Henderson Corporation Pty Ltd v Hewitt

[2005] WASC 165

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   HENDERSON CORPORATION PTY LTD -v- HEWITT [2005] WASC 165

CORAM:   SIMMONDS J

HEARD:   1 JULY 2005

DELIVERED          :   29 JULY 2005

FILE NO/S:   CIV 1163 of 2000

BETWEEN:   HENDERSON CORPORATION PTY LTD

Plaintiff

AND

ANDREW MALCOLM RUPERT HEWITT
Defendant

Catchwords:

Practice and procedure - Application to amend writ of summons and statement of claim - Rejoinder of parties - Pleading of breach of contract and fiduciary duties - Whether pleading discloses no reasonable cause of action - Whether pleading embarrassing - Matters bearing on discretion to grant leave to join parties - Proof of necessity for joinder - Significance of possible limitation defences available to parties sought to be joined - Whether unreasonable delay in making application out of time - Turns on own facts

Legislation:

Limitation Act 1935 (WA)

Rules of the Supreme Court 1971 (WA), O 18 r 6, O 20 r 19, O 21 r 5

Result:

Application granted

Category:    B

Representation:

Counsel:

Plaintiff:     Mr J R B Ley

Defendant:     Mr M C Hotchkin

Solicitors:

Plaintiff:     Arthur Metaxas & Co

Defendant:     Hotchkin Hanly

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

Barnes v Addy (1874) LR 9 Ch App 244

Birkett v James [1978] AC 297

Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398

Clark Boyce v Mouat [1994] 1 AC 428

Coulthard v Disco Mix Club Ltd [1999] 2 All ER 457

Duke Group (in liq) v Alamain Investments Ltd [2003] SASC 415

Fico v O'Leary [2004] WASC 215

Hart-Roach v Public Trustee, unreported; SCt of WA; Library No 980044; 11 February 1998

Homestyle Pty Ltd v City of Belmont [1999] WASCA 59

Jakovljevic v L & B Doslov [2000] WASCA 131

Midland Bank Trust Co Ltd v Hett Stubbs & Kemp (a firm) [1979] Ch 384

Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400

Ratnam v Cumarasamy [1964] 3 All ER 933

Re Morris Fletcher & Cross' Bills of Costs [1997] 2 Qd R 228

Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator [2002] WASC 149

Speedworx Pty Ltd v Bunbury Car Club Inc [2005] WASC 16

The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93

Townsend v Collova [2005] WASC 4

Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514

WMC Resources Ltd v Southern Cross Pipelines Australia Pty Ltd & Ors [2002] WASCA 308

Case(s) also cited:

ABB Service Pty Ltd v Hetherington [2001] WASCA 417

Atkinson v Fitzwalter [1987] 1 All ER 483

Bride & Bride v Peat Marwick Mitchell [1989] WAR 383

Charlie Carter Pty Ltd v SDAEA (Western Australia) (1987) 13 FCR 413

Dobra v Brennan, unreported; FCt SCt of WA; Library No 970481; 25 September 1997

Gould v Johnson (1702) 91 ER 367

Grovit v Doctor [1997] 2 All ER 417

Hooker Corporation Ltd v Commonwealth of Australia (1986) 65 ACTR 32

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

In re McHenry; McDermott v Boyd [1894] 3 Ch 290

Latrobe Country Credit Co-operative Ltd v Smith [1999] 1 VR 440

Mann v Board of Health of the Australian Capital Territory (1996) 67 FCR 383

Morgan v Banning (1999) 20 WAR 474

New Zealand Netherlands Society "Oranje" Inc v Kuys [1973] 2 All ER 1222

Renowden v McMullin (1970) 123 CLR 584

Sinclair v James [1894] 3 Ch 554

State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323

SIMMONDS J: 

Introduction

1. This is an application with a rather involved history, in proceedings with an unhappily long history.  The application is to rejoin parties who had initially been named in the original writ of summons but who were removed relatively early in the history of the proceedings by amendments to the writ.  The application is also to make amendments to the statement of claim largely - but not entirely ‑ in relation to these rejoined parties.  To understand the application, as well as what is the strenuous opposition of the present (singular) defendant to it, it is necessary to review the history of the proceedings in some detail.  As will become apparent, I need to review that history by reference to a number of stages in it.

The history of the action, from commencement until the amendments to the defence in 2002

1. Kevin Leslie Henderson was a director of a group of companies which, with their associated trusts and superannuation funds, was called the Henderson Group.  One of the companies in the Henderson Group was Henderson Corporation Pty Ltd. 

2. This action was commenced by a writ of summons filed 14 February 2000 showing Henderson Corporation and Henderson as first and second plaintiffs, and two companies, an individual and a partnership as defendants.  The two companies were Gibrae Pty Ltd, shown as the first defendant, and Samit Pty Ltd, shown as the third defendant.  The individual was Andrew Malcolm Rupert Hewitt, shown as the second defendant.  The firm was Barrington Partners, shown as the fourth defendant.  The two companies, and the firm, were later removed as parties, in the circumstances I will describe.  The present application proposes to rejoin them.  In the proposed substituted statement of claim the subject of the present application, it is pleaded that Gibrae and Samit are companies in which Hewitt was and still is a director and a shareholder, while Barringtons is an accounting firm in which Hewitt was a senior partner.

3. The indorsement of claim on the writ was, as against the first or second defendant, Gibrae and Hewitt, for damages and related relief for loss incurred on, and an account of, all dealings and payment of such amounts as were found to be due to the plaintiffs arising out of breaches of contract or of fiduciary duty "in or about 1996" relating to an oral joint venture or partnership entered into in 1993.  The oral agreement was for the first or second plaintiff to fund the first or second defendant to enter into share transactions and make other investments on behalf of the joint venture or partnership, with the profits to be shared among "the parties", and with the first or the second defendant to bear all of the losses.  The first or second defendant was, by the agreement, to report on all investments completed under it.  The agreement was terminated by notice on 25 January 2000.  The joint venture or partnership, it was claimed, had made losses, and there had been no or no adequate reporting under the agreement.

4. The indorsement of claim was, as against the second defendant alone, Hewitt, of four sorts.  One was for damages and related relief for breach of the duties in the Corporations Law of honesty and of reasonable care as an officer of the third defendant. Another was for damages for negligence in and during 1996 in making investments for the first or the second plaintiff and failure to report regularly on all investments made, sounding in tort and in contract, in the latter case arising out of implied terms in an oral contract entered into in 1992 whereby the second defendant undertook to act as a financial or investment adviser or both for the first or second plaintiff, and to make investments on its or his behalf. The third was for damages for breach of an implied warranty of authority in falsely purporting to act on behalf of the fourth defendant as a financial or investment adviser or both to the first or the second plaintiff and in purporting to make investments on its or his behalf. The fourth sort of claim was for damages and related relief for misleading and deceptive conduct in contravention of s 10 of the Fair Trading Act 1987 (WA) by falsely representing the defendant had purchased a stipulated quantity of shares in a particular company on behalf of the orally created joint venture or partnership referred to.

5. The indorsement of claim was, as against the third defendant, Samit, (in respect of its status as "the vehicle for or manager of" the orally created joint venture or partnership referred to) for restitution, or an account of all investments and payment of such amounts as were found to be due to the plaintiffs, and for related relief.

6. The indorsement of claim was, as against the fourth defendant, Barringtons, for damages and related relief for negligence in and during 1996 in making investments for the first or the second plaintiff and for failure to report regularly on all investments made, sounding in tort and in contract.  In the latter case the basis of the claim was implied terms in an oral contract entered into in 1992 whereby the fourth defendant, represented by the second defendant, undertook to act as a financial or investment adviser or both for the first or second plaintiff, and to make investments on its or their behalf.

7. After no action under the writ had been taken for some months, the plaintiffs were called upon to show cause why the action should not be struck out, in relation to which Henderson swore an affidavit dated 4 September 2000.  I return to some of the contents of this affidavit below.  In the event, the action was not struck out.

8. The next event in the proceedings occurred on 21 December 2000.  It was the service of the writ on Hewitt alone, although appearances were entered not only for him, but also for Gibrae, Samit and Barringtons.  Then followed a statement of claim, filed and served on 14 February 2001.  This statement of claim was amended, in what for my purposes were very minor respects, pursuant to an order made by Registrar Johnston the following day.  It was at that time noted before the Registrar that the statement of claim as amended only pleaded claims against Hewitt by Henderson Corporation, and that amendments to the writ would need to be made.

9. On 20 March 2001, on an application to amend the writ and to re‑amend the statement of claim, Registrar Johnston ordered that the plaintiff have leave to amend them in terms of the minutes attached to the application.  The transcript on the court file indicates that the Registrar made no order as to costs, as he noted that the application had come about because of the "incorrect" naming of the first, third and fourth defendants in the writ, while also noting they had not been joined by the plaintiff as they had not been served, but rather they had elected to have memoranda of appearances filed for them.

10. The resultant amended writ of summons deleted Henderson as a plaintiff and Gibrae, Samit and Barringtons as defendants, and also deleted the separate claims against the last two, the alternative claims against Gibrae, and the claim for breaches of fiduciary duty.

11. The resultant re‑amended statement of claim, the current such pleading, refers only to a 1993 agreement, between Henderson Corporation, by its agent Henderson, and Hewitt, for the purchase and sale of shares and options over shares in publicly listed companies.  The pleaded terms of the agreement include that Henderson Corporation was to fund the purchase of the shares and options; Hewitt was to decide which were to be purchased and sold and when; Henderson Corporation and Hewitt would share equally the gains realised from these shares and options; Hewitt would bear, and would indemnify Henderson Corporation with respect to all losses resulting from the purchases and sales; Hewitt at his cost would keep records and accounts of all transactions, receipts and payments; and Hewitt at his cost would provide Henderson Corporation with monthly information regarding the transactions, including receipts and payments.  It is pleaded that Henderson Corporation provided a sum of just under $350,000 under the agreement; Hewitt purchased certain shares and options or caused them to be purchased; the agreement was terminated by notice on 25 January 2000; and Henderson Corporation incurred losses from the transactions.  Breaches of the agreement are pleaded consisting in the failure to provide the regular monthly information, and in the failure and refusal to provide any indemnity for loss.  

12. It will be seen that the statement of claim makes no claim against any defendant other than Hewitt, and as to him, only makes claims in contract.  As to those claims, they are only for failures or refusals to provide information and to indemnify. 

13. The Registrar's 20 March 2001 orders included that Hewitt file and serve any defence and counterclaim by 10 April 2001.  Hewitt in turn, on 30 March 2001, served Henderson Corporation with a request for further and better particulars, and on 27 April 2001 particulars were provided.

14. On 18 June 2001, at the hearing of Henderson Corporation's application for an order to compel Hewitt to comply within seven days with the order of 20 March 2001, Hewitt indicated he intended to issue third party proceedings against Barringtons' professional insurer, which he was ordered to do by 9 July 2001.  At the same time, Henderson Corporation's application was dismissed, and Hewitt filed and served a defence. 

15. On 5 July 2001 Henderson Corporation applied to have the defence struck out, and at the hearing of this application on 2 August 2001 Hewitt consented to such strike out, and to an order he have leave to file and serve an amended defence by 16 August 2001.

16. On 9 July 2001 Hewitt applied for leave to issue third party proceedings against Barringtons' insurer, and at the hearing of that application on 2 August 2001 it was adjourned sine die.  No further proceedings on that application have since occurred.

17. On 21 August 2001, Hewitt filed and served an amended defence.  On 30 October 2001 Hewitt was granted leave to file and serve a further amended defence by 20 November 2001.

18. On 31 January 2002 Hewitt filed and served an application for leave to file and serve a still further amended defence.  This application was accompanied by a minute of proposed amended defence, which both counsel before me identified as the undated document titled "Minute of Proposed Amended Defence (Amended Pursuant to the Order of Registrar Johnson [sic] made 2 August 2001)".  On 24 May 2002, by consent order, Hewitt was given leave to amend his defence in terms of the minute.

19. As the minute is of some significance to the present application, I need to say something in detail about it.

The amendments to the defence in 2002

1. For the first time, the plaintiff said, Hewitt's defence went beyond traversals of the statement of claim.  The minute admitted that there was an oral agreement for the purchase and sale of shares and options over shares in publicly listed companies with Henderson Corporation made through its agent Henderson, but the date of agreement was put in or about April 1992, instead of 1993, and it was said the agreement was made with Hewitt as agent for Gibrae, itself acting as trustee for the Hewitt Investment Trust.  The minute pleaded that, although Henderson Corporation would "usually" contribute the funds for the purchases, Gibrae was not precluded from doing so as well.  It was admitted that Hewitt would decide which shares and options to purchase and sell and when, and it was admitted that the gains realised from these shares and options would be shared equally, but between Henderson Corporation and Gibrae, not Henderson Corporation and Hewitt.  It was also pleaded that Henderson Corporation and Gibrae would share all losses equally, rather than Hewitt alone bearing them, that Gibrae not Hewitt would keep appropriate records and accounts of all transactions, and that Gibrae not Hewitt would provide "regular reports".  The minute pleaded that all of the transactions specified in the statement of claim were made by Gibrae or its nominee Samit, but denied that Henderson had provided the sum claimed.  The minute pleaded that Gibrae caused Barrington Partners to provide Henderson Corporation and Gibrae with regular accounts "on a weekly basis or thereabouts", and that by letter dated 3 December 1996 Gibrae provided a schedule to Henderson Corporation of all "stock transactions" between 13 April 1992 and 3 December 1996 pursuant to the 1992 agreement.

2. The minute also pleaded there were certain implied terms of the 1992 agreement.  One was that Gibrae had authority until expressly revoked to buy and sell stock on behalf of Henderson Corporation and Gibrae, and another was that Henderson Corporation would do all that was necessary to facilitate the sale of stock, including delivering to Gibrae any share scrip Henderson Corporation had.  The minute pleaded a breach of the latter term in respect of shares in one of the companies in the list in the statement of claim, and as a consequence a sale opportunity was lost, and any loss in respect of the acquisition of those shares was solely the responsibility of Henderson Corporation.  However, it was admitted that Henderson Corporation had incurred losses, but, to the extent of "any imbalance between the plaintiff [Henderson Corporation] and Gibrae in the sharing of net losses", Gibrae, not Hewitt, was liable to indemnify Henderson Corporation.

3. The minute further pleaded that Hewitt had received a notice of termination dated 25 January 2000, but it was addressed not only to him but also to Gibrae and Samit, and the notice did not terminate the agreement, it having been terminated by the parties' conduct in or about January 1997 in their ceasing to undertake any further transactions.

4. I turn now to the subsequent history of the action until the present application was made in September 2004.

The subsequent history of the action until the present application in September 2004

1. On 24 June 2002, one month after Hewitt was given leave to amend his defence in the terms I have described, Henderson Corporation requested further and better particulars of it, and these were provided on 25 July 2002.

2. On 15 October 2002, at a status conference, Henderson Corporation's then solicitors indicated they were contemplating seeking leave to re‑amend the writ to rejoin Gibrae as a party to the action, and it was ordered that any such application be made by 12 November 2002.  It will be noted that no mention appears to have been made of Henderson, Samit or Barringtons.  No such application to rejoin any party pursuant to the order was in fact made, in circumstances I will return to.

3. On 1 May 2003, at a case evaluation conference, the then solicitors for Henderson Corporation indicated they would be applying for a declaration that they had ceased to act for the company. 

4. On 15 July 2003, Metaxas & Vernon filed a notice they had been appointed as Henderson Corporation's solicitors.  The firm subsequently became Arthur Metaxas & Co, the plaintiff's present solicitor.

5. On 26 November 2003, at a case evaluation conference, Henderson Corporation's solicitor indicated his intention to re-amend the writ to rejoin Henderson as a plaintiff and Gibrae, Samit and Barringtons as defendants, and it was ordered that Henderson Corporation have 30 days "to make any application for the joinder of plaintiffs and defendants".  No application within that period was in fact made, in the circumstances I will describe below.

6. On 25 August 2004, at a further case evaluation conference, a representative of the current solicitor for Henderson Corporation indicated that it would be applying for leave to rejoin Henderson as a plaintiff, and to rejoin Gibrae, Samit and Barringtons as defendants.  It was ordered that any such application be filed and served by 15 September 2004.

7. On 14 September 2004, the present application, dated 13 September 2004, was filed and served, with minutes of proposed amendments to the writ and the statement of claim.  As will become apparent, those minutes underwent some changes subsequently.  I turn now to consider the present application.

The present application

1. The application's subsequent history until the hearing before me was, as I have said, an involved one, which I return to below.  It is sufficient for present purposes to describe the application in its current, amended, form.  It has four principal component parts.

2. One part, comprising the request for two orders, is for dispensation with the requirements to confer in O 59 r 9 (on which, as I will indicate, an order has already been made) and that the plaintiff, Henderson Corporation, be given leave to make the application out of time.

1. The second part is for the grant of leave to rejoin Henderson as plaintiff and Gibrae, Barringtons and Samit as defendants.

2. The third part is for the grant of leave to re‑amend the writ of summons in terms of the amended minute, dated 23 June 2005, of a proposed further amended writ of summons, replacing one originally dated 11 May 2005.  No objection was taken to this document replacing the one dated 11 May 2005 for the purposes of this application pursuant to programming orders made at an earlier hearing of this application.  I return to those orders later.

3. The amendments to the writ proposed by the 23 June document are to restore the original alternative indorsed claim by both Henderson Corporation and Henderson against Hewitt or Gibrae, including to restore the claim for breaches of fiduciary duty, while changing the dates for the breaches from "in or about 1996" to "in or about 1996 to in or about 2000" (a change not indicated as a change on the 23 June minute) and replacing the references to an oral joint venture agreement or alternatively an oral partnership agreement with an "agreement".

4. However, there is no separate indorsed claim against Hewitt alone, where the original writ, as I have indicated, made claims against him for breaches of the Corporations Law in negligence and for breach of an implied warranty of authority.

5. As to Barringtons, the separate indorsed claim now to be made is not for breach of contract or a duty of care, but for breaches of fiduciary duty arising out of the retainer of the firm by Henderson Corporation or Henderson for accounting and taxation services and financial and business advice, as well as out of the payment of moneys by one or other plaintiff to Hewitt for the purposes of purchasing shares and options as determined by him where he received the moneys in his capacity as a partner of the firm and in the normal course of the firm's business.  The original claim, as I have indicated, was for breaches of the contract to act as an adviser and to make investments on Henderson Corporation's or Henderson's behalf, and for negligence.  Although the claims are closely related, by reference to the retaining of the firm to advise, there are differences in the range of the retainer, and there is reliance on a fiduciary relationship rather than on a contractual one.

6. As to Samit, the separate indorsed claim now to be made is not in respect of its role of vehicle for, or manager of, a joint venture or partnership, as in the original writ, but in respect of Samit being knowingly concerned in Hewitt's breaches of fiduciary duty.

7. The fourth part of the application is for leave to file a substituted statement of claim in terms of the amended minute, dated 23 June 2005, of a proposed substituted statement of claim, replacing one originally dated 11 May 2005.  No objection was taken to this document replacing the one dated 11 May 2005 filed for the purposes of this application pursuant to programming orders made at an earlier hearing of this application.  Again, I will return to those orders below.

8. The proposed substituted statement of claim pleads the 1993 oral agreement in much the same way the current statement of claim does, but has it entered into between Henderson Corporation or Henderson with Hewitt or Gibrae, and identifies the offices of Barringtons as the place of entry, while also pleading that Hewitt, Gibrae or Samit would make the purchases and sales on behalf of the parties to the agreement.  The proposed substituted statement of claim also pleads the payments made and transactions entered into under the agreement in much the same way as the current statement of claim, but adds that the payments were made to Hewitt, Gibrae or Samit, and that Hewitt or Gibrae paid the funds to Samit for it to use them for those transactions.  The proposed substituted statement of claim pleads the termination of the agreement by notice by Henderson Corporation and Henderson to Hewitt, Gibrae and Samit on the same date as in the current statement of claim.  The former pleads losses from the transactions under the agreement in much the same way as the current document, but has them suffered by Henderson Corporation or Henderson.  Breaches of the agreement are also pleaded in much the same way, but committed by Hewitt or Gibrae.

9. The proposed substituted statement of claim pleads a number of matters without any equivalent in the current statement of claim, so as to found the claims for breaches of fiduciary duty by Hewitt and Barringtons.  The fiduciary relationships relied upon, between Henderson Corporation or Henderson or both and Hewitt and Barringtons, are of two sorts.  One is in relation to the entry into the 1993 agreement.  The other is in relation to transactions entered into under the agreement.  These parts of the pleadings are the ones to which the defendant's objections go, and I will return to them in more detail below.  For now, it is sufficient to provide a general account of them.

10. To found the fiduciary relationships in relation to the entry into the agreement, the proposed substituted statement of claim pleads Hewitt's position as a partner in Barringtons over the period 21 March 1986 to 30 June 1999; the firm's retainer by Henderson and Henderson Corporation; the firm's provision of their services through him; and the development of a relationship of trust and confidence between Henderson and Henderson Corporation, on the one hand, and Hewitt and Barringtons, on the other, to the extent that Hewitt was appointed a director of companies in the Henderson Group, and Henderson or Henderson Corporation engaged in a purchase and sale of shares of a particular company on Hewitt's oral advice.

11. To found the fiduciary relationships in relation to transactions under the agreement, the proposed substituted statement of claim pleads the same matters as for the other fiduciary relationship, and adds pleadings as to representations made by Hewitt that he had knowledge of what shares or options to buy for profit from his frequent communications with stockbrokers and officers of publicly listed companies; as to his advice that Henderson and Henderson Corporation should embark on a venture with their funds to purchase shares and options as determined by Hewitt, sharing profits equally, and with Hewitt to indemnify them for any losses; as to the 1993 agreement's terms; and as to certain action under it.

12. The proposed substituted statement of claim pleads a number of fiduciary duties as arising pursuant to these fiduciary relationships, to which I will return in more detail when I consider the defendant's objections to the pleadings.  The proposed substituted statement of claim pleads, as the breaches of the duties arising in relation to the entry into the agreement, a failure to advise Henderson or Henderson Corporation or both that, instead of entering into the agreement, they could have entered into an arrangement with a stockbroker which would not have required them to share profits; that in making his representations and advice Hewitt had a conflict of interest; and, in the case of Barringtons, that they had failed to prevent Hewitt acting under the agreement.  The proposed substituted statement of claim pleads as the breaches of the duties arising in relation to transactions under the agreement, the failure to account in respect of transactions over the period from about 1 June 2003 to 1 September 1996; the failure to indemnify in respect of losses made on transactions using the moneys received from Henderson or Henderson Corporation or both; and, in the case of Hewitt, he acted for them when he had a conflict of interest.

13. The proposed substituted statement of claim adds to the current statement of claim pleadings as to Hewitt's directorships in Gibrae and Samit, the reason being, it appears, to found claims against the two for being knowingly concerned in Hewitt's breaches of fiduciary duty.

14. I turn now to my consideration of the merits of the application.  I deal first with the joinder application and the applications for dispensation with the requirements of O 59 r 9, and for leave to make this application out of time.  I then consider the application in relation to the writ of summons and the statement of claim.

The joinder of Henderson, Gibrae, Samit and Barringtons:  its basis

1. The basis of this part of the application lies in Rules of the Supreme Court 1971 (WA), O 18 r 6(2)(b), which is:

   "(2)At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application -

   (a)order that any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be a party;

   (b)order that any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, be added as a party,

   but no person shall be added as a plaintiff without his consent signified in writing or in such other manner as may be authorised.

   (3)An application by any person for an order under paragraph (2) adding him as a defendant must, except with the leave of the Court, be supported by an affidavit showing his interest in the matters in dispute in the cause or matter."

2. Although counsel for Hewitt had, in previous submissions for an earlier hearing of this application dated 16 February 2005, taken the position that once a party had been removed under O 18 r 6(2)(a), there was no power to rejoin such a party under O 18 r 6(2)(b), this position was not pressed on me. I am of the view counsel was right not to press it. The wording of O 18 r 6(2)(b) is wide enough to encompass a rejoinder. The fact that a party or parties had originally been joined but subsequently removed is, however, properly to be taken account of as a matter that bears on the exercise of my discretion under the rule, as I will indicate.

3. Counsel for Hewitt submitted that on the pleadings without the proposed amendments, only the addition of Henderson and Gibrae could reasonably be described as "necessary" within O 18 r 6(2)(b). It was further submitted that, in the absence of any affidavit attesting to facts which, if accepted, established a cause of action against either of Samit or Barringtons, Henderson Corporation had failed to prove that necessity. In addition, it was submitted I should take account of the late stage at which the joinder was being sought, and the adequacy of any explanation proffered for the delay. I deal with the first two points, together, and then I reach the third.

The necessity for joinder and its proof in this case

1. As to the question of the necessity to rejoin Gibrae and its proof, the matter is clear from the minute of amended defence of 31 January 2002, as counsel for Hewitt appeared to concede.  The matter of the rights and liabilities in contract of Hewitt, rather than Gibrae, to Henderson Corporation is squarely in issue in these proceedings.  It is established that the question of the necessity of joinder is to be approached by reference to a consideration of whether the rights and liabilities of the person to be joined as against any party to the action will be directly affected by any order which may be made in the action:  Homestyle Pty Ltd v City of Belmont [1999] WASCA 59. The question was rather one in relation to Samit and Barringtons, regarding the necessity for their presence, and its proof.

2. It seems to me, on the terms of O 18 r 6, particularly r 6(3), that an affidavit is not required to establish the necessity referred to in r 6(2)(b). While it might be appropriate for the court to stipulate for an affidavit in a particular case in the exercise of its discretion (there is no doubt it may have regard to any affidavit a potential party supplies: see Civil Procedure in Western Australia, at [18.6.5B]), in this case I do not consider an affidavit is necessary. This would seem to me to be so even allowing for the fact that the application to rejoin is being made after an earlier successful application to remove the same parties. That is because of what I consider to be evident as to the range of matters that since then has emerged as being in dispute in this action. I note that for the purpose of determining that range, I can have regard, not only to the existing pleadings, but also to disputed issues of fact "subjacent" to the pleadings, and to foreshadowed amendments to the pleadings (Civil Procedure in Western Australia, at [18.6.1]).

3. I rely here particularly on the minute of defence filed on 30 January 2002, which points to the nature and quality of the involvement of Samit and Barringtons in the agreement.  I also rely on the further detail as to that nature and quality, and the involvement of Henderson himself, that emerges from the further and better particulars the parties have supplied to date in relation to the oral agreement for investment in shares and options over shares of publicly listed companies which, along with the differences between the parties as to points of detail, lies at the heart of this action. 

4. A relationship between Hewitt, Gibrae and Samit based on Hewitt's directorship in both companies is shown in one of the answers by Hewitt to Henderson Corporation's request for further and better particulars of 24 June 2002.  It is that relationship which, as I have indicated, is significant to the claim in the proposed pleading against the two companies based on their knowing involvement in Hewitt's alleged breaches of fiduciary duty arising out of the oral agreement.  I return below to the question whether those breaches are sufficiently pleaded in the proposed substituted statement of claim.  However, for now I also note that is not in contest before me that Hewitt was a partner in Barringtons, and I further note a relationship between Henderson and Barringtons is shown in one of the answers by the plaintiff to the defendant's request for further and better particulars of 10 April 2001, where it is said that the alleged 1993 oral agreement was made in a conversation between Hewitt and Henderson "at the offices of his accounting firm, Barrington and Partners", and that Henderson entered into the agreement as agent for Henderson Corporation, an agency arising out of his position as a director of that company. 

5. It thus seems to me that, as I will explain in more detail below, duties of a fiduciary character between Hewitt and Henderson, and his company Henderson Corporation, might be reasonably arguable as arising out of the agreement, given those relationships.  Just such issues of fiduciary duties and their breach are proposed to be raised in this action, as I have indicated.  I return below to the adequacy of the proposed pleading to raise these issues.  If there were such duties, and they were arguably breached, there would indeed be issues of the liability to Henderson and Henderson Corporation of the two companies having to do with the possibility of their knowing involvement (see Barnes v Addy (1874) LR 9 Ch App 244), through their common director Hewitt, in those breaches.

6. It thus seems to me that, as to Gibrae and Samit, no affidavit is required to establish the necessity for their joinder and such necessity is established, subject to the adequacy of the proposed pleading in relation to those companies.

7. As to Barringtons, I have already referred to a relationship between Henderson, and possibly Henderson Corporation, with Barringtons, as shown in one of the answers to the request for further and better particulars of 10 April 2001.  I have also referred to the relationship between Hewitt and Barringtons.  As I have already indicated, both relationships are significant to the fiduciary duties claimed in the proposed pleading to be owed by Barringtons to Henderson or Henderson Corporation, one set of which was allegedly breached in relation to the entry into the 1993 agreement, and the other set of which was breached in relation to transactions under it.  I also note that the minute of 31 January 2002 refers to the involvement of Barringtons in the performance of the agreement's reporting obligations.  These matters indicate to me that it might reasonably be argued that duties of a fiduciary character owed by Barringtons might have arisen both in relation to the entry into the agreement and the performance of it, and might have been breached as a result of Hewitt's conduct or that of those he nominated.  Again, whether these matters are adequately pleaded in the proposed pleading is something I return to below.

8. In relation to Barringtons, it thus seems to me that no affidavit is required to establish the necessity for the firm's joinder, and again such necessity is established, subject to the adequacy of the proposed pleading in relation to the firm.

9. This takes me to the third point raised by the submissions for Hewitt in relation to joinder.  That point is to do with delay.

The matter of delay:  limitation defences generally

1. There appear, from the defendant's submissions, to be two aspects to the point as to delay.  One is that there are, it was said, limitation defences which might be successfully invoked by Gibrae, Samit and Barringtons to the pleadings as to be amended.  The other is the delay in bringing this application for joinder itself. 

2. As to the limitation defences, the proposed claims against Gibrae are based on both breaches of contract and knowing involvement in breaches of fiduciary duty, while the proposed claims against Samit are based only on the latter, and the claims against Barringtons are also based on breaches of fiduciary duties alone. 

3. As to Gibrae, the conduct to be relied upon as constituting the breaches of contract is the failure to supply information and the failure to indemnify, while the conduct to be relied upon as breaches of fiduciary duty in which Gibrae was knowingly concerned, was Hewitt's representations and advice in relation to the entry into the agreement, as well as acting under it while Hewitt had a conflict of interest (in relation to the purchases of shares and options he made or caused to be made pursuant to the agreement) and his failure to account or indemnify.

4. As to Samit, the conduct to be relied upon as breaches of fiduciary duty in which it was knowingly concerned was the same conduct as for Gibrae in relation to transactions under the agreement, but not any conduct in relation to entry into it. 

5. As to Barringtons, the conduct to be relied upon as breaches of fiduciary duty in relation to entry into the agreement is their failure to provide certain advice to the beneficiary of the duties, their failure to advise the beneficiary that in making the representations and providing the advice he did Hewitt had a conflict of interest, and their failure to prevent Hewitt from acting under the agreement.  In relation to the purchases of shares and options Hewitt made or caused to be made pursuant to the agreement, the conduct relied upon as breaches of fiduciary duty by Barringtons is their failure, or their failure to cause Hewitt, to account and to indemnify.

6. I turn first to consider any limitation defences arising out of the statutes of limitations, after which I consider any other defences of a similar sort based on delay.

Limitation defences from statute

1. Claims of breaches of contract, and failure to account, are statute barred six years after the breach in question:  Limitation Act 1935 (WA), s 38 (1)(c)(v) and s 38(1)(c)(iii), respectively. In relation to the parties to be rejoined as defendants, counsel before me appeared to recognise the claims against them are taken to be made from the date of service upon them of the amended writ (see Civil Procedure in Western Australia, [18.6.7] and [18.6.8]). In this case, if the agreement ran to 25 January 2000, as Henderson Corporation will continue to plead but Hewitt currently denies, at least the later of these failures would seem arguably not to be statute barred (see Handford P, "Limitation of Actions: the Australian Law" Lawbook Co, Pyrmont, 2004, at [30], the position as to partnership arrangements), while the failure to indemnify, being an obligation whose time for performance was not specified, arguably did not occur until the latest time at which it could have been performed (see Midland Bank Trust Co Ltd v Hett Stubbs & Kemp (a firm) [1979] Ch 384), which likewise (on the plaintiff's date for termination of the contract) would seem arguably to fall within the limitation period.

1. In relation to breaches of fiduciary duty, there is no statutory limitation period (Law Reform Commission of Western Australia, "Report on Limitation and Notice of Actions", Project No 36, Pt II (January 1997), par 13.12; Handford (supra) at [6]).  This is at least where (as here) the pleaded breaches are not also pleaded as breaches of trust, to which Limitation Act 1935 (WA), s 47(1) might apply (see Handford, at [101]).

2. However, it is possible that the statutory limitations previously referred to in relation to the breaches of the contractual duties to account and indemnify would be applied by analogy to the corresponding breaches of fiduciary duty.  At the same time, it is not altogether clear the analogy would be drawn (see the Law Reform Commission's Report, par 13.3, par 13.5(5), par 12.16 and par 13.4).  Further, a determination of the point in proceedings like this application, where I do not have the advantage of the evidence which would bring out the complete nature of the plaintiffs' proposed claims, would not seem to me to be appropriate (Duke Group (in liq) v Alamain Investments Ltd [2003] SASC 415, per Doyle CJ, at [135] and [136], referring to Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, per Mason CJ, Dawson, Gaudron and McHugh JJ, at 533). These last points are also applicable, it seems to me, to the pleaded breaches of fiduciary duty in relation to the entry into the agreement, where presumably the analogy which would be sought to be drawn would be with claims for misrepresentation (Duke Group, Doyle CJ at [122] ‑ [127]).

3. Of course, the rejoinder of the other defendants here would not preclude them from taking limitations or similar defences subsequently (Civil Procedure in Western Australia, at [18.6.8]).

4. Where an analogy would not be drawn, this would leave the equitable doctrines of laches and acquiescence (Handford (supra), at [7]).  I turn to consider those defences, beginning with laches.

Limitation defences: laches

1. A widely quoted description of the doctrine of laches is that from Spry, ICF, "The Principles of Equitable Remedies" 6th ed Lawbook Co, Pyrmont 2001, and is as follows (at 431):

   "The defence of laches arises if two conditions are satisfied: first, there must be unreasonable delay on the part of the plaintiff in the commencement or prosecution of proceedings, and secondly, in view of the nature and consequences of that delay it must be unjust in all the circumstances to grant the specific relief that is in question, whether absolutely or on appropriate terms or conditions."

2. I note that laches is a defence to a claim, and thus the burden is on the defendant to show it applies.  Although the defendant does not in terms rely upon the defence, the heavy reliance in the defendant's submissions on matters of delay, and the maintenance of the position that there are limitations defences to what the plaintiff proposes, indicate to me I need to address the laches defence.

3. In relation to the first element, "unreasonable delay", this requires me to consider the explanations I have for the lapses of time since the "occurrence of the events giving rise to the claim", as well as since the plaintiff became "aware of the circumstances giving rise to the claim" (Duke Group (supra), Doyle CJ, at [156]).  This in turn requires me to provide rather more detail about the circumstances of the delays than I have so far, so as to provide the full context to those explanations.  As will become apparent, this detail will also be of significance to my consideration of the suggested barriers to this application based on delay other than the barrier represented by the doctrine of laches.

4. I have identified several distinct periods of delay since the occurrence of the events giving rise to the claims in this case.  One such period was from the date of the entry into the agreement of 1992 or 1993 to the last quarter of 2000, after the commencement of the action, but before the writ and the statement of claim had been served.  For the plaintiffs' explanation for this period of delay, I was directed to the affidavit of Henderson sworn 4 September 2000 to which I referred earlier, in which he deposes to a fire at his home "about the middle of 1996".  This fire apparently destroyed or badly damaged many of the business records of the Henderson Group as well as of Henderson himself, necessitating a reconstruction which, it seems, was still on foot even at the date of the affidavit (par 11). 

5. For the purposes of considering when the original plaintiffs became aware of the circumstances giving rise to the claim, I note that this affidavit also refers to the Henderson Group structure being the result of advice received from Barringtons and Hewitt from "about 1989" (par 5).  I also note the following (par 9):

   "The claim by the first plaintiff and me is that by reason of a whole range of breaches of fiduciary duty and other legal duties that the defendants or one of them owed to the first plaintiff [Henderson Corporation] and myself, one or more of the defendants is liable to account to and pay compensation for the loss and damage suffered by the first plaintiff and me."

6. As will become apparent, the matter of which of the originally joined defendants might have owed fiduciary duties, of what sorts, and how those duties might have been breached, raises issues of some complexity.

7. The next period of delay was from the filing, on 14 February 2001, of the original statement of claim in the action to the making of case management orders, on 15 October 2002, giving leave to Henderson Corporation to make application to join Gibrae by 12 November 2002.  Shortly after the beginning of this period, as I have indicated, Henderson, Gibrae, Samit and Barringtons were removed from the action, as a result of amendments to the writ of summons, and a re-amended statement of claim was filed, with the claim against Hewitt only, and put solely in terms of contractual obligations from the agreement.  Towards the end of this period, after a series of defences had been filed and served, and following filing, on 25 July 2002, of the defendant's particulars of its amended defence, it had become evident that, as I have previously described, Hewitt admitted an agreement like the one asserted by Henderson Corporation, but with Gibrae, not Hewitt, and with the involvement in its performance of Samit and of Barringtons.  Counsel for Henderson Corporation indicated that, from the information they had, it was not possible to say why the claim had been pleaded in its original form, notwithstanding the form of the original writ of summons.  The delay between 25 July 2002 and 15 October 2002 does not appear to me to be significant, except to indicate what seems to be a recurring theme in this action, of the difficulty, on both sides, in arriving at final pleadings expeditiously.  On the plaintiff's side, in light of the complexity of the issues I have referred to, this is understandable, to some extent at least.

8. The next delay is between 15 October 2002 and 26 November 2003, when, after a notice of appointment of Metaxas & Vernon as solicitors for the plaintiff had been filed (on 15 July 2003), and after an earlier conference on 5 November 2003, to which I will return, Registrar S Boyle made, among other orders, an order that the plaintiff have 30 days within which to apply for leave to join plaintiffs and defendants

9. During that period there was, on the affidavit of Arthur Metaxas, current solicitor for Henderson Corporation, sworn 21 February 2005, a "protracted" dispute as to fees between Henderson Corporation and Mr Metaxas' predecessor as solicitors for the company, and "as a result of that dispute I believe [those solicitors] took no step in the action on behalf of the plaintiff between October 2002 and 15 July 2003, when Metaxas & Vernon commenced acting" (par 5).  It is agreed that subsequently that firm became a sole proprietorship, Arthur Metaxas & Co, Henderson Corporation's current solicitors. 

10. It does need to be noted that, as the plaintiff's submissions for the hearing before me allowed, on 1 May 2003 the former solicitors indicated at a case management conference that those solicitors would be applying for a declaration that they were no longer acting.  The transcript of the hearing on the Court file reports that those solicitors said they had not to that point made any application in that regard, because Henderson had suffered the tragic loss of his daughter in an accident the previous month that had also resulted in a grand‑daughter being hospitalised, and because those solicitors had hoped that Metaxas & Vernon, who were acting for Henderson in another matter, might lodge a notice of appointment.  Mr Metaxas in another affidavit, sworn 11 May 2005, also refers to Henderson's loss of his daughter (without any reference to a grand‑daughter) "in a traffic accident on 31 March 2003".  This is referred to as an event delaying the resolution of Henderson's dispute with his former solicitors over costs (par 7).  The court file also indicates that subsequently the former solicitors did file an application for the declaration referred to, and on 10 June 2003 Registrar S Boyle made an order that they cease to be the solicitors acting for Henderson Corporation.

11. I also need to note, from the transcript on the court file of the case evaluation conference, on 21 January 2003, following an earlier case status conference on 19 November, that the representative of the then solicitors for Henderson Corporation indicated, in the presence of a representative for the solicitors for Hewitt, that the solicitors for Henderson Corporation had sought their client's instructions as to whether Gibrae should be rejoined and interrogated, and had received instructions it did not wish so to proceed.  Henderson Corporation's solicitors immediately added they expected there would then be a mediation or an entry for trial.  This is confirmed by the fact that at that evaluation conference Registrar S Boyle made an order for mediation and for entry for hearing six weeks after the mediation conference, if no resolution was achieved at it.  I further note that the transcript of the hearing on 1 May 2003 reports that the legal representative of the defendant had said that informal discussions between Henderson and Hewitt indicated the unlikelihood of mediation being of value.  In the event, the mediation and entry for trial orders were vacated when, on 26 November 2003, the Registrar also made orders vacating the case evaluation conferences and converting the conference before her back to a status conference, before ordering the plaintiff have leave within 30 days to make an application for joinder of plaintiffs and defendants.

12. The transcript of the case evaluation conference, on 5 November 2003, immediately preceding that of 26 November 2003, shows the representative of the current solicitor for the plaintiff confirming Registrar S Boyle's understanding of a "hiatus for personal reasons associated with the plaintiff as well".  That representative went on to refer to the very recent receipt of "four boxes of files", making for "16 files altogether". 

13. The next period is from 26 November 2003 to 14 September 2004, when the present application was filed and served.  The only other events during that period indicated on the Court file are a notice of change of solicitors, on 29 January 2004, to Arthur Metaxas & Co, case management orders of Registrar S Boyle of 25 August 2004, and an appeal to a Master against those orders by notice filed on 30 August 2004.  That appeal was dismissed by Acting Master Chapman on 15 October 2004.  The 25 August orders included an order for any application for leave out of time to amend the writ and substitute the statement of claim, including joining of any other parties, be filed and served by 15 September 2004.  It will be seen then that there was a period in the order of nine months during which no application to join parties or amend the writ or statement of claim was made.

14. As to that nine month period, the affidavit of Mr Metaxas of 21 February 2005 deposes that he was unable, between 26 November 2003 and December 2003, to prepare the necessary application owing to the demands of other work and the lack of competent assistance.  In December 2003 he hired another experienced solicitor, who was not able to commence work until January 2004, due to a prior commitment.  Almost immediately after he joined the practice this solicitor was instructed to prepare the application.  Owing to the pressure of other work, Mr Metaxas further deposes, it was not until July or August 2004 that he became aware the application had not been produced, and he caused the solicitor to bring the matter on.

15. On 14 September 2004 a form 18A application dated 13 September 2004 was filed.  This principally sought leave to make the application out of time, and that the plaintiff be granted leave to re-amend the writ of summons and to file a substituted statement of claim in terms of the attached minutes.

16. This leaves the delay after 14 September 2004 in the hearing of this application before me.  On 24 November 2004 Registrar S Boyle referred the plaintiff's application to a Master for determination and made a number of programming orders. It appears that from February 2005 onwards first one Master and then another was discovered to have a conflict that prevented them hearing the matter.  There was then a hearing on 12 May 2005 before her Honour Jenkins J at which she ordered the dismissal of the part of the application requesting that the requirements of O 59 r 9 be dispensed with, that the hearing of the present application be adjourned, and that the application be amended, principally by including a request for leave to rejoin Henderson as first plaintiff, Gibrae as second defendant, Barringtons as third defendant and Samit as fourth defendant.

17. Her Honour further ordered that the minutes of re‑amended writ of summons and substituted statement of claim originally filed for the purposes of the application be replaced by amended minutes dated 11 May 2005 of proposed further amended writ of summons and proposed substituted statement of claim previously filed for the hearing before her.

18. Her Honour also included programming orders to the effect that, following any response by the defendant within seven days to the amended minutes, the plaintiff was to file any further amended minute or minutes. 

19. I note also, however, that her Honour made the order she did adjourning the hearing of the 14 September 2004 application because of the late filing of the plaintiff's amended minutes dated 11 May 2005.  That seems to me to be a determination that part of the delay in the hearing of this application was the responsibility of the plaintiff, which is reinforced by her Honour's further order that the plaintiff pay the defendant's costs of the hearing before her, and the defendant's costs of the adjournment thrown away by substitution of the amended minute of the proposed substituted statement of claim, to be taxed and paid forthwith.

20. Her Honour's programming orders were in fact made at the suggestion of the defendant to ensure a "conferral" on the pleading issues with a view to honing and refining them to "essentially" the joinder issues.  I note that there was some refining of the pleading issues as a result of the process, although, as will become apparent, significant ones remained.  I also note, from the transcript of the conference before Registrar S Boyle which resulted in the order for the making of the current application by 15 September 2004, that the time allowed for that purpose was to facilitate a process of conferral in respect of the proposed amendments to the pleadings.

21. I was told that the plaintiff did not comply with the time period allowed for the production of a further amended minute of the proposed substituted statement of claim, and the defendant secured the listing of the hearing of the application before Commissioner Birmingham QC.  However, the learned Commissioner discovered he also had a conflict.  This resulted in the application eventually being listed before me.

22. I conclude from this that there is a portion of the delay in relation to the hearing of this application representing matter which goes to exercising my discretion not to grant the indulgence the plaintiff seeks.  At the same time I conclude that in the history of the matter, including the appeal taken against the orders of 25 August 2004, it is most unlikely that a different course involving conferral would have been availing. 

23. Including the delay from 14 September 2004 to the hearing before me that resulted from the late filing of the amended minutes, for the purposes of the hearing of this application before Jenkins J, there is it seems to me, a reasonable explanation for the larger portion of the delay in the rejoinder of the parties.  This is in terms of the way in which the pleading of the defendant supplied support, (which the plaintiff's own inquiries might have led it to conclude up until then was missing) which was sufficient to cause its legal representatives to revisit the original decision not to continue with the other defendants as parties as the original writ of summons had provided.  In view of the complexity of the issues to which I have made reference previously, it seems to me this would have taken the plaintiff's legal representatives to a reasonable time after late October 2002, when it appears Henderson Corporation's instructions were sought.

24. As to the delay between then and late March 2003, when Henderson suffered the tragic personal loss he did, it seems to me there is at least arguably a reasonable explanation for not making the application to join.  It is that of the prospect for acceleration of the resolution of the matter or its progress to trial represented by the prospect for mediation and, failing resolution at such mediation, entry for trial, which produced orders to that effect.  While the efforts to mediate apparently came to nothing, as I have indicated, the tragic loss I have referred to in my view reasonably explains a delay of the order of the next eight months, notwithstanding strong submissions to the contrary by counsel for Hewitt, when combined with the disruption represented by the (delayed) change of the plaintiff's solicitors.

25. There is, however, the matter of the delay in the order of nine months, after late November 2003, when the matter of rejoinder had clearly been returned to by the solicitors for the plaintiff, and time had been allowed for a fresh application for joinder of parties.  While it is true that the cause of the delay is put at the feet of solicitors for the plaintiff alone, and the explanation proffered is one in terms of efforts to comply which were unavailing, I have no explanation of the lack of any reference to instructions from the client in the face of its solicitor's lack of compliance with an order allowing a limited time for such an application to be made.  I consider that, in view of the history of the action to that point, and the nature of the delay, such an explanation is called for, even although the burden with respect to making out laches is on the defendant.  I also note that once it was clear to the solicitor for the plaintiff, after some six months, that his instruction to his associate to prepare the necessary document had not been complied with, it took that associate about a further three months to complete the task.  At the same time, I note the complexity of the pleading task involved, to which I earlier made reference, and to which I return below.  It was not a matter of simply restoring an earlier form of pleading.

26. I have also noted the two sets of delays in the hearing of this application, one arising out of the adjournment of the hearing by Jenkins J, and one arising out of the further delay in the production of the amended proposed substituted statement of claim that was before me, both having to do, it seems, with the late production of the plaintiff's proposed amended pleadings.  The delays in this respect appear to be relatively slight, however, and to have resulted in pleadings which have significantly focussed the parties' differences.

1. Overall, for the purposes of the doctrine of laches, it seems to me to be arguable, without it being clear (because of the relatively short portion of the total delay involved, and the explanations proffered), that unreasonable delay is made out.

2. This would then take me to the second element of that doctrine, whether, in view of the nature and consequences of the delay, it would be unjust in all the circumstances to grant the specific relief that is in question, whether absolutely or on appropriate terms or conditions. 

3. In relation to this second aspect I note the passages from Spry (supra), at 434 and 435, quoted in Duke Group (supra), Doyle CJ, at [152] and [153] as follows:

   "It is not sufficient, however, that the defendant should be able to show merely that the plaintiff has been guilty of unreasonable delay. It must be shown further that the delay in question has rendered unjust the grant of the particular relief that is sought. So ordinarily it must be established, that by reason of the material delay, either the plaintiff has gained an unjust advantage or the position of the defendant has been altered so that an injunction now granted would operate more harshly upon him than an injunction granted with delay or that some other such consideration has arisen so that in all the circumstances it is just that the plaintiff should be confined to such other remedies as he maybe entitled to.

   …

   The classic cases of laches arise when, during unreasonable delay by the plaintiff, the defendant either expends money or incurs an additional liability or, again during unreasonable delay by the plaintiff, evidence that may assist the defendant in presenting his case becomes more difficult to procure, so that, on either of these grounds, he will be in a substantially worse position if proceedings for specific relief are pursued against him now rather than earlier. In either of these cases it must appear that the delay of the plaintiff has given rise, not merely to some trivial inconvenience, but to a substantial detriment." (footnote omitted)

4. I note that there is no material from the defendant to indicate any specific form of prejudice that would be suffered from joinder by any of the parties to be rejoined.  However, I was invited to conclude, from the nature of the claims being made here, resting as they do in large part on an oral retainer and an oral agreement, that prejudice could be inferred in the form of the difficulties in proof to which the parties concerned would be put.  I was also invited to have regard to the fact that this is a case of rejoinder, where the parties so affected might have taken their removal to indicate that they could arrange their affairs without regard to the matters in issue in this litigation.  Of course, I do not have the parties concerned before me. 

5. However, I do not consider that it is possible in these proceedings to conclude that it has been shown that delay has rendered unjust the relief sought here.  The fact of the filing of the minute of amended defence on 31 January 2002 indicates that, after some earlier attempts, starting with the filing of the first defence on 18 June 2001, to formulate an adequate defence by that date, Hewitt had concluded it had assembled material sufficient to formulate the terms appearing there.  Those were terms which in my view, as I have explained, might lead to an application to rejoin the other parties that defence refers to, particularly in respect of Gibrae, a company which was on the amended defence acting as trustee for the Hewitt Investment Trust.  I note that no reliance was placed in any of the material put before me by the defendant on the representation by the plaintiff's then solicitors at the 21 January 2003 case evaluation conference that it had received instructions not to proceed against Gibrae.  In any event this might reasonably have been viewed as a tactical concession to permit proceeding to court‑ordered mediation or entry for trial (to both of which the plaintiff's legal representative referred immediately after referring to his client's instructions, as I have said). 

6. At the same time, the claims made in the proposed amended writ of summons and pleaded in the proposed substituted statement of claim, except as to Gibrae, differ in a number of respects that I have referred to from, while also being related to, the claims indorsed on the original form of the writ.  It is not readily apparent to me why the other parties would have concluded that they could organise their affairs without regard, not simply to the matters in those indorsements, but to any other, if related, matter that might emerge in the course of the litigation and lead to an application like this one.  This is particularly so given the difficulties in grappling with the complex issues to which I have referred, difficulties of a sort that it might be inferred underlaid both the plaintiff's and the defendant's difficulties in pleading.  However, I do not have those other parties before me, and at the very least it might be that there are forms of prejudice they might have suffered not apparent on the material I do have.

7. Thus I conclude, for laches as I did for the statutory limitation periods, that it is not clear there are limitation defences, and that I am not precluded from ordering the joinder of the defendants here by the fact that a limitation defence in terms of laches may be "arguable":  Bainbridge (supra), Wheeler J, at [9] and [11].  Of course, as I have previously indicated, this defence would be available to be argued by the other parties following their rejoinder.

8. This takes me to the defence of acquiescence.

Limitation defences:  acquiescence

1. Whether viewed as a form of laches or as a separate doctrine acquiescence requires two conditions to be satisfied, as indicated by Spry (supra), as follows, at 440:

   "First, there must, on the part of the plaintiff, be an assent or lying by in relation to the acts of another person; and secondly, in view of the assent or lying by and consequent acts it must be unjust in all the circumstances to grant the specific relief that is in question."

2. This defence has much in common with laches, with the special feature that "ordinarily" a plaintiff is not defeated by the defence if their inaction is "due to ignorance of material facts" (Spry, at 442).  In this case, it is not clear when the plaintiff had the knowledge of all of the material facts required to proceed to take the action represented by the application before me, and I must remember the onus is on the defendant in this regard.  Further, while the assent or lying by in relation to the acts of another might be represented by delay in prosecuting the plaintiff's rights (see Handford (supra), at [7]), it is not clear to me, for the reasons I have already indicated in relation to laches, that the defendants have been prejudiced such that it would be unjust and unreasonable to grant relief (Spry, at 442 ‑ 443).  Again, I note that I do not have those other parties before me, and at the very least it might be that there are forms of prejudice they might have suffered not apparent on the material I do have.

3. Thus I conclude for acquiescence, as I did for laches and for the statutory limitation periods, that it is not clear there are limitation defences, and that I am not precluded from ordering the joinder of the defendants here by the fact that a limitation defence in terms of laches may be "arguable":  Bainbridge (supra), Wheeler J, at [9] and [11].  Again, this defence would remain to be argued by the defendants following their rejoinder.

4. I turn now to the second aspect of the submissions for Hewitt as to delay, that of the delay in bringing this application itself.

Delay in bringing this application

1. I note the following, from Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator [2002] WASC 149, Heenan J, at [8], reversed on other grounds sub nomWMC Resources Ltd v Southern Cross Pipelines Australia Pty Ltd & Ors [2002] WASCA 308:

   "It has been held that the court has a discretion to refuse an order for joinder - Lancaster Banking Co v Cooper (1879) 9 Ch D 594, especially if the application is made at a late stage but that, generally speaking, the power is widely exercised. Indeed, it would be difficult to justify the exclusion of a party whose presence is necessary for the effectual determination and adjudication of matters in dispute and, consequently, it would seem that any discretionary power to decline an order would largely be confined to practical matters of convenience or disruption which might tell against the late admission of such a party - consider the situation which arose in News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 527."

2. In the present matter, which is still some distance from trial, it does not seem to me that there are any such practical matters of convenience or disruption telling against the admission of the additional parties.

3. However, in this case there is also the matter of the failure of the plaintiff to apply to join within the time provided for in the Registrar's order of 26 November 2003, as part of a larger history of delay in these proceedings. This of course is why the application is also for leave to make the application out of time, both for joinder and (in my view, because of their largely consequential character) for amendment of the writ and of the statement of claim (see O 3 r 5(1)). That aspect of the present application also makes relevant an additional set of considerations, arising out of the system of positive case flow management (see Civil Practice in Western Australia, at [3.5.1]), especially given that the applicant had earlier failed to apply for joinder of Gibrae alone, by 12 November 2002, the period set in the order of 15 October 2002. Those principles go to proper expedition in interlocutory processes, the promotion of the just determination of disputes, the efficient disposition of the business of the court, maximising the efficient use of available judicial and administrative resources, and facilitating the timely disposal of business at a cost affordable to the parties (O 1 r 4A and r 4B).

4. In approaching the exercise of my discretion to allow this application to be made, I consider that I should have regard to the principles recently reviewed by the Court of Appeal in The Hancock Family Memorial Foundation Ltd v Fieldhouse [2005] WASCA 93, per Steytler P and Owen JA, at [93] – [103] in relation to applications to strike out actions for want of prosecution. This requires me to consider the five matters listed by their Honours at [100]:

   ·"The length of the delay;

   ·the explanation for the delay;

   ·the hardship to the plaintiff if the action is dismissed and the cause of the action left statute‑barred;

   ·the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay; and

   ·the conduct of the defendant in the litigation."

5. Here I must consider the material proffered on which to base the exercise of the discretion to allow the application to make the application out of time.  This material is the explanations I have referred to, particularly from the affidavits of Mr Metaxas, as to the delay in proceeding to make this application, as well as the delays in making (indeed, the failure to make) the application under the previous order (see Ratnam v Cumarasamy [1964] 3 All ER 933 at 935). In considering the delays involved and the adequacy of the explanations offered for them, I should also note the delay since the earliest of the circumstances, the preliminaries to the entry into the oral agreement in 1993, in respect of which a breach of fiduciary duty relied upon in the action is pleaded. This is because a "late start makes it the more incumbent upon the plaintiff to proceed with due speed" (Birkett v James [1978] AC 297, per Lord Diplock, at 322, quoted in Jakovljevic v L & B Doslov [2000] WASCA 131, per Steytler J, at [30], Kennedy and Anderson JJ agreeing, in relation to applications to dismiss actions for want of prosecution).

6. In considering the delays and the explanations for them I need to weigh as well the prejudice to the possibility of a fair trial from delay in a case where much of the basis for the claims as pleaded in the current statement of claim, and at least as much in the proposed substituted statement of claim, rests on oral exchanges between one or more of the parties as founding the obligations to which they or other parties are subject.  Delay in the circumstances may be such that any particular prejudice, such as loss of a witness or particular deterioration in recollection, does not need to be shown, but rather prejudice may be inferred (Jakovljevic, (supra) Steytler J at [41], [42]).

7. Particularly in the light of the principles of positive case flow management, I should not consider myself prevented from refusing to accede to the application for leave to apply out of time because the fault lies with the plaintiff's solicitor rather than with the plaintiff (Civil Practice in Western Australia at [3.5.3]), although as I have indicated it is not clear that the client was not at least in part at fault in relation to part of the delay.

8. I have already reviewed in some detail, in connection with laches, the delays in this action, and the explanation, or lack of explanation, for them.  I consider that I have received a reasonable explanation for the larger portion of the delays, including the delay in commencing the action and in serving the writ that is referred to the destruction of, or damage to, business records of Henderson Corporation and Henderson. 

9. However, the nine months delay after 26 November 2003 gives me more concern, given the need for the plaintiff to proceed "with all due speed".  That delay involved a failure to comply with a case management order, the second of its sort in these proceedings.  There are also the related, if substantially less significant, delays in the hearing of this application arising out of the late production of the amended proposed substituted pleadings.  The importance of compliance with the timing requirements in the court's system of case management has recently been stressed in The Hancock Family Memorial Foundation Ltd v Fieldhouse (supra) per Steytler P and Owen JA, at [94], [95] and [152].  However, I do not find a deliberate or contumelious disregard for the orders of the court in this case, although I do find there was a period of delay for which there is an explanation, pointing to efforts to comply, albeit an explanation which gives me the concern to which I referred in relation to the defence of laches above.  I further note that the period was not anything like as long as those in Jakovljevic (supra) or that for the preparation of the statement of claim in The Hancock Family Memorial Foundation Ltd v Fieldhouse (per Steytler P and Owen JA, at [123] and [124]), although there does not appear to have been a case management order with respect to that preparation.  On balance, the circumstances I have identified, in my view, moderate what would otherwise be the impact on the values of timeliness that the orders for the making of an application like this one serve.

10. So far as prejudice to the plaintiff is concerned, the denial of the application would not clearly, of itself, it seems to me, create a limitation of actions difficulty for it.  However, the necessity to launch a separate action would likely create the need for the plaintiff of applying to consolidate such proceedings with the current ones, in view of the issues they share. 

11. So far as prejudice to the defendants is concerned, including the current defendant and the additional defendants, I need to weigh the protraction of the proceedings that will flow from the joinder and consequential changes to the pleadings, and its implications for the possibility of a fair and efficient trial, allowing for the fact that this matter is still some distance from trial.  I have reviewed, in the context of the laches defence, the matter of whether it would be unjust to the defendants to allow the joinder to go forward.  I also note that the issue before me at this point is one of whether the plaintiff should succeed in gaining the indulgence of the court, rather than whether the defendant has established a clear equitable defence. 

12. Finally, as to the conduct of the defendant in this litigation, I note that it took him some time to produce a final defence, one from which ultimately the current application flows. 

13. However, I also note that there is no question here, it seems to me, of any acquiescence by the defendant in any of the delays in this case, in the sense relevant to the present concern as to delay (rather than in relation to the equitable defence of acquiescence).  To the contrary, I note the appeal taken by the defendant against the order of Registrar S Boyle in relation to the current application, to which I referred above.

14. I note the importance attached to the acquiescence their Honours discerned in The Hancock Family Memorial Foundation Ltd v Fieldhouse, per Steytler P and Owen JA, as well as their distinction between acquiescence and other conduct in the face of non‑compliance with the rules of case management, at [138]:

    "We think that it is the question of acquiescence that sets this case apart.  It is true that a defendant is not under a positive obligation to insist that a plaintiff complies religiously with each and every time limit placed on it by the rules of court.  But there is a difference between the absence of a positive obligation of that nature on the one hand and, on the other hand, a tacit agreement not to insist on reasonable compliance where the party concerned has done so with knowledge and in a situation where that party might benefit."

15. On balance, I have determined that the application for leave to make this application out of time should be granted.  In making that determination, I particularly note that it was not until about the time the further and better particulars of the current defence were provided, on 25 July 2002, that the plaintiff might be seen to have the material upon which to proceed to consider making an application of the sort (if not on all fours with that) represented by the present application.  I have already indicated why I consider that application should be seen to be necessary to permit all of the issues between the parties to be effectually addressed.  By 24 May 2002, when the defendant received leave to amend his defence in terms of the 31 January minute, he appears to have concluded the inquiries he had found to be necessary to plead a substantive defence which, like the statement of claim, relied heavily on matters of oral exchange between the parties.  Further, the plaintiff had subsequently indicated it was considering making an application like the current one, both in October 2002 and November 2003, leading to the orders giving leave so to proceed ‑ although in January 2003, as I have said, the then solicitors for the plaintiff had indicated, at a case evaluation conference, they had received instructions not to proceed with a joinder, albeit in a context of a move to mediation or entry for trial.

16. While the delays after 25 July 2002 to 14 September 2004 are not insignificant, particularly in light of the need to proceed with all due speed to which I have repeatedly referred, the bulk of the delay is in my view adequately explained. 

17. However, in making this determination I again note that I did not have the parties proposed to be joined as defendants before me.  It may be that there are matters of prejudice to them not apparent on the material before me that would affect the determination that I have made here.  Therefore, I would stress that the determination I am making here is based only on the materials put before me by the current plaintiff and the current defendant, and is made as between them.  This should not be taken to preclude an application within a reasonable time by the defendants to be joined to have the issue of delay, in the sense I am considering at this point, determined as to them with the advantage of material and submissions from them.

1. This takes me then to the aspects of the application having to do with leave to amend the writ of summons and the statement of claim.

Leave to amend the writ of summons and the statement of claim:  the basis and principles

1. The basis of this part of the application lies in O 21 r 5(1), which is in terms:

   "(1)Subject to – 

   (a)Order 18 Rules 6, 7 and 8;

   (b)Order 20 Rule 19 paragraphs (2) to (5); and

   (c)the following provisions of this Rule,

   the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as the Court may direct."

2. I put aside the matter of any limitation of actions defences (see O 21 r 5(2) – O 21 r 5(5)), arising in respect of the amendments sought to the writ of summons, and arising in respect of the proposed substituted statement of claim in accordance with the terms of the minutes of 23 June 2005. I also put aside the matter of the delay in making the application to have these amendments made. I have already dealt with those limitation defences and the matter of that delay.

3. In considering this application, I must note the defendant's objections to the amendments which, although not so specified, appear to be those to be made by the proposed substituted statement of claim. As the defendant indicated, this makes relevant, even if they would not otherwise be raised for consideration, the principles applicable to an application under O 20 r 19 to strike out pleadings. The particular principles invoked by the defendant were that the pleadings in the respects counsel identified disclosed "no reasonable cause of action" (O 20 r 19(1)(a)) or were such as "may prejudice, embarrass or delay the fair trial of the action" (O 20 r 19(1)(c)).

4. I note that there are two sets of submissions from the defendant with respect to the proposed amendments to the pleadings for the purposes of this application, one dated 16 February 2005 (which also relates to the joining of parties) and one dated 30 June 2005.  I gather that it is only the defendant's submissions dated 30 June 2005 on which I should focus for present purposes.  I so gather because of the way those submissions were headed, because of the oral submissions of the defendant at the hearing, and because of the history of the further version of the proposed pleadings put up for the purposes of this application, as that history was recounted to me and as it appears to emerge from a comparison between the earlier submissions of the defendant, on an earlier version of those proposed pleadings, and the 30 June submissions.

5. The well accepted approach to whether a pleading "discloses no reasonable cause of action" of relevance to this case appears repeatedly in judgments of this Court on applications to strike out, and I respectfully adopt the recent and convenient statement in Speedworx Pty Ltd v Bunbury Car Club Inc [2005] WASC 16, Master Newnes, at [10]:

   "The principles to be applied on such an application are well known and were not in dispute. Great care must be exercised to ensure that the plaintiff is not improperly deprived of the opportunity for a trial of their claim. A claim will only be struck out where it is clear that on the facts pleaded the claim cannot succeed: Dalgety Australia Ltd v Rubin; unreported, SCt of WA, Library No 5485, 24 August 1984.  A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie:  Hospital Contributions Fund of Australia v Hunt (1983) 44 ALR 365 at 373."

6. I also note the following passage from Civil Procedure in Western Australia, at [20.19.6]:

   "Under the modern system of pleading, the question is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, 'the question is whether it would be open to the applicant upon the pleadings to prove facts at the trial which would constitute a cause of action':  Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 414; 13 ACSR 117 at 127."

7. A useful overview of whether a pleading "may prejudice, embarrass or delay the fair trial of the action" is in Hart-Roach v Public Trustee, unreported; SCt of WA; Library No 980044; 11 February 1998, Murray J, at 8:

   "So far as the defendant's contentions that particular pleadings should be struck out depend upon the proposition that they are embarrassing, it is to be noted that the phrase employed in O 20 r 19(1)(c) is that the pleading 'may prejudice, embarrass or delay the fair trial of the action'. The phrase is a composite one. It imports the notion that the character of the pleading is such as to make the fair trial of the action so as to enable the court to do justice between the parties more difficult to achieve, that the trial will be unduly protracted or delayed, or the form of the pleading is in any other way calculated to prejudice the legal process. There are many cases in the books where, upon this ground, pleadings have been struck out because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general. Little point would be served in my collecting any of the many cases here."

8. The defendant's submissions with respect to the adequacy of the amendments to be made by the proposed substituted statement of claim are concerned with the pleading, both of the bases for fiduciary duties owed by Hewitt and Barringtons, and of the breaches of them.  Inadequacies in the pleading of these would render inadequate the pleaded bases for the liabilities for knowing involvement in such breaches of Gibrae and of Samit.  I deal first with the challenges to the adequacy of the pleading of the circumstances giving rise to Hewitt's and Barringtons' fiduciary duties.

9. Before doing so, I note that the plaintiff did not make submissions to me that the defendant lacked standing to make objections concerning portions of the proposed pleadings going to proposed parties other than himself.  Such a submission had earlier been made in written submissions for the hearing before Jenkins J.  I do not consider that any such submission could be sustained.  The defendant has a sufficient interest in the complication of the proceedings to which he is a party that would result from the proposed pleadings in the respects that his objections concern.

10. At the same time, however, the proposed defendants are not before me, and have not had an opportunity to make submissions going to prejudice to them that may result from the amendments proposed to be made.  Consistently with the approach I took with respect to their joinder, any leave to amend must be without prejudice to their right, within a reasonable time, to apply to have the writ of summons and the pleadings struck out (see Civil Procedure in Western Australia, at [21.5.26]).

The proposed pleadings as to the bases for the fiduciary duties

1. The defendant points out that a relationship of accountant and client does not of itself give rise to a fiduciary duty.  Rather, the matter is determined by the scope of the task or tasks undertaken.  See Townsend v Collova [2005] WASC 4, Le Miere J, at [173]. Nor does an instance of an accountant advising a client on a business transaction, or even several instances of this, necessarily give rise to such duties.

2. While this appears to be correct, so far as it goes, the proposed substituted statement of claim does not plead simply an accountant and client relationship between Barringtons and Henderson and Henderson Corporation, or particular instances of advice given.  Rather, as I earlier indicated, the document pleads the scope of the retainer (par 9), which includes accountancy, taxation, financial and business advice elements, as well as the provision of the retainer services through Hewitt (par 5 and par 10), and the development of a relationship of trust and confidence between Henderson and Henderson Corporation, on the one hand, and Hewitt and Barringtons, on the other, to the extent of the particular results pleaded (par 11).  The retainer, the provision and the development are pleaded as the basis, both of the fiduciary duties arising in respect of entry into the 1993 agreement (par 23 for the fiduciary relationship, and par 24, for the duties, for Hewitt; and par 31, for the fiduciary relationship, and par 32, for the duties, for Barringtons), and, with certain other elements, of the fiduciary duties arising in respect of action taken or not taken under it (par 25, for the fiduciary relationship "when Hewitt purchased shares and options or caused shares and options to be purchased pursuant to the Agreement", and par 26, for the duties, for Hewitt; and par 33, for the fiduciary relationship "when Hewitt purchased shares and options or caused shares and options to be purchased pursuant to the Agreement", and par 34, for the duties, for Barringtons).  This seems to me to be sufficient to plead that Hewitt and Barringtons undertook to perform certain tasks on behalf of another or others in a way which is capable of giving rise to fiduciary duties:  Finn PD, "Fiduciary Obligation" Lawbook Co, Sydney, 1977, at [467]; Fico v O'Leary [2004] WASC 215, Heenan J, at [143] – [144].

3. It is a separate matter to determine the content or scope of the fiduciary duties arising: Townsend above, Le Miere J, at [174]. An important determinant of the scope of the duties undertaken is what may have been agreed or understood between the parties as to the services the fiduciary was to perform: Meagher RP, Heydon, JD and Leeming MJ, Meagher, Gummow and Lehane's "Equity Doctrines and Remedies" 4th ed Butterworths, Chatsworth, 2002, at [5 ‑ 10] and [5 ‑ 115]. This is a matter of considerable importance to evaluating the defendant's submissions as to the adequacy of the pleading of the breaches of the fiduciary duties, to which I now turn. It will become apparent that there are also some objections to the form in which some of the fiduciary duties are pleaded. Those are objections with which I deal in considering the objections to the pleading of the breaches.

The proposed pleading as to the fiduciary duties and their breaches

1. The defendant submits that there is a failure to specify to which of the pleaded fiduciary duties the pleaded breaches, in relation to the entry into the 1993 agreement (par 27 for Hewitt, par 35 for Barringtons), and in relation to action under the agreement (par 28 for Hewitt, par 36 for Barringtons), relate.  On the face of the pleadings, it seems to me that each of the breaches is related to all of the pleaded fiduciary duties.  I need to consider, however, whether in fact the pleadings are embarrassing in being unclear in the respect the defendant refers to, by considering the pleaded duties and breaches in some detail.  In doing this, I will consider the defendant's objections to particular aspects of the duties and breaches as pleaded.

2. The pleaded fiduciary duties in relation to entry into the agreement are not as clearly pleaded as one might wish in respect of the alignment between the person or persons (Henderson or Henderson Corporation or both) to whom the duties are owed, that is, the beneficiary of the duties, and the person or persons to whom the duties relate.  But I consider the pleaded duties are reasonably clearly:

   ·at all times to act in the best interest of the beneficiary (par 24.1 for Hewitt, par 32.1 for Barringtons);

   ·in the case of Hewitt, not to act for or advise the beneficiary if there was a conflict between the duties Hewitt owed them and his interest (par 24.2), or, in the case of Barringtons, not to act for the beneficiary if there was a conflict between the firm's duty to them and their interests or the interest of Hewitt (par 32.2); and

   ·in the case of Hewitt, not to prefer his interest to the interests of the beneficiary (par 24.3), or, in the case of Barringtons, not to prefer their interests or the interest of Hewitt to those of the beneficiary (par 32.3). 

3. These three duties as pleaded are the well understood expressions of the basic fiduciary duty of undivided loyalty to the beneficiary:  see Meagher, Heydon and Leeming (supra), at [5‑030] (for the first two) and [5‑070] (for the third).  In any event, the defendant took no objection to this way of pleading them.

4. The first of the two pleaded breaches of these duties for Hewitt in relation to entry into the agreement (par 27.1) is making the pleaded representations (par 12) and giving the pleaded advice (par 13) preliminary to entry into the agreement without advising Henderson and Henderson Corporation they could instead enter into an arrangement with a stockbroker.  Under that arrangement, it was pleaded, the stockbroker would identify shares and options over shares in publicly listed corporations for purchase and sale at a profit, for the purchase of which Henderson or Henderson Corporation or both would provide the funds, the purchase and sale of which at a profit the stockbroker would make, but with whom Henderson or Henderson Corporation would not be required to share the profit less brokerage (par 14).  The corresponding pleaded breach for Barringtons (par 35.1) is their failure or neglect to advise Henderson or Henderson Corporation or both that, instead of entering into the agreement, they could enter into such an arrangement with a stockbroker.

5. Given the bases on which the fiduciary duties rest, particularly the retainer, the pleaded relationship of trust and confidence and the duties' formulations, it seems to me that this breach is related to each of those duties ‑ through the pleaded duty to advise on the alternative to the agreement represented by the arrangement for the purchase and sale of stock and options with a stockbroker (par 14).

6. However, the defendant objected that the breach could not be related to the fiduciary duty to act in the best interests of the beneficiary (par 24.1 and par 32.1) in the presence of the indemnity in the agreement, as that protected the beneficiary against loss, and so the agreement could not be otherwise than in their best interests.  It does not seem to me that this follows from the indemnity.  The pleaded retainer includes to provide financial and business advice (par 9.4), and the scope of what that involves, particularly in terms of addressing the particular investment needs of the beneficiary, depends upon the terms of the retainer, which on this pleading of duty and breach can be seen to involve advice as to the comparative wisdom of the agreement proposed (see the references to Clark Boyce v Mouat [1994] 1 AC 428 and to Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398 in Meagher, Heydon and Leeming (supra), at [5.115]), especially as the proponent, Hewitt, directly or it would appear indirectly through Gibrae and the Hewitt Investment Trust, would have a financial interest in the transaction (see Re Morris Fletcher & Cross' Bills of Costs [1997] 2 Qd R 228, at 243, and the discussion of that case in Meagher, Heydon and Leeming, at [5‑115]; and Fico (supra), Heenan J, at [147]). 

7. However, the defendant also objected that the pleaded breach was not sustainable without a plea that the beneficiary was ignorant of the possibility of an alternative arrangement with a stockbroker as pleaded, and in any event the possibility of such an arrangement was "common knowledge" not requiring disclosure.  It does not seem to me the pleading is defective on either account.  The pleading of duty and breach can be seen to involve a plea that, by reason of the duty owed them, resting on the basis it did, the beneficiary was entitled to expect disclosure of the matter (see Meagher, Heydon and Leeming, at [5‑005] on reasonable expectations and fiduciary relationships), while the fact that a matter may be common knowledge does not prevent it being required to be disclosed, particularly where the fiduciary has an interest in the transaction (see Meagher, Heydon and Leeming on Re Morris Fletcher & Cross' Bills of Costs (supra)). 

8. The defendant further objected that the pleaded breach could not be related to the duty not to act or advise in a position of conflict as the conflict had not been specified, and in any event the duty could not arise simply from the fact that the advice might result in "remuneration" for Hewitt from the venture.  In my view neither objection can be sustained.  The pleadings indicate the duty is to advise of the alternative to the venture represented by the arrangement with a stockbroker, and the interest is that in the rewards to be gained by Hewitt from the venture, directly or through Gibrae, without venturing his own funds.  Nor is the fact that a fiduciary's remuneration at stake sufficient to prevent a duty to advise arising in such a case: see Meagher, Heydon and Leeming on Re Morris Fletcher & Cross' Bills of Costs. 

9. The second of the two pleaded breaches of the fiduciary duties for Hewitt in relation to entry into the agreement (par 27.2) is his failure or neglect to advise the beneficiary that in making the representation and giving the advice there was a conflict between the duty he owed to them and his interest in obtaining a benefit from the venture.  It follows from what I have indicated to this point that this can be related to each of the three fiduciary duties for Hewitt.

10. For Barringtons, there are three breaches of the fiduciary duties pleaded as owing by them in relation to the entry into the agreement.  Two of these breaches correspond to the two pleaded breaches by Hewitt (par 35.1 and par 35.2), and no further comment is needed on them.  The third breach, pleaded for Barringtons only, is their failure to take any steps to prevent Hewitt acting for the beneficiary pursuant to the agreement (par 35.3).  This pleaded breach appears to go to a duty to protect the beneficiary from the conduct of others, or at least of partners conducting themselves as Hewitt was doing.  This of course is not a form of vicarious liability.  As a form of liability of a partnership for the conduct of its partners, it does not have any basis in partnership law evident to me.  I return below to what might be involved in pleading such a form of liability.  In my view, then, the basis for such a plea is not evident, and I would not grant leave to amend in this respect.  However, as I consider, as indicated later, that there is a possibility the shortfall may be made good, I would allow the plaintiffs a reasonable time to reformulate the pleading, to make apparent its basis as a reasonable cause of action:  see Civil Procedure in Western Australia, at [21.5.5].

11. The pleaded fiduciary duties in relation to action under the agreement are the same three for Hewitt (par 26.1 – par 26.3) and for Henderson Corporation (par 34.1 – par 34.3) as for the duties in relation to entry into the agreement, with certain additions. 

12. For Hewitt, the addition is a pleaded fiduciary duty to account, or to cause Samit or Gibrae to account, to the beneficiary "in respect of" all moneys "received" and "paid out" by him or Samit or Gibrae in relation to the "purchase and sale and purchase" of "shares and options" pursuant to the agreement from about 1 June 1993 to 1 September 1996 (par 26.4).  This appears to be an informational obligation, a matter to which I return below.  I conclude there that such an obligation is to be distinguished from the equitable remedy of an account (see Meagher, Heydon and Leeming, at [25‑020]), from an equitable duty to account for property of the beneficiary held on constructive trust (see Meagher, Heydon and Leeming, at [34‑080]), and from the related matter of the duty to account for a profit made in breach of duty (see Meagher, Heydon and Leeming, at [5‑245]). 

1. For Barringtons, the first addition is a pleaded duty to ensure an account "of all moneys" by him or on his behalf "received" and "paid out … in respect of the share and option transactions conducted pursuant to" the agreement was given "on a regular monthly basis" by Hewitt or on his behalf to the beneficiary (par 34.4).  The second addition is a pleaded duty to account for all moneys by Hewitt or on his behalf received and paid out in respect of those transactions to the beneficiary "on a regular monthly basis" (par 34.5).  These two appear to me to be two aspects of the pleaded term of the agreement for periodic accounting, using, as those pleaded duties do, the language as to the period for the accounting of the pleaded term.

2. I note for this purpose that the only pleaded provision of funds pursuant to the agreement by the beneficiary to Hewitt, Samit or Gibrae, or any combination of them, is for the period from about 1 June 1993 to 1 September 1996 (par 18.1), and there is a pleading of what appear to be the initial purchases of shares and options made with those funds (par 18.2).  There is no reference to any subsequent provision of funds.  I return to this matter shortly.

3. The first of the three pleaded breaches of these duties for Hewitt in relation to action under the agreement (par 28.1) is acting, as I have previously indicated, for the beneficiary pursuant to the agreement when there was a conflict between the duty owed to the beneficiary and his interest in so acting.  On the analysis I have provided to this point, this plea could be related to all of the first three of Hewitt's fiduciary duties, considered as continuing obligations to make the beneficiary aware of the stockbroker alternative to the agreement.  However, it is not clear to me how this plea could be related to the additional plea as to the duty to account (in the sense I have identified, to provide information about the moneys received and paid out).  I consider below the defendant's objection to that duty as pleaded, in terms of whether it can be seen as a fiduciary duty at all.  However, it is difficult for me to see how simply acting pursuant to the agreement is a breach of the pleaded duty to account.  I would therefore not give leave to make the amendment represented by the plea of this breach, but, in light of my discussion below of the defendant's objection to the possibility of such a duty, would allow the plaintiffs a reasonable time to apply for leave to reformulate the pleading.

4. The second of the three pleaded breaches of the four fiduciary duties for Hewitt in relation to action under the agreement (par 28.2) is in terms of a failure to comply with the pleaded fiduciary duty to account (par 26.4), except that there is no reference to moneys received by Hewitt, Samit or Gibrae, otherwise than from the beneficiary, in relation to the purchase and sale of shares and options pursuant to the agreement.  It seems to me that this failure to act in relation to funds pleaded as received and paid out under the agreement can be related to all of the fiduciary duties pleaded, with respect to the first three such duties (those I have characterised as aspects of the generally expressed fiduciary duty of undivided loyalty to the beneficiary) on the analysis I have described, and, with respect to the fourth pleaded fiduciary duty (the duty to account), on the terms of the pleaded breach

5. However, the defendant objects that the fourth pleaded fiduciary duty, to account, is simply a contractual, and not a fiduciary one.  While there is indeed support for the view that a "simple" duty to account owed by a fiduciary under the terms of their contract with the beneficiary is not a fiduciary duty (Coulthard v Disco Mix Club Ltd [1999] 2 All ER 457, per Jules Sher QC, Deputy Judge, at 476), there are circumstances in which it seems such a duty might arguably be an aspect of the general duty of undivided loyalty, where the conduct might be seen to be "aggravated by a conflicting interest or an adverse fiduciary engagement" (see Meagher, Heydon and Leeming, at [5‑325]). As such circumstances are pleaded here, as I have indicated, I do not consider that, on this account, the denial of leave to plead this duty and its breach would be appropriate. However, I would distinguish the duty to account that might be argued for here from the equitable remedy of an account, and both from the liability of a fiduciary for funds held by the fiduciary as a constructive trustee, or the liability to account for profits made in breach of a fiduciary duty.  It would also seem to me that the pleaded duty in the circumstances pleaded here would take its content from the agreement.

6. As to the first proposition, that the duty pleaded is an informational one, I note the following explanation of the law from Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400, Millett LJ, Pill and May LJJ agreeing at 415 – 416, in the light of the obligation to account under the agreement (my emphasis):

   "Whether he was in fact a trustee of the money may be open to doubt. Unless I have misunderstood the facts or they were very unusual it would appear that the defendant was entitled to pay receipts into his own account, mix them with his own money, use them for his own cash flow, deduct his own commission, and account for the balance to the plaintiff only at the end of the year. It is fundamental to the existence of a trust that the trustee is bound to keep the trust property separate from his own and apply it exclusively for the benefit of his beneficiary.  Any right on the part of the defendant to mix the money which he received with his own and use it for his own cash flow would be inconsistent with the existence of a trust.  So would a liability to account annually, for a trustee is obliged to account to his beneficiary and pay over the trust property on demand.  The fact that the defendant was a fiduciary was irrelevant if he had no fiduciary or trust obligations in regard to the money. If this was the position, then the defendant was a fiduciary and subject to an equitable duty to account, but he was not a constructive trustee.  His liability arose from his failure to account, not from his retention and use of the money for his own benefit, for this was something which he was entitled to do."

7. There is a further distinction, between a duty to account in the informational sense, and the duty to account for profits gained from breach of duty (see Meagher, Heydon and Leeming, at [5-245]).  There is, it seems to me, no sufficient pleading of any such duty to account for profits in this case, as there is no pleading of any profit from any pleaded breach of duty.  Of course, the remedy of an accounting that is sought in this case (see proposed substituted statement of claim, par 38.1(d), for Hewitt, par 38.2(d), for Gibrae, par 38.3(c), for Samit and par 38.4(c), for Barringtons) may establish that there was such a profit here.

8. As to the second proposition, that the duty to account as pleaded takes its content from the agreement, I have already referred to the way an agreement or understanding between the parties may condition the scope of fiduciary obligations one party may owe another.  However, I note that on one of the forms of the case as pleaded Gibrae, not Hewitt, is the other party to the agreement.  However, on that case Hewitt was acting as an agent of Gibrae in relation to the agreement, for the purposes at least of entry into it and the purchase and sale of shares and options pursuant to the agreement.  It seems to me this indicates that the pleaded fiduciary duty to account, of Hewitt, would take its content from the agreement.

9. Whether the pleading is adequate to describe the duty I have referred to, and its breach, is a different matter.  The defendant has raised this question, as he objects that the fiduciary duty to account is not pleaded with sufficient precision to permit its scope to be ascertained, at least without reference to the agreement.  As I have indicated, the scope of the fiduciary duties is indeed conditioned by any agreement between the fiduciary and the beneficiary.  This, it seems to me, is clear from the form of the fiduciary duties to cause Hewitt to account, and to account themselves, pleaded for Barringtons, as I have indicated (using the period described in the pleaded term of the agreement), which is not vulnerable to this objection.  However, the different form of the duty to account pleaded for Hewitt creates, in my view, an uncertainty as to the scope of Hewitt's duty which renders the pleading of it, and of the breach here, embarrassing.  However, I would allow the plaintiff a reasonable time to apply for leave to reformulate the pleading.

10. The third of the three pleaded breaches of the four fiduciary duties for Hewitt in relation to action under the agreement (par 28.3) is pleaded in terms of a failure or refusal to indemnify the beneficiary after having received moneys from them (as pleaded in par 18), having used those moneys to cause Gibrae or Samit or both to purchase shares and options over shares in publicly listed companies, and having made losses on those transactions.  However, it is difficult for me to see how a failure or refusal to indemnify is a breach of the first three pleaded aspects of the duty of undivided loyalty, or of the pleaded duty to account.  There is no pleaded fiduciary duty to indemnify, which might be so pleaded in the same way as I discussed for the pleaded duty to account.  At the hearing, counsel for the plaintiff appeared to concede this.  I would therefore not give leave to make the amendment represented by the plea of this breach, but would allow the plaintiff a reasonable time to apply for leave to reformulate the pleading.

11. For Barringtons, there are two breaches of the fiduciary duties pleaded as owing by them in relation to action under the agreement.  The first is the failure to account or to cause Hewitt to account to the beneficiary "on a regular monthly basis" for all moneys received by Hewitt or on his behalf and paid out by him or on his behalf in relation to the purchase and sale of shares and options pursuant to the agreement (par 36.1).  It will be seen this is in very similar terms to the corresponding breach for Hewitt, although without any reference by name to any involvement of Gibrae or Samit.  Although the duty to account pleaded for Barringtons is not objectionable, on my view, unlike the corresponding pleaded duty for Hewitt, the pleaded breach is unclear, for the reasons I have given for Hewitt, as to whether or not that breach goes to a different duty.  I would therefore not give leave to make the amendment represented by the plea of this breach, but would allow the plaintiff a reasonable time to apply for leave to reformulate the pleading.

12. The second breach of the fiduciary duties pleaded as owing by Barringtons in relation to action under the agreement is the failure or neglect to cause Hewitt to indemnify the beneficiary in respect of the losses they incurred under the agreement.  It will be seen this breach is in similar terms to the corresponding breach for Hewitt, although without any reference to the receipt of moneys from the beneficiary, their use and Hewitt having made losses.  However, it seems to me that this pleaded breach is objectionable in the same way as that breach for Hewitt.  As for that breach, I would therefore not give leave to make the amendment represented by the plea of this breach, but would allow the plaintiff a reasonable time to apply for leave to reformulate the pleading.

13. My conclusions thus far are that the proposed pleadings as to the fiduciary duties and their breach are adequate, in respect of all but, for Hewitt, the pleaded duty to account and the failure to account, and the pleaded failure to indemnify, and, for Barringtons, the pleaded failure to take any steps to prevent Hewitt acting for the beneficiary pursuant to the agreement, and the pleaded failures to account and indemnify.  In respect of those exceptions, I would not grant leave to amend, but would allow the plaintiff a reasonable time to apply for leave to reformulate the pleading

14. This leaves the defendant's objections to the pleaded breaches of fiduciary duty by Barringtons on two bases.  One was that there is no pleading that the conduct of Hewitt was in the ordinary course of business of Barringtons, so as to engage the vicarious liability of the firm under Partnerships Act 1895 (WA), s 17.  The other basis was that there was no plea the other partners knew of Hewitt's representations or advice, or of the agreement, so as to found any breach based on a plea they permitted him to make those representations, give that advice or enter into that agreement.

15. It seems to me that, to the extent the pleading goes to the vicarious liability of the firm for the representations made by Hewitt as pleaded (in par 12), the objection must fail.  The terms of the retainer with Barringtons were pleaded, as I have indicated, as that they would provide, among other things, financial and business advice (par 9.4).  Hewitt was to provide the services for Barringtons (par 10).  The representations were pleaded as having been made "in the course of a meeting at Barringtons' offices in 1993", by Hewitt "in his capacity as a partner of Barringtons and in the course of providing financial and business advice to Henderson and/or Henderson Corp" (par 12).

16. However, the pleadings as to the advice, and the entry into the agreement, stand on a different footing.  The advice to enter into a venture that ultimately assumed the form of the agreement is simply pleaded to have been given "at about the same time as Hewitt made the representations" without any reference to the business of Barringtons (par 13).  Although this might fairly be seen to be financial or business advice to a client of the firm by a partner designated to give it, given at or about the same time as the representations were made, there is no pleading to connect that advice with Barringtons in the same way as the pleading as to the representations.  The partner may well have been acting in, and been seen to be acting, in a personal capacity.  The entry into the agreement is on a similar footing.  It is simply pleaded that "in or about mid 1993, Henderson and/or Henderson Corp, by its agent, Henderson, made a verbal agreement ('Agreement') with Hewitt and/or Gibrae, by its agent, Hewitt, at Barringtons' offices" (par 16). 

17. Therefore, I would not give leave to the amendments so far as they plead the vicarious liability of Barringtons for the conduct of Hewitt in respect of the advice and the entry into the agreement, but would allow the plaintiff a reasonable time apply for leave to reformulate the pleading, which would seem to be a relatively simple matter, particularly in light of the minute of the proposed amended writ of summons.

18. The other basis for objection ‑ the knowledge of the other members of the firm for the purposes of permission to make the representations, give the advice or enter into the agreement - to the extent it does not go to establishing the scope of business of the firm for the purposes of its vicarious liability, goes to a matter I raised earlier, of a breach of fiduciary duty by Barringtons in their failure to prevent others, or at least their partners, engaging in conduct where such failure was in breach of the firm's duty to protect the beneficiary from that conduct.  The fiduciary duty to prevent such failures, which might be an aspect, in the circumstances, of the duty of undivided loyalty owed by the firm (see Meagher, Heydon and Leeming, at [5‑325]), might be made out by reference to knowledge that conduct of a partner of a sort for which the firm had been retained, or sufficiently related to such conduct, was being engaged in, such that it could be seen by the beneficiary to be permitted by the firm.  It is also possible, however, such a duty might be made out in other ways.  It is apparent to me, at the same time, that such a duty has not been sufficiently pleaded. 

19. To the extent then that the pleadings as to breach by Barringtons depend on a fiduciary duty of the firm to protect the beneficiary from the conduct of Hewitt, I do not consider the pleadings are adequate.  But I would allow the plaintiff a reasonable time to apply for leave to further amend their pleading in this respect

Conclusions and orders

1. As to the proposed interlocutory order for dispensation with the requirements of O 59 r 9, I note the order of Jenkins J dismissing this part of the application.  At the same time I note the process of conferral, of a sort, that resulted from the programming features of the orders of Registrar S Boyle and of Jenkins J, and I also note the costs orders to be made on this application.  I do not consider that the failure to confer within that rule should prevent the hearing and determination of this application.

2. As to the proposed interlocutory order for leave to make this application out of time, I have concluded that the plaintiff should be granted leave.  However, in that respect I would draw attention to the terms of the next three orders.

3. As to the proposed interlocutory order for leave to rejoin Henderson as first plaintiff, Gibrae as second defendant, Barringtons as third defendant and Samit as fourth defendant, I would grant such leave, subject to the following. There must be filed a written notice of consent by Henderson to be joined as first plaintiff, as required by O 18 r 6(2), closing words. It is probably unnecessary to note that the rights of Gibrae, Barringtons and Samit, in respect of the delay in their rejoinder, of the limitation sort to which this judgment has referred, are not affected by this order. However, I would note that I would reserve the right of those three parties within a reasonable time to apply to have their joinder set aside on the basis of delay in the other respects to which I have previously referred.

4. As to the proposed interlocutory order for leave to re‑amend the writ of summons in terms of what is now the minute of 23 June 2005, I would grant that order.  However, I would reserve the rights to which this judgment has referred of Gibrae, Barringtons and Samit within a reasonable time to apply to strike out the amendments.

5. As to the proposed interlocutory order for leave to file a substituted statement of claim in terms of what is now the minute of 23 June 2005, I would grant that order, save in the respects previously indicated.  As to those respects, I would grant leave within a reasonable time to apply to make further amendments.  However, I would reserve the rights to which this judgment has referred of Gibrae, Barringtons and Samit within a reasonable time to apply to strike out the amendments other than the further ones, for which such reservation is unnecessary.

6. As to the proposed interlocutory order that the plaintiff, by which I understand is meant Henderson Corporation, pay the defendant's costs thrown away by reasons of the amendments, I would make that order.

7. As to the proposed interlocutory order that the plaintiff, by which I understand is meant Henderson Corporation, pay the defendant's costs of this application in any event, I would make that order.

8. I will hear from the parties as to the terms of the orders to give effect to these conclusions, and in particular as to the time periods within which the plaintiffs and the defendants may make the further applications "within a reasonable time" I have referred to.

9. I will also hear from the defendant and the plaintiff as to any order the defendant might wish to seek granting leave to make consequential amendments to its pleadings, on terms that the costs of such amendments be the defendant's in any event.