Case: State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146
Outcome: cited
In relation to the further amendment of the amended statement of claim, the applicant submitted in summary as follows: &#8226; It is important that the pleadings properly reflect the real questions raised by the proceedings, and that the Court permit the parties to make necessary amendments unless the proposed amendment is obviously futile or would cause substantial injustice for which there cannot be compensation: Abela v Giew (1964) 81 WN (Pt 1) NSW 344 at 345. &#8226; As pointed out by the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 , justice is the paramount consideration in determining an application to amend pleadings. &#8226; Following directions made by the Court, samples of Termiglass were obtained from the respondent and sent to the applicant's expert, Dr Holt. The applicant suspected that the samples supplied did not accurately represent the product that was being installed. The applicant obtained samples of the respondent's product from other sources. Some of these samples, when tested, were found to fail as an effective termite barrier. &#8226; The amendments proposed to the amended statement of claim arise from matters which have come to the attention of the applicant after the commencement of the proceedings, the obtaining of samples, and issues arising from the variability of the samples. The variability in the sampling and therefore the effectiveness on such an inconsistent product is a matter that is now an issue in the proceeding, given the evidence that has been obtained to date and is still being obtained, including that there is a real difference between the samples provided by the respondent pursuant to the Court-approved regime and the evidence obtained of other examples of termiglass that have been installed. &#8226; The amended pleading also relies upon s 51A Trade Practices Act given the representations relate to future matters, namely the quality of the Termiglass to be installed. &#8226; Given that the product has been installed in over 30,000 sites in south-east Queensland there is clearly substantial public interest in ensuring that issues in these proceedings are properly litigated. &#8226; The proceedings are not old, with the first directions being made on 15 February 2008. &#8226; The proposed amendments are already encompassed by the amended statement of claim in its current form, however out of an abundance of caution and to prevent time wasted at the trial arising from possible dispute, the applicant applies to have its pleadings amended. &#8226; There is no prejudice to the respondent by allowing the amendment. &#8226; The applicant accepts that it will bear the respondent's costs of vacation of the trial dates, although Mr Peden submitted that, if the applicant is successful, it should receive its costs of the hearing of 4 June 2008. 19 In relation to the application for the vacation of the hearing dates, the applicant submitted in summary as follows: &#8226; If the Court granted the applicant leave to further amend the amended statement of claim, the matter will not be ready for a hearing commencing on 23 June 2008. &#8226; Even without the amendment to the pleadings the applicant is not ready because the applicant has not concluded its evidence due to problems in relation to the quality of the termites connected with the testing of the respondent's samples by the applicant's expert. &#8226; The findings of their Honours in JL Holdings are relevant to the determination of the vacation of hearing dates. &#8226; The Court should order the hearing dates vacated: o to allow the amended pleadings and the real issues raised by the amended pleadings to be properly litigated and justice to be properly attained; o to allow completion of scientific evidence; o in view of the public policy importance of the issues raised by this litigation; o because the principal issues that are raised by the amended pleadings have arisen as a consequence of matters discovered since the evidence in chief was being obtained and because of the sample provided by the respondent being apparently inconsistent with the product actually being installed; o because of the limited time that has elapsed to date in preparing the matter for hearing; o because no prejudice can be demonstrated by the respondent in permitting the hearing date to be vacated. 20 In relation to inspection of the premises pursuant to O 17, the applicant submitted in summary that: &#8226; the proposed further amended statement of claim asserted the inability of the manufacturing processes used by the respondent to consistently produce commercial quantities of product being installed by the respondent; &#8226; it was clear that the samples obtained of the Termiglass installed, differs to the product which had been provided by the respondent; and &#8226; to resolve the issues of how such difference occurs and the issues raised by the further amended statement of claim the orders sought under O 17 should be allowed. 21 In relation to the further amendment to the amended statement of claim the respondent submitted in summary as follows: &#8226; The case sought to be made against the respondent by the applicant at all times until 30 May 2008 was that Termiglass did not work and that, as a result, statements by the respondent that it did work were misleading and deceptive. The amendments to the pleadings sought by the applicants create a fundamentally different controversy between the parties - namely that: o Termiglass has different specifications from that which are asserted by the respondent; o the process of production used by a third party manufacturer of the respondent is deficient; o the product sold by the respondent does not conform to specifications of Termiglass and, in those circumstances, Termiglass does not do, or does not always do, what the respondent said it does; o the representations relate to future matters within the meaning of s 51A Trade Practices Act . &#8226; The justice of the case supports the refusal of the relief sought by the applicant because, inter alia : o it is clear that the alleged issue of variability of the particle size in Termiglass was known by those who control the applicant at least by January 2006, well before proceedings were commenced by the applicant; o notwithstanding this knowledge the applicant chose to formulate its case in the way it did, and sought to collect and put on evidence consistent with that case; o the applicant accepted in a directions hearing that alleged differences between the product being installed and the products that were the subject of the samples provided pursuant to the assessment procedures was a matter for trial; o the applicant only sought to amend its pleadings five weeks before trial; o there is now some evidence that the proceedings may be actually causing detriment to the respondent; o there is no justification for the delay of the applicant in relation to its proposal to plead s 51A. 22 The respondent opposed the proposed adjournment of the trial on the same basis that it opposed the proposed amendment to the pleadings. Further the respondent submitted that, even if the Court did grant the applicant leave to amend its pleadings, no adjournment of the trial should be granted nor should it be given the opportunity to adduce further evidence. 23 Conveniently, general principles relevant to the Court granting leave to amend pleadings were summarised recently in the judgment of Edmonds J in SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 4) [2007] FCA 1035. In relation to this issue I adopt the following statements of his Honour: " [14] The starting point is that all of such amendments should be made as are necessary to enable the real questions in controversy between the parties to be decided: Queensland v J L Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 ; Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537. Although O 13 r 2 of the Federal Court Rules ('the Rules') confers a discretion on the Court as to whether to allow the amendments, it is well-established that an amendment will ordinarily be allowed provided it can be done without harm to the other party which cannot be compensated by an award of costs or an adjournment: The Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 ; Londish v Gulf Pacific Pty Ltd [1993] FCA 470 ; (1993) 45 FCR 128. [15] The overriding concerns should be to ensure that all matters in issue upon which the parties seek adjudication are determined in the proceeding and to avoid a multiplicity of proceedings: Caruso Australia Pty Ltd v Portec Australia Pty Ltd [1986] FCA 40. [16] Order 13 r 2(2) of the Rules makes explicit reference to this principle: All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings. [17] The general approach is that where a party satisfies the Court that he or she generally desires to amend the pleadings so as to alter an existing claim or to introduce a new claim, leave should be granted unless the proposed amendment is so obviously futile that it would be struck out if it had appeared in the original pleading or would cause substantial injustice which cannot be compensated for in the manner indicated in [14] above: Abela v Giew (1964) 81 WN (Pt 1) (NSW) 344 at 345. [18] It is recognised that the allowance of an amendment before a trial begins (when there is time for a proper defence to be filed) stands in a very different position from amendment towards the end of a trial: Ketteman v Hansel Properties Ltd [1987] AC 189 at 220 per Lord Griffiths." 32 I have considered the respondent's submission that, even with the pleadings amended, the trial can still proceed on the 23 June 2008. In my view it is unlikely that either party would be properly prepared for trial by that date, given that the respondent will need to consider whether to amend its defence, and fresh orders as to discovery and further evidence as well as new trial directions may be necessary. Although the proceedings are currently listed for hearing for five days commencing 23 June 2008, as Kirby J pointed out in JL Holdings , [1997] HCA 1 ; 189 CLR 146 at 169-170 departures from a Court-ordered timetable including orders as to trial dates are not decisive, as such orders are servants of justice.