Bate v International Computers (Aust) Pty Ltd
[1984] FCA 224
•03 AUGUST 1984
Re: ERNEST WILLIAM BATE
And: INTERNATIONAL COMPUTERS (AUSTRALIA) PTY. LTD.
VG No. 53 of 1978
(1984) ATPR para 40 - 475 / 2 FCR 526
Practice and Procedure - Limitation of Actions
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Woodward J.(1)
CATCHWORDS
Practice and Procedure - amendment to statement of claim - whether amounting to a fresh cause of action - whether in substance a counter-claim to a cross-claim - period of limitation for counter-claim to a claim under the accrued jurisdiction of the Court.
TRADE PRACTICES - period of limitation for claims under s.87 of the Act.
Judiciary Act 1903 ss.79 & 80
Trade Practices Act 1974 ss.82 & 87
Limitation of Actions Act (Vic) 1958 s.30
Practice and Procedure - Amendment to statement of claim - Whether a statute-barred amendment may be revived by a cross-claim on the same issue.
Limitation of Actions - Limitation of action for damages under s. 87 of the Trade Practices Act 1974 (Cth) - Amendment of statement of claim raising statute-barred cause of action may be permitted where the same cause of action is the subject of a cross-claim by the defendant.
HEADNOTE
Held: (1) That claims brought under s. 87 of the Trade Practices Act 1974 (Cth) which are supplementary and ancillary to claims for damages under s. 82(1) of the Act are subject to a limitation period of three years.
(2) The limitation period established by state legislation applies to a claim entertained under the accrued jurisdiction of the Federal Court which would otherwise have been heard in a State court. The State Act will apply in terms both to the right to bring the action and to the right to counter-claim.
(3) An amendment to the statement of claim otherwise statute-barred will be permitted where the defendant cross-claims in respect of the same subject matter.
Aurel Forras Pty Ltd v. Graham Karp Developments Pty Ltd (1975) V.R. 202, followed.
HEARING
Melbourne, 1984, May 3; August 3. #DATE 3:8:1984
SUMMONS.
Summons seeking leave to amend the statement of claim.
J. Larkins Q.C. and B. Doyle, for the plaintiff.
G. Beaumont, for the defendant.
Cur. adv. vult.
Solicitors for the plaintiff: Paving Whiting & Byrne.
Solicitors for the defendant: Moules.
G.F.V.
ORDER
The application by the plaintiff for leave to amend its statement of claim to the form produced to the Court on 5 April 1984 be allowed.
The costs of this application be costs in the cause.
Orders accordingly.
JUDGE1
The matter was commenced in September 1978 by a writ of summons, with statement of claim annexed, issued under the rules then applying to this Court; it has since been ordered that the matter proceed under the Federal Court Rules, but it is convenient in these reasons to continue to refer to the parties as plaintiff and defendant. The defendant entered an appearance seven months later and filed a request for further and better particulars six months after that. Then nothing happened, so far as the Court was concerned, for four years.
On 3 November 1983 the defendant filed a cross-claim against the plaintiff. The matter was then set down by the Court for a directions hearing. The defendant then filed a notice of motion seeking to have the statement of claim dismissed for want of prosecution or, alternatively, leave to deliver an amended defence and counterclaim with consequential directions.
On 5 April 1984 the Court refused the application to strike out the statement of claim, gave leave retrospectively (and without objection) for the filing of the cross-claim, and adjourned the hearing to allow the plaintiff to formulate an amended statement of claim. The plaintiff now seeks leave to make a number of amendments and the defendant has objected to leave being granted in respect of several of them. The defendant's objection is that these amendments disclose a cause of action not pleaded by the plaintiff in his original statement of claim and that the cause of action now disclosed is statute barred. It was assumed without argument, by both counsel, that a six-year period of limitation applies to the present case, presumably by operation of the Limitation of Actions Act (Victoria) 1958, brought into play by ss.79 and 80 of the Judiciary Act 1903.
In my view the position is more complicated than that. In the first place I believe that the applicant's claim is governed by a three-year period of limitation. The Trade Practices Act 1974 provides, in s.82(2), for a three-year period for damages claims brought under s.82(1) of the Act, as this claim clearly is (see below). In my view the same limitation period must apply to the other claims under s.87 of the Act which are supplementary and ancillary to that basic claim for damages. This must clearly be so if s.87(1) is invoked, as appears to be the case here (see below), because its availability is wholly dependent upon the claim under s.82. Even if s.87(1A) were relied upon, enabling the other claims to stand on their own feet, I believe that the scheme of the Act requires that claims so closely related to damages claims as are the claims in this case must meet the same limitation requirements; see Fenech v Sterling 1983 ATPR 40-413. The situation may well be different if claims under s.87(1A) were appended to an application for an injunction under s.80, as to which there is no limitation period in the Act - although the Court would no doubt be slow to grant relief where an application had been long delayed.
The question as to whether, and to what extent, a State Limitations Act applies to the exercise of federal jurisdiction by a court established by the Commonwealth Parliament, has concerned the High Court on several occasions; see, in particular, William Crosby & Co. Pty. Ltd. v Commonwealth of Australia (1963) 109 CLR 490, Pederson v Young (1963) 110 CLR 162 and John Robertson & Co. Ltd. v Ferguson Transformers Pty. Ltd. (1973) 129 CLR 65. It is not necessary for present purposes to analyse the respective judgments in those cases, because I think it is clear in principle that the relevant state Limitations Act must apply to a claim entertained under the accrued jurisdiction of the Federal Court which would otherwise have been heard in a state court. The state Act will apply, in its terms, both to the right to bring the claim and to the right to counter-claim against that accrued jurisdiction claim. There is nothing in any of the High Court judgments to suggest otherwise.
The basic facts of this case are that between 14 May 1974 and 16 September 1977 the plaintiff, a pathologist, and the defendant company entered into a series of agreements for the rental, sale, licensing and servicing of a considerable range of computer equipment and components to be used by the plaintiff in his profession. The agreements were reduced to writing. It is common ground that the written agreements relevant for present purposes relate to two different computer systems and various components for those systems; they have been described as the 2903 series computer ('2903 computer') and the 2960 series computer ('2960 computer'). The 2903 computer was delivered to the plaintiff and used by him; the 2960 computer had not been delivered to the plaintiff at the time he repudiated any liability under the agreements relating to it.
By the statement of claim it is alleged that in the course of negotiations between the plaintiff and defendant, leading to the making of various 'computer agreements', the defendant engaged in conduct, and made representations, in contravention of sections 52(1) and 53(a) of the Trade Practices Act 1974 ('the Act'). The term 'computer agreements' as used in the statement of claim is particularised in paragraph 3 of the statement of claim; it is not necessary here to set out that list of 28 agreements. The list consists of 26 agreements that relate to the 2903 computer and its components and includes only two agreements that relate to the 2960 computer. It is common ground that the two 2960 computer agreements listed are not the central contracts for that series.
The particulars of the alleged contraventions of sections 52(1) and 53(a) are stated in the following terms:
"In or about the month of August, 1973 the Defendant supplied to the Plaintiff a "Management Summary" in respect of the Defendant's computer equipment known as I.C.L. 2903 Computer System hereinafter called "the 2903" The said Management Summary inter alia contained the following representations and/or statements -" (A list of eleven detailed representations then follows).
The statement of claim then goes on to allege that these representations proved to be untrue and inaccurate, and as a result sections 52(1) and 53(a) of the Act have been contravened. Another allegation in the statement of claim which is relevant for present purposes reads:
"The said conduct or some of it and the said representations and/or statements or some of them .... were maintained and/or engaged in and/or repeated by the Defendant towards and to the Plaintiff from time to time between the months of August, 1973 and June, 1977."
No particulars of the occasions or of the form in which the representations were repeated are provided. Although it does not express it clearly, this paragraph suggests that it was not only the 'Management Summary' referred to in the particulars that induced the plaintiff to enter into the computer agreements listed, but that other statements and representations were also made by the defendant and relied on by the plaintiff.
The particulars of relief sought by the plaintiff demonstrate that it is to be limited to the listed 'computer agreements'. The relief sought is -
"A. An order that the Defendant refund to the Plaintiff moneys paid by the Plaintiff by way of rent, hire and other consideration pursuant to the agreements referred to in the Particulars to paragraph 3 hereof.
B. Damages.
C. A declaration that pending payment of such damages the Plaintiff be no longer required to pay any of the sums due by him pursuant to the contracts particularized under paragraph 3 hereof.
D. An injunction restraining the Defendant pending the hearing of this action and pending payment of such damages as should be assessed in favour of the Plaintiff from seizing the 2903 Computer or any component part or associated pieces of equipment pursuant to any of the terms of the contracts particularized in paragraph 3 hereof.
E. Orders that the said contracts insofar as the terms thereof are inconsistent with these orders be re-written to conform to such orders.
F. Such further Orders, Declarations or Relief as the Court shall deem just."
Paragraph B is clearly a claim pursuant to s.82(1) of the Act, and paragraphs A, C and E appear to rely upon s.87(1), which enables ancillary orders to be made in such a case.
The plaintiff now seeks leave to amend its statement of claim to include, in the particulars to paragraph 3, a number of additional agreements relating to the 2903 computer and, more important, a series of written agreements that relate to the 2960 computer. Counsel for the plaintiff submitted that, although not previously particularised, these 2960 computer agreements clearly fall within the period 14 May 1974 to 16 September 1977, which was referred to in paragraph 3 of the statement of claim.
The defendant contends that the inclusion of these agreements is more than a mere particularisation of agreements not previously specified. It is in effect the pleading of facts establishing a new cause of action. In developing this argument counsel relied particularly on the proposed amendment to the particulars which sets out the representations on which the plaintiff would rely in relation to the 2960 computer. These representations, set out in a proposed paragraph 5(3), are quite different from those alleged in relation to the 2903 computer. Although these are also amended in proposed paragraph 5(2), such amendments are in elaboration or explanation of the allegations in the original statement of claim. Although some variation is involved, this amendment in 5(2) is, in my view, clearly permissible.
Sub-paragraph 5(3) is in a different category altogether. It makes clear that the plaintiff now wishes to complain of quite separate representations regarding a quite separate set of contracts. The two 2960 computer contracts previously lumped together with the 2903 computer contracts are now back in their rightful place. No explanation of this has been offered to the Court; one can only assume that they were previously included with the 2903 contracts in error.
The argument that the proposed amendments concerning the 2960 computer amount to the raising of a fresh cause of action is further supported by the amended claim for relief. This is in the following terms:
"A. A declaration that the Defendant has contravened the provisions of Sections 52 and 53 of the Trade Practices Act 1974.
B. An order that the Defendant refund to the Plaintiff moneys paid by the Plaintiff by way of rent, hire, and other considerations pursuant to the Computer Agreements.
C. Damages.
D. A declaration that each of the Computer Agreements in Series 17, 19 and 20 (the 2960 contracts) was void ab initio or alternatively, rescinded by the Plaintiff as from December 1977 or such other date as to the Court shall seem proper.
E. An order that the Computer Agreements comprised in Series 2 to 20 inclusive (the 2903 and 2960 contracts) be varied in such manner as shall to the Court seem proper. F. Such further orders, declarations, or relief as the Court shall deem just.
The defendant's central objection to the belated inclusion of the main 2960 computer agreements is that the plaintiff, by his failure to include them in the original statement of claim, or to introduce them in the five years that followed, has abandoned his claim in relation to them. It contends that the agreements and the statements and representations in relation to them constitute a new cause of action which is now statute barred. Accordingly, it is said that, following the practice that originated with Weldon v Neal (1887) 19 QBD 394, the amendment ought not to be allowed.
A leading Australian authority on this subject is the High Court decision of Renowden v McMullin (1970) 123 CLR 584. In that case the plaintiff, a solicitor, brought an action against a firm of auditors who had been responsible for the auditing of books relating to his practice. By his general endorsement on the writ of summons he claimed loss and damage alleging breach of contract and breach of the duty of care imposed on the defendants, as auditors, by the provisions of the Legal Professional Practice Act (Vic) 1958. The statement of claim delivered pursuant to the writ claimed only loss and damage in respect of the breach of statutory duty. At a time when the action in respect of breach of contract was statute barred the plaintiff sought leave to amend his statement of claim to include it. The High Court held that the plaintiff's failure to include this cause of action in his statement of claim amounted to an abandonment of it and, since it was statute barred at the time the amendment was sought, the amendment could not be allowed. Owen J., who delivered the decision of the majority, said (at p.608):
"... in a case in which an amendment to a statement of claim is sought which raises a cause of action of a kind different to that which is alleged in the statement of claim and it appears that at the date when the amendment is sought that cause of action would be statute barred if a writ were then issued, the amendment should not be allowed except perhaps in what Lord Esher had described (in Weldon v Neal above) as 'very peculiar circumstances' ..."
Although in the present case it is the particular set of contracts, rather than the nature of the action, which is different, I think the inference of deliberate abandonment of any substantial claim relating to the 2960 computer is clear enough.
In my view the facts of the present case can be distinguished from those considered by the High Court in Black v City of South Melbourne (1964) 38 ALJR 309. There the High Court was asked to decide, among other things, whether an amendment to the plaintiff's statement of claim on the day of the trial, allowed by the trial judge, should have been permitted, given that the period of limitation had run at the time the amendment was sought. The plaintiff had claimed damages for injuries sustained whilst using the defendant's public baths. He alleged by his statement of claim that the defendant occupier owed him a duty of care as an invitee, and so was responsible for the injuries sustained when he dived in and collided with a submerged piece of timber. He had sought to amend his claim to include allegations that, because of the combination of the height of the platform and the depth of the water, he had struck his head on the bottom. Barwick C.J., (in a judgment in which Kitto & Taylor JJ., concurred) said (p.310):
"It seems to me quite plain that, throughout the plaintiff's cause of action did not change, though his particularising of the facts by which he proposed to sustain the cause of action did substantially alter. It would, in my opinion, have been an improper exercise of judicial discretion for the trial judge in this case to have refused the plaintiff the opportunity to present his proofs of that cause of action differently to the manner in which he had originally proposed. Questions of surprise and disadvantage because of a change of course in proof can almost always be met by adjournment and appropriate orders as to costs. It would certainly have been so in this case. As there was, in my opinion, no new cause of action involved in the changed particulars, no question of the statute of limitations fell for consideration."
The case argued by counsel for giving leave to amend to include the 2960 computer agreements, can be summarized in the following propositions:
1. Paragraph 3 of the statement of claim describes a
series of 'computer agreements' made between the parties on dates between 14 May 1974 and 16 September 1977. The statements and representations alleged to have contravened the Act which are now sought to be included (and the respective agreements to which they relate) are computer agreements and are specified as having occurred within that period, which was unnecessarily wide to cover the 2903 computer agreements, the last of which was entered into on 30 June 1977.
2. The particulars of 'computer agreements' referred to
in paragraph 3 of the statement of claim do, whether erroneously or not, make reference to two of the 2960 computer agreements. As a result the 2960 computer agreements are not completely alien to the statement of claim.
3. The statement of claim does suggest that the
statements and representations detailed in the Management Summary were repeated and maintained between the months of August 1973 and June 1977. Although, this allegation does not specifically relate to the 2960 computer agreements and the statements and representations alleged to have been made in respect of them, it serves to indicate that the statements and representations particularised in the statement of claim were not the whole of the relevant communications between the parties. It could be argued that the inclusion of the new sub-paragraph 5(3) merely incorporates further particulars of the statements and representations thus referred to.
4. The defendant is not confronted with a cause of
action of a different nature from that previously raised. Section 52(1) and 53(a) contraventions are alleged and the relief sought is similar, though not identical.
Although these are cogent arguments, I would be inclined to refuse leave to amend on the ground of a clear intention to abandon the central claim concerning the 2960 computer agreements, were it not for the circumstances surrounding the filing of the cross-claim by the defendant. Although this matter was not particularly relied upon in argument it is, in my view, decisive of the case.
It is not necessary to consider the cross-claim in detail for present purposes, except to say that by that claim the defendant seeks damages for the breach (by way of wrongful repudiation in October 1977) of computer agreements entered into with the plaintiff, including those that relate to the 2960 computer. In fact by its cross-claim the defendant raises the basic 2960 computer agreements for the first time in this action. The agreements the defendant incorporates in its cross-claim include all the agreements which the plaintiff now seeks leave to incorporate in the particularised list in paragraph 3 of the statement of claim.
By objecting to the plaintiff's amendments to include claims relating to the 2960 computer agreements, the defendant is in effect asking the Court to deny the plaintiff an opportunity to counter-claim against the defendant in respect of the basic 2960 computer agreements. It is clear that, pursuant to s.30 of the Victorian Limitation of Actions Act 1958, either a set-off or counter-claim which might otherwise have been statute barred in cases such as the present, is put beyond challenge by being deemed "to have been commenced on the same date as the action in which the set-off or counter-claim is pleaded". The defendant's cross-claim, pursuant to the Court's accrued jurisdiction, in the present case having already been saved by this rule, the plaintiff must also receive the benefit of it. I am satisfied that the matters the plaintiff now wishes to raise for the first time can properly be regarded as a counter-claim, and there is authority for the view that, in the circumstances of this case, they are properly pleaded by way of amendment to the statement of claim; see Aurel Forras Pty. Ltd. v Graham Karp Developments Pty. Ltd. 1975 VR 202 at 220.
The substance of the matter is that the plaintiff has sued the defendant over the 2903 computer, claiming it was misrepresented to him. The defendant has belatedly cross-claimed over the 2960 computer which the plaintiff refused to accept. The plaintiff now wishes to counter-claim, within the meaning of the Limitation of Actions Act (Vic) 1958, to show that that computer was also misrepresented. In my view he is entitled to do so. The plaintiff will have leave to amend his statement of claim as sought. I hereby certify that this and the twelve (12) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon. Mr. Justice Woodward
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