Meredith v Commonwealth of Australia
[2009] ACTSC 168
•19 November 2009
WAYNE GARRY MEREDITH v COMMONWEALTH OF AUSTRALIA
[2009] ACTSC 168 (19 November 2009)
PRACTICE AND PROCEDURE – application to amend statement of claim where action out of time – Court Procedures Rules 2006 (ACT), rr 502, 503 – whether amendment a new cause of action – suggested test – alleged negligent statement by additional representor held to be a new cause of action – whether action arises from the “same or substantially the same facts” – employment relationship with additional representor sufficiently different to distinguish facts – relevance of specific prejudice arising from the unavailability of the representor and general prejudice to the respondent.
Limitation Act 1985 (ACT), s 11
Trade Practices Act 1974 (Cth), s 52, 53
Court Procedures Rules 2006 (ACT), rr 6, 502, 503, 509, 511, 514
Commonwealth of Australia v Cornwell (2007) 229 CLR 519
Weldon v Neal (1887) 19 QBD 394
Brickfield Properties Ltd v Newton [1971] 1 WLR 862
Renowden v McMullin (1970) 123 CLR 584
Morgan v Banning (1999) 20 WAR 474
Draney v Barry [2002] 1 Qd R 145
Hristeas v GMH Pty Limited [1968] VR 14
Black v The City of South Melbourne (1964) 38 ALJR 309
Collins v Hertfordshire County Council [1947] KB 598
Golski v Kirk (1987) 14 FCR 143
Howarth v Adey [1996] 2 VR 535
Canberra Cruises and Tours Pty Limited & Ors v Commonwealth of Australia and Anor [2003] ACTSC 90
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
Lexmead (Basingstoke) Ltd v Lewis & Ors [1982] AC 225
Nectaria Nominees Pty Limited v Commonwealth of Australia (1992) 111 FLR 459
Stone James v Pioneer Concrete WA Pty Limited [1985] WAR 233
Chatsworth Investments Limited v Cussins (Contractors) Limited [1969] 1 WLR 1
Adam v Shiavon [1985] 1 Qd R 1
Brunsden v Humphrey (1884) 14 QBD 141
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
EX TEMPORE JUDGMENT
No. SC 528 of 2007
Judge: Refshauge J
Supreme Court of the ACT
Date: 19 November 2009
IN THE SUPREME COURT OF THE )
) No. SC 528 of 2007
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:WAYNE GARRY MEREDITH
Plaintiff
AND:COMMONWEALTH OF AUSTRALIA
Defendant
ORDER
Judge: Refshauge J
Date: 19 November 2009
Place: Canberra
THE COURT ORDERS THAT:
The plaintiff has leave to amend paragraph 7 of the Statement of Claim as proposed in the draft Amended Statement of Claim annexed to the Application in Proceedings dated 11 November 2009.
The plaintiff has leave to amend the Reply as proposed in the draft Amended Reply annexed to the Application in Proceedings dated 11 November 2009.
Leave is refused for the amendment to paragraph 3(d) and to insert paragraph 7A of the Statement of Claim.
The plaintiff pay the defendant’s costs of the application and amendment, such costs not to be payable until judgment in the proceedings.
On 9 January 1966, Mr Wayne Garry Meredith commenced full-time work as a temporary employee of the Commonwealth of Australia working in ACT Forests, initially for the Commonwealth but later for the Australian Capital Territory in Uriarra Forest and then Pierce’s Creek Forest, both in the ACT. He ceased employment with the Commonwealth on 1 July 1994 when he was transferred with self-government to Territory employment. On 29 August 2001 he accepted a redundancy from that employment.
During his working life he says he made a number of inquiries about joining the Commonwealth Superannuation Scheme. He says, however, that he was advised by his superiors that he was not eligible to be a member of any such scheme. His alleged ineligibility was said to have been put in various ways: he was “an industrial worker”, “a blue collar worker”, he was not a permanent employee. Mr Meredith claims that he was not only in fact eligible but that he would have joined and been accepted into a Commonwealth superannuation scheme had he been provided with the correct advice. Accordingly, he now sues for damages that he says flow from the incorrect advice he received.
He commenced proceedings for the recovery of these damages on 6 August 2007. Though the claimed negligent advice had been given to Mr Meredith, he says, between 1966 and about 1977, these proceedings were not statute barred by operation of s 11 of the Limitation Act 1985 (ACT). The High Court in Commonwealth of Australia v Cornwell (2007) 229 CLR 519, a similar case, said that the cause of action in tort for negligent advice in such circumstances only accrued on the retirement of the recipient of such advice when any actual damage was sustained.
On the first day of the hearing of the trial of Mr Meredith’s claim, however, he made an application through one of his counsel Mr J Gordon, co-counsel with Mr R Davis for Mr Meredith, for leave to amend the Statement of Claim and Reply. There were three amendments to the Statement of Claim. Ms C Dowsett, junior counsel with Mr S Estcourt QC for the Commonwealth, informed me that the Commonwealth consented to one of the amendments to the Statement of Claim, that to par 7, to vary the dates of certain advice and to the amendment to the Reply.
Accordingly, I gave leave to Mr Meredith to file an amended Statement of Claim to amend par 7 as proposed in the draft Amended Statement of Claim annexed to the Application in Proceedings dated 11 November 2009, and the draft Amended Reply annexed to the same application in proceedings. The other amendments, however, were opposed.
They involved the addition of a person in the list in par 3 of the Statement of Claim of persons alleged to have been relevantly employed by the Commonwealth in a management capacity in ACT Forests and to insert a new par 7A to allege that when approached by Mr Meredith this person or another person already mentioned in the list advised that Mr Meredith and members of his forestry gang were not eligible to join a superannuation scheme with the Commonwealth because they were not public servants and the relevant scheme was a public service superannuation scheme. The opposition to these amendments was based on the submission that the amendments would add a cause of action that was statute barred and would prejudice the Commonwealth in the conduct of the proceedings.
Context
As Mr Meredith ceased eligible employment on 29 August 2001 any cause of action arising out of negligent advice about Mr Meredith’s eligibility to join a Commonwealth Superannuation Scheme became statute barred, that is not maintainable, on 29 August 2007. Thus if the amendments proposed do add a new cause of action by this application the limitation period expired over two years ago.
Explanation for delay
Mr Meredith’s solicitor Mr R Faulks made an affidavit to explain how the amendments came to be sought at this time. He deposed that in conference with counsel with Mr Meredith and some other employees of ACT Forests in about June 2009, counsel advised that it was appropriate to amend the Statement of Claim to include “further information about action taken by [Mr Meredith] in seeking information from the Forester [a Mr G Croston] between 1967 and 1977.”
This is not really an explanation for the delay but rather an explanation of how it came about that the amendment was being sought. While such an explanation is relevant to the exercise of the discretion, I am not aware of any authority to suggest that in this situation it is a necessary precondition to the grant of leave to allow an amendment.
Amendment
Rule 502 of the Court Procedures Rules2006 (ACT) (Court Procedures Rules) regulates the court’s power to give leave for a party to amend a document. It is expressed to be subject to r 503:
502Amendment—of documents
(1)At any stage of a proceeding, the court may give leave for a party to amend, or direct a party to amend, an originating process, anything written on an originating process, a pleading, an application or any other document filed in the court in a proceeding in the way it considers appropriate.
(2)The court may give leave, or give a direction, on application by the party or on its own initiative.
Note 1Pt 6.2 (Applications in proceedings) applies to an application for leave or a direction under this rule.
Note 2Rule 6902 (Leave may be given on conditions) provides that, if the court gives leave under these rules, it may give the leave on the conditions it considers appropriate.
(3)The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started.
(4)If there is a mistake in the name or identity of a party, the court must give leave for, or direct the making of, amendments necessary to correct the mistake, even if the effect of the amendments is to substitute another person as a party.
(5)This rule does not apply in relation to an amendment of an order.
NoteSee r 6906 (Mistakes in orders or court certificates) for amendment of orders.
(6)This rule is subject to rule 503 (Amendment—after limitation period).
503Amendment—after limitation period
(1)This rule applies in relation to an application for leave in a proceeding to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.
NotePt 6.2 (Applications in proceedings) applies to an application for leave under this rule.
(2)The court may give leave to make an amendment correcting a mistake in the name or identity of a party, even if the effect of the amendment is to substitute a new party, only if—
(a)the court considers it appropriate; and
(b)the court is satisfied that the mistake sought to be corrected—
(i)was a genuine mistake; and
(ii)was not misleading or likely to cause any reasonable doubt about the identity of the person intending to sue or intended to be sued.
(3)The court may give leave to make an amendment changing the capacity in which a party sues, whether as plaintiff or counter-claiming defendant, only if—
(a) the court considers it appropriate; and
(b)the changed capacity in which the party would then sue is a capacity in which the party might have sued on the day the proceeding was started by the party.
(4)The court may give leave to make an amendment to include a new cause of action only if—
(a)the court considers it appropriate; and
(b)the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.
Thus the wide power of amendment given by r 502 is substantially circumscribed by r 503 where the limitation period has expired. In this it appears that the Court Procedures Rules have retained the principle enunciated in Weldon v Neal (1887) 19 QBD 394, though rule 503(4) has been “designed to break down the rigid practice which through undue adherence to Weldon v Neal … had too often produced injustice” (Brickfield Properties Ltd v Newton [1971] 1 WLR 862 (at 872) per Sachs LJ.
Here the limitation period had expired and so r 503 was relevant. It, however, only imposed limitations on amendments which correct a mistake in the name or identity of a party which changed the capacity in which a party sues or which included a new cause of action. Any other amendments fall to be considered under r 502 even if the limitation period has expired. The point was made that Mr Meredith has referred in the application proceedings to r 502 not 503 instead or as well.
That may well be because Mr Meredith’s position initially was that there was no new cause of action which he seeks to include. In any event I give Mr Meredith leave to amend the application in proceedings to include a reference to r 503 additionally in order 1 as sought. I shall make the amendment myself in manuscript on the filed application in proceedings and, in the circumstances, under r 6 dispense with any further compliance with r 509 and any compliance with r 511 so far as the amended application in proceedings is concerned.
The opposition to these amendments was based on the submission that the amendments would add a cause of action that was statute barred and would prejudice the Commonwealth in the conduct of the proceedings.
Cause of action
The principal objection to the amendments is that they involve the pleading of a new cause of action. Mr Gordon submitted that it did not involve the pleading of a new cause of action or if it did it arose out of the same facts or substantially the same facts as a cause of action for which relief had already been claimed. Mr Gordon submitted that the amendments were only in the nature of further particulars of the negligence to advice that was already referred to in the Statement of Claim.
The approach of the courts has not always been helpful. In Renowden v McMullin (1970) 123 CLR 584 the plaintiff originally sued in negligence for a breach of duty of care by the defendant as his auditor but sought after the expiry of the limitation period to add a claim for breach of contract, though it might be difficult to see that significant new facts were required for that purpose. But as Wheeler J said in Morgan v Banning (1999) 20 WAR 474 (at 486):
It does appear that in that the years since Weldon v Neal, the courts have experienced difficult in defining precisely what constitutes a new “cause of action” for the purpose of the rule, and it also appears to be the case that on occasion the rule has been applied to what may be seen as little more than a change of label, or the addition of particulars to facts already forming the basis of a claim, in a manner which may have been unduly rigid and capable of causing potential injustice to plaintiffs.
Her Honour noted the care needed to avoid a construction of court rules which was inconsistent with statute. Her Honour continued:
If I am correct in the view that the court’s inability to permit the raising of a new cause of action (rather than a new description or a new form of action) is as a result of a lack of power to do that which the statute of limitation prohibits, then O 21 r 5(5) [the equivalent of rule 503(4)] and its equivalents can only be directed to curing the unduly rigid and narrow interpretation of Weldon v Neal which may be discerned in a line of authority…
The position now as I understand it is that the rule in Weldon v Neal applies to a cause of action which is truly new, and may not be abrogated without statutory authority. At least in a clear case, the court should refuse to allow the addition of a new cause of action in that sense. There may of course be circumstances where it is not clear how the amendment relates to the original cause of action and in such a case, it may be preferable that the issue be left for trial, just as the issue may be left for trial where it is not clear from the pleadings whether an action is time-barred. If there is no new cause of action in that sense, but is rather a re-labelling, addition, modification or clarification of an existing cause of action raised in the indorsement, O 21 r 5(5) is applicable. When the discretion is exercised in that case it is of course to be remembered that the effect of a refusal to permit an amendment may be that a plaintiff will be unable to bring an issue before the court at all, and questions of justice to the plaintiff, delay, reasons for delay, prejudice to the defendant or other persons, possible abuse of process, among others, will be relevant.
It has to be remembered that in that case what was in issue, as in many of the older cases, was the alignment of the proposed amendment with a general endorsement on a writ of summons.
It is further to be noted that the rules of various courts now differ in many aspects and one must be cautious about applying principles enunciated by courts which have construed different rules. Thus, for example, the uniform civil procedure rules of Queensland which were construed in Draney v Barry [2002] 1 Qd R 145 include in the equivalent of r 503 of the Court Procedures Rules, a provision not appearing in the latter rule, which expressly preserves the general power of amendment in those rules. Thus, as one would expect, the approach in those rules is somewhat more generous than under the Court Procedures Rules although bearing in mind the need to remember the statutory prohibition. Further, a statutory provision gave wide power in Queensland to permit amendment despite the expiry of the limitation period.
There are many cases in which the question of whether a new “cause of action” has been pleaded. Contrary to the approach of Wheeler J these often appear to rely on the categorisation of the claim.
Thus, for example, in Hristeas v GMH Pty Limited [1968] VR 14, Pape J agreed that the Master was correct in permitting an amendment to a claim for damages for bodily injury. The plaintiff had been injured when using a piece of welding equipment. He initially pleaded that the apparatus he was using was faulty because it was not properly insulated and he had been electrocuted. The amendment sought was to permit him to claim that he had been required to operate the equipment with a pressure hand grip requiring repeated vigorous contractions of his hand.
Following a similar case in the High Court, Black v The City of South Melbourne (1964) 38 ALJR 309, the Court held that the cause of action remained the same, namely negligence causing bodily injury, but that the particulars changed. See also Collins v Hertfordshire County Council [1947] KB 598. On the other hand, in Golski v Kirk (1987) 14 FCR 143, the Full Court of the Federal Court of Australia held that professional negligence in failing to warn or properly advise on medical treatment is a different cause of action from professional negligence in the unskilful performance of a surgical operation.
I was referred to Howarth v Adey [1996] 2 VR 535 where apparently a different conclusion was reached but that is not a case where the limitation statute was involved and quite different issues arose. It seems to me that it is helpful to return to what Owen J said in Morgan v Banning (at 476):
This issue falls away if the phrase ‘cause of action’ in O 21 r 5(5) is understood in a narrow sense as meaning the basket of facts which give rise to the right to approach the court for relief rather than as the description of the right to sue by reference to the old forms of action. This must be so or the rule would be in conflict with the statute and, thus, ultra vires.
See Canberra Cruises and Tours Pty Limited & Ors v Commonwealth of Australia and Anor [2003] ACTSC 90 (at [14]).
Is the claim here a new cause of action? As is clear I have not had the time I would have liked to consider this issue but it seems to me that one approach to the question of whether there is a new cause of action is to ask the following question. If a plaintiff fails to prove to the court’s satisfaction the material facts, not including prefatory averments or matters of inducement, in respect of the pleaded cause of action to the requisite satisfaction of the trial court or at least substantially as to all them, yet does prove the material facts proposed to be included in the amendment, would the plaintiff still be entitled to relief from the court? If the answer is “no”, then that is a strong indication that what is pleaded is not in the relevant sense a new cause of action. Conversely if the answer is yes it seems likely that it is a new cause of action.
What has been claimed here is that on a separate occasion some years after the other alleged misstatements a further negligent misstatement was made. The dates show a period claimed of somewhere within eight years. Negligent misrepresentation as a cause of action requires:
(1) a statement to be made which is a misstatement;
(2) which is negligently made;
(3) which is made by the defendant, or someone for whom the defendant is responsible, and who has a “special relationship” with the plaintiff;
(4) but which is intended to be relied upon and is in fact relied upon; and,
(5) which causes the plaintiff to suffer economic loss.
See Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; Lexmead (Basingstoke) Ltd v Lewis & Ors [1982] AC 225 (at 264).
It is true, as was conceded by Ms Dowsett, that if proved the amended pleading would not sound in additional or different damages. On the other hand, if the other pleaded allegations fail but this one succeeded in being upheld then the damages would flow from that. I find this a difficult question. As Pape J said in Hristeas v GMH Pty Limited: “it is obvious that it is not an easy task to decide within which line of authority a case such as the present falls.”
It seems to me that every statement by a different relevant person is a cause of action in which Mr Meredith can rely to found his claim. While there is clearly a sense in which the repetition of the same negligent advice has the capacity to reinforce the reliance that Mr Meredith would place on the advice already received, I do not consider it sufficient to render the separate occasion in this case merely as a particular of a cause of action otherwise pleaded. Accordingly I find that the amendments proposed are to include a new cause of action.
Same facts or substantially the same facts
Rule 503 permits a new cause of action to be pleaded notwithstanding the expiry of the limitation period where it arises out of the same or substantially the same facts. While this term has been subject to some judicial consideration, it has not been subject to as much consideration as the notion of cause of action.
There can be no real difficulty when all that is included is a cause of action that arises directly from the same pleaded facts as occurred in Nectaria Nominees Pty Limited v Commonwealth of Australia (1992) 111 FLR 459 but the same facts there gave rise to a claim under s 52 of the Trade Practices Act 1974 (Cth) as well as under s 53(a) of that Act which had already been pleaded.
Similarly, in Stone James v Pioneer Concrete WA Pty Limited [1985] WAR 233, the plaintiffs sought to rely on a breach of contract in 1976 as well as a breach of contract in 1979. The Court considered, however, that it was the one contract. The pleaded breach was a failure to prepare an agreement with due care as required by a contract of retainer and the proposed amendment was to plead a breach of the contractual duty of care in giving the advice which led to the instruction to prepare the agreement. This, the Court held, was “substantially the same facts.”
In Chatsworth Investments Limited v Cussins (Contractors) Limited [1969] 1 WLR1, the facts were slightly complicated because the contract on which the plaintiff wished to sue had been assigned and the assignor took over the name of the assignee so when the plaintiff sued the named defendant it turned out to be the wrong company. The amendment then sought was to plead a novation of the contract upon assignment and the Court held that suing on the contract by adding the claim for novation was probably substantially the same facts, though preferred to base the decision to permit the amendment on the general discretion to allow amendments in the interests of justice.
Another good example is Adam v Shiavon [1985] 1 Qd 1 where a claim for property damage arising out of a motor vehicle accident was initially commenced but later the plaintiff sought to add a claim for bodily injury. The Court held that being the one accident, the amendments proposed to include a cause of action which “arises out of substantially the same facts” as the cause of the action already the subject of the claim for relief. It was accepted that it was not the same facts (see Brunsden v Humphrey (1884) 14 QBD 141 (at 146, 152)), but held that it was substantially so.
Brickfield Properties v Newton was again a case of a contract or retainer in respect of which the plaintiff had pleaded one breach negligent supervision by the retained architect) and wished to amend to add another (negligent design of the building). The Court allowed the amendment. In the course of judgment, Cross LJ said (at 880):
It is no objection to amendment under [O 20 r 5(5)] that some of the facts set out of which the new cause of action arises are peculiar to it and that some of the facts out of which the old cause of action which arises are peculiar to it. It is enough if the overlap is so great that the new cause of action can fairly be said to rise out substantially the same facts as the old cause of action.
Here, however, all the facts will be new and none will overlap. The representation is different, the words used may be the same as others used or similar but are those of the representor. The relationship will be a different one. It seems to me that the amendment does not arise out of the same or substantially the same facts.
Ms Dowsett submitted that the Commonwealth would be prejudiced by amendment. In part, of course, this is because of the doctrine of “relation back” which, despite the reservations expressed in Morgan v Banning, has at least in this jurisdiction been statutorily enacted in r 514(3) of the Court Procedures Rules.
That prejudice, however, flows inevitably and, being what might be called general prejudice, is part of the balance that needs to be considered in each case.
In this case, however, Ms Dowsett submitted that specific prejudice arose because the alleged misrepresentor had died. That is a significant matter.
Mr Gordon, however, pointed out that he had died before the expiry of the limitation period and that the Commonwealth suffers no additional prejudice beyond that which it would have suffered if the pleading included by the amendment had been part of the Statement of Claim attached to the Originating Claim.
In a different context, but as is part of a consideration of limitation periods, the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 held that the rationale of limitation periods meant that the whole of the prejudice must be considered and not what might be called the “marginal prejudice” which is created in the period following the expiry of the limitation period. See per Toohey and Gummow JJ (at 548-9) and McHugh J (with whom Dawson J agreed) (at 554-5).
It is not clear whether this view of the effect of prejudice applies in these circumstances. Given that it is based on the rationale and theory of why limitation periods are imposed it seems likely that it does. In the event, given the decision to which I have come I do not need to decide the issue.
In the circumstances, I am satisfied that the proposed amendments to the Statement of Claim to par 3 and to insert a new par 7A amount to the inclusion of a new cause of action but not one based on the same or substantially the same facts. Accordingly this part of the application is refused.
It seems to me that Mr Meredith has, by the application, sought an indulgence which has in part been granted and should pay the costs, but has failed in the balance of the application when ordinarily costs would follow the event. I order that the plaintiff pay the Commonwealth’s costs of the application and amendment, such costs not to be payable until judgment in the proceedings.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 21 December 2009
Counsel for the plaintiff: Mr J Gordon and Mr R Davis
Solicitor for the plaintiff: Sneddon Hall & Gallop
Counsel for the defendant: Mr S Estcourt QC and Ms C Dowsett
Solicitor for the defendant: Australian Government Solicitor
Date of hearing: 18 November 2009
Date of judgment: 19 November 2009
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