APT Finance Pty Ltd v Bajada - [2007] WADC 21

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: APT FINANCE PTY LTD -v- BAJADA & ANOR [2007] WADC 21

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: 20 DECEMBER 2006

DELIVERED : 14 MARCH 2007

FILE NO/S: CIV 2924 of 2002

BETWEEN: APT FINANCE PTY LTD
Plaintiff
AND
ALEXANDER STANISLAS BAJADA
Defendant
RINZE BRANDSMA
Third Party

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - O 18 r 7 - Application for substitution of plaintiff where plaintiff's interest assigned - Interpretation of r 7 - Sufficiency of evidence

Legislation:

Nil

Result:

Application unsuccessful

Representation:

Counsel:

Plaintiff:     Mr P Bevilacqua
Defendant:     Mr A Hershowitz
Third Party  :     Mr S Clune

Solicitors:

Plaintiff:     Price Sierakowski
Defendant:     Muries Lawyers
Third Party  :     Deacons

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

Nil

Case(s) also cited:

Wong v Minister for Immigration & Multicultural and Indigenous Affairs (2005) 146 FCR 10
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Carob Industries Pty Ltd (In liq) v Simto Pty Ltd [2000] WASCA 362
Jennings v Credit Corp Australia Pty Ltd [2000] NSWSC 210

DEPUTY REGISTRAR HARMAN: The plaintiff's claims damages as the result of breach of three deeds described in the statement of claim as the 1999 Loan Deed the 1999 Rollover Deed and the 2000 Loan Deed.
By the application before me the plaintiff seeks an order in the following terms:
1.The Plaintiff ceases being the Plaintiff in this action.
2.Seiza Investments Pty Ltd … be added as the Plaintiff in this action.
3.The Plaintiff have leave to amend its Writ and Statement of Claim in terms of the Minute of Proposed Amended Writ and Statement of Claim dated 21 November 2005 …
4.…
5.The Plaintiff pay the Defendant's and Third Party's costs thrown away by reason of the amendments.
6.The Defendant and Third Party pay the Plaintiff's costs of the application.
The grounds of the application are expressed as follows:
1.The plaintiff wishes to amend the Writ and Statement of Claim in order to substitute Seiza Investments Pty Ltd as the plaintiff in this action pursuant to order 18 rule 7(2) of the Supreme Court Rules 1971 as:
a)The plaintiff has assigned to Seiza its interest in the loan deeds, the subject of this action; and
b)It is necessary in order to ensure that all matters in dispute in the cause may be effectually and completely determined and adjudicated upon that Seiza be added as the Plaintiff.
2.The further grounds contained in the affidavit of John Graham Rogers sworn 8 November 2005, … and the affidavit of John Graham Rogers sworn 4 April 2006 … .
Order 18 r 7 is as follows:
"(1)Where a party to an action dies or becomes bankrupt but the cause of action survives, the action shall not abate by reason of the death or bankruptcy.
(2)Where at any stage of the proceedings in any cause or matter the interest or liability of any party is assigned or transmitted to or devolves upon some other person, the court may, if it thinks it necessary in order to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, order that other person to be made a party to the cause or matter and the proceedings to be carried on as if he had been substituted for the first mentioned party.
An application for an order under this paragraph may be made ex‑parte."
The applicant carries the onus of persuasion that the condition for the exercise of power has been satisfied and that it is appropriate that the order be made.
The first issue relating to be addressed is whether r 7(2) should properly be confined by the context expressed at r 7(1). Both the structure of the rule and the wording of r 7(2) would suggest that the power would only be exercised where the case came within the scope of r 7(1). The structural point is self evident. The reference to the "the first mentioned party" at the conclusion of r 7(2) could only be a reference to the party mentioned at r 7(1). This case does not fall within the scope of r 7(1).
In the event that the reference to "the interest … of any party is assigned" in r 7(2) stands alone, it would be a matter of considering whether the plaintiff's interest has been assigned to Seiza Investments Pty Ltd.
According to par 3 of the proposed amendment to the pleading, there has been a chain of assignment of the plaintiff's interest in the claims the subject of the action from the plaintiff via a series of corporate entities that I will describe as ZCMMF, ZCMA, ZCMASF and Challenge Life to Seiza Investments Pty Ltd. During the period that it was in the hands of ZCMSAF, ZCMSAF changed its name to Zed and from Zed to CMF. The evidence of the progress of the process of assignment is provided in the form of instruments attached to the affidavit of John Graham Rogers sworn 8 November 2005. The plaintiff acknowledges some difficulty would be had in tracing its interest to Seiza Pty Ltd simply on those instruments and it relied on par 12 and par 14 of Rogers' second affidavit sworn 4 April 2006. They are as follows:
"12.I refer to "annexure D" of my Previous Affidavit. Although the two documents comprised in "Annexure D" are both executed by Zed Capital Markets Australia Structured Finance Pty Ltd only, I have seen a copy of the deeds executed by all parties.
…
14. In the case of each assignee or transferee of interests in the loan, I was at the relevant time either an employee of the respective assignee or transferee or an employee of a related company and, in each case, involved with the transactions. I, therefore, can confirm that the conditions including valid offers and acceptances required by each of the deeds (Annexures "A" - "E" of my Previous Affidavit) have been satisfied."
The insufficiency of that evidence was highlighted during the hearing.
The applicant had previously made an application seeking an order in the same terms which was dismissed. It has brought an appeal against that decision in the Full Court of the Supreme Court which is yet to be heard. The ground of that application had been:
"The plaintiff wishes to amend the Writ and Statement of Claim in order to join a plaintiff pursuant to order 18 rule 6(2) of the Supreme Court Rules, who has had the interests in the loan deeds, the subject of this action, transferred to it."
Rule 6(2) is as follows:
" At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application-
(a) …
(b)order that any person who ought to have been joined as a party or whose presence before the court is necessary in order to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon , be added as a party, …"
It is difficult to avoid the observations made by the court on the hearings of that application in relation to the deficiencies in the chain of assignment upon which the applicant would rely. In his reasons for decision Deputy Registrar Hewitt stated:
"The facts as they emerge from the affidavit material filed in support of this application are that it appears that the present plaintiff APT Finance Pty Ltd assigned its interest in a number of assets including the loan (sic) which is the subject of the present action to a transferee named ZCM Matched Funding Corp. On that score the documentation is incomplete.
The document which is before me requires a notice to have been completed and delivered and as far as I know there is no copy of that notice produced to me. I am asked to take it on trust that the necessary steps which were required to be taken have been taken and for the purposes of this determination I will accept that to be the case but note in passing the very unsatisfactory state of the evidence which is put before me."
The Deputy Registrar then proceeded to deal with aspects of the case which he considered to be more significant for the purposes of an application under r6. In making the comment that I have cited he had before him the evidence that is before me and there is no reason why I would reach any different conclusion. In the case before me it is not appropriate to be accommodating of the applicant at that point as the fundamental issue to be determined is whether I am satisfied that Seiza Investments Pty Ltd holds the benefit established by the deeds. In my opinion the applicant's difficulty in establishing the assignment appeared to be minimised and the focus of its submissions was on what might be characterised as a beneficial impact of the power expressed at r 7: that it would allow for the differences between the parties in relation to the satisfaction of the condition to be contested within the scope of the action. The strength of that proposition appeared to draw upon the fact that so to do would not waste any benefits derived by the parties in the litigation and public resources that had been devoted to the action to date.
Ultimately it not a matter of whether the words "all matters in dispute in the cause or matter" used in r 7(2) could be interpreted to extend beyond what is revealed on the close of pleadings to include contests that swirl around an application brought under the rule. The prospect that the proposed plaintiff could have pleaded the proposed statement of claim is not a useful datum. Unless the court is satisfied that there had been an assignment to Seiza Investments Pty Ltd there is no reason to entertain the exercise of the power. Where by an application it is proposed that that there be significant fundamental changes wrought upon an action it is for the applicant to satisfy the court that it is appropriate that it be accommodated. In my opinion the applicant travelled little if any distance down that path.
The "public interest" considerations are wider than were projected by the applicant. The public has a greater interest in maintaining an orderly approach to the exercise of power. It is incidental that in any particular case the allocation of such resources may be projected as having been wasted.
If I were otherwise disposed in relation to the satisfaction of the condition it would be a matter of reflecting upon whether to exercise the power. According to the evidence in support of the application and the proposed pleading the action was commenced by the plaintiff after it had assigned its interest in the relevant deeds. At that time those interests were in the hands of ZCMA. Seiza Investments Pty Ltd took an assignment of those interests in November 2004. I am not aware of any difficulty that has presented itself to the plaintiff's solicitors during the life of the action. Any proposition to the contrary could be tested by the fact that assignment to Seiza Investments Pty Ltd took place so long ago. The impetus for the change proposed appears to have emerged from activity independent of the action taken by the assignee. The evidence does not reveal the dimensions of any future difficulty. There is no evidence that engages with the test of necessity.
That said the applicant seeks an order that would exceed what is provided by the rule in that it would be removed from the action. I suppose that such a result would construct a case of necessity. The term of the proposed disengagement is that it would pay any costs thrown away by the other parties. In any litigation there is scope to consider that a represented litigant would generate an expectation that the costs of his representation would be recoverable from his opponent. In considering the applicant's proposal there would be no reason why the court would consider removing the prospect of realising such a benefit. In effect the plaintiff proposes that it should be accorded immunity from such exposure. In my opinion the considerations that swirl around the issue of assignment and the proposed pleading are enough to demonstrate that even if I had been disposed to make an order in relation to the balance of the application it would not have been appropriate to accord such immunity. In any case where the applicant sought to be released from an action it would be for the applicant to put the terms upon which it would seek such a release. Where a party puts such a proposal there is no reason for the court to do more than make an assessment of it. An applicant would either be successful on the terms that it set or it would not. That part of the applicant's proposal is patently inadequate.
Whilst on the issue of costs I note that the applicant seeks an order that the defendant and third party pay the costs of the application. There is no explanation given as to why that result would be appropriate.
In the affidavit of John Graham Rogers he deposes at par 20 as follows
"There is no prejudice to the other parties to the action due to the notice of identity of the plaintiff and it would be in the interests of the administration of justice to substitute Seiza for the plaintiff in this action."
In my opinion the significance of any want of prejudice is a second order issue. The plaintiff has not brought a sufficient case to justify the court undertaking a balancing of considerations that the reference to prejudice would suggest. The only other observation that I need to make is that I do not appreciate what else that the applicant would seek to convey by the second ground of the application.
In my opinion the application fails comprehensively.