Kanivah Holdings v Holdsworth Properties [2000] NSWSC 348

New South Wales Supreme Court

CITATION : Kanivah Holdings v Holdsworth Properties [2000] NSWSC 348 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50129/99 HEARING DATE(S) : 24.3.2000, 3.4.2000,11.4.2000 JUDGMENT DATE : 28 April 2000

PARTIES : Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd & Egan National Valuers (NSW) Pty Ltd & Keith Norris JUDGMENT OF : Hunter J

COUNSEL : Plaintiff: M S Jacobs QC P J Bambagiotti First Defendant: I M Jackman SOLICITORS : Plaintiff: Emerys Law Firm First Defendant: Minter Ellison CATCHWORDS : Practice and Procedure - leave to amend summons - futility of allowing amendment - leave to amend to raise prima facie improbable case - application of Part 15A SCR to exercise of discretion. CASES CITED : General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 DECISION : Application for leave to amend, in part, refused on ground of futility and, in part, allowed.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

COMMERCIAL LIST

HUNTER J

FRIDAY 28 APRIL 2000

50129/99 KANIVAH HOLDINGS PTY LTD -v- HOLDSWORTH PROPERTIES PTY LTD & EGAN NATIONAL VALUERS (NSW) PTY LTD & KEITH NORRIS

REASONS FOR JUDGMENT 1 On 3 March 2000, by consent, leave to amend was granted against the second and third defendants in the form of the further amended summons filed in these proceedings. The plaintiff also sought leave to amend in the form of that summons, against the first defendant. Objection was taken to the granting of such leave on the ground that it would be futile to allow the amendment. 2 In the conduct of this application both parties have approached the question on the basis that I am entitled to go beyond the matter pleaded in the further amended summons and have regard to matters of fact to which the proposed amendments relate. On reflection, I was not convinced that such an approach was the correct one, save to the extent that it evidenced matters of fact which were not in dispute, or were the subject of admissions by the plaintiff. 3 It is on that limited basis that I have taken into account matters of fact extraneous to the allegations sought to be raised by the plaintiff. 4 However, the factual material so evidenced by the parties has given rise to a consideration by me of Pt 15A of the Supreme Court Rules and, in particular, rr 1 and 3 which are in the following terms: "[15A.1] Putting matters in issue unreasonably 1 (1) A party to proceedings must not in a pleading or at a trial or hearing make, or put in issue, an allegation of fact unless it is reasonable to do so. (2) A party to proceedings who has in a pleading or at a trial or hearing made, or put in issue, an allegation of fact must not maintain that allegation or its controversion unless it is reasonable to do so. … [15A.3] Scope of Part 3 Nothing in this Part shall give rise to, or affect, any right to seek that proceedings or any claim for relief or any defence be stayed or dismissed or struck out." 5 Initially, the operation of Pt 15A was not argued before me and for that reason the matter was relisted to hear further argument on the possible application of Pt 15A to the issues raised on this application. 6 As I read Pt 15A and particularly r3, it is not intended that the rules should have the effect of lowering the standard to be satisfied by an applicant in a strike out application as established in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and in the long list of authorities that have applied General Steel. Nor do I see Pt 15A as cutting down the prima facie entitlement of a party to have an amendment as expressed by Dawson J in The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 456 as follows: "The rules of court have always provided that leave to amend pleadings may be given for the purpose of determining the real question in controversy between the parties (see now O. 36, r. 1 of the Supreme Court Rules (Vict.)) and an amendment should ordinarily be allowed if any harm arising from so doing can be compensated for by the imposition of terms upon the party asking for the amendment: see Shannon v.Lee Chun; Tildesley v. Harper; Cropper v. Smith. The usual terms which are imposed are an order for costs or an adjournment. In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed. But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed. That will be an issue upon trial."