Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 4]
[2016] WASC 74
•9 MARCH 2016
BELGRAVIA NOMINEES PTY LTD -v- LOWE PTY LTD [No 4] [2016] WASC 74
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 74 | |
| Case No: | CIV:2583/2013 | 1 MARCH 2016 | |
| Coram: | TOTTLE J | 9/03/16 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Application to reopen allowed Plaintiffs' renewed application for leave to amend indorsement of claim rejected | ||
| B | |||
| PDF Version |
| Parties: | BELGRAVIA NOMINEES PTY LTD JOONDEL DEVELOPMENTS PTY LTD LOWE PTY LTD COLIN REGINALD HEATH PENHURST NOMINEES PTY LTD |
Catchwords: | Practice and procedure Amendment to indorsement on writ Application dismissed in part Where plaintiff applied to reopen case Whether plaintiff denied procedural fairness Where judge applied principle of law not raised in argument Where principle taken from case which was discussed in argument Plaintiffs were deprived of opportunity to put submissions Appeal would cause further delay in proceedings Leave to reopen granted Practice and procedure Amendment to indorsement on writ Where amendment would add new cause of action Where new cause of action would otherwise be statute barred O 21 r 5(2) Rules of the Supreme Court 1971 (WA) Limitation period must be current at time writ is issued Where limitation period for some causes of action had expired before writ issues O 21 r 5(2) did not apply Limitation periods s 38 Limitation Act 2005 (WA) Extension of limitation period Where no application yet made to extend limitation period Section 38 did not affect operation of O 21 r 5 |
Legislation: | Limitations Act 2005 (WA), s 38, s 43, s 44 Rules of the Supreme Court 1971 (WA), O 21 r 5(2) and (5) |
Case References: | ABB Service Pty Ltd v Hetherington [2001] WASCA 417 Wentworth v Wentworth [1999] NSWSC 638 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- JOONDEL DEVELOPMENTS PTY LTD
Plaintiffs
AND
LOWE PTY LTD
First Defendant
COLIN REGINALD HEATH
Second Defendant
PENHURST NOMINEES PTY LTD
Third Defendant
Catchwords:
Practice and procedure - Amendment to indorsement on writ - Application dismissed in part - Where plaintiff applied to reopen case - Whether plaintiff denied procedural fairness - Where judge applied principle of law not raised in argument - Where principle taken from case which was discussed in argument - Plaintiffs were deprived of opportunity to put submissions - Appeal would cause further delay in proceedings - Leave to reopen granted
Practice and procedure - Amendment to indorsement on writ - Where amendment would add new cause of action - Where new cause of action would otherwise be statute barred - O 21 r 5(2) Rules of the Supreme Court 1971 (WA) - Limitation period must be current at time writ is issued - Where limitation period for some causes of action had expired before writ issues - O 21 r 5(2) did not apply
Limitation periods - s 38 Limitation Act 2005 (WA) - Extension of limitation period - Where no application yet made to extend limitation period - Section 38 did not affect operation of O 21 r 5
Legislation:
Limitations Act 2005 (WA), s 38, s 43, s 44
Rules of the Supreme Court 1971 (WA), O 21 r 5(2) and (5)
Result:
Application to reopen allowed
Plaintiffs' renewed application for leave to amend indorsement of claim rejected
Category: B
Representation:
Counsel:
Plaintiffs : Mr M D Cuerden SC
First Defendant : Mr D H Solomon
Second Defendant : Mr D H Solomon
Third Defendant : Mr C S Gough
Solicitors:
Plaintiffs : Robertson Hayles Lawyers
First Defendant : Solomon Brothers
Second Defendant : Solomon Brothers
Third Defendant : Mills Oakley Lawyers
Case(s) referred to in judgment(s):
ABB Service Pty Ltd v Hetherington [2001] WASCA 417
Wentworth v Wentworth [1999] NSWSC 638
- TOTTLE J:
Introduction
1 On 18 November 2015 I published reasons in respect of the plaintiffs' application to make further amendments to the indorsement of claim on the writ of summons in this action. The application was controversial because the plaintiffs sought to add new claims to the indorsement that the first and second defendants argued were statute barred.
2 The application was successful in part.
3 On the publication of my reasons I invited the parties to make submissions in respect of the orders to be made to give effect to the reasons and in respect of costs. The plaintiffs' counsel foreshadowed an application to reopen. Pending the hearing of that application I deferred the making of orders giving effect to my reasons. Likewise, I made no order as to costs. Subsequently, the first and second defendants foreshadowed an intention to apply for leave to reopen. Due to time-tabling difficulties, there was an unfortunate delay in the hearing of the applications to reopen and the hearing did not take place until 1 March 2016.
The plaintiffs' application to reopen
4 The gravamen of the plaintiffs' application is that I denied the plaintiffs procedural fairness by deciding one aspect of the application on which the plaintiffs were unsuccessful by reference to an application of the Rules of the Supreme Court O 21 r 5(2) which was not the subject of argument before me and in respect of which the plaintiffs had not made submissions.
5 The background to the original application to amend is set out in the reasons of 18 November 2015. In those reasons at [8] to [20] I set out the principles that govern applications for leave to amend a writ of summons if the effect of the amendment is to add a new cause of action which if made the subject of fresh proceedings would have been statute barred by a fixed period of limitation. There was no great controversy between the parties as to the principles - what was contentious was the application of those principles.
6 I included in the statement of principles a reference to the observation of McLure J, as her Honour then was, (with whose reasons Wheeler J agreed) in ABB Service Pty Ltd v Hetherington [2001] WASCA 417 at [13] to the effect that O 21 r 5(2) and (5) could only be relied upon to add a new cause of action if the limitation period applicable to that cause of action was current at the date of the commencement of the action but had expired at the time the application to amend was made. I pause to record that ABB Service was a decision cited by the plaintiffs, though for propositions other than the one to which I have just referred.
7 The claims the plaintiffs sought to add to the indorsement were claims in respect of the receipt by the first defendant of a series of payments made between 4 April 2006 and 29 January 2012. It was alleged that these payments were made by the plaintiffs and the third defendant by mistake. I will refer to the payments as the 'mistaken payments' and to the claims as the 'mistaken payment claims'.
8 There were 20 payments. Six of those payments were made between 4 April 2006 and 26 March 2007. That is more than six years before the issue of the writ of summons on 18 October 2013. Seven payments were made between 29 October 2007 and 16 July 2009, and the remainder were made between 8 January 2010 and 29 January 2012.
9 In my 18 November 2015 reasons I posed the question: Had a limitation period which was current at the time of the issue of the writ expired at the time of the application? Before answering that question I recorded that the plaintiffs accepted that the relevant limitation period was six years from the accrual of the cause of action. I held that the limitation period commenced on the receipt by the defendants of the payments. The plaintiffs had pleaded in their amended statement of claim the dates on which the payments they sought to recover had been made and received. On the facts as alleged in the amended statement of claim, I held that the limitation period had expired in respect of mistaken payments received by the first defendant before 18 October 2007 and that the amendment should only be allowed in relation to those claims which were current at the time the writ was issued but had expired by the time the application to amend was made; that is, payments received by the first defendant in the period between 29 October 2007 and 16 July 2009. No limitation issue of any kind arose in relation to the payments made on and after 8 January 2010.
10 The plaintiffs contend that the application of O 21 r 5(2) in the manner in which I applied it in the 18 November 2015 reasons was not argued before me and they were deprived of the opportunity to put submissions to me on the point and, thus, have not been afforded procedural fairness.
The discretion to reopen
11 A court may reopen after judgment but before the entry of orders. The power to do so is discretionary. It is a power exercised with great caution having regard to the public interest in maintaining the finality of litigation. The principles of general application to the question of reopening by first instance judges where avenues of appeal are readily available were discussed by Santow J in Wentworth v Wentworth [1999] NSWSC 638.
While appellate courts must have regard to whether and to what extent there is any prospect of any final appellate review and which in the case of the Australian courts of appeal depends upon special High Court leave, the principles for exercise of the discretion as laid down in Smith v NSW Bar Association (No 2) (supra) at 265 embrace all courts:
'The power is discretionary and, although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation (Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684). Thus, if reasons for judgment have been given, the power is only exercised if there is some matter calling for review (Marinoff v Bailey (1970) 92 WN(NSW) 280 at 284; National Benzole Co Ltd v Gooch [1961] 1 WLR 1489 at 1492-1494). And there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal (State Rail Authority of NSW v Codelfa Constructions Pty Ltd (1982) 150 CLR 29 at 38-39, 45-46; Wentworth v Rogers [No 9] (1987) 8 NSWLR 388 at 394-395).'
Per Brennan, Dawson, Toohey and Gaudron JJ in Smith v NSW Bar Association (No 2) at 265.
Their Honours went on to say (at 265) 'the power to review a judgment in a case where the order has not been entered will not ordinarily be exercised to permit a general reopening'.
Speaking in broad terms, the basis for review has been expressed thus (in Yenald (supra) at 42,362):
'An order varying the terms of a judgment that has not been entered will be made to correct error or oversight or to give effect to a review of the contemplated order so that the orders made deal more adequately with the matter as litigated by the parties before the Court. (See: The Texas Company (Australasia) Ltd v FCT (1940) 63 CLR 382 per Starke J at 457).'
In appellate courts particularly, there is to be weighed the public interest in the finality of litigation against what would otherwise be irremediable injustice; State Rail Authority of New South Wales v Codelfa Construction Pty Ltd at 38 per Mason and Wilson JJ. But that latter factor does not have the same weight where, as here, appeal is allowed as of right or as a matter of usual course.
The discretion to reopen or vary a judgment is thus significantly qualified. As is so often said, the power should 'be exercised with great caution'; Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684. Examples where reopening was denied serve to illustrate the constraint observed by the courts in exercise of the discretion:
(i) Where the ground was that the Court misconstrued a section of legislation this was said to be 'an attempt to re-argue the substantial question decided in the appeal after hearing full argument from counsel for the parties'; Wentworth v Woollahra Municipal Council (supra) at 685.
(ii) Where the grounds are an allegation of bias against the Court or allegations of mistaken findings of fact, the proper procedure is to seek special leave to appeal from the High Court. Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 at 395.
(iii) Where what is occurring is in truth the re-agitation of arguments already considered by the Court; as was said by Mason CJ in Autodesk (at 302):
'It must be emphasised that the jurisdiction [to review or re-hear an issue] is not to be exercised for the purposes of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a re-hearing has failed to present the argument in all its aspects or as well as it might have been put'.
(iv) Where the parties have been sufficiently heard on the impugned issue; Autodesk Inc v Dyason (No 2).
(v) Where even if there be the possibility of some misapprehension on the Court's part as to the facts or relevant law, this misapprehension can be attributed solely to the neglect or default of the party seeking the re-hearing; for 'the purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases'; per Mason CJ in Autodesk at 303.
Examples on the other hand where review has been allowed in the case of a judgment or order of a court of first instance include the following:
(i) Where the court's reasons for judgment inadvertently did not deal with important matters argued by counsel at the hearing where an appeal to correct this would involve inevitable delay; Twenty-First Australia Inc v Shade (NSWSC, Young J, 31 July 1998, unreported) in Butterworths Unreported Judgments at 18.
(ii) Where the court's reasons involve 'infelicity of expression and ambiguous statements' which may be corrected by the trial judge upon the bringing in of short minutes; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 2) (1998) 29 ACSR 290.
(iii) Where reopening in respect of an order which was consequential upon a finding of error of law and the trial judge had no intention that the order have the effect that further evidence could be called on in the remittal to the tribunal below, and where the possible effect of the order had not been the subject of argument at hearing; AB v Federal Commissioner of Taxation (1998) 157 ALR 510. (While the order arising out of this decision to reopen the matter and the previous decision which found an error of law were overturned on appeal in Glennan v Commissioner of Taxation [1999] FCA 297, the decision to reopen was not itself canvassed in the appeal.)
(iv) Where what was sought was further consideration of orders in respect of the nature and extent of equitable relief which had been earlier sought at trial (in the context of a complex litigation); Farrow Finance Company Ltd (in liquidation) v Farrow Properties Pty Ltd (in liquidation) and Ors (SC(Vic), Hansen J, 16 April 1998, unreported).
(v) Where a party had misunderstood the basis of a pleading and failed to address the issue in its strike-out application; Hoad v Nationwide News (1996-1997) 37 IPR 407 [Anderson J SC(WA)]
(vi) Where excision of a paragraph from a judgment was sought where the trial judge had mistakenly referred in his reasons to a situation which did not exist; Smits v Buckworth (No 2) (NSWSC, Young J, 14 November 1997, unreported).
(vii) Where the trial judge recalled his order after deciding it was wrong immediately after making it; Pittalis v Sherefettin [1986] 1 QB 868.
In the Court of Appeal, where further appeal would have depended on discretionary special leave from the High Court, the Court agreed to reopen its decision in order to permit a reconsideration of a particular issue, because the court had not originally been made aware of authority directly in point and which was to the contrary to that earlier decision; Wentworth v Wentworth (NSWCA, 30 November 1998, unreported).
While illustrations of where the courts have or have not reopened a judgment not yet entered are of value, they can be subsumed more generally in what Mason CJ said in Autodesk (at 301-2). He delimited the scope of the discretion by explaining that 'the exceptional step' of reviewing an issue might occur where a court has good reason to consider that it had proceeded on a misapprehension as to the facts or the law and where the misapprehension cannot be attributed solely to the applicant's neglect or default.
Disposition on plaintiffs' application for leave to reopen
12 I have come to the conclusion that I should allow the plaintiffs to reopen. I have reached this conclusion because there is force in the plaintiffs' submissions that the issue on which I decided to refuse leave to amend in respect of some of the mistaken payment claims was not the subject of argument before me and, thus, it can be said that the plaintiffs were deprived of the opportunity to put submissions to me on that issue. The focus of the argument before me was on the issue of whether the mistaken payment claims arose from the same facts, or substantially the same facts, as claims made in the original indorsement of claim.
13 In reaching the conclusion that the plaintiffs should be allowed to reopen, I have balanced the interests of finality in this interlocutory application with the need for a speedy, just and efficient disposition of the action generally. It is true that the plaintiffs could apply for leave to appeal if I refused leave to reopen and made orders giving effect to my reasons of 18 November 2015, but an application for leave to appeal, and any subsequent appeal, has the potential to delay the future conduct of this action in which there has already been one appeal to the Court of Appeal and an application for special leave to the High Court of Australia. I appreciate, of course, that the plaintiffs may be disappointed with my disposition of their application following the grant of leave to reopen, and that an application for leave to appeal may follow in any event but, if so, it will not be complicated by the argument over procedural fairness raised in support of the plaintiffs' application to reopen.
14 The plaintiffs' submissions in support of the application for leave to reopen outline the submissions that they wish to make in support of the application to me to re-consider the relevant aspect of my decision. The point is a short and confined one, and the submissions are limited. I consider that it is in the interests of the parties that I should deal with it.
Reconsideration of the application to amend to add the mistaken payment claims
15 The plaintiffs argue that the approach I should have taken to the application to amend to include the mistaken payments made and received prior to 18 October 2007 is the approach I took to the application to amend to add what I termed in my reasons of 18 November 2015 the 'knowing receipt claims' and the 'rescission claim'. The approach was that the question of whether the knowing receipt and rescission claims were statute barred should be determined at trial.
16 It is important to emphasise that:
(a) It was accepted by the plaintiffs that the limitation period in respect of the mistaken payment claims was six years, s 13 of the Limitation Act 2005 (WA) (the Act).
(b) Whilst it was not conceded at the (first) hearing of the application to amend that the causes of action accrued at the date of the receipt by the first defendant of the payments, in the course of the hearing following the grant of leave to reopen, the plaintiffs' senior counsel accepted that if it was not for the plaintiffs' reliance on s 38 of the Act, which reliance I explain below, the causes of action accrued on the dates the mistaken payments were received.
(c) The dates of the payments and receipts were pleaded in the amended statement of claim and it was a simple exercise to identify those payments which were made more than six years before the writ was issued.
17 Thus the limitation question in relation to the mistaken payments made six years or more before the issue of the writ was entirely straightforward and capable of being determined on a summary basis.
18 The plaintiffs submitted that leave to amend should be granted in respect of those mistaken payments which were made more than six years before the issue of the writ because it was possible for the plaintiffs to make an application pursuant to s 38 of the Act to extend time to commence an action in respect of those causes of action. It was submitted that to refuse to allow the amendments would involve a summary determination of limitation questions that the authorities made clear should rarely be determined before trial.
19 The plaintiffs have not made an application pursuant to s 38 of the Act. It was submitted that they were not obliged to do so until the defendants had made it clear whether they intended to raise limitation defences. It was submitted that if limitation defences were raised, the plaintiffs' reply would 'include reliance' on s 38 of the Act. On the issue of the timing of an application pursuant to s 38 of the Act, my attention was drawn to the fact that an application pursuant to that section may be made at any time before or after the issue of proceedings and before or after the close of pleadings.
20 Section 38 of the Act must be read with s 43 and s 44. The sections read as follows:
38. Court may extend time to commence actions in cases of fraud or improper conduct
(1) A plaintiff may apply to a court for leave to commence an action on a cause of action even though the limitation period provided for under this Act has expired.
(2) On an application a court may extend the time in which the action can be commenced up to 3 years from when the action ought reasonably to have been commenced if the court is satisfied that the failure to commence the action was attributable to fraudulent or other improper conduct of the defendant or a person for whom the defendant is vicariously liable.
(3) Nothing in section 39, 41 or 42 prevents a court from extending, under this section, the time in which a plaintiff can commence an action.
(4) This section does not apply to an action relating to the publication of defamatory matter.
43. Jurisdiction and procedure
(1) Subject to subsection (2), an extension application is to be made by summons in the jurisdiction in which -
(a) the existing action, if any, has been brought; or
(b) the proposed action would be brought if the application were successful,
as is relevant to the case.
(2) An extension application in respect of an arbitration for a difference or matter under an arbitration provision is to be made by summons to the Supreme Court.
(3) The plaintiff is to serve a copy of the summons on each person against whom the action that is the subject of the extension application is brought or proposed to be brought.
(4) Despite subsection (1), the Supreme Court may give leave to bring an action in any court which seems to it to be the appropriate court.
(5) An extension application can be sought or determined at any time before or after the issue, or close of, pleadings.
44. Further matters for court's consideration on extension applications
When deciding, on an extension application, whether to extend the time for the commencement of an action, a court is to have regard to -
(a) whether the delay in commencing the proposed action, whatever the merit of the reasons for that delay, would unacceptably diminish the prospects of a fair trial of the action; and
(b) whether extending the time would significantly prejudice the defendant (other than by reason only of the commencement of the proposed action).
21 The effect of the plaintiffs' submissions is that the words of limitation appearing in O 21 r 5(2) to the effect that an amendment may only be allowed pursuant to O 21 r 5(5) if the period of limitation relevant to the cause of action sought to be added by amendment was current at the date of the issue of the writ should be subject to an implied qualification, 'unless an application for an extension of time within which to commence an action may be made pursuant to s 38 of the Limitation Act 2005'.
22 The interaction between s 38 of the Act and O 21 r 5(2) and (5) raised in this case has not been the subject of consideration in the authorities.
23 I have given careful consideration to the plaintiffs' submissions. I remain of the view that the application to amend the indorsement of claim to add causes of action in relation to the mistaken payments made before 18 October 2007 should be refused. My reasons are as follows:
1. There is no challenge to the statement of the applicable principles set out in [8] to [20] of my 18 November 2015 reasons which included the proposition that there is no general discretion under O 21 r 5 to permit amendment despite the expiry of the relevant limitation period. The plaintiffs' application for leave to amend must thus be brought within O 21 r 5(2) and (5).
2. The express terms of O 21 r 5(2) require me to consider whether the limitation periods in respect of the causes of action sought to be added by the amendment were current at the time of the original writ. If I conclude that the limitation periods in respect of those causes of action were not current at the time of the issue of the writ, I do not have a discretion to allow the amendment. This approach is consistent with what was said by McLure J in ABB Services at [13] and her Honour's observations are binding on me, though I should add, with respect, that I agree with them.
3. In my reasons of 18 November 2015 I concluded that when the action was commenced the limitation periods were current in respect of all mistaken payments received on or after 29 October 2007 and that the limitation periods in respect of mistaken payments made before 18 October 2007 were not current. This conclusion arises clearly from the dates of the receipts and payments and the fact that there is no argument about the limitation period, absent the consequences that might flow from an application under s 38 of the Act. On that basis, and consistently with the approach outlined in the preceding paragraph, I remain of the view that claims in respect of mistaken payments made before 18 October 2007 cannot be added by amendment.
4. The plaintiffs' foreshadowed invocation of s 38 of the Act does not cause me to revise my conclusion. I do not accept that the words 'after any period of limitation current at the date of the issue of the writ has expired' as they appear in O 21 r 5 (2) should be read as if they were subject to the qualification 'unless a plaintiff applies (or may apply) for leave to commence an action pursuant to s 38 of the Limitation Act 2005'. There is no sound basis for construing the sub-rule in that manner. Section 38 of the Act provides for the grant of leave to commence an action. Neither s 38 nor s 43 addresses the issue of extending the limitation period to facilitate amending the originating process in an existing action. Having regard to the words of the Act, there is no sound basis for construing s 38 as applying to an application to amend the originating process in an existing action by adding an otherwise statute barred cause of action.
5. My conclusion that s 38 of the Act may not be invoked within the context of an application for leave to amend a writ pursuant to O 21 r 5(2) and (5) is reinforced by the provision in the Act of a procedure for the making of an application for an extension (s 43) and by the provision of criteria to which the court is to have regard in deciding whether to extend time or not. The inclusion in the Act of these provisions suggests that an application for an extension of time within which to commence proceedings is not to be subsumed in an application to amend an existing originating process.
6. I accept that the views I have set out above are capable of creating the seemingly anomalous result that a party may be prevented from adding a claim by amendment that it might be permitted to make if a fresh action was commenced. This is what has occurred in this case. It is a consequence of the timing of the application for leave to amend. Unfortunate though that is, and although it may give rise to case management difficulties, it does not justify what I consider to be an unwarranted construction of either O 21 r 5(2) or s 38 of the Act or a departure from the principles governing the application of the O 21 r 5(2) and (5) established by the authorities.
The first and second defendants' application for leave to reopen
24 The first and second defendants' application for leave to reopen was founded upon the proposition that they did not have the opportunity to address me on the legal consequences which they contend flow from my rejection of the plaintiffs' submissions that the mistaken payment claims were encompassed within the claims made in the existing indorsement of the writ. It was submitted on the first and second defendants' behalf that, having rejected that submission and identified the existence of a mistake or series of mistakes as the feature that distinguishes the mistaken payment claims from the existing claims [35] – [38], I should have concluded that the mistaken payment claims did not arise out of the same or substantially the same facts as the existing claims. It was contended that the first and second defendants did not have an opportunity to develop this submission because they did not know that I would settle on the existence of the mistake or mistakes as the distinguishing feature.
25 I allowed the first and second defendants to reopen on this point but reflecting on the submissions developed by their counsel, I consider that the substance of the submissions was the same as the submissions put at the hearing of the original application and rejected by me between [41] and [52] of my 18 November 2015 reasons. Thus, I am not persuaded that my reasoning was in error as contended for by the first and second defendants.
26 I will hear the parties in relation to the orders to be made in respect of my reasons of 18 November 2015.
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