Mills v Better Buildings Pty Ltd

[2010] NSWSC 1093

CITATION:	Mills v Better Buildings Pty Ltd [2010] NSWSC 1093
HEARING DATE(S):	17 September 2010
JUDGMENT DATE :	17 September 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Palmer J
EX TEMPORE JUDGMENT DATE:	17 September 2010
DECISION:	Partial representative orders made on terms.
CATCHWORDS:	PRACTICE AND PROCEDURE – REPRESENTATIVE ORDER – thirteen plaintiffs with separate cases but common questions of fact and law – whether representative order appropriate in case management – no question of principle.
LEGISLATION CITED:	Conveyancing Act 1919 (NSW) – s 55(2A) Fair Trading Act 1987 (NSW) – Trade Practices Act 1974 (Cth) – s 52, s 84(2) Uniform Civil Procedure Rules 2005 (NSW) – r 7.4
CATEGORY:	Procedural and other rulings
PARTIES:	Malcolm James Mills (First Plaintiff) Better Buildings Pty Ltd (First Defendant) Anthony Hayek (Eighth Defendant) Vero Insurance Ltd (Ninth Defendant)
FILE NUMBER(S):	SC 2009/289868
COUNSEL:	A.J. McInerney (First Plaintiff) G.T.W. Miller QC, D.M. Roberts (First Defendant) M.H. Southwick (Eighth Defendant) A.C. Casselden (Ninth Defendant)
SOLICITORS:	Slater & Gordon (First Plaintiff) MCG Lawyers (First Defendant) Gary George & Co (Eighth Defendant) Gadens (Ninth Defendant)

2009/289868 Mills & Ors v Better Buildings Pty Ltd & Ors

JUDGMENT – Ex tempore

Introduction

1 By a Statement of Claim filed on 4 September 2009, the First Plaintiff, Mr Mills, and twelve other parties as additional Plaintiffs, sued the First Defendant, Better Buildings, and eight other Defendants.

2 Very broadly, each Plaintiff alleged that:

– between February and July 2007 he, she or it had entered into a contract to purchase from Better Buildings and the Second and Third Defendants as vendors, a home unit in a building in Northmead;

– he, she or it was induced to enter into the contract by representations made by the Sixth Defendant, Ms Thompson, and the Eighth Defendant, Mr Hayek;

– Ms Thompson was the controller of the Fourth and Fifth Defendants, Mortgage Miracles, and Sound Property Investments, and Mr Hayek was the controller of the Seventh Defendant, Pulse Property

– Pulse, Mr Hayek, Mortgage Miracles, Sound Property Investments and Ms Thompson acted in concert to promote and market the units in the Northmead building and receive commission on successful sales (although I note that the Statement of Claim does not expressly allege by whom the commission was paid);

– the representations made by Ms Thompson and Mr Hayek to each of the Plaintiffs separately and, apparently, on different occasions, in the course of marketing the units were misleading and deceptive within the meaning of the Trade Practices Act and the Fair Trading Act

– in making the misleading and deceptive misrepresentations, Ms Thompson, Mortgage Miracles, Sound Property Investments, Pulse and Mr Hayek were the agents of Better Buildings and the Second and Third Defendants, whereby they are liable for the consequences of those representations by virtue of s 84(2) of the Trade Practices Act and the equivalent in the Fair Trading Act ;

3 By a proposed Amended Statement of Claim which discontinues as against the Second and Third Defendants, each Plaintiff now seeks:

– a declaration that Mortgage Miracles, Sound Property Investments and Pulse Property were jointly or severally the agents of Better Buildings in relation to the entry by that Plaintiff into a contract of sale;

– a declaration that the representations made to that Plaintiff were misleading and deceptive;

– consequential orders avoiding the contracts or damages;

– alternatively, an order for the return of the deposit under the contract pursuant to s 55(2A) of the Conveyancing Act 1919 (NSW).

4 By an Amended Notice of Motion filed on 28 July 2010, the Plaintiffs relevantly seek:

“1. A direction that the claim of Malcolm James Mills (the First Plaintiff) be heard and determined first as a test case (for the Second to Ninth Plaintiffs) pursuant to s 61 of the Civil Procedure Act (the ‘CPA’).

2. Alternatively to order 1, an order that this proceeding be carried on by Malcolm James Mills as representing the Second to Ninth Plaintiffs (incl) pursuant to r 7.4(2) of the Uniform Civil Procedure Rules (the ‘UCPR’), s 61 of the CPA, and/or the Court’s inherent or incidental jurisdiction.”

5 The representative order is the relief principally sought by Mr McInerney of Counsel, who appears for the Plaintiffs. The scope of the representative orders sought has been narrowed in argument, so that it now encompasses only the question whether the representations said to have been made by Mr Hayek and Ms Thompson, as controllers of Mortgage Miracles, Sound Property Investments and Pulse respectively, can be sheeted home to Better Buildings for the purposes of s 84(2) of the Trade Practices Act and the Fair Trading Act (“the agency issue”).

6 The proceedings are at a stage where the pleadings are complete, or almost complete. The proposed Amended Statement of Claim requires minor amendments and should not occasion substantial delay or expense in the filing of Amended Defences. However, only the First Plaintiff, Mr Mills, has put on evidence. Discovery is complete, or almost complete.

7 Mr McInerney urges that the representative order should be made and that the claim of Mr Mills alone should be advanced to a hearing, the claims of the other Plaintiffs in the pleadings lying in abeyance until the question of agency is determined. Mr McInerney submits that, in this way, the agency issue will not need to be determined in thirteen separate proceedings with consequent wastage of expense and time, and the risk of conflicting judgments, and there will be an issue estoppel, of which all parties can take advantage.

8 I agree that the result proposed by Mr McInerney is desirable. I agree that the agency issue is, indeed, a common issue of fact and of law in all claims made by the Plaintiffs. The facts upon which that issue depends are highly unlikely to vary from the case of one Plaintiff to the case of another, as the focus of attention is the relationship between Better Buildings and the other Defendants and not on what was said to each individual Plaintiff by any of the Defendants other than Better Buildings.

9 However, I do not think that the way of managing the proceedings urged by Mr McInerney is appropriate. At present, there is one proceeding with thirteen Plaintiffs. Each Plaintiff has a separate and distinct case, as each must prove what was said to him, her or it, what reliance was placed on the representation, and what loss and damage was suffered. Further, each Plaintiff must show what particular circumstances in his, her or its case warrant the discretionary relief under s 55(2A) of the Conveyancing Act which each seeks.

10 In other words, under the umbrella of one proceeding there are really thirteen separate proceedings.

11 What Mr McInerney urges is that this single proceeding be split, one part of it, i.e. Mr Mills' case, going forward to trial and possibly appeal, and the other twelve parts of it remaining in limbo in the meantime. If adopted, this course is highly likely to cause complications in case management and on the question of costs. I think that the desirable result sought by Mr McInerney can be achieved by another means.

12 UCPR 7.4 relevantly provides:

“(1) Subject to subrule (5), this rule applies to any proceedings concerning:

(a) any matter in which:
(i) numerous persons have claims against the same person, and
(ii) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances, and
(iii) the claims of all those persons give rise to a substantial common issue of law or fact, or

(b) any matter in which numerous persons have the same liability.

(2) Proceedings to which this rule applies may be commenced and, unless the court orders otherwise, carried on by or against any one or more persons as representing any one or more of them.
…
(4A) If it appears to the court that determination of the issue or issues common to all the represented persons will not finally determine the claims of all the represented persons, the court may give directions in relation to the determination of the remaining issues.
…
(4C) A represented person, whether or not joined as a party, is taken to have brought proceedings on the day on which the person became a represented person on all of the person’s causes of action that may be determined by judgment in the proceedings.”

13 I am satisfied that the requirements of paragraph (1) are met in this case. No Defendant has submitted to the contrary. Paragraphs (2) and (4) make it clear that all thirteen Plaintiffs do not have to be party to these proceedings in order to get the benefit of a representative order: Mr Mills alone may be appointed their representative. Paragraph (4A) enables the Court to give directions for the resolution of the claims of all Plaintiffs other than Mr Mills, insofar as those claims depend on issues other than the agency issue.

14 Paragraph (4C) makes it clear that, if the Plaintiffs other than Mr Mills are removed as parties to these proceedings, they suffer no disadvantage by lapse of time if, having the benefit of a judgment on the agency issue in their favour, they then decide to prosecute their own individual proceedings for relief. In short, no limitation defence can be raised against them.

15 Leaving all Plaintiffs other than Mr Mills to conduct their own separate proceedings means that the Plaintiffs will not be disadvantaged in terms of time and expense as they would be as Plaintiffs in one proceeding if one or other of their number failed to comply with directions for the filing of evidence or discovery. One Plaintiff will not be burdened, directly or indirectly, with the costs of an unsuccessful issue raised by another Plaintiff. Each Plaintiff will be able to decide whether he, she or it wishes to retain the same lawyers or separate lawyers. Some issues will overlap in all proceedings, particularly if the same witnesses are to give evidence for the Defendants in all cases and issues of credit are raised. If all Plaintiffs wish to do so, they can coordinate their efforts so as to warrant a direction that all their proceedings be heard at the same time, evidence in one being evidence in the others. But they are not compelled to do this, of course, if their individual circumstances dictate otherwise.

16 For these reasons, I will make a representative order as to the common issue of agency, but only on condition that all Plaintiffs other than Mr Mills, discontinue on the express understanding that, upon determination of Mr Mills' proceedings, they will be at liberty to commence their own separate proceedings, if so advised, without penalty.

17 I will stand the Notice of Motion over for a short time to enable the Plaintiffs to bring in Short Minutes of Order effecting these reasons and providing for further directions to enable Mr Mills' proceedings to be brought to trial as soon as possible.

18 I order that the costs of this application – that is, the costs relating to the issue of whether there should be a separate order – be costs in the cause. The cause may turn out to be the one in which there is only one Plaintiff, namely Mr Mills. It may then be at the end of the proceedings that Mr Mills alone – rather than he and the other Plaintiffs – has to bear the costs of this application if he is unsuccessful or the trial judge so orders. Nevertheless, I think that is the inevitable consequence of the costs order that I should make, bearing in mind this is essentially a case management question.

– oOo –