Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Young v Hones (No 2) [2014] NSWCA 338
• Hearing dates: 2 May 2014
• Decision date: 01 October 2014
• Before: Bathurst CJ; Ward JA; Emmett JA

Decision

Orders made on 2 May 2014:

1.Application for leave to appeal from refusal to adjourn hearing on 23 August 2013 refused.

2.Application for leave to appeal from refusal to allow further amended statement of claim to be filed refused.

3.Leave given for Notice of Contention to be filed in Court on behalf of 4th and 5th respondents.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: PROCEDURE - appeal - application for leave to appeal against interlocutory decision - whether primary judge erred in refusing application to further amend statement of claim - whether primary judge erred in refusing oral application for adjournment during reply submissions to put on evidence explaining lateness of application to further amend the statement of claim
• Legislation Cited: Civil Procedure Act 2005 (NSW); Encroachment of Buildings Act 1992 (NSW); Fair Trading Act 1987 (NSW); Trade Practices Act 1974 (Cth); Uniform Civil Procedure Rules 2005 (NSW)
• Cases Cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164; Banque Commerciale SA (En Liquidation) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279; Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250; Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658; Frank Jasper Pty Ltd v Deloitte Touche Tomatsu (A Firm) [2006] WASC 24; Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; House v R [1936] HCA 40; (1936) 55 CLR 499; Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516; Jaycar Pty Ltd v Lombardo [2011] NSWCA 284; John Holland Pty Ltd v Miami Gold (WA) Pty Ltd [2006] WASC 141; Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; Warragamba Winery Pty Ltd v State of NSW [2010] NSWCA 174; Young v Hones [2014] NSWCA 337; Young v Hones [2013] NSWSC 580
• Category: Principal judgment
• Parties: Margo Young (Applicant/Appellant); Brian Keith Hones (First Respondent); Jason Hones (Second Respondent); Ian Hemmings (Third Respondent); Hughes Trueman Pty Ltd (Fourth Respondent); Stephen John Perrens (Fifth Respondent)
• Representation: Counsel: RD Newell (Applicant/Appellant); JC Kelly SC with MJ Darke (First and Second Respondents); TD Miller SC with Ms PA Horvath (Third Respondent); DB Studdy SC with SE Gray (Fourth and Fifth Respondents); Solicitors: LC Muriniti & Associates (Applicant/Appellant); Colin Biggers & Paisley (First and Second Respondents); Moray & Agnew (Third Respondent); Kennedys (Fourth and Fifth Respondent)
• File Number(s): CA 2013/301763
• Publication restriction: Nil

Decision under appeal

• Citation: Young v Hones (No 2) [2013] NSWSC 1429
• Date of Decision: 2013-09-27 00:00:00
• Before: Garling J
• File Number(s): SC 2010/41007

HEADNOTE

[This Headnote is not to be read as part of the judgment]

This judgment relates to an application for leave to appeal from two interlocutory decisions of a judge of the Common Law Division of the Supreme Court. Ms Young had sought leave to file a proposed further amended statement of claim, to include allegations of breach of fiduciary duty against the first to third respondents. In the course of reply submissions, Ms Young's counsel made an oral application to adjourn the hearing of the application to amend the pleadings, to enable the filing of an affidavit explaining the lateness of the application to further amend the pleadings. The primary judge dismissed both Ms Young's applications.

The Court held, dismissing the application for leave to appeal:

(1) no error was shown in his Honour's discretionary decision to dismiss the adjournment application and leave to appeal will not be granted from an interlocutory decision, where the appeal is doomed to fail, as was the case for the adjournment application (at [63]); and

(2) it was open to his Honour to find that allowing the amendment to the statement of claim would lead to prejudice; no error has been shown in his Honour's decision to refuse leave to file the amended pleading (at [117]-[118]).

Judgment

1 THE COURT: By summons filed on 20 December 2013, Ms Young sought leave to appeal from the summary dismissal of proceedings brought by her in the Common Law Division. It was accepted by the first to third respondents (and the remaining respondents did not demur) that the effect of the judgment for summary dismissal was that it was a final judgment for which leave to appeal was not required (AT 51.23, AT 58.26-29). Nevertheless, Ms Young also sought to challenge two interlocutory rulings of the primary judge prior to the summary dismissal of the proceedings and proceeded on the basis that leave was necessary for that purpose. The Court heard Ms Young's applications for leave to appeal from the two interlocutory decisions and ruled on those in advance of hearing Ms Young's summary dismissal appeal. The Court indicated on that occasion that it would provide reasons for the dismissal of the respective leave applications at the time judgment was handed down on the summary dismissal appeal. These are those reasons.

Background

2 The background to the Common Law Division proceedings is set out in Ward JA's judgment on the summary dismissal appeal (Young v Hones [2014] NSWCA 337). Suffice it for present purposes to note that Ms Young is a pensioner who has been in dispute for over a decade as to certain building works carried out by her neighbours to their property. Ms Young contended (and it was not ultimately disputed by the neighbours) that part of the building works that had been carried out to the property were not authorised. Ms Young complained as to the drainage problems caused by the works.

3 Ms Young brought proceedings in the Land and Environment Court ("L&E proceedings") against her neighbours in 2003, seeking relief in relation to the disputed building works. It does not appear to be disputed that at least part of the relief claimed in those proceedings was an order for the reinstatement of the neighbours' land.

4 The L&E proceedings were, other than as to costs, settled by consent in 2004 shortly after the commencement of the hearing. Ms Young accepted an undertaking by the neighbours to lodge a development application for, and to carry out, certain agreed remediation works to address the drainage problem that it was accepted was caused by the works. After a contested costs hearing, a costs order was made in favour of Ms Young in those proceedings.

5 The neighbours were not parties to the subsequent Common Law Division proceedings. Rather, those proceedings were brought by Ms Young against the lawyers and engineers who had been retained by her or on her behalf and/or had given advice in relation to the L&E proceedings and/or the settlement of those proceedings. (There is a dispute, of relevance to Ms Young's summary dismissal appeal, as to the precise scope of the retainer of the fifth respondent and, in particular, his role in relation to the L&E proceedings. Nothing turns on this for the purposes of the leave applications.)

6 The respective parties against whom the Common Law Division proceedings were brought were: the solicitors who were retained by Ms Young in relation to the L&E proceedings (the first and second respondents in the present proceedings); the barrister who was briefed to appear for and advise Ms Young in the L&E proceedings (the third respondent); the engineer who gave advice (and ultimately some evidence) in relation to the works required to rectify the drainage issues caused by the disputed building works (the fifth respondent); and the engineering services company which employed the engineer and who was said to be vicariously responsible for his conduct (the fourth respondent). For convenience, the first three respondents will collectively be referred to as the "lawyer respondents" and the remaining two respondents as the "engineer respondents".

7 Ms Young complains that each of the respondents has breached a duty of care owed to her under his or its retainer and/or arising under the general law of negligence. She also contends that the lawyer respondents are liable for misleading and deceptive conduct in breach of the statutory prohibitions on such conduct in trade or commerce contained in the now repealed Trade Practices Act 1974 (Cth) and in the Fair Trading Act 1987 (NSW).

8 Ms Young's underlying complaint, in essence, is that the basis on which she agreed to the settlement in 2004 of the L&E proceedings - in particular, her acceptance of the undertaking proffered by her neighbours in relation to the then agreed remediation works - was "illusory" (AT 68.18) in that this was not a workable solution to the drainage problem caused by the neighbours' building works (for reasons that it is not necessary here to detail) and that it operated so as to pass on to her the burden of dealing with drainage from her land that should have been borne by her neighbours.

9 In effect, Ms Young contends that the only effective solution to the problem caused by her neighbours' building works (which included the excavation of their land and construction of a granny flat and a retaining wall) was for them to be required to reinstate the property to the condition it was in prior to those works and that, for such relief to be available in the L&E proceedings, it was necessary for the consent authority (Warringah Council) to have been joined as a party to the proceedings.

10 Not only does Ms Young contend that her respective advisers were negligent (and, in the case of the lawyer respondents, had engaged in misleading and deceptive conduct) but she also asserts that the lawyer respondents acted mala fide in their conduct of the proceedings and the settlement of the proceedings. Ms Young's Counsel (Mr Newell) maintains that this has been Ms Young's case from the outset.

11 In August 2013, after many iterations of her pleading and shortly after allegations of intentional harm on the part of the lawyer respondents had been removed from her statement of claim, Ms Young sought leave further to amend her claim in order to plead that the lawyer respondents acted mala fide and were in breach of their respective fiduciary duties to her. She sought to include in the pleading an allegation that the lawyer respondents had acted (knowingly) so as to prefer the interests of Warringah Council to hers. The so-called interest of the Council in this regard was apparently identified in an earlier iteration of the pleading by reference to a Council "Agenda" and in the proposed further amended pleading as the "Council Purpose". In short, it was the alleged objective of the Council to shift onto Ms Young the burden of drainage from her land. The means by which that objective was allegedly achieved was the notation of "false" excavation levels on a construction certificate issued by the Council in late 2002 in relation to the neighbours' building works.

12 The many and varied attempts by Ms Young to plead her claims against the lawyer respondents are an important part of the context in which the interlocutory decisions about which Ms Young complains were made.

Leave Applications

13 Grounds 7-14 of Ms Young's summons seeking leave to appeal filed on 20 December 2013 challenge the following decisions made by the primary judge:

(i) the refusal by his Honour on 23 August 2013 of an oral application, made by Mr Newell in the course of reply submissions on his client's application further to amend her statement of claim, to adjourn the hearing of that application so as to permit the filing of an affidavit explaining the lateness in the bringing of that further amendment application; and

(ii) the subsequent refusal by his Honour to grant leave for the filing by Ms Young of the proposed further amended statement of claim in the proceedings (that being the pleading that sought to include allegations of breach of fiduciary duty against the lawyer respondents).

14 Both those decisions are discretionary interlocutory decisions on matters of practice and procedure. Challenging such decisions is a difficult task: Warragamba Winery Pty Ltd v State of NSW [2010] NSWCA 174 at [6]; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45]. Ordinarily, it is appropriate to grant leave to appeal from such decisions only where there is an issue of principle involved or a question of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46].

15 What must be shown is error in the House v R sense (House v R [1936] HCA 40; (1936) 55 CLR 499 at 505), namely that the primary judge: made an error of legal principle; made a material error of fact; took into account some irrelevant consideration; failed to take into account, or to give sufficient weight to, some relevant matter; or arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred (even though the error in question may not explicitly appear on the face of the reasoning). It is not sufficient merely to show that the primary judge was arguably wrong: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]. Nor is it to the point that the appellate Court might have arrived at a different result had it exercised the relevant discretion at first instance (House v R at 504-505).

16 As noted, Ms Young's application proceeded on the basis that leave was required in order to appeal from each of those interlocutory decisions. Even if it might have been said that the challenge to the latter decision was subsumed in the challenge to the correctness of the ultimate summary dismissal judgment (on the reasoning in Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478), for the reasons which are canvassed in (ii) below that challenge would not have succeeded.

(i) Refusal to grant an adjournment of the hearing of separate questions for determination

17 The ground on which this decision was challenged was expressed as follows:

8. Further, or in the alternative, his Honour erred in not allowing the adjournment sought by the Plaintiff to provide a further affidavit explanation for the circumstances in which the proposed adjournment arose insofar as such further affidavit explanation was necessary. (emphasis added)

18 The words italicised above reflect the position advanced by Ms Young, and seemingly adhered to in the present proceedings, that no such affidavit explanation was necessary as the reason for the lateness in bringing the application was evident from the circumstances before the Court. That submission cannot be accepted in light of what was said in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 as to the need for such an explanation.

Circumstances in which application for adjournment was made

19 The circumstances in which the hearing (of the separate questions as to whether advocate's/witness immunity was a complete answer to Ms Young's claims) came to be fixed for 23 August 2013 are relevant when setting the context of the challenge to his Honour's ruling on the adjournment application.

20 On 13 April 2012, his Honour heard a number of interlocutory applications that concerned what his Honour described as Ms Young's attempts to formulate a proper pleading setting out her claims against the parties to the proceedings: Young v Hones [2013] NSWSC 580 (at [6]). At that stage, as his Honour noted in his later reasons: Young v Hones (No 2) [2013] NSWSC 1429 at [55], there had been at least eight iterations of the statement of claim in proceedings that had commenced in February 2010. (His Honour's May 2013 judgment will be referred to in these reasons as Young v Hones (1) and his Honour's September 2013 judgment as Young v Hones (2).)

21 The applications before his Honour in April 2012 were as follows:

(i) an application by the first and second respondents filed by notice of motion on 30 August 2011 seeking orders that the proceedings be dismissed and applications by the third respondent (by notice of motion filed 2 March 2012) and by the engineer respondents (by notice of motion filed 6 March 2012) seeking similar orders; and

(ii) an application by Ms Young by notice of motion filed on 6 March 2012 that she be granted leave to file and serve a further amended statement of claim.

22 Copies of all of those notices of motion were not before this Court. Nor were the various iterations of Ms Young's pleading prior to the amended statement of claim filed on 5 August 2013, pursuant to the leave granted by his Honour, or the defences filed by the respondents to an earlier filed statement of claim.

23 It is clear from his Honour's recitation of the procedural history of the proceedings (Young v Hones (1) at [19]-[53]) that the hearing on 13 April 2012 was not the first occasion on which applications for the dismissal of the proceedings based on the perceived deficiencies in Ms Young's pleading had come before the Court.

24 As at 13 April 2012, the form of the pleading on which Ms Young sought to rely was described by his Honour of consisting of three documents: a 59 page unsigned "Proposed Amended Statement of Claim", a 4 page document headed "Paragraph 39 Particulars - Particulars of Intention to Accept Sham Undertaking", and a single sheet of paper containing a substitute paragraph for one of the paragraphs in the first document.

25 Having regard to the terms of the orders ultimately made by his Honour in ruling on these applications, it appears that as at 13 April 2012 one or more of the lawyer respondents had already filed defences to the initial (or at least an earlier) iteration of the pleading, in which advocate's immunity had been pleaded as a defence to the claims made against them. (It may be that the engineer respondents had also filed defences raising the issue of witness immunity. The appeal papers do not make this clear.)

26 On 17 May 2013, his Honour dismissed each of those motions: Young v Hones (1). In so doing, his Honour ordered Ms Young, if she wished to proceed on her statement of claim filed on 11 November 2010 (a copy of which this Court does not have), to notify the respondents in writing by 1 June 2013 of her intention to do so, and gave leave for the respondents to file, on or before 28 June 2013, any further notices of motion seeking the hearing of a separate question under rule 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) with respect to the issues raised by the pleaded advocate's immunity defences.

27 What followed from his Honour's decision in May 2013 is set out in his Honour's subsequent reasons in September 2013: Young v Hones (2) from [24]. This summary is largely taken from those reasons and from the transcript of what transpired at the directions hearing before his Honour on 2 August 2013.

28 There was further delay on the part of Ms Young in formulating the pleading on which she wished to rely. On 5 July 2013, the matter came back before his Honour for directions. On that occasion, Mr Newell indicated that Ms Young wished to seek leave to file an amended statement of claim "within a week". Directions were made for Ms Young to file any such motion by 19 July 2013.

29 His Honour noted (in Young v Hones (2) at [25]) that on 5 July 2013, Mr Newell said:

... I came here today intending, and insofar as I don't receive instructions to the contrary, intending that the draft I am working on will stay clear of causes of action based on intention because in the circumstances of this case, they are overwhelmingly convoluted and ultimately, it's a line that has to be drawn in managing the proceedings.

I am conscious of the advocate's immunity. I had in mind that the allegation of mala fides would not be pressed because we arrived here today confident that the failure to advise the joinder of a party is an entrenched exception so far as the common law - I'll have to get further instructions on that.

As I am presently minded, those causes of action based on intention would not be pursued. A cause of action based on negligence which centres on the remedy that's required and the necessary joinder of the council to achieve that remedy, would be the core of the case, as well as the failure to give technical advice about the actual drainage issue that should have been the subject of the case. That's the engineers.

30 There appears to have been no motion filed in compliance with the direction made on that occasion. However, on 1 August 2013, a proposed amended statement of claim was sent to the solicitors for the respective defendants. At a directions hearing on 2 August 2013, there was no opposition by the respondents to the grant of leave for the filing of that amended pleading, it being noted by Senior Counsel for the third respondent that the pleading had "removed all of the distracting issues of fraud, conspiracy and so on" and that the pleading was one about alleged negligent conduct of the case and settlement of the case.

31 The respondents indicated that they wished to pursue applications for the pleading to be struck out and sought orders providing for the hearing of strike out motions (based on the applicability of the immunity defence) together with an application for the question of immunity to be determined on a separate basis. The latter seems to have arisen as a consequence of the debate before his Honour on that occasion.

32 His Honour, in exchanges with Counsel (AB 354/355), referred to the need, or potential need, if the matter were to proceed on the basis of a summary dismissal/strike out application as opposed to a hearing of separate questions for determination, for the parties to adduce such evidence as they would at final hearing on the relevant issue.

33 At the directions hearing on 2 August 2013, Mr Newell did not object to a hearing of separate questions per se, but did at first object to the separate questions being heard on 23 August 2013. This objection was made on the basis that Ms Young would seek to put on evidence in relation to the rule 28.2 (separate questions) application. However, Mr Newell subsequently said to his Honour that he was not suggesting the matter could not proceed on 23 August 2013 and that Ms Young would consider her position and put on evidence if the other application (there apparently referring to the strike-out application) was brought forward.

34 Mr Newell said on that occasion:

I have to say this, we have pleaded, I will call it non-intentional causes of action. We have not conceded and do not concede that the conduct was bona fide and we say that the test for advocate's immunity is that the conduct if it was bona fide - so that we would have thought that one of the issues to be determined, that the matter can't be dismissed without that question being a live question, unless the Court views it as a constituent of the material test

...

So that would be a matter for submission, I guess but there is an issue and it is my submission that so far as there is material before the Court, that it is the onus that the party proposing the evidence and they need to demonstrate that it is bona fide. I am not even sure if we would need to put a reply whether it is bona fide because we don't bear the onus. We need to avoid any lack of clarity and we say we don't make that concession, we put it in issue and the failure to adduce evidence will be the subject of a Jones v Dunkel [[1959] HCA 8; (1959) 101 CLR 298] submission in regard to that matter. (emphasis added)

35 The upshot of the debate on that occasion was that orders were made, which were not ultimately opposed by Mr Newell, with respect to the hearing and determination, in advance of all other questions in the proceedings, of separate questions as to whether the defence of advocate's or witness immunity was a complete answer to any, and if so, which part or parts of the claims made against the respective respondents. His Honour fixed 23 August 2013 as the date for the hearing of the separate questions in addition to the hearing of the motions for summary dismissal.

36 Mr Newell conceded on the present application that he had consented to the hearing of the separate questions (e.g. at AT 18.19), albeit adding more than once that such consent was for the hearing of the separate questions "according to law" (see at AT 17.42; 29.31; 29.38). To the extent that this qualification was said to have required his Honour not to have heard and determined the separate questions at all, it necessarily renders the consent meaningless. Certainly, Mr Newell did not on 2 August 2013 oppose the making of orders for the hearing of the separate questions on the basis that no such hearing could be held until the pleadings had closed or in the absence of evidence as to the facts contended in the pleading.

37 His Honour on 2 August 2013 also extended the time within which Ms Young was to file and serve any further evidence in opposition to the motions to 9 August 2013. No further evidence was ultimately filed for Ms Young in relation to the various motions of the respondents.

38 On 5 August 2013, a further version of the amended statement of claim was filed by Ms Young (AB 66) pursuant to the leave that had been granted. Although the document as filed was not identical to the version that had been before his Honour, no issue was taken with the filing of the 5 August 2013 version of the pleading. His Honour noted that the substance of this pleading was the same as the proposed amended statement of claim in respect of which leave was granted on 2 August 2013.

39 Relevantly, however, on 20 August 2013, Ms Young's solicitors foreshadowed to the respondents a further application for leave to amend the statement of claim, indicating that this was to include an amendment to include a plea of breach of fiduciary duty and/or mala fides (AB 313). The letter asserted that the amendments (the draft pleading not then being served on the respondents) were "of narrow compass" and "not complex" and, it was submitted, would not cause any prejudice. The letter also asserted that the decision to seek leave further to amend was made:

On reflection, and in order to avoid delay or controversy over this issue, and as a matter of abundant caution ...

40 The letter advised that the solicitors had asked Counsel to draft amendments to the statement of claim "economically dealing with a claim of mala fides" and were informed that "the matter can be approached on a basis that is not impermissibly convoluted".

41 The indication given as to the content of the foreshadowed mala fides allegation was as follows:

We understand that the allegation of mala fides will be based upon your client's [this being the letter to the third respondent's solicitors] breach of fiduciary duty in preferring the interests of the Council:

1. Which sought (to your client's knowledge) to shift the burden of the surface water to our client; and

2. Prepared a Construction certificate which meretriciously turned the Consent plans on their head while (again to your client's knowledge) concealing the matter from our client.

Armed with that express knowledge your client's only rational course (which was imperative to the Plaintiff's interests) was to conduct the proceedings on the basis that the Consent would be set aside and to make plain to the Council and the [neighbours] as early as possible that that would occur.

In fact, your client consciously elected to conduct and settle the proceedings on the foundation that the Consent would not, and could not (given the Council was nevr [sic] joined as a party) be set aside in the full knowledge that that would mean that our client would in practice be left with the onerous and prohibitively expensive problem of securing drainage arrangements for her land.

The matter largely turns on the incontrovertible terms and effect of the writing called the Points of Claim settled in conference by the Second and Third Defendants on 23 May 2003. It also turns on the effect of the construction certificate plans as already pleaded of which your client was aware but hoped to claim to be unaware. The Council thereby secured an unconscionable and irrational windfall at the expense of our client.

42 On receipt on 22 August 2013 of the draft proposed further amended statement of claim, the solicitors for the third respondent drew attention to the requirement for any such application to be by way of a notice of motion and affidavit addressing the matters identified in Aon as relevant to an amendment application (AB 316). There was no response thereto by Ms Young's legal representatives.

43 On 23 August 2013, shortly prior to the commencement at 2pm that day of the hearing fixed first for the separate questions and then for the summary dismissal motions, two successive versions of the further proposed amended pleading were served on behalf of Ms Young. When the matter duly came before his Honour, leave was sought (and granted with no opposition) for a notice of motion seeking further leave to amend and a supporting affidavit from Ms Young's solicitor to be filed in court. That application was heard in advance of the hearing of the separate questions.

44 It was in the context of that application for leave further to amend her pleading, though not until oral submissions in reply, that Ms Young's application for an adjournment was made. By that stage, submissions had been made to his Honour on behalf of the respondents to the effect that Ms Young had not provided any, or any adequate, explanation for the lateness of her application for further leave to amend and that the materials put before the Court suggested that a deliberate and careful reconsideration of the pleading had been undertaken in light of his Honour's judgment in Young v Hones (1) such that the current filed pleading could only be viewed as a result of conscious decisions being made as to the manner of pleading.

Primary judge's reasons

45 His Honour noted (Young v Hones (2) at [119]-[121]) the submissions by Mr Newell in response to the respondents' challenge as to the adequacy of the explanation for the lateness of the amendment. At [122], his Honour recorded that Mr Newell had accepted that he had come to the motion for leave to amend conscious of the principles in Aon and had determined that there was no need to provide an explanation for the lateness of the application. His Honour also noted that Mr Newell had nevertheless said he would welcome the opportunity to put on an affidavit concerning the matter.

46 His Honour refused the adjournment application (at [124]-[125]) on the basis that Ms Young had made a forensic decision to proceed with the application for an amendment without providing any explanation in addition to that which emerged from her solicitors' correspondence. His Honour was satisfied that Ms Young knew of the relevant legal principles and had decided not to "go to the cost and expense of putting on an explanation to support [the] application". His Honour further noted that it was not until he had specifically drawn Counsel's attention to the absence of an explanation that an adjournment was sought.

47 His Honour concluded (at [125]) that the interests of justice did not permit an adjournment for Ms Young then to put on such an explanation, particularly in light of the opposition of the respondents to an adjournment based on further costs and delay.

Ms Young's position

48 Ms Young's position appears to be that the explanation given by Mr Newell from the bar table on 23 August 2013 for the lateness in relation to the amendment application was adequate and that the reason for the late application was evident from the circumstances.

49 That explanation was that Ms Young and her Counsel had had difficulties "coming to grips with" the matter (as noted by his Honour at [119]).

50 In written submissions on the present application, Mr Newell states (at [7]) that:

The circumstances in which the Claimant experienced difficulties were that she sought to plead her case by reference to the Agenda [a defined term in one of the earlier iterations of the pleading, referring to the alleged objective of the Council to shift the burden of drainage on to Ms Young] pursuant to which she understood that material parties had acted. That necessarily involved a highly convoluted pleading - and the more so because the purport of what are now appreciated as being elaborate machinations were not fully understood by the Claimant. It is evident that the early procedural history reflected an attempt by the Claimant to come to grips with the purport of, what in the circumstances of her pleaded case, were highly convoluted and surreptitious machinations calculated to support an agenda leading to the shifting of a drainage burden to her. (emphasis as per submissions)

51 In oral submissions on the present application it was submitted that the difficulty in pleading was illustrated in the following way:

Of the difficulties of ascertaining what had happened. The way that the purport of the DA, the consent, which appeared to speak of a retaining wall, when drawings morphed into construction certificate drawings, even then it was difficult to understand what the signals were in those drawings. And there is an example in the pleading where I've set out how the inference is to be drawn that a 20 centimetre retaining wall, which is an absurdity so it doesn't immediately commend its to the mind, is actually revealed by the hieroglyphics in the stamped drawings.

...

... there was a bit issue about them [the drawings] being concealed [at the time of the L&E proceedings, though it was conceded that Ms Young had them before proceedings were started in the Supreme Court]

...

... everything in this case, all communications in this case - one of the features is that all messages are by remote implication ... (AT 7.12; 29; 44]

52 However, although the submissions are not wholly consistent as to when it is that the fiduciary duty claim was first appreciated by Ms Young and her legal representatives, the difficulties of which Mr Newell spoke seem largely to have related to the "early procedural history" of the matter to which reference was made in the written submissions. The existence of such difficulties provides no ready or obvious explanation for the fact that as at 2 August 2013 a decision had been made to remove all intentional causes of action from the pleading but by 20 August 2013 the decision was made to seek leave to amend to include an intentional breach of fiduciary duty claim.

53 There is certainly no evidence to suggest that some new information had been obtained, or some sudden enlightenment reached, as to the way in which Ms Young contended that the lawyer respondents were liable to her. The pleading that was the subject of the earlier strike out motions appears to have contended for the existence of a Council "agenda", from which one would infer that Ms Young's legal representatives considered that there was a reasonable basis on the facts known to Ms Young for such an allegation. That "agenda" was the very basis on which Ms Young's solicitors indicated on 20 August 2013 that the allegation of mala fides/breach of fiduciary duty largely turned.

54 What can be discerned from the correspondence in which the proposed amended pleading was served on the third respondent is simply that there was a change of mind by Ms Young's legal representatives as to whether it might be necessary to plead the kind of allegations that had just been withdrawn from the pleading, in case the respondents were to be correct in their assertion that immunity was a complete defence to the claims (of negligence and/or misleading and deceptive conduct) made against them in the 5 August 2013 pleading.

55 The fact that there was a considered decision not to adduce evidence as to the lateness of the amendment application was highlighted by what Mr Newell said on submissions to this Court (at AT 6.40):

To be completely frank, the reason the evidence wasn't put before the court was because there was a belief that, because the amendment that was allowed was only very recent and it was only going to be a matter of days before this additional amendment, which was done because of the question of mala fides and an error of judgment in thinking that it didn't need to be pleaded to be an issue in the case, so because the proposed pleading was only completed, doing the best we could, a matter of a day or two before the hearing, there was no time to prepare an affidavit as to the history of the matter.

56 The basis on which Ms Young contends that his Honour erred, in the exercise of his discretion, in refusing the adjournment is that "a great deal turned on it" (AT 2.2) and that the refusal to grant the adjournment was "productive of a manifest injustice" (AT 2.11). That submission assumes that the lack of an explanation for the lateness of the amendment application was dispositive of that application. It is submitted by Mr Newell that, if the dismissal of the amendment application turned on the lack of an explanation for the lateness of the amendment application, then the prejudice that would have flowed from the adjournment to permit such an explanation to be made was "entirely out of proportion" to the prejudice that flowed from the refusal of the adjournment (that being the dismissal of Ms Young's claim) (AT 2.21).

Decision

57 The first and second respondents contend that Ms Young should not be permitted to make and maintain a considered decision not to lead evidence of a particular kind, in order to avoid costs, and then seek an adjournment at the point of making oral reply submissions in order to permit the consequences of that very decision to be avoided, particularly in circumstances where such an adjournment would visit additional costs and delay on the other parties. That submission has a great deal of force.

58 As the respondents emphasise, the absence of an affidavit explaining the lateness in making the further amendment application was a conscious and deliberate choice on the part of Ms Young and her legal representatives. There was no suggestion that those representing Ms Young were not well aware of what was required to support an application for a further amendment to the pleadings in circumstances such as were there before the Court. It had been expressly drawn to their attention by the third respondent's solicitors, in correspondence to which there was no response.

59 The conclusion by his Honour that Ms Young should be left to the consequences of that forensic decision does not bespeak any error warranting appellate intervention. It does not appear to have been submitted to his Honour that the delay in providing an affidavit at the time was due to a lack of time to prepare an affidavit as to the history of the matter (as suggested at AT 6.47).

60 The only suggestion that there was any explanation, beyond the difficulties that Mr Newell said from the bar table that there had been in the early procedural history of the matter in "coming to grips" with the case, was that which fell from Mr Newell in the course of submissions on the second interlocutory decision, namely that there had been a misapprehension or "error of judgment" in thinking that mala fides "didn't need to be pleaded to be an issue in the case" (AT 6.44). However, it is by no means apparent that this is the explanation that would have been forthcoming had his Honour granted the requested adjournment.

61 As to the explanation that lateness of the amendment application was due to the "difficulties" there had been in coming to grips with the matter, his Honour would have been justified in treating this as unsatisfactory in circumstances where it was not suggested that any new information had come to Ms Young's attention in the period between 2 August and 23 August 2013. Certainly the belief by Ms Young that the lawyer respondents' conduct had been mala fide was not one that had emerged only after the 2 August directions hearing.

62 Apart from the fact that his Honour's reasons make apparent (as will be discussed below) that the dismissal of the application for leave to amend did not turn solely on the lack of an explanation for the lateness of the amendment, the submissions for Ms Young on this aspect of the matter fail to point to any error in the exercise by his Honour of the discretion to refuse an adjournment. It appears simply to be to assumed (which is by no means self-evident) that the explanation that would have been forthcoming had an adjournment been granted for the purpose of putting on an affidavit for that purpose would have been adequate.

63 His Honour's decision on the adjournment application was a discretionary judgment on a matter of practice and procedure. There was no error of principle that affected his Honour's decision nor was the decision such as to warrant a conclusion that there had been a miscarriage in the exercise of his Honour's discretion. An appeal from his Honour's decision was doomed to fail. Leave will not be granted to appeal from interlocutory decisions where the appeal is doomed to fail.

64 Leave to appeal from that decision was accordingly refused.

(ii) Refusal to grant leave for filing of further amended statement of claim

65 The challenges to his Honour's decision not to grant leave for the filing of the proposed further amended statement of claim are reflected in grounds 7 and 9-14 of the draft notice of appeal:

7. His Honour erred in not allowing the Appellant's proposed amendment in terms of the PASOC [proposed amended statement of claim].

9. His Honour erred in holding that the pleading in the PASOC was not adequate.

10. His Honour did not give adequate reasons for his conclusion that the proposed amended pleading was inadequate in that he did not identify the pleading problems militating against allowing the PASOC to be filed.

11. His Honour erred in holding that the Appellant's allegations of conduct against the Lawyer Defendants which was akin to fraud were not adequately pleaded.

12. His Honour erred in that he did not provide adequate reasons for not allowing the proposed amendment in that he did not identify how the Appellant's proposed amendment would in fact offend case management principles in circumstances that:

(a) The Lawyer Defendants did not identify any prejudice by reason of the filing of the PASOC.

(b) In the circumstances at the time of the proposed amendment, there could be no prejudice to the Lawyer Defendants by reason of the filing of the PASOC.

(c) The Appellant's proposed amendment was proposed before any defence had been filed, or ordered to be filed, to the pleading of 6 August 2013 ("the 6 August Pleading") [there, apparently referring to the pleading filed on 5 August 2013].

(d) The PASOC was proposed before the Defendants had filed any evidence in support of their originally filed defences.

(e) The PASOC did not significantly depart in structure or forensic reach from the 6 August Pleading.

(f) The Appellant's proposed amendments were not calculated in the circumstances at the time of the proposed amendment to occasion any wasted costs by the Lawyer Defendants.

(g) The Appellant's proposed amendments were not calculated in the circumstances at the time of the proposed amendment to occasion any prospective delay in the conduct of the Proceedings.

(h) Less than 3 weeks (18 days) had elapsed since an amendment by the Plaintiff (the 6 August Pleading) on the basis of the [sic] His Honour's judgment of 3 May 2013.

(i) An explanation for the fact of proposed amendments satisfactory in the circumstances of the case had been given by the Appellant in fact for the proposed amendments at the time of the Appellant's application to amend.

(j) The explanation for the fact of the proposed amendments was the same in large part as for the amended statement of claim of 6 August 2013.

(k) Further His Honour had regard to statements by Counsel for the Plaintiff made before the Court on 2 August 2013. Those statements included the statement to the effect that the position of the Appellant was predicated upon her stated position that she did not concede that the conduct pleaded in the 6 August pleading was bona fide, and an understanding that it was incumbent on the Respondents to show lack of mala fides.

(l) The content of the PASOC shows the complexity of the matter and supports the inference that many of the matters there pleaded had been concealed from the Appellant.

(m) His Honour erred in that he omitted to have regard to matters (relevant in the circumstances of the case) to which the Court's regard was directed by section 58 Civil Procedure Act 2005 being:

(i) Degree of difficulty or complexity to which the issues in the Proceedings had given rise.

(ii) Degree of likely injustice if the amendments sought by the Appellant were not allowed.

(iii) The difficulties that the Appellant encountered in conducting the Proceedings were not of her own making by reason that the matters or the purport of matters evident from the PASOC in that they were not disclosed to her, or were concealed from her, by the Lawyer Defendants.

13. His Honour erred in that the explanation for the Appellant's proposed amendment, reasonably necessary in the circumstances of the case, was evident from the circumstances which included that:

(a) The Appellant sought to bring forward allegations of mala fides into the statement of claim for abundant caution in light of the Respondents' applications on foot;

(b) The Appellant's PASOC exploited a means of pleading the issue of breach of fiduciary duty/mala fides without the Appellant's attempting to deal with the full complexity (and necessarily convoluted nature) of:

(i) The Kings [the neighbours] and the Council's ultimate agenda, and;

(ii) The Lawyer Defendants' knowledge of that agenda.

14. His Honour misapprehended the significance of the proposed amendments which did not reflect not an attempt to overcome previous alleged pleadings problems but reflected a manifestly different and better understanding of the purport of the Lawyer Defendants' conduct the subject of the previously filed statement of claim.

Procedural history

66 Part of the procedural history of the proceedings that is relevant when considering the application made on 23 August 2013 for leave further to amend the pleading has been set out above. It must be remembered that the proposed pleading for which leave was sought on 23 August 2013 was the fifth version of the pleading that had been served on the respondents after his Honour's judgment of 17 May 2013 (there having been numerous iterations of the pleading before then) and, significantly, the allegations of knowing breach of fiduciary duty sought to be pleaded followed from a conscious decision made on 2 August 2013 to restrict the pleading to non-intentional claims.

67 Also to be noted is that the proposed pleading was one that Ms Young herself concedes was "highly convoluted" (in the written submissions at [7]) and which she asserts was "necessarily convoluted" (in the draft notice of appeal ground 13 (b)). Indeed, a theme of the description of the proposed pleading was that it was convoluted - the submission being that this was something necessarily engendered by the complexity or machinations involved in the Council "agenda" and that it was not "impermissibly convoluted".

His Honour's decision

68 His Honour had considered in Young v Hones (1) (at [78]-[84]) the principles of law affecting pleadings and clearly had those in mind when considering the subsequent amendment application: Young v Hones (2) (at [58]), there noting that proper pleading was of fundamental importance to the Court as well as to the parties. His Honour noted that the power to grant leave was an ample one and referred to the matters to which the Court is obliged to have regard or may have regard when considering the exercise of such a power ([59]-[65]).

69 His Honour considered (at [51]) that the substantive nature of the proposed amendments could be appreciated from the following paragraphs of the proposed pleading:

• [53A], which pleaded the Council's purpose in issuing the relevant consent and construction certificate;

• [102A], which pleaded that each of the lawyer respondents, by reason of the matters therein stated, owed a fiduciary duty to Ms Young;

• [106A], which pleaded that in breach of the pleaded fiduciary duties each of the lawyer respondents "in the conduct of the Proceedings had regard to and preferred the interests of the Council as informed by the Council Purpose rather than the interests of [Ms Young]";

• [106B], which pleaded reliance, for the allegations of breaches of fiduciary duty, on the facts matters and circumstances pleaded in [106C] to [106Q]; and

• [106M], which pleaded that the failures or breaches pleaded earlier on the part of the lawyer respondents ([80] and [81] respectively) were breaches of fiduciary duty or incidents of the breaches of fiduciary duty pleaded at [106A] in that:

as no reasonable practitioner could have in good faith failed to raise those matters against the Council the omissions are incidents of or occurred by reason of the conduct of the Proceedings [by the lawyer respondents] in the interests of the Council.

70 His Honour noted (at [52]) that, following on from the above allegations, Ms Young sought to plead in summary that the terms of the settlement of the L&E proceedings were, to the lawyer respondents' knowledge, unfavourable to her and such as to have secured the "Council Purpose". His Honour then considered (from [66]-[84]) the allegations sought to be made in the proposed pleading.

71 His Honour concluded (at [130]) that the proposed amended statement of claim was not in a form suitable to go forward and said (at [131]) that even if Ms Young was capable of producing a pleading he was not persuaded in the exercise of his discretion that it was in the interests of justice to permit any further amendment.

72 The conclusion that the pleading was not in a form suitable to go forward was based on his Honour's earlier conclusion (at [84]) that, notwithstanding the oral submissions made in support of the application to amend the pleading, there was no allegation in the proposed pleading of mala fides or bad faith on the part of the lawyer respondents and that, given that the nature of such an allegation was akin to fraud, it was essential that it be directly made in the proceedings if it were to be pleaded.

73 Ms Young cavils with the conclusion expressed at [84] but, in any event, it is apparent from his Honour's reasons at [128]-[131] that his Honour's criticism of the latest attempt at pleading the claim was not determinative of the amendment application and nor was the lack of an affidavit explanation for the lateness of the amendment application.

74 The basis for his Honour's refusal to permit the amendment was that Ms Young had made a careful and deliberate decision to restrict her claim to non-intentional causes of action and had done so for good forensic reasons ([129]); the proceedings had been on foot for over three years and Ms Young had had a very large number of attempts to produce a further pleading ([127]); Ms Young had already had a sufficient opportunity to plead her case; Ms Young had apparently reconsidered the matter and wished to change her mind "yet again"; and in those circumstances it was too late for a further amendment ([129]). His Honour was of the view that the time had come when the respondents were entitled to be heard to say "enough is enough" ([129]). His Honour had the words of the plurality in Aon (at [102]) in mind when reaching that conclusion.

Nature of the proposed amendments

75 When identifying the proposed amendments on 23 August 2013, Mr Newell indicated that they related essentially to two matters (AB 364.47ff).

76 The first was to address something that it was said had been "overlooked", namely "the question of a further jurisdiction that is needed in order to remedy the plaintiff's position". This was said to relate to an encroachment by a "massed footing" onto Ms Young's land. Mr Newell indicated that a large part of the claim was that the joinder of the Council to the L&E proceedings had been necessary for the removal of the footing so that an order (referred to in the pleading as "a s 124 order") for reinstatement of the land could be made. Mr Newell submitted to his Honour that not only did this require the Council to be a party to the proceedings but that the jurisdiction of the Land and Environment Court needed to be supplemented by an order under the Encroachment of Buildings Act 1992 (NSW) or an injunction of the Supreme Court based in its "trespass jurisdiction".

77 The second proposed amendment to which Mr Newell referred related to the so-called "mala fides issue". Mr Newell said that Ms Young had had occasion to consider the position in relation to the mala fides issue, having regard to the submissions that had been made by the respondents as to the advocate's immunity issue. He said that the matter had been approached on the basis that the issue of mala fides was a matter for reply when the defence (of advocate's immunity) was raised. Mr Newell went on to say (at AB 365.25ff) that:

The procedure that was contemplated today [i.e., presumably, the separate question determination] had the potential to apparently, and without anything else happening, to have the proceedings dismissed without a reply being filed. In the circumstances the plaintiff determined earlier this week to bring forward the allegations that she would have made by way of reply to the defence and to seek leave to amend the statement of claim to insert them there. (my emphasis)

78 Pausing there, all that had been suggested on 2 August 2013 was the possibility of a reply - Mr Newell then being unsure whether any reply would be necessary on the basis of the contention that the onus as to bona fides in the context of a claim for immunity lay on the party claiming the immunity. By 23 August 2013, it was apparently being suggested that a decision had been reached that there would be a reply and as to what would have been included in a reply, and that it had then been determined to "bring forward" those allegations. There can be no doubt as to the aptness of his Honour's description of this application as being a change of mind on the part of Ms Young.

79 The subject matter of the allegations there sought to be brought forward was mala fides, or knowing, breach of fiduciary duty in the sense of a pleading of fraud or equitable fraud, yet on 2 August 2013, Mr Newell had confirmed that all intentional claims had been removed from the pleading. Nor can his Honour's opinion that there was good forensic reason for Ms Young to remove those allegations (following the criticism of the earlier pleading in Young v Hones (No 1) and in the face of the respondents' then application to strike out the pleadings and for summary dismissal of the proceedings) be criticised as not available, given the procedural history of the matter.

80 In explaining the proposed amendments to deal with the allegation of breach of fiduciary duties by the lawyer respondents (set out at [106A]-[106Q] of the proposed further amended pleading), Mr Newell said (AB365.33ff):

The gravamen of the claim is that the conduct of the proceedings by the lawyer defendants involved a breach of their fiduciary duties to the plaintiff. ... At the core of it is the fact that whatever was agreed at court, what [had] all ready [sic] unbeknownst to the plaintiff in a certain way had happened is that the construction certificate which had been issued and which she had not been shown by the council, had actually turned what she understood to be consent for a retaining wall on its head.

81 In essence, what Ms Young wished to contend, as was summarised by his Honour at [72], was that the consequence of the issue of a construction certificate given by the Council to the neighbours for certain works on their property (of which certificate Ms Young was not aware at the time of settlement of the L&E proceedings) was to place the burden on Ms Young of "organising" and "giving effect to" the drainage of surface water on her land; whereas she had understood the effect of the neighbours' undertaking that was accepted by way of settlement of those proceedings was that the relevant obligation in relation to drainage works would be on, or would remain with, her neighbours (whose property is down slope from that of Ms Young). Mr Newell explained to his Honour that an important point of the amendments was the allegation that the lawyer respondents knew about the contents of the construction certificate and its effect.

82 Mr Newell further explained to his Honour that the allegation was that the Council "well knew" that the effect of the construction certificate was that the consent became one for a 20 centimetre retaining wall; that this "vindicated a ... false notion" that the neighbours did not excavate or change the surface levels on the boundary (but had only excavated 20cm); and that the effect of the issue of the construction certificate plans was therefore that the neighbours obtained an entitlement to maintain their (unauthorised) change of the surface levels and the development without supporting the drainage of Ms Young's land. In that way it was alleged that what the Council did in relation to the issue of the construction certificate was to shift onto Ms Young the burden of drainage of the surface water from her land.

83 The allegation then sought to be made against the lawyer respondents was that they (AB367.22ff):

... knew the true levels, they knew that the council knew the true levels, they knew that the council issued a construction certificate affecting the consent based on false levels. Then, well knowing that they needed the construction certificate to plead the case, they conducted the case without looking at the construction certificates.

84 The fundamental matter that was said to have underscored "what may still be a somewhat complicated course of conduct" was the concealment (by the lawyer respondents) of the shifting of the surface water burden to Ms Young (AB 367.30). It was said that matters had been "manipulated to the detriment of the plaintiff". Mr Newell informed his Honour that what had been "perplexing" was to work out what the agreement was at court. It was said that after a complex analysis it was apparent that the agreed undertaking (to lodge a development application for the agreed rectification works) was "all about" draining a 20 centimetre retaining wall and that the question of the surface water had already been dealt with in the Council's earlier consent (i.e., by reference to the construction certificate that was said to be based on "false levels").

Alleged error on the part of his Honour

85 Set out above are the various grounds on which the refusal to grant leave for the amendment is challenged. In oral submissions, it was contended that his Honour erred in the exercise of his discretion in this regard in three respects.

86 First, that his Honour "did not consider the case management principles that he was mandated to consider" (AT 2.35). By this, Mr Newell seems to have meant that his Honour wrongly applied the case management principles set out in Aon, since it is obvious on the face of his Honour's reasons that regard was had to those principles.

87 What is said for Ms Young in this regard is that the amendment came under the rubric of an amendment for the purpose of making certain that the real issues in the case are dealt with (AT 13.47); that "the issue [of mala fides] was always there, it just needed to be announced" (AT 14.17); that "there were no case management adverse consequences" arising from the proposed amendment; and that this was simply "not a matter where there was prejudice" (AT 3.29).

88 Second, in oral submissions it was suggested in effect that the amended statement of claim should have been allowed because otherwise injustice would flow to Ms Young as a result of the fact that the 2 August 2013 pleading had been filed under the belief that mala fides could be pleaded in reply (because the onus was on the respondents to establish a lack of mala fides if they wished to invoke advocate's or witness immunity) (AT 12.17). However, Mr Newell would not concede that there was any misapprehension to that effect and said that the proposed amendment was for more abundant caution because the reply had not yet been pleaded and "a great deal turned" on the mala fides issue (AT 13.38). Mr Newell was adamant that "the issue of bona fides versus mala fides never left the case for one day" (AT 12.45), that it was never abandoned as an issue (AT 14.23) and just "needed to be announced" (AT 14.18); albeit ultimately conceding that the allegation of mala fides had "left" the pleading with the 5 August 2013 amended statement of claim (AT 13.5).

89 Third, reliance was placed on the further matters referred to in the written submissions.

90 Dealing with those submissions in turn, and bearing in mind that what was required was for Ms Young to show an error in the House v R sense in order to permit appellate intervention, the Court's view was as follows.

Application of case management principles

91 The broad proposition that there were no case management adverse consequences to the grant of leave to amend, and no prejudice to any of the litigants were the amendment to be permitted, need only be stated to be rejected.

92 Although the proceedings had not reached the stage of closure of pleadings (which must in large part have been due to the many and varied attempts at amending the pleadings over the years), they had been on foot for over three years and there had been considerable costs incurred. It is not consistent with the case management principles mandated by the Civil Procedure Act 2005 (NSW), or the statements of principle articulated in Aon, for a plaintiff to be permitted time and time again to amend the pleadings.

93 It is well recognised that the stress of ongoing litigation is a prejudice to litigants. In Jackamarra v Krakouer [1998] HCA 27 at [29]; (1998) 195 CLR 516 at 526, the High Court, referring to prejudice arising from delay in an admittedly different context, said:

Delays in the courts are a major cause of disquiet not only among those who resort to the courts but also among judges and all others associated with the courts. Delay will almost always impede the proper disposition of any case that does not come to trial promptly. Memories fade; records may be lost. The impediments are many, varied and obvious. Those impediments may be overcome but their presence is an added burden for both the litigants and the court that must try the case. Delay in a case will almost always add to the costs. The case takes longer to prepare and to try because the events are no longer fresh in the minds of those who will give evidence. Costs, therefore, increase. Delay in a case also adds to the overall burden on the judicial system. The case that has been delayed in coming to trial and therefore takes a day longer to try than otherwise would be needed, keeps another case out of the lists for that day. Or, as happened here, the case that has been delayed occupies the courts by applications to remedy some failure to comply with prescribed time limits. Each day's delay in bringing a case to trial and final judgment simply prolongs the uncertainty and worry felt by the litigants. No doubt there are other reasons for the disquiet felt by both litigants and lawyers about delay but the matters we have mentioned indicate why it is so important to avoid delays wherever possible. (emphasis added)

94 All the more must this be so if what is alleged against a person acting in his or her professional capacity, then expressly abandoned when challenged, and then sought to be reintroduced in a different form, is an allegation akin to fraud. It must be remembered that legal practitioners are officers of the Court. Allegations of fraud made against them in the conduct of litigation are very serious allegations.

95 The suggestion that his Honour in some way failed to appreciate the significance of the proposed amendments must be rejected. His Honour carefully considered the proposed pleading. What clearly weighed in his Honour's mind was the history of the pleadings to that stage of the proceedings. Aon is not authority for the proposition that a plaintiff can engage in endless attempts to formulate a proper cause of action.

96 The very fact that the "issue" of "mala fides" had been one to which Ms Young had turned her mind for some time, yet had deliberately chosen not to plead in the most recent version of the pleading prior to the proposed amendment, tells against the suggestion that it was in the interests of justice that she be allowed to amend in order to introduce (or to reintroduce) a serious allegation that she had previously eschewed as part of her causes of action.

97 It is not to the point that Mr Newell had uttered the words "mala fides" in submissions as something that might possibly be raised in a reply. Nor can the submission be accepted that it was "not a real issue" for the respondents to suggest there had been a delay in bringing forward the amendment because it had always been there but just "needed to be announced". If Ms Young's causes of action involved an allegation of fraudulent conduct or the like, then it was incumbent on her to plead it and to plead it properly. She deliberately chose not to do so on 2 August 2013.

98 The submission by Mr Newell that there was a factor that was contra-indicative to the refusal of leave, namely that the allegations did not represent a "new claim" against the lawyer respondents, fails to focus on the fact that the only claims that were made against the lawyer respondents as at 23 August 2013 were the claims in negligence and for misleading and deceptive conduct that were then pleaded.

99 Mr Newell noted that he had made plain on 23 August 2013 that Ms Young continued to maintain that the conduct of the lawyer respondents was mala fides, "and, by necessary implication, in breach of fiduciary duty". He submitted that the amended pleading effectively created a "cognate addendum" to the existing pleading and did not radically change or alter from a forensic point of view what had already been pleaded, since the essential issue of the 20cm retaining wall had been pleaded. He emphasised that it had been Ms Young's position at the outset that mala fide was contended. Such a submission ignores the fact that the proposed amended pleading sought to raise an allegation of mala fide that materially expanded the allegations in the then amended statement of claim. The fact that earlier allegations akin to fraud had been raised but then removed from the pleading is not to the point.

100 No error has been shown in the weight that his Honour attached to the history of the pleading attempts by Ms Young or to the forensic decision made by her to remove allegations of "intentional" causes of action from the pleadings.

Injustice arising from pleading misapprehension

101 Mr Newell submitted that at most there subsisted an error of judgment "in the drafting of the existing pleading or in a judgment about what is to be pleaded in it" (expressly adopting the language at [82] in Aon) for the 18 days up to the application to amend "during which the allegations of mala fides were not formally rehearsed" in the statement of claim. (Of course, his principal position is that it was not necessary for the pleading to raise the issue of mala fides at all and that it was a matter that could be raised in reply to an invocation of immunity by the lawyer respondents.)

102 However, the submission was not put to his Honour that the need for the amendment was to avoid injustice arising out of a misapprehension as to the pleading. His Honour cannot be said to have erred in not permitting the amendment based on a consideration not put to him.

103 Mr Newell conceded that he was in a position before the last application made before the primary judge to make the very serious allegations now propounded against the lawyers but "in a different form". He said that this had not been done "because it was done in a very convoluted form which was counterproductive"; he conceded that the previous pleading was highly convoluted and said that there had been a desire to get away from that and to simplify the case. That illustrates the fact that there was a conscious decision made to abandon, in the pleading, the very kind of allegations now sought to be reintroduced. His Honour did not err in placing weight on this factor.

Other matters raised in submissions

104 Mr Newell disputed that there was any failure on the part of Ms Young properly to plead the conduct which was akin to fraud. He identified the conduct as being the deliberate breaches of fiduciary duty. Mr Newell contended that the requirement to plead fraud depends (apart from a requirement to plead the conduct itself) upon pleading the state of mind with which the alleged conduct was engaged as well as supporting that allegation of state of mind with material facts and submitted that the proposed pleading adequately pleaded the state of mind with which the conduct in question was engaged.

105 Mr Newell pointed in this regard to the pleading (at [53A]) of the fact of the "Council Purpose" said to be antithetical to Ms Young's interests; to the pleading (at [69]) of knowledge by the lawyer respondents of the Council Purpose; and to the allegation (at [106A]) that the lawyer respondents had regard to and preferred the interests of the Council as informed by the Council Purpose rather than to the interests of Ms Young (in having her land drained and retained).

106 It is submitted that the pleading makes plain the state of mind with which the lawyer respondents engaged in the conduct amounting to a breach of fiduciary duty and that they deliberately advanced the case in the interests of the Council knowing that the Council's interests were antithetical to those of Ms Young. Mr Newell refers to [106C] to [106Q] as pleading the facts, matters and circumstances relied upon for the inference of a deliberate breach of fiduciary duty.

107 There is no doubt that from a pleading point of view it is not necessary (though in the interests of clarity it would be preferable) to use the specific words "fraud" or "dishonesty" provided it is clear that fraud or dishonesty is being alleged: Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 at 268; Banque Commerciale SA (En Liquidation) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 per Dawson J at 295 [13].

108 However, what his Honour drew attention to (Young v Hones (2) at [80]) was the absence of a clear or direct allegation that any of the lawyer respondents acted in bad faith. (That conclusion was a charitable one in this Court's opinion.) His Honour considered that, at its highest, [106M] pleaded an absence of good faith. In fact, it does so only inferentially, by alleging that "no reasonable practitioner could in good faith" have failed to act as there pleaded.

109 His Honour considered (at [81]) that [106M] raised an evidentiary submission: to the effect that the Court should assume that the lawyer respondents were competent and reasonable practitioners and therefore that since their breaches of duty were so poor it should be inferred that the omissions about which Ms Young complained were indicative of them conducting themselves in the interests of the Council. Mr Newell submits that this cannot be a principled objection to the pleading because he says [106M] is not a pivotal allegation.

110 It is submitted that this paragraph does nothing more than "announce reliance" by Ms Young upon the cumulative effect of the matters pleaded in [80] and [81] in support of the claim of breach of fiduciary duty/mala fides pleaded at [106A] and supported by the material facts pleaded in [106C] to [106Q]; and that reliance upon the matters in [80] and [81] is for the purpose of inference that the cumulative effect of those breaches "speaks of mala fides".

111 The logic of Ms Young's pleading is said by Mr Newell to be (see [91b] of the written submissions) that:

... the common sense, if not inevitable, conclusion that so many gross and implausible breaches of duty, each and all tending to the obvious advantage of the Council, (and the Council's purposes) to the profound detriment of their own client - cannot be accidental. It is submitted that it is in error to reject a pleading because it seeks to make clear the purport of an allegation - a fortiori, where it is reasonably necessary to avoid the risk of surprise.

112 Mr Newell submits that the allegation of bad faith is made plainly at [106A]. That paragraph simply asserts that the respective lawyer respondents in breach of their fiduciary duties preferred the interests of the Council rather than those of Ms Young.

113 Reliance is placed on what was said in John Holland Pty Ltd v Miami Gold (WA) Pty Ltd [2006] WASC 141 by Newnes M (as his Honour then was) at [45] to [48] to the effect that what is required is a statement of the case that is sufficiently clear to allow the party a fair opportunity to meet it: Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664; Frank Jasper Pty Ltd v Deloitte Touche Tomatsu (A Firm) [2006] WASC 24.

114 The pleading submissions ultimately do not assist Ms Young. Even if this were a model of good draftsmanship, which it most certainly is not, his Honour's reasons make clear that it was the combination of numerous attempts at pleading; the forensic decision to remove allegations of intentional conduct from the pleading; as well as the criticism of the pleading of breach of fiduciary duty in bad faith, that led his Honour to refuse leave to amend. In passing, however, it should be noted that no error is revealed in his Honour's assessment of the deficiencies of the pleading.

Decision

115 Section 64 of the Civil Procedure Act permits the making of all necessary amendments for the purpose of determining the real issues in dispute in proceedings. Section 64 is expressly made subject to s 58, which requires the Court to follow the dictates of justice. The Court must have regard to the just, quick and cheap resolution of the real issues in the proceedings (s 56) and the efficient disposal of Court business and the efficient use of judicial resources (s 57). As made clear in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230, compliance with these requirements is mandatory. Allsop ACJ (as his Honour then was), with whom Campbell and Young JJA agreed, there said at [36] that ss 56-59 (together with ss 60 and 61 of the Civil Procedure Act) bring about:

a new statutory balance among various factors in litigation including court and party efficiency and the delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering justice, they corrode the ability of the courts to provide individual justice.

116 The overriding purpose of the Civil Procedure Act and Uniform Civil Procedure Rules is therefore to facilitate the just, quick and cheap resolution of the real issues in the proceedings. What his Honour concluded was that, in circumstances where there had been a large number of attempts to formulate the pleading and a forensic decision had been made not to plead an allegation of intentional harm followed by a further change of mind, enough was enough. This Court agrees.

117 As to the complaint that there was no evidence of prejudice that would flow from the amendment, it was clearly open to his Honour to conclude that there would be prejudice: namely, the prejudice of the respondents having to deal with the admittedly convoluted pleadings; the prejudice in the respondents incurring further costs in dealing with the proposed further amended claim and pleading a defence to it if leave were granted; and the prejudice for anyone (particularly an officer of the Court) having litigation hanging over his or her head in which serious allegations of fraud (pleaded in such a convoluted and infelicitous way) are made.

118 It is apparent from the procedural history of the matter, to which both sides have referred, that there were a number of indulgences given to Ms Young. There is nothing to point to any error by his Honour in refusing leave to file the amended pleading in the circumstances in which he did.

119 Finally, the grievance obviously felt by Ms Young at what has occurred can be discerned from the emotive language in which correspondence has issued from her solicitors and in which submissions have been put on her behalf. There is no doubt that Ms Young considers that a great injustice has been done to her. Her Counsel has described the L&E proceedings, and the settlement of those proceedings, as no more than an "illusion". It may well be that it is this sense of grievance that has led to the apparent readiness of Ms Young to conclude that her professional advisers must have acted fraudulently in conducting the proceedings. However, it is a serious matter to allege fraud and it was incumbent on her present advisers not only to comply with their ethical obligations when so doing but also to apply objectivity when advising Ms Young and in pleading such a cause of action. Unfortunately, the manner in which the pleadings have been drafted and the tone of the correspondence and submissions made on Ms Young's behalf does not give rise to a great deal of confidence in this regard.

Conclusion

120 For those reasons, the Court refused leave to appeal from each of the interlocutory decisions.

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Decision last updated: 01 October 2014