Collins v Du Plessis Auction Gallery Pty Ltd (ACN 007 858 237)

[2012] SASC 161

Supreme Court of South Australia

(Magistrates Appeals: Civil)

COLLINS v DU PLESSIS AUCTION GALLERY PTY LTD (ACN 007 858 237) & ORS

[2012] SASC 161

Judgment of The Honourable Justice Kelly

15 August 2012

MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT

PROCEDURE - INFERIOR COURTS - SOUTH AUSTRALIA - MAGISTRATES COURT

Appeal against decision of Magistrate dismissing application for joinder of third respondent - Magistrate dismissed the application on the basis that none of the particulars of the Statement of Claim identified any cause of action at against the third respondents - appellant argued that the Magistrate erred in his application of the test for joinder - discussion of principles governing joinder under r 23 of the Magistrates Court (Civil) Rules 1992 (SA).

Held: Magistrate correct to dismiss the application to join the third respondents as defendants in respect of the proposed causes of action based on the allegation that the third respondents were owners of the goods - appellant permitted to join the third respondents as defendants in the action for the proposed causes of action based on the Fair Trading Act 1987 (SA).

Magistrates Court Act 1991 (SA) s 3, s 40; Trade Practices Act 1974 (Cth) s 52, s 75B; Fair Trading Act 1987 (SA); Misrepresentation Act 1972 (SA) s 7; Magistrates Court (Civil) Rules 1992 (SA) r 3, r 23; Limitation of Actions Act 1938 (SA), referred to.
Yorke v Lucas (1985) 158 CLR 661, discussed.

COLLINS v DU PLESSIS AUCTION GALLERY PTY LTD (ACN 007 858 237) & ORS
[2012] SASC 161

Magistrates Appeal:   Civil

KELLY J.

1. This is an appeal against an interlocutory decision of a Magistrate dismissing the appellant’s application to join the third respondents, John and Patricia Wilson, as defendants in an action brought by the appellant against both the first and second respondents. 

2. It is necessary to set out some of the relevant background to explain how it is that this matter has reached this Court, while still in the pre-trial stages in the Magistrates Court.

   Background

3. The appellant’s claim against the first and second respondents arises out of his purchase of two jade vases at an auction held on the first respondent’s premises on 30 July 2006.

4. The appellant’s claim, first filed in the Magistrates Court on 10 September 2008, is that the two vases purchased by him for the sum of $37,000 were represented by both the first and second respondents as genuine Chinese antiques.  The vases were in fact copies. 

5. Prior to the auction the first and second respondents produced a catalogue in which the vases purchased by the appellant were described as lots 81 and 83 respectively.  In that catalogue lot 81 was described as a museum-quality archaic jade lidded vessel from the Warring States Period (475-221BC).  Lot 83 was defined as a Zhou Dynasty (1050-221BC) archaic jade vessel.  The appellant purchased lot 81 for $13,000 and lot 83 for $24,000. 

6. Sometime after purchase the appellant sought a valuation from a valuer who expressed the opinion that the goods were not in fact genuine Chinese antiques but fake modern reproductions. 

7. There has been some delay in the progress of the litigation in the Magistrates Court, some of which appears to be attributable to the failure by the defendants to properly identify the original owner of the vases at the date of auction.  That issue appears to have been resolved after the second respondent, Robyn Adele du Plessis, was joined as second defendant in the action.  She has subsequently admitted ownership of the goods. 

8. The first and second respondents discovered two certificates of authenticity which have been in the possession of the defendants since at least 2009.  In paragraph 10 of the defendants defence (“the Defence”), the defendants admit that those certificates were in their possession prior to the date of auction.  The certificates of authenticity were provided by the third respondents, John and Patricia Wilson. 

9. By an application dated 23 February 2012 the appellant sought permission to join Mr and Mrs Wilson as defendants in the action.  Both the existing defendants and the Wilsons opposed the application for joinder.  Faced with the appellant’s proposed statement of claim in which it is alleged, amongst other things, that on 30 July 2006 the Wilsons were the owners of the goods auctioned as lots 81 and 83, Mrs Wilson filed an affidavit on behalf of both herself and her husband expressly refuting that they were the owners of any items that were auctioned by the defendants on 30 July 2006. 

10. The causes of action which the appellant now proposes to plead against the Wilsons are contained in the proposed fourth amended statement of claim (“the Claim”).  The allegations against the Wilsons in that document are wide-ranging.  They include the claim that the Wilsons were owners of the goods offered for sale by the first and second respondents on 30 July 2006.  The causes of action which the appellant seeks to plead as against the Wilsons include breach of contract, fraudulent misrepresentation, innocent misrepresentation, misleading and deceptive conduct and conspiracy.  All of the claims, with the exception of one, are based on the allegation that the Wilsons were the owners of the goods.  The claim that the Wilsons engaged in misleading and deceptive conduct is based on the assertion that they provided the certificates of authenticity to the defendants prior to auction on 30 July 2006. 

    The Magistrate’s Decision

11. The Magistrate dismissed the appellant’s application on the basis that none of the particulars of claim contained in the Claim identify any cause of action at law against the Wilsons.  His Honour accepted the submission made by the Wilsons that as the appellant was unaware of the certificates of authenticity until well after the auction there was no basis on which the appellant could assert reliance on the certificates.  His Honour further accepted that the appellant could not substantiate its assertion that the Wilsons in some way were owners of the goods.

12. On appeal, the appellant argued that, when considering the application for joinder, the Magistrate erred in his application of the test for joinder by effectively applying the test for summary determination of a matter.  The effect of that, in the appellant’s submission, was that error lay in the dismissal of the application. 

    The Relevant Principles

13. An appeal from the civil jurisdiction of the Magistrates Court is in the nature of a rehearing. Section 40 of the Magistrates Court Act 1991 (SA) provides that any party to a civil action (except a minor civil action) may in accordance with the rules of the Supreme Court, appeal against any judgment given in an action. The Magistrates Court Act 1991 (SA) defines judgment for the purpose of that rule to include an interlocutory judgment.

14. The Court has a discretion to order that a person who is not a party to the action be joined as a party.  This Court is not entitled to substitute its own discretion in lieu of the discretion exercised by the court below unless error has been demonstrated in the exercise of that discretion.  Even where no exercise of discretion is involved, error on the part of the Magistrate must be demonstrated before this Court will intervene. 

15. The appellant’s fundamental complaint on appeal is that the Magistrate did not have any or any proper regard to the relevant rules of the Magistrates Court in dismissing his application to join the Wilsons as defendants in the action. 

16. It was argued that the appellant’s proposed Claim discloses several prima facie causes of action against both the existing defendants and the Wilsons, and that, in accordance with the principles in r 23 and r 3(1) of the Magistrates Court (Civil) Rules 1992 (SA), the Magistrate ought to have acceded to the appellant’s application.  Rule 23 of the Rules states:

    (1)The misjoinder or non-joinder of parties will not defeat an action, but the Court must ensure that the correct parties are joined to enable the Court to determine all questions involved in the action.

    …

17. Rule 3 requires the Court in the exercise of its jurisdiction and powers to attempt to determine all matters in dispute in an action so as to avoid multiplicity of actions.  The appellant submits that had the Magistrate applied those principles correctly he would have made the order to join the Wilsons as defendants in the action. 

    Discussion

18. In my view, the Magistrate was correct to dismiss the application to join the Wilsons as defendants in respect of the proposed causes of action based on breach of contract, fraudulent misrepresentation, conspiracy, and alleged breaches of s 52 and/or s 75B of the Trade Practices Act 1974 (Cth).

19. The fundamental problem with each of those claims is that they are all based on the same allegation that the Wilsons were the owners of the goods. 

20. The appellant maintains this allegation notwithstanding that in the Defence the second respondent admits that she was the owner of the goods. Nevertheless counsel for the appellant submitted that there is other material which demonstrates that there was a contract between the appellant and the Wilsons.  He pointed to the contents of the catalogue pleaded at paragraph 5 of the Claim and the contents of the certificates of authenticity which are pleaded at paragraphs 7B.1 and 7B.2.  The appellant said that the similarity of content between the catalogue and the certificates lead to an inference that the author of the certificate and the author of the catalogue are one and the same person.  This, the appellant argued, is sufficient to raise a prima facie case that the Wilsons were the authors of both documents and therefore they were the owners of the goods in respect of which the certificates were issued.  In support of that submission Mr Quinn pointed to the behaviour of the respondents earlier in the proceedings, in particular the change of position of the first respondent from originally asserting that the goods were owned by the late Mrs C Karykis to the belated admission by the second respondent Robyn du Plessis that she was in fact the owner as executor and trustee of her late father’s estate.

21. These allegations also gave rise to the appellant’s submission that there is a prima facie case that the Wilsons as true owners conspired with the defendants to defraud prospective purchasers, breached the contract of sale and fraudulently misrepresented the goods as authentic antiques when they knew or were reckless as to the truth of the matter. 

22. The claim based on s 7 of the Misrepresentation Act 1972 (SA) is also based on the premise that the Wilsons were the true owners. Similarly, the claim alleging conspiracy is based in part on the allegation that the Wilsons would from time to time receive proceeds from the sale of modern reproductions as part of an ongoing agreement with the respondents to sell off fake modern reproductions as authentic archaic jade artefacts.

23. In my view there is a distinct air of unreality about the appellant’s proposed pleadings.  The appellant’s claim that the Wilsons were the owners of the goods is based on reasoning which, with all due respect to counsel for the appellant, is far-fetched and fanciful. 

24. An allegation of fraud is not one which should be lightly made.  It is an abuse of process to plead fraud without giving adequate particulars.  The material relied on by the appellant to support the claims of fraud, conspiracy, deceit and breach of contract is without proper foundation and the claims are therefore untenable.  In my view the Magistrate was correct to refuse permission to the appellant to proceed against the Wilsons in respect of each of those proposed causes of action.

25. Nor can I accept that there is any proper foundation for the claim that the Wilsons could be liable for a breach of the Trade Practices Act 1974 (Cth) by reason of complicity with the respondents contrary to the provisions of s 75B of the Act. I cannot accept Mr Quinn’s submission that in order to make out allegation under s 75B of that act proof of dishonesty is not required. The High Court in Yorke v Lucas said:[1]

    Section 75B, on the other hand, in speaking of aiding, abetting, counselling or procuring, makes use of an existing concept drawn from the criminal law and unless the context requires otherwise, there is every reason to suppose that it was intended to carry with it the settled meaning which it already bore: cf. Barker v. The Queen. Nor is there any reason to suppose that because the application of s 75B may occur in conjunction with a provision such as s 52, which requires no intent, it must also be construed so as to dispense with intent as an element of aiding, abetting, counselling or procuring.

    [Footnote omitted]

    [1]    Yorke v Lucas (1985) 158 CLR 661 at 668.

26. For these reasons I do not consider that the appellant can make out a prima facie claim with respect to any of the proposed pleadings, with the exception of the proposed claim based on alleged breaches of s 56 and/or s 58 of the Fair Trading Act 1987 (SA). It appears that the certificates of authenticity provided by the Wilsons were in possession of the first and second respondents prior to the auction in July 2006. Whilst I refrain from making any comment on the proposed merits of the claim, I am not prepared to say that it would be impossible for the appellant to establish that the material in the catalogue with reference to lots 81 to 83 is based on the contents of the certificates of authenticity which were issued by the Wilsons. Should the appellant be able to establish that fact in the way foreshadowed it may be possible for the appellant to make out the necessary element of proximity in order to succeed in the claim. To this extent I consider that the appellant has a prima facie case at least against the third respondents in respect of the proposed claim under the Fair Trading Act 1987 (SA). In this respect only I take a different view to the Magistrate.

27. I do not consider the fact that the appellant will need to apply for an extension of time in which to bring proceedings for relief under the Fair Trading Act 1987 (SA) is any bar to permission being granted now for the Wilsons to be joined as defendants in respect of that proposed action.

28. In the light of my conclusion I make the following orders:

    1The appellant is permitted to join the third respondents, John and Patricia Wilson, as defendants in the action for the purpose of pleading breaches of the Fair Trading Act 1987 (SA).

    2The appellant is refused permission to plead as against the third respondents the matters contained in paragraphs 2A, 2A.4, 4, 7G insofar as that paragraph contains an allegation that the third respondents acted with the intention of misleading and deceiving purchasers as to the origin, antiquity, and authenticity of the goods, 7H.3, 10, 11, 12, 13 insofar as that paragraph alleges a sale contract was entered into with the third respondents, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 30, and 32.