permitted if they allow the Court to determine the real dispute between the parties. 10 The High Court of Australia in The State of Queensland v J L Holdings Pty Limited (1997) 189 CLR 146 gave consideration to this question of amendment of pleadings. Kirby J referred in his judgment to considerations which may tend to favour the extension of an indulgence to a party applying for it and to considerations which tend to argue against the grant of such an indulgence; but ultimately the basis upon which the Court must exercise the discretion vested in it to allow or withhold the leave to a party to amend its pleadings must depend upon the question of doing justice between the two parties. 11 I am in agreement with the submission made on behalf of the plaintiff that there has been no real explanation as to why, after almost ten years, the defendant now wishes to amend its Defence. The fact that the defendant has changed its legal representation may have brought about the present application. But there is certainly no evidence before the Court as to why the previous legal representatives of the defendant, having prepared, presumably after due consideration, a Defence in the form of that which was filed on 22 August 1989, did not seek to amend that Defence in the way in which the present solicitors now seek to amend it. There is no evidence before the Court which suggests that the previous solicitors for the defendant did not have before them the entirety of the material which would have enabled them to prepare a Defence, placing before the Court in an appropriate fashion the assertions of the defendant in relation to the present claim of the plaintiff. 12 I have considerable sympathy with the situation in which the plaintiff finds himself, especially concerning the possible evidentiary problems which were outlined by Counsel for the plaintiff as constituting possible prejudice to the plaintiff if the amendment were allowed. Nevertheless, there is no specific evidence that any of those possible problems will, in fact, confront the plaintiff. Further, Counsel for the defendant has expressly informed the Court that the issue which would arise upon the filing of the proposed Amended Defence would not in any way cause different or further discovery to be required by the parties to the proceedings. 13 The conclusion at which I have arrived is that despite the unsatisfactory circumstances in which the present application has been made and the very considerable delay in the making of the application, I should nevertheless grant to the defendant the leave which it seeks to file the Amended Defence. 14 I will hear Counsel on the appropriate costs order. 15 (Counsel address the Master on costs.) 16 (Mr Rich sought leave to refer the Master to an affidavit of Jeffrey Mannion, former solicitor for the plaintiff, to explain the delay in prosecuting the matter.) 17 MASTER: I have now heard submissions concerning the costs of the present application. The defendant submits, since it has been successful in its application for leave to amend the Defence, there should be no costs presently awarded against it but that the costs of the application to amend should be costs in the proceeding. The plaintiff, on the other hand, submits that he should be awarded the costs of the application to amend, and, further, that those costs should be awarded on the indemnity basis, and that, in any event, those costs, if awarded, should be allowed to be assessed forthwith, so that the plaintiff will not have to wait until the conclusion of the substantive proceedings before receiving the benefit of any costs which might be made in his favour in relation to the present application. 18 The defendant has been successful in its application to amend the Defence. However, that fact is not, of itself, determinative of the question of costs. The defendant was seeking the exercise of a discretion by the Court. The defendant waited more than nine years since the Defence was originally filed before making the application. There was no evidence to suggest that the material upon which the present application was made was not, in its entirety, available to the solicitors who had prepared the original Defence. Although the plaintiff was not successful in its resistance to the application, I consider that the plaintiff was justified in opposing the application. 19 In all the circumstances, I consider that the plaintiff is entitled to have his costs of the application to amend. I am not, however, satisfied that there is any ground upon which I should order that the costs should be other than the normal party and party costs. The considerable delay in making the application does not, of itself, justify an award of indemnity costs. However, I do propose to grant leave to the plaintiff to proceed forthwith to assessment of the costs so that the plaintiff will not be kept out of receiving the benefit of that costs order until after the conclusion of the substantive proceedings. 20 I make the following orders: 1. I make an order as in paragraph 1 in the Notice of Motion filed by the defendant on 31 August 1998, such Amended Defence to be filed on or before 12 February 1999. 2. I order that the defendant pay the costs of the plaintiff of the aforesaid Notice of Motion, such costs to be on the party and party basis. 3. I grant leave to the plaintiff to proceed forthwith to assessment of the foregoing costs. 21 Are there any other orders or directions I should make? 22 HODGEKISS: I would ask that soon after 12 February that the matter come back before the Registrar for directions as the plaintiff will then be in a position to contemplate further directions and then affidavits can go on to make sure the matter is, in a relatively short time, ready to be put in the list. 23 RICH: I have no objection to that course, Master. 24 DISCUSSION ON ADJOURNMENT DATE 25 MASTER: I add to my previous orders: 4. I stand the matter over to Tuesday 16 February 1999 before the Registrar, for directions. Last Modified: DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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