Brandsma & Crockett Pty Ltd & Anor v Heindal Pty Ltd

[2003] HCATrans 272

[2003] HCATrans 272

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P48 of 2002

B e t w e e n -

BRANDSMA & CROCKETT PTY LTD

First Applicant

MGI BRANDSMA CROCKETT PTY LTD

Second Applicant

and

HEINDAL PTY LTD

First Respondent

ALISTAIR RITCHIE

Second Respondent

LEANNE FLORENCE RITCHIE

Third Respondent

DENNIS DAVIS

Fourth Respondent

ROBYN LYNETTE CAMPBELL DAVIS

Fifth Respondent

Application for special leave to appeal

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 8 AUGUST 2003, AT 12.02 PM

Copyright in the High Court of Australia

__________________

MR I.A. MORISON:   May it please the Court, I appear for the applicants.  (instructed by Srdarov Richards Burton)

MS F.C.E. DAVIS:   May it please the Court, I appear for the respondents.  (instructed by Phillips Fox)

GUMMOW J:   Yes, Mr Morison.  We have bombarded with printed material here.

MR MORISON:   Yes, for my part, I apologise for that, your Honour.  Just dealing with one aspect of it, the application that we have made to amend the name of the second applicant is not opposed and so I seek leave for the second applicant to change its name to Bridge Trading Pty Limited.

GUMMOW J:   Yes, you have that leave.

MR MORISON:   Secondly, I have amended the grounds from the original grounds and essentially now ground 1 relates to validity of the rule and the second to the application of the rule, taking into account particularly the question of the Australian company number.

I note that my learned friend has raised a Metwally point.  This was not raised before.  My submission is that both in the Full Court grounds and in the original grounds before this Court the point was raised, though not as directly as it is now.

GUMMOW J:   This is the validity point?

MR MORISON:   No this is the ACN point, which is ground 2, which, if the rule is found to be valid, I would then use to show that the circumstances do not justify the application of the rule in view of the use of the Australian company number.

GUMMOW J:   Where do we see this further ground?

MR MORISON:   It is in supplementary papers that were filed with the Court.  We were told that we did not need ‑ ‑ ‑

GUMMOW J:   I know.  Whereabouts in this forest?

MR MORISON:   I beg your pardon.  If the Court would go to the amended draft notice of appeal and to page 2 of that document.

GUMMOW J:   To page 2?

MR MORISON:   Yes.  I have removed 2.1.1 altogether.  I have removed the first wording of the next paragraph so that the only two grounds in relation to validity relate to the effectiveness of the substitution from the date of service of the order and then secondly, the attack on the rule itself as it being ultra vires.

The point that is objected to I think mainly is the amendment to 2.2 where your Honours will see that whereas the ground sought in effect to revisit evidence concerning the exposure of the second applicant to the respondents, it is now confined to a ground relating to the amendment of the CAN, of the Australian company number.

Now, the objection that is taken is that the ACN point, and perhaps the Court will see the grounds a bit more clearly on page 7 where it is set out without franking, so that 2.2 on page 7 is the ground simply that there was an error in law in holding that the rule was an available source of power to amend the ACN of the first applicant, the ACN of the second appellant.

GUMMOW J:   Where did the Full Court deal with this ACN point?

MR MORISON:   They, in fact, did not deal with it a great deal but it was raised in the grounds of appeal before the Full Court ‑ ‑ ‑

GUMMOW J:   Wait a minute, where did they deal with it at all?  It does not immediately come back to my mind, maybe it is here.  Justice McLure gave a very detailed judgment.

MR MORISON:   Yes.  I amend what I earlier said.  It may be that they did not deal with the point specifically, except in the context of the identity of the parties.  Justice McLure on page 38 of the application book notes that the search was conducted of the name, was not aware “that the Practice Company had changed its name”, but her Honour does not there mention the issue of the ACN.

GUMMOW J:   Why should we get into this?

MR MORISON:   Because it was, in my submission, raised in the grounds before the Full Court.

GUMMOW J:   Yes, but was it argued?  We both sat on intermediate courts.  What was argued did not necessarily provide a mirror reflection of what was in the notice of appeal.

MR MORISON:   I am not able to say whether it was argued in a separate way from the argument about the identity of the second applicant.

GUMMOW J:   Yes, well you do not have leave to argue the ACN point as any freestanding point on your leave application, Mr Morison, so proceed with and use the rest of your time to your best advantage on any other point you have.

MR MORISON:   Yes, in that case I will deal with the first ground, which goes to the validity or the operation of the rule and I seek to make three points upon that broadly.

HEYDON J:   And that was not put at all below to either the Master or the Full Court?

MR MORISON:   What was that, your Honour?

HEYDON J:   The question of whether the rule in the Supreme Court Rules was ultra vires because of inconsistency with the Trade Practices Act, the Fair Trading Act and the Limitation Act?

MR MORISON:   I believe that it was.  This is a ground that has not been objected to but, for example, his Honour Justice Murray at page 34 of the application book deals with the dichotomy between Order 21 rule 5(1), that is the general amendment power, and Order 21 rule 5(2), that is the power to allow an amendment relating back.

GUMMOW J:   This suggested inconsistency, is that by operation of section 109 of the Constitution, is it?

MR MORISON:   No, it is not.  It is simply put that the rule seeks to oust the Limitation Act and, indeed, the Trade Practices Act, the limitation provisions in both of those Acts by ‑ ‑ ‑

GUMMOW J:   I do not understand ground 2.1.2, at the moment, of your revised application.  Alternatively, if it does confer the power you say it is ultra vires and void as being inconsistent with section 82 of the Trade Practices Act.

MR MORISON:   Yes.

GUMMOW J:   What meaning can one give to that?  What meaning ‑ ‑ ‑

MR MORISON:   Yes, and section ‑ ‑ ‑

GUMMOW J:   Just listen to me for a minute. What meaning can one give to that other than the operation of section 109 of the Constitution, otherwise it is a meaningless statement?

MR MORISON: It is not intended to raise section 109, your Honour. It is intended to ‑ ‑ ‑

GUMMOW J:   It might not be intended to be, but you cannot make the point good without relying on it.  That is what I am trying to explain to you. 
To rely on it you need to give notices under section 78B of the Judiciary Act which was not done, was it?

MR MORISON:   No.

GUMMOW J:   Why should we get into it?

MR MORISON:   I wish to point out to your Honour that the last words in that ground refer also to the Limitation Act, section 38.

GUMMOW J:   Indeed they do.  I am worried about the earlier words at the moment, so can we dismiss from consideration any reliance on inconsistency with the Trade Practices Act.

MR MORISON:   Yes.

GUMMOW J:   Right.  So, it is the Fair Trading Act and the Limitation Act.  Are they dealt with below?

MR MORISON:   As I say, the ground has not been objected to.

GUMMOW J:   It might not be.  We do not shut our eyes to these matters.  Where is it dealt with by the Full Court?

MR MORISON:   Yes.  For example, on page 47 of the application book at paragraph 51 ‑ ‑ ‑

GUMMOW J:   Thank you.

MR MORISON:   Reference is made there, albeit shortly, to the rejection of an argument that the English rule was ultra vires.  That is responding, or must be responding to the invalidity and ultra vires point that was raised in the ground of appeal before the Full Court relating to the effect of Pfeiffer on the Bridge Shipping decision.  That is as far as I can go to indicating to the Court where that matter was raised.

GUMMOW J:   Thank you.

MR MORISON:   Now, I just wish to make three propositions to the Court on this question of ultra vires.  The first is that as a result of Pfeiffer a limitation period is a matter of substantive law.  The second point is that it follows from that that a limitation defence ‑ ‑ ‑

GUMMOW J:   Wait a minute - is a matter of substantive law for the purposes of classification under the rules applied in international law, which is not involved here.

MR MORISON:   Yes, but it was not confined to that, in my submission, in the judgment of the majority.  At 544 the majority says – after the making of that point about the classification of – the classification goes on to say:

These principles may require further elucidation in subsequent decisions but it should be noted that giving effect to them has significant consequences for the kinds of case in which the distinction between substance and procedure has previously been applied.

What I submit the Court is doing there is saying that whilst we are holding that limitation periods are substantive law in this context there are ramifications of that decision in other contexts which may require examination.  My submission is that there is a ramification here because if

the limitation defence is a matter of substantive law then a limitation defence is a right and not some procedural advantage that might or might not be temporary.

If that is correct we now have the law in the position that a limitation defence is a right, then this rule which is not backed by statute, as it is in two other States, takes away that right because the rule itself contemplates that an amendment by way of the correction of name could have the effect of the substitution of parties.  That being so, and once it is accepted that there will be a substitution of a party which would otherwise have had a limitation defence for the other party in circumstances where now, because of the substitution and the non‑relation back, it will be deprived of that defence the effect of the rule then is to take away what the legislature has provided.

The suggestions that have been made in some of the State courts, whose decisions I have referred to, that the rule accepts the limitation period but simply deals with the procedural aspect of amendment cannot be upheld in the context of a limitation defence which is going to be removed because the effect of this rule called an amendment rule will be to substitute a party, generally speaking, from the beginning and deprive it of a substantive limitation defence.

That is not a rule that simply deals with procedure or the conduct of proceedings or practice.  It is a rule that has the effect of depriving a litigant, or a potential litigant, of a limitation defence.  So in my submission, it is inevitable that the rule must either go or be read down so that it cannot have relation back to the time of the original proceedings.  If it please the Court.

GUMMOW J:   We do not need to call on you, Mr Davis.

With respect to the remaining grounds in the amended application for special leave to appeal, namely 2.1.1 and 2.1.2, we are of the view first that there are no reasonable prospects of success in a challenge to the reasoning of Justice McLure at paragraphs 47 and following in her reasons for decision, the electronic citation of which is [2002] WASCA 96.

Insofar as the grounds seek to argue a further point, in particular, respecting inconsistency and validity, we would not embark upon those without the assistance of the reasoning of the Supreme Court of Western Australia, in particular in a matter such as this having a significant impact upon the practices and procedures of that court.  Accordingly, special leave to appeal is refused.

Ms Davis, you seek costs?

MS DAVIS:   Yes, your Honour, I do.  I seek an order that the applicants pay the respondents’ costs of the special leave application.

GUMMOW J:   Yes, that cannot be resisted.  Dismissed with costs.  The Court will adjourn to reconstitute.

AT 12.23 PM THE MATTER WAS CONCLUDED