Plaintiff Seeks Leave for Amendment of Statement of Claim

Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 (31 May 2022)

The plaintiff seeks leave to file and serve a proposed further amended statement of claim (Fourth FASOC).  The defendants oppose leave being granted to the plaintiff to make a number of the proposed amendments.  The Court, in determining whether a proper basis for claims was established, relied upon Civil Procedure Act 2010 (Vic). 

Facts:

The plaintiff (TeleChoice or plaintiff) seeks leave pursuant to r 36.01(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) to file and serve a proposed fourth further amended statement of claim (Fourth FASOC) and the defendants (Optus Entities or defendants) oppose leave being granted to the plaintiff to make a number of the proposed amendments.  

To date, there have been about 14 or 15 drafts or filed different versions of the statements of the claim since the proceeding was commenced.  The first version was a draft statement of claim sent with a letter of demand in 2013 shortly after the end of the Final Dealer Appointment. However, the proceeding was not commenced until about four and a half years later in December 2017.  The Fourth FASOC presents as a lengthy, dense, and complex document that in various parts is not easy to read and comprehend.

This amendment application follows from a strike out / stay/summary judgment application brought by the Optus Entities (2021 Application) in respect of various aspects of the plaintiff’s third further amended statement of claim (Third FASOC).  On 3 August 2021 orders were made striking out various parts of the Third FASOC (Strike Out Orders), but allowing the plaintiff a further opportunity to reformulate aspects of its claims and seek leave to amend. 

It was determined in part that certain paragraphs ought not to be struck out, stayed, or dismissed at that point in time because TeleChoice was to be given a further opportunity to seek to reformulate and properly articulate certain claims. These paragraphs primarily related to what was defined as the Telstra Revenue Claims.

The parties agreed that the orders on the 2021 Application should include an order adjourning the further hearing of the Optus Entities’ 2021 Application, as they did. 

The Optus Entities submitted that if leave to amend the Telstra Revenue Claims was not granted, then the substantive paragraphs that would remain relating to these claims should be struck out and that no further opportunity ought to be given to the plaintiff to seek to re-plead them.

In broadterms, the amendments sought to be made are said by the plaintiff to address deficiencies addressed in the context of the 2021 Application, including matters raised in the Strike Out Reasons, and to seek to introduce a new claim that was not part of the third amended statement of claim (Third FASOC).

Issue:

Whether or not the Court should grant the plaintiff a further opportunity to re-craft the fourth further amended statement of claim (Fourth FASOC) so as to re-introduce another claim not included in the third amended statement of claim (Third FASOC).

Applicable law:

Supreme Court (General Civil Procedure) Rules 2015 (Vic) - empowers the court to grant leave to any party to amend any document for the purpose of “determining the real question in controversy between the parties to any proceeding”.  

Civil Procedure Act 2010 (Vic) s 7 - provides that the overarching purpose of this Act and the rules of court in relation to civil proceedingsis to facilitate the just, efficient, timely, and cost‑effective resolution of the real issues in dispute.

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 - referred to a range of other considerations which need to be weighed in the balance in the exercise of the discretion to grant an amendment to a pleading. 

Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 - provides that the limitation issue is one that should be left to trial and that it was not ‘ripe for determination’ now. 

AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 204–205 [69] - provides that in deciding whether to grant leave to a party to amend its pleadings, the court must consider whether the proposed amendments facilitate the identification of the real issues in dispute and the just resolution of the proceeding.

ABL Nominees Pty Ltd v MacKenzie (No 2) [2014] VSC 529 - provides that the power to amend in r 36.01 (1) of the Supreme Court (General Civil Procedure) Rules 2005 (Rules) authorises the court to order that a party have leave to amend any pleading for the purpose of determining the real question in controversy between the parties to any proceeding, correcting any defect or error or avoiding multiplicity of proceedings.

Commonwealth v Verwayen (1990) 170 CLR 394, 456 - provides that an amendment that is futile because it is obviously bad in law will not be allowed.

Matthews v SPI Electricity Pty Ltd (Ruling No 6) [2012] VSC 70 - provides that the court, on this type of application, will not engage in an examination of the merits of the case foreshadowed by the proposed amendment, but where that amendment introduces a patently hopeless issue for determination then its inclusion will be futile and that will be a significant, and probably decisive, matter in the exercise of the court’s discretion.

Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 - provides that if the amendment has no real prospect of success at trial then that would be a highly relevant factor in the exercise of the discretion to refuse the application.

ACN 074 971 109 v The National Mutual Life Association of Australasia Ltd [2010] VSC 186 - established that, absent extraordinary circumstances, leave to amend will be granted.

Trevor Roller Shutter Service Pty Ltd v Crowe [2011] VSCA 16 - provides that Aon may have ‘reinvigorated the procedural paradigm’ insofar as time, costs, and limited judicial resources are relevant considerations in the determination of whether to allow certain interlocutory processes.

Analysis:

To allow the claim to proceed at this advanced point in the procedural history of the proceeding would require the parties to embark upon any further steps that would involve further material delay, time, and expense.  To allow the Inducing Breach Claim to proceed in the circumstances would not well serve the overarching purpose of achieving the just, efficient, timely, and cost-effective resolution of the real issues in dispute. 

TeleChoice has had more than an ample opportunity to properly formulate its claims in this proceeding. Insofar as it now seeks to properly articulate a claim based on the Actual Telstra Rates, it has failed to do so.

Even if the Court was satisfied that a proper basis for the inducing breach of contract claims had been established, case management, CP Act, and Aon-related considerations, when considered together with the risk of prejudice to the Optus Entities, would have resulted in the refusal of leave to amend to include the inducing breach of contract allegations and claims at this time in any event. 

To allow amendments of the kind contemplated to further delay the progress of this matter towards trial would not be consistent with the court’s or the parties’ respective obligations under the CP Act or the overarching purpose.

It was also observed by the judge that there has been no adequate explanation put forward as to why, when the first statement of claim was prepared in 2013, it was not until late 2021 that the proposed claim has been introduced, albeit inadequately.

Noting the other matters raised, the CP Act and case management issues are further reasons sufficient of themselves not to allow the amendments relating to the Actual Telstra Rates to be made.

Conclusion:

TeleChoice should not be given a further opportunity to re-craft the further amended statement of claim (Fourth FASOC) so as to re-introduce a misleading and deceptive conduct claim based on the so-called Actual Telstra Rates referred to in paragraph 16(b) or the alleged Telstra market share related increased sales volumes referred to in paragraph 16(c) and Part C of Annexure A.