Ehrhardt v Ehrhardt - [2021] WASC 104

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   EHRHARDT -v- EHRHARDT [2021] WASC 104
CORAM:   REGISTRAR WHITBREAD
HEARD:   8 APRIL 2021
DELIVERED          :   13 APRIL 2021
FILE NO/S:   CIV 2824 of 2019
BETWEEN:   ANDREW MICHAEL FRANZ EHRHARDT
Plaintiff
AND
CATHERINE CHRISTINE EHRHARDT
Defendant

Catchwords:

Practice and procedure - Application to amend statement of claim to add new cause of action - Joinder of new partition claim - Adjoining blocks with no commonality of purpose or structures but commonality of ownership - Turns on own facts

Legislation:

Property Law Act 1969 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiff	:	Mr R Gillon
Defendant	:	Mr J Park

Solicitors:

Plaintiff	:	Lawton Gillon
Defendant	:	Dentons Australia

Case(s) referred to in decision(s):

Minerology v Sino Iron [No 16] [2017] WASC 340
Silverstone Holdings Pty Ltd (as trustee for the Devereux Property Trust) v American Home Assurance Co (1997) 18 WAR 516

REGISTRAR WHITBREAD:

The plaintiff and the defendant are brother and sister and own two properties jointly as tenants in common in equal shares:
(a)205 Railway Parade Maylands which is a single lot comprising three residential units (the residential land), and
(b)211 Railway Parade Maylands which is a single lot containing three shops (the commercial land).
The plaintiff and the defendant are unable to agree upon the sale of either property.
The plaintiff commenced this proceeding seeking an order for sale of the commercial land pursuant to s 126 of the Property Law Act 1969 (WA) (the Act).
The plaintiff now seeks leave of the court pursuant to the Rules of the Supreme Court 1971 (WA) (RSC) O 21 r 5 to amend the statement of claim in terms of the minute of proposed amended statement of claim filed on 18 January 2021. Effectively the amendment seeks the same relief as is sought for the commercial land, for the residential land; that is, an order for sale pursuant to s 126 of the Act.
It was not in issue between the parties that the plaintiff's application to amend the statement of claim sought to add a new cause of action to the statement of claim. Leave of the Court is therefore required to amend the statement of claim.
Order 21 r 5 states:
Amending writ or pleading with leave
(1) This rule is subject to -
(a) Order 18 rules 6, 7 and 8; and
(b) Order 20 rule 19(2) to (5).
(2) The court may at any stage of the proceedings, without determining whether any relevant period of limitation has expired, allow the plaintiff to amend the plaintiff's writ, or any party to amend that party's pleading, on any terms as to costs or otherwise that may be just and in the manner (if any) that the court may direct.
An action for partition is an action seeking equitable relief bought by a person/persons entitled to apply (ie those holding at least half of the interest in the land (pursuant to s 126(1) of the Act), against any other persons interest in the land.
The defendant, or defendants, to such an action are defendants only in their capacity as persons interested in the land the subject of the action and not in any other capacity.
Joinder of different causes of action will generally be permitted where either the new cause of action relates to the plaintiffs claiming in the same capacity, and defendants being liable in the same capacity, in respect of all of the proposed causes of action to be joined (if an application can be made under O 18 r 1(a); see Silverstone Holdings Pty Ltd (as trustee for the Devereux Property Trust) v American Home Assurance Co (1997) 18 WAR 516, 526 to 527 as to the retrospective power of the court to grant leave pursuant to O 18 r 1(2)) or, with the leave of the Court.
Leave of the Court will only be given where a proper basis for joinder is established and joinder would be in accordance with the principles of efficient case management as set out in O 4A; for example, where any new cause of action arose out of the same facts, or substantially the same facts, as the existing cause of action. Commonality of the identity of the parties, of itself, would be insufficient; something more is required.
On the hearing, the plaintiff only pressed for its application to be dealt with pursuant to O 21 r 5 (having also raised O 18 r 1). The defendant objects to the plaintiff's application on multiple bases, including that the claim for partition of the residential land only arose after the action in respect of the commercial land had been commenced. I do not need to decide all of the matters raised by the defendant because, even assuming that the plaintiff's application could properly bought under O 18 r 1, I do not consider that joinder should be ordered for the following reasons.
The plaintiff and the defendant are parties to the action, as presently constituted, in their capacity as persons interested for the purposes of s 126(1) of the Act, in the commercial land.
What is now sought to be added is a new cause of action by the plaintiff against the defendant in their respective capacities as persons interested in the residential land for the purposes of s 126(1). Hence, if joinder were permitted the plaintiff and defendant would be parties to the suit in different capacities, as owners of the commercial land and as owners of the residential land. What, if any, difference does that make?
Under s 126(5)(b) of the Act, one of the functions of the Court is to inquire as to the nature of the land and the persons interested therein. Any persons interested may be bound by the Court's orders notwithstanding that they are not parties to the action.
Persons interested may include mortgagees, persons holding encumbrances, or persons claiming through any of the registered proprietors. Those persons will be different for the two parcels of land relevant to this application; for instance, the lessees of the commercial tenancies have no interest in the residential land and vice versa (there being a third-party lessee of one of the residential units). The whole scheme of s 126 is that an action relates to a specific parcel of land.
I should not be taken to be saying that a single action for partition could not be bought in respect of multiple parcels of land that are utilised in practice as a single parcel (for instance, because they are adjoining parcels with structures crossing boundaries or because they are parcels operated together as a single farm). Where, however, the parcels are discrete parcels of land put to different uses with obviously different persons interested in each of the parcels, it is neither consistent with the scheme of s 126, nor convenient, to grant leave to join different causes of action in the same proceeding for the purposes of O 21 r 5. Given the scheme of s 126, it is irrelevant that the parcels are adjoining each other, and owned by the same parties, where the uses of those parcels are completely different.
Further, the current proceeding, which relates to the commercial land, is close to completion. A defence has been filed conceding the need for an order for sale of that land and, therefore, the current proceeding should be capable of swift resolution. However, the defendant in the current proceeding deposes (pars 16 to 18 of the affidavit of Catherine Christine Ehrhardt sworn on 26 March 2021 (the Ehrhardt affidavit)) to the fact that she resides in one of the Units on the residential land with her family as the family home, where she wishes to remain (pars 26 and 27 of the Ehrhardt affidavit). Accordingly, on basis of the defendant's submissions and evidence before me on the application, it is likely that the defendant will wish to raise different defences in any partition action relating to the residential land. That would only serve to delay the current proceeding, which is not in the interests of efficient case management pursuant to the principles set out in O 4A.
For those reasons, I refuse to grant the plaintiff's application for leave to amend the statement of claim to add a new cause of action.
In the circumstances, it is also unnecessary to determine the question of whether, applying Silverstone Holdings Pty Ltd (supra), the plaintiff can rely on O 18 r 1(c), because I would not make the orders sought by the plaintiff under O 21 r 5. Both RSC Orders would result in the consideration of, and the determination of, the same matters as to whether to grant leave in the present circumstances. Order 18 r 1(a) could not apply as I have found that the plaintiff is not claiming, and the defendant is not alleged to be liable, in the same capacity in respect of both causes of action.
Further, it is not necessary for me to determine the defendant's other objections, including whether the claim for partition of the residential land arose after commencement of this proceeding such that it cannot be joined by reason of the Eshelby principle (see Minerology v Sino Iron [No 16] [2017] WASC 340 [121] to [123]).
It follows that the plaintiff should commence a separate proceeding seeking partition of the residential land. Alternatively, the plaintiff may (even though on the application the plaintiff said he would not) decide to wait for the outcome of the present proceeding, as the resolution of the dispute in relation to the commercial land may impact on the prospects of resolving the issues in relation to the residential land without the need for further litigation.
I will hear the parties as to the costs of the application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RD
Associate to Registrar Whitbread
13 APRIL 2021