Grotherr v Maritime Timbers Pty Ltd

[1990] HCATrans 299

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B23 of 1990

B e t w e e n -

TONY DAVID GROTHERR

Applicant

and

MARITIME TIMBERS PTY LTD,

HENRY JOHN GOOSTREY, COLLINS

& DAVEY MOTORS (OLD) PTY LTD

and VOLVO (AUSTRALIA) PTY LTD

Respondents

Application for special leave

to appeal

MASON CJ
TOOHEY J

McHUGH J

Grotherr 1 7/12/90

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 7 DECEMBER 1990, AT 10.09 AM

Copyright in the High Court of Australia

MR W. SOFRONOFF, QC:  If the Court pleases, I appear with

my learned friend, MR P.J. BASTON, for the

applicant. (instructed by Anderson & Bone)

MS S.M. KIEFEL, OC: If the Court pleases, I appear with my

learned friend, MR P.V. AMBROSE, for the

respondent. (instructed by Henderson Trout)

MASON CJ: Yes, Mr Sofronoff.

MR SOFRONOFF:  Your Honours, the applicant was involved in

a motor vehicle accident.	He sued the driver and
owner of a Volvo truck.	He also sued the

distributor because it appeared that the truck had

been supplied with faulty brakes. At the end of the limitation period he obtained discovery of a

telex from Volvo itself, the respondent, to the

distributor, and it showed that Volvo had been

aware from about the date of the accident that the

brakes on the truck were faulty and it caused the

applicant's expert to change his opinion so to

conclude that the distributor might not have been

able on a reasonable inspection to have detected

the defect, that is to say it appeared that the

distributor might not be liable but that Volvo was.

The applicant applied under Order 3 of the

Supreme Court Rules to add Volvo as a defendant,

both for the recovery of damages for personal
injury in respect of which the limitation period
had expired, and for damages for damage to property
in respect of which the limitation period had not

then expired. At the same time, the defendant by

election applied to join Volvo as a third party.

The master allowed the joinder of Volvo as a third

party - - -

MASON CJ:  We are familiar with the history of the matter,

so you can proceed to the principal point.

MR SOFRONOFF:  Thank you, Your Honour. Your Honours, the

point is this: in this case at the date of the

application to the judge at first instance the

applicant could; as of right, have issued a writ

against Volvo claiming damages for injury to

property. He could have then applied to the court

under Order 32, which governs amendments, to add a

new cause of action, notwithstanding that the cause

of action was out of time, the personal injuries

action. That would have been granted if, it

appears on the authorities, the interests of

justice required it, rather than whether there were

special and peculiar circumstances, the Wheldon v

Neal test. I will come to the authorities in a

moment in respect of that aspec. But simply because

the applicant elected to apply to join Volvo to an

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existing action he has been required to show

special or peculiar circumstances and he has been

refused leave to join Volvo on that basis by reason

of the decision of the majority of the Full Court.

TOOHEY J:  Does that mean then that you do not accept

Lynch v Keddell as a decision that governs this

matter?

MR SOFRONOFF:  Yes, we submit that it cannot make sense that

there be two tests: one, the Lynch v Keddell/

Wheldon v Neal test for joinder of a party, and

another more liberal test for the joinder of a

cause of action.

TOOHEY J:  I must say I do not know that that comes through

terribly clearly in the proposed notice of appeal

which rather focuses upon the Lynch v Keddell test

and seeks to demonstrate that there were peculiar

or special circumstances.

MASON CJ: If I can add to that, the affidavit in support of

the application appears to mask that point as

formidably as one could.

MR SOFRONOFF: Perhaps that is so, Your Honours. The

position before the Full Court was, of course, that

Lynch v Keddell (No 2) had then been just recently

decided a few months before. It, of course, was

not challenged before the Full Court.

MASON CJ: Well now, can you tell us what is the rule of

court that governed this application?

MR SOFRONOFF: Order 3, Your Honours, which is in the book

of authorities that was delivered to Your Honours.

MASON CJ: Order 3, rule 11?

MR SOFRONOFF: Yes, 11:

The Court shall not refuse to determine a

cause or matter by reason only of the

misjoinder or non joinder of parties, and the

Court may in every cause or matter deal with

the matter in controversy so far as regards

the rights and interests of the parties

actually before it. ·

The Court may, at any stage of the

proceedings, either upon or without the

application of either party -

and so on, order that persons be joined.

MASON CJ: Well now, can you enunciate a principle that

would in some way provide some limitation on the

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generality of that provision? You say that the

Wheldon v Neal principle as accepted in the

Lyndell case does not apply.

MR SOFRONOFF:  We submit, Your Honours, that the discretion

is not limited in the way that Wheldon v Neal would

limit it, but that instead there is a general

discretion. When, however, a limitation period has

expired, that will form a very weighty
consideration against the grant of leave to join
the defendant. That being so, in such a case, as a

matter of fact, any court faced with such an

application would require very weighty reasons on

the other side in order to deny the respondent its

right to rely upon the time bar. But that is a

matter of consequence given the nature of that sort of application, but one does not, in our respectful

submission, limit the discretion of the judge

hearing the matter by reference to the sorts of

things that were said in Wheldon v Neal, for

example, which, in effect, virtually excluded the

possibility of there being such a successful
application other than in, as it was put, a very,

very rare case.

Under very peculiar circumstances the court

might perhaps have power to allow such an

amendment, but certainly as a general rule it would

not do so.

TOOHEY J: Is it the joinder that is controlled by the

notion of peculiar or special circumstances, or is

it the operation of rule 13 which is governed by

that sort of notion, because it does not assist, as I understand the Queensland rules, the plaintiff to

have a defendant joined if the limitation period is

expired unless advantage is taken of rule 13?

MR SOFRONOFF: That is so, Your Honour. Implicit in any

application to join a defendant out of time would

be the necessity to obtain an order, the effect of

which would be to preclude the defendant from	relying upon the Limitations Act. That being so,	in our submission, however, one does not conclude
that there is a discretion which is fettered in the
way that, in our submission, Wheldon v Neal would
fetter it.

Instead, there is the usual sort of

discretion. However, as a matter of fact, the

consequence of there having been an expiry of the

limitation period is that that is a very powerful

factor.

TOOHEY J: But was the matter not argued at all stages

according to the Lynch v Keddell test?

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MR SOFRONOFF: It was, Your Honour, it was.

TOOHEY J: Are we being invited now to approach the matter

not be reference to the basis upon which it was

decided below, but upon some quite new basis?

MR SOFRONOFF: Yes, Your Honours, you are. Could I say

this? The respondent, ironically - the appellant

below - asked that Lynch v Keddell be reconsidered

in a particular way that does not concern

Your Honours today.

TOOHEY J: But that was really to give the Limitation Act

priority over the rules.

MR SOFRONOFF:  Yes, and the Full Court said, not

surprisingly, that they had just determined Lynch v

Keddell and they certainly were not going to, at

this early stage, reconsider it. So the position

in Queensland is that Lynch v Keddell (No 2) is,

subject to what this Court might do, the law with

respect to joinder of parties and, perhaps to a lesser extent, with respect to adding causes of action, which are time-barred against parties

already parties to the action.

It would have been futile to have attempted to raise this matter before the Full Court.	It was
not raised, but it would have been, in our

submission, futile to raise it because the court

has just recently considered the matter at length.

Your Honours, in New South Wales, in McGee v

Yeomans, which is number 6 in our list, the

New South Wales Court of Appeal decided that in

respect of a rule that, in our submission, is

materially similar to Order 32 of the Supreme Court

Rules of Queensland, that is the rule governing

amendment of causes of action, that the Wheldon v

Neal principle did not apply and that instead there

was a general discretion. That appears,

Your Honours, at page 280 of the reasons of

Mr Justice Glass - - -

TOOHEY J:	Mr Sofronoff, just before you take us to that passage, if you are going to, I am still having
trouble with the basis upon which this Court is
being invited to grant special leave, because the notice of appeal seeks not that the matter go back for further consideration but, in effect, that
there be a joinder of the proposed defendant on a
basis that would preclude the Limitation Act provision from operating, but how could this Court reach a decision on that sort of point? There may
be quite a lot of evidence that was not strictly
relevant to the proceedings below that might need to be lead on both sides?
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MR SOFRONOFF:	Your Honours, the basis upon which special

leave is to be sought is in paragraph 11 of the

affidavit, page 136 of the record. Reference is

made there to the fact that the appeal deals with

joinder, and then over the page at page 137,

subparagraph e, the point is made that although

Lynch v Keddell has been decided, it:

has not satisfactorily settled the principles.

I should say that when one reads the case, of course, it sets out to settle the principle that

Order 3 deals with joinder of parties, Order 32

deals with amendments and that, in so far as

Order 3 is concerned, Wheldon v Neal applies.	Then
we set out the list of cases in which varying
views, until Lynch v Keddell (No 2) have been

expressed, and at the end of the day we submit that

only this Court can determine for Queensland

certainly, and with the existence of cross-vesting

legislation, for other States as well, the question
whether the old Wheldon v Neal test, the strict

test, is applicable, or whether, in accordance with other discretions in other parts of the rules there

is simply a general discretion which will throw up

familiar circumstances, and therefore common ways

of approaching the problem.

TOOHEY J: 

And would it be right to say that that was not

the way in which the matter was approached before
the Full Court?

MR SOFRONOFF: That is correct, Your Honour, but as I say,

the position before the judge at first instance was

that he was satisfied there were peculiar

circumstances. The respondent today appealed and

argued that there were not special circumstances.

We submitted to the contrary. It would have been

futile to ask the Court to do anything different

with respect to Lynch v Keddell, it having settled

the matter so it said a short time before, but we

ask Your Honours to do that.

TOOHEY J: But, did not Lynch v Keddell only purport to

settle the matter in respect of the particular rule

to which you have taken us?

MR SOFRONOFF:  Your Honours, it went further than that

because - could I take Your Honours to it? It is

No 20 in our list. It certainly concentrates on

that because until then there had been confusion as

to which of the two rules applied and whether they

in fact both applied but at the fourth sheet, if

Your Honours do not have the pages at the top of the photocopies, of the reasons, the seventh page

of the reasons, the Chief Justice in the paragraph

beginning with the words "In the second place" - do

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Your Honours have that? Page 16, I think,

Your Honours. It is the fourth sheet in the book.

MASON CJ: Yes, we have it.

MR SOFRONOFF:  At line 15, Your Honours, His Honour said:

McGee v Yeomans was concerned, in effect,

with adding a new cause of action against an

existing defendant or an action against him in

a different capacity and the result, in the

view of the majority, of the various amendments

made to the provisions corresponding to our

O.32 r.1 was that the old restrictive rule of

Weldon v Neal was totally replaced by a general

unfettered discretion which simply took into

account all of the relevant circumstances. I

would have some difficulty in accepting that

the introduction of rules designed to bring

clarification and perhaps some liberalisation

in limited areas

I skip over the part in parenthesis -

should result in the total abrogation of the

old strict rules governing the general right

to amend to add new causes of action out of

time. This is especially so when the rules
introduced have attached strictly limited

conditions which govern their operation. It

is unnecessary and undesirable to pursue this

analysis of Adam v Shiavon further since we

are, in my view now governed by the authority

of Lynch v Keddell in the case of applications

to amend to add parties out of time.

And, Lynch v Keddell No 1, of course, applied the

old strict test to the matter of joinder.

I should tell Your Honours that since the list

of authorities went to Your Honours, a case has

been brought to my attention in which this Court

considered Weldon v Neal not directly with respect
to the matter that I am now addressing.	The case

is Renowden v McMullin, (1970) 123 CLR 584, and it

was concerned with the question whether something

that had been raised in the writ, but not in the

statement of claim, the limitation period having
expired, precluded an amendment to raise a cause of
action that was statute barred. It is probably

only necessary to take Your Honours to page 613,

where Justice Owen who delivered the reasons of the

majority, after the quote from another case said:

I would only add that I do not find any

injustice in applying what Lord Esher

described as "the settled rule of practice".

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A statement of claim or, in New South Wales,

the plaintiff's declaration identifies the

case that the defendant is called upon to

answer. He is entitled to assume that any

other and different claim which is not

included in the plaintiff's pleading but which

the writ is wide enough to cover has been

dropped from the action -

and so on. So that the point that we are asking

Your Honours to decide, was not directly raised in that case but, both in the reasons of the majority

and the minority, the correctness of Weldon v Neal

was not doubted with respect to amendments.

Your Honours, we submit that it cannot be

correct that form should govern substance and it is

a matter of substance, in our submission, if a

person is precluded from pursuing a cause of

action. Form, in this respect, that had my client

chosen to issue a writ and then ask for leave to

amend by adding a statute barred cause of action,
one test might have been applied, but had he

preceded in this way, the result is that Volvo is

still a third party. The question of the

faultiness of the brakes will be agitated, but my

client, the plaintiff, will not be able to benefit

from the fruits of a judgment against Volvo. That,

in our submission, cannot be a correct result.

Your Honours, those are our submissions.

MASON CJ:  Thank you, Mr Sofronoff. Ms Kiefel, perhaps you

might direct your remarks in the first instance to

this problem that has been identified in this case,

namely that the case that the applicant now wants

to present to this Court, differs from the case

that was presented in the supreme court and, in the

course of dealing with it, you might direct our

attention to the consequences that might flow if we

were to embark upon a consideration of the case

which the applicant now decides to present.

MS KIEFEL:  Thank you, Your Honour. The applicant for

special leave did not raise before the Full Court

the question now sought to be argued, that is to
say whether or not Order 3 as determined by Lynch v
Keddell (No 2) ought to have a wider operation.

Before the Full Court it was pointed out that this

Court's determination in Van Nguyen v Van Nguyen

was in the process - if the judgment had not been

published it was shortly to be available and

Your Honours will see that in the reasons of the

Full Court that was referred to by Their Honours

and they were invited by this respondent's counsel

to overturn Lynch v Keddell on another basis, of

course, and so the opportunity existed for the

applicant for special leave, at that point, in our

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submission, to ask the Full Court to overturn

Lynch v Keddell (No 2) given this Court's

reasonings in Van Nguyen v Van Nguyen. That course

was not followed.

In our submission, in any event, this case deals only with joinder and the joinder of parties

under Order 3 rules 11 and 13 has been determined

by the Full Court consistently, the line of

authorities being Archie v Archie and Smyth Third

Party, (1980) Qd R 546, Lynch v Keddell (No 1),

(1985) 2 Qd R 103, and -

McHUGH J:	The references are set out at pages 137 and 138.
MS KIEFEL:	Thank you, Your Honour, and finally, of course,

in the decision of the Full Court again in this

case. The Full Court has thus determined that

Order 3 deals exclusively with applications for

joinder where a limitation defence might be lost

and that the principles applicable to such an
application are that special or peculiar

circumstances ought to exist in a circumstance, of

course, where a defence of a limitation period has

been lost.

In our submission, therefore, there is no need

for this Court to resolve any alleged

inconsistency. There is none, in our submission,

in the decision of the Full Court to date.	In our
submission, there is a variance between the

application for special leave here and the grounds

of appeal.

The grounds of appeal effectively, in our

submission, ask the Court to review the findings of

fact made by the Full Court. We understand from

argument this morning, of course, that it will be

sought to be argued that the facts ought to be

attributed to a different basis, that is to say a

wider exercise of discretion, a question of whether

the interests of justice generally are met which

would involve an overturning of Lynch v Keddell (No

2), but that is not clearly raised in the grounds

of appeal itself, it would seem to require

amendment to the notice of appeal.

Your Honours, the application for special

leave also highlights the inconsistency in

approaches between the New South Wales and

Queensland rules. This was dealt with in

Lynch v Keddell. There is, of course, an important

difference in the rules themselves and that

explains why cases such as Adam v Shiavon are not

followed in this respect by the Queensland

Full Court. I am not sure that I have answered

Your Honour Justice Toohey's questions as to what

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would follow if this Court were to grant special

leave and consider the question of Lynch v Keddell

(No 2), the decision in that case again.

TOOHEY J:  The notice of appeal invites the Court simply, as

it were, to allow the application.

MS KIEFEL: Yes. Your Honour, there would, in our

submission, if the basis were to be widened, be the

need for further evidence because the question of prejudice in the circumstance where wider grounds

were to be argued than was previously the case

before, in turn, the master, the single judge and

the Full Court, there would need to be further

evidence generally with respect to the question of

prejudice.

MASON CJ:  I suppose it can be said, Ms Kiefel, that in one

case, at least, this Court has considered a
substantial question of law not argued in the
courts below which necessitated findings being made

on issues of fact not considered in the courts

below; Legione v Hateley is the case that I have

in mind. Now, when one bears in mind that the

Court took upon itself to consider the substantial
question in Legione v Hateley in those

circumstances, why should the Court not take a

similar course here?

MS KIEFEL:  Your Honour, in our respectful submission, the

Court, in Legione v Hateley, was faced with an area

of law that needed either direction or some

expression, some guidance from the High Court. In

this particular case the High Court is being asked

to review a decision of the Full Court with respect
to particular rules applicable in Queensland upon

which the Full Court has pronounced on three

occasions.

In our submission, there is no need for

clarification or guidance or for the widening of

any aspect of the rule.

McHUGH J: But many would have said that the law was

regarded as settled before Legione v Hateley.

MASON CJ:  Indeed, it is hard to think of any area of the

law which, as it were, more deserved that

description.

MISS KIEFEL: Quite, Your Honour. Your Honour, in this

case, we submit that since it only involves the
question of joinder of parties it does not squarely

raise the question of joinder under the other

order, that is Order 32. We understand the basis,

of course, that a rule of practice and procedure,

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first spoken of in Wheldon v Neal might be reviewed

by the High Court if the High Court considered the

question important enough.

MASON CJ:  It is true to say that the Court is more

reluctant to grant special leave in cases to

consider the interpretation of rules dealing with

matters of practice and procedure.

MS KIEFEL:  Yes, Your Honour. We would have to concede at

one level, of course, that this does involve the

question of rights.

MASON CJ: But the result in this case does seem

extraordinary, does it not, when one bears in mind

what Mr Sofronoff said at the outset of his

submissions.

MS KIEFEL: With respect to the Limitation of Actions Act?

MASON CJ: Yes, and what would have been available to the

plaintiff had the plaintiff moved in a different

way.

MS KIEFEL:  Your Honour, that point was touched upon in the

argument before the Full Court and it was our

submission before the Full Court - it was not a

matter specifically dealt with in Their Honours'

judgments but it was our submission in the Full

Court that that would not follow given section 11

of the Act. That is to say where the action joined

was an action for property damage with personal

injury the relevant period of limitation would have

been that, with respect, applicable to personal

injury.

Your Honours, section 11 provides:

Notwihstanding any other Act or law or rule of

law, an action for damages for negligence,

trespass, nuisance or breach of duty ..... in

which damages claimed by the plaintiff consist

of or include damages in respect of personal

injury to any person or damages in respect of

injury resulting from the death of any person

shall not be brought after the expiration of three years from the date on which the cause of action arose.

As I have mentioned, that matter was raised in the

Full Court, but Their Honours in their decisions -

one of the justices commented upon it that no

decision was necessary in this case. In our

submission that result, contemplated by the

applicant for special leave here, would not have

arisen.

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Further Your Honours, if that be a basis in a

circumstance where the Court was considering the

wider basis of joinder, that is to say where the

interests of justice require, it was, of course,
the case as appears from the chronology appended to

Mr Justice Lee's decision, that the applicant for special leave here took no step, even upon invitation from another party, to effect joinder

and so the applicant for special leave, in our

submission, would have a considerable hurdle to

overcome, even on the broader basis, in satisfying

this Court that, in all the circumstances,

particularly given the prejudice noted by

Mr Justice Lee, to the respondent here, that the interest of justice would be made out. Those are

our submissions, Your Honour.

MASON CJ:  Thank you, Ms Kiefel. Yes Mr Sofronoff.

MR SOFRONOFF:	I have no reply, Your Honour.
MASON CJ:	You may resume your seat, Mr Sofronoff.
MR SOFRONOFF:	Thank you, Your Honour.
MASON CJ:	The applicant seeks special leave to present a

case based on an interpretation of Order 3 rule 11
of the Supreme Court Rules, which was not argued in
the courts below. Indeed, the case now sought to

be presented is very different in that the

applicant, in a relevant respect, accepted the

authority of Lynch v Keddell (No 2), yet he now

seeks to have that decision overruled. If the

applicant's arguments were to be upheld, findings

of fact would need to be made on issues not
considered by the primary judge. In these
circumstances, and bearing in mind that the
question concerns the interpretation of the rules

of the Supreme Court, the case is not appropriate

for the grant of special leave.	The application is
therefore refused.

MR KIEFEL:  We would ask for costs, Your Honours.

MASON CJ: Yes, and you do not oppose that, Mr Sofronoff?

MR SOFRONOFF:	No, Your Honour.
MASON CJ:	The application is refused, with costs.

AT 10.46 AM THE MATTER WAS ADJOURNED SINE DIE

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