Sydney Attractions Group Pty Ltd v Schulman [2012] NSWSC 1359

Supreme Court New South Wales

Medium Neutral Citation: Sydney Attractions Group Pty Ltd v Schulman [2012] NSWSC 1359 Hearing dates: 5, 6 and 8 November 2012 Decision date: 09 November 2012 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Leave to amend pleadings refused Catchwords: PRACTICE AND PROCEDURE - amendments - lack of adequate explanation for delay - futility - prejudice Legislation Cited: Civil Procedure Act 2005 Uniform Civil Procedure Rules Cases Cited: Breen v Williams [1996] HCA 57; (1996) 186 CLR 71 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 Cropper v Smith (1884) 26 Ch D 700 State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 Sydney Attractions Group Pty Ltd v Schulman [2012] NSWSC 951 Texts Cited: Ritchie's Uniform Civil Procedure NSW Category: Interlocutory applications Parties: Sydney Attractions Group Pty Ltd (plaintiff) Frederick Schulman (defendant) Representation: Counsel: R McKeand SC with A C Casselden (plaintiff) N J Kidd SC (defendant) Solicitors: Herbert Geer Lawyers (plaintiff) Levitt Robinson Solicitors (defendant) File Number(s): SC 2010/92382 Publication restriction: Nil

Judgment

Introduction 1The general background to these proceedings is set out in my judgment of 21 August 2012: Sydney Attractions Group Pty Ltd v Schulman [2012] NSWSC 951. 2I shall use the same abbreviations as appear in that judgment. 3Sydney Attractions seeks leave to file an Amended Reply and an Amended Response. Both amendments add allegations to the same effect. 4The amendments sought to the Reply are in the following terms: - "In reply to the whole of the Defendant's Response to Amended Summons the Plaintiff says as follows. a)The Deed contained the following provisions. 7.1 The Releasor (or its professional advisers) will be entitled to inspect and audit the Purchaser's Business Records on reasonable notice during normal business hours (no more frequently than once every 12 months during the Earn Out Period) to the extent necessary to verify the calculation of the amount of each payment under the Deferred Component under clause 5 after the date of any previous inspection pursuant to this subclause. The Purchaser must make all relevant Business Records available to the Releasor (or its advisers) for this purpose. 7.2 If the Releasor disputes the Purchaser's calculation of any amount of the Deferred Component, then the Releasor must give notice of the dispute ('Dispute Notice') to the Purchaser within 30 Business Days after completion of its inspection pursuant to subclause 7.1. 7.3 A Dispute Notice given pursuant to subclause 7.2 must detail with reasonable particularity the respects in which the Releasor disagrees with the Purchaser's calculation of the relevant amount of the Deferred Component the subject of the dispute. 7.4 If the Releasor gives a Dispute Notice to the Purchaser within the period required by subclause 7.2 and the Releasor and the Purchaser do not resolve the dispute within 10 Business Days after the date on which the Dispute Notice is given to the Purchaser then either the Releasor or the Purchaser may refer the matters in dispute to the Independent Accountant with a request that the Independent Accountant make a decision in respect of the dispute within 30 days of receiving the reference. 7.5 If a dispute is referred to the Independent Accountant (a) the Purchaser must procure that all necessary access to the relevant Business Records is given to the Independent Accountant; and (b) within 7 days of the reference the Releasor and the Purchaser may prepare and deliver to the Independent Accountant any submission about the matters in dispute they wish to make. 7.6 The Independent Accountant will act as an expert not an arbitrator and their decision will be final and binding on the parties, except in the case of Material manifest error. b)It was implicit from the language of clause 7 in the context of the Deed as a whole that the right to inspect conferred by clause 7.1 must be exercised within 30 Business Days (as defined in the Deed) of the service on the Defendant of the Plaintiff's calculation of the amount of each payment under the Deferred Component payable pursuant to the Deed. c)Alternatively to b), it was an implied term of the Deed that the right to inspect conferred by clause 7.1 must be exercised within a reasonable time, which, in the circumstances, was within 30 Business Days (as defined in the Deed) of the service on the Defendant of the Plaintiff's calculations of each payment under the Deferred Component payable pursuant to the Deed. d)The Plaintiff served on the Defendant its calculations of the amounts payable under the said Deferred Component together with a certificate pursuant to clause 5.12 of the Deed, on 28 September 2009. e)By agreement between the Plaintiff and the Defendant, by his solicitors, the time for exercising the right to inspect conferred by clause 7.1 was extended until 20 November 2009; alternatively, it was unilaterally extended by the Plaintiff to that date. f)The Defendant failed to exercise the said right to inspect within the extended time and thereby forewent the right to inspect. g)On the true construction of the Deed, by foregoing the right to inspect the Defendant had no right to dispute the Plaintiff's calculations of each payment under the Deferred Component payable pursuant to the Deed. h)Alternatively, in order for the Defendant to be entitled to dispute 'the Purchaser's calculation of any amount of the Deferred Component' after foregoing the right to inspect it was mandatory that he give notice of the dispute in accordance with clause 7.2 within 30 days of the expiry of the right to inspect pursuant to clause 7.1. i)The Defendant gave no notice of dispute to the Plaintiff within 30 Business Days of the extended period for inspection of the Plaintiff's 'Business Records'. j)On the true construction of clause 7 the Defendant is not entitled to dispute the Purchaser's calculation of any amount of the Deferred Component, in these proceedings or otherwise." (Emphasis added) 5This matter is fixed for hearing for three weeks commencing 19 November 2012. 6Application to amend was first made before me on 5 November 2012. On that occasion I made directions for the service of evidence and submissions and adjourned the matter to 6 November 2012. Because of the state of my list, I was not able to finally deal with the matter on that day. Final argument occurred before me on 8 November 2012.