Cockerill v Westpac Banking Corporation

[1991] FCA 626

Re: GRAHAM DOUGLAS COCKERILL, A BANKRUPT, WITH THE CONSENT OF MR ROBERT BURNS,
HIS TRUSTEE IN BANKRUPTCY, ARTHUR DAVID THOMAS DINGLE, A BANKRUPT, WITH THE
CONSENT OF MR ROBERT BURNS, HIS TRUSTEE IN BANKRUPTCY AND VALERIE DINGLE, A
BANKRUPT, WITH THE CONSENT OF MR ROBERT BURNS, HER TRUSTEE IN BANKRUPTCY and
IVOR WORRELL
And: WESTPAC BANKING CORPORATION
No. N G29 of 1991
FED No. 626
Practice
(1991) 32 FCR 36

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Practice - joinder of applicant - whether limitation of action "relates back" to date of inception of suit - effect of concept of "matter" on time limitation in Federal Court.

Federal Court Rules, O.6 R.11(3)

Ketteman v Hansel Properties Ltd. (1987) AC 189

Fernance v Nominal Defendant (1989) 17 NSWLR 710

State of Western Australia v Wardley Australia Ltd. (1991) 102 ALR 213

HEARING

BRISBANE

#DATE 24:10:1991

Counsel for the applicants: Mr F.W. Redmond

Solicitors for the applicants: Whitman and Co.

Counsel for the respondent: Mrs P.M. Wolfe

Solicitors for the respondent: Feez Ruthning

JUDGE1

On Friday, 18 October last, I allowed an application for joinder of Mr Ivor Worrell as an applicant and adjourned all questions as to the conditions of joinder. As to the latter, I had in mind principally questions raised on behalf of the respondent bank as to the operation of the statutes of limitations.

1. The principal application is one in which allegations are made of misleading conduct under the Trade Practices Act 1974, and under the general law, relating to a loan in foreign currency; an attack is made on the validity of securities given in relation to that loan. The principal application was begun on 25 January 1991, but at that time each of the applicants was a bankrupt, having become so on acceptance of debtors' petitions on 26 October 1990. The respondent applied for dismissal of the proceedings on the ground of those bankruptcies, asserting that the cause of action had vested in the then trustee. On 23 May 1991, I adjourned the application for dismissal, because it was said that the bankrupts proposed to apply to annul their respective bankruptcies. However, no applications for annulment were pursued; instead, steps were taken to replace the then trustee by Mr Worrell, who is said to be prepared to pursue the suit. On 19 August 1991, I made an order for dismissal of the proceedings if a trustee was not joined as applicant by 19 October 1991.

2. Mr Worrell, having become trustee of the bankrupts' estates, was joined as an applicant, as I have said, on 18 October 1991. The respondent, by its counsel, opposed the joinder and, in the alternative, submitted that conditions should be attached to any joinder with a view of preventing the suit being pursued by Mr Worrell insofar as it was, at the date of his joinder, statute-barred.

3. The contention was that the suit was partly statute-barred and that if no condition were imposed, the respondent bank might be disadvantaged. It was apparently thought by the respondent bank that it might suffer a disadvantage from the joinder with respect to time limitations, if the joinder of Mr Worrell "related back" for limitation purposes to the inception of the suit, enabling him to sue as if he had always been an applicant. Reference was made to Mabro v Eagle, Star and British Dominions Insurance Company, Limited (1932) 1 KB 485 and cases in that line.

4. In my opinion, the contentions for the respondent should be rejected, for three reasons.

5. In Ketteman v Hansel Properties Ltd. (1987) AC 189, it was decided by the House of Lords that for limitation purposes, joinder of a defendant does not, under English law, relate back to the date of institution of the suit. The ground of the decision in Ketteman's case was that:
   "A cause of action is necessarily a cause of action against a
   particular defendant, and the bringing of the action which is
   referred to must be the bringing of the action against that
   defendant in respect of that cause of action" (200F, 217D, 223C and 223D).
   

6. Suppose a suit is brought to recover damages in tort against the person who actually did the damage. Then, on the basis of Ketteman's case, if it is decided to join that person's principal, there would be no relation back, the cause of action against the new defendant not being the same as that against the original defendant. It would seem that the same should apply to joinder of an additional plaintiff. If, for example, it were found that there was some difficulty about ownership of the property damaged, it is not easy to see why a distinction should be drawn for this purpose between addition of a plaintiff or applicant, on the one hand, and addition of a defendant or respondent, on the other.

7. Order 6 Rule 11(3) of the Federal Court Rules reads as follows:
   

"Subject to sub-rule (2), where a party is added pursuant to an order under rule 8 or rule 10, the date of commencement of the proceeding so far as concerns him shall be the date of filing of the originating process amended so as to add him as a party or, where an amended originating process is not filed, the date of the amendment adding him as a party".

Rule 11(2) seems to contain nothing presently relevant.

1. The effect of the corresponding New South Wales rule was discussed by Gleeson C.J. in Fernance v Nominal Defendant (1989) 17 NSWLR 710, in which it was pointed out that the amendment of the originating process by the addition of a party under the New South Wales rules "does not relate back to the date of commencement of the proceedings for the purpose of a statute of limitations ..." (718F). The supposed disadvantage as to the statutes of limitations does not arise.

2. There is authority in the Full Court in favour of the view that the rule in Weldon v Neal (1887) 19 QBD 394 does not apply, or has not full application, to proceedings in federal jurisdiction in this Court; that rule is that amendments should not be allowed to raise fresh claims in respect of causes of action which have become statute-barred since the proceedings were begun: see State of Western Australia v Wardley Australia Ltd. (1991) 102 ALR 213. The basis of this view, as explained in Wardley's case (an action alleging breach of s.52 of the Trade Practices Act 1974 as well as claiming common law relief) was set out by the Court as follows:
   

"In stipulating in s 82(2) that the action under s 82 may be commenced at any time within three years after the date on which the cause of action accrued, the legislature does not purport to limit the nature of the matter in respect of which jurisdiction is conferred by s 86. In our view, it is sufficient to meet the limitation provision of s 82(2) of the Act for a proceeding to be instituted in respect of a matter arising under the Act, the substance of which is defined by a factual base which would encompass conduct said to be in contravention of the provisions of Pt IV or Pt V of the Act" (234).

1. But for that authority, one might have experienced some difficulty in accepting the view that the terms of s.77(i) of the Constitution or those of s.86(1) of the Trade Practices Act 1974 were, insofar as the former uses the word "matters" and the latter the word "matter", intended to say anything about time limitations. As to s.86(1), I would, were the matter res integra, have had difficulty in accepting that the presence of s.86(1) was truly intended to qualify the operation of s.82(2); the latter provision requires an action for damages in reliance on, for example, s.52 of the Act, to be commenced within three years after the date on which the cause of action accrued. In my opinion, however, the proper course is to follow the view expressed by the Full Court, from which it would seem to follow that not only the rule in Weldon v Neal (above), but also the cognate rule relating to joinder of parties, is inapplicable in a case such as this. That is, once it is accepted that limitation provisions are complied with by timely institution of a suit relating to an identifiable matter, it would seem to follow that elaborations of the matter by the making of additional claims, or claims by or against additional parties, within its scope, are unaffected by time limitation provisions.

2. For these reasons, I am of opinion that no conditions with respect to the statutes of limitations should be imposed. If the respondent wishes to raise the statutes, that should, I think, be done by its pleading. It has occurred that successful applications have been made to strike out all or part of the claims made in suits of this kind on the basis of time limitations. No doubt it would be open to the respondent to apply accordingly. However, there is some authority (a decision of mine) suggesting that it may be, in some circumstances, unwise to dissect a suit of this kind until the present uncertainty as to the proper construction of the time limitations provisions of the Trade Practices Act is dispelled: Thannhauser v Westpac Banking Corporation (1991) ATPR 41-136.

3. The order for joinder of Mr Worrell will therefore have no conditions attached of the kind foreshadowed.