Starwhist Pty Ltd v Tonge (No. 2)

I gave judgment on the Motion by the Defendant for leave to file an amended defence and a cross-claim on 21 July 2017: Starwhist Pty Ltd v Tonge [2017] NSWSC 963.

The Defendant has now proffered the proposed amended defence and the cross-claim. The Plaintiff takes issue with two parts of the pleadings. The matters in the cross-claim, effectively, mirror the matters in the Defence in that regard.

The Plaintiff says that the pleading contained in paragraphs 25 to 27 of the amended defence represents a new claim that was not argued before me and was not the subject of my judgment. Those paragraphs read as follows:

Mr Sneddon, of counsel for the Defendant, accepts that that is a new claim, but says it arises from the fact that the executed form of the deed by the Plaintiff was not made available to the Defendant until 5 July; that was two days before I heard the Motion. The only reason put forward to explain why the cause of action in paragraphs 25 to 27 was not contained in the amended defence and cross-claim put forward was “other things were on our minds in relation to the day of the motion”. I took that to mean that it did not occur to those acting for the Defendant until a later time.

The chronology is relevant. The affidavit annexing the signed copy of the deed by the Plaintiff was served on 5 July. The Motions were argued on 7 July. I gave judgment on 21 July and the first time this new cause of action has been put forward was subsequent to my judgment. I had, in fact, directed that the amended form of the defence and the cross-claim were to be provided within 14 days. That was not done.

The form that is sought to be relied upon was e-mailed to my Associate at 5.57pm last night. I assume it was delivered to the Plaintiff's solicitor a little before that time, but, judging by the email chain that my Associate was copied in on, very little time was given to the Plaintiff's solicitor to consider this form of the documents.

No proper reason has been put forward to explain why the cause of action in paragraphs 25 to 27 was not raised, or notified at an earlier time. The Defendant had two days before the hearing of the Motion to consider the matter. The Defendant could, after I had reserved judgment, have sought to reopen the matter to raise it in the two week period it took me to deliver judgment. The Defendant could also have raised the matter after I delivered judgment and considerably before the time that it was raised.

To some extent, what was permitted to be put forward by me in my judgment of 21 July 2017 was an indulgence to the Defendant when all of these matters should have been raised at an earlier time.

Bearing in mind ss 56 to 58 of the Civil Procedure Act 2005 (NSW), I do not consider that the Defendant should now be permitted to rely on paragraphs 25 to 27 of the amended defence. Those paragraphs are mirrored in paragraphs 8 to 10 of the proposed cross-claim.

Counsel for the Plaintiff has submitted that if those paragraphs are omitted from the cross-claim, that will have a bearing on the relief claimed in the cross-claim, particularly, paragraphs 4 to 6. I have not closely examined those paragraphs, to know if that is correct. That is something that the Defendant will have to take on board in proffering the further forms of these pleadings.

The Plaintiff has drawn my attention to the order I made dismissing the Defendant’s notice of motion filed 13 June 2017 and making no order as to costs. The Plaintiff submitted that the form of the cross-claim sought to be filed in that notice of motion differed significantly from what was thereafter put forward in the Defendant’s Notice of Motion filed 21 June 2017.

I accept that the order I made that there be no order as to costs of the motion of 13 June 2017 was based on a misconception that this earlier motion sought only to file a cross-claim in the same form as that put forward in the motion of 21 June 2017. I consider that the order I made should be corrected under the slip rule.

I will vary order 3 that I made on 21 July to provide that the Defendant's Notice of Motion filed 13 June 2017 is dismissed and the Defendant is to pay the Plaintiff's costs of that Motion.