Silver v Dome Resources NL [2006] NSWSC 619

New South Wales Supreme Court

CITATION : Silver v Dome Resources NL [2006] NSWSC 619

HEARING DATE(S) : 22 May 2006

JUDGMENT DATE : 22 May 2006

JURISDICTION : Equity

JUDGMENT OF : Hamilton J

DECISION : Application for further amendment of defence refused.

CATCHWORDS : PROCEDURE [101] Supreme Court procedure - Practice under Supreme Court Rules – Amendment - Relevant considerations - Prejudice – Lateness of application – Overriding purpose.

Musumeci v Winadell Pty Limited (1994) 34 NSWLR 723 CASES CITED : Silver v Dome Resources NL [2006] NSWSC 26 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 Carter and Harland, Contract Law in Australia (4th ed, 2002) [348]

Michael Bernard Silver (P1 & XD1) PARTIES : Fair Choice Limited (P2 & XD2) Dome Resources NL (D1 & XC1) Durban Roodepoort Deep Limited (D2 & XC2)

FILE NUMBER(S) : SC 2586/01

COUNSEL : J E Thomson (Ps & XDs) T G R Parker SC (Ds & XCs)

SOLICITORS : Bull, Son & Schmidt (Ps & XDs) Allens Arthur Robinson (Ds & XCs)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

MONDAY, 22 MAY 2006

2586/01 MICHAEL BERNARD SILVER & ANOR v DOME RESOURCES NL & ANOR JUDGMENT 1 HIS HONOUR: The course of late applications for leave to rely on particular contentions and for amendments to the pleadings in these proceedings continues in the application that is before me this morning. The defendants now formally seek leave to insert in the defence by way of a paragraph 6(da) a denial that the Amended Retirement Deed was supported by valuable consideration as between Silver and Dome Resources NL. 2 I did deal with this subject matter in my judgment Silver v Dome Resources NL [2006] NSWSC 26 delivered on 3 February 2006 ("my February judgment"). It is true, as Mr Parker, of Senior Counsel for the defendants, pointed out, that that was not formally an application to amend. It was an application to rely on a contention to the effect of the amendment now sought. In my February judgment I expressed the view that such a contention could not be relied upon in the absence of an appropriate allegation in the pleadings, contrasting the absence of such an allegation in relation to the first defendant ("Dome") with the presence of such an allegation in relation to the second defendant ("DRD"). 3 I was also influenced in the decision I came to on that occasion by the absence of any evidence from the defendants' lawyers negativing that the difference in the pleading situation between Dome and DRD was a consciously taken tactical decision. 4 Very, very late in the day that lack has been remedied in an affidavit of the defendants' solicitor on the record, who deposes that the absence of the denial in the case of Dome was inadvertent. As to the material brought forward, that is the principal difference between the situation as I deal with it today and the situation as I dealt with it on 3 February 2006. 5 It is true, as observed above, that I did not then have before me a formal application for amendment of the defence. However, I clearly indicated that the relevant contention sought to be put could not be put without an amendment and that I should not allow an amendment at that stage. 6 Mr Parker summarised his arguments under three points. The first point directed attention to the fact that the plaintiffs were earlier content to deal with the same argument in relation to DRD without seeking further evidence and that it was inconsistent with that attitude for them now to say that they wanted further evidence to deal with the situation vis a vis Dome. 7 However, Mr J E Thomson, of counsel for the plaintiffs, has reminded me in answer that the situation of DRD is quite different. DRD was not at the time it entered into the relevant agreement already in contractual relations with anyone in the plaintiffs' camp, so that the entry into that relationship could operate as consideration for the giving of the guarantee by DRD. Dome, on the other hand, was already in contractual relations with the plaintiffs, so that the problem of consideration in relation to it was quite different. That was the situation when I dealt with the matter in February and it is the situation now. That is why it is said on the plaintiffs' behalf that they would now need to lead evidence as to the potential "value", to use the word in a very general sense, of the maintenance of Silver's services to Dome after the new contractual arrangement. 8 Mr Parker's second point was that, in reality, the question as to whether the decision in Musumeci v Winadell Pty Limited (1994) 34 NSWLR 723 applies is purely a question of law with no factual element. That decision and its English predecessor Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 have been the subject of criticism in Carter and Harland, Contract Law in Australia (4th ed, 2002) [348]. Whether it is to be applied or not would undoubtedly be the subject of legal argument, but I am by no means convinced that there is not room for factual matters introduced by way of evidence to play a part in and have an effect on the result of that argument. 9 Mr Parker's third point is that the evidence led concerning the new evidence to be sought is too vague and insubstantial to justify a refusal of the amendment by reference to the necessity for gathering and presenting such evidence. Mr Marucci, the plaintiffs' solicitor, set out his stance concerning this in a letter he wrote to the defendants' solicitors on 9 May 2006. On the hearing of the application he gave evidence as to the truth of his factual assertions in the letter and that he held the opinions stated in it. He was cross examined by Mr Parker concerning this. He was unable to be precise as to the exact content that the evidence would have or as to the personal identity of the potential witnesses, other than Mr Silver himself. However, it is quite understandable that he had not entered into the exercise of collecting the evidence and incurring costs accordingly until it became plain whether or not this amendment would be granted. I certainly find it impossible to exclude at this stage that such evidence may have to be gathered and led and find it hard to put a definition on the time that would be necessary for this purpose. In the circumstances, I do not find Mr Marucci's evidence by its generality insufficient to support opposition to the amendment. And I find that the necessity to seek that evidence is quite real. 10 I have already spoken of the lateness of a number of applications in this case. This one is even later. What is more, as I have said, the only real difference in the material now relied on is the filing of the affidavit of the defendants' solicitor, which could have been brought forward when the application which culminated in my February judgment was conducted over a period during late 2005. 11 In short, I do not think there is sufficient reason to depart from the view which I expressed concerning the agitation of this point in my February judgment. As I then said, the case has been protracted. The relevant economic strength of the parties appears unequal. Upon the program that has now been set, what further evidence there must be and final submissions flowing from it (bearing in mind that what purported to be the final submissions in the case are long since over) can be concluded in June, permitting a reservation of judgment on 22 June. 12 In my view, enough is shown in evidence to create a fear that the case will not be able to be completed in that time if this amendment is allowed, necessitating further days to be taken quite late in the year after my pending leave. I take into account the stress which litigation, particularly major litigation, imposes on parties. I also take into account s 56 of the Civil Procedure Act 2005. The first plaintiff has gone to live in London, which, even in these days of modern forms of communication, complicates the obtaining of instructions (including evidence) by solicitors in Sydney. I do not believe that a costs order would be adequate to relieve the prejudice which the plaintiffs would suffer. 13 In all the circumstances, it is my view that nothing sufficient has been shown to cause me to depart from the conclusion that I came to in my February judgment. The application for amendment of the defence made today is refused. The defendants must pay the plaintiffs' costs of the application.