Creasy's Grain Enterprises Pty Limited v Gregory Street Pty Limited [2005] NSWSC 746

New South Wales Supreme Court

CITATION : Creasy's Grain Enterprises Pty Limited v Gregory Street Pty Limited [2005] NSWSC 746

HEARING DATE(S) : 25 July 2005

JUDGMENT DATE : 29 July 2005

JURISDICTION : Common Law Division

JUDGMENT OF : Associate Justice Malpass at 1

DECISION : The orders made by the Registrar on 22 April 2005 are set aside; the notice of motion filed on 11 November 2004 is dismissed; the defendant is to pay the costs of that notice of motion and the costs of the review.

CATCHWORDS : Review - conditional grant of leave to amend - discretionary powers of amendment - interests of justice, otherwise order and special circumstances.

Sale of Goods Act 1923, s54 LEGISLATION CITED : Supreme Court Rules 1970, Pt 20 r1

Creasy's Grain Enterprises Pty Limited (Plaintiff) PARTIES : Gregory Street Pty Limited (formerly known as Maltco Pty Limited)

FILE NUMBER(S) : SC 10145/02

Mr R N Gye (Plaintiff) COUNSEL : Mr M J Watts (Defendant)

AR Connolly & Company (Plaintiff) SOLICITORS : Kellmoore Solicitors (Albury) by their agents Levitt Robinson (Defendant)

LOWER COURT JURISDICTION : Supreme Court

LOWER COURT FILE NUMBER(S) : 10145/02

LOWER COURT JUDICIAL OFFICER : Assistant Registrar Howe

- 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

29 July 2005

10145 of 2002 Creasy's Grain Enterprises Pty Limited v Gregory Street Pty Limited (formerly known as Maltco Pty Limited)

JUDGMENT 1 His Honour: These proceedings were commenced in the District Court on 31 March 1999. The claim was in the sum of $184,404.32. The plaintiff was claiming the price that is said was owing in respect of malting barley sold by it to the defendant. The claim represented the total amount said to be payable in respect of certain invoices (the invoices). 2 The defendant filed a defence and cross-claim. 3 The defence raised what has been described as a plea of satisfaction. The cross-claim (which is also referred to as a counter-claim therein) raised allegations of breach of, inter alia, implied terms pursuant to provisions of the Sale of Goods Act 1923 (the Act) (in respect of unfitness and lack of quality) and claimed the suffering of loss and damage. 4 The defendant was successful in having the proceedings removed into this court. This took place towards the end of 2001. 5 In 2003, the defendant sold its business to a third party and dispersed the proceeds of sale. It came to a state where it had no assets and was unable to pay any order for costs made against it. There seems to be no issue that it has continued to be impecunious. 6 In 2004, an order was made staying the cross-claim pending payment of security for costs in the sum of $120,000.00. No payment has been made. 7 As at 1 February 2005, the cross-claim came to be dismissed (by reason of the failure to provide the security) and the defendant was ordered to pay the plaintiff's costs of the cross-claim. 8 In late 2004, the defendant had sought to file an amended defence (by notice of motion filed on 11 November 2004). It appears that the defendant presented a number of different versions of the proposed pleading. 9 By then, the proceedings had accumulated a long history with significant default on the part of the defendant. 10 The plaintiff opposed the proposed amendment (inter alia on grounds of abuse of process and prejudice). A contested hearing took place before Assistant Registrar Howe. On 22 April 2005, the Registrar made the following orders:- 1. Upon payment of the costs ordered in Order 1 of the Orders made on 1 February 2005 as agreed or assessed, leave is granted to the Defendant to file and serve an Amended Defence in the form of annexure AMW 1 to the affidavit of A M Williams sworn 21 April 2005 within 14 days of such payment . 2. The Defendant is to pay the costs thrown away by reason of the amendment . 3. Costs of this application are to be costs in the cause of the Section 54 of the Sale of Goods Act set off. 4. Matter listed for Status Conference at 9.00am on 20 May 2005. 11 The proposed amended defence which is the subject of the leave granted by the Registrar relates to other invoices. It admits non-payment of the amount claimed by the plaintiff. It pleads damages as a set-off. It is common ground that it propounds in substance the same allegations of fact that were made in the cross-claim. It expressly pleads a reliance on s54 of the Act. The end result is either the same or similar to what was presented in the cross-claim. 12 Section 54 enables either the setting up against the seller of a breach of warranty in diminution or extinction of the price or the maintaining of an action against the seller for damages for breach thereof. 13 Before proceeding further, I should mention Part 52A Rule 9(1) of the Supreme Court Rules 1970 (the Rules). The effect of it was the subject of brief submissions. It seemed to be accepted that the dismissal of the cross-claim was not the conclusion of "proceedings" in the sense used therein. Whether or not that be the case, in my view, it is erroneous to contend that (as was put by the defendant) an otherwise order requires special circumstances to be shown. 14 The defendant has sought a review of the decision made by the Registrar. The review took place on 25 July 2005. 15 The function of a review is well established. The court has a second look at the decision of the Registrar. His or her decision stands unless it is set aside. 16 The amendment of documentation is the subject of discretionary power. The court has, inter alia, an unfettered discretion in respect of the amendment of any document in proceedings (Part 20, Rule 1(1) of the Rules). The discretion is exercised having regard to the relevant circumstances of the particular case before the court and so that justice is best served. The applicant bears the onus of satisfying the court that the proposed amendment should be allowed. 17 In granting leave to amend, the Registrar did so conditionally. It was conditional upon payment of the costs of the cross-claim. 18 The plaintiff has made a Calderbank offer in respect of those costs (see letter dated 6 May 2005). The offer has been rejected by the defendant. 19 The parties have provided written submissions. These have been supplemented by oral argument. 20 In bringing the review, the defendant seeks to have the condition set aside. It does so on a number of grounds (see written submissions). 21 At the commencement of the review, the plaintiff took the stance that the orders of the Registrar should be confirmed. During the course of the review, it changed its position. The plaintiff then sought to have the orders made by the Registrar on 22 April 2005 set aside and the defendant's notice of motion dismissed with costs. 22 In imposing the condition, it appears that the Registrar may have in mind a minimising of prejudice to the plaintiff. He may have also had in mind that an order for the costs of the amendment by itself would not adequately compensate the plaintiff. The imposition of the condition was not sought by the plaintiff. The defendant sees what he has done as being in the nature of an amendment of the costs order made on 1 February 2005 or a form of security for costs. 23 The review has led me to the view that the decision of the Registrar should be disturbed. It seems to me, when regard to had to the relevant circumstances of this particular case, that the leave granted by the Registrar was not in the best interests of justice. I consider that justice is best served if the orders made by him are set aside. 24 Accordingly, the orders made by the Registrar on 22 April 2005 are set aside. The notice of motion filed on 11 November 2004 is dismissed. The defendant is to pay the costs of that notice of motion and the costs of the review. **********