Alomes v Piggott Wood and Baker (A firm)

[2000] TASSC 179

[2000] TASSC 179

CITATION:                 Alomes & Ors v Piggott Wood & Baker (A firm) [2000] TASSC 179

PARTIES:  ALOMES, Helen Therese & Others
  v
  PIGGOTT WOOD & BAKER (A firm)

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  525/2000
DELIVERED ON:  18 December 2000
DELIVERED AT:  Hobart
HEARING DATE:  4 December 2000
JUDGMENT OF:  Cox CJ

CATCHWORDS:

Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Court - Parties - Application for joinder of further plaintiffs after commencement of the action - Whether separate rule for adding plaintiffs only source of power to do so.

Rules of the Supreme Court 2000 (Tas), rr179, 184.
Foxe v Brown (1984) 58 ALR 542, referred to.
Aust Dig Procedure [271]

REPRESENTATION:

Counsel:
             Plaintiffs:  C R Doherty
             Defendant:  K B Procter
Solicitors:
             Plaintiffs:  Toomey Manning & Co
             Defendant:  Murdoch Clarke

Judgment  Number:  [2000] TASSC 179
Number of paragraphs:  5

Serial No 179/2000
File No 525/2000

HELEN THERESE ALOMES & OTHERS v
PIGGOTT WOOD & BAKER (A FIRM)

REASONS FOR JUDGMENT  COX CJ

18 December 2000

1. Twenty-two named plaintiffs issued a writ against the defendant firm on 28 July 2000 claiming damages for breach of contract, negligence, negligent misstatement, breach of trust or misleading and deceptive conduct.  By their statement of claim, they claimed that at all material times the defendant was a firm of solicitors, that it was a controlled fund operator conducting a contributory mortgage fund and that each of the plaintiffs was a client of it.  Each plaintiff claimed to have deposited money with the defendant for investment on certain conditions set out on an application form.  The plaintiffs asserted breach of contract by the defendant in failing to honour the terms of the agreement, negligence in respect of the investment of their money, negligent misstatement as to the plaintiffs' capacity to withdraw the money, breaches of trust in (inter alia) lending on inadequate security, and misleading or deceptive conduct in respect of the withdrawal of money and failure to keep the plaintiffs properly informed of material matters, including the charging of fees to the borrowers of the money.  As a result of the defendant's alleged conduct, the plaintiffs claimed to have been unable to recover a substantial amount of the money invested and of the interest due to them thereon.  Detailed particulars of the claims were set out in a series of schedules to the statement of claim, identifying (inter alia) the date and amount of each investment, the borrower and the security, the breaches of contract alleged by each plaintiff, the loss and damage suffered, the breaches of the duty of care, the dates of notice to withdraw their funds given by each plaintiff, the date of the defendant's responses to the plaintiffs' notices to withdraw funds and the dates of the defendant's ceasing to remit interest to the plaintiffs.

1. The plaintiffs, at a directions hearing, now seek the following orders:

"1That the following persons and entities be joined as plaintiffs in this proceeding:

(a)     Neville George Arnol and Elizabeth Louise Arnol;

(b)     Betty Margaret Clennett;

(c)     Robert Thomas Davis;

(d)     Heather Margaret Hogg;

(e)     Perpetual Trustees Tasmania Limited (ACN 009 475 610); and

(f)     Christopher John Schofield and Anne Catherine Schofield.

2That the plaintiffs have leave to amend the Statement of Claim in accordance with the amended Statement of Claim annexed hereto and dated 2 November 2000.

3That the defendant file and serve an amended Defence to the amended Statement of Claim referred to in paragraph 2 within 14 days of the date of this order.

4That both parties make, file and serve a List of Documents verified by Affidavit by no later than 22 December 2000.

5That both parties deliver any Interrogatories by no later than 16 February 2001.

6That the parties deliver answers to any Interrogatories by no later than 9 March 2001."

An affidavit by the plaintiffs' solicitor identifies the amendments sought to the statement of claim and deposes to his having received instructions from the additional six proposed plaintiffs which are incorporated in the amendments proposed for the statement of claim.  These amendments indicate that the six proposed plaintiffs have similar claims to those of the 22 initial plaintiffs arising out of similar transactions with the defendant.  Counsel for the plaintiffs, Mr Doherty, did not identify the rule he relied upon for the first order.  Mr Procter for the defendant submitted that Rules of the Supreme Court, r184, could not be availed of because that only applied where the addition as a party of a person who ought to have been joined as a party was necessary for the judge to adjudicate and settle all the questions involved in the proceeding or where through mistake a wrong party had been named as plaintiff.  I agree that r184 is not appropriate to the plaintiffs' application.  Mr Procter acknowledged that r179 might have been availed of at the commencement of the action, but as I understand his submission, it was to the effect that joinder under that rule is not available after the commencement of proceedings.

1. In Litigation Evidence and Procedure, 6th ed, by Mark Aronson and Jill Hunter, the authors state at 63 - 64:

"[3.12]  The words 'joinder' and 'addition' used to be terms of art.  Joinder could occur only at the instance of the plaintiff when drawing up the originating process.  The term did not apply to any procedure happening after the issue of originating process.  Addition, on the other hand, was applied only to procedures for increasing the number of parties after originating process had been issued:  Swain v Nominal Defendant [1960] SR(NSW) 455 and Foxe v Brown (1984) 58 ALR 542. Each jurisdiction has different rules governing joinder and addition. If the distinction were adhered to strictly, then the plaintiff's right to add D2 to a case already launched would be governed by different, and usually narrower, rules than those governing the plaintiff's right to include D2 as one of the parties at the time of issue. Simply put, it is easier to include D2 from the outset than it is to add D2 once the case has started. This is quite arbitrary, and unless a statute of limitations time bar has arisen between the time the proceedings issued and the time of the proposed addition of a new party, many judges nowadays tend to take an expansive interpretive approach to the rules, merging the joinder and addition criteria if it is the plaintiff who is seeking to enlarge the number of parties to the case. In addition to the natural disinclination of the judiciary to read too much into the distinctions between the joinder and addition rules, most jurisdictions now have rules allowing what they call joinder after a case has started, if the plaintiff has sought the court's leave in that regard.  For those jurisdictions, at least, their own rule structure has confounded any attempt to keep to the original meanings of joinder and addition.

Therefore, the rules governing joinder and addition have been tending to coalesce, a tendency which has accelerated with the introduction into the rules of most jurisdictions of a provision empowering retrospective joinder."

The authors identified the jurisdictions which now have Rules allowing joinder after a case has started as Victoria (O 9.02), Western Australia (O 18, r 4(1)), New South Wales (Pt 8, r 2), Northern Territory (r 9.02), South Australia (r 27.01) and Federal Court (O 6, rr 2, 4).  The Victorian rule permits joinder by leave, before or after the joinder.  So does the New South Wales Rule.  But for such a provision, it seems that Mahoney JA in Qantas Airways Ltd v A F Little Pty Ltd [1981] 2 NSWLR 34 would not have permitted a joinder (of a further defendant) after the case had been instituted. At 55 he said:

"… it is necessary to consider whether, Qantas's claim against the builder not having been joined originally, it can now be joined.  In my opinion, it can.  For this purpose, it is necessary to advert to the power of the court to amend an existing proceeding to permit the addition of a further claim.  I do not think that an amendment of the present kind would fall within the inherent power of the court: cf Chitty, Archbold's Practice p 1554.  The power of amendment necessary for this purpose must, I think, be found in the rules.  Until recently, it does not appear that there was any such power of amendment.  The general power to amend has not been relied on to allow an amendment to add a party for the purpose of making a new claim against him: cf now Pt 20, r 1.  It was no doubt for this reason that, in 1955, Devlin J in Amon's case (1956) 1 QB 357, said that a plaintiff seeking the relevant amendment would 'no doubt' have to rely upon the equivalent of r 8, in so far as that might extend to cover his application.

But, as I have said, the English rule corresponding to Pt 8, r 2  was shortly thereafter amended to allow a party to be joined 'with the leave of the court'.  It is not necessary for present purposes to consider whether that amendment would have allowed the court to grant such an amendment as would allow the addition of such an additional party in an existing proceeding.  But in the rules of this State, Pt 8, r 4 ensures that such an amendment may be made.  That rule provides that the court may grant leave to add a party under r 2 'before or after the joinder' and that a plaintiff may apply for leave under r 2 'either before or after filing his originating process'.

In my opinion, r 4 makes clear that the court may grant the leave necessary for the joinder of an additional person as a defendant under r 2 after the initiation of the proceeding."

The Federal Court rule also allows joinder by leave and permits such leave to be granted before or after the joinder.  In Bishop v Bridgelands Securities & Anor (1990) 25 FCR 311, Wilcox J, in reliance upon the leave provision, permitted the joinder of a further 113 plaintiffs, with one plaintiff who had initiated the proceedings. All claims were similar in character involving the deposit of moneys with the defendants and lost by the latter as the result of breaches of the terms upon which the money had been deposited. The leave provision appears to have been added so as to overcome problems created by the High Court's interpretation in Payne v Sutton (1980) 145 CLR 609 of the words of that Court's equivalent of the former Tasmanian rule, O18, r1, namely a right of relief in respect of or arising out of the same transaction (or set of circumstances) or series of transactions. The present Tasmanian rule does not use the word "same" and hence the problem of it being treated as governing "set of circumstances or series of transactions" does not arise. Nevertheless, the fact remains that the present rule does not contain a leave provision, still less an express provision authorising the grant of leave before or after joinder.

1. In these circumstances, I am of the view that r179 does not authorise me to join the proposed plaintiffs. In Foxe v Brown (supra), Mason J made it clear in respect of the joinder rule regarding defendants that it applied so as to authorise a plaintiff to select his defendant or defendants at the commencement of action rather than to authorise the court to join them later.

"For a person who is not a party to be added as a defendant against the wishes of the plaintiff, resort must be had to O 16, r 4(2)."  (at 544)

The High Court O16, r4(2) is the equivalent (though differently expressed) of our r184 allowing for addition of parties as opposed to joinder of parties.  That a discrete set of rules is applicable to each method of putting more than one party before the court is reinforced, in my view, by the presence in r184(4) of a requirement that "a person must not be added as a plaintiff or applicant without his or her consent in writing".  One would expect that if the joinder provision were to be used to add plaintiffs after commencement of action, a similar provision would appear therein, but it does not.

1. In consequence, the application to add the six proposed plaintiffs must be refused and the amendments to the statement of claim consequent on their anticipated inclusion cannot be allowed.  I authorise the amendment of the statement of claim by the addition of subpars(p) and (q) in par18 and subpars(t) and (u) in par30, as opposition to them was withdrawn by Mr Procter.  The remaining amendments sought were the addition of pars46 - 51 and the prayer relying on breaches of fiduciary duty.  Mr Procter opposed them because par46, by repetition of par3 of the existing statement of claim, alleged that the plaintiffs were clients of the defendant, and par47 alleged that the borrowers were also clients of the defendant, but neither allegation identified the capacity in which they were clients of the defendant.  Mr Procter submitted that the fiduciary duties depended upon whether the relationship was one of solicitor and client or controlled fund operator and lender or borrower.  Mr Doherty sought the opportunity to formulate appropriate amendments to make this clear.  Accordingly, I adjourn the further hearing of this matter sine die to enable that to be done.