ABB Service Pty Ltd v Hetherington - [2001] WASCA 235

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: ABB SERVICE PTY LTD (formerly known as ABB ENGINEERING CONSTRUCTION PTY LTD) -v- HETHERINGTON & ANOR [2001] WASCA 235

CORAM: WHEELER J
McLURE J

HEARD: 25 MAY 2001

DELIVERED : 9 AUGUST 2001

FILE NO/S: FUL 51 of 2001

BETWEEN: ABB SERVICE PTY LTD (formerly known as ABB ENGINEERING CONSTRUCTION PTY LTD) (ACN: 000 095 250)
Applicant
AND
KENNETH SYDNEY HETHERINGTON
JULIE ANN HETHERINGTON
Respondents

Catchwords:

Practice and procedure - Adequacy of indorsement of claim in a writ - Nature of relief - Turns on own facts

Legislation:

Limitation Act 1935

Supreme Court Rules, O 6 r 1, O 20 r 19, O 20 r 2(2), O 21 r 5(5)

Trade Practices Act, s 52

Result:

Appeal successful

Category: B

Representation:

Counsel:

Applicant: Mr P B O'Neal
Respondents : Mr C F McLeod

Solicitors:

Applicant: Minter Ellison
Respondents : Deacons

Case(s) referred to in judgment(s):

Bill Discount Services Pty Ltd v Dill-Macky, unreported; FCt SCt of WA, Library No 6700; 7 May 1987
Elsum v Jameson (1974) VR 529
Morgan v Banning (1999) 20 WAR 474
Renowden v McMullin (1970) 123 CLR 584
Ruzeu v Massey-Ferguson (Aust) Ltd (1983) 1 VR 733
Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Trustek Australia Pty Ltd v Burke & Ors, unreported; SCt of WA (Wheeler J); Library No 980121; 16 March 1998
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514

Case(s) also cited:

Thompson v Thompson (1942) 59 WN (NSW) 219
Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621
Re Will of FB Gilbert (deceased) (1946) 46 SR (NSW) 318

WHEELER J: I have had the advantage of reading in draft the reasons to be published by McLure J. I agree with them, and with the orders proposed by her Honour.
McLURE J: This is an application for leave to appeal from orders made by Master Sanderson on 9 March 2001 dismissing the applicant's application to strike out the writ, alternatively the indorsement of claim. The writ is dated 25 February 2000 and the indorsement states:
"The plaintiffs' claim is for damages:
1.pursuant to section 82(1) of the Trade Practices Act (Commonwealth) (the "Act") for breach by the defendant of section 52 of the Act; and
2.for negligent misstatement;
with respect to representations made by the defendant between 1 July 1996 and 28 February 1997 in connection with a contract between the defendant and Monaveen Pty Ltd for the performance of civil engineering services and works."
Order 6 r 1 of the Supreme Court Rules ("SCR") provides:
"(1)Before a writ is issued, it must be indorsed with a concise statement of the nature of the claim made, and of the relief or remedy required in the action.
(2)In the case of non‑compliance with par (1) the defendant may apply before appearance to set aside or amend the writ or for particulars."
The writ was served on the applicant on 5 December 2000 and it entered a conditional appearance to the writ. The applicant in its strike‑out application relied on O 6 and O 20 r 19(1)(a) of the SCR.
The applicant's proposed grounds of appeal are:
1.The learned Master erred in law in failing to find that the indorsement discloses no reasonable cause of action or alternatively is not a concise statement of the nature of the claim in that:
(a)the content and form of the alleged representations are unspecified;

(b)the indorsement of claim does not disclose to whom the representations were made;
(c)the indorsement of claim does not disclose how any duty of care arose in the circumstances;
(d)the indorsement of claim does not disclose what loss the respondents suffered or when;
(e)the indorsement of claim does not disclose how any loss is said to have been caused.

2.The learned Master erred in law in holding in effect that the sufficiency of an indorsement is only material when contrasting the scope of the indorsement with the scope of the allegations made in a statement of claim.
3.The learned Master erred in law in holding that the compliance or otherwise of an indorsement with Order 6 Rule 1 cannot be determined until a statement of claim has been filed.

The Master in his reasons for dismissing the strike‑out application said:
"The indorsement on the statement of claim is, to say the least, brief and I think that it would be better were it more expansive in its indication to the defendant of the nature of the case that the defendant has to meet.
Having said that, I think that care has to be exercised as to whether or not there is any point to be served, given the way litigation is conducted in this day and age, in striking out an indorsement of claim. If it were the case that a subsequent statement of claim did not fit within the terms of the indorsement, then that is an issue which can be dealt with in a different context.
Although there is a paucity of information in the indorsement, I am satisfied that it is in general terms enough to allow the defendant to know what case it has to meet. In the circumstances I think that what I should do is order that within 21 days the plaintiffs file their statement of claim.
If the statement of claim is not within the terms of the indorsement - that is, it is broader or simply cannot be accommodated within the words used in the indorsement - then the defendant will no doubt exercise the rights that it has and attempt to strike out the statement of claim."
This application raises for consideration the information which must be included in an indorsement to satisfy the requirements of O 6 r 1 and O 20 r 19 of the SCR. The minimum requirement has to be assessed in the context of the functions of an indorsement of claim in a writ. It has three functions two of which are related. Firstly, it marks out the perimeter within which a plaintiff may frame the statement of claim. Pursuant to O 20 r 2(2) of the SCR:
"A statement of claim must not contain any allegation or claim in respect of a cause of action unless that cause of action is mentioned in the writ or arises from facts which are the same as, or include or form part of, the facts giving rise to a cause of action so mentioned."
If a statement of claim or a proposed amendment exceeds the indorsement, the statement of claim should be struck out or the amendment refused unless the indorsement is amended: Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 at 238.
Secondly, an indorsement in a writ has important limitation ramifications. The Limitation Act 1935 is concerned with the date of issue of the writ. Provided a writ is not a nullity, amendments can be made to a defective indorsement on the writ if the terms of the writ are wide enough to encompass the proposed amendments as they particularise, clarify or expand a cause of action already instituted: Morgan v Banning (1999) 20 WAR 474; O 21 r 5(5) SCR. An open ended or otherwise defective indorsement may be relied on to the advantage of a plaintiff who seeks to amend its writ and then its statement of claim after the expiry of the limitation provided.
Thirdly, an indorsement also provides notice to the defendant of the nature of the plaintiff's claim and the relief sought in the action. However, it is not intended to be in the nature of a pleading but only a summary of the nature of the claim: Renowden v McMullin (1970) 123 CLR 584 at 595.
The nature and extent of the information necessary to meet the requirement that the indorsement contain a concise statement of the nature of the claim made and the relief or remedy required does not depend upon a rigid formula. Relevant information can be conveyed in different ways and adequacy is to be determined from the indorsement as a whole.
In this case the indorsement identifies the causes of action (breach of s 52 of the Trade Practices Act and the tort of negligent misstatement) and the relief (damages). That information on its own is insufficient. The balance of the indorsement refers to representations made by the defendant between 1 July 1996 and 28 February 1997 in connection with a contract between the defendant and Monaveen Pty Ltd for the performance of civil engineering services and works.
In my opinion, the respondents' indorsement of claim does not comply with O 6 r 1 or O 20 r 19(1) of the SCR. In particular, there is no information in the indorsement which links the respondents or either of them to:
(a)receipt of or reliance on or even knowledge of the representations;
(b)the contract between the applicant and Monaveen Pty Ltd which is said to be the subject matter of the representation;
(c)the damage arising from the representations.
The indorsement does not put the facts in a recognisable legal framework showing how the respondents' claims arise and the relationship between the claims and the loss. Without further information the reader is left to speculate as to how it is the respondents have a claim for damages against the applicant for representations made by the applicant about a contract between the applicant and a third party. There are a number of possible permutations and links which could theoretically give rise to a claim by the respondents against the applicant for breach of the pleaded causes of action. However, the respondents must state those links so they cannot subsequently be the beneficiary of such an open‑ended plea in the event a limitation issue arises.
In order to make the links, the indorsement should identify to whom the representations were made and how representations in connection with a contract between the applicant and a third party affected the respondents (whether it be by way of providing personal guarantees or advancing loan funds to Monaveen Pty Ltd or otherwise) resulting in damage to the respondents.
The applicant submitted that a defendant should be able to consider its defence under the Limitation Act from the information included in an indorsement: Ruzeu v Massey-Ferguson (Aust) Ltd (1983) 1 VR 733 at 734 ‑ 735; Elsum v Jameson (1974) VR 529 at 542 ‑ 543. Both Victorian cases involved a claim for personal injuries where the date of the accident and the accrual of the cause of action coincided. In my opinion, there is no requirement that an indorsement in a writ for a representation based claim under the Trade Practices Act or in negligence contain all the relevant facts necessary to establish the date of accrual of the cause of action. In many cases that can involve a complex factual analysis: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514).
However, there should be sufficient factual information in the indorsement to predetermine the limitation outcome. That is, the facts in the indorsement should enable a factual trail to be pursued which will result in identification of the date on which the cause of action accrued. The information establishing the links referred to earlier in these reasons is necessary for this purpose. The only additional information required for this purpose is further detail identifying the subject matter of the representations. The respondents are not required to state the content or the substance of the representations as in a statement of claim. However, they do need to narrow the focus of the description of the subject matter of the representations. Finally, in view of the wide time‑frame identified in the indorsement during which the representations were said to have been made, the respondents need to identify the manner (writing, oral or implied) in which the relevant representations were made.
For these reasons, I am of the opinion that the indorsement does not comply with O 6 r 1 and O 20 r 19(1) of the SCR on the grounds set out in par 1(a) (save for the reference to "content"), (b), (c) and (e) of the proposed grounds of appeal. I am not satisfied that proposed grounds of appeal 2 and 3 are an accurate statement of the Master's reasons for dismissing the applicant's strike‑out application. I interpret the Master's reasons concerning the statement of claim to be a reference to an application as a result of the statement of claim failing to comply with O 20 r 2(2) of the SCR.
For the purposes of determining the application for leave to appeal, it is necessary to consider what, if any, orders the Master should have made. The applicant applied to strike out the writ or, alternatively, the indorsement. It did not seek to set aside the writ. The source of the power to set aside the writ is O 6 r 1 (2) of the SCR and the source of the power to strike out the indorsement and consequentially the writ is O 20 r 19(1) of the SCR: Trustek Australia Pty Ltd v Burke & Ors, unreported; SCt of WA (Wheeler J); Library No 980121; 16 March 1998. The consequences of striking out the writ can be significant. If the writ was struck out (or set aside) and the plaintiff forced to commence the action again some 15 or 16 months later, its limitation position may be significantly prejudiced. The applicant's position is that the trade practices' claim is already statute barred. That is a matter for another time.
Alternative approaches to relief would be to:
(i)strike out the indorsement of claim;
(ii)leave the applicant to seek particulars pursuant to O 6 r 2 of the SCR;
(iii)permit the respondent to amend (or apply to amend) the indorsement of claim.
To strike out the indorsement without making consequential orders is inappropriate. It would leave the action in suspension. An available consequential order would be to give the respondents general leave to amend the indorsement. However, such an order may be to unfairly advantage the respondents in relation to causes of action time barred after commencement of the action and unfairly disadvantage the respondents' ability to rely on O 21 r 5(5) of the SCR in relation to causes of action (as that phrase is understood in the context of that rule as identified in Morgan v Banning at 486 ‑ 487) arising before the commencement of the action.
If the proper disposition of the matter was to leave the applicant to seek particulars under O 6 r 2 of the SCR, I would not grant leave to appeal. Although the Master erred in concluding that the indorsement complied with the SCR, no substantial injustice would be incurred by refusing to grant leave to appeal in those circumstances. However, the nature and extent of the deficiencies in the indorsement are such that, as with omissions of material facts from a statement of claim, they should not be cured by particulars.
In my view, the appropriate course is for this Full Court to consider and, if appropriate, accede to any application which the respondents wish to make to amend the indorsement to comply with O 6 r 1(1) and O 20 r 19(1) of the SCR. That application can be dealt with by expressly reserving the applicant's rights in relation to the limitation issues which may or will arise. The Court has the power to permit such amendments: O 6 r 1(2) of the SCR; Bill Discount Services Pty Ltd v Dill-Macky, unreported; FCt SCt of WA, Library No 6700; 7 May 1987. Failing such an application by the respondents within ten days from the date of handing down these reasons, the orders will be that:
(a)the applicant have leave to appeal and the appeal be allowed on the grounds in subparagraphs (a) as amended by deleting reference to content, (b), (c) and (e) of par 1 of the applicant's proposed grounds of appeal;
(b)the indorsement of claim and the writ be struck out pursuant to O 20 r 19 (1) of the SCR.