Beri Distributors Pty Ltd v Rose
[2016] WADC 80
•9 JUNE 2016
| JURISDICTION | : | DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL |
| LOCATION | : PERTH | ||
| CITATION |
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| CORAM |
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| HEARD |
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| DELIVERED |
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| FILE NO/S |
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| BETWEEN |
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AND
JOANNA BARBARA ROSE
Defendant
| FILE NO/S | : | CIV 3936 of 2014 |
| BETWEEN | : | BERI DISTRIBUTORS PTY LTD Plaintiff |
| AND | ||
| MAUREEN LUCILLE ROSE Defendant | ||
| Catchwords: |
Practice and procedure - Application to amend writ and indorsement of claim to add new defendants and causes of action
[2016] WADC 80
Legislation:
Nil
Result:
Although the court had the power to add defendants and enlarge the causes of action pursued, the proposed causes were not sustainable - application dismissed
Representation:
CIV 3934 of 2014
Counsel:
| Plaintiff | : | Mr B Wheatley |
| Defendant | : | Mr B Campbell |
Solicitors:
| Plaintiff | : | Mossensons |
| Defendant | : | Hale Legal |
CIV 3936 of 2014
Counsel:
| Plaintiff | : | Mr B Wheatley |
| Defendant | : | Mr B Campbell |
Solicitors:
| Plaintiff | : | Mossensons |
| Defendant | : | Hale Legal |
Case(s) referred to in judgment(s):
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
[2016] WADC 80
DEPUTY REGISTRAR HEWITT
DEPUTY REGISTRAR HEWITT: These actions commenced in December 2014 and each has been characterised by a number of amendments to the pleadings, particularly the statement of claim, which I think is up to its fifth revision. The plaintiff has now brought an application in each of the actions to add a defendant and amend the indorsement to include additional matters not claimed in the original writ.
I will commence by analysing action CIV 3936 of 2014. The essence of the action is for monies loaned by the plaintiff to the defendant. In its original form the writ claimed monies said to have been advanced by the plaintiff to the defendant between 5 January 2011 and 1 June 2011, pursuant to a loan agreement made between the plaintiff and the defendant. The defendant referred to in this particular action is Maureen Lucille Rose. It is now proposed to amend the indorsement to the writ by adding the defendant to the other action, namely CIV 3934 of 2014 as a second defendant and making certain amendments to the indorsement which would constitute the second defendant a borrower, directly sued for the monies said to have been loaned, to claim from the second defendant a sum of $90,000 said to be due by virtue of her breach of a warranty of authority that she was acting as the agent for the first defendant, namely Maureen Lucille Rose, and finally a cause of action as follows:
Alternatively, the defendants are estopped from denying $90,000 was loaned to the first defendant, Maureen Lucille Rose, by representing or promising that funds would be repaid which the plaintiff relied upon and advanced funds to the first defendant, Maureen Lucille Rose.
3 The addition of an additional defendant and the amendments to the
indorsement of claim constitute the introduction of fresh causes of action. A fresh cause of action requires the approval of the court before it can be introduced and the addition of a party requires the court to consider the provisions of O 18 r 4, which deals with a joinder of parties which relevantly provides that the court may join more than one parties as defendants to an action where some common question of law or fact would arise in the various causes pursued against those defendants. In my view that criterion has been satisfied and the court has the power to permit the joinder of the additional defendant providing that the cause of action intended to be pursued against that defendant is viable. In order to consider that proposition it is necessary to analysis the individual causes of action sought to be pursued by the plaintiff against the proposed second defendant. An affidavit has been filed in support of the application by one Antonio DePaolo in which he sets out the basis of the plaintiff's
[2016] WADC 80
DEPUTY REGISTRAR HEWITT
claim against the existing defendant and the proposed second defendant. In par 3 of that affidavit the deponent testifies that the defendant and the proposed second defendant have a close personal relationship and acted together in relation to the payments made to them by the plaintiff. The defendant and the proposed second defendant are mother and daughter and it is said they negotiated the terms of repayment for identified loans, one of which was payable to the defendant and the other to the proposed second defendant. The affidavit identifies various purposes for which the monies were required and it is said that an agreement was reached between both defendants and the plaintiff that the monies would be repaid from the proceeds of the sale of a property forming part of the estate of the first defendant's late mother.
4 On that basis, I am completely unable to understand how it can be
said that the proposed second defendant is jointly responsible for the payment of the loans which were made to the first defendant, or indeed that the loans could in any way be construed as loans to her. In my view it lies ill in the mouth of the applicant when it is clear from the evidence which he has given in his affidavit that the monies advanced were not intended for both of them but a certain sum was intended for the first defendant and a certain sum was intended for the second defendant. Accordingly, I am unable to see that there is any proper basis to pursue the second defendant as contractually liable to the plaintiff for monies advanced to the first defendant and in so far as the application seeks such an order I refuse it.
5 The next issue which is pursued in the application is a claim that the
second defendant should be joined as a defendant to a claim for a breach of warranty of authority. That proposition arises from a contention raised by the plaintiff that the proposed second defendant held herself out as acting as agent for the first defendant in relation to the loan of $90,000. In my view that proposition founders on par 5 of the supporting affidavit in which it is said:
The terms of the loan agreement were agreed between myself, the defendant and her daughter, Joanna Rose, who initially requested the $90,000 loan on behalf of the defendant, who had debts to pay which included mortgage repayments on the Bullsbrook property and nursing home debts for her late mother.
In par 6 the deponent states:
It was initially agreed with both the defendants and Joanna Rose that the loan funds would be repaid upon sale of the property at 406 Eleventh
Road, Hilbert ('the Hilbert property') …
[2016] WADC 80
DEPUTY REGISTRAR HEWITT
7 In my view, statements such as these indicate that the plaintiff
considered itself to be directly dealing with the defendant, and although the proposed second defendant may have had some roll in those transactions, it cannot be said that she brought them into existence. I am unable to see a basis upon which the second defendant can be said, on the evidence presented by the plaintiff, to be in breach of a warranty of authority.
On the final aspect which is sought to be introduced the plaintiff wishes to enter an amendment to the indorsement in the following terms:
Alternatively the defendants are estopped from denying $90,000 was loaned to the first defendant, Maureen Lucille Rose, by representing or promising that the funds would be repaid which the plaintiff relied upon and advanced funds to the first defendant, Maureen Lucille Rose.
9 I imagine that this cause is intended to invoke the principles set out
in the case of Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR
387.10 In that case, the High Court unanimously adopted the principle that
an equitable estoppel can exist and it can be the basis of a cause of action.
Relevantly, Brennan J at [34] of his decision said:In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.
[2016] WADC 80
DEPUTY REGISTRAR HEWITT
Justice Deane at [18] of his decision said:
It has often be said that estoppel can be used only as a shield and not as a sword. In so far as estoppel by conduct is concerned, that statement is generally true only in the very limited sense that such an estoppel operates negatively to preclude the denial of, or a departure from, the assumed or promised state of affairs and does not of itself constitute an independent cause of action. The authoritative expositions of the doctrine of estoppel by conduct (or, in more obscure language, in pais) to be found in judgments in this court have been consistently framed in general terms and lend no support for a constriction of the doctrine in a way which would preclude a plaintiff from relying upon the assumed or represented mistaken state of affairs (which a defendant is estopped from denying) as the factual foundation of a cause of action arising under ordinary principles of the law (see, eg, the general statements of principle in Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 at 327-8; Thompson v Palmer, at 57-8; Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 at 734-5; West v Commercial Bank of Australia Ltd (1935) 55 CLR 315 at 322; Grundt, at 657, 674-7; Legione v Hateley (1983) 152 CLR 406 at 430-2 ; 46 ALR 1). There is no basis in principle for such a constriction of the doctrine. In so far as decisions or statements in judgments in cases in other courts would support a contrary view, they should not be accepted in this country. It follows that a plaintiff in the position of the Mahers in the present case is entitled to plead and rely upon the facts giving rise to an operative estoppel by conduct which precludes the defendant from denying the existence of a binding contract for the purpose of affirmatively establishing the foundation for the case to be dealt with on the basis of the assumed fact that there was such a contract. That being so, such an estoppel provides the factual foundation of an ordinary action for enforcement of that 'contract' notwithstanding that those facts demonstrate that no binding contract was actually made.
12 The case establishes that an equitable or promissory estoppel is
capable of supporting a cause of action. The proposed amendment is however not couched in those terms, the amendment seeks to estop the defendants from denying a particular proposition. That is not the basis of a cause of action, but the basis of a defence. Even allowing for the drafting, it seems to me that the scenario described by the plaintiff in the supporting affidavit falls a long way short of what is required to found an equitable estoppel. In truth these actions are a competition between the proposition that the advances were loans as propounded by the plaintiff or gifts as propounded by the defendants. The material on which the plaintiff seeks to rely is simply evidence which bears on that issue not a basis for a separate causes of action. The mere failure to keep a promise does not create an equitable estoppel. It is to be remembered that the basis of the plaintiff's claim and proposed claim is that the defendants are liable to it for the loan monies which were advanced. If that is not the
[2016] WADC 80
DEPUTY REGISTRAR HEWITT
case, it is very difficult to see how an equitable estoppel will permit the plaintiff to recover from these defendants a loan which is found not to have existed. In my view the proposed cause of action is a dead end. Accordingly I am of the view that the plaintiff should not be permitted to amend the indorsement in the manner contemplated.
13 I now turn to action 3934 of 2014. That is an action against
Joanna Barbara Rose which is very closely similar to the matter with which I have dealt. The first proposed amendment is to introduce Maureen Lucille Rose as the second defendant and a person therefore liable for the full amount said to have been advanced to the existing defendant. Secondly, to introduce a claim for breach of warranty of authority in purporting to act on behalf of Maureen Rose in relation to the loans and finally an estoppel in similar terms as that which has already been discussed. For reasons I have described in case 3936 of 2014 I consider these aspects of the application should not be allowed.
14 There is however a final proposal to amend monetary amount from
$215,600.78 - $296,860.10. That matter was not argued before me and it strikes me as uncontroversial however I will hear counsel on that issue before I dispose of the application.
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