Gollan v Tunnell Boring Equipment Pty Ltd

[1995] QCA 368

IN THE COURT OF APPEAL	[1995] QCA 368
SUPREME COURT OF QUEENSLAND	Appeal No. 139 of 1995
Brisbane
[Tunnell Boring & Anor. v. Gollan & Anor.]
BETWEEN:

TUNNELL BORING EQUIPMENT PTY LTD (ACN 009 948

958) AND STEVEN MORGAN

(Applicants)

AND:

WILLIAM CAMPBELL GOLLAN AND FANIGUN PTY LTD

AS TRUSTEES FOR THE GOLLAN FAMILY TRUST

(Respondents)

Macrossan C.J.
Fryberg J.

Helman J.

Judgment delivered 22/08/1995

Separate reasons of the court, the Chief Justice and Fryberg J. concurring as to the order made,

Helman J. dissenting.

APPLICATION FOR LEAVE TO APPEAL REFUSED, WITH COSTS

CATCHWORDS:	APPEAL - District Courts Act 1967 s.92(2A) - order made under Rule 23 of the District Courts Rules for joinder of plaintiff after expiration of limitation period - whether important question of law or justice
Counsel:	W. Sofronoff Q.C. with K. Holyoak for the applicants P. McMurdo Q.C. with K. Varley for the respondents
Solicitors:	McKays for the applicants Baker Johnson for the respondents

Hearing Date: 1 August 1995

IN THE COURT OF APPEAL	[1995] QCA 368
SUPREME COURT OF QUEENSLAND

Appeal No. 139 of 1995

Brisbane

Before Macrossan CJ
Fryberg J
Helman J

[Tunnell Boring & Anor v. Gollan & Anor]

BETWEEN:

TUNNELL BORING EQUIPMENT PTY LTD (ACN

009948958) and STEVEN MORGAN

(Applicants)

AND:

WILLIAM CAMPBELL GOLLAN and FANIGUN PTY LTD as trustees for the GOLLAN FAMILY TRUST

(Respondents)

REASONS FOR JUDGMENT - THE CHIEF JUSTICE

Judgment delivered 22/08/1995

The circumstances in which this application for leave to appeal arose are set out in the reasons which have been prepared by Helman J. A Judge of District Courts ordered that a company be joined as plaintiff in proceedings after the statutory limitation period had fully run. The District Courts provisions governing the matter reflect the similar provisions in the Supreme Court where a number of decisions have been given dealing with the power to order joinder outside the limitation period. It was common ground that an order for joinder could, in the present circumstances, have been made only if "special circumstances" existed to support it. See e.g. Lynch v. Keddell [1985] 2 Qd.R. 603. The order having been made, its character and the circumstances in which it was made, were such that an appeal against it could be brought to this Court only if leave were given on the basis that an important question of law or justice was involved: see s.92(2A) of the District Courts Act 1967. In hearing the application for leave, the Court in this case found it convenient to hear the parties upon the merits of the order for joinder.

The case which was made seeking the order for joinder below showed that the personal injuries which the original plaintiff suffered had caused loss, not only to him but also to a company by which he was employed at relevant times, and of which he was to be regarded as the controller. It was said that the company had suffered financial loss as a result of the loss to it of the original plaintiff's services.

The reasons of the Judge below in ordering joinder disclose what was his principal basis for so ordering. He was of the view that in this State for a considerable time damages claims had commonly been constructed by practitioners on the basis that injured plaintiffs could claim directly for the amount of loss suffered by company employers in which they held interests, doing this without the necessity of joining those companies as plaintiffs in the proceedings. Because of what was said to him from the Bar table without dissent in the course of the hearing and relying on what he understood from his own experience, he was permitted to decide the issue on the basis that a widespread practice of the kind described did indeed exist.

For such a practice to be in place it could only be because defendants in suits commonly accepted that claims could appropriately proceed in that fashion whether for reasons of convenience or because they saw nothing legally unsound in it. This practice was said to have proceeded with plaintiffs claiming and recovering on that basis up until the recent decision of this Court in Seymour v. Suncorp Insurance & Finance No. 239 of 1993, 14/12/94. Earlier decisions given on appeal in the Supreme Court which might be thought to bear upon the matter, namely Batt v. Wilkinson [1983] 2 Qd.R. 619 and Lago v. Lago [1983] 2 Qd.R. 29 between which some tension seems to exist, were said not to have caused the practice described to be departed from. The way in which the original plaintiff intended to advance his claim in the present case showed that he was following the practice. This appeared clearly enough from material disclosing the basis of his claim as communicated to the defendant.

Taking the view which he did of the practice commonly followed, I think it was open to the Judge to decide that the lack of endorsement accorded to it by Seymour v. Suncorp Insurance & Finance, supra, could be regarded as constituting special circumstances sufficient to justify his making an order for joinder out of time. The situation where a common practice is said to have been established should be distinguished from the case of a mistake of law made by an individual practitioner leading him erroneously to fail to join a necessary party within time. As to that latter situation, it is not necessary to say anything in this case. The way in which we view this present appeal must depend upon the way in which the parties, in effect, collaborated in permitting if not inviting the Judge's approach. If, in another case which might arise, a challenge is to be made to the extent to which any practice as described was in fact previously in place, the discretionary exercise involved in considering an out of time application for joinder would to that extent, be different.

Here the decision of the Judge simply involved the exercise of a discretion on a basis which was made relevant for his consideration and was capable of being regarded as constituting special circumstances. No attempt to question the extent of the principles recently declared in Seymour v. Suncorp Insurance & Finance was involved, and I do not regard the case as involving any challenge to any other

accepted principle of law of general application. I do not think that any important question of law or justice was involved and I would refuse leave with costs.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 139 of 1995

Brisbane

Before Macrossan C.J.

Fryberg J. Helman J.

[Tunnell Boring & Anor. v. Gollan & Anor.]

BETWEEN:

TUNNELL BORING EQUIPMENT PTY LTD (ACN 009 948 958)

AND STEVEN MORGAN

(Applicants)

AND:

WILLIAM CAMPBELL GOLLAN AND FANIGUN PTY LTD AS

TRUSTEES FOR THE GOLLAN FAMILY TRUST

(Respondents)

REASONS FOR JUDGMENT - FRYBERG J.

Judgment delivered 22/08/1995

The circumstances giving rise to this application are set out in the judgment of Helman J.

The important question of law or justice said on behalf of the applicant to arise in the case was:

"Whether a mistake [of law] by a lawyer, because it is shared by many other lawyers, is capable of amounting to a special circumstance justifying depriving a defendant of a limitation defence."

In my judgment, that question does not arise in this case. The learned District Court judge did not base his decision upon the proposition that there had been a mistake made by the plaintiff's lawyer, whether shared by many other lawyers or not. He did not even make a finding of fact to that effect. What he did find was that until the decision of this Court in Seymour v Gough1 there existed a practice in Queensland (at least in the District Court)

"of claiming losses sustained strictu sensu by a family company or a trust or a partnership as losses in fact sustained by the plaintiff where that plaintiff was either the guiding light of the company or the partnership or the principal beneficiary of a trust."

He found that that practice has existed over many, many years in Queensland. He based his judgment principally on that finding. Because the question which the applicant wishes to agitate in this Court therefore does not arise in this case, I would refuse leave to appeal.

We were informed that a considerable number of cases are pending in which the circumstances are similar to those found by Judge Botting. For this reason it is appropriate to say a little more. Before us, the applicant accepted the finding of fact by His Honour that the practice referred to above existed. In my judgment that concession was soundly made. The learned District Court judge has a vast experience in personal injuries litigation and I for one would not be prepared to go behind the finding referred to. It is worth noting that before His Honour counsel for the present applicant did not challenge his opponent's assertion of the existence of the practice. The case had proceeded in the District Court in accordance with the practice.

The applicant submitted that the practice was "no more than a misinterpretation of the law". The declaratory theory of the nature of common law judgments renders the conclusion that the practice was wrong inevitable, but that seems to me of marginal relevance. The fact is that it was the practice. Moreover, the practice received some encouragement from the decision of the Full Court in Batt v Wilkinson2, although it cannot be said that that decision compelled it. The tension between that decision and that of a differently constituted Full Court in Lago v Lago3 some eleven months earlier doubtless contributed to the existence of the practice. The question whether Seymour changed the law is largely irrelevant, though doubtless that decision resolved the tension.

To my mind, reliance by a plaintiff upon that practice is quite plainly capable of giving rise to special circumstances in the sense referred to in the long line of Queensland cases dealing with adding parties outside the limitation period4. In this context it is important to bear in mind that in such an application a judge at first instance is, on the received doctrine, still exercising a discretion, albeit a fettered one. The question on appeal must always be whether in all the circumstances it was open to the judge to exercise his discretion in the way in which he did. There were times during the argument on behalf of the applicant in the present matter when one might have thought we were being invited to re-exercise the discretion ourselves. In my judgment, in the circumstances of the present case the existence of the practice to which I have referred was sufficient to commit the matter to His Honour's discretion. No basis for interfering with the exercise of that discretion has been suggested. For that reason also I would refuse leave to appeal.

Moreover, as the passage from His Honour's judgment quoted by Helman J. makes clear, His Honour did not base his decision solely on the practice. He also took into account material filed by the plaintiff in compliance with the Rules of Court which he thought clearly showed the nature of the claim being made, and an answer to interrogatories which also shed light on that topic. He based his decision on the "cumulative effect" of all of the matters to which he referred. It was argued for the applicant that His Honour's characterisation of the documents referred to could not be sustained. In my judgment, that is clearly not a point warranting the grant of leave to appeal to this Court5.

In the alternative it was argued that even if one accepted His Honour's characterisation of the documents, the fact that the defendant did not respond by alerting the plaintiff to his problem could not amount or contribute to the special circumstances necessary to justify the addition of a plaintiff under the authorities. It was said that a defendant is entitled to sit back, say nothing and demand that the plaintiff prove his case. That, it was submitted, is inherent in the adversarial system.

It is of course trite to observe that we operate under an adversarial system. However that system is not one designed to further trial by ambush. Pleadings should enable the parties and the Court to identify the real issues between the parties. In particular circumstances it may well be necessary for a defendant who knows or ought to know of an incorrect foundation for a head of the plaintiff's claim positively to raise the point in his defence if he wishes to rely on it. Although the defence in the present case was not before us, we were told from the bar table that the point was not raised in it. Whether it ought to have been raised was a matter which His Honour might properly have considered; and if he were of the view that it should have been raised he could have taken that into account in assessing the existence or otherwise of special circumstances. That approach is supported by the judgments of McPherson and de Jersey JJ. in Grotherr v Maritime Timbers Pty Ltd6. I do not understand the judgment of Lee J. in that case to be inconsistent with it. In particular, I would point out that the examples given by Lee J.7 were expressly not intended to be exhaustive. The Rules of Court do not confer a right to silence on litigants in civil cases. In my view a wrongful failure to draw attention to an issue may have been capable of contributing to special circumstances in the present context. His Honour's reasons on this aspect were economically expressed (it was an ex tempore judgment), but may well have been founded on such a basis. In the circumstances, it is unnecessary to express a conclusion on the point.

I have approached this case on the basis that the proper test to be applied is the existence of special circumstances. That basis was accepted by both parties before us. It may be that the time is ripe to reconsider the question whether the discretion conferred by O. 3 r. 11 is indeed a fettered one (as most of the cases referred to above suggest) or an unfettered one. For a time, the latter view was supported by dicta from Archie v Archie and by the decision in Adam v Shiavon8, but it is fair to say that the former view has prevailed in this state. The impact of the decision of the High Court in Bridge Shipping Pty Ltd v Grand Shipping S.A.9 on that view is however yet to be considered. The issue was neither argued nor considered in Hayward v Darling Downs Aircraft Services Pty Ltd10 and remains for consideration in an appropriate case. This is not such a case.

In summary in my judgment the application for leave to appeal should be refused because (a) the question which the applicant seeks to agitate in this Court does not arise in the circumstances of the case; and (b) any appeal would certainly fail.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane	Appeal No. 139 of 1995
Before Macrossan C.J.

Fryberg J. Helman J.

[Tunnell Boring & Anor. v. Gollan & Anor]

BETWEEN:

TUNNELL BORING EQUIPMENT PTY LTD (ACN 009 948

958) AND STEVEN MORGAN

(Applicants)

AND:

WILLIAM CAMPBELL GOLLAN AND FANIGUN PTY LTD

AS TRUSTEES FOR THE GOLLAN FAMILY TRUST

(Respondents)

REASONS FOR JUDGMENT - HELMAN J.

Judgment delivered 22/08/1995

This is an application for leave to appeal against an order made on 8 June 1995 in the Brisbane

District Court that Fanigun Pty Ltd as trustee for the Gollan Family Trust be joined as the second

plaintiff in action no. 4022 of 1992 and that such joinder be deemed to take effect as and from the

day on which the plaint was filed, 14 December 1992. The defendants now apply under s.92(2) of

the District Courts Act 1967 for leave to appeal. Leave to appeal is necessary since the learned

judge's order was not a final judgment of the District Court. Leave cannot be granted unless some

important question of law or justice is involved (s.92(2A)). The Court heard argument on the

application for leave and on the merits of the appeal itself.

The action arose out of a motor vehicle collision which took place on 30 January 1991. The first plaintiff claims to have been injured in the collision and alleges that the collision and his injuries were caused by the second defendant's negligence for which the first defendant is vicariously liable.

The first plaintiff claims $200,000 damages for personal injuries and consequential loss.

The second plaintiff's claim is for $200,000 damages for loss of the services of the first

plaintiff caused by the negligence of the first or the second defendant. The first plaintiff is a director

of the second plaintiff which trades as "Bill Gollan Car Sales". The plaintiffs say that since before

1979 the first plaintiff has been employed by, the driving force behind, and the mainstay of, the

second plaintiff.

The effect of his Honour's order, which was made under Rule 23 of the District Courts

Rules which is the same in substance as Order 3 Rule 11 of the Rules of the Supreme Court, was

to deem the second plaintiff's action to have begun before the limitation period applicable to the

action expired, notwithstanding that when the application was made it had expired. His Honour

concluded that the case was one of a special or peculiar circumstance and so warranted an order

designed to overcome the time bar. Such an order may be made under Order 3 Rule 11 - see

Hayward v. Darling Downs Aircraft Services Pty Ltd [1993] 2 Qd.R. 153, and it follows that

one may be made under Rule 23 also. His Honour explained his conclusion in this way:

"I have formed the very clear view that the applicant has demonstrated that the circumstances of his case can properly be characterised as being special or peculiar and has brought itself within the ambit of the test to be applied.

The principle basis on which I so find is this, it has been submitted that there was a clear practice until recently of claiming losses sustained strictu sensu by a family company or a trust or a partnership as losses in fact sustained by the plaintiff where that plaintiff was either the guiding light of the company or the partnership or the principle beneficiary of a trust and so on. I have no doubt that there has been such a practice over many years now in Queensland. In my experience at the Bar and on the Bench since I have been familiar with that practice which as I say has in my view existed over many, many years in Queensland.

The plaintiff instituted these proceedings adopting or following that long established practice. The plaintiff filed material as he was bound to complying with the rules of this Court which clearly, in my view, the nature of the claim that he was making and as I understand it also the answer to interrogatory equally shed light upon the same topic.

Those particulars furnished in compliance with the rules were furnished as I understand it in the first quarter of 1993. The limitation period expired in January of 1994 and the Court of Appeal in Suncorp v. Seymour, a decision handed down on 14 December 1994, have effectively put an end to the practice that I have described.

The result of that decision will be that unless the application is granted the plaintiff or the plaintiff and the applicant between them will suffer losses or may suffer losses which prior to the decision in Seymour the plaintiff might have expected to recover in his action.

It seems to me that in this case there is no prejudice shown that would be suffered by the respondent other than of course the prejudice of being denied the right to raise the statute of limitations. The damnum to the plaintiff and/or the plaintiff and the applicant if the application is not to be granted will of course be or may be significant.

It seems to me that there has been no suggestion, of course, of any fraudulent conduct by any person. All that has happened here is that the plaintiff's legal advisers appropriately considering the then prevailing practices adopted a course which has now been held to have been one that was not proper.

As I understand it the Court of Appeal in Suncorp v. Seymour in fact overruled earlier decisions of the Court of Appeal in Queensland which it then declared obviously to be erroneous. It seems to me as I say that these circumstances can very readily be characterised as being special and indeed I think could also be fairly described as being peculiar and using those words of course I am using them in the context in which they are used in such cases as Growther.

I should emphasise of course that I do not regard the absence of prejudice to the respondent other than the loss of the right to raise a statute or the great prejudice to the plaintiff as in themselves of course amounting to special circumstances or peculiar circumstances.

What I arrive principally is the erroneous practice which has only recently been shown to be erroneous, the long-standing nature of that practice and taking that circumstance into account together with the other matters that I have mentioned. Looking at the cumulative effect of all those matters it seems to me that I can properly characterise the facts of this case as being special and/or peculiar.

It therefore seems to me appropriate that I should grant the relief sought.."

In my view his Honour's decision does raise an important question of both law and justice

which goes beyond the consequences of the decision upon the immediate parties to the action;

actions like this are numerous, and the same point is likely to arise again. The question may be

summarized thus: Can the unexpected exposure of an erroneous practice of the kind referred to by his Honour based on a mistake of law be regarded as a special or peculiar circumstance justifying an

order of the kind made by his Honour? That is not quite as the question was put to us, but I think it

accurately defines the issue here.

All things considered I think that leave to appeal should be granted.

It is as well to reflect, in considering the merits of the appeal, that what was contemplated by

his Honour's order was the avoidance of the effects of a limitation statute by means of a discretion

found to have been implied in a rule of court. The categories of cases in which the discretion may

validly be exercised must necessarily be few.

A mistake resulting in the absence of a necessary party, if proceeding from the error of an

individual person, has been held not to be a special or peculiar circumstance - see Perrett v.

Robinson [1985] 1 Qd.R. 83, at pp.92-93 per McPherson J. (with whose reasons Campbell C.J.

agreed), and Grotherr v. Maritime Timbers Pty Ltd [1991] 2 Qd.R. 128 at pp.152-153 per Lee

J. This was not, however, an individual error but one made by many and based upon a long-

standing practice. I think that that left it open to his Honour to treat the case as revealing a special

or peculiar circumstance: the sudden discovery that a generally adopted practice can no longer be

relied on is sufficiently unusual to qualify as "special" or "peculiar".

I should mention that there were some submissions directed to us on the premise that the

defendants had notice from the first plaintiff, before the expiration of the limitation period, of the

second plaintiff's claim. There is no comfort for the plaintiffs in that, since the defendants were

entitled to remain silent about any failure to join a necessary party - see Grotherr v. Maritime

Timbers Pty Ltd, supra, at p.153 per Lee J.

My conclusion is therefore that it was open to his Honour to find that there was a special or

peculiar circumstance in this case. Leave to appeal should be granted, and the appeal dismissed.

1

Unreported, C.A. 239/93, 14.12.94.

2

[1983] 2 Qd.R. 619.

3

[1983] 2 Qd.R. 29.

4

Archie v Archie [1980] Qd.R. 546; Perrett v Robinson [1985] 1 Qd.R. 83; Lynch v Keddell [1985] 2 Qd.R. 103; Lynch v Keddell No. 2 [1990] 1 Qd.R. 10; Grotherr v Maritime Timbers Pty Ltd [1991] 2 Qd.R. 128; Hayward v Darling Downs Aircraft Services

6

[1991] 2 Qd.R. 128.
At p. 152.
[1985] 1 Qd.R. 1.
(1991) 173 C.L.R. 231.
[1993] 2 Qd.R. 153

7
8
9
10