HIH Casualty & General Insurance v MAM Mortgages Ltd

[1999] QCA 449

99.449

COURT OF APPEAL

DAVIES JA THOMAS JA ATKINSON J

Appeal No 6361 of 1999

HIH CASUALTY AND GENERAL INSURANCE

LTD	Appellant (Third Party)
and
MAM MORTGAGES LIMITED and
OTHERS	Respondent(First Plaintiff)
Appeal No 6588 of 1999
CAMERON BROS (A FIRM)	First Appellant(First Defendant)
and

DAVID ALAN STUART CAMERONSecond Appellant(Second Defendant)

and

MAM MORTGAGES LIMITED

(IN LIQUIDATION) First Respondent(First Plaintiff)

1

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and

MELBOURNE ASSET MANAGEMENT
NOMINEES PTY LTD

(IN LIQUIDATION)	Second Respondent(Second Plaintiff)
BRISBANE ..DATE 28/10/99

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DAVIES JA: These are appeals from an order made by a judge of the Trial Division on 16 June last pursuant to Order 3 rule 11 of the Rules of the Supreme Court which were in force at the relevant time, permitting the joinder of an additional plaintiff outside the relevant period of limitation, namely the limitation period for actions in contract. Consequent orders were made for the delivery of further amended pleadings.

The action in which the order was made was one for
damages for breach of contract, negligence and
misleading conduct against valuers on the basis that
money had been lent by the plaintiff or the person
sought to be joined in reliance on negligent
valuations. The original plaintiff is now the first
respondent and the party joined as additional plaintiff
is the second respondent. The appellants are the firm
of valuers and a principal of that firm who are the
defendants in the action and their insurer, who is a
third party in the action.

It does appear now to be doubtful as to whether proceedings were started in the name of the right person as plaintiff. As appears from facts to which I will refer shortly the first respondent's liquidator, who is also the liquidator of the second respondent, who had the conduct of these proceedings, thought he'd commenced the proceedings in the name of the right

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plaintiff relying on the advice of senior counsel to
that effect. But the third party, by its defence of
18 December last, for the first time put that question
plainly in issue, that is, the question whether the
first respondent was the proper plaintiff to institute

these proceedings.

The third party insurer had earlier conducted the
defence in the name of the defendants and in that
capacity had delivered a defence in June 1996 which did
not raise this point in specific terms as the defence
of 18 December 1998. It simply denied negligence and
put the respondent to proof of loss. Indeed, it seems
that the respondent defendants have still not, by their
amended defence of 26 March this year, specifically put
in issue the entitlement of the respondent to bring
these proceedings. Nevertheless, it became clear, as I
have indicated, on 18 December last year that that was
a live issue in the action, and it was plainly unclear

before that time.

The respondent before the learned primary judge and
before this Court put forward a number of matters on
the basis of which it said special or peculiar
circumstances justified the joinder of the additional
plaintiff out of time, that being the test as is common
ground between the parties here under Order 3 rule 11
of the Rules of the Supreme Court.

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I shall mention, first, some of those factors omitting
what seems to me to be the major factor and the one
which his Honour the learned primary judge thought was
the major factor justifying special or peculiar
circumstances. The first is that the facts concerning
the relationship between the respondents are somewhat
obscure. Neither the respondents' solicitor nor the
liquidator has been able to locate documents evidencing

the terms of the relationship between the respondents.

The liquidator had no personal involvement in the

transactions the subject of these proceedings and he is
plainly limited in his knowledge of the matters giving
rise to these proceedings because of that, and because
of documents which would assist in that respect.

The second matter is that the liquidator, in my view, took appropriate and reasonable steps to ensure, on the material which he had, who was the correct plaintiff to commence these proceedings.

He sought and obtained the advice of senior counsel on this question, which was to the effect that the first respondent was the correct plaintiff.

The third matter is that although it is strictly
correct that there are some additional allegations, the
essential matters in dispute remain the same other than

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the question I have just mentioned; and that is which
is the appropriate and correct plaintiff who has the

correct cause of action.

And the final matter which I mention in this
preliminary way is that there does not appear to be any
evidence of prejudice to the appellants arising out of
the joinder.

The appellants have asserted that there is and they have referred to the absence of documentation to which I have already referred, but in my view that is more likely to prejudice the plaintiffs in the action in proving the case than it is to prejudice either of the appellants.

The factor which the learned primary judge relied on
most is the fact that as appears to be the case the
appellants have lain by for some period of time,
including the whole of the period of limitation for the
contract action, without specifically pleading the
basis as the third party now pleads it upon which they
wish to rely, that the first respondent is not the

correct plaintiff.

The respondent and more specifically the liquidator
was, in my view, entitled, on the basis of the
documents which he had, and the opinion of senior

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counsel to commence proceedings in the name of the
first respondent, as he did. But once it became clear
that this question was being put in issue as to whether
the first or second respondent should be the
appropriate plaintiff, it was also appropriate on the
part of any cautious party to seek to add the second

respondent as additional plaintiff.

The learned primary judge said that this was itself
sufficient special or peculiar circumstances to justify

the joinder.

Now, it has been pointed out by the appellants that in
fact in an affidavit sworn on behalf of the respondents
other matters were mentioned. It was said, for
example, in that affidavit that the first respondent
had formed the view that the second respondent ought to
be bound by final judgment but the affidavit went on to
say that it is appropriate as a matter of caution to

join the company as plaintiff in this action.

That, in my opinion, notwithstanding the form of the
pleading as it was then proposed, indicates that the
view had then been formed, really because of the
matters raised by the third party for the first time,
that it was appropriate to, as a matter of caution as I
have said, join the second respondent as a plaintiff.

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It is true that there is little evidence upon which
this inference can be drawn but in my opinion
nevertheless it was a reasonable inference for the
learned primary judge to draw, and in those
circumstances, bearing in mind that this is an appeal
from an interlocutory judgment on a matter of practice
and procedure involving as it does the exercise of a
discretion, I cannot be satisfied that there is any
basis that has been shown for holding that the exercise
of the discretion by the learned primary judge was

wrong.

In my opinion, therefore, the appeals should be
dismissed.

I should say, however, that the question was raised as to whether rule 69 of the Uniform Civil Procedure Rules should apply but I have formed the view in all of the circumstances I have mentioned that the justice of this case does not require that and that the ordinary procedure should follow. That is that the matter should proceed by way of appeal not by way of rehearing under the former rules.

I would accordingly dismiss the appeals.

THOMAS JA: I agree. The defence delivered in July
1996 did not plead that the plaintiff MAM suffered no

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loss. That this was not in accordance with the
requirements of the rules of pleading was correctly
conceded by Mr McMurdo QC on behalf of the third party

appellant.

It is true that the material filed by the respondents
(that is to say the original plaintiff and the putative
additional plaintiff) shows some adversion by the
original plaintiff to the question whether it was the
appropriate claimant and it also reveals a decision to
proceed with the action as it was then constituted.
The question that has troubled me is whether the
inappropriate pleading of the defendants was
responsible for the lapse of time that resulted in the
present application being made outside the limitation
period.

Although the respondents did not expressly swear that the pleading caused or contributed to their delay, the material does show that within a reasonable time of actual exposure by the defendants of their true point the present application for joinder was made. I think it is open to infer that the application was prompted by exposure of the fact that there would be a real issue at trial that the wrong plaintiff had sued and that the identity of the person who suffered loss in consequence of the acts of the defendant would be a real issue at trial.

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It is also open to infer that had the point been exposed when it should have been by proper pleading in July 1996, the present application would probably have been brought within the limitation period.

Accordingly I see no reason to interfere with the approach that was made by the learned judge below on this procedural issue.

I agree that the appeal should be dismissed.

ATKINSON J: I agree that the appeal should be dismissed for the reasons given by Justice Davies.

...

DAVIES JA: The appeals are dismissed with costs.

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