- On 18 January 2003, the Canberra bushfires destroyed Australian National University’s (“ANU“) Mt Stromlo Observatory . ANU’s insurance policy distributed the risk between three insurers.
- ANU commenced proceedings in December 2004 in the ACT Supreme Court against the insurers.The insurers filed defences arguing that ANU understated the value of the premises and omitted certain buildings.
- ANU filed an amended statement of claim joining its broker, Aon Risk Services Pty Ltd (“Aon“) as fourth defendant. The amended statement of claim raised an alternative claim against Aon that it was negligent in failing to arrange insurance coverage for the omitted property.
- The proceedings were set down for a trial commencing on 13 November 2006. ANU sought leave to amend its statement of claim against Aon to allege a different contract of service and add a claim that Aon was negligent by failing to state the correct value of the properties.
- The Supreme Court granted ANU’s application to amend. Aon appealed to the High Court.
- The High Court allowed Aon’s appeal, holding that to allow ANU to amend their pleadings would have too great a prejudicial effect on Aon.
- Reasons for this included the substantive nature of the amendments, the trial date had already been set, no explanation had been given for the late amendment, and costs would be an inadequate remedy.
Significance on Civil Procedure
- The High Court majority made a number of general statements of principle concerning applications for leave to amend pleadings. These include:
- The fact of substantial delay and wasted costs (the concerns of case management) will be importance for an application for leave to amend.
- Parties seeking leave to amend pleadings at a late stage should ensure that there is an adequate explanation for the delay.
- A party’s ability to change pleadings will be limited, particularly if the litigation is advanced – a party has an opportunity, not a right, to change pleadings.
- The effect on other litigants and the public as a whole will be considered.
- An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim subject to payment of costs by way of compensation.
“…the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost- effective resolution of a dispute has an effect upon the court and upon other litigants.”
(Gummow, Hayne, Crennan, Kiefel and Bell JJ at )
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