JURISDICTION	:	DISTRICT COURT OF WESTERN AUSTRALIA 
IN CIVIL 

LOCATION	:	PERTH 

CITATION	:	RILEY -v- THE BUZZ CORP PTY LTD [2012] WADC 55 

CORAM	:	DAVIS DCJ 

HEARD	:	23 & 30 MARCH 2012 

DELIVERED	:	5 APRIL 2012 

FILE NO/S	:	CIV 2469 of 2007 

BETWEEN	:	MICHAEL MARK RILEY
First Plaintiff
 
RILAND PTY LTD
Second Plaintiff
 
AND
 
THE BUZZ CORP PTY LTD
First Defendant
 
KEVIN ALSTON FLYNN
Second Defendant
 
ANTONIO CANTONI
Third Defendant 

Catchwords:
Practice and procedure - Late application for leave to amend defences - Costs order against solicitor - Application by plaintiffs for indemnity costs 
Legislation:
Trade Practices Act 1974 (WA)
District Court Rules 2005
Rules of the Supreme Court 1971
Legal Profession Act 2008 (WA) 
Result:
Defendants' application for leave to amend granted
Plaintiffs' application for indemnity costs refused 

Representation:
Counsel:
First Plaintiff	:	Mr R A Blow
Second Plaintiff	:	Mr R A Blow
First Defendant	:	Mr P G McGowan
Second Defendant	:	Mr P G McGowan
Third Defendant	:	Mr P G McGowan 
Solicitors:
First Plaintiff	:	Gadens Lawyers
Second Plaintiff	:	Gadens Lawyers
First Defendant	:	Vincent Partners
Second Defendant	:	Vincent Partners
Third Defendant	:	Vincent Partners 

Case(s) referred to in judgment(s):

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Hyatt v BHP Biliton Iron‑Ore Pty Ltd [2010] WADC 131
Lai v Tiao (No 2) [2009] WASC 22
May v Thomas [2008] WASCA 215
McWilliams Wines Pty Ltd v LS Booth Wine Transport (1992) 25 NSWLR 723
Miller v Evans [2010] WASC 127 (S)
Permanent Mortgages Pty Ltd v Vandenbergh [2009] WASCA 156
Re Malley SM; Ex Parte Gardner [2001] WASCA 83
Ridehalgh v Horsefield [1994] 3 All ER 848
Rodwell v Hutchinson [2010] WASCA 197
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129(S)
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
University of Western Australia v Gray (No 17) [2007] FCA 924
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290
Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679

1	DAVIS DCJ: The defendants in this action have applied by chamber summons dated 10 February 2012 for leave to amend their defences.  The application is a late one, as the matter has been listed for trial with trial dates allocated to commence on 21 May 2012.
2		The defendants initially sought leave to amend in accordance with minutes of proposed amended defences dated 31 January 2012, filed separately for each defendant.  There was a change in counsel for the defendants and fresh minutes of proposed amended defences dated 19 March 2012 were filed.  As a result of difficulties identified during the hearing of this application relating to terminology and form, another two versions have been produced of the proposed further re‑amended defence of the first defendant (which will be mirrored in the proposed amended defences of the second and third defendants).  The latest proposed further re-amended defence is dated 30 March 2012.
3		The application for leave to amend is opposed by the plaintiffs.  The principal ground on which the amendments are opposed is the delay in bringing the application.  The amended defences raise matters not previously pleaded which the plaintiffs say should have been raised earlier in the proceedings.  The plaintiffs submit that they will suffer undue prejudice if the defendants are allowed to amend their pleadings and, if the amendments are granted, the plaintiffs would need to file a reply to raise issues of estoppel.
Legal principles
4		The relevant principles to be applied on an application to amend a pleading are well known.  As set out by Newnes AJA in May v Thomas [2008] WASCA 215 [33] - [34], in general, a party should be permitted to amend their pleading so that the court may decide all matters in issue between the parties, unless the amendment would cause an injustice to the other party which could not be adequately remedied, for instance by an order for costs.  The party seeking the amendment bears the burden of persuading the court that the amendment will not cause irremediable prejudice to the other party.  However, the party opposing the amendment ordinarily bears the evidential onus of adducing evidence in relation to the prejudice, at least where the proof of that prejudice lies in the hands of that party.  It is not sufficient for a party to rely on prejudice which results from an unreasonable act or omission on the part of that party.
5		When considering whether it is just to grant leave to amend at a late stage in the proceedings, the following competing factors must be taken into account and balanced:
1.	the reasons for delay in making the application;
2.	the prejudice to the applicant if leave is not granted;
3.	the prejudice to the other party or parties if leave is granted; and
4.	the impact on the public interest if leave is granted.
See: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290; Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323.
6		On the issue of delay, it is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case.  Much may depend upon the point the litigation has reached relative to trial when the application to amend is made: Aon [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
7		While a just resolution of proceedings remains paramount in the exercise of the discretion on whether or not to grant leave to amend, and the parties should be given a proper opportunity to plead their case, limits may be placed upon re-pleading when delay and cost are taken into account.  An order for costs may not always provide sufficient compensation and therefore achieve a just resolution: Aon [98] (Gummow, Hayne Crennan, Kiefel and Bell JJ).
8		In relation to prejudice, a relevant factor weighing in favour of allowing leave to amend is that the proposed amendments do not extend in any material way the factual ambit of the action and the amendments are not of such a nature that, if allowed, would prejudice the other party in the conduct of the trial: Permanent Mortgages Pty Ltd v Vandenbergh [2009] WASCA 156 [21] and [22].
9		As to the impact on the public interest, the proper exercise of the court's discretion involves taking into account inefficiencies in the use of the court as a publicly funded resource arising from the vacation or adjournment of trials (which has an impact not only upon the parties but also other litigants seeking a resolution of their cases), and the need to maintain public confidence in the judicial system: Aon [5], [27] and [35] (French CJ), [111], [113] and [114] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The background to this application 
10		The background to these proposed amendments is that on 30 August 2011 the plaintiffs filed a re-amended statement of claim in accordance with an order of the court made 15 August 2011.
11		The defendants were ordered to file and serve any amended defences by 14 September 2011.  The defendants obtained two extensions of time to do this, one extension granted on 19 September 2011, with the defendants given until 10 October 2011 to file their amendments and the second extension granted on 19 October 2011, extending the time for compliance until 2 November 2011.
12		On 2 November 2011 the defendants made another application to extend the time for the filing of the amended defences for another four weeks until 30 November 2011, along with other orders. The application was heard by Deputy Registrar Hewitt on 29 November 2011 and dismissed, with an order that the defendants pay the plaintiffs' costs of the application in any event.  I have been unable to find any recorded reasons as to why the application was dismissed. Perhaps it was because the delay was not adequately explained.  The Deputy Registrar had before him an affidavit sworn 28 November 2011 by a solicitor employed by the solicitors on the record for the defendants ('the solicitor').  The only explanation given was that the solicitor had been working on drafting the amended defences since 1 September 2011 but had, since then, 'been distracted by urgent or unavoidable commitments on other files'.
13		This matter then went to a listing conference on 19 December 2011 when the trial dates for May this year were allocated.  On 22 December 2011 the solicitors for the defendants faxed through three proposed amended defences.  There was a directions hearing before Acting Principal Registrar Kingsley on 30 January 2012 when, among other directions, it was ordered that any application by any party was to be filed and served on or before 10 February 2012, with the first return date of 13 February 2012, the date to which the directions hearing was adjourned. 
14		The defendants then filed their chamber summons for leave to amend their defences dated 10 February 2012, together with colour copies of the proposed amended defences, showing the proposed amendments to the further re-amended defence of the first defendant in red, blue and green, (the amendments in green being the latest proposed amendments) and the proposed amendments of the defences of the second and third defendants in red. 
15		On 13 February 2012 directions were made for the filing of an affidavit in support of the application by the defendants and the filing of submissions by each party, with the defendants' application listed as a special appointment before a judge.
16		At the first hearing of this application before me on 23 March 2012, among other matters raised in opposition to the proposed amendments there were some difficulties raised by the plaintiffs in relation to the use by the defendants of the term 'COMET Consulting Agreement' as defined in the statement of claim, leading to some confusion (although in my view that the confusion arose, in part, from the way in which the term was both defined and then used in the statement of claim).  I adjourned the hearing for seven days to, among other things, enable the parties to address this.  A further revised minute of the proposed further re-amended defence of the first defendant was produced and filed, dated 29 March 2012.  This addressed other concerns of the plaintiffs and narrowed the matters in dispute.
17		At the adjourned hearing of this application the plaintiffs raised some further matters related to form, and not substance, of two particular paragraphs of the proposed amendments.  A further minute of the proposed further re‑amended defence of the first defendant was filed by the defendants on 30 March 2012 and what is set out in that minute are the proposed amendments with which I will deal.
The proposed amendments
18		It is necessary to say something about the plaintiffs' claim.  The first plaintiff is a business consultant and sole director of the second plaintiff.  The second plaintiff carried on the business of supplying the first plaintiff's services as a business consultant.  It is alleged that in November 2006 the first defendant agreed to employ the first plaintiff as its CEO after he provided consulting services to the first defendant under a Commonwealth Commercialising Emerging Technologies Grant.  This is referred to in the statement of claim as the COMET Consulting Agreement.
19		The agreement by which it is alleged the first defendant was to engage or employ the first defendant as its CEO is a separate agreement, defined as the CEO Agreement, pleaded to have been made partly orally and partly in writing.  The written part of the CEO Agreement is said to comprise a PowerPoint presentation which the first plaintiff gave to the first defendant's board of directors on 27 November 2006 and the oral portion of the CEO Agreement comprises the presentation which the first plaintiff made to the first defendant's board of directors and a subsequent conversation that he had with the second defendant.  It is alleged that the CEO Agreement contained terms that the first plaintiff would undertake the COMET Consulting Agreement and upon completion of that, he would be appointed as CEO on a particular remuneration package.
20		It is pleaded that the first plaintiff did complete the 
COMET Consulting Agreement and thereafter the first defendant failed to employ him, in breach of the express terms of the CEO Agreement made in November 2006.  The particulars of the breach are that on or about 13 June 2007 the first plaintiff received from the second defendant an email enclosing a draft employment agreement containing a remuneration package different to the express terms of the CEO Agreement, and then, by emails dated 19 and 21 June 2007, the first defendant advised that it would not change its position and would not employ the first plaintiff.
21		In the alternative to the contractual claim it is alleged that if there was not a binding contract made as pleaded, the promises made to employ the first plaintiff as the first defendant's CEO were representations made in trade and commerce in respect of a future matter and were misleading and deceptive contrary to s 52 of the Trade Practices Act 1974 (Cth). 
22		In all versions of the defences filed on behalf of the defendants it was not admitted that the first defendant was a company engaged in trade and commerce within the meaning of the Trade Practices Act. 
23		In the first amendments made to the first defendant's defence it was not admitted that the CEO Agreement had been made, but it was admitted that the first defendant had negotiated with the first plaintiff concerning his possible employment with the first defendant.  It was also admitted that the first plaintiff provided services to the first defendant in respect of the COMET Consulting Agreement and further admitted that the first defendant did not offer the first plaintiff the remuneration package as pleaded in the statement of claim, but that was because the first defendant was not bound to do so.
24		In the latest version of the proposed amendments, par 3 of the further re‑amended defence dated 30 March 2012, there is an expanded pleading of what the defendants say was the contractual relationship between the parties.  These amendments are not opposed by the plaintiffs.  It is important to set these out to understand the amendments which are opposed.  The first defendant:
(a)	admits that there were negotiations between the first plaintiff and the first defendant concerning the possible employment by the first defendant of the first plaintiff;
(b)	states that it (the first defendant) did not agree to employ the first plaintiff on any terms whatsoever during the negotiations pleaded in 3(a) above or otherwise; 
(c)	states that on 28 November 2006 the second defendant (on behalf of the first defendant) forwarded to the first plaintiff a draft agreement headed 'ISPire NETWORKS PTY LTD – CONTRACT FOR PROVISION OF CONSULTANCY SERVICES' ('the Draft Contract');
(d)	states that between 28 November 2006 and 29 May 2007, the Draft Contract was amended at the request of the first or second plaintiff or both;
(e)	states that on or about 29 May 2007, the first plaintiff signed the final version of the Draft Contract on behalf of the second plaintiff and the second defendant signed it on behalf the first defendant ('the Contract for Consultancy Services');
(f)	states that the Draft Contract, all subsequent amended versions of it and the Contract for Consultancy Services provided that the first defendant would engage the first or second plaintiff as the first defendant's CEO (as defined in the re-amended statement of claim), subject to finalisation of an employment contract;
(g)	admits that the first plaintiff (as the 'nominated resource' of the second plaintiff specified in the Contract for Consultancy Services) completed the work required of the second plaintiff pursuant to the Contract for Consultancy Services on or about 13 April 2007;
(h)	admits that the first plaintiff (as the second plaintiff's 'nominated resource' pursuant to the Contract for Consultancy Services) provided services to the first defendant in respect of the Contract for Consultancy Services and further admits that it (the first defendant) did not offer the first plaintiff the remuneration package as it is pleaded in the re‑amended statement of claim and adds that the first defendant was not bound to do so.
25		In relation to the alleged representations made in breach of s 52 of the Trade Practices Act, the first defendant has, since the first amendments to its defence, always stated that it did not make any representations as alleged.
26		Following the hearings before me, the proposed amendments which are in dispute have been narrowed to two aspects:
1.	a change from the non-admission that the first defendant was engaged in trade and commerce to a denial that it was so engaged, and to add an explanation as to why it was not so engaged: par 2 of the first defendant's minute of amended defence. What is now proposed to be pleaded is that:
(a)	the first defendant was not providing or offering goods or services for reward either at all or, in the alternative to the general public, 
(b)	the first defendant intended to seek to raise a minimum amount of capital from private investors by no later than mid 2007 and if it failed to do so, then it was possible it would not proceed to commence offering goods or services to the general public for reward;
(c)	any negotiations for a contract of employment between the first defendant and the first plaintiff were not and are not in trade and commerce within the meaning of the Trade Practices Act; and
(d)	the first plaintiff was attempting to interest the first defendant in employing him.
2.	an expansion of the defendants' response to the alternative claim brought pursuant to the Trade Practices Act, to raise alternative defences that if the alleged representations were made (which is denied), the defendants: 
(a)	deny that the representations were made in trade and commerce: par 6(c)(ii).  This follows from the proposed amendments to par 2;
(b)	deny that the first plaintiff relied on the alleged representations or any of them, alternatively the first plaintiff ceased to rely on the alleged representations or any of them on the happening of one or more of the following events: when the Draft Contract was provided to the first plaintiff or the second plaintiff; when amended versions of the Draft Contract were provided to the first plaintiff or the second plaintiff; and, or, when the Contract for Consultancy Services was executed by the second  plaintiff (through the agency of the first plaintiff).  Particulars provided set out the chronology of when the plaintiffs allege that the representations were made (27 November 2006) and when the Draft Contract and other contractual documentation were provided to the plaintiffs (28 November 2006 and following): par 6(c)(iii);
(c)	state that the representations were qualified by the terms of the Draft Contract, the amended versions of the Draft Contract and the Contract for Consultancy Services: par 6(c)(iv).
The reasons for the delay
27		Two affidavits in support of the defendants' chamber summons filed 10 February 2012 have been sworn by the solicitor – one affidavit sworn 10 February 2012 and a second affidavit sworn 17 February 2012.  The latter affidavit attempted to explain the delay.  Interestingly this affidavit gave a different explanation from that given in the solicitor's affidavit sworn 28 November 2011.
28		In pars 10 to 13 of his affidavit sworn 17 February 2012 the solicitor deposed to the fact that he did not have regard to the provisions of r 48A of the District Court Rules 2005 until mid‑December 2011, wrongly assuming that amendments could be made to the defences without leave.  It was submitted to me during the hearing on 23 March 2012 that under the Rules of the Supreme Court 1971 amendments can be made without leave at any point up to seven weeks before trial and that the solicitor wrongly assumed the Rules of the Supreme Court applied and proceeded on the basis that leave was not required.  That is a matter which I cannot accept given the orders which were made by the court, and extended on two occasions, for the defendants to file their amended defences, together with the refusal of an extension of time to comply with those orders on 28 November 2011.  The solicitor knew that there was an order with which he (and his clients) had to comply.
29		In par 23 of his affidavit sworn 17 February 2012, the solicitor also stated that he received the plaintiffs' experts report on or about 26 October 2011 and that necessitated him spending time trying to retain a valuer and taking instructions on the report.  He said that he was also occupied by the need to make an all encompassing application in the action in which he sought to deal with a range of issues.  However he said he left the application too late and served it late and that was why the application was dismissed.  He deposed that there were some ambiguities in the plaintiffs' re-amended statement of claim and he had to wait for these to be corrected before making further amendments.  Finally, he briefed counsel in mid‑December 2011.  As a result of briefing counsel, further amendments to the defences were required and took some time.  In my view none of these matters adequately explain the delay.  Further, if counsel was required to represent the defendants in this action and settle the amended defences, counsel should have been briefed much earlier than December 2011.
30		On 20 March 2012, the defendants' solicitors filed submissions.  Although this is not contained in affidavit form, the submissions contained an explanation for the fresh set of proposed amended defences filed on 19 March 2012.  The defendants' counsel advised on 8 March 2012 that he could no longer act and new counsel was briefed and again amended the proposed defences.
31		In the submissions filed on behalf of the defendants it was stated that 'the delay in filing the defences is not the fault of the defendants and they therefore should not be prejudiced thereby'.  I have taken this to mean that the delay is the fault of the defendants' solicitors.  This leads to cost consequences for the solicitors, which I raised during the hearing of the application and will address later in these reasons.  
32		In relation to the first factor which I must take into account when considering whether to allow these late amendments to the pleadings, I find that the delay results largely from the failure to comply with court orders, which has not been adequately explained, however, the delay is not the fault of the defendants, rather it is the fault of the solicitor.  The responsibility of the solicitor is a material matter to take into account in the exercise of my discretion: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196, 202.
33		In the submissions made on behalf of the plaintiffs, reliance was placed on the delay and the principles in Aon, particularly at [111], where it was stated that the fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Although I accept that the defendants' delay in this case, following the plaintiffs' amendments in August last year, does raise wasted costs and is contrary to case flow management principles, the delay is not the only factor I must take into account.  As was stated in Aon at [111], all matters relevant to the exercise of a power to permit amendment should be weighed.
Prejudice to the defendants (applicants) if leave is not granted
34		In relation to the proposed amendments to par 2 and par 6(c)(ii), Counsel for the defendants submitted it was always the case that the plaintiffs would have to prove as a positive part of their case that the first defendant was engaged in trade and commerce.  He explained the reasons for bringing the amendment was to 'plead out the particularity' so that the plaintiffs may better understand why the defendants say there was no trade and commerce.  This was a factual matter followed by legal submissions, which was always going to be the course to be followed at trial.
35		As to the proposed amendments par 6(c)(iii) and (v), counsel for the defendants again explained that these were to provide 'more specific illustrations' of how the defendants' case that there was no reliance will be put in cross-examination and in closing, subject to the evidence.  The amendments to par 6 spelled out the lines of cross‑examination that would be put to the first plaintiff and what the defendants say are the sequential arrangements between the parties with the new definitions pleaded in par 3 (which I have set out at [24]). These pleadings were to make it clear that there was no agreement, let alone any representation about an agreement, in relation to the first plaintiff being employed as the first defendant's CEO.  It was submitted that almost all of these matters would be canvassed at trial, irrespective of whether leave to amend was granted, but the defendants had taken the view that a more fulsome defence would assist the plaintiffs and the trial judge.
36		There was no suggestion that if the amendments were not allowed there would be any material prejudice to the defendants.
Prejudice to the plaintiffs (respondents)
37		In relation to the proposed amendments to par 2 and par 6(c)(ii), there can be no surprise or prejudice to the plaintiffs in the denial that the first defendant engaged in trade and commerce.  As O 20 r 14 of the Rules of the Supreme Court provide, traverse may be made either by a denial or by a statement of non‑admission.  Whether the first defendant engaged in trade and commerce has always been in issue, as it was never admitted.
38		The onus is on the plaintiffs to establish that the first defendant or its directors have, in trade and commerce, engaged in conduct which is false or misleading.  The defendants could argue, based on the evidence at trial, that any representations allegedly made in relation to the first plaintiff's employment as the first defendant's CEO were not made in trade and commerce. In my view this is a matter that could always be raised by the defendants, as a matter of mixed fact and law: see Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, McWilliams Wines Pty Ltd v LS Booth Wine Transport (1992) 25 NSWLR 723; Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679.
39		There was no affidavit filed on behalf of the plaintiffs deposing to any further evidence which they would need to adduce in light of the proposed amendments or otherwise setting out why these pleaded matters would extend the trial or in some way prevent the trial proceeding. 
40		What was submitted to me was that there was prejudice to the plaintiffs because, while the plaintiffs were required to show that the first defendant was engaged in trade and commerce, there was now a 'focus point' being placed on that issue.  It was put to me that if this matter had been raised at the outset 'we would clearly have given this issue far more attention'.  I am unable to accept this submission.  The plaintiffs and their legal advisers must have known each of the elements they need to prove in order to establish a breach of the Trade Practices Act, and should have already canvassed whether or not representations made in the course of negotiations relating to a contract for the employment of the first plaintiff as the first defendant's CEO would be representations made in trade and commerce.
41		During the hearing on 23 March 2012 counsel for the plaintiffs conceded that when it came to prejudice, these proposed amendments to par 2 and par 6(c)(ii) of the first defendant's minute of further amended defence was 'of the least impact from a prejudicial point of view'.
42		I am not satisfied that the plaintiffs will suffer any prejudice if I grant leave to the defendants to amend their defences in accordance with par 2 and par 6(c)(ii) of the first defendant's minute of further amended defence.  The amendments do not raise any new factual issues for the plaintiffs, since they have always born the burden of proof on the issue of whether the first defendant was engaged, and the representations made, in trade and commerce.  There is still time before trial begins for the plaintiffs' solicitors and counsel to prepare in relation to that point, particularly when I take into account the fact that they have had notice of these proposed amendments since the first version of the proposed amended defences dated 31 January 2012.
43		I turn now to the matters pleaded in par 6(c)(iii) and (iv) of the first defendant's minute of further re-amended defence which raise issues relating to the first plaintiff's reliance on the representations (if they are found to have been made).
44		Whether or not there was reliance on the representations is, again, an issue on which the plaintiffs bear the onus of proof and on which the defendants can always cross‑examine.  Presumably the plaintiffs intend that evidence will be given of all the circumstances involving the first plaintiff and the officers of the first defendant, the discussions held between them concerning the employment of the first plaintiff as the first defendant's CEO, and subsequent discussions including events which later followed in June 2007 and which the plaintiffs say constituted a breach of the CEO Agreement.
45		Again, there was no affidavit evidence of any prejudice to the plaintiffs by reason of these proposed amendments, but it was submitted on behalf of the plaintiffs that if these amendments were allowed they would need to file a reply to those allegations to raise estoppel and to deal with further misleading and deceptive conduct by the defendants, leading to significant additional work to the plaintiffs.  The nature of the proposed reply and new Trade Practices Act claim were outlined to me from the bar table.  
46		If, as it was submitted to me, there was other conduct by the first defendant or its officers which was misleading and deceptive and related to the issue of the first plaintiff's employment as CEO, that raises a question as to why the plaintiffs did not include this in the statement of claim.  A new claim under the Trade Practices Act is not a matter which can be raised in a reply and this is a matter which should always have been raised in the statement of claim: see Seaman, Civil Procedure Western Australia at [20.5.1]; University of Western Australia v Gray (No 17) [2007] FCA 924 [20] and [42] (French J); Hyatt v BHP Biliton Iron‑Ore Pty Ltd [2010] WADC 131 [13] to [16] and [22].
47		While it was conceded that a reply could be prepared and filed in plenty of time before trial, it was argued that the plaintiffs should not have to deal with a new issue after four years (although it was conceded that had these matters been pleaded in September 2011 as originally ordered there would have been no complaint) and it would be prejudicial to the plaintiffs because they would not have as much time to then deal with the other matters to do with the case.
48		I consider it unlikely that these proposed amendments will cause any difficulty to the plaintiffs and I am not persuaded that there is any real prejudice to the plaintiffs, certainly not to the extent which has been submitted to me. 
49		As a matter of both pleading and submission on the facts as they are established at trial, it will be open to the defendant to say that the first plaintiff did not rely and could not have relied on the representations which were made, because of the facts and circumstances which existed at the time, as led in evidence.  The defendants' case is that all of the contractual documents made it clear that there was no agreement and no representation.  All of the contractual documents are now pleaded in the proposed amendments which are not opposed and will be led in evidence at the trial. In my view the additional matters now raised by the proposed amendments in par 6(c)(iii) and (iv) are all part of the factual matrix which will be canvassed in evidence at trial.  
The public interest
50		The principal consideration when looking at the impact on the public interest is whether to allow the amendments is likely to necessitate an adjournment of the trial.  
51		The issue of whether the representations were made in trade and commerce is a matter on which, as I have already observed, the plaintiffs have always had the onus of proof.  The question of whether or not the first plaintiff relied on the alleged representations (if they are found to have been made) will be canvassed in evidence and the matters raised by the defendants fall within the factual matrix to be considered at trial.  The witnesses which each party will need to call will not change.  There is no suggestion by either party that the proposed amendments to the defences would require an adjournment of the trial.
52		I find that these amendments will not prolong or delay the trial or lead to its adjournment and that the amendments are not of such a nature that, if allowed, would prejudice the plaintiffs in the conduct of the trial.  In my view the plaintiffs can fairly and reasonably address all of the issues raised in the time available before trial.  
Conclusions on the application for leave to amend
53		Having considered and weighed all the factors in light of the applicable principles, I am satisfied that the interests of justice favour the granting of leave to the defendants to plead the matters raised in par 2 and par 6 of the first defendant's minute of further re-amended defence dated 30 March 2012.
54		I am not satisfied that there will be any real prejudice to the plaintiffs by granting leave to the defendants to make these amendments.  There is no suggestion that any additional witnesses will be required.  The amendments raise matters which would always be canvassed at trial and will not extend in any material way the factual ambit of the action.  Both of the points sought to be raised by the amendments could not be avoided at trial.  Granting leave will allow the just determination of the issues in dispute between the parties.  In fact the conduct of the trial is likely to be enhanced by these amendments because they more clearly define the issues.
55		There is no reason why the plaintiffs cannot deal with the defendants' cases as amended between now and the trial to commence on 21 May.  The plaintiffs have had notice of the substance of the amendments (although the form of pleading has changed) for some weeks.  There is still time for the filing of a reply to raise issues of estoppel if, indeed, one is required, before the commencement of the trial.  I am satisfied that this will not prejudice the trial dates and both parties can reasonably address the matters arising from both the amendments and any reply in the time prior to trial.
56		This is not, in my view, a case where it is too late for a further amendment: Aon [102].
57		I will grant the defendants leave to amend their pleadings accordingly.
Costs
58		On the issue of costs, the usual order on an application for leave to amend is that the party seeking the amendment pays the other party's costs in relation to the application, as well as any costs thrown away by reason of the amendment.
59		On the basis of the delay in bringing this application, particularly given that there had been a failure to comply with the orders of this court which was due to the fault of the solicitor and not the defendants, along with the written submissions by the defendants' solicitors that 'the delay in filing the defences is not the fault of the defendants', I raised during the hearing of this application whether an adverse costs order should be made against the defendants' solicitors.  Order 66 r 5 of the Rules of the Supreme Court provides that the court may order any practitioner to pay costs personally if it considers the practitioner to be responsible for 'any improper, unreasonable, or negligent act or omission'.  Order 66 r 5 (2) provides that no order under that rule should be made against a practitioner unless he or she has been given a reasonable opportunity to appear before the court and show cause why the order should not be made. 
60		The solicitor was present throughout both hearings on 23 and 30 March 2012 and I was advised that he understood that the effect of the material before the court, particularly the written submissions I have mentioned, exposed him to an order for costs against him personally.  I was also advised that an order against the defendants' solicitors would not be opposed, although it was subsequently requested at the adjourned hearing that I not make an order against the firm of solicitors but rather make it against the solicitor personally.
61		On behalf of the plaintiffs it has been submitted that in relation to the original application brought on 10 February 2012, the appropriate costs order should be that the solicitor pay those costs on an indemnity basis.  In the application, in addition to the orders sought for leave to amend the defences, there were other orders sought which are no longer pursued.  These orders included:
4.	The time for the defendants to provide the experts report be extended to 15 March 2012.
5.	The plaintiffs pay the defendants' costs incurred in relation to the plaintiffs' request that the defendants provide discovery of e‑mails on the account [in the name of the first plaintiff] on an indemnity basis, to the intent that the plaintiff (sic) be completely indemnified for its costs excepting only costs unreasonably incurred or of an unreasonable amount and relevant scale limits not apply, to be taxed.
62		 Counsel for the plaintiffs produced a summary schedule of costs incurred by the plaintiffs with respect to the defendants' application dated 10 February 2012 and argued that the actual costs incurred by the plaintiffs on all matters raised in the original application, including the issue of the indemnity costs order sought by the defendants, exceeded the amount allowable under the Legal Practitioners Supreme Court (Contentious Business) Determination 2010 (WA) ('the Scale').  The Scale limit for an interlocutory application set by item 10(a) is $10,230.  (The plaintiffs' schedule included independent counsel fees, although that independent counsel did not actually appear on the hearing of the application before me, nor did that counsel prepare submissions which were filed and served by the plaintiffs in accordance with the directions made on 13 February 2012).
63		An indemnity costs order departs from the usual orders made on the disposition of an interlocutory application like this one, where costs are usually awarded on a party/party basis.  It is well established that an indemnity costs order will only be made in exceptional circumstances: see Rodwell v Hutchinson [2010] WASCA 197 [29]; Re Malley SM; Ex Parte Gardner [2001] WASCA 83.
64		I have had regard to the principles applicable to the making of indemnity costs orders in litigation as set out in Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129(S) [10].  In summary, the discretion to make an indemnity costs order must be exercised judicially.  There must be some special or unusual feature in the case to justify the exercise of the discretion in that way. Nonetheless, an indemnity costs order may constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct by a party or the party's legal advisers.
65		Assistance as to the meaning of the terms 'improper' and 'unreasonable' can be found in the judgment of Sir Thomas Bingham MR in Ridehalgh v Horsefield [1994] 3 All ER 848, 861 ‑ 862, applied in Lai v Tiao (No 2) [2009] WASC 22 [35]:
'Improper' means what it has been understood to mean in this context for at least half a century. The adjective covers, but is not confined to, conduct which would ordinarily be held to justify disbarment, striking off, suspension from practice or other serious professional penalty … But it is not in our judgment limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can fairly be stigmatised as such whether or not it violates the letter of a professional code.
'Unreasonable' also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the events to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner’s judgment, but it is not unreasonable.
66		I am not prepared to make an indemnity costs order in the circumstances of this interlocutory application.  In my view, there is no special or unusual feature in the application brought by the defendants.  While some parts of the application were misconceived and later not pursued, that does not, in my view, constitute any improper or unreasonable conduct on the solicitor's part.  The basis for the exercise of my discretion under O 66 r 5 was the solicitor's delay and failure to comply with court orders, as a result of which the application for leave to amend was required to be made.  Insofar as the application also included other matters, those other matters which were not pursued do not reflect any improper or unreasonable conduct, but rather reflect on the solicitor's judgment.
67		Further, while there have been some changes in the proposed amended defences filed on behalf of the defendants between 31 January 2012 and 30 March 2012, most of the changes were made after the change in counsel for the defendants in early March.  I must take into account that new counsel needed to be properly briefed and have the opportunity to review the pleadings.  The changes made by the defendants' new counsel addressed many of the concerns raised in the plaintiffs' written submissions in response to the minutes dated and filed 31 January 2012.  The changes which were made to the proposed amended defences after the initial hearing before me on 23 March 2012 were made partly to clarify terminology used (as to which I have made observations at [16] above about the confusion arising from the term COMET Consultancy Agreement and subsequent references to that term in the statement of claim), and partly to address further concerns raised by counsel for the plaintiff in oral submissions following the filing of the minutes of 29 March 2012.  I do not consider it appropriate to penalise, by way of an indemnity costs order, any party, or that party's solicitor, for making further amendments or changes to proposed amended pleadings to meet the other party's concerns or to narrow the issues in dispute on an application for leave to amend. 
68		Finally, s 280(2) of the Legal Profession Act 2008 (WA) permits the court to make a special costs order if it considers that scale costs are inadequate because of the unusual difficulty, complexity or importance of the matter.  To make such an order the court must first form an opinion that the costs otherwise allowable would be inadequate and then form an opinion that such inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S); Miller v Evans [2010] WASC 127 (S).  In my view the defendants' application, even in its original form, did not raise unusually difficult, complex or important matters and it is not appropriate to make any special costs order pursuant to s 280(2) of the Legal Profession Act.
69		Any costs order against the solicitor should be to pay the costs on a party/party basis, to be taxed.  
70		I will hear from the parties as to the appropriate form of the orders which I should make.