First Mortgage Managed Investments Limited v Pittman (No.3)

1. [1]

   This judgment deals with an application, made by Ms Locke, in a Notice of Motion which she has sought leave to file, to withdraw admissions made by her, in her Defence, which were repeated in an Amended Defence, to the Cross-claim brought against her by Mr Pittman and Mr Webster.

2. [2]

   It will be appropriate to recount the essential history of the proceedings to assist in the determination of the issues. This Motion will be referred to as the Second Motion.

3. [3]

   This Second Motion raises similar, but not wholly identical, issues and considerations as those dealt with by the Court on an earlier Notice of Motion in December 2014. I will refer to the December motion as the First Motion. The reasons for that motion were delivered ex tempore, and have since been published: First Mortgage Management Investments Pty Ltd v Pittman (No.2) [2014] NSWSC 1929.

4. [4]

   I will assume familiarity with those reasons and the subsequently identified judgments at first instance, and on appeal.

First Instance Hearing

1. [5]

   These proceedings were commenced in 2008. They were eventually listed for a contested hearing, which was conducted in July 2011.

2. [6]

   On 1 November 2012, a lengthy judgment was delivered in which I concluded that a loan agreement between First Mortgage Managed Investments Ltd (“FMMI”) and Basil James Pittman and Rex Neil Webster, which was entered into in 2006, and a variation to that loan in 2008, were unjust within the meaning of the Contracts Review Act 1980. It followed that security by way of mortgages which FMMI held over the land of Mr Pittman and Mr Webster with respect to the 2006 and 2008 loans was also unjust.

3. [7]

   I ordered by way of relief that Mr Pittman and Mr Webster should be relieved of any obligation under those agreements and any security documents entered into because of them. I dismissed the Second Cross-claim brought by Mr Pittman and Mr Webster against Ms Margot Locke. The reasons for judgment and order were published: First Mortgage Managed Investments Ltd v Basil James Pittman [2012] NSWSC 1332 (“first instance judgment”).

4. [8]

   Ms Locke, although an active party during the preparation phase of the proceedings, did not appear at the contested hearing in July 2011, and took no part in them.

5. [9]

   The contested hearing of the proceedings which led up to the judgment and orders was a full one. It involved the taking of evidence from Mr Pittman and Mr Webster which was tendered both in their defence of the claim being made against them by FMMI, and on the prosecution of their Cross-claim against Ms Locke. Other witnesses gave evidence. Much of the factual evidence was the subject of challenge, both by way of cross-examination and in submissions. Evidence was in part contradictory and inconsistent. It was necessary to assess the credibility of both Mr Pittman and Mr Webster, and of other witnesses.

6. [10]

   Ultimately, the judgment shows that findings on contentious matters were made, and the issues posed on the pleadings were, as necessary, determined. It was against these findings and conclusions that FMMI brought its appeal to the Court of Appeal.

7. [11]

   Because the orders made at first instance relieved Mr Pittman and Mr Webster of any liability at all to FMMI, there was no loss or damage which could be made the subject of any determination on the Second Cross-claim. Accordingly, the Court, at the request of counsel for Mr Pittman and Mr Webster, ordered that the Second Cross-claim be dismissed.

8. [12]

   Another Cross-claim by Mr Pittman and Mr Webster against a solicitor, Mr Christopher Edwards, was settled immediately prior to the commencement of the hearing in July 2011.

Appeal

1. [13]

   On 7 April 2014, the Court of Appeal upheld an appeal by FMMI against the first instance judgment. The Court of Appeal agreed that the 2006 loan agreement and the 2008 variation agreement were unjust, in all of the circumstances, but nevertheless held that the orders as to relief ought to be set aside. Accordingly, the appeal was allowed in part: see First Mortgage Managed Investments Pty Ltd v Pittman [2014] NSWCA 110. Specific orders were not made at that stage and the parties were directed to formulate proposed orders for the consideration of the Court of Appeal. It was apparent from the reasons of the Court of Appeal, that one of the orders to be made would involve a significant monetary judgment in favour of FMMI and against Mr Pittman and Mr Webster. The precise amount was, at that stage, unclear.

2. [14]

   On 19 August 2014, the Court of Appeal granted leave to Mr Pittman and Mr Webster to file a cross-appeal naming Ms Locke as a cross-respondent, seeking an order setting aside the order for the dismissal of the Second Cross-claim in the first instance judgment. The Court of Appeal ordered, subject to some compliance requirements, that an order setting aside the dismissal of the Second Cross-claim ought be made. Ms Locke, although served with the application of Mr Pittman and Mr Webster to file a cross-appeal and to grant relief, did not appear in the Court of Appeal. The Court of Appeal upheld the cross-appeal, set aside the first instance order dismissing the Second Cross-claim, and remitted the Second Cross-claim of Mr Pittman and Mr Webster against Ms Locke to me for hearing and determination: see First Mortgage Management Investments Pty Ltd v Pittman (No.2) [2014] NSWCA 272.

3. [15]

   On 31 October 2014, the Court of Appeal made final orders in the substantive appeal including:

4. [16]

   Pursuant to the orders of the Court of Appeal, the proceedings on the Second Cross-claim were listed before the Court on 5 December 2014. On that day, Ms Locke, who was then representing herself, provided the Court with a Notice of Motion. The hearing of that Motion was adjourned to 18 December 2014.

First Notice of Motion

1. [17]

   On 18 December 2014, having instructed Mr Martin Rosenblatt, a solicitor who appeared, Ms Locke moved on the Notice of Motion dated 15 December 2014, seeking orders granting her leave to re-open the hearing of the Second Cross-claim, and to adduce fresh evidence in defence of the Second Cross-claim.

2. [18]

   For the reasons which I then gave in an ex tempore judgment, I refused Ms Locke’s application to re-open the Second Cross-claim to enable her to adduce further evidence and to cross-examine witnesses about existing evidence: First Mortgage Managed Investments Pty Ltd v Pittman (No.2) [2014] NSWSC 1929.

3. [19]

   Having delivered judgment dismissing the First Motion, I directed that each party to the Second Cross-claim file and serve written submissions as to the outcome of the Cross-claim in a timely way – Ms Locke’s submissions by 30 January 2015, and Mr Pittman and Mr Webster’s submissions by 13 February 2015. I indicated that upon receipt of the last of those submissions, I would reserve my judgment on the Second Cross-claim.

Second Notice of Motion

1. [20]

   On 30 January 2015, Mr Martin Rosenblatt, the solicitor for Ms Locke, sent an email to the Court to which was attached “by way of filing” an Outline of submissions of Ms Locke on the Second Cross-claim. The body of the email foreshadowed a further notice of motion. It said:

2. [21]

   On 2 February 2015, Mr Rosenblatt sent a further email to the Court informing the Court that he anticipated that his client would be “… in a position to file the notice of motion and supporting affidavit shortly”.

3. [22]

   On 4 February 2015, Mr Rosenblatt sent an email to the Court in which he said:

4. [23]

   The solicitors for Mr Pittman and Mr Webster were sent copies of these emails.

5. [24]

   The Second Motion seeks the following orders:

6. [25]

   Attached to the Notice of Motion was the proposed Further Amended Defence. It will be necessary to examine the proposed amendments in due course.

7. [26]

   Although simply expressed, Ms Locke’s solicitor accepted that if the relief sought in the Second Motion was granted, further directions would need to be made to enable evidence to be served and that a full hearing on the Second Cross-claim would follow, including further oral examination and cross-examination together with the tender of additional written material and documents.

8. [27]

   On 12 February 2015, the proceedings were listed before the Court. On that occasion Mr Rosenblatt, on behalf of Ms Locke, sought leave to file that Second Motion in Court, together with an affidavit of Ms Locke sworn 4 February 2015. Mr Lazarus, counsel for Mr Pittman and Mr Webster, opposed the grant of leave to file the Second Motion.

9. [28]

   In explaining why, amongst other things, his clients opposed the grant of leave to file the Second Motion, counsel for Mr Pittman and Mr Webster made it plain that even if the motion was filed, it had no prospect of success and, he further submitted, that it could only be viewed

10. [29]

    The phrase “… extreme time pressure …” was a reference to the judgment entered against his clients by the Court of Appeal, which did not come into effect for a period of six months from 31 October 2014: see [15] above.

11. [30]

    Further submissions were received, and ultimately I determined, with the consent of all parties, that the submissions which each party made could be considered on the basis that, even if leave to file the Second Motion was granted, the motion ought be dismissed on its face, having regard to all of the circumstances.

12. [31]

    Counsel for Mr Pittman and Mr Webster made it plain that in agreeing to this course, his clients would, if they were unsuccessful, wish to challenge by cross-examination, the evidence of Ms Locke in her affidavit sworn 4 February 2015, because they did not accept the accuracy of it, and would also wish to respond by adducing evidence in response to that affidavit. He submitted that, in the circumstances, the Court ought bear this in mind in the ultimate determination of the Second Motion.

13. [32]

    Accordingly, this judgment determines the Second Motion on that basis.

Proposed Further Amended Defence

1. [33]

   It is necessary to examine the substance of the proposed Further Amended Defence to understand whether the relief sought in the Motion ought be granted.

2. [34]

   The first group of amendments deal with the pleading in the Cross-claim of an agreement in 1994. The history of that agreement, which was the first of the loan transactions involving Mr Pittman and Mr Webster, is to be found at [175]-[184] of the first instance judgment. The ultimate conclusion in that judgment was that there was not direct consequence flowing from this short term arrangement with respect to the later mortgage.

3. [35]

   However, the pleaded terms of that agreement are repeated in the cross-claim with respect to the later loans and, accordingly, the pleaded terms achieve a good deal of significance.

4. [36]

   The proposed Further Amended Defence would put in issue this initial 1994 transaction, and each of the subsequent transactions, by withdrawing admissions made of each of the matters set out in paragraph 17 of the Cross-claim. Of particular relevance, as matters of context and relationship when the Court considers the later transactions, is the fact that Ms Locke, having admitted that the agreement between her and Mr Pittman and Mr Webster was one where:

5. [37]

   The significance of the allegations to which reference has just been made, and the change in Ms Locke’s defence, becomes apparent as subsequent loans are considered. These loans, commencing with the Forest Knoll Facilities ([195]-[211] of the first instance judgment), and the Flamanda loans ([212]-[232] of the first instance judgment) were each alleged in the Cross-claim to have been entered into by Mr Pittman and Mr Webster pursuant to an agreement with Ms Locke, which had the features pleaded in paragraph 17 of the Cross-claim and which were originally admitted by Ms Locke with respect to each loan, and which she now wishes to deny.

6. [38]

   The issue posed by these amendments, if they were allowed, would involve a re-examination of the Court’s conclusions about Mr Pittman and Mr Webster, expressed in [210]-[211], [230]-[232] and, in particular, [374]-[376] of the first instance judgment.

7. [39]

   The next set of amendments of significance in the proposed Further Amended Defence are those in paragraphs 32-34, which respond to paragraphs 53-55 of the Second Cross-Claim. Although it is proposed to amend the Second Cross-claim (without objection), that amendment does not affect the issues being here considered, as it simply identifies and pleads with specificity, the monetary judgment sum as a consequence of the Court of Appeal’s orders.

8. [40]

   It is convenient to set out these pleadings in a consolidated table which includes, in the conventional way, the setting out of the amendments:

9. [41]

   The effect of these proposed amendments is, in my assessment, very significant. On the pleadings as they presently stand, Mr Pittman and Mr Webster claim that they are entitled to be indemnified by Ms Locke for any monies owed by them to FMMI on the basis of six separately articulated causes of action, each pleaded in the alternative, namely:

10. [42]

    In the defence which presently stands, Ms Locke denies any fraud, misleading or deceptive conduct and any breach of fiduciary duty, including the existence of a fiduciary duty.

11. [43]

    The extent of the dispute with respect to the two claims of estoppel is not readily apparent from the defence. Ms Locke does not “resile” according to the pleading, from the assumptions of fact pleaded, but pleads other relevant facts. The better view is that she seems to put in issue these claims.

12. [44]

    However, the position is very different with respect to the cause of action pleaded for breach of contract. On the present pleadings, as can be observed, each of the integers of this cause of action has been admitted in each of the two defences which have been filed, the latter of which presently stands. That was the position at the time of the original contested hearing. The proposed amendments have the effect of denying the relevant elements of that cause of action, denying any breach of contract and denying that Mr Pittman and Mr Webster have suffered any loss or damage.

13. [45]

    Since what is at the heart of the second motion is an amendment of a pleading, which involves the withdrawal of admissions, it is convenient to examine the Court’s power to grant such an amendment, and the principles which apply.

Civil Procedure Act 2005

1. [46]

   Section 64 of the Civil Procedure Act 2005 deals with the amendment of documents generally, and provides all necessary power to the Court to grant leave to amend a document, including the Defence in this case. This power extends to amending a document in a way which includes the withdrawal of admissions.

2. [47]

   Section 56(2) of the Civil Procedure Act requires the Court, when exercising such a power as that contained in s 64, to seek to give effect to the overriding purpose. That purpose is:

3. [48]

   Section 58 of the Civil Procedure Act is also applicable. It is in the following form:

4. [49]

   The Uniform Civil Procedure Rules (“UCPR”) are not relevant to this particular application. Part 19 deals with amendment. However, those rules principally address matters of mechanics and procedure, and are not directly relevant here.

5. [50]

   The principles relating to amendment were considered by the High Court of Australia in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. The High Court was considering the application of the ACT legislation, which was in similar, but not identical terms to the NSW legislation.

6. [51]

   French CJ, in finding that the discretion of the primary judge to permit an amendment to a statement of claim, which was sought on the first day of the hearing of the proceedings, had miscarried, said at [5]:

7. [52]

   Further, the Chief Justice said at [35]:

8. [53]

   The plurality judgment (Gummow, Hayne, Crennan, Kiefel and Bell JJ), in considering the application of r 21 of the Court Procedure Rules 2006 (ACT), which is in substantially similar terms to s 56 of the Civil Procedure Act, said at [102]-[103]:

9. [54]

   It is against the context of these powers and principles, that it is necessary to individually consider each application for amendment.

Ms Locke’s Explanation

1. [55]

   Ms Locke has provided an explanation in support of the second motion contained in her affidavit of 4 February 2015.

2. [56]

   That explanation is challenged, and is not accepted, by Mr Pittman and Mr Webster. Their counsel has indicated that should the Court consider the second motion on any basis other than that articulated above, he would wish to cross-examine Ms Locke upon the explanation which she proffers.

3. [57]

   Nevertheless, it is appropriate for me to outline the explanation. The explanation at face value, and describing it only for the purpose of this motion, suggests that Ms Locke’s present view is that the admissions, which she now seeks to withdraw, were wrongly or mistakenly made at the time the first Defence, and the amended Defence, were each filed.

4. [58]

   Ms Locke accepts that at that the time the Defences were filed she had instructed solicitors, given to them a version of the facts, then discussed the pleadings on each occasion with her solicitors and, on one occasion, having initially discussed the proposed Defence, amendments were made to it whilst she was at the solicitor’s office and she then signed them.

5. [59]

   She accepts that she signed both of the Defences, but asserts that she was not specifically aware of the detail of that which she was admitting. She also alleges that at the time she gave instructions to file these defences, she was not psychologically well, and her relationship with her solicitors was not a satisfactory one.

6. [60]

   Insofar as she did not appear at the contested first instance hearing to argue her defence, she says:

7. [61]

   The reference to FMIL in this paragraph is a reference to FMMI (as I have used that abbreviation in this judgment).

8. [62]

   She further asserts that at the time she abandoned the defence of the Cross-claim, she was in a distressed mental state and had significant levels of stress and anxiety caused by the legal proceedings.

9. [63]

   Ms Locke’s affidavit of 4 February 2015, gives no explanation at all about the events of August 2011, to which reference was made in [17]–[18] of the judgment on the First Motion.

10. [64]

    She also gives no explanation at all as to why she did not appear in the Court of Appeal to resist the cross-appeal of Mr Pittman and Mr Webster, by which they sought to challenge the dismissal of their Cross-claim against her.

11. [65]

    Ms Locke’s affidavit does not suggest that the evidence which she wishes to adduce, if permitted, is in any way fresh evidence. She does not suggest that it was not in existence, or available to her at the time of the contested first instance hearing.

Discernment – Context and Timing

1. [66]

   The consideration of this Application commences with the identification of context and timing. The contested hearing at which evidence was taken occurred in July 2011. Ms Locke, for what appears to be strategic reasons, see [60] above, accepted advice not to appear and contest the cross-claim against her. The advice was, as it turns out, not unreasonable. It seems only to have failed to address the issue of the benefit, if any, which Mr Pittman and Mr Webster received from the loans, which was discussed in the first Court of Appeal judgment.

2. [67]

   In her absence from the contested hearing, findings were made about the reliability and credibility of each of Mr Pittman and Mr Webster. Findings were also made about her involvement in the loans and dealings which underlay FMMI’s claim against Mr Pittman and Mr Webster. Findings were also made which were adverse to Ms Locke’s credibility. Those findings, in part, depended on the evidence given by witnesses called by FMMI at the hearing.

3. [68]

   Ms Locke again sought to participate in the proceedings in August 2011, when she sent the document entitled “Submissions” to the Court, but she did not proceed with any application of the kind to which her attention was drawn by the Registrar. Her decision in this respect is unaddressed by any evidence, accordingly, it is unexplained and was, I infer, an intentional one.

4. [69]

   Whilst the proceedings were before the Court of Appeal, Ms Locke had the opportunity to appear to contest, if she wished, the submissions of Mr Pittman and Mr Webster as to the proper disposition of their cross-appeal, leave having been given to file it.

5. [70]

   She elected not to do so. She provides no material in support of this Motion which would explain this decision. I would infer that it was a considered and deliberate one.

6. [71]

   After the finalisation of the Court of Appeal proceedings in October 2014, Ms Locke unsuccessfully applied to re-open the proceedings on the Cross-claim to adduce evidence, but failed to persuade the Court that she should be allowed so to do: First Mortgage Managed Investments Ltd v Pittman (No.2) [2014] NSWSC 1929.

7. [72]

   She now applies again for orders, as will be seen, the effect of which would be to allow her to lead further evidence.

8. [73]

   From the perspective of Mr Pittman and Mr Webster, the timing is, as well, an important feature. They have until the expiry of six months from the orders of the Court of Appeal of 31 October 2014, before the judgment against them and in favour of FMMI for about $1.95M comes into effect. It is now over two years since the first instance judgment was delivered, when the findings in their favour and contrary to Ms Locke were made.

9. [74]

   The subject matter of those factual findings concerned events from 1994 through to and including 2008. Over six years has now elapsed since the last of those events. Three and a half years have elapsed since they gave evidence about these events.

10. [75]

    All of these factors amount, in my assessment, to unfair prejudice to Mr Pittman and Mr Webster which could not be adequately addressed by an order for costs. Particularly, but not exclusively, in cases involving individual litigants, the very process of litigation itself is stressful. Here, at this late stage, for this litigation to be further delayed, and the uncertainty which the litigation engenders for Mr Pittman and Mr Webster with respect to their home, and their property, the stress engendered by the delay is greatly exacerbated.

Discernment – Likely Consequences

1. [76]

   The first and most obvious consequence is that, if the admissions were permitted to be withdrawn then, because the pleadings upon which the contested hearing was conducted included the admissions, and given that Mr Pittman and Mr Webster were not required to lead evidence with respect to such admitted facts, and the admitted cause of action, it would be necessary to give Mr Pittman and Mr Webster an opportunity to supplement their evidence as part of their case in chief on the cross-claim against Ms Locke.

2. [77]

   Fairness would dictate that Ms Locke would then have an opportunity to respond to that evidence. In addition, she would no doubt wish to read the affidavits which she has sworn, and which she has filed in the proceedings. It is presently unclear whether the reading of those affidavits would then require a response in evidence from Mr Pittman and Mr Webster, but it is safe to assume that it would.

3. [78]

   The end result is that the Cross-claim, which has already been the subject of a contested hearing, and the makings of findings of fact about the principal participants and facts, which were not set aside on appeal, would need to be completely reheard, and on evidence different from that which was previously advanced.

4. [79]

   The second consequence is that Mr Pittman and Mr Webster would be put to considerable additional expense to conduct a trial of the Cross-claim for a second time, which would require a repetition of evidence which has already been given, together with such additional evidence as is sought to be led. It may be, indeed likely to be, that witnesses called by FMMI at the first instance hearing would need to be recalled, by Mr Pittman and Mr Webster.

5. [80]

   The third consequence is that the final resolution of this litigation, which has been on foot since 2008, would be significantly delayed while each of the steps necessary as described above, were effected.

6. [81]

   In considering the exercise of the discretion, it is appropriate to record that the case as put forward by Ms Locke to allow her to withdraw the admissions, does not depend upon the late emergence of any evidence, which she did not know about at the time the admissions were made, or else at the time of the hearing in July 2011.

7. [82]

   Discernment – Administration of Justice

8. [83]

   The proper administration of justice requires that public confidence not be undermined by the way in which litigation is conducted, and finalised. Other matters also contribute to the proper administration of justice.

9. [84]

   The first such matter is careful attention to the principle of finality of litigation. In D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1, the plurality (Gleeson CJ, Gummow, Hayne and Heydon JJ) remarked on the importance, albeit in a different context, of the principle of finality. At [34]–[36], they said:

10. [85]

    Here there has been a contested hearing involving a number or parties on a complex interaction of factual issues. The hearing took place and was resolved by reference to the pleadings as they stood at the time. An appeal was allowed, but only in part. The relevant factual findings, with the exception of those dealing with whether Mr Pittman and Mr Webster received any, and if so what, benefit from the loans, were affirmed. That very significant part of the dispute was “quelled”, and finally. The effect of the second motion would be to attack those findings and seek to have different findings made. This approach is not consistent with the principle of finality.

11. [86]

    The second matter which requires to be addressed is the effect upon public confidence in the administration of justice which would arise if the findings contended for by Ms Locke were made by the Court after a new hearing. In such event, there would be two judgments, namely the first instance judgment containing factual findings affirmed on appeal, and a second judgment, in the same proceedings, dealing with the Cross-claim, which would contain findings which were necessarily inconsistent with the earlier judgment.

12. [87]

    By way of example, in the first instance judgment, I made the following findings which directly touched upon the relationship between Ms Locke, Mr Pittman and Mr Webster. These findings, held by the Court of Appeal to be correctly made, formed a basis for the later conclusions that the loan agreements with FMMI were unjust. This is what was found in the first instance judgment:

13. [88]

    If the course urged by Ms Locke, by this Motion were to be implemented, Ms Locke would seek findings entirely contrary to those set out above. She seeks findings, the effect of which would be that Mr Pittman and Mr Webster were men who knew well what the financial risks were, and who were willing, and effectively equal, co-venturers in the various enterprises. She would also seek to persuade the Court that she was not a sophisticated business woman, but that she was a victim of poor advice, and difficult prevailing economic conditions.

14. [89]

    A second judgment, which contradicted to the extent urged the findings in an earlier judgment, and which produced such inconsistency, would be an offence to the administration of justice, and would undermine public confidence in it.

15. [90]

    The third matter which requires to be addressed as part of the maintenance of public confidence in the administration of justice, is the similarity of issues raised by the First Motion, and this Second Motion. In effect, whether this Second Motion is simply a further attempt to re-agitate the issues decided a short time ago, when the First Motion was heard.

16. [91]

    It is to be recalled that the First Motion, which was an application to re-open the Second Cross-claim to adduce further evidence, was heard in December and the subject of an ex-tempore judgment. As the reasons for judgment on the First Motion show, it was refused because Ms Locke had failed to demonstrate that, in the various ways recorded, permitting the proceedings on the Cross-claim to be re-opened would serve the overriding purpose of the Civil Procedure Act. She was unable to persuade the Court that the prejudice to Mr Pittman and Mr Webster could be remedied, and she was unable to persuade the Court that making the orders sought would be consistent with the principle of finality of litigation.

17. [92]

    This Second Motion is sought to be heard only a few weeks later in terms of the Court’s ordinary sittings. Although it is expressed as dealing with filing a Further Amended Defence, in substance and effect, it seeks to re-open the Second Cross-claim and to have further evidence taken at a further hearing.

18. [93]

    Although both of these Motions are interlocutory in nature, it is not properly open to a party to, in effect, continue to agitate by sequential motions and in circumstances where there has been no change of circumstances, the same substantive issues. It is open to a party to seek leave to appeal against an interlocutory judgment. But, in the absence of a change of circumstances, it is generally not open to a party to have a “second go” to attempt to obtain a different result, including by supplementing evidence which was not thought to be necessary, or which was simply not called on the first occasion: National Parks and Wildlife Service v Pierson [2002] NSWCA 273; (2002) 55 NSWLR 315, at [17] – [18] per Palmer A-JA, (Mason P and Santow JA agreeing).

Discernment – Dictates of Justice

1. [94]

   Undoubtedly, the refusal of the orders sought would create prejudice to Ms Locke. She would be unable now to present evidence which she submits is relevant and important. She would be the subject of a judgment based substantially on admissions in a pleading which she now claims ought never to have been made. She submits that she would be severely prejudiced by any judgment which the Court would enter against her, because she has not had a fair and reasonable opportunity to put her case before the Court and to have it heard.

2. [95]

   I accept that such prejudice exists. But it is one factor to be weighed in the balance when considering what the dictates of justice require in these circumstances.

3. [96]

   It is also necessary to bear in mind that the dictates of justice do not permit the refusal of orders in a motion such as this for the purpose of punishing Ms Locke for earlier defaults in, or for the conduct of, the litigation. Such considerations have no part to play in the determination of this motion.

Discernment – Conclusion

1. [97]

   I have carefully considered and weighed up all of the matters to which reference has been made.

2. [98]

   It is my conclusion that the application for leave to file the Second Motion ought to be allowed, but that the Second Motion ought to be dismissed. I have reached that conclusion because the interests of justice weigh decisively against allowing Ms Locke to withdraw admissions by filing another defence, with the inevitable consequence of a second hearing on the Second Cross-claim.

3. [99]

   The prejudice to Mr Pittman and Mr Webster is irremediable. An order for costs will not cure their prejudice. The undoubted stress and anxiety from continuing litigation cannot adequately be addressed. Allowing the order sought in the Second Motion would be inconsistent with furthering the overriding purpose of litigation. It would, in my assessment, undermine public confidence in the administration of justice at this very late stage to make orders, the effect of which would require a further hearing with the features to which attention has been paid above.

Orders

1. [100]

   The Court orders:

   1. (1)

      Grant leave to the cross-defendant to the Second Cross-claim to file in Court the Notice of Motion dated 4 February 2015.

   2. (2)

      Grant leave to the cross-defendant to the Second Cross-claim to file in Court an affidavit of Ms Margot Locke dated 4 February 2015.

   3. (3)

      Order that the Notice of Motion dated 4 February 2015 be dismissed.

   4. (4)

      Order the cross-defendant to the Second Cross-claim to pay the Cross-claimant’s cost of the Motion.