Eggerth v Piccardi

Case [2017] FCA 939

FEDERAL COURT OF AUSTRALIA

Eggerth v Piccardi [2017] FCA 939

File number(s): NSD 437 of 2015
Judge(s): DERRINGTON J
Date of judgment: 18 August 2017
Catchwords:

PRACTICE AND PROCEDURE – Interlocutory application to amend statement of claim – statement of claim agitates new causes of action – whether further amended statement of claim sufficiently particularised

PRACTICE AND PROCEDURE – Joinder – whether parties should be joined under r 9.05 of the Federal Court Rules

TRUSTS AND TRUSTEES – Entitlement of beneficiary to bring an action where trustee unwilling or unable to do so – consideration of whether “special circumstances” existed

Legislation:

Limitation of Actions Act 1974 (Qld), s 38(1)(b)

Federal Court Rules rr 9.05, 9.08
Cases cited:

Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75

Gosper v Sawer (1985) 160 CLR 548

Kitchen v Royal Air Force Association [1958] 1 WLR 563

Levy v Watt (2014) 308 ALR 748

Page v Central Queensland University [2006] QCA 478

Ramage v Waclaw (1988) 12 NSWLR 84
Date of hearing: 10 August 2017
Registry: Queensland
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Category: Catchwords
Number of paragraphs: 39
Counsel for the Applicant: Mr D O’Sullivan QC and Mr A Stumer
Solicitor for the Applicant: Trisley Lawyers
Counsel for the Respondents: Mr D Cooper QC and Mr A Christie
Solicitor for the Respondents: Aitken Whyte Lawyers

ORDERS

NSD 437 of 2015
BETWEEN:

THEODOR EGGERTH

Applicant
AND:

KURT PICCARDI

First Respondent

GERLINDE PICCARDI

Second Respondent

KURT ANTHONY PICCARDI (and another named in the Schedule)

Third Respondent

JUDGE:

DERRINGTON J

DATE OF ORDER:

18 AUGUST 2017

THE COURT ORDERS THAT:

1.Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) the applicant have leave to amend his Originating Application in the form of the Further Amended Originating Application filed on 12 July 2017.

2.Pursuant to r 16.53 of the Federal Court Rules 2011 (Cth) the applicant have leave to amend his Statement of Claim in the form of the Further Amended Statement of Claim filed on 12 July 2017.

3.The amendments in the Further Amended Originating Application and the Further Amended Statement of Claim take effect on and from 12 July 2017.

4.Pursuant to r 9.05 of the Federal Court Rules 2011 (Cth) Sonia Marie Piccardi, Tony Kirk Piccardi and Heidi Anne Piccardi be joined as defendants to the proceedings.

5.The applicant pay the respondents’ costs thrown away by reason of the making of the amendments referred to in orders 1 and 2 hereof.

6.The costs of the application to amend be each party’s costs in the proceedings.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

DERRINGTON J:

  1. This application is for a number of orders relating to amendments which are sought to be made to…

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AGLC
Eggerth v Piccardi [2017] FCA 939
Case
[2017] FCA 939
Decision Date

CaseChat Overview and Summary

The case of Eggerth v Piccardi involved an interlocutory application to amend a statement of claim, which raised new causes of action. The applicant sought to join additional defendants and amend the statement of claim to include allegations that were not sufficiently particularised. The dispute centred on whether the further amended statement of claim was sufficiently particularised and whether additional parties should be joined under the relevant rules.

The court was required to decide whether the allegations in the further amended statement of claim were adequately particularised and whether the new defendants should be joined. The court also considered whether "special circumstances" existed that entitled the beneficiary to bring an action where the trustee was unwilling or unable to do so.

The court held that it was appropriate to allow the allegations to be made at that stage, provided they could be further particularised in the future. The court found that the amendments to the originating application and statement of claim were sufficiently particularised and that the additional defendants should be joined. The court also determined that the costs thrown away by reason of the making of the amendments should be paid by the applicant, but not on an indemnity basis as the allegations of fraud were not clearly of the category justifying such an award.

The final orders included granting leave to amend the originating application and statement of claim, joining the additional defendants, and directing the applicant to pay the respondents' costs thrown away by reason of the amendments. The costs of the application to amend were to be each party's costs in the proceedings.

Orders

Orders of the court

1. Pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) the applicant have leave to amend his Originating Application in the form of the Further Amended Originating Application filed on 12 July 2017.

2. Pursuant to r 16.53 of the Federal Court Rules 2011 (Cth) the applicant have leave to amend his Statement of Claim in the form of the Further Amended Statement of Claim filed on 12 July 2017.

3. The amendments in the Further Amended Originating Application and the Further Amended Statement of Claim take effect on and from 12 July 2017.

4. Pursuant to r 9.05 of the Federal Court Rules 2011 (Cth) Sonia Marie Piccardi, Tony Kirk Piccardi and Heidi Anne Piccardi be joined as defendants to the proceedings.

5. The applicant pay the respondents’ costs thrown away by reason of the making of the amendments referred to in orders 1 and 2 hereof.

6. The costs of the application to amend be each party’s costs in the proceedings.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In the circumstances, despite the generality of some of the pleadings, it is appropriate to allow the allegations to be made at this stage. If, of course, the allegations cannot be further particularised in the future, different questions may arise. Conclusion In the result, and not without some hesitation, it is appropriate that the applicant has leave to amend the originating application and Statement of Claim in the form of those documents as filed on 12 July 2017. In accordance with what is the usual practice, the amendments to the originating application and Statement of Claim will take effect from the date of filing. It is also appropriate to make the orders that Miss Sonia Marie Piccardi, Tony Kirk Piccardi and Heidi Anne Piccardi be joined as defendants to the proceedings.Costs The applicant ought pay the costs thrown away by reason of the making of the amendments. There does not seem to be any dispute about that. However, the respondents assert that the costs should be paid on an indemnity basis. In particular, they make reference to the allegations of fraud in the reply filed on 29 September 2015. It is submitted that these allegations were wrongly made by the applicant knowing them to be false and that, eventually, they were not pursued. In this respect the respondents refer to the allegations of “concealed fraud” in paragraphs 1(b), 2(b), 5(b), and 7(b) of the Reply. However, the allegations of “concealed fraud” are made by a reference to s 38(1)(b) of the Limitation of Actions Act 1974 (Qld). They are not necessarily allegations of actual fraud (See Kitchen v Royal Air Force Association [1958] 1 WLR 563, 569 and Levy v Watt (2014) 308 ALR 748, 771-772). In the case of a beneficiary’s claim that a trustee has breached a trust duty of which the beneficiary is not aware, it is apparent that an extension of the limitation period can be pleaded by reference to s 38(1)(b) without any allegation of actual fraud. That arises by reason of the existence of the duty of the trustee to act in the interests of the beneficiary. Whether that be a fiduciary duty or a trust duty need not be decided. If there were a breach of trust, the continuation by the trustee to act without obtaining the fully informed consent of the beneficiary would most likely result in a breach of fiduciary duty. To obtain the fully informed consent of the beneficiary, the trustee would need to disclose the breach. By whatever reasoning path, the trustee will usually have had a duty to inform the beneficiary of the existence of the breach and of their entitlements as against the trustees. The failure to make such disclosure is likely to constitute an equitable fraud within the scope of s 38(1)(b). The point to be made here is that the allegations of fraud referred to by the respondents were not clearly of that category of dishonesty which is referred to in those cases justifying the grant of an award of indemnity costs by the wrongful pursuit of allegations of fraud.

Ratio Decidendi

Legal Principle Established

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