Leave to Amend a Defence Filed Late – Case Note
Stonegate Legal is pleased to announce a successful procedural ruling in the Supreme Court of Queensland in JustKapital Financing Pty Ltd (Receivers & Managers Appointed) (in liquidation) v Compo Legal Pty Ltd [2026] QSC 13.
Acting for the defendant, Compo Legal Pty Ltd, Stonegate Legal (alongside Stephanie Philippou of Counsel) obtained leave for our client to amend its defence shortly before trial, preserving a genuinely arguable defence to significant repayment claims under complex litigation funding arrangements.
Background to the Case
The plaintiff, JustKapital Financing Pty Ltd (in liquidation), supported by its appointed receivers and managers, commenced proceedings seeking recovery of over $1 million said to be owing under litigation funding arrangements with the defendant.
The defendant admitted to entering into the financing arrangements and acknowledged that the funding invoices were unpaid.
However, the defendant contended that repayment obligations were not simply governed by invoices becoming due but were subject to a “cashflow term”, an implied contractual term arising from the parties’ longstanding commercial relationship.
Shortly before trial, the defendant sought leave to amend its defence to expressly plead this cashflow-based defence.
The plaintiff opposed the application on several grounds, contending that the proposed amendment would effectively withdraw admissions previously made, that the pleading was defective in form, and that the application was brought late without adequate explanation, thereby giving rise to potential prejudice and delay.
Supreme Court’s Findings
Justice Cooper granted the defendant leave to amend its defence to plead the alleged “cashflow term”. His Honour held that the amendment did not improperly withdraw admissions but instead raised “another matter” forming part of the defendant’s positive case concerning the timing of repayment obligations under the funding arrangements.
The Court held that:
- The proposed amendment disclosed a reasonably arguable defence raising issues appropriate for determination at trial concerning the timing of repayment obligations under the funding arrangements.
- Concerns about delay or prejudice were outweighed by the parties’ interests in ensuring that genuinely disputed issues were determined on their merits in accordance with the overriding purpose of the Uniform Civil Procedure Rules 1999 (Qld).
The Court’s ruling confirms that late amendments even close to trial will be permitted where they raise substantial issues central to the just resolution of the dispute, and where prejudice can be managed.
Leave to amend was granted subject to a condition requiring further amendment to plead the operation of an alleged “Write-Off Term”.
Significance for Commercial Litigation
This decision reinforces key procedural principles for commercial litigation, particularly:
- The distinction between admissions and substantive defences remains critical in amendment applications.
- Courts maintain discretion to allow late amendments that advance the real issues in dispute, so long as they are not frivolous or devoid of reasonable argument.
- Procedural finality will not automatically trump substantive justice where arguable defences affect substantial sums and fundamental contractual rights.
Final Message from Stonegate Legal
Stonegate Legal is proud to have secured this outcome for the defendant, ensuring that our client can present a fully informed defence to significant financial claims.
If you are navigating procedural disputes, amendments close to trial, or complex commercial claims, our commercial litigation team is ready to assist.
