Federal Court of Australia

Exclusive Building Tas Pty Ltd v Gunson (Application for leave to appeal) [2026] FCA 843

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    The applicants for leave to appeal pay the respondents’ costs of the application.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    The application before the Court is for leave to appeal from an interlocutory judgment of a single judge of this Court. Such leave is required under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (the Act).

2    In the substantive proceeding, the applicants (the Gunsons) claim damages for misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law in Sch 2 of the Competition and Consumer Act 2010 (Cth) and trespass to land. Their interlocutory application sought leave to file an Amended Originating Application and Amended Statement of Claim to add a new cause of action in breach of contract. The application was granted by the primary judge over the objection of the respondents (collectively, Exclusive Building), who now seek leave to appeal.

3    The Gunsons’ application for leave to amend was made pursuant to r 16.53(2) of the Federal Court Rules 2011 (Cth) (the Rules), which provides, relevantly:

A party may apply under subrule (1) for leave to amend a pleading to add or substitute a new claim for relief, or a new foundation in law for a claim for relief that arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party…

4    The principles relevant to an application for leave to appeal are well-established. Two factors of particular importance are (a) whether the judgment is attended by sufficient doubt to warrant it being reconsidered by a Full Court; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398.

5    It is also well-established that caution should be exercised in granting leave to appeal from an interlocutory judgment concerning a matter of practice and procedure. In Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, the High Court held at 177:

Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure…Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties... For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan In re the Will of F B Gilbert (dec) [(1946) 46 SR (N.S.W.) 318 at 323]:

“... I am of the opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

(See also Samsung Electronics Co Ltd v Apple Inc [2013] FCAFC 138 at [20]; National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155 at 161.)

6    The Court is only required to consider the proposed grounds of appeal, “at a reasonably impressionistic level, and enquire whether a ground is ‘sufficiently arguable’ or has ‘reasonable prospects of success’”: EBT17 v Minister for Home Affairs [2019] FCA 200 (Burley J) at [4].

7    Exclusive Building’s draft Notice of Appeal contains the following grounds:

1.    Her Honour did not correctly apply the principles espoused in Aon Risk Services Pty Ltd v Australian National University (2009) 239 CLR 175 in that she failed to consider whether the proposed amendment:

(a)     would have an effect upon the Court and other litigants;

(b)    would be consistent with maintaining public confidence in the justice system;

(c)    would be contrary to the interests of achieving justice for the applicants.

2.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matter that the respondents had had sufficient opportunity to plead a cause of action for breach of contract in light of the fact that the cause of action arose in June 2024 and the application was made 11 months after the commencement of the proceeding.

3.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matters that the proceeding as constituted by the then extant statement of claim was:

(a)    an abuse of process;

(b)    inconsistent with the respondents’ overarching obligations provided for in sections 37M and 37N of the Federal Court of Australia Act 1976;

(c)    an artifice designed to invoke the jurisdiction of this court and to repose personal liability in the individual applicants.

4.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matter that the respondents had embarked upon a deliberate strategy which involved the late filing of the proposed amended pleading.

5.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matter that the late application for amendment caused the vacation of the trial date on 8 December 2025; a date which has been fixed by the court since 4 April 2025.

6.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matter that no explanation for the delay in making the amendment application had been provided.

7.    Her Honour erred in accepting a submission from the bar table as a purported explanation for the delay and by doing so failed to accord the applicants procedural fairness.

8.    Her Honour failed to consider, failed to adequately consider or give proper weight to the relevant matter of the non-compensable inconvenience and stress upon the individual respondents and erred in finding that such matters are “features” of litigation.

8    It is common ground that the primary judge’s order involved the exercise of a discretion and that in any appeal, the principles from House v The King (1936) 55 CLR 499 at 504-505 will have to be applied:

It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

9    Although most of the grounds set out in the draft Notice of Appeal challenge the weight and adequacy of consideration given by the primary judge to particular factors, counsel for Exclusive Building conceded those aspects of the grounds in the course of argument.

10    I understand Exclusive Building’s counsel to ultimately explain the grounds of appeal that were pressed as follows:

(1)    Her Honour erred in applying the approach taken in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 (JL Holdings) that justice between the parties would rarely militate against granting leave to amend in light of the ability of the Court to award costs, when that approach was overruled in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon).

(2)    Her Honour erred by failing to consider the following submissions made on behalf of Exclusive Building:

(a)    the Gunsons had failed to plead an obvious cause of action at an early stage in the proceeding;

(b)    the Gunsons embarked upon a “deliberate strategy for improper purposes”, namely that, “the proceeding was a tactic and an artifice to drag in the individual directors”;

(c)    the interlocutory application had given rise to or caused an adjournment of the trial; and

(d)    no explanation was given on oath as to the lateness of the interlocutory application.

11    The primary judge produced ex tempore reasons for judgment. As her Honour’s reasons are succinct, it is convenient to reproduce the whole of the relevant passages here:

The application was opposed principally on the basis that there had been an ample opportunity to amend, an unacceptable delay in bringing the application, and that the amendments do not arise out of substantially the same facts as already pleaded...

The principles in relation to an application of this kind are well-known and need not be restated. Indeed, they were not in dispute. Relevantly for present purposes, it may be accepted that the principles that apply in an application of the present kind are not solely concerned with the interests of the parties but also the interests of the Court and the impact on other litigants. The principles that apply in an application when a trial date needs to be vacated are different to the principles that apply when a trial date does not need to be vacated, as in the present case. Finally, there ought to be an explanation for the delay.

The respondents submitted that there has been ample opportunity to amend, and to file a proposed amended statement of claim in the form of MS-1.2, having regard to the following: first, various defects and the failure to complete the building works were raised at the view of the property on 3 February 2025; secondly, the applicants filed evidence on or around 30 April 2025, part of which was directed to a claim for breach of contract of the kind which is subject to the present application; and, finally, there was correspondence in September 2025 when a breach of contract claim was first foreshadowed.

These matters do demonstrate that there has been some awareness, for some time, of the relevance and intention to rely upon facts and matters, namely, defects and the failure to complete, which are relevant to the cause of action now pleaded in the proposed amended statement of claim.

By way of explanation for delay, the applicants made two principal submissions. First, whether or not a cause of action accrued, and damages were able to be assessed, was likely to be an issue at the trial of the action as currently pleaded and, consequentially, this application has been brought to avoid an issue estoppel arising.

Although there has been some delay in bringing the application, and the applicants’ conduct is less than satisfactory, I accept that it is necessary to ensure that all of the issues in controversy can be determined in the most expeditious way and that the amendment ought to be allowed having regard to the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth).

In saying that, I have had regard to the respondents’ submissions to the contrary and I will say something briefly about those. Firstly, insofar as the respondent submitted that the amendment ought only be granted on the basis of an order that the applicants pay the respondents’ costs on an indemnity basis, and that the proceeding be reconstituted so that the Australian Consumer Law claim and the claims against the second and third respondents are dismissed, I note that there is no application to strike out or for summary dismissal of those claims. I, therefore, do not accept the submission that the proceeding should be reconstituted if the amendment is allowed.

Secondly, in relation to the respondents’ submission that there should be an order for indemnity costs, I accept that there should be the usual order that the respondents have their costs of the application and the costs thrown away by reason of the amendment. However, there were no additional reasons put forward and I am not satisfied that it is appropriate to make an order for costs other than on the usual basis, which is a party/party basis.

Thirdly, the respondents submit that they will be significantly prejudiced if the application were granted by reason of stress and inconvenience, lost time and duplication, financial loss due to the delay in payment and legal costs. Any legal costs and financial loss due to delay in payment will be matters for which the respondents may be compensated, if they are ultimately successful, by an award of interest and by way of an order for costs. As to stress and inconvenience and lost time and duplication, unfortunately, they are features of litigation which would always be a factor in any application of this kind. However, for the reasons that I have given, I am persuaded that the interests of justice are better served by allowing this amendment so as to ensure that all issues between the parties can be finally resolved.

…

12    Exclusive Building’s proposed first ground of appeal would assert that the primary judge failed to apply the approach espoused in Aon and wrongly applied the approach taken in JL Holdings. The primary judge observed that the principles applying to an application for leave to amend were not in dispute and well-known and did not need to be restated. Exclusive Building submits that the principles were in fact in dispute because the Gunsons submitted that the primary judge should apply JL Holdings, whereas Exclusive Building submitted that her Honour should apply Aon.

13    However, an examination of the transcript of the hearing before the primary judge indicates that all parties accepted that the relevant principles were those contained in Aon. The Gunsons’ counsel submitted that, “[t]he problem prior to Aon, and which JL Holdings was being used for, was the proposition which was taking it too far in the sense that it denigrated all other factors except for prejudice and can it be resolved by costs”. Exclusive Building’s counsel submitted that, “Aon overruled Queensland v JL Holdings Pty Ltd which stood for the proposition that amendments should invariably be granted to an applying party because the justice of the case or ‘justice as between the parties’ would rarely militate against the granting of leave in light of the ability of the court to order costs in favour of the responding party”. Those submissions were generally consistent with the holding in Aon at [96]. Accordingly, her Honour was correct to say that the principles were not in dispute.

14    Exclusive Building’s counsel drew the Court’s attention to a number of passages from Aon, which, as I understood the submission, it is alleged her Honour failed to apply:

    The rules concerning civil litigation are no longer to be considered as directed only to the resolution of the dispute between the parties – the achievement of the just but timely and cost-effective resolution has an effect upon the Court and other litigants (at [93]).

    Where a party has had a sufficient opportunity to plead their case, it may be necessary for the Court to make a decision which may produce a sense of injustice to that party for the sake of doing justice to the opponent and other litigants (at [94]).

    It cannot be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs (at [98]).

    Much may depend upon the point the litigation has reached relative to a trial. There may be cases where it is too late for further amendment, having regard to the other party and the other litigants awaiting trial dates (at [102]).

    In most cases where there is delay, a party should explain it: they will need to show that their application is made in good faith and also bring the circumstances giving rise to the amendment to the Court’s attention so they may be weighed against the effects of the delay and the objectives of the Rules (at [103]).

    An application for leave to amend should not be approached on the basis that a party is entitled to raise an arguable claim, subject to the payment of costs by way of compensation; there is no such entitlement (at [111]).

    The fact of a substantial delay and wasted costs and the concerns of case management will assume importance (at [111]).

    Statements in JL Holdings which suggest only a limited application for case management are not consonant with the Court’s earlier recognition of delay, not only upon the parties, but also upon the Court and other litigants, and should not be applied in the future (at [111]).

15    That the primary judge did apply the relevant principles from Aon is demonstrated by her Honour’s reasons. Her Honour expressly indicated that the applicable principles, “are not solely concerned with the interests of the parties but also the interests of the Court and the impact on other litigants”. Her Honour observed that the principles that apply when a trial date needs to be vacated are different to those that apply when a trial date does not need to be vacated. Her Honour noted that there ought to be an explanation for the delay. Her Honour’s focus was on what the interests of justice required rather than taking an approach that the Gunsons should merely be permitted to raise a new cause of action on payment of costs. It is apparent that her Honour applied the relevant principles from Aon.

16    Exclusive Building submits that the primary judge failed to consider their submission that the Gunsons had failed to plead an obvious cause of action at an early stage in the proceeding. However, the primary judge recorded that Exclusive Building had submitted there had been an ample opportunity for the Gunsons to amend to raise breach of contract since at least 3 February 2025 (the interlocutory application was dated 8 October 2025). Her Honour found that, “there has been some delay in bringing the application, and the [Gunsons’] conduct is less than satisfactory”. Accordingly, the submission was not only considered but accepted.

17    Exclusive Building also submits that the primary judge failed to consider a submission that the substantive proceeding was, “an artifice designed to invoke the jurisdiction of the court and to repose personal liability in the individual applicants”. The submission was that the misleading or deceptive conduct claim had been commenced so that the directors of Exclusive Building could be named as respondents, and this was said to be an improper purpose. It may be noted that in the course of the application for leave to appeal, Exclusive Building’s counsel withdrew an assertion made in his written submissions that the proceeding was an abuse of process, so it is unclear where the submission is left.

18    In any event, the primary judge, speaking of Exclusive Building’s submission that leave to amend should only be granted on the basis that the misleading or deceptive conduct and trespass claims be dismissed, observed, “there is no application to strike out or for summary dismissal of those claims”. Presumably, that submission had been made because the directors who were allegedly improperly joined would be removed as parties if only the contractual claim proceeded. Her Honour apparently proceeded on the basis that while Exclusive Building’s allegation that the substantive proceeding had been brought for an improper purpose would have been centrally relevant in any strike out or summary judgment application in the principal proceeding, it was not significant for determination of the amendment application. Accordingly, the appropriate conclusion is that her Honour did consider the improper purpose submission, but did not accept that it affected the outcome of the amendment application.

19    Exclusive Building submits that her Honour failed to consider their submission that the application for leave to amend had given rise to an adjournment of the trial. However, the Gunsons submitted that the trial had already been adjourned by reason of default by both parties and was not related to the application to amend. This contested factual issue was decided in the Gunsons’ favour by the primary judge, as demonstrated by her Honour’s reference to the different principles that apply, “when a trial date does not need to be vacated, as in the present case”. Accordingly, her Honour did consider the submission that the amendment application had caused the trial date to be vacated but decided the point against Exclusive Building.

20    Exclusive Building submits that her Honour failed to take into account the submission that the Gunsons had given no explanation on oath as to the lateness of the interlocutory application. However, the explanation provided was that the application for amendment had been brought to avoid an issue estoppel arising. This was substantially a matter for submissions rather than evidence.

21    In any event, the primary judge found, in Exclusive Building’s favour, that there was, “some delay in bringing the application”, and that, “the [Gunsons’] conduct is less than satisfactory”. These were findings to the effect that there was no satisfactory explanation for the delay. They indicate that Exclusive Building’s submission was considered. Nevertheless, her Honour was persuaded that the interests of justice were served by allowing the amendment. The absence of a satisfactory explanation for a delay did not mean that her Honour was obliged to refuse the amendment.

22    I am not satisfied that the primary judge’s judgment is attended by sufficient doubt to warrant reconsideration on appeal at this stage.

23    Further, I am not satisfied that substantial injustice would result if leave to appeal were refused, supposing the primary judge’s decision to be wrong. Exclusive Building will have a full opportunity to defend the breach of contract claim. And even if they lose, they have the benefit of s 24(1E) of the Act which provides that the fact that there has been, or can be, no appeal from an interlocutory judgment does not prevent a party from founding an appeal from a final judgment on the interlocutory judgment. Accordingly, if Exclusive Building still wishes to challenge the grant of leave to amend after judgment is given in the substantive proceeding, they will be able to appeal. Although Exclusive Building will incur some additional costs in the meanwhile, they can be expected to be awarded those additional costs if they ultimately succeed.

24    In these circumstances, the application for leave to appeal should be dismissed with costs.

Associate:    

Dated:    1 July 2026