The defendant was the purchaser on the contract for sale of an apartment in Forestville, which the plaintiff, the vendor, terminated. Proceedings were commenced claiming the deposit and seeking other costs.

The defendant filed a notice of motion at a late stage in the proceeding, seeking to file entirely new claims pleading unconscionable conduct against the real estate agent, and negligence against her solicitors (the proposed fourth cross-defendant) who acted on the purchase. Richmond J dismissed the defendant’s application.

Moray & Agnew acted for the proposed fourth cross-defendant on the defendant’s unsuccessful motion. 

The Facts

The parties entered into a contract for sale dated 28 October 2021. A 10% deposit of $140,000 was paid to a third party.

The sale did not go through by the date for completion, and the plaintiff issued a notice to complete. The contract was subsequently terminated on 25 January 2022.

The plaintiff commenced proceedings claiming the deposit and other damages for loss on the resale, along with interest and costs.

Initially, the defendant’s case was that she did not receive the notice to complete or alternatively that the plaintiff had repudiated the contract. She filed a cross-claim seeking damages for wrongful termination. Evidence was exchanged in late 2022 and the matter was set down for hearing commencing on 27 July 2023.

On 24 July 2023, the defendant’s solicitors ceased acting. Richmond J granted an application by the defendant to vacate and adjourn the hearing to 29 August 2023. The defendant in the meantime instructed counsel who, at a directions hearing on 16 August 2023, advised the Court that the defendant would be seeking to advance entirely new claims against the real estate agent and her solicitors on the purchase.

Leave was granted for the defendant to file a notice of motion seeking those orders, and the hearing date was vacated once more. The motion was listed for hearing on 24 October 2023

In her motion, the defendant sought leave to amend under section 64 of the Civil Procedure Act 2005 (NSW) (‘the CPA’), which permits amendments to pleadings, subject to the overriding purpose stated in section 56 of the CPA, being the just, quick and cheap resolution of the real issues in the proceedings.

His Honour had regard to the factors discussed in Kelly v Mina [2014] NSWCA 9 at [47] relevant to the Court’s discretion when considering applications to amend pleadings, including:

• Whether the amendment will cause substantial delay
• The extent of wasted costs that will be incurred
• Whether there is an irreparable element of unfair prejudice caused by the amendment (such as stress on individuals) which cannot be adequately compensated
• Case management and resourcing concerns in light of the state of the proceeding when the amendment is sought, and inefficiencies arising from the vacation of hearing dates
• Whether the amendment will lessen public confidence in the judicial system; and
• Whether a satisfactory explanation has been given for the amendment at the time it is sought.

His Honour noted the substantial delay which had already occurred due to the proposed amendment and recognised further delay would follow should it be allowed.

His Honour also considered the matter of wasted costs.  As the parties accepted that the defendant was impecunious and that the plaintiff was unlikely to recover much of his quite substantial costs incurred to date (exceeding $97,000), his Honour regarded overall costs compared to the amount likely to be recovered as ‘very significant factors against allowing the amendment’ [24].

That the plaintiff was an individual was also a determining factor.  His Honour took into account the strain that litigation imposes on individual litigants in relation to both cost and delay (per Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [100]-[101]), as the joinder of additional parties would potentially expose the plaintiff to costs he would be unlikely to recover if successful [25].

The timing of the application was also considered.  His Honour questioned why the new causes of action were not raised earlier in circumstances where evidence relevant to the allegations had been served in September 2022.  This suggested that the delay was not the result of a new matter having recently come to light, but rather a forensic decision by the defendant’s former solicitors [28].

Having regard to the prejudice in terms of wasted costs and delay to the plaintiff, his Honour found it was not in the interests of justice that the defendant’s application to file the proposed amended defence and amended cross-claim be allowed at such a late stage in the proceeding.

Conclusion

Litigants should be mindful of how the Court will deal with applications which seek to amend pleadings or to join new parties at particularly advanced stages of proceedings, in light of the overriding purpose stated at 56 of the CPA.

When considering whether (and when) to seek leave to amend pleadings and join new parties, issues of delay, wasted costs, unfair prejudice, case management concerns and the reasonableness of explanations in support of any such application should be carefully considered.

Further information / assistance regarding the issues raised in this article is available from the author, Brian Moroney, Partner, Alex Carolan, Lawyer or your usual contact at Moray & Agnew.