Cork v AAL Aviation Limited
[2014] FCA 1085
•8 October 2014
FEDERAL COURT OF AUSTRALIA
Cork v AAL Aviation Limited [2014] FCA 1085
Citation: Cork v AAL Aviation Limited [2014] FCA 1085 Parties: BERNARD LAWRENCE CORK v AAL AVIATION LIMITED (ACN 008 642 886)
MARK LESLIE BEST v AAL AVIATION LIMITED (ACN 008 642 886)
GARRY EDWARD KEAR v AAL AVIATION LIMITED (ACN 008 642 886)
GREGORY DAVID BROWN v AAL AVIATION LIMITED (ACN 008 642 886)
KEVIN JOHN BREWER v AAL AVIATION LIMITED (ACN 008 642 886)
File numbers: ACD 10 of 2012
ACD 11 of 2012
ACD 24 of 2012
ACD 25 of 2012
ACD 87 of 2012Judge: FOSTER J Date of judgment: 8 October 2014 Catchwords: LIMITATION OF ACTIONS – whether an application to amend a Statement of Claim to include claims for damages for breach of contract should be refused because the amendment is futile for the reason that, in the circumstances of the particular case, all breaches of contract relied upon by the applicant occurred more than 30 years before the relevant proceeding was instituted with the consequence that all claims were statute-barred by reason of the operation of s 51(1) of the Limitation Act 1969 (NSW) (the ultimate bar) notwithstanding that the applicant sought to argue that the ultimate bar was postponed on account of the fraudulent concealment of his cause of action by the respondent – whether the ultimate bar can be postponed by reason of fraudulent concealment or unconscionable reliance upon the Limitation Act Legislation: Australian Airlines (Conversion to Public Company) Act 1988 (Cth)
Australian National Airlines Act 1945 (Cth)
Federal Court of Australia Act 1976 (Cth), Pt IVA
Interpretation Act 1987 (NSW), s 34
Limitation Act 1969 (NSW), ss 14, 51, 52–56, 58, 59, 60, Pt 2 and Pt 3 (generally)
Limitation (Amendment) Act 1990 (NSW)
Superannuation Act 1922 (Cth)
Superannuation Act 1976 (Cth)Federal Court Rules 2011, r 8.22 and r 16.53
Cases cited: Cheney v Duncan (2001) 34 MVR 28, [2001] NSWCA 197
Commonwealth Bank of Australia v Barker [2014] HCA 32
Commonwealth Bank of Australia v Barker (2013) 214 FCR 450
Commonwealth v Cornwell (2007) 229 CLR 519
Hawkins v Clayton (1988) 164 CLR 539
Kennedy v Beckman [2008] BCSC 323
McRae v Royal Trust Corp of Canada [1992] BCJ No 2036Sampson v Zucker (unreported, Court of Appeal, NSW 11 December 1990, BC9606395)
Weldon v Neal (1887) 19 QBD 394Meagher RP, Heydon D and Leeming M, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (4th ed, Butterworths LexisNexis, 2002)
Date of hearing: 11 October 2013 and thereafter decided on the papers Date of last submissions: 27 November 2013 Place: Sydney (via video link to Canberra) (heard in Canberra) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 76 Counsel for the Applicants: Mr JRC Gordon Solicitor for the Applicants: Snedden Hall & Gallop Counsel for the Respondent: Mr M Speakman SC Solicitor for the Respondent: Johnson Winter & Slattery
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 10 of 2012
BETWEEN: BERNARD LAWRENCE CORK
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
8 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
1.The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 11 of 2012
BETWEEN: MARK LESLIE BEST
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
8 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
1.The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 24 of 2012
BETWEEN: GARRY EDWARD KEAR
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
8 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
1.The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 25 of 2012
BETWEEN: GREGORY DAVID BROWN
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
8 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
1.The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 87 of 2012
BETWEEN: KEVIN JOHN BREWER
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
8 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
THE COURT ORDERS THAT:
1.The parties immediately confer with a view to agreeing orders in order to give effect to these Reasons for Judgment.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 10 of 2012
BETWEEN: BERNARD LAWRENCE CORK
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 11 of 2012
BETWEEN: MARK LESLIE BEST
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 24 of 2012
BETWEEN: GARRY EDWARD KEAR
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 25 of 2012
BETWEEN: GREGORY DAVID BROWN
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
RespondentIN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 87 of 2012
BETWEEN: KEVIN JOHN BREWER
ApplicantAND: AAL AVIATION LIMITED (ACN 008 642 886)
Respondent
JUDGE:
FOSTER J
DATE:
8 OCTOBER 2014
PLACE:
SYDNEY (VIA VIDEO LINK TO CANBERRA) (HEARD IN CANBERRA)
REASONS FOR JUDGMENT
The applicant in proceeding ACD 10 of 2012, Bernard Lawrence Cork, was, for many years, employed by the respondent, AAL Aviation Limited (AAL).
AAL was formerly known as Australian Airlines Limited which was incorporated in 1988 pursuant to the Australian Airlines (Conversion to Public Company) Act 1988 (Cth). Prior to April 1988, Australian Airlines Limited was known as Australian National Airlines Commission (the Commission) which was a body corporate incorporated for a public purpose under the Australian National Airlines Act 1945 (Cth). Prior to 1988, the Commission had traded for many years as Trans-Australian Airlines.
In September 1992, AAL was purchased by Qantas Airways Limited (Qantas). AAL remains a wholly-owned subsidiary of Qantas.
Mr Cork worked for the Commission and then for AAL in the period from 1973 until September 1992 when his employment was transferred to Qantas. He remained as an employee of Qantas until October 2006 when he was made compulsorily redundant.
Mr Cork complains that, as a result of the conduct of various officers and employees of AAL, he was prevented from joining or denied the opportunity to join the Commonwealth Superannuation Scheme (CSS) in place under the Superannuation Act 1922 (Cth) and, in later years, under the Superannuation Act 1976 (Cth).
Mr Cork contends that, at all times up to 1 July 1980, as an employee of AAL, he was eligible to join the CSS.
On 1 July 1980, the CSS then in place was closed to employees of AAL. As a result, after 1 July 1980, it was no longer possible for Mr Cork to join the CSS.
The present proceeding was commenced on 6 February 2012. At that time, Mr Cork sued two respondents: The first respondent was AAL and the second respondent was the Commonwealth of Australia.
As against AAL, Mr Cork relied upon actions in tort for negligent advice, negligence generally and a claim for breach of statutory duty.
On 27 August 2013, Mr Cork discontinued his claim against the Commonwealth. As a result, the Commonwealth’s Cross-Claim against AAL was dismissed and the Commonwealth ceased to be a party to Mr Cork’s proceeding.
In late 2013, as a result of inspecting documents provided on discovery by AAL, Mr Cork’s legal representatives informed AAL’s legal representatives that Mr Cork wished to amend his Statement of Claim in order to accommodate the fact that the Commonwealth was no longer a party to the proceeding, in order to make certain other minor changes and in order to add two additional causes of action, being an action for damages for breach of contract and an action for damages in tort for deceit.
Correspondence between the lawyers then ensued.
The lawyers representing AAL were prepared to allow the pleading in deceit to go forward, subject to being protected in respect of any limitation defence that may have been available to AAL as at the date Mr Cork first propounded his proposed Further Amended Statement of Claim.
However, AAL’s lawyers opposed the grant of leave to amend to Mr Cork to plead the contract case which he had notified.
AAL contended that, as pleaded, the last breach of contract relied upon by Mr Cork in his proposed Further Amended Statement of Claim took place in early June 1981. In light of that circumstance, AAL contended that, both under s 14 of the Limitation Act 1969 (NSW) (Limitation Act) and under s 51 of that Act, time began to run in June 1981, at the latest. AAL then argued that, notwithstanding that the postponing factors specified in ss 52–56 might, in an appropriate case, operate to postpone the bar provided for in s 14, upon the true interpretation of the Limitation Act, none of those postponing factors could operate to postpone the ultimate bar provided for in s 51 of that Act viz 30 years running from the date from which the limitation period for the relevant cause of action fixed by or under Pt 2 of the Limitation Act runs. The ultimate proposition, therefore, was that Mr Cork’s proceeding was commenced more than 30 years after the last breach of contract now sought to be relied upon by him and was thus statute-barred by the ultimate bar under s 51 of the Limitation Act.
AAL submitted that, in light of the above matters, leave to amend to plead the cause of action in contract now sought to be relied upon by Mr Cork should be refused because the amendment would be futile.
Mr Cork has not purported to bring a representative action under Pt IVA of the Federal Court of Australia Act 1976 (Cth). However, his lawyers are representing a number of other persons who were also employed by AAL at various times. Eight such persons have brought proceedings in this Court. Each of those persons has instituted a separate action on that person’s own behalf. Four of those eight persons instituted proceedings after I heard argument in relation to Mr Cork’s application to amend his Statement of Claim. The causes of action relied upon by those four persons are not precisely the same as those now sought to be relied upon by Mr Cork. The remaining four persons all instituted their proceedings in 2012. Each of those persons filed a Statement of Claim substantially in the same form as the Statement of Claim filed on behalf of Mr Cork. Each of those persons now seeks to amend his Statement of Claim in the same fashion as Mr Cork. Thus, the present application has direct implications for four other cases in the Court. Those cases are:
·Mark Leslie Best v AAL Aviation Limited (ACD 11 of 2012)
·Garry Edward Kear v AAL Aviation Limited (ACD 24 of 2012)
·Gregory David Brown v AAL Aviation Limited (ACD 25 of 2012)
·Kevin John Brewer v AAL Aviation Limited (ACD 87 of 2012).
As was the case with Mr Cork’s proceeding, each of the applicants in the 2012 proceedings which I have listed at [17] above has discontinued his proceeding as against the Commonwealth and, as a result, the Commonwealth has ceased to be a party to each of those proceedings.
THE PROPOSED AMENDMENTS
The new contract case sought to be pleaded by Mr Cork is found in paragraphs 4A, 20, 52A and 52B of his proposed Further Amended Statement of Claim.
In par 3 of the existing Statement of Claim, Mr Cork pleads that, on or about 17 June 1973, he commenced employment with AAL in a permanent full-time position as a Porter-Driver, located in Newcastle.
In par 4 of his proposed Further Amended Statement of Claim, Mr Cork pleads:
At all material times:
(a)it was an express term, alternatively an implied term, of the Applicant’s contract of employment with the Respondent, that:
(i)the Applicant would (after concluding a probationary period of three months), upon application, be entered into Commonwealth superannuation;
(ii)and the Applicant would be engaged in a capacity that entitled him to join Commonwealth superannuation;
(b)implied terms of the Applicant’s contract of employment with the Respondent were that:
(i)the Respondent would not conduct itself in a manner likely to destroy or seriously damage the relationship of mutual trust and confidence between the employer and employee by acting to deny the Applicant the benefits of his contract of employment; and/or
(ii)the Respondent would not act capriciously, arbitrarily, unreasonably or dishonestly in conformance with the objects of the contract of employment; and/or
(iii)the Respondent would cooperate with the employee in order to implement the express terms of the employment contract;
(the “implied term of trust and confidence”)
In subpars (c), (d) and (e) of par 4, Mr Cork provides particulars of the contract of employment to which he has referred in pars 3 and 4. In subpar (e) of par 4, Mr Cork pleads that the implied term of trust and confidence upon which he relies is a term implied by law.
In par 4A, Mr Cork pleads that, on or about 17 September 1973, he successfully completed the three month probationary period pursuant to the terms of his contract of employment.
In par 20, Mr Cork pleads that AAL is liable for the actions of its officers and employees.
In par 52A of his proposed Further Amended Statement of Claim, Mr Cork alleges that AAL breached the express terms of his contract of employment pleaded in par 4(a) by representing to him and by continuing to represent to him that he would be entitled to participate in Commonwealth superannuation in circumstances where AAL knew or ought to have known that it did not intend to place him in Commonwealth superannuation or, alternatively, intended to prevent him from joining Commonwealth superannuation if possible or, alternatively, intended to delay him joining Commonwealth superannuation as long as possible. Mr Cork also alleges that AAL breached those terms by not processing his application to be admitted to Commonwealth superannuation. He also alleges that AAL delayed his admission to Commonwealth superannuation. In addition, Mr Cork alleges that AAL misled him into believing that it was processing and facilitating his admission to Commonwealth superannuation when, in truth, it was not. Finally, he also alleges that he was misled by representations to the effect that the reason that he had not been admitted was due to circumstances beyond AAL’s control or because AAL was acting to be “fair to all employees” when neither of those things was true.
In par 52A(b), Mr Cork also alleges that AAL breached the implied term of trust and confidence pleaded in par 4(b).
In par 52B, Mr Cork alleges that he has suffered loss and damage as a result of the breaches pleaded in par 52A. The loss and damage claimed is set out in the particulars to par 52B in the following terms:
Particulars
(a)The Applicant did not join Commonwealth superannuation under the 1922 Act; and
(b)The Applicant did not thereafter:
(i)become a member of Commonwealth superannuation under the 1976 Act, when it replaced the scheme created under the 1922 Act; or alternatively
(ii)otherwise join Commonwealth superannuation under the 1976 Act; and
(c)The Applicant lost the ability to join Commonwealth superannuation upon the introduction of Statutory Rule 181 of 1980;
(d)The Applicant lost the ability to join Division 4 of the QANTAS Plan;
(e)As a consequence, the Applicant has received and is entitled to receive less superannuation benefits than he otherwise would have received under each of the CSS and the QANTAS Plan;
(f)The Applicant lost his right to enforce the express term of his contract that he be enrolled in Commonwealth superannuation upon completion of the three month probation period.
In par 52A of Mr Cork’s proposed Further Amended Statement of Claim, the breaches relied upon are related to matters pleaded in pars 21–24, 25–38 and 41 of the Further Amended Statement of Claim. Those paragraphs in the Further Amended Statement of Claim have not been substantially altered from the existing Statement of Claim.
In those paragraphs, Mr Cork avers that he became eligible to join the CSS in about mid-October 1973 and that thereafter he took such steps as he believed were necessary in order to join that scheme but that he was misled at all times as to the steps being taken by AAL to give effect to the commitments which it had made over the years concerning his entitlement to join the CSS.
The last representation or set of representations relied upon in the series of paragraphs in the proposed Further Amended Statement of Claim to which I have referred at [28] above are contained in the letter dated 2 June 1981 which is pleaded in full in par 41 of the existing Statement of Claim and thus in the same paragraph of the proposed Further Amended Statement of Claim.
It is thus quite clear that the breaches of contract sought to be relied upon by Mr Cork all occurred in the period from October 1973 to 2 June 1981.
As I have already mentioned, Mr Cork commenced the present proceeding on 6 February 2012. That is plainly more than 30 years after 2 June 1981 and more than 30 years after the dates mentioned in pars 21–38 of the existing Statement of Claim.
AAL does not oppose any of the other amendments contained in Mr Cork’s proposed Further Amended Statement of Claim including those amendments which raise for the first time the tort of deceit. In respect of that matter, AAL seeks an order from the Court that any leave to amend should be on terms that it is without prejudice to the right of AAL to take any limitation points arising in respect of any amendment and in respect of the date of effect of any amendment. I take that application to be an application for an order preserving to the trial the question of whether Mr Cork’s case in deceit was already statute-barred at the time that he first raised his intention to plead a cause of action based in deceit or possibly at an earlier time eg prior to the commencement of his proceeding. I think that such an order as sought by AAL should be made.
CONSIDERATION
A preliminary point arises.
At the time when Mr Cork’s application for leave to amend was argued before me and at the time when I reserved my decision on that application, I was bound to follow the decision of the Full Court in Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 in which, by majority, the Full Court held that, ordinarily, under Australian law, there is an implied term of mutual trust and confidence in a contract of employment so that an employer must not, without reasonable and proper cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. This term was held by the Full Court to be implied as a matter of law.
On 10 September 2014, the High Court overturned that decision (Commonwealth Bank of Australia v Barker [2014] HCA 32). All of the Justices of the High Court agreed that, in Australia, no such term should be implied into contracts of employment as a matter of law.
In the initial Written Submission filed on Mr Cork’s behalf, Counsel for Mr Cork tied the implied term pleaded in par 4(b) of the proposed Further Amended Statement of Claim to the implied term of mutual trust and confidence relied upon by Mr Barker in Commonwealth Bank of Australia v Barker. Although the articulation of the implied term in par 4(b) of Mr Cork’s proposed Further Amended Statement of Claim may be thought to go beyond the implied term relied upon by Mr Barker in Commonwealth Bank of Australia v Barker, in light of the submissions made on behalf of Mr Cork, I am satisfied that the implied term pleaded in Mr Cork’s proceeding was intended to encompass but go no further than the implied term relied upon by Mr Barker in Commonwealth Bank of Australia v Barker.
In those circumstances, although the parties have not had an opportunity to address this point, the High Court has authoritatively determined that no such implied term exists in Australian law. I am bound to apply that authority and thus am bound to decline to grant leave to Mr Cork to plead such a term on the ground that such a pleading is bad in law. Accordingly, for these reasons, I would refuse leave to amend to include par 4(b).
In addition to his arguments based upon the ultimate bar, Senior Counsel for AAL also made submissions to the effect that the proposed Further Amended Statement of Claim was, in any event, embarrassing in a pleading sense because there is a disconformity between the alleged terms of the contract, on the one hand, and the alleged breaches of contract, on the other hand. For reasons which I will now explain, I need not address the pure pleading points raised on behalf of AAL.
It was common ground before me that it is the NSW Limitation Act which applies in Mr Cork’s case and in the other proceedings brought against AAL to which I have referred at [17] above.
Section 14(1)(a) of the Limitation Act provides that an action on a cause of action founded on contract is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims. It is well established that a cause of action founded on a contract first accrues to the plaintiff when the breach of contract relied upon occurs. This is because the cause of action is complete once the relevant breach has occurred.
In Mr Cork’s case, the breaches relied upon all occurred in the period from October 1973 to 2 June 1981.
Subject to any postponing factor, the cause of action in contract sought to be relied upon by Mr Cork is therefore not maintainable because s 14(1)(a) of the Limitation Act has been engaged in the present case. Indeed, AAL has relied upon s 14(1) in its existing Defence.
The lawyers for AAL have informed Mr Cork’s legal representatives that they also intend to rely upon s 14(1)(a) of the Limitation Act in order to defeat Mr Cork’s foreshadowed claim in contract.
Mr Cork’s lawyers have responded to that indication by informing AAL’s lawyers that, in the event that AAL relies upon s 14(1)(a), Mr Cork will rely upon s 55 of the Limitation Act in order to postpone time running against Mr Cork until a date in 2013 when, according to Mr Cork, the true state of affairs was revealed to Mr Cork’s lawyers during the course of discovery being provided to Mr Cork by AAL.
AAL’s lawyers responded to that indication by contending that s 55 of the Limitation Act cannot operate to postpone the effect of the ultimate bar provided for by s 51 of that Act.
The point being taken based upon the operation of s 51 of the Limitation Act is taken at this point in time in order to found a submission on the part of AAL to the effect that leave to amend to plead the foreshadowed contract case should be refused because such an amendment would be futile, that case being unarguably statute-barred.
Section 51 of the Limitation Act is in the following terms:
51 Ultimate bar
(1)Notwithstanding the provisions of this Part, an action on a cause of action for which a limitation period is fixed by or under Part 2 is not maintainable if brought after the expiration of a limitation period of thirty years running from the date from which the limitation period for that cause of action fixed by or under Part 2 runs.
(2)This section does not apply to a cause of action in relation to which an order has been made under Subdivision 3 of Division 3 (Discretionary extension for latent injury etc).
When the Limitation Act was first enacted in 1969, s 51(2) did not form part of s 51. Apart from minor inconsequential references to Pt 2, s 51 as originally enacted conformed to s 51(1) in the Act as it presently stands.
Section 51(2) was added to the Limitation Act by the Limitation (Amendment) Act 1990 (NSW) (Act No 36 of 1990).
Section 55 of the Limitation Act remains in the form in which it was originally enacted in 1969. Section 55 is in the following terms:
55 Fraud and deceit
(1)Subject to subsection (3) where:
(a)there is a cause of action based on fraud or deceit, or
(b)a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed,
the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment.
(2)Subsection (1) has effect whether the limitation period for the cause of action would, but for this section, expire before or after the date mentioned in that subsection.
(3)For the purposes of subsection (1), a person is answerable for fraud deceit or concealment if, but only if:
(a)the person is a party to the fraud deceit or concealment, or
(b)the person is, in relation to the cause of action, a successor of a party to the fraud deceit or concealment under a devolution from the party occurring after the date on which the fraud deceit or concealment first occurs.
(4)Where property is, after the first occurrence of fraud deceit or concealment, purchased for valuable consideration by a person who is not a party to the fraud deceit or concealment and does not, at the time of the purchase, know or have reason to believe that the fraud deceit or concealment has occurred, subsection (1) does not, in relation to that fraud deceit or concealment, apply to a limitation period for a cause of action against the purchaser or a person claiming through the purchaser.
In his Second Reading Speech in support of the Limitation Bill given on 26 March 1969, the then Attorney-General (Mr McCaw) informed the NSW Legislative Assembly that the Limitation Bill was based on a report of the NSW Law Reform Commission made as the result of a reference to the Commission early in 1966 (see NSW Parliamentary Debates, Session 1968–1969, 17 Elizabeth 2, Vol 79 at pp 5151–5153).
Up to 1 January 1970, the law of limitations that operated in New South Wales was the Imperial Statute 21 James I which was passed in 1623. In his Second Reading Speech, the Attorney-General mentioned that England had updated its law of limitations in 1874 and again in 1939. He observed that the 1939 English enactment on the subject was the starting point of the government’s law reform on the subject in New South Wales. He said that one difference that remained, however, was that, in New South Wales, a six year period was generally to continue to apply whereas in England a three year period had generally been introduced. One of the matters specifically mentioned by the Attorney-General in his Second Reading Speech was that the Bill provided that certain causes of action would be extinguished upon the expiration of the relevant limitation period. In substance, the Attorney-General made clear that the government was intending to adopt the Law Reform Commission Report which had underpinned the Bill.
The relevant Law Reform Commission Report is the Report of the Law Reform Commission being the First Report of the Law Reform Commission on the Limitation of Actions (LRC 3) of October 1967.
The Limitation Bill forming part of that Report is in the same terms as the Bill tabled in Parliament by the government of the day in 1969. At pp 92–145 of the Law Reform Commission Report, the Commission set out detailed notes on the Bill forming part of that Report. At pars 240–241 (p 127) of those notes, the Commission said in relation to s 51:
240.The only similar provision at present in force is section 17 of the Imperial Real Property Limitation Act, 1833. Under section 16 of that Act there is an extension of the limitation period for an action to recover land in cases of infancy or other disability of the plaintiff. Section 17 provides that, notwithstanding any extension for disability, an action to recover land is not to be brought after forty years from the date when the cause of action accrues. There is a similar rule in proviso (c) to section 22(1) of the Imperial Act of 1939, but the period is thirty years instead of forty years. This ultimate bar after thirty years is a support to the security of old system titles to land: in general a vendor of old system title land must show a chain of title commencing at least thirty years before the date of the contract: Conveyancing Act 1919–1964, s.53(1). It is strange, therefore, that neither the present law in New South Wales nor the Imperial Act of 1939 fixes any ultimate bar where the expiration of the limitation period is postponed by acknowledgment or part payment or on account of fraud or mistake.
241.We think, however, that, quite apart from questions of title to land, a statute of limitations ought not to allow an indefinite time for the bringing of actions even if the disabilities and other matters dealt with in Part III of the Bill do exist. These disabilities and other grounds of postponement may well be outside the knowledge of the defendant and we think it right that, after a period of thirty years has elapsed, there should be no further postponement of the statutory bar on any ground.
Part 3 of the Limitation Act is headed “Postponement of the bar”. Divisions 2A, 3 and 4 are not presently relevant. Division 2, which comprises ss 52–56, is relevant. Mr Cork relies upon s 55 upon the basis that he contends that the cause of action in contract which he now seeks to plead was fraudulently concealed from him thereby postponing the bar during the period that the concealment was operative ie until mid-2013.
Senior Counsel for AAL submitted that, upon the true interpretation of s 51 of the Limitation Act, that section provides an ultimate bar of 30 years to any cause of action whether or not that cause of action has been fraudulently concealed from the putative plaintiff. He submitted that the introductory words of s 51(1) “Notwithstanding the provisions of this Part …” make clear that the ultimate bar was intended to become operative once the 30 year period had expired irrespective of whether or not there had been postponing factors in play such as fraudulent concealment. It was submitted on behalf of AAL that those introductory words manifest a clear intention on the part of the legislature that the ultimate bar was to operate, come what may, and was not susceptible to postponement by resort to any of the succeeding provisions of Pt 3 of the Limitation Act.
Counsel for Mr Cork submitted that the ultimate bar was susceptible to postponement by reason of the operation (inter alia) of s 55 of the Limitation Act because the time limit fixed by s 51 is a “… a limitation period fixed by or under [the Limitation Act]…” and thus susceptible to postponement by reason of the operation of s 55. He went on to submit that, if there is conflict between s 55 and s 51, s 55, being a remedial and beneficial provision, should be construed to give the fullest relief which the fair meaning of its language will allow. He also submitted that the opening words of s 51 do not conclude the matter. In this regard, he relied upon certain remarks made in a text book which, in his submission, were to the effect that, when enacted, s 51 applied only to ss 58, 59 and 60 of the Limitation Act.
Senior Counsel for AAL also relied upon the fact that s 51(2) was inserted into the Limitation Act in 1990. He submitted that, if there is any ambiguity as to the meaning s 51(1), s 51(2) is a permissible aid to the construction of s 51(1), even though s 51(2) was enacted after s 51(1). He argued that s 51(2) explicitly identifies only one specific category of “carve out” from s 51(1) (viz where an order has been made under Pt 3 Div 3 subdiv 3) which indicates a statutory intention that there is no other carve out from s 51(1).
I think that the introductory words of s 51(1) have the meaning contended for by Senior Counsel for AAL for the reasons submitted by him. Mr Cork’s submissions effectively ignore those words.
In any event, under s 34 of the Interpretation Act 1987 (NSW), the Law Reform Commission Report of October 1967 is relevant material for the purposes of construing s 51 and s 55 of the Limitation Act. That being so, I think that pars 240–241 of that Report (esp par 241) make perfectly plain that the 30 year period specified in s 51 is not capable of being postponed by reason of the operation of s 55 of the Limitation Act. As par 241 of the Law Reform Commission Report makes clear, there should be no further postponement of the 30 year ultimate bar on any ground.
For these reasons, I consider that s 51(1) of the Limitation Act does provide an ultimate bar of 30 years which cannot be extended by the postponing factors described in s 55 of that Act. In the case of Mr Cork, more than 30 years has passed since the date of the most recent breach of contract relied upon by him in his foreshadowed contract case. For this reason, and subject to certain other arguments raised on his behalf, the amendment by which he seeks to plead a case in contract is futile and should not be permitted.
Counsel for Mr Cork sought to meet these difficulties by raising other arguments.
First, he relied upon two Canadian cases (McRae v Royal Trust Corp of Canada [1992] BCJ No 2036 and Kennedy v Beckman [2008] BCSC 323). Both of those cases relate to legislation which is materially different in form from the relevant provisions in the Limitation Act. For this reason, I do not find them helpful in resolving the present issue.
Next, Mr Cork sought to engage equitable principles in order to overcome the effect of s 51(1) of the Limitation Act. But, as the authors of Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (4th ed, Butterworths LexisNexis, 2002) note at par 34-095, the equitable doctrine of concealed fraud furnishes an answer only to equitable claims and cannot be used to furnish grounds for a common injunction restraining a defendant at law from pleading the statute of limitations or to provide the basis for a valid replication on equitable grounds to a common law plea of the statute. In addition, the High Court has put such an argument to rest in Commonwealth v Cornwell (2007) 229 CLR 519. At 523–524 [9], the six majority Justices said:
It will be necessary to return to the issue raised by reliance upon s 33. It is sufficient at this stage to note the following. First, in cases of “concealed fraud” courts of equity refused to apply by analogy statutes of limitation which operated upon actions at law. Secondly, this doctrine of “concealed fraud” did not furnish an answer on equitable grounds to a plea in a common law court of the 1623 Act or other limitation statute to, for example, an action in tort; it was not possible to plead by way of replication on equitable grounds that the existence of the plaintiff’s cause of action had been fraudulently concealed from the plaintiff by the defendant (Hunter v Gibbons (1856) H & N 459 [156 ER 1281]). Accordingly, in Metacel Pty Ltd v Ralph Symonds Ltd, Sugerman JA said ([1969] 2 NSWR 201 at 203; cf Sheldon v R H M Outhwaite (Underwriting Agencies) Ltd [1996] 1 AC 102 at 111, 120-121):
“Concealed fraud remains a special doctrine of courts of equity applicable where relief is sought in those courts and is not applicable in bar of the Statute of Limitations in a pure common law action.”
Finally, Mr Cork invoked certain remarks made by Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 589–591. At those pages, his Honour said:
It is inevitable that a Statute of Limitations will, on occasion, lead to injustice in the special circumstances of particular cases. Such injustice, when it occurs, is an unavoidable cost of the benefits involved in ensuring that plaintiffs act promptly and that defendants are not subjected to the litigation of stale claims. The present case falls, however, in an anomalous category where the applicability of a limitation provision such as s.14(1) would invariably involve prima facie hardship and injustice and where any compensating public benefit, apart from protecting the courts from being required to determine issues of distant fact, is absent. If a wrongful action or breach of duty by one person not only causes unlawful injury to another but, while its effect remains, effectively precludes that other from bringing proceedings to recover the damage to which he is entitled, that other person is doubly injured. There can be no acceptable or even sensible justification for a law which provides that to sustain the second injury will preclude recovery of damages for the first. It would, e.g., be a travesty of justice and common sense if the law provided that a cause of action lay for damages for false imprisonment but then went on to provide that that cause of action would be lost if the false imprisonment continued for six years after the cause of action first accrued. Likewise, it would be a travesty of justice and common sense if the law imposed a duty upon a solicitor to take positive steps to inform a third person of the contents of a document of which the solicitor was alone aware and then provided that any cause of action against the solicitor for damage caused by a negligent failure to perform that duty would be lost if the negligence continued for six years. It is arguable that the notion of unconscionable reliance upon the provisions of a Statute of Limitations which provides the foundation of the long-established equitable jurisdiction to grant relief in a case of concealment of a cause of action until after the limitation period has expired (cf. s.55(1) of the Limitation Act) should, by analogy, be extended to cover cases such as these where the wrongful act at the one time inflicts the injury and, while its effect remains, precludes the bringing of an action for damages. It seems to me, however, that the preferable approach is to recognize that it could not have been the legislative intent that the effect of provisions such as s.14(1) of the Limitation Act should be that a cause of action for a wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings. On that approach, the reference in s.14(1) of the Act to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings.
In the present case, the negligent failure of the firm to notify Mr. Hawkins of the existence or contents of the testatrix’s will effectively precluded the institution of the present proceedings against the firm until he was finally informed of his appointment as executor. The present proceedings were instituted within six years of that time. That being so the firm’s defence based upon the Limitation Act fails.
Mason CJ and Wilson J appear to have endorsed these remarks made by Deane J (see their Honours’ judgment at 543).
Senior Counsel for AAL submitted that, even if the principle articulated by Deane J in Hawkins v Clayton is good law in Australia (a matter about which there is considerable doubt), the principle is narrowly confined. In Sampson v Zucker (unreported, Court of Appeal NSW, 11 December 1990, BC9606395 at 7), Gleeson CJ (when his Honour was Chief Justice of NSW) said that it was unnecessary for the disposition of the appeal before the Court to go into the interesting question of the standing of the principle enunciated by Deane J in Hawkins v Clayton. His Honour said that that principle had not been applied by the other Justices who decided Hawkins v Clayton. At 6, his Honour said that, in Hawkins v Clayton, the tortious act alleged against the solicitors directly made it impossible for the cause of action against the defendant solicitors to be pursued.
In Cheney v Duncan (2001) 34 MVR 28, [2001] NSWCA 197, Ipp JA said (at [31]):
The essence of the exception as so enunciated [by Deane J in Hawkins v Clayton] is that it applies when the very act of negligence that inflicts the injury also has the effect of precluding the bringing of an action for damages. There must be a coincidence between the negligent conduct and the conduct that conceals from the plaintiff that he or she has a cause of action.
In Mr Cork’s case, the breaches of the express contractual terms alleged in par 4(a) of his proposed Further Amended Statement of Claim did not make it impossible for him to sue for those breaches and did not preclude him from doing anything. He knew that he had not been provided with Commonwealth superannuation. His case is that he was misled from time to time about the progress of his application to be provided with Commonwealth superannuation. He was never told that he had been joined into the CSS. He cannot bring himself within the principle articulated by Deane J in Hawkins v Clayton.
Lastly, Mr Cork relied upon r 8.22 and r 16.53 of the Federal Court Rules 2011. Rule 8.22 is irrelevant. It addresses the date upon which an amendment constituted by the substitution of one party for another is to take effect. Rule 16.53 is also irrelevant. At best, it may be used to overcome the rule in Weldon v Neal (1887) 19 QBD 394. The present problem does not concern that rule. The present difficulty for Mr Cork is that his cause of action for breach of contract was statute-barred at the time when it was commenced in February 2012.
CONCLUSIONS
For all of the above reasons, I propose to refuse leave to Mr Cork to plead the contract case contained in his proposed Further Amended Statement of Claim. He should have leave to plead the other matters set out in his proposed Further Amended Statement of Claim subject to AAL’s reservation of rights to which I have referred at [33] above in relation to the proposed action in deceit.
There should be the usual costs order in respect of costs thrown away by the amendments.
I think that costs of the argument before me concerning Mr Cork’s proposed contract case should follow the event—that is to say, Mr Cork should pay the costs of and incidental to that argument.
There will need to be consequential orders for the filing of an Amended Defence and perhaps for dealing with other matters such as particulars. In addition, orders will need to be made in the other four proceedings commenced in 2012. There will also be a need to consider the impact of this judgment on the other four matters viz the 2013 and 2014 proceedings.
I have already listed all matters of which I am aware before me on Friday next, 10 October 2014, for directions. All I will do at the moment is to order the parties immediately to confer with a view to agreeing a set of orders for each of those matters, in the expectation that the orders can be made on Friday next.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 8 October 2014
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