Catta Pty Ltd v Alan Hilder Pty Ltd

[2003] TASSC 127

[2003] TASSC 127

CITATION:              Catta Pty Ltd v Alan Hilder Pty Ltd [2003] TASSC 127

PARTIES:  CATTA PTY LTD

AITKINS, Robert George

v

ALAN HILDER PTY LTD (ACN 009 565 682)

E R HENRY WHERRETT & BENJAMIN (a firm)

HENRY, Nigel Rutherford

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  1452/1995

622/1998

DELIVERED ON:  27 November 2003
DELIVERED AT:  Hobart
HEARING DATES:  10, 18 September 2003
JUDGMENT OF:  Slicer J

CATCHWORDS:

Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Court - Parties - Joinder of parties - Joinder of plaintiff after expiry of limitation period - Special circumstances.

Supreme Court Rules 2000 (Tas), r184.
Weldon v Neal (1887) 19 QBD 394; Stilbo Pty Ltd v MCC Pty Ltd (2002) 11 Tas R 63, followed.
Hayward v Darling Downs Aircraft Services Pty Ltd [1993] 2 Qd R 153, distinguished.
Aust Dig Procedure [271]

REPRESENTATION:

Counsel:
             Plaintiff:  M E O'Farrell
             First Defendant:   No Appearance
             Second and Third Defendants:     K E Procter SC
Solicitors:
             Plaintiff:  Dobson Mitchell & Allport
             First Defendant:  Gunson Williams
             Second and Third Defendants:     Murdoch Clarke

Judgment Number:  [2003] TASSC 127
Number of Paragraphs:  19

Serial No 127/2003
File Nos 1452/1995

622/1998

CATTA PTY LTD, ROBERT GEORGE AITKINS
v ALAN HILDER PTY LTD (ACN 009 565 682),
E R HENRY WHERRETT & BENJAMIN (a firm),
NIGEL RUTHERFORD HENRY

REASONS FOR JUDGMENT  SLICER J

27 November 2003

1. The plaintiff applies for an order pursuant to the Supreme Court Rules 2000, r184, that:

"Robert George Aitkins be joined as a Plaintiff to the action."

1. Mr Aitkins is a joint director of Catta Pty Ltd ("Catta"), and authorised to make an affidavit in support of the application.  His co-director is Lynette Joy Aitkins, the former wife of the intended plaintiff.  Catta, incorporated in April 1986, is the trustee company for a discretionary trust, the Robert Aitkins Family Trust ("the Trust") established by deed dated 9 May 1986.  In 1985 Catta (or at least its intended director) entered into negotiation for the purchase of land at Old Beach.  A contract was signed and the sale completed in 1986, after the incorporation of Catta, which became the registered proprietor.  Some land was sold leaving three portions, comprising some 14.8ha, owned by Catta.  Those portions can be identified as:

A	Lot 2	CT 4491/96	9.6ha	East Derwent Highway
B	CT 4537/11	4.2ha	Morrisby Road
C	CT 101886/5	1ha	Morrisby Road

1. The marriage of Robert and Lynette Aitkins was dissolved by the Family Court which made property orders on 12 June 1992.  Those orders included:

"5  That Catta Pty Ltd as Trustees for the R G Aitkins Family Trust at its expense on or before 5:00 pm on 30th June 1992 do all acts and things necessary and execute such deeds documents instruments and writings necessary to assign to the Husband the property situated at East Derwent Highway being the whole of the land comprised in Certificate of Title Volume 4491 Folio 96 subject to a mortgage to the National Australia Bank secured over the land.	(Land A)
6    That Catta Pty Ltd as Trustee for the R G Aitkins Family Trust at its expense on or before 5:00 pm on the 30th June 1992 do all acts and things necessary and execute such deeds documents instruments and writings necessary to assign to the wife the property situated at the end of Morrisby Road, Old Beach in Tasmania being the whole of the land comprised in Conveyance 62/3801 subject to a mortgage to the National Australia Bank secured over the land.	(Land C)
7    That Catta Pty Ltd as Trustee for the R G Aitkins Family Trust, by 5:00 pm on 30th June 1995, [sic] do all things necessary to place the property off the end of Morrisby Road, Old Beach in Tasmania being the whole of the land comprised in Certificate of Title Volume 4537 Folio 11 subject to a mortgage to the National Australia Bank secured over the property on the market for sale by private treaty."	(Land B)

1. The orders were complied with.  The land which was the subject of order 5 was further divided into three titles with one of those titles (Lot 3) becoming the subject of these proceedings.  The intention of the directors of Catta had been that each would hold the land subject to the orders of the Family Court on trust for Catta in its capacity as trustee of the family trust.  They intended for Catta to expend moneys for the development of land A and land C and receive the benefits of sale.  Catta received an amount of $145,000 following the development and sale of land C between 1993 and 1997.  Lot 3 is not yet developed.

1. In 1995, Catta commenced an action (No 1542/1995) for damages against Alan Hilder Pty Ltd for negligence and breach of contract with respect to portion of land A.  In essence, the action arose following a claimed failure of the defendant to make provision in the subdivision for a right of way which resulted in a loss to the company on sale.  The defendant issued third party notices against the present second and third defendants who had acted as the plaintiff's solicitors in the preparation and approval of the subdivision.

1. In 1998, Catta commenced separate proceedings (No 622/1998) against the second and third defendants seeking damages in terms similar to those sought in action 1452/1995.  On 21 February 2000, the actions were consolidated and leave granted by this Court for the delivery of an amended statement of claim on 13 June 2003, encompassing the necessary facts and legal claims as against each of the three defendants.  The defence of the first defendant was confined to denials and non-admissions.  The defence of the remaining defendants raised as an issue a telephone conversation between the third defendant and the plaintiff's agent, Mr Robert Aitkins, on or about 9 June 1992 in which it was said that the question of access was discussed.

1. In its amended particulars of claim dated 20 April 2001, the plaintiff states:

"1.1The property which is the subject of this action was owned by Catta Pty Ltd at the date of the alleged negligent acts.  Catta Pty Ltd held the property in its capacity as trustee of the Robert Aitkins Family Trust.  This Trust was established by a deed of trust dated 9 January 1986.

1.2In 1991, for personal reasons, the 2 directors of Catta Pty Ltd, Mr Robert Aitkins & Ms Lyn Aitkins decided to divorce.  As the directors of Catta Pty Ltd, they agreed to transfer 2 of the 3 parcels of land at Old Beach registered in the name of Catta Pty Ltd.

1.3The land at the end of Morrisby Road was transferred to Lyn Aitkins, and it was agreed she would hold it in trust for Catta Pty Ltd.

…

1.5The land at Fouche Avenue [lot 3] was transferred to Mr Robert Aitkins and it was agreed he would hold it in trust for Catta Pty Ltd.

1.6The transfers were effected in September 1992.

1.7It was agreed between Lyn Aitkins and Robert Aitkins that Catta Pty Ltd would continue to control, and take the benefit of, the subdivision of all land at Old Beach, regardless of the name in which the land was registered."

1. In those particulars, the plaintiff claimed damages quantified as:

(1)	Loss of value of the remaining part of the subdivision	$50,500
(2)	Legal costs	$5,975
(3)	Additional engineering and surveying fees	$7,747
(4)	Compensation for interest and GST payments	[not quantified]
(5)	Additional "head work charges" required by alteration to subdivision	$102,330

1. In his affidavit filed in support of these proceedings, Mr Aitkins deposes:

"24Actions 1452 of 1995 and 622 of 1998 were commenced in the name of Catta because the negligence alleged against all defendants occurred when Catta was the registered proprietor of land R [lot 3], and because it is Catta which has suffered damage because it was not able to develop land R [lot 3] as it had intended.

25Lyn and I considered at all times that because Catta was the beneficial owner of land R [lot 3], it was proper for it to be plaintiff.  I have now been advised by my solicitors that even though Catta was the beneficial owner of land R [lot 3], because I hold land R [lot 3] on trust for Catta, I should be made a plaintiff in these actions.

26My view that Catta was the correct plaintiff was formed as a result of advice which I received from Catta's current solicitors and its former solicitors, Piggott Wood & Baker to the effect that Catta was the correct plaintiff.  I accepted that advice at the time.

27The real issue in these actions is the substantial loss which has been suffered by the beneficial owner of land R [lot 3].  So that the issue can be determined, I consent to be joined as plaintiff to these actions."

The deponent was not cross-examined on his affidavit, nor were its contents challenged by other evidence.

1. The plaintiff has annexed to its application a proposed amended consolidated statement of claim.  The proposed pleading seeks two amendments of substance, namely:

"1A At all material times the second named plaintiff was:

(a)  a director of the first plaintiff;

(b)  from on or about 25 September 1992 the registered proprietor of the Nichols block;

(c)  held the Nichols block as Trustee for benefit of the Robert George Aitkins Family Trust; or alternatively

(d)  held the Nichols block subject to a resulting trust to the first named plaintiff.

…

and the plaintiffs claims:

(a)   damages;

(b)   interest;

(c)   costs to be taxed"

1. The second and third defendants oppose the application for joinder and leave to file the proposed statement on the bases that joinder would defeat the limitation period and amendment to the statement of claim will offend the principles stated in Weldon v Neal (1887) 19 QBD 394.

Joinder

1. The powers and the relevant principles governing the exercise of discretion in joinder and amendment have been considered by this Court in Stilbo Pty Ltd v MCC Pty Ltd (2002) 11 Tas R 63 (see also MCC v Stilbo [2001] TASSC 143). The Supreme Court Rules, r184, relevantly provides:

"184 ¾ (1)  At any stage of a proceeding and whether or not any relevant limitation period has expired, the Court or a judge, either on or without application, may order ¾
…

(b)that the name of a person who ought to have been joined as a party or whose presence may be necessary for the Court or judge to adjudicate on and settle all the questions involved in the proceeding be added; or

(c)if through a genuine mistake a proceeding has commenced in the name of the wrong person as plaintiff or applicant or it is doubtful if it has commenced in the name of the right plaintiff or applicant, that any other person be added or substituted as plaintiff or applicant.

…

(4)     A person must not be added as a plaintiff or applicant without his or her consent in writing.

…

(6)     Unless otherwise ordered, a proceeding against a party whose name is added as defendant or respondent is taken to have begun on the service of the originating process on that party.

(7)     An application under subrule (1) ¾

(a)may be made to the Court or a judge at any time before trial or at the trial of the action;

…

(8)     If an order is made under subrule (1) or (2)(b) ¾

(a)   the originating process is to be amended accordingly; and

…

(d)the proceeding continues as if the new defendant or respondent had originally been made a defendant or respondent."

1. Here the plaintiff seeks to base the application on subr(1)(b) and (c).  Robert Aitkins has always been the "guiding hand" of Catta and in all the pleadings thus far has been named in his capacity as an "agent for the company".  The dealings with each defendant have been conducted by or through him.  The claims of misrepresentation or negligent representation are said to have been made to and through him personally.  None of the defendants can be said to have been taken by surprise at his "appearance" in the pleadings.  His claim that he had acted on legal advice in nominating Catta, rather than himself, as the appropriate party has not been challenged on the hearing of the application for joinder.

1. The rule should be afforded wide import (Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231). The term "whether or not any relevant limitation period has expired" governs the exercise of discretion which, in turn, requires different considerations depending on whether a party seeks to add a new plaintiff or seeks to extend liability to a new defendant. The rule recognises the distinction between an intended plaintiff (r184(1)(c) and (4)), defendant (r184(6), (8)(c) and (d)) and parties generally (r184(1)(a) and (b)). When the bringing of an action against a defendant through joinder might be defeated by a plea of limitation, then the discretion ought be exercised only in exceptional circumstances (Stilbo v MCC (supra)).  Subrule (6) restricts (unless otherwise ordered) the date of commencement of the action to the date of service of the originating process, thus permitting a plea of limitation to remain at the option of a defendant.  No similar restriction is imposed on an intended plaintiff.  Subrule (8)(a) permits the amendment to the originating process.  Here the interests of Catta and the intended plaintiff are identical and their real identity synonymous.  Whether a particular remedy remains open to Catta, rather than Robert Aitkins, might require consideration in any adjudication necessary to "settle all of the questions involved in the proceeding".  Further, the Court accepts that the nomination of Catta as plaintiff might well be correct, but might possibly have been a consequence of a "genuine mistake" of law.

1. The transfer of title from Catta to Robert Aitkins was required by a court of law seeking to do justice as between husband and wife.  The method employed by that court might have had an affect on the legal status and rights of the intended plaintiff and Catta and may have affected the decision to name Catta as plaintiff.

Amendment

1. The real complaint by the second and third defendants is that the amendment might afford Robert Aitkins a remedy which might not be open to Catta.  The proposed statement of claim does not seek to add a new cause of action.  The proposed statement of claim, par1A, simply states the status of the intended plaintiff, a matter already stated in the pleadings.  It is the replacement of the word "plaintiffs" for "plaintiff" which widens the remedy sought.  Yet in real terms Catta and Aitkins are the same entity.  The issue between the parties is primarily one of contractual and tortuous liability.  It would not be a satisfactory "adjudication on all the issues", if liability were established, that remedy be precluded because of the legal status of a corporation.  No question of prejudice caused by the passage of time in the identification and obtaining of evidence arises and no new cause of action arises (Jones v Bellgrove Properties Pty Ltd [1949] 2 KB 700; Marshall v London Passenger Transport Board [1936] 3 All ER 83). The defendants have always known of the identity of the intended plaintiff and his relationship with Catta (Her Majesty's Attorney-General for England v Sorati [1969] VR 88). While the joinder of a new party as plaintiff will always, strictly speaking, involve the addition of a new cause of action (Lynch v Keddell (No 2) [1990] 1 Qd R 10), there remains a difference when the identity of the additional party is synonymous with the existing one. Insofar as the defendants rely on the decision of the Queensland Court of Appeal in Hayward v Darling Downs Aircraft Services Pty Ltd [1993] 2 Qd R 153, I would decline to follow it. In that case the appellant had instructed his solicitors that he was the owner of the damaged helicopter and it was only after the limitation period had expired that he disclosed the true ownership. Further, the Queensland Rules of Court did not, in the opinion of Fitzgerald P:

"… authorise an order joining a new party, not in substitution, but in addition, to the party initially named."  [Hayward (supra), Fitzgerald P at 156.]

1. The defendants claim that the basis for the claim for damages is dependent on various dates of valuations of the property and that the latest date for the operation of the limitation period is December 1994.  They claim that joinder and amendment of Robert Aitkins as owner, a status different from the previous claim as trustee or agent for Catta, causes prejudice because of the present claims of both legal and beneficial ownership.  However, joinder and amendment do not alter the claimed status as trustee.  Robert Aitkins does hold the land on trust for Catta which, in turn, would hold any benefit from the proceeds of sale or damages on trust for the family trust.  The amendment simply regularises the effects of the order of the Family Court.

Special circumstances

1. The exercise of discretion ought not be lightly exercised and some cases refer to the need for special circumstances (Weldon v Neal (supra); Stilbo v MCC (supra)).  In this case, the onus is on the plaintiff to show those circumstances (Grotherr v Maritime Timbers Pty Ltd [1991] 2 Qd R 128). The Court is satisfied that the following matters constitute special or peculiar circumstances:

(1)The land which is the subject of these proceedings was owned by a closely held company on trust for others.  The status of the company altered through proceedings in the Family Court.  There is a common identity, in substance, between the existing and proposed plaintiffs.  The intention of the intended plaintiff and Catta is to administer the proceeds of the trust.

(2)The intended plaintiff was the representative of the company in the dealings with the defendants in respect of the land.  The existing pleadings identify him as acting as agent for the company.

(3)The defendants have at all times known of the factual circumstances alleged against them and there is no prejudice occasioned by matters such as lost evidence and the like.

(4)Identity and status, rather than a different cause of action, are the issues giving rise to joinder.  It is the remedy which might not be available to the present plaintiff because of a legal consequence which might arise by reason of status, which is in issue.

(5)A real issue, namely entitlement to a particular remedy, might not be susceptible to adjudication if joinder is not permitted.  The decision to authorise Catta to initiate the action was one made on legal advice, not a tactical move designed to enhance the plaintiff's cause.

Conclusion

1. Joinder ought be permitted.  The parties argued the question in the light of the proposed statement of claim.  Before leave is granted to allow the amendment to that pleading, counsel will be afforded the opportunity to consider and make any appropriate submissions on the amendment if any matters other than those occasioned by joinder require resolution.