FEDERAL COURT OF AUSTRALIA

Frigger v Trenfield (No 3) [2020] FCA 150

ORDERS

THE COURT ORDERS THAT:

1.    The applicant's interlocutory application for leave to amend the originating application to include a defamation claim is dismissed.

2.    Costs are reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Edited from the transcript)

JACKSON J:

1    The applicants have applied for leave to amend the originating application in these proceedings. They wish to add a claim for what are described as non-economic damages for defamatory imputations alleged to have been published in a letter which the first respondent, Ms Trenfield, sent to the Australian Financial Complaints Authority on 27 September 2019.

2    The background to, and issues in the present proceeding, have been comprehensively described in Frigger v Trenfield [2019] FCA 1746 and Frigger v Trenfield (No 2) [2019] FCA 2009, and I will not repeat those descriptions here. Suffice to say that the present issues do not include any question of defamation, although for reasons I will mention, there is some overlap between the issues that are raised by the proposed defamation claim and the present issues in the proceedings.

3    It is not necessary to go into the content of the letter of 27 September 2019, which was before the court, or the nature of the defamatory imputations with the Friggers wish to allege arise from that letter, in any detail. The letter was sent in response to a complaint which the Friggers sought to make to the Australian Financial Complaints Authority in relation to the conduct of Commonwealth Securities Limited (CommSec) in respect of the share portfolio administered by that company, which is described in more detail, in particular, in Frigger v Trenfield (No 1).

4    The applicants say that in that letter, Ms Trenfield made statements concerning the beneficial ownership of the shares which are comprised in the ComSec portfolio, which were capable of conveying defamatory imputations. It is apparent that there is scope for overlap between the issues that would be raised by any claim for defamation relying on the letter, and certain issues which arise in the present proceeding, which also concern the ownership of the CommSec portfolio.

5    The applicants submitted that it is 'almost mandatory' for a court to give leave to amend to add a proposed new claim so that all the real issues may be tried without multiplicity of proceedings. To the extent that this is a submission that the court's discretion is somehow confined by that consideration, I do not accept it. While it is, of course, a powerful consideration to be addressed in any application to amend, the authorities make it clear that ultimately the power to give or refuse leave to amend an application is a matter for the discretion of the court. That is a discretion that is to be exercised by reference to all relevant factors, which inevitably include the overarching objective found in s 37M of the Federal Court of Australia Act 1976 (Cth) to facilitate the just resolution of disputes according to law, and as quickly, inexpensively, and efficiently as possible. Justice Wigney summarised the general principles that commonly apply in relation to the exercise of the discretion in Rush v Nationwide News Pty Ltd (No 2) [2018] FCA 550; (2018) 359 ALR 564 at [25]-[30].

6    I have already referred to the overlap between the issues that arise in the present proceeding, and issues that are likely to arise if leave to amend is given to add the defamation claim. Apart from the issues concerning ownership of the CommSec portfolio which I have already mentioned, in the proceeding as presently constituted the applicants seek the removal of the first respondent (not the second respondent, Mr Allen). They do so on the basis, among others, that in communicating with parties including the Australian Financial Complaints Authority, Ms Trenfield has breached obligations to act honestly and impartially that are found in r 42-10 of the Insolvency Practice Rules (Bankruptcy) 2016 (Cth) and to communicate in a professional manner as required by r 42-15 of those rules.

7    I accept that is another respect in which the letter of 27 September 2019 may be relevant to both the present proceeding and the proposed new defamation claim. However, I do not consider that these areas of overlap, while substantial, are sufficient to justify the amendment of the originating application so as to include the defamation claim. My reasons for that are as follows.

8    Firstly, I do not accept the submission made by the applicants that adding the defamation claim is not going to delay the resolution of the present proceedings. It is notorious that defamation claims can give rise to difficult and intricate issues of fact and law which, in their nature, are likely to be quite different to the issues which will require to be resolved in the present proceedings, albeit there will be some overlap between the two.

9    As an example of that, if one turns to the notice of concerns which the applicants have provided in relation to the defamation claim, it contains allegations about their conduct concerning, for example, the filing of tax returns, which go beyond the questions of the beneficial ownership of the relevant assets and the conduct of the trustee that are presently raised in the proceeding. I therefore consider that if a potentially complicated and contentious defamation claim is added to the present proceedings, it is likely to delay its just resolution in a speedy and efficient way.

10    The second concern I have about giving leave to amend, which is related to the first concern, is that generally defamation proceedings, by their nature, need to proceed by way of pleadings so that innuendos, imputations, and defences can be fully and precisely pleaded out. That is reflected in paragraph 3.2 of the Defamation Practice Note which this court published on 12 November 2019, which provides that due to the nature of defamation proceedings, any defamation proceeding should be commenced by filing an originating application supported by a statement of claim, rather than by a concise statement.

11    So I consider that if a defamation proceeding is commenced by the applicants, it is likely that it would need to proceed by way of pleadings, and that is not easy to reconcile with the manner in which the present proceeding has gone ahead based on affidavits, at least not without significant change to the course of the proceeding which is likely to lead to further significant delay.

12    Thirdly, I do not consider it necessary to provide leave to amend to add the defamation claim because if the applicants do commence separate proceedings, it will be possible for those to be case managed by me so that, to the extent that there is overlap between the issues that emerge, and to the extent that the defamation proceeding can be resolved in whole or in part along with, and without undue delay to, the present proceeding, that can still be achieved.

13    For example, it may turn out that the court determines that it is appropriate to make a decision on the subject of a beneficial ownership of the shares in the CommSec portfolio in the course of the present proceeding, and that may limit such issues as may arise, for example, in relation to a plea of justification in any defamation proceeding.

14    All in all, I do not consider that adding a defamation claim to this proceeding will facilitate the just resolution of the matter according to law as quickly, inexpensively, and efficiently as possible. The overriding goal of the court, in particular given the way that the present proceeding has evolved, is to achieve a trial of the present proceeding so that the issues in it can be resolved as soon as possible. It is likely to be inconsistent with the achievement of that goal to permit the issues covered by the present proceeding to grow more than they already have, especially given the clearly adversarial relationship of the applicants and the respondents, as evidenced by the conduct of, and evidence in, this proceeding. To add a further claim of a different nature to the present claim is simply likely to be productive of further issues which are going to delay the resolution of the issues that have already arisen.

15    I record that my decision on the application to amend has not been influenced by submissions made by either party to the effect that their claim or defence, as the case may be, is bound to succeed. Whether the claim or any defences will succeed is a matter likely to require evidence to determine, and for the reasons I have given is best resolved within the framework of the established process of resolving defamation claims on the basis of pleadings.

16    For those reasons, the application for leave to amend the originating application to include the defamation claim is dismissed.

Associate:

Dated:    18 February 2020