Federal Court of Australia

Albert St Group Pty Ltd v Universal Real Estate Vic North Pty Ltd (No 2) [2026] FCA 611

ORDERS

THE COURT ORDERS THAT:

Pleadings

1.    The First Respondent is granted leave pursuant to r 15.05 of the Federal Court Rules 2011 (Cth) (Rules) to file a notice of cross-claim against Riteshkumar Darji (Mr Darji), substantially in the form annexed to the affidavit sworn by Kristy Cappellotto on 7 April 2026.

2.    Any such notice of cross-claim be filed and served by 4 pm on 18 May 2026.

3.    By 4 pm on 19 June 2026, Mr Darji file and serve any defence to the cross-claim.

4.    By 4 pm on 26 June 2026, the First Respondent file and serve any reply to the defence to cross-claim.

Discovery

5.    By 4 pm on 3 July 2026, Mr Darji is to make standard discovery pursuant to r 20.14 of the Rules.

Lay evidence

6.    By 4 pm on 17 July 2026, Mr Darji is to file and serve any affidavits of lay evidence on which he intends to rely.

7.    By 4 pm on 31 July 2026, the First Respondent is to file and serve any affidavits of lay evidence in response on which it intends to rely.

Objections and witnesses

8.    By 4 pm on 7 August 2026, the First Respondent and Mr Darji are to exchange lists of affidavits filed by them upon which they propose to rely at trial.

9.    By 4 pm on 14 August 2026, the First Respondent and Mr Darji are to advise each other of those witnesses required to attend the trial for cross-examination.

10.    By 4 pm on 21 August 2026, the First Respondent and Mr Darji are to exchange lists of objections to affidavit evidence in soft copy, identifying in each case the basis of the objection, including by reference to any relevant sections of the Evidence Act 1995 (Cth), and the First Respondent and Mr Darji are to confer by their counsel to endeavour to resolve those objections.

11.    By 4 pm on 28 August 2026, the First Respondent and Mr Darji are to file a document indicating:

(a)    the objections which they agree are to be upheld;

(b)    any other proposed agreed rulings with respect to affidavit evidence; and

(c)    any remaining objections on which a ruling by the Court is required.

Chronology

12.    Service pursuant to Order 15 of the orders made on 18 August 2025 (Orders) (of the draft proposed chronology of agreed facts) shall also be effected upon Mr Darji.

13.    Order 16 of the Orders (by which the Respondents are to respond to the Applicant’s draft proposed chronology of agreed facts) shall apply equally to Mr Darji.

Court book and tender bundles

14.    Service pursuant to Order 19 of the Orders (of the searchable, electronic copy of the court book with a hyperlinked index and a hard copy of the court book) shall also be effected upon Mr Darji.

Outline of opening submissions

15.    By 4 pm on 15 September 2026, Mr Darji file and serve his outline of opening submissions, limited to 20 pages.

Authorities

16.    Order 25 of the Orders (by which the Respondents are to provide to the Applicant a .pdf copy of each of the authorities and legislation that are referred to in the Respondents’ list and not referred to in the Applicant’s list, together with a soft copy of the Respondents’ list) shall apply equally to Mr Darji.

17.    Service pursuant to order 26 of the Orders (of the consolidated hyperlinked list of authorities and legislation, and joint bundle of the authorities and legislation in electronic form) shall also be effected upon Mr Darji.

Other matters

18.    The Orders made on 18 August 2025 are otherwise confirmed and, for the avoidance of doubt, any reference in those Orders to “the parties” shall include Mr Darji.

19.    Liberty to apply.

20.    Costs reserved.

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

REASONS FOR JUDGMENT

BENNETT J:

1    On 7 April 2026, the First Respondent filed an interlocutory application seeking leave pursuant to r 15.05 of the Federal Court Rules 2011 (Cth) (Rules) to file a notice of cross-claim against Riteshkumar Darji, substantially in the form annexed to the affidavit of Kristy Cappellotto sworn on 7 April 2026. That affidavit also annexes a copy of a draft statement of cross-claim.

2    The parties informed the Court that the Applicant and Second Respondent neither consent to nor oppose the application, and do not seek to be heard in relation to it. Submissions were filed by the First Respondent on 13 May 2026.

Principles

3    Rule 15.04 of the Rules requires a party to file and serve any cross-claim on the date that a defence is due. Rule 15.05(1) provides that where a party does not comply with r 15.04 it must apply for leave. The application for leave must be supported by an affidavit setting out the nature of the cross-claim and its relationship with the subject matter of the proceeding, and reasons why the cross-claim was not filed in accordance with r 15.04.

4    The principles applicable to the grant of leave to file a cross-claim out of time are summarised in Rush v Nationwide News Pty Ltd (No 2) [2018] FCA 550; 359 ALR 564 at [87] (Wigney J):

The principles that are applicable to the grant of leave to file a cross-claim out of time are relevantly the same as those that apply in the case of applications for leave to amend. Relevant considerations include: whether the subject matter of the claim fell within the Court’s jurisdiction; the extent of the delay; whether an acceptable explanation has been provided for the delay; any prejudice to the other party or parties occasioned by the delay; the merits or strength of the proposed cross-claim; the degree of connection between the proposed cross-claim and the subject matter of the principal proceedings; and the desirability that all disputed matters between the parties connected with the subject matter of the proceedings be dealt with in the main trial: Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 33 ALR 127 at 129, 133, 134; Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-9; Sunbeam Corporation Ltd v Breville Pty Ltd [2007] FCA 496; Lendlease Project Management and Construction (Australia) Pty Ltd v Construction, Forestry Mining and Energy Union (No 3) [2011] FCA 912 at [18]; Tada Constructions Corporation Pty Ltd v JP Dixon Real Estate Pty Ltd (No 3) [2012] FCA 329.

5    At the core of the issue is the overarching purpose of civil practice and procedure provisions in s 37M of the Federal Court of Australia Act 1976 (Cth). As the cross-claim proposes to join Mr Darji as a cross-respondent, it is necessary to consider the principles that apply to joinder under r 9.05 of the Rules (Aspect Safety Group Pty Limited v Swift [2022] FCA 904 (Swift) at [23] (Cheeseman J)). Rule 9.05(1) states:

(1)     A party may apply to the Court for an order that a person be joined as a party to the proceeding if the person:

 (a)     ought to have been joined as a party to the proceeding; or

 (b)     is a person:

 (i)     whose cooperation might be required to enforce a judgment; or

 (ii)     whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined; or

(iii)     who should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings.

Evidence

6    The affidavit of Ms Cappellotto addresses the matters relevant to r 15.05 of the Rules in the following manner.

The nature of the cross-claim (r 15.05(2)(a)(i))

7    The Applicant’s statement of claim alleges that the allegedly misleading representations were made by the First Respondent to Mr Darji, and then passed on by Mr Darji to the Applicant. The draft cross-claim contends that this factual circumstance has the consequence that Mr Darji is liable for the Applicant’s loss and damage, rather than the First and Second Respondents. In the alternative, it seeks an order that Mr Darji is a concurrent wrongdoer.

8    By the proposed cross-claim, the First Respondent seeks damages and/or compensation pursuant to ss 236 or 237 of the Australian Consumer Law (ACL) for Mr Darji’s contraventions of ss 18 and/or 30 of the ACL, as well as contribution pursuant to Part IV of the Wrongs Act 1958 (Vic). The material facts pleaded in the proposed cross-claim are substantially adopted from those relied upon in the main claim.

9    I am therefore satisfied it is closely related to the main claim and relates to very similar (if not identical) facts and issues.

Explanation for late filing (r 15.05(2)(a)(ii))

10    The First Respondent’s defence was filed on 23 July 2025. Ms Cappellotto’s affidavit provides the following explanation for not filing the notice of cross-claim on that date:

(1)    On 22 April 2025, the Applicant indicated in correspondence that it intended to join Mr Darji. On 31 July 2025, after the First Respondent’s defence had been filed, the Applicant stated in correspondence that it no longer sought to join Mr Darji.

(2)    The First Respondent’s defence pleaded that Mr Darji was a concurrent wrongdoer. Due to an oversight, the First Respondent’s legal team did not consider until after reviewing the Applicant’s reply, filed on 6 August 2025, that it would be necessary to bring a cross-claim against Mr Darji because the Applicant’s claim under s 30 of the ACL may not be apportionable.

(3)    On 18 August 2025, the Court ordered the parties to attend mediation by 28 November 2025. The First Respondent considered that it was appropriate to await the outcome of mediation prior to seeking to join Mr Darji, to avoid the expense, inconvenience and complications associated with his joinder.

(4)    Following the unsuccessful mediation, which commenced on 3 December 2025 and concluded shortly before the end of 2025, the First Respondent sought and obtained instructions to file this application.

11    In relation to prejudice caused by the delay, Ms Cappellotto states:

Given the matters outlined above, I do not expect that the foreshadowed cross-claim will require the extant parties to amend their pleadings, make additional discovery, file additional evidence or otherwise affect the timetable of the proceeding in any way. I believe that Mr Darji's defence to the cross-claim, discovery and evidence can be incorporated into the existing timetable without the need for any extensions of time or adjournments.

12    The affidavit of Ms Cappellotto contains a draft notice of cross-claim that complies with r 15.02, in compliance with r 15.05(2). The notion that the application would not occasion delay is consistent with the position taken by the Applicant and Second Respondent, who neither consent to, nor oppose, the application.

Consideration

Delay

13    Delay is the main issue in this application. The interlocutory application seeking leave to file the notice of cross-claim was filed over eight months after the cross-claim was required to be filed under r 15.04. I consider that this is a significant delay (see, eg, Swift at [26]).

14    The explanation for the delay after the First Respondent’s legal team realised in August 2025 that a cross-claim would be necessary is unsatisfactory. In Swift, Cheeseman J considered a circumstance where a party deliberately deferred seeking leave to file a cross-claim until after the mediation proved to be unsuccessful. Her Honour observed at [29]-[30]:

As noted, the Swifts, through their solicitor, have frankly acknowledged that they elected to defer seeking leave to file a cross-claim until after the mediation proved to be unsuccessful. That is inconsistent with the requirements of ss 37M(1)(b), (2)(b) to (d) and 37N(1) of the Act. As noted at paragraph [22] above, s 37M(1) provides that the overarching purpose of the practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37M(2)(b) to (d) provides that the overarching purpose includes to facilitate the objectives of efficiently using judicial and administrative resources; efficiently disposing of the Courts overall caseload; and disposing of all proceedings in a timely manner. Section 37N imposes an obligation on parties to conduct proceedings in a way that is consistent with the overarching purpose, and provides that a party’s lawyer must assist the party to comply with that duty.

The deliberate decision by the Swifts to defer bringing the cross-claim within time and consenting to both mediation before a Registrar of the Court and a timetable for the filing of evidence flies in the face of the rule that any cross-claim is to be filed contemporaneously with the defence. It undermines the Court’s ability to facilitate the just resolution of the dispute between the parties in a manner that is quick, inexpensive and efficient and at a cost that is proportionate to the importance and complexity of the matters in dispute. To stand by and consent to mediation, knowing that if the mediation fails, then leave to file a cross-claim out of time will be sought, positively undermines the likely efficacy of mediation. Consenting to an evidence timetable well after the mediation had concluded but before bringing forward the application for leave to file the cross-claim similarly undermines the Court’s ability to manage the proceedings in a way that promotes the overarching purpose.

15    As this passage highlights, the purpose of the Rule which requires the filing of a cross-claim at the time of the defence is, in part, to ensure that all issues that may bear upon the outcome of the matter are ventilated at an early stage. Ms Cappellotto suggests in her affidavit that she sought to avoid the expense and inconvenience of joinder if the matter could, in any event, be resolved. That argument might have some weight, but no explanation is then given for the delay between the conclusion of the mediation in December, and the filing of the application in April. That delay is unsatisfactory. It follows that this factor weighs somewhat against the grant of leave. However, it is submitted that the delay is not so inordinate that the First Respondent ought to be prevented from prosecuting its cross-claim, and the proposed orders do not propose re-visiting steps already undertaken. Importantly I accept that the delay was not taken for tactical or forensic benefit.

Prejudice

16    Ms Cappellotto’s evidence is that she does not expect that the proposed cross-claim would require any amendment to the existing pleadings, additional discovery or evidence.

17    On 18 August 2025, the proceeding was listed for trial commencing on 12 October 2026 on an estimate of five days. On the same date, a timetable was set under which the pleadings concluded on 20 August 2025, discovery concluded on 19 August 2025, lay evidence was due to be filed by 7 November 2025, and expert evidence was due to be filed by 9 March 2026 (by the Applicant) and 4 May 2026 (by the Respondent). This timetable has been complied with, save for some evidence that appears to have been filed outside the time permitted by the Court’s orders. The parties have not sought leave to rely on evidence filed outside the time permitted by the Court.

18    No party has submitted that it will suffer prejudice as a result of the joinder of Mr Darji. Accordingly, the only prejudice I consider relevant is the possibility that the dates set down for the trial will be disturbed.

19    The First Respondent has proposed a set of orders dealing with the timing of, inter alia, discovery, evidence, objections, agreed facts and submissions as between the First Respondent and Mr Darji. Those proposed orders would retain the trial date currently listed. I have considered those orders, and in my view they are appropriate.

20    For those reasons, this consideration favours the grant of leave.

Merits of proposed cross-claim

21    As observed in Swift (at [36]), “[t]he assessment of the merits of the proposed cross-claim on an application such as this is necessarily approached in a summary way”. It is sufficient to note that the draft statement of cross-claim evinces an arguable case and states the facts relied upon to establish the claim with clarity. It is not deficient on its face (cf Swift at [36]; Martin v Twin Creeks Golf & Country Club Ltd [2021] FCA 1499 at [49]-[52] (Abraham J)).

22    It is not appropriate to consider the merits in depth; it is sufficient to say that the proposed cross-claim is not deficient on its face. The merits of the proposed cross-claim favour the grant of leave.

Degree of connection

23    The proposed cross-claim is closely connected to the subject matter of the proceeding. The representations alleged in the statement of claim to have been misleading were conveyed to Mr Darji, and passed on by Mr Darji to Mr Gupta, the sole director and shareholder of the Applicant. For that reason, there is likely to be significant, if not complete, overlap in the facts relevant to the substantive proceeding and those relevant to the cross-claim. This factor favours the grant of leave.

Conclusion

24    In all the circumstances, I am content it is appropriate to grant leave in the manner sought, and to make the consequential orders for the progress of the matter proposed. I will make the orders broadly in the for proposed, however it is appropriate that the cross claim be filed and served more quickly than the orders contemplated. Mr Darji will, of course, be able to seek any necessary amendments by application.

Associate:

Dated:    15 May 2026