B & P Falcinella Pty Ltd v Hamilton - [2015] SASCFC 5

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal)
B & P FALCINELLA PTY LTD AND ANOR v HAMILTON AND ANOR
[2015] SASCFC 5
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Blue and The Honourable Justice Parker)
22 January 2015
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - AMENDMENT
LIMITATION OF ACTIONS - GENERAL MATTERS - AMENDMENT OF ORIGINATING PROCESSES AND PLEADINGS OUTSIDE LIMITATION PERIOD - AMENDMENTS INTRODUCING NEW CAUSE OF ACTION OR PARTICULARISING CAUSE OF ACTION
Application for permission to appeal to the Full Court from a judgment of a single Judge dismissing an appeal against an order by a Master for amendment of a statement of claim with prospective effect to introduce an application for an extension of time to add an additional cause of action.
The plaintiffs (respondents) were granted leave to amend their statement of claim to introduce with prospective effect an additional cause of action which was statute barred and to seek an extension of time in respect of the additional cause of action. The defendants (appellants) appealed to a single Judge against the grant of leave to amend. The appeal was dismissed except insofar as the date from which the amendment was to take effect was modified.
Whether under rule 57 of the Supreme Court Civil Rules 2006 the Court has power to order an amendment on a prospective basis to introduce a claim for an extension of time to add an additional cause of action that would otherwise be statute barred.
Held (the Court):
Permission to appeal refused. Rule 57 gives the Court a general power to order the amendment of a statement of claim upon conditions the Court considers appropriate, including the condition that the amendment only operate prospectively. This power is not conditioned upon a new or added cause of action arising out of substantially the same facts as the original cause of action. Rule 54(6) of the Supreme Court Civil Rules 2006 does not operate to limit the power conferred by rule 57 (at [17]-[18]).
Limitations of Actions Act 1936 SA s 48; Supreme Court Civil Rules 2006 (SA) r 54, r 54(6)(b), r 54(7)(a), r 57; Supreme Court Civil Rules 1987 (SA) r 53.03(c), r 53.01(1), referred to.
Brook v Flinders University of South Australia (1988) 47 SASR 119, discussed.
Agtrack (NT) Pty Ltd v Hatfield (2003) 7 VR 63; Air Link Pty Ltd v Paterson (No 2) (2003) 58 NSWLR 388; Perpetual Executors and Trustees Assoc of Australia Ltd v FCT (1948) 77 CLR 1; Weldon v Neal (1887) 19 QBD 394, considered.

B & P FALCINELLA PTY LTD AND ANOR v HAMILTON AND ANOR
[2015] SASCFC 5
Full Court: Kourakis CJ, Blue and Parker JJ
THE COURT:

This is an application for permission to appeal to the Full Court from a judgment of a single Judge dismissing an appeal against an order by a Master for amendment…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] SASCFC 5
Decision Date: 22 January 2015

CaseChat Overview and Summary

The Full Court of the Supreme Court of South Australia considered an application for permission to appeal from a judgment of a single judge. The application arose from a dispute between the plaintiffs, the Hamiltons, and the defendants, B & P Falcinella Pty Ltd and Marschall. The Hamiltons had previously sued Simeon Wines Limited for breach of contract, and Falcinella and Marschall were joined as co-defendants. Following a successful outcome in that action, the Hamiltons commenced the present proceedings against Falcinella and Marschall, seeking a share of their unrecovered legal costs incurred in the Simeon action, based on indemnity under the Partnership Act 1891 (SA) or an equitable lien or trust.

The central legal issues before the court were whether the Supreme Court had the power to permit an amendment to the statement of claim to introduce a new cause of action for taking or re-opening partnership accounts, and to seek an extension of time for this new cause of action, particularly when it might otherwise be statute-barred. Specifically, the court had to determine if the proposed amendment fell within the scope of rule 54 of the Supreme Court Civil Rules 2006 (SA), which requires the new cause of action to arise from substantially the same facts as the original causes of action, and if rule 57, which deals with amendments to add a statute-barred cause of action, was applicable.

The Full Court reasoned that there was no principle to confine the power conferred by rule 57 in the manner suggested by the defendants. The court held that allowing an amendment under rule 57, even with prospective effect, caused no prejudice to a defendant, as a plaintiff could simply commence a new action and seek an extension of time, likely resulting in the two actions being heard together. The court found it preferable for the entire controversy to be resolved in a single action. Consequently, the Full Court concluded that the single judge's decision upholding the Master's order for amendment was correct.

Permission to appeal was refused.

Orders

Orders of the court

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Background

Background to the litigation

This is an application for permission to appeal to the Full Court from a judgment of a single Judge dismissing an appeal against an order by a Master for amendment of a statement of claim with prospective effect to introduce an application for an extension of time to add an additional cause of action.Background The plaintiffs (the Hamiltons) and the defendants (Falcinella and Marschall) were partners in the Golden Heights Partnership. The partnership was dissolved on 1 May 2006[1] and winding up of its affairs was completed by 30 October 2006. [1] When the Hamiltons sold their interest in the business to third parties. In September 2007, the Hamiltons instituted an action in the District Court against Simeon Wines Limited for damages for breach of contract for sale by the partnership to Simeon Wines of grapes from the 2006 vintage year (the Simeon action). Because the Hamiltons relied upon a joint cause of action vested in all four partners, Falcinella and Marschall were necessary parties and were joined as co-defendants.[2] The Hamiltons succeeded in the Simeon action and in May 2012 judgment was entered in favour of the Hamiltons, Falcinella and Marschall against Simeon Wines for $103,850 together with the Hamiltons’ costs of action on a party/party basis.[3][2] District Court Civil Rules 2006 (SA) rules 73 and 74. The Hamiltons also joined Golden Heights Estate Pty Ltd, the nominee and manager of the partnership, but that company can be ignored for present purposes.[3] Costs orders were also made in favour of Falcinella and Marschall as against Simeon Wines (75 per cent) and the Hamiltons (25 per cent), but those costs orders can be ignored for present purposes. In May 2013, the Hamiltons instituted this action against Falcinella and Marschall for payment of a 50 per cent share of their unrecovered legal costs incurred in prosecuting the Simeon action.[4] The pleaded causes of action were indemnity under the Partnership Act 1891 (SA)[5] or an equitable lien or trust over the proceeds of the Simeon action.[4] The action was instituted in the Magistrates Court but subsequently transferred to the District Court and then to the Supreme Court.[5] Partnership Act 1891 (SA) s 24(1)(b) or s 39. On 21 October 2013, the Hamiltons applied to amend their statement of claim to introduce an additional cause of action for taking or re-opening the partnership accounts. On 16 December 2013, they applied to amend their statement of claim to introduce an application for an extension of time in which to bring the action insofar as it would include the additional cause of action.[6][6] Limitations of Actions Action 1936 (SA) s 48. On the hearing of the amendment application, Falcinella and Marschall argued that the Court had no power to permit the amendment under rule 54 of the Supreme Court Civil Rules 2006 (SA) (the Rules) because the new cause of action did not arise out of substantially the same facts as the original causes of action within the meaning of rule 54(7)(a) and the Court had no power to permit the amendment under rule 57 because rule 54 covers the field of the Court’s power to permit an amendment to add a cause of action that is statute barred. A Master upheld the first argument but rejected the second, ordering that the amendment take effect from 21 October 2013.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

As a matter of principle, there is no reason to read down or confine the power conferred by rule 57 in the manner suggested by Falcinella and Marschall. Exercise of the power conferred by rule 57 in the manner exercised by the Master and upheld by the Judge causes no prejudice to a defendant. As the Judge observed, there is nothing to prevent a plaintiff instituting a new action pleading the new cause of action and seeking an extension of time in which to do so. In that event, it is likely that the two actions would be heard together and in substance the defendant would be in no better position than if the statement of claim in the original action had been amended with prospective effect. In a case such as the present, it is preferable that the controversy between the parties be the subject of one action rather than a multiplicity of actions.Conclusion The decision of the Judge is plainly correct. Permission to appeal is refused.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.