1110 Hay Pty Ltd as trustee for the Hay Street Trust v Metso Minerals (Australia) Ltd [No 2]
[2018] WASC 227
•31 JULY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: 1110 HAY PTY LTD as trustee for THE HAY STREET TRUST -v- METSO MINERALS (AUSTRALIA) LTD [No 2] [2018] WASC 227
CORAM: DERRICK J
HEARD: 26 JULY 2018
DELIVERED : 26 JULY 2018
PUBLISHED : 31 JULY 2018
FILE NO/S: CIV 3327 of 2011
BETWEEN: 1110 HAY PTY LTD as trustee for THE HAY STREET TRUST
Plaintiff
AND
METSO MINERALS (AUSTRALIA) LTD
First Defendant
METSO MINERALS OY
Second Defendant
METSO MINERALS (AUSTRALIA) LTD
Plaintiff by counterclaim
AND
1110 HAY PTY LTD as trustee for THE HAY STREET TRUST
Defendant by counterclaim
Catchwords:
Application to re-open case and adduce additional evidence after completion of trial - Principles to be applied in determining application to re-open case and adduce additional evidence after completion of trial - Whether applicant seeking to introduce new cause of action - Whether new cause of action precluded by limitation period
Legislation:
Duties Act 2008 (WA)
Limitation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Application dismissed
Category: B
Representation:
Original Action
Counsel:
| Plaintiff | : | Mr C S Williams |
| First Defendant | : | Mr B W Ashdown |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Solomon Brothers |
| First Defendant | : | Squire Patton Boggs |
| Second Defendant | : | No appearance |
Counterclaim
Counsel:
| Plaintiff by counterclaim | : | Mr B W Ashdown |
| Defendant by counterclaim | : | Mr C S Williams |
Solicitors:
| Plaintiff by counterclaim | : | Squire Patton Boggs |
| Defendant by counterclaim | : | Solomon Brothers |
Case(s) referred to in decision(s):
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341
Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290
HP Mercantile Pty Ltd v Dierickx [2012] NSWSC 1005
Re Kenneth Wright Distributors Pty Ltd (in liquidation); W J Vine Pty Ltd v Hall [1973] VR 161
Read v Brown (1888) 22 QBD 128
DERRICK J:
(This judgment was delivered extemporaneously and has been edited from the transcript.)
Introduction
This action, the trial of which has already occurred, arises out of a dispute between the plaintiff and the first defendant (the defendant) in relation to amounts payable by them under the terms of a lease (the Lease) and an agreement entered into between them as part of a settlement of a prior dispute.
The Lease related to premises (the Premises) situated at 1110 Hay Street in West Perth (the Land). At the time that the Lease was entered into the plaintiff was the owner of the Land. The Lease governed the defendant's occupation of the Premises from 1 November 2008 although it was not signed by the plaintiff and the defendant until 12 March 2009.
On 21 February 2012 the plaintiff entered into a contract to sell the Land to Castilo Pty Ltd (Castilo). On 24 April 2012 (the Settlement Date) the settlement of the sale of the Land took place. From the Settlement Date Castilo became the lessor under the Lease and therefore, subject to any assignment, became entitled to rent and other money payable by the defendant under the Lease as at that date.
In the action the parties identified a number of questions to be answered by the court in order to determine the dispute between them. One of the questions posed was whether cl 6.9(b)(1) of the 2011 Joint Form of General Conditions (the General Conditions), which were incorporated into the contract between the plaintiff and Castilo for the sale of the Land, validly effected as at the Settlement Date an assignment back from Castilo to the plaintiff of the claims brought by the plaintiff in the action, the claims being for rent and other money allegedly payable by the defendant to the plaintiff under the Lease as at the Settlement Date.
The five day trial of the action commenced before me on 14 May 2018 and concluded on 17 May 2018. I reserved my decision. I am yet to hand down my decision.
On 29 June 2018, a little over a month after the trial was completed, the plaintiff, by way of a letter from its solicitors to the court, applied for an order permitting it to reopen its case for the purpose of tendering a Deed of Assignment executed by the plaintiff as assignee and Castilo as assignor on 29 May 2018 (the Deed). In their letter the plaintiff's solicitors stated that after the conclusion of the trial the plaintiff and Castilo had entered into the Deed 'for the purposes of giving effect to Castilo's obligations under [clause] 6.9(b)(2) of the [General Conditions]'. By the letter the plaintiff also applied for leave to amend its Second Further Re‑Amended Statement of Claim (the Statement of Claim) to reflect the execution of the Deed.
The defendant opposes the plaintiff's application (the application).
The relevant terms of cl 6.9(b), the Deed and the proposed amendments
Clause 6.9(b) of the General Conditions relevantly provides:
Where the Property is at Settlement or, on possession, subject to a Lease the following will apply.
(b)… where, as at the Settlement Date or on the Possession Date, Rent was due to the Seller and has not been paid by the Tenant, the following apply.
(1)The Buyer assigns to the Seller the unpaid Rent.
(2)The Buyer will immediately on request by the Seller sign:
(A)a deed of assignment of that unpaid Rent in favour of the Seller; and
(B)a notice to the Tenant of the assignment,
which deed and notice of assignment must be prepared by the Seller at the expense of the Seller.
Clause 26.1 of the General Conditions defines the term 'Rent' to mean 'rent and other money payable by a Tenant under a Lease.
The Recitals to the Deed are, by cl 1.5 of the Deed, expressed to be 'correct and [to] form part of [the Deed]'.
Recital B provides, in effect, that the contract for the sale of the Land incorporated the General Conditions and that pursuant to cl 6.9(b)(1) of the General Conditions Castilo (the assignor) assigned to the defendant (the assignee) all rent and other moneys payable by the defendant under the Lease as at the Settlement Date.
Recital D provides, in effect, that pursuant to cl 6.9(b)(2) Castilo agreed to immediately on request by the plaintiff sign a deed of assignment of all unpaid rent and other moneys payable under the Lease as at the Settlement Date in favour of the plaintiff as well as a notice to any tenant of the assignment.
Recital E provides, in effect, that pursuant to cl 25.3 of the General Conditions the obligations under cl 6.9(b)(2) survive settlement and continue to be enforceable.
Recital F provides, in effect, that Castilo and the plaintiff enter into the Deed in order to give effect to Castilo's obligations under cl 6.9(b)(2) of the General Conditions.
Clause 2.1 of the Deed provides:
The Assignor hereby acknowledges and agrees that it assigned to the Assignee absolutely all of its right, title, claim and interest in any unpaid Rent on and with effect from the Settlement Date.
Clause 2.2 of the Deed provides:
The Assignor hereby transfers and assigns to the Assignee absolutely all of its right, title, claim and interest in any unpaid Rent as of the Settlement Date. The Assignee accepts such transfer and assignment.
As is apparent from what I have already said about the terms of the recitals, the term 'Rent' is defined in cl 1.1 of the Deed to mean 'rent and other moneys payable by a Tenant' under the Lease.
The proposed amendments to the Statement of Claim are to introduce new pars 14A and 14B, and to make an amendment to existing par 16.
The proposed new pars 14A and 14B are in the following terms:
14AFurther or alternatively, on 29 May 2018, [the plaintiff] and Castilo executed a deed of assignment (the 'Deed of Assignment').
14BThe Deed of Assignment contained an express term which, on its proper construction was to the effect that, on 24 April 2012, further or alternatively, upon entry in the Deed of Assignment, Castilo assigned to [the plaintiff] all Rent and other moneys payable by [the defendant] to [the plaintiff] under the Lease (clauses 2.1 and 2.2).
The proposed amendment to par 16 is to insert the words 'further or alternatively, on 1 June 2018' so that the paragraph will read:
On 4 May 2012, further or alternatively, on 1 June 2018, [the plaintiff] gave [the defendant] express written notice of Castilo's assignment to the plaintiff of all Rent and other moneys payable by [the defendant] to [the plaintiff] under the Lease.
Context of the application
In order to put the application in context it is necessary to refer, as briefly as possible, to the submissions that were made by the parties at trial in relation to the proper construction of cl 6.9(b)(1) of the General Conditions. I emphasise that in referring to the submissions I am not attempting to recite the submissions in detail. I am simply going to refer to them to the extent that is necessary to deal with the application.
It is convenient to refer first to the defendant's submissions.
The defendant's position at trial was that cl 6.9(b)(1) did not, on its proper construction, operate so as to effect a valid assignment back from Castilo to the plaintiff of the claims brought by the plaintiff in the action. In support of its position the defendant advanced two arguments. First, it contended that cl 6.9(b)(1) provided for an assignment of future property, that the assignment could therefore only be effective if consideration was given for the assignment, and that as no consideration was given for the assignment in the present case the result was that no valid assignment took place. Second, the defendant contended that the contract for the sale of the Land did not provide that the Land was sold subject to the Lease and that therefore cl 6.9(b)(1) did not, by reason of the terms of cl 6.10 of the General Conditions, apply to the sale of the Land and therefore did not effect a valid assignment by Castilo to the plaintiff of the claims brought in the action.[1]
[1] Clause 6.10 of the General Conditions provides, 'Clauses 6.6 to 6.9 inclusive will apply where the Contract provides that the Property is sold subject to the Lease'.
The plaintiff's position at trial was that on its proper construction cl 6.9(b)(1) operated to effect an assignment of existing property as at the Settlement Date as opposed to providing for an assignment of future property, that is property that was yet to come into existence, and that consequently it was not necessary for the plaintiff to provide consideration for the assignment. Alternatively, the plaintiff contended that if cl 6.9(b)(1) did operate so as to effect an assignment of future property it did give consideration for the assignment. The plaintiff further contended that the contract for the sale of the Land did provide that the Land was sold subject to the Lease as required by cl 6.10 of the General Conditions.
With respect to cl 6.9(b)(2) of the General Conditions, the plaintiff's position was that the clause had no bearing on the validity of the assignment pursuant to cl 6.9(b)(1) but was rather a clause that simply imposed an obligation on the buyer to sign a deed of assignment in the event that the seller required a deed of assignment to be executed.
I note, as is apparent from what I have already said about the defendant's arguments, that the defendant did not take issue with the plaintiff's construction of cl 6.9(b)(2). That is, the defendant did not argue that the execution of a deed of assignment was necessary to give effect to an assignment under cl 6.9(b)(1) if, contrary to its arguments, the clause did otherwise operate so as to effect an assignment of the claims brought by the plaintiff in the action.
Contentions of the parties on the application – summary
It is against the background of the above stated competing submissions made at trial that the application is made.
The plaintiff contends that the Deed is relevant to the question to be determined by the court to which I have already referred. The plaintiff contends, in essence, that in the event that the court accepts the defendant's arguments advanced in relation to cl 6.9(b)(1) and thereby holds that the clause, contrary to the plaintiff's primary case, failed to effect the assignment back from Castilo to the plaintiff of the claims brought by the plaintiff in the action, cl 2.2 of the Deed will provide a basis for the court to find that the assignment has now occurred. The plaintiff contends that it would not be in the interests of justice for its claim to be dismissed on the basis that cl 6.9(b)(1) did not effect a valid assignment when the reality is that the plaintiff has now executed the Deed with Castillo effecting the assignment.
The defendant opposes the application on the following grounds:
1.The plaintiff has failed to properly plead the Deed such that the defendant cannot be certain of the case put against it;
2.The plaintiff failed to pursue the evidence of the Deed with reasonable diligence;
3.To allow the application will be contrary to case management principles of a speedy and efficient resolution of the matter;
4.To allow the tender of the Deed will not produce a different result; and
5.The Deed is not capable of being tendered in evidence or relied upon due to a failure to lodge it for the assessment or payment of stamp duty pursuant to the Duties Act 2008 (WA).
The defendant asserts that for these reasons the plaintiff has failed to establish that the interests of justice are served by allowing it to reopen its case.
Applicable legal principles
The principles to be applied in determining an application such as the present are well established. The principles are, with respect, conveniently summarised by Pritchard J in Hancock Prospecting Pty Ltd v Hancock.[2] The principles may be stated as follows.
[2] [2013] WASC 290 [182] ‑ [185].
A court has the power to re‑open a case after a hearing has concluded but before judgment is delivered for the purpose of hearing additional submissions or admitting new or additional evidence.
A variety of factors will be relevant to the exercise of the discretion to re‑open.
The guiding principle is whether the interests of justice are better served by allowing, or rejecting, the application to re‑open.
Other factors which are relevant to the exercise of the discretion include:
1.The time at which the application is made (leave to re‑open will be more readily given where the application is made after judgment has been reserved and before judgment has been given);
2.The likely prejudice to the party resisting the application;
3.The public interest in the finality of the litigation and the clear expectation that parties will advance all of their arguments at the time of the hearing; and
4.Case management principles, especially the need for the court to manage litigation efficiently, having regard to the limited resources of the courts and the demand for those resources.
Further, in a case like the present where the application is to re‑open to admit additional evidence, additional factors relevant to the exercise of the discretion will include:
1.Why the evidence was not adduced at the hearing, and in particular whether a deliberate decision was made not to adduce the evidence, or whether the evidence would have been available had reasonable diligence been exercised; and
2.The materiality of the evidence to the issues in dispute and whether the admission of the evidence may produce a different result.
Analysis
Against the background of the applicable statements of principle I turn to deal with the substantive merits of the application. It is convenient to approach this task by addressing each of the defendant's grounds of opposition to the application in turn.
Failure to properly plead case
Dealing first with the defendant's contention that the plaintiff has failed to properly plead its amended case.
I have already referred to clauses 2.1 and 2.2 of the Deed as well as the terms of the proposed new par 14B of the Statement of Claim.
Clause 2.1 speaks in the past tense. By the clause Castilo acknowledges and agrees that 'it assigned' to the plaintiff all of its right, title, claim and interest in any unpaid rent and other money payable under the Lease with effect from the Settlement Date. So, as the plaintiff's counsel put it during his oral submissions, cl 2.1 does no more than acknowledge or confirm the plaintiff's primary position, namely that an effective assignment occurred on the Settlement Date pursuant to cl 6.9(b)(1). The plaintiff does not rely upon cl 2.1 of the Deed in order to support a case against the defendant that there has been an assignment.
Clause 2.2 provides that Castilo 'hereby assigns and transfers' (that is, assigns as at the date of the Deed) to the plaintiff all of its right, title, claim and interest in any unpaid rent and other money payable under the Lease as at the Settlement Date. It is this clause which purports to effect the assignment upon which the plaintiff now seeks to rely in the alternative to the assignment by reason of cl 6.9(b)(1).
Against this background I turn to proposed par 14B. By proposed par 14B the plaintiff alleges that the Deed 'contained an express term', which on its proper construction, is to the effect that on the Settlement Date Castilo assigned to the plaintiff all unpaid rent and other moneys payable by the defendant to the plaintiff under the Lease, or alternatively, was to the effect that on the date of entry into the Deed, namely 29 May 2018, Castilo assigned to the plaintiff all unpaid rent and other money payable by the defendant to the plaintiff under the Lease. This pleaded allegation is problematic. In the first place it is not pleaded as part of the alternative proper construction that the assignment was of all rent and other money payable under the Lease as at the Settlement Date which is what cl 2.2 of the Deed provides. Further, and perhaps more significantly, it is not clear from par 14B which express term of the Deed the plaintiff alleges did either of the things alleged in the paragraph. The express term, whether cl 2.1 or cl 2.2 is not specified in the paragraph. Indeed, on its face par 14B does appear to conflate the terms of cl 2.1 and cl 2.2 of the Deed.
In short, in my opinion, proposed par 14B as presently pleaded does not properly or clearly plead the terms of the Deed or the factual basis for the pleaded effect of the Deed. However, during the course of the hearing of the application the plaintiff's counsel made clear that what the plaintiff is intending to allege by par 14B is that the Deed contained an express term, namely cl 2.2, which provided that upon entry into the Deed, that is, on 29 May 2018, Castilo assigned to the plaintiff all rent and other moneys that were payable by the defendant to Castilo under the Lease as at the Settlement Date. This being the case, and as the defendant's counsel properly conceded, the unclear way in which proposed par 14B is currently pleaded does not in itself provide a basis for refusing the application given that the proposed paragraph can be easily further amended to properly reflect the case that the plaintiff is now seeking to advance.
Failure to pursue evidence of Deed with reasonable diligence
The next of the defendant's grounds for opposing the application is that the plaintiff failed to pursue the evidence of the Deed with reasonable diligence.
The defendant initially pleaded only non‑admissions in relation to the alleged assignment back by Castilo to the plaintiff of rent and other money payable under the Lease. However, by its Further Amended Substituted Defence filed on 28 March 2017 (the Defence) the defendant pleaded a positive defence disputing the validity of the assignment under cl 6.9(b)(1). Thus the plaintiff was put on notice that the defendant was denying the validity of the alleged assignment pursuant to cl 6.9(b)(1), and the essential grounds for the denial, approximately 14 months prior to the commencement of the trial.
Even though the plaintiff was made aware in March 2017, by the terms of the Defence, that the defendant was challenging the validity of the alleged assignment under cl 6.9(b)(1), the affidavit sworn by a solicitor employed by the plaintiff's solicitors in support of the application reveals that the plaintiff did not take any steps to request Castilo to execute a deed of assignment, as is provided for by cl 6.9(b)(2), until 10 May 2018. This was one clear working day before the commencement of the trial. It was this approach by the plaintiff's solicitors that ultimately resulted in the Deed being executed, albeit after the conclusion of the trial. The Deed was drafted by the plaintiff's solicitors.
There is no suggestion that the plaintiff could not have obtained the evidence in the form of a deed of assignment at any time during the 14 month period following the defendant pleading its positive case challenging the validity of the assignment. To the contrary, the plaintiff's counsel expressly conceded during his oral submissions that there is no reason why the plaintiff could not, at the point at which the defendant pleaded its positive case, 'have sought to bolster its position with respect to the assignment by approaching Castilo and obtaining the execution of the [Deed]'.[3]
[3] ts 377.
Further, there is simply nothing in the affidavit material filed by the plaintiff in support of the application which provides any explanation, let alone any reasonable explanation, for its failure, once the defendant had pleaded its positive defence to the alleged assignment, to take steps to arrange for the execution of a deed of assignment at an earlier point in time so that it could adduce the Deed in evidence at the trial. The plaintiff is completely silent on this point.
The plaintiff did not prior to the trial or at any time during the trial advise the court that it was in the process of arranging for the execution of a deed of assignment and that it may seek to rely on the deed once executed as part of its case. The plaintiff did not seek an adjournment of the trial pending the execution of a deed of assignment.
The plaintiff's conduct in not taking any steps to arrange for the execution of a deed of assignment until the eve of the trial, the plaintiff's failure to provide any explanation for not taking steps to arrange for the execution of a deed of assignment prior to the eve of the trial, and the plaintiff's failure to inform the court prior to or during the trial that it was taking these steps and that it may seek to rely on the executed deed, in my view militate strongly against allowing the application.
I note that if it is assumed in the absence of evidence and for the sake of the argument that the explanation for the plaintiff not having taken steps to arrange for the execution of a deed of assignment until the eve of the trial is a failure by the plaintiff's legal representatives to appreciate or become aware of the possible relevance to the case of a deed of assignment (and I emphasise that I am not finding that this is the explanation), I do not consider that this would be a factor in favour of allowing the application. I say this because there was ample time between the defendant pleading its positive case and the commencement of the trial for the plaintiff's legal representatives to consider and canvass all arguments on which they wished to rely.[4]
[4] Hancock Prospecting v Hancock [139].
I note further in this context that the plaintiff in its written submissions filed in support of the application asserts that the defendant's amendment by which it pleaded its positive case challenging the validity of the assignment, although made well prior to trial, was not made until after all substantive pre‑trial steps had been completed, and that in these circumstances 'the timing of the plaintiff in seeking the execution of the Deed is not as significant a factor as it would have been had the validity of the assignment always been squarely in issue'. Even accepting that the defendant's amendment was made after all substantive pre‑trial steps had been completed, I do not see this fact as providing any sort of explanation for the delay in seeking the execution of the Deed, or as providing any support for allowing the application, or as in any other way being relevant to the exercise of my discretion to allow or refuse the application.
Case management principles
I turn to the next of the defendant's arguments raised in opposition to the application, namely that to allow the application will be contrary to principles of case management.
This matter has a long history. Proceedings were first commenced in 2011. Since that time there have been a number of interlocutory hearings and disputes.
If the application is allowed programming orders will need to be made allowing time for the parties to amend their pleadings and file further written submissions. Further it is likely, as the defendant contends, that it will be necessary to allocate a further substantive hearing of at least half a day for additional legal argument. It may also be necessary for the defendant to adduce some further evidence, although it is not at this point clear if this will prove to be the case. In short, and bearing in mind the court's commitments, to allow the application will not only place a further demand on the court's resources, it will also inevitably result in a not insignificant additional delay in the finalisation of this very longstanding dispute by the court providing its judgment.
To allow the application will also not sit comfortably with the public interest in the clear expectation that parties will advance all of their arguments at the time of the trial of the action.
It follows that I accept the submission made by the defendant that the principles of case management militate against allowing the application.
I also recognise in this context that the additional delay that will be caused by allowing the application is in itself a form of prejudice to the defendant. This is also a factor that militates against allowing the application.
I note that the defendant in its written submissions filed in opposition to the application asserts that if the application is allowed there will be a potential issue as to the joinder of Castilo as a party given the drafting of cl 2.1 of the Deed. I have some difficulty seeing, at least at this point, why it might become necessary to join Castilo. Accordingly, this is not a matter that I have taken into account in concluding that case management principles militate against the application being allowed.
Tendering of the Deed will not produce a different result
The next of the defendant's arguments is, in essence, that if the application is allowed and the Deed is tendered the result in the action will be no different. This argument is advanced in respect of both cl 2.1 and cl 2.2 of the Deed, although the nature of the argument advanced in relation to each clause is different.
So far as cl 2.1 of the Deed is concerned, the defendant's argument is, in essence, that given that the clause appears to do nothing more than confirm that on the Settlement Date Castilo assigned to the plaintiff pursuant to cl 6.9(b)(1) the rent and other money payable under the Lease, it adds nothing to the arguments advanced by the plaintiff at trial in support of its case that an effective assignment occurred pursuant to cl 6.9(b)(1). I accept this submission. To the extent that the Deed by cl 2.1 simply confirms that the assignment occurred on the Settlement Date pursuant to cl 6.9(b)(1), and was then executed by Castilo in accordance with the obligation imposed on it by cl 6.9(b)(2), the Deed adds nothing to the arguments raised by the plaintiff at trial. If the effect of cl 6.9(b)(1) was, on its proper construction and as the defendant contended at trial, to provide for an assignment of future property, and the plaintiff provided no consideration for the assignment, then the terms of cl 2.1 of the Deed cannot operate to make the assignment effective. Again, I note in this context that there was no dispute between the parties as to the effect of cl 6.9(b)(2), namely that it had no bearing on the validity of any assignment pursuant to cl 6.9(b)(1).
I turn then to cl 2.2 of the Deed. Clause 2.2, as I have already pointed out, appears to provide for an assignment, as at the date of the execution of the Deed, namely 29 May 2018, by Castilo to the plaintiff of all rent and other money that was payable by the defendant under the Lease as at 24 April 2012. The defendant submits that for the plaintiff to seek to adduce the Deed and to rely on cl 2.2 to establish that on 29 May 2018 Castilo assigned to the plaintiff all rent and other money payable to it under the Lease as at the Settlement Date is to attempt to introduce an entirely new cause of action which is statute barred by the applicable six year limitation period provided for in s 13(1) of the Limitation Act 2005 (WA).
The plaintiff in its written submissions does not expressly address the defendant's submission that it is attempting, by the application, to introduce an entirely new cause of action. Further the plaintiff's counsel in his oral submissions did not expressly address this point. However, in a letter from the plaintiff's solicitors to the defendant's solicitors dated 17 July 2018 (which is annexed to the affidavit affirmed by a solicitor employed by the defendant's solicitors in opposition to the application) the plaintiff's solicitors assert, in substance, that the plaintiff is not, by seeking to rely on cl 2.2 of the Deed, making any fresh claim and that all that cl 2.2 does is 'provide an alternative basis for the subsequent assignment back to [the plaintiff]' of the claims brought by the plaintiff in the action on which it sued in February 2012. I will assume for the purposes of dealing with the application that the plaintiff maintains the position as set out in its solicitors' letter. As to the limitation issue, the plaintiff submits that the Limitation Act is of no relevance.
I do not accept the plaintiff's submission that it is not, by seeking to rely on cl 2.2, attempting to introduce a new cause of action. In my view the plaintiff is, to the extent that it is seeking to rely on cl 2.2 of the Deed, attempting to introduce an entirely new basis for asserting that Castilo assigned to the plaintiff the right to rent and other money payable under the Lease (or in other words, the claims brought by the plaintiff in the action) as at the Settlement Date. While the plaintiff's case has always previously been that the assignment occurred on the Settlement Date by reason of the operation of cl 6.9(b)(1) of the General Conditions, the case which the plaintiff now appears to be seeking to advance in reliance on cl 2.2 of the Deed is that the assignment from which its right to bring the claims in the action is derived occurred on 29 May 2018 pursuant to cl 2.2 of the Deed. Thus, so far as cl 2.2 of the Deed is concerned, this is not a case in which the plaintiff is seeking to re‑open its case simply for the purpose of adducing some additional evidence in support of a claim that it has always made, namely that the assignment occurred on the Settlement Date. Rather, it is seeking to adduce evidence so as to enable it to make a substantially different and additional claim, namely that the assignment, which (as the plaintiff's counsel accepted) must be proved as part of its claim for the rent and other money payable under the Lease as at the Settlement Date occurred by a different means, by way of the Deed, on a different (much later) date. In these circumstances, the plaintiff is, in my view seeking to re‑open its case to introduce a new cause of action.[5] The fact that Castilo was obliged to enter the Deed to comply with its obligations under cl 6.9(b)(2) does not alter the position.
[5] See generally Read v Brown (1888) 22 QBD 128; Re Kenneth Wright Distributors Pty Ltd (in liquidation); W J Vine Pty Ltd v Hall [1973] VR 161, 172; HP Mercantile Pty Ltd v Dierickx [2012] NSWSC 1005 [120] ‑ [123], [129].
Leaving aside for the moment any limitation issue, the fact that the plaintiff is seeking to re-open its case to adduce evidence in the form of cl 2.2 of the Deed so as to enable it to make a substantially different and additional claim, in my view militates strongly against allowing the application. This is particularly so when one bears in mind the comments that I have already made about the plaintiff's unexplained delay in attempting to arrange for the execution of a deed of assignment.
In relation to the issue of the limitation period, the defendant submits that as at 29 May 2018 more than six years had passed since 24 April 2012, that Castilo therefore had no right to claim any rent or other money payable under the Lease as at 29 May 2018, and that accordingly cl 2.2 of the Deed is incapable of assigning to the plaintiff any right, title, claim or interest to unpaid rent and other money that was payable under the Lease to Castilo as at the Settlement Date. The defendant submits that given that Castilo could not, due to the limitation period, bring any action for unpaid rent and other money payable under the Lease as at the Settlement Date, the plaintiff is similarly precluded from doing so pursuant to a purported assignment by way of the Deed. The defendant submits that the position of an assignee who has taken an assignment after the limitation period has expired is indistinguishable to that of the assignor[6] The defendant submits that in these circumstances the plaintiff should not be permitted to re-open its case for the purpose of tendering the Deed and consequently should also be precluded from amending the Statement of Claim in the proposed way.
[6] Re Kenneth Wright Distributors (172); HP Mercantile Pty Ltd v Dierickx [120] ‑ [123], [129].
The plaintiff submits that no issue of any limitation period arises because the plaintiff commenced the proceedings claiming the rent and other moneys payable under the Lease in respect to which the alleged assignment under cl 6.9(b)(1) and the alleged assignment under cl 2.2 of Deed relate within the relevant limitation period. The plaintiff submits that its commencement of the action stopped any limitation period running so far as any assignment by Castilo is concerned. As the plaintiff's counsel put the plaintiff's position:
The point here is so long as someone is able to pursue these proceedings as an assignee of Castilo or otherwise, then they are not barred by the expiry of a limitation period applicable to the underlying causes of action that subsisted in the hands of the plaintiff immediately prior to the conveyance of the property to Castilo.[7]
[7] ts 393.
I accept the defendant's submissions. As at 29 May 2018 Castilo, due to the expiry of the six year limitation period, had no right to bring an action against the defendant for unpaid rent or other money payable under the Lease as at the Settlement Date. Accordingly, cl 2.2 of the Deed is incapable of giving the plaintiff the right to do so.
In my view, the point which the plaintiff's submissions overlook is that the commencement by it of the action for rent and other money payable by the defendant under the Lease prior to the Settlement Date, and the continuation of those proceedings from the Settlement Date as the alleged assignee from Castilo pursuant to cl 6.9(b)(1), stopped the limitation period running against it but not Castilo. If an assignment by Castilo of unpaid rent and other money that was payable under the Lease to Castilo as at the Settlement Date did not occur under cl 6.9(b)(1) on the Settlement Date, the fact that the plaintiff had commenced an action claiming the unpaid rent and other money did not impact on the limitation period within which Castilo is required to make any claim for that unpaid rent and other money.
It follows, in my view, that even if the application was to be allowed and the Deed was tendered cl 2.2 of the Deed would not operate so as to add anything to the position of the parties as advanced at trial in relation to the issue of the assignment. To put it another way, the Deed, if allowed to be adduced, would not in my view be material to the issue in dispute between the parties. This fact obviously militates strongly against allowing the application.
I note that in dealing with the limitation period issue, I have not overlooked O 21 r 5 of the Rules of the Supreme Court 1971 (WA). I am aware that O 21 r 5 reflects the general principle that limitation issues are best decided at trial with the consequence that an amendment will only be disallowed on the basis of a limitation defence in the clearest case.[8] However, given that the trial of the action has now been completed the court is in effect required to determine the limitation issue as part of determining whether it should exercise its discretion to allow the application to re‑open the case. In any event, I am persuaded that this is a case in which it is clear that the plaintiff is, by reason of s 3 of the Limitation Act, precluded from making any claim based on cl 2.2 of the Deed.
Deed not lodged for assessment of duty
[8] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341 [47].
The final argument advanced by the defendant in opposition to the application relates to the Deed not being stamped.
It is not in dispute that the Deed is not stamped and does not show evidence of lodgement for assessment or payment of duty.
The defendant contends that in the event that it is asserted that there was consideration provided by the plaintiff to Castilo for the assignment of the right to rent and other money payable under the Lease as at the Settlement Date the plaintiff must, by reason of s 279 of the Duties Act, show that the Deed has been lodged and 'duty endorsed' before it can be adduced in evidence. The defendant contends that the Deed does give rise to a dutiable transaction by reason of s 11(1)(a), s 15 and s 16(1)(f) of the Duties Act.
The plaintiff submits that an assignment of a chose in action for payment of money is not a dutiable transaction and that accordingly there is no duty to be paid on the Deed.
At the end of the day I do not consider that this is a question that I need to finally determine for the purposes of dealing with the application. I say this because if I was, subject to the duty issue, minded to allow the application I would make any such order permitting the reopening of the case conditional on the Deed being lodged for assessment for duty and, in the event that duty was assessed to be payable, the payment of the duty. I would not at this point refuse the application on the ground that the Deed is not stamped. I note in this context that both counsel accepted the appropriateness of the course outlined if I was to come to the view that the application should be allowed.
Conclusion
I have found that the plaintiff failed to pursue with reasonable diligence the obtaining of the evidence comprised of the Deed, that the plaintiff has failed to provide any explanation for its delay in obtaining the evidence comprised of the Deed, that case management principles militate against allowing the application, that the plaintiff by the application is seeking to introduce a new cause of action, and that to allow the plaintiff to tender and rely on the Deed will not have any material impact on the issues in dispute. Taking all of these matters into account, it is my opinion that it is not in the interests of justice to allow the application. I therefore refuse the application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CP
ASSOCIATE TO THE HONOURABLE JUSTICE DERRICK31 JULY 2018