Mir Bros Trading Co Pty Ltd v Cavasinni Constructions Pty Ltd
[2015] NSWSC 421
•16 April 2015
|
New South Wales |
Case Name: | Mir Bros Trading Co Pty Ltd v Cavasinni Constructions Pty Ltd |
Medium Neutral Citation: | [2015] NSWSC 421 |
Hearing Date(s): | 23 February 2015 |
Date of Orders: | 16 April 2015 |
Decision Date: | 16 April 2015 |
Jurisdiction: | Common Law |
Before: | Harrison AsJ |
Decision: | The Court orders that: |
Catchwords: | PRACTICE AND PROCEDURE - pleadings - application to file and serve a further amended statement of claim – whether there was a mistake in the name of the parties – whether new causes of action arise from substantially the same facts – whether the justice of the case requires leave to amend – whether the amendments would be futile |
Legislation Cited: | Civil Procedure Act 2005 (NSW) |
Cases Cited: | Alec Finlayson Pty Ltd v Royal Freemason Benevolent Institution of New South Wales Nominees Ltd [2013] NSWSC 1168 |
Texts Cited: | Clark & Lindsell on Torts, 19th ed |
Category: | Procedural and other rulings |
Parties: | Mir Bros Trading Co Pty Ltd (Plaintiff |
Representation: | Counsel: |
File Number(s): | 2013/45104 |
Publication Restriction: | Nil |
JUDGMENT
HER HONOUR: By notice of motion filed 28 November 2014, the plaintiff seeks an order that it be granted leave to file and serve a further amended statement of claim pursuant to ss 64(1) and 65(2) of the Civil Procedure Act 2005 (NSW).
The plaintiff is Mir Bros Trading Co Pty Ltd (“Mir Bros”). The current defendant is Cavasinni Constructions Pty Ltd (“Cavasinni Constructions”).
Mir Bros seeks to amend its claim against Cavasinni Constructions and add two defendants, namely, the owner of adjoining land, Cavasinni Developments Pty Ltd (“Cavasinni Developments”) and the managing director of both Cavasinni Constructions and Cavasinni Developments, Mr Vittorio Cavasinni (“Mr Cavasinni”). For convenience, I shall refer to Cavasinni Constructions, Cavasinni Developments and Mr Cavasinni as “the Cavasinni Interests” except where the identity of the separate entities is required. The same counsel appeared on behalf of Cavasinni Constructions, Cavasinni Developments and Mr Cavasinni. As there have been a number of draft proposed further amended statements of claim, for ease of identification I have marked the latest version of the PFASC as MFI - 1.
Mir Bros relied on the affidavit of Sam Mir dated 28 November 2013 and that of its solicitor, Marcus Graham dated 28 November 2014. The Cavasinni Interests relied on the affidavit of their solicitor Brett Wilson dated 30 January 2015.
Factual background
The general manager of Mir Bros is Mr Sam Mir (“Sam Mir”). Sam Mir’s father, Mr John Mir (“John Mir”) is the director of the Mir Bros Group of companies. Mir Bros is the owner of a parcel of land at Wetherill Park (“the Mir Land”). Cavasinni Constructions was the owner of the adjoining land (“the Cavasinni Land”). Cavasinni Developments undertook a development of industrial units on its land, which included significant civil engineering works on the Mir Land and the construction of a retaining wall along the common boundary of the two properties. The Cavasinni Land has since been sold.
I shall briefly outline Sam Mir’s version of events. For the purposes of this application only, I have accepted his version of events. I acknowledge that at trial, his version would be the subject of cross examination.
It is common ground that in 2000, the parties entered into an oral agreement that formed the contract between them. Sam Mir says that in 2000 Mr Cavasinni, as managing director of Cavasinni Constructions, approached Mir Bros and said that, “he wanted to develop the Cavasinni Land by constructing factory units on it.” Sam Mir deposes that Mr Cavasinni also said “that due to the topography of the Mir Land and the Cavasinni Land, he would be required to cut and fill the Mir Land to achieve the desired floor level.” From this conversation it is unclear how Sam Mir knew that Mr Cavasinni was acting as managing director of Cavasinni Constructions.
Sam Mir says that initially, he and John Mir said to Mr Cavasinni that Mir Bros would allow Cavasinni Constructions access to the Mir Land to construct walls along the boundary line, provided that the boundary walls were strong enough to withstand backfill to their full height and lateral load if Mir Bros was to construct a building on the Mir Land; and that the Mir Land was reinstated and compacted pursuant to a geotechnical engineer’s certificate following construction. This conversation, as deposed in Sam Mir’s affidavit of 28 November 2013, is not in the form required at trial. It is important as it forms the basis of the contract between them.
By about 15 September 2000, Cavasinni Constructions commenced earthworks. Sam Mir says that at that time, Cavasinni Constructions did not have the permission of Mir Bros to do so. Nor had there been any agreement between them as to the terms of any permission.
On 15 September 2000, John Mir wrote to the manager at “Cavasinni Constructions”, marked for the attention of “Mr Vic Cavasinni”. John Mir stated:
“Our recent inspection of the above property revealed that pursuant to the civil engineering and construction works being carried out on your site along our eastern boundary, certain activities were carried out upon our land without our consent.
It is acknowledged that you did approach this office some time ago to discuss certain issues to which you were to provide further information and details for our consideration and determination. This simply was not carried out.
We were quite surprised to observe the extent of earthworks carried out upon our land without any prior notification or consent. We noted excavation of earthworks along our eastern boundary were generally around 7 metres or more in width with varying depths between (0.5-2) metres extending approximately 200 metres. Also, we noted a large stockpile of spoil located along the south eastern boundary of the subject property.
We are very disappointed and concerned that this activity has taken place without any understanding and agreement being reached between the parties. However, notwithstanding the foregoing, we would like to approach this matter in a friendly and neighbourly manner provided you are prepared to address the following issues to our satisfaction:
Would you kindly advise as to:
1.1 When will the stockpile of spoil located on the above land be removed completely; and
1.2 When will the above land be restored to our satisfaction.
Please confirm as per our earlier discussion:
2.1 That all excavated and disturbed areas be refilled and compacted right up to the boundary line using clean compactable clay/shale material that came off our land; and
2.2 That all controlled fill compaction work will be carried out under the supervision of an approved geotechnical laboratory and certified accordingly; and
2.3 That the retaining walls (factory walls) you are erecting will be structurally adequate to retain the material along our boundary to their full height.
We would expect to receive a written undertaking from you in respect to paragraphs 2.1 to 2.3 inclusive that you will comply with the said requirements at your earliest convenience.
We would require that you address the following issues as a matter of urgency and we await your advice in that regard.”
On 1 October 2000, Mr Cavasinni, on a Cavasinni Construction letterhead, replied:
“…
In direct reference to each point on your letter, the following is our response:
1.1) It is our intention to remove the stockpile as soon as practical. Should the existing situation be of any hindrance please contact me.
1.2) The land will be restored as soon as the building’s panels have been erected, sealed and the compaction of the fill is complete. This will be done progressively, as each building is constructed.
2.1) The disturbed areas will be refilled right up to the boundary line using compactable material as approved by a geotechnical engineer.
2.2) All controlled fill supervision will be conducted by SMEC Testing and will be certified as required.
2.3) The retaining walls have been designed to accommodate the existing material at full height. Please find the attached engineer’s certificate for your files.
…”
Between 2001 and March 2007, the construction of factory walls by Cavasinni Constructions along the eastern boundary of the Mir Land and the Cavasinni Land took place.
On 26 January 2007, Mr Cavasinni, on a Cavasinni Constructions letterhead, wrote to Mir Bros’ solicitor stating:
“We refer to your letter dated January 23, 2007 and we take umbrage to the need of Mir Bros Group to deal with the issues stated via legal means.
We do agree that the works have not been completed, principally because there is ongoing activity with construction of more buildings. Rest assured that once the work is completed, we will meet our requirements.” [The letter dated 23 January 2007 is not in evidence]
On 30 January 2007, Mir Bros’ solicitor responded:
“At the time our client agreed to allow you to conduct the excavation it was envisaged by our client that the development and associated works would be completed within a reasonable time. Your failure to advise our client of the time frame that the works would be completed only confirmed our client’s expectation that they would be completed within a reasonable time.
We note the works have been conducted over a 5 year period which is not acceptable. There appears to be no valid reason why the land disturbed at the initial stage of the works has not been reinstated to its natural existing levels and the rubbish removed given that the first factory is complete and sold.
Furthermore, the requirement for disturbed areas to be refilled using compactable material approved by a geotechnical engineer and the compaction to be supervised and certified by SMEC Testing should have occurred at the time the initial stage was refilled. Therefore these documents should be available.
Please provide all the documents and information requested in our letter dated 23 January 2007 to our office as a matter of urgency.
We confirm due to your failure to comply with the agreement you are not permitted or authorised to access our client’s property until notified further in writing of our client’s consent.”
As at 9 March 2007, the outstanding works still were not completed. On that day Mr Cavasinni, on a Cavasinni Constructions letterhead, wrote:
“This is a courtesy note advising you and your client that the works to the factory wall under construction, adjacent to your client’s property, is nearing completion. Blockfill will be placed on Wednesday, and the granular backfill will commence after the 21-day curing time of the blockfill is achieved.
When the works to this factory wall is complete, any outstanding works to your client’s property will be attended to.”
It is important to appreciate that the terms of the contract and the identity of the parties to that contract were not identified when the contract was made. This is because the discussions in relation to the agreement that took place were oral ones. As at 9 March 2007, the work on the Cavasinni Land had not been completed. Hence, Cavasinni Constructions advised that it was not in a position to carry out the remedial works on the Mir Land. It is not clear the date by which the remedial work should have been completed, nor what was a reasonable time for that work to be finalised. The date of the breach of contract is one that can only be ascertained at trial after evidence has been given and factual findings made. It is from that date that damages can be calculated. However, it is also argued that there are latent defects in the works carried out on the Cavasinni Land (that have affected the Mir Land) that have only recently become apparent.
Procedural history
On 12 February 2013, Mir Bros filed a statement of claim. On 11 April 2014, Mir Bros filed an amended statement of claim (“ASC”). Cavasinni Constructions consented to the amendments to the ASC on the basis that such consent was without prejudice and to its right to rely upon any limitation defences available to it.
The pleadings in the ASC allege that:
(a)Mr Cavasinni was the managing director of Cavasinni Constructions (at [6]).
(b)Cavasinni Constructions was related to Cavasinni Developments at the relevant time ([2]).
(c)Mr Cavasinni sought permission of Mir Bros to undertake specific works on the Mir Land as part of Cavasinni Developments’ development of its land ([3] and [8]).
(d)Mir Bros gave its consent on certain conditions (“the conditions”) ([4] and [6]) and an agreement was entered into (“the Agreement”) ([7]).
(e)Cavasinni Constructions owed Mir Bros a duty of care to carry out its works with reasonable care ([13a]).
The following separate causes of action were alleged from [10]-[15] of the ASC:
Breach of the Agreement ([10], [12] and [14]).
That the matters complained of constitute a nuisance caused or permitted by Cavasinni Constructions, their servants and agents ([11]).
Breach of duty of care ([15]).
On 30 April 2014, Cavasinni Constructions filed its defence to the ASC. Cavasinni Constructions denies the terms of the oral contract as alleged by Mir Bros. It also denies that Mir Bros is entitled to orders in the nature of specific performance. It alleges that the proceedings are commenced out of time by reason of s 14 of the Limitation Act 1969 (NSW); and that Mir Bros is estopped, by its silence and inaction, from now bringing these proceedings 13 years after the alleged agreement.
Since Mir Bros commenced proceedings, the preparation of its case for trial has been less than ideal. So much so that on 8 November 2013, while Registrar Kenna extended time for Mir Bros to file its evidence in chief to 29 November 2013, she ordered that it was not permitted to serve further evidence after that date except with leave of the Court.
On 3 October 2014, Gadens filed a notice of change of solicitor on behalf of Mir Bros. The explanation for the delay in seeking leave to file a further amended statement of claim is provided by Mr Graham, Mir Bros’ current solicitor. Mr Graham deposed that at the time of Gadens’ initial instructions, there was an extant order of this Court that Mir Bros file the FASC by 3 October 2014. That order has not been complied with. The solicitor then outlined the steps he has taken to finalise a FASC. They include a number of meetings with representatives of Mir Bros, requesting and obtaining a copy of the file from the former solicitors, requesting and obtaining documentation from Mir Bros including Fairfield Council records and finally, he has considered the affidavit of Sam Mir dated 28 November 2013.
The proposed amendments in the PFASC
The proposed further amended statement of claim (“PFASC”) is attached the motion filed by Mir Bros on 28 November 2014. The proposed amendments contained in the PFASC fall into three categories:
(a)amendments as to the way in which the case is put against Cavasinni Constructions;
(b)amendments that add causes of action against Cavasinni Constructions; and
(c)amendments that add Cavasinni Developments and Mr Cavasinni as defendants to all of the claims made.
Specifically, those amendments are as follows:
An allegation that Cavasinni Developments and Mr Cavasinni were also parties to the Agreement and its breach ([3]-[5], [6] and [10] of the PFASC).
An allegation of trespass by the Cavasinni Interests, in the event that they did not enter the Agreement ([5A], [6]) including an allegation of continuing trespass by leaving or permitting to remain upon the Mir Land large stockpiles of excess material excavated from the Cavasinni Land ([6A]).
A claim that the Cavasinni Interests are estopped from denying the Agreement ([7], [7A], [7F] and [7G]).
If the Court finds that there was no Agreement, an allegation that the Cavasinni Interests contravened s 52 of the Trade Practices Act 1974 (Cth), in leading Mir Bros to believe that the Agreement was in place ([7B]-[7E]).
An allegation that Cavasinni Developments and Mr Cavasinni were also guilty of the nuisance alleged ([11]), which Mir Bros says is a continuing nuisance (by leaving or permitting to remain upon the Mir Land large stockpiles of excess material excavated from the Cavasinni Land and by constructing and leaving or causing to remain upon the Mir Land underground drainage).
An allegation that Cavasinni Developments and Mr Cavasinni also owed a duty of care, which they breached ([12]-[13]).
An allegation of continuing trespass against the Cavasinni Interests by constructing and leaving or causing to remain upon the Mir Land underground drainage ([13A]-[13C]).
The Cavasinni Interests oppose the amendments set out in the PFASC subject to a few exceptions. They are the [6A] trespass, subject to limiting the period to between 12 February 2007 and 31 March 2007; the first nuisance claim at [11] (but subject to limiting the period to between 12 February 2007 and 31 March 2007); the common law duty claim and statutory claim at [12] and [13]; and the claim for indemnity at [15] and [16].
Leave to amend - general principles
Mir Bros seeks leave pursuant to ss 64 and 65 of the Civil Procedure Act. Rule 19.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) applies to amendments to add parties.
Sections 64 and 65 of the Civil Procedure Act read:
“64 Amendment of documents generally
(cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)
(1) At any stage of proceedings, the court may order:
(a) that any document in the proceedings be amended, or
(b) that leave be granted to a party to amend any document in the proceedings.
(2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.
(3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.
(4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.
(5) This section does not apply to the amendment of a judgment, order or certificate
65 Amendment of originating process after expiry of limitation period
(cf SCR Part 20, rule 4; DCR Part 17, rule 4)
(1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings.
(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as:
…
(b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court’s opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or
(c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court’s opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.
(3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced.
(4) This section does not limit the powers of the court under section 64.
(5) This section has effect despite anything to the contrary in the Limitation Act 1969.
(6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings.”
UCPR 19.2(1) and (4) read:
“19.2 Amendments to add or remove parties
(1) Subject to subrules (2) and (3), the amendments that may be made under rule 19.1 include an amendment that would have the effect of adding a party to, or removing a party from, the proceedings.
…
(4) If a person is added as a party under this rule, the date of commencement of the proceedings in relation to that person is taken to be the date on which the amended document is filed.”
The specific provisions of s 65 do not limit the general power conferred by s 64. Under s 64 an amendment may be allowed even if its effect is to add a statute barred cause of action.
The general principles that apply to an application for leave to amend are well known. Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 makes clear that the paramount consideration is one of the dictates of justice as between the parties: see also Dymocks Book Arcade Pty Ltd v Capral Ltd [2011] NSWSC 1423 at [7]-[10] and [50].
Mir Bros’ preferred position is to be granted leave to amend under s 65, as this allows the amendments to take effect from the date on which the proceedings were commenced, namely, 12 February 2013. Mir Bros’ fall back position is to rely upon s 64, where the amendments date from the date upon which the PFASC is filed. I shall firstly deal with the applications under s 65, then with the Court’s discretion to grant leave under s 64; and finally, with whether it would be futile to amend based on the strength of the Cavasinni Interests’ limitation defence and/or a want of evidence for the new claims.
Application of s 65(2)(b) - has there been a mistake?
Mir Bros submitted that it is clear that it intended to claim against “the party who sought access and agreed to the conditions, the party who undertook the works and the party responsible for the works”. Mir Bros argued that Cavasinni Constructions, Cavasinni Developments and Mr Cavasinni all fall within, or are likely to fall in, one or more of the categories of that description, since:
The oral agreement was made between Mr Cavasinni and John Mir. Mr Cavasinni was a director of both Cavasinni Constructions and Cavasinni Developments. John Mir was a director of Mir Bros. The discussions between them lacked clarity in identifying precisely the parties to the agreement.
Mr Cavasinni was the directing mind concerning Cavasinni Developments’ development and the works on the Mir Land.
Cavasinni Developments, as the adjoining owner, was the developer of its land and the party authorising and directing the works on the Mir Land.
Cavasinni Constructions undertook some of the works, although its precise arrangement with Cavasinni Developments and Mir Bros is unknown at this stage. Mir Bros’ current position is that it has no knowledge of the extent to which the works it undertook under that arrangement coincided with the works the subject of the oral agreement, and that those matters remain to be determined at a final hearing.
Mir Bros submitted that since Cavasinni Constructions, Cavasinni Developments and Mr Cavasinni were all intended to be parties, there has been a mistake made in limiting the claim to Cavasinni Constructions, and that the amendments are consequently necessary to identify the actual intended parties to the agreement.
Section 65(2)(b) allows a party to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the Court’s opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party.
Counsel for Mir Bros submitted that these amendments fall within s 65(2)(b) since the mistake lies only in the name, not in the description of the parties, and so consequently the mistake is neither misleading nor as such to cause reasonable doubt as to their identity.
Counsel for Mir Bros referred to the well known passage in Bridge Shipping Pty Ltd v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231 where McHugh J (at 259-260) explained:
“The concluding words of sub-r (4) ‘whether or not the effect is to substitute another person as a party’ enable a plaintiff to substitute one person for another person as a party to the action. Those words also imply that the fact that the plaintiff intended to sue the person who was sued does not prevent the sub-rule applying provided that there was a mistake in the name of the person sued. Moreover, a plaintiff may make ‘a mistake in the name of a party’ not only because the plaintiff mistakenly believes that a certain person, whom the plaintiff can otherwise identify, bears a certain name but also because the plaintiff mistakenly believes that a person who answers a particular description bears a certain name. Thus, a plaintiff may make a mistake ‘in the name of a party’ because, although intending to sue a particular person whom the plaintiff knows by sight, the plaintiff is mistaken as to that person’s name. Equally, the plaintiff may make a mistake ‘in the name of a party’ because, although intending to sue a person whom the plaintiff knows by a particular description, eg the driver of a certain car, the plaintiff is mistaken as to the name of the person who answers that description. In both cases, the plaintiff knows the person intended to be sued by reference to some property or properties which is or are peculiar to that person but is mistaken as to the name of that person. In the first case, the properties which identify the person are personal characteristics; in the second case, they are the properties which are of the essence of the description of that person. But for the purpose of sub-r (4) that distinction is irrelevant. In both cases, the plaintiff was mistaken only as to the name of the person intended to be sued. There is no warrant for treating sub-r (4) as dealing only with the case where the properties which identify the party are inherent properties. That is, there is no warrant for treating sub-r (4) as dealing only with the case where the plaintiff says: ‘The person I wish to substitute as a party is that entity which I identified by certain inherent properties peculiar to it but whose name I mistakenly believed was X.’ The sub-rule applies equally to the case where the plaintiff says: ‘The person I wish to substitute as a party is that entity which I identified by reference to certain properties which are true of it and of no one else and whose name I mistakenly believed was X.’ In both cases, a mistake in the name of the party has occurred and can be seen to have occurred only because the person sued does not have or is not identified by some property or properties which is or are peculiar to the person intended to be sued and to no one.”
“Sub-r (4)” is r 36.01(4) of the Supreme Court (General Civil Procedure) Rules (1996) (repealed) (Vic) which has textual similarity with s 65(2)(b) of the Civil Procedure Act. In Greenwood v Papademetri [2007] NSWCA 221 at [58] Campbell JA commented on the application of Bridge Shipping to s 65(2)(b):
“[58] The principles stated in Bridge Shipping have been applied in this Court to the construction of Pt 20 r 4 Supreme Court Rules and to the corresponding provisions in the former District Court Rules 1973: eg, Archbishop of Perth v ‘AA’ to ‘JC’ inclusive (1995) 18 ACSR 333 at 349 per Cole JA (with whom Meagher JA agreed); Maamary v Pepsico Australia Pty Ltd [2001] NSWCA 375 at [51] ff per Giles JA (with whom Mason P and Studdert J agreed). In my view they should also be applied to the construction of s 65(2)(b).”
I respectfully agree with those comments of Campbell JA.
Mir Bros submitted that its broad proposition is that there was an agreement between two men, both of whom knew there were companies standing behind each other and that there could be no doubt that Mr Cavasinni was part of the agreement, acting for himself as the “directing mind”, and also on behalf of Cavasinni Developments, as the owner, and for Cavasinni Constructions, who undertook the work. Counsel for Mir Bros also submitted that after the interaction between John Mir and Mr Cavasinni, the correspondence concerning the agreement was from Cavasinni Constructions which may have led to Mir Bros, as counsel put it, “closing our eyes as to whether other parties were involved” and commencing proceedings against only Cavasinni Constructions. I accept that the correspondence from Mr Cavasinni was unusually on Cavasinni Construction’s letterhead. It was never on Cavasinni Development’s letterhead.
Mir Bros again referred to Greenwood at [61] and [62], where Campbell JA considered whether s 65(2)(b) applied to multiple parties. His Honour referred to passages from Greentree v G D Searle & Co (Supreme Court of NSW, 31 July 1992, unreported) at [14] and [15] that he found to be instructive:
“[61] McInerney J then considered whether the rule enabled the names of three defendants to be substituted for the name of one defendant. He said (at 14):
‘… the entity intended to be sued is that entity with the properties described in the statement of claim. What has appeared … is that, on the information supplied by the defendants, there is more than one entity that has such properties.’
[62] In response to an argument that what was being done was adding parties rather than substituting parties, McInerney J said (at 15):
‘I cannot accept, in principle, that it becomes clear that if more than one party shares certain properties, then in those circumstances, if there has been a mistake in the naming of the party, that it is not possible under this rule to substitute more than one party. The Rule of construction is that the singular form includes the plural (see s 8(b) of the Interpretation Act 1986). I cannot accept this is adding of parties. Adding of parties normally includes the leaving of the original party in the action. In this case this is clearly a substitution of three parties for one party …’.”
In these current proceedings, Mir Bros intends to leave the original defendant as a party in the action.
Counsel for Mir Bros also referred to Greenwood at [34] and [35] where Campbell JA explained:
“[34] Section 65(2)(b) does not confer on the court power to correct any and every mistake that has been made in the name of a party to the proceedings. It applies only to a mistake that, in the court’s opinion, is neither misleading, nor such as to cause reasonable doubt as to the identity of the person intended to be made a party. In some cases where an amendment is sought under s 65(2)(b) there may be considerable argument about whether a mistake in the name of a party has those characteristics. However, no such argument was put to us on the present appeal.
[35] Even if a proposed amendment is one whose effect could be described by the language in para (b) of s 65(2), there is still a discretion in the court whether to permit that amendment. Section 65(2) contemplates that any amendment made under s 65(2) will be effected through leave granted under s 64(1)(b). Thus, the discretion of the court concerning whether to grant leave to amend under s 65(2) needs to be exercised in accordance with s 64(2). Section 64(2) itself requires the court to exercise its discretion in accordance with s 58, which in turn requires the court to have regard to the provisions of ss 56 and 57. Even if it were not inherent in the grant of a discretion to a judicial officer, s 58(2)(b) enables the court to have regard, in an application for an order under s 65(2)(b), to matters such as the knowledge that the person proposed to be added as a party had of the proceedings during the limitation period, and the nature and degree of any prejudice that the person sought to be added would suffer if the order were made.”
In response, the Cavasinni Interests submitted that the assertion that there has been a mistake should be rejected as no direct evidence of any mistake has been given by Mir Bros. It was submitted that Mir Bros contention that the mistake can be inferred from the pleadings fails, since the original version of the pleadings expressly identified both Mr Cavasinni, as the person engaged in the alleged discussions in 2000, and Cavasinni Developments, as a related entity to Cavasinni Constructions and as the owner and occupier of the Cavasinni Land prior to its subdivision and sale in 2007 or 2008, indicating that Mir Bros always knew of the identities of Mr Cavasinni and Cavasinni Developments and of their respective roles in the factual matrix.
Consequently, the Cavasinni Interests submitted that Mir Bros knew of Cavasinni Constructions identity as a builder and did not erroneously think that it was the owner and developer of the land. Nor did Mir Bros erroneously conflate Cavasinni Constructions and Mr Cavasinni. Rather, Mir Bros knew that Mr Cavasinni was the managing director of Cavasinni Constructions and the person who, on a practical level, Mir Bros’ representatives had dealt with. The crux of those submissions was that Mir Bros made a forensic decision not to make a claim against Mr Cavasinni and Cavasinni Developments, not a mistake, and that s 65(2)(b) does not apply to permit a plaintiff to reverse informed strategic decisions from which it later wishes to resile.
The issue for this Court is who Mir Bros intended to sue. In ascertaining those intentions it is necessary to again briefly refer to the comments of Campbell JA in Greenwood at [56]-[57] and [59]-[60]:
“[56] Even though McHugh J in this passage talks of ‘substituting’ one person for another person as a party to the action, that was because the particular case with which the Court was then concerned involved what was clearly a substitution of one entity for another.
[57] In the result, the application in Bridge Shipping failed. It failed because Bridge Shipping had at all times intended to sue the owner of the vessel. Its mistake did not concern the name of the entity that was the owner of the vessel. Rather, its mistake was in thinking that the owner of the vessel, rather than the charterer, was the carrier of the goods.
…
[59] In Greentree v G D Searle and Co (Supreme Court of NSW, 31 July 1992, unreported) McInerney J considered a situation where various plaintiffs in a class action sought damages arising from their use of a defective product. The proceedings had been commenced against an entity described as ‘G D Searle and Co’. Those proceedings were begun in the belief that G D Searle and Company had manufactured, designed and marketed the product. No such entity as ‘G D Searle and Company’ existed. Rather, there was an entity called ‘G D Searle and Co’. Further, G D Searle and Co had carried on the business relating to the product during only part of the time to which the claim related, up to May 1978. From May 1978 until January 1986 another entity, SCI Corp, carried on the business. In January 1986 G D Searle and Co was renamed the Nutrasweet Company, and another entity, that had been incorporated in 1985, adopted the name G D Searle and Co, and, it was alleged, carried on the business thereafter. Application was made under Pt 20 r 4 Supreme Court Rules to substitute the Nutrasweet Company, SCI Corp, and G D Searle and Co for G D Searle and Company. Part 20, r 4 then provided:
(1) Where any relevant period of limitation expires after the date of filing of a statement of claim and after that expiry an application is made under rule 1 for leave to amend the statement of claim by making the amendment mentioned in any of subrules (3), (4) and (5), the Court may in the circumstances mentioned in that subrule make an order giving leave accordingly, notwithstanding that that period has expired.
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(3) Where there has been a mistake in the name of a party and the Court is satisfied that the mistake was not misleading or such as to cause reasonable doubt as to the identity of the person intended to be made a party, the Court may make an order for leave to make an amendment to correct the mistake, whether or not the effect of the amendment is to substitute a new party.”
[60] McInerney J held that there had been a mistake in the name of a party, in the sense explained in Bridge Shipping. This was, in substance, because the plaintiffs had intended to sue the entity that had manufactured, designed and marketed the product, and mistakenly believed that G D Searle and Company had manufactured, designed and marketed the product at all relevant times.”
It is possible that Mir Bros, in naming the entities who answer a particular description, may have made a mistake in the sense explained in Bridge Shipping. Mir Bros may have intended to claim against “the party who sought access and agreed to the conditions, the party who undertook the works and the party responsible for the works” and has made a mistake in naming that party as only Cavasinni Constructions.
However, there is no evidence from Mir Bros to establish that it had intended to sue all the entities involved in the works undertaken on the Mir Land. Although statements were made by counsel in submissions about the possibility that “confusion” arose from the way in which the correspondence between the parties was conducted, no direct evidence of this “confusion” on Mir Bros part was proffered, other than the correspondence itself. Without such critical evidence, this Court cannot be satisfied that there has been a mistake in the name of a party.
The application of Mir Bros to add Mr Cavasinni and Cavasinni Developments as defendants under s 65(2)(b) fails. However, for reasons set out below, I would grant leave for the proposed defendants to be added under s 64. The consequence of that, however is that the amendment will only take effect from the date upon which the PFASC is filed: UCPR 6.28 and 19.2(4); Street v Luna Park Sydney Pty Ltd [2006] NSWSC 230 per Brereton J at [47], leaving for determination the issue of limitation periods, that, for reasons articulated below, should be determined at a final hearing.
Application of s 65(2)(c) - do the causes of action arise from substantially the same facts?
Mir Bros also seeks leave to add several new causes of action against Cavasinni Constructions. Section 65(2)(c) allows a party to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court’s opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.
Mir Bros submitted that the facts central to the claims made in the ASC are those relevant to the agreement made between John Mir and Mr Cavasinni, and what was done or not done pursuant to that agreement. Counsel for Mir Bros argued that it was clear that the claims made in the PFASC rely on the same or substantially the same facts that are central to the claims made in the ASC. Mir Bros further submitted that s 65(2)(c) does not require the facts to be the same, just substantially the same, and that whether that test is met is a question of “degree and impression”: Dymocks Book Arcade at [7].
Mir Bros referred to Becket v Le [2012] NSWSC 1193, where Garling J at [17] set out the approach this Court should take in determining whether there are the same or substantially the same facts. His Honour lists several features to be considered in making such a determination, including where the parties to the cause of action for relief claimed are identical and where the relief claimed is identical. His Honour stated:
“[17] In my opinion, the new causes of action and claims for relief do arise out of the same or substantially the same facts as the existing proceedings. Whilst the facts, as is obvious from the additional facts which are pleaded, are not identical, they are nevertheless substantially similar. The substantial similarity arises at least in these ways:
(1) The parties to the causes of action and the relief claimed are identical.
(2) The causes of action arise from a single interaction, albeit over a number of hours, between the plaintiff and the defendants on 29 April 2007.
(3) The additional facts which are sought to be pleaded would have been relevant evidence to be given at a hearing on the causes of action in the original statement of claim and were included in the plaintiff’s evidentiary statement.
(4) The factual and forensic basis for the acts amounting to the new causes of action remain the same as the earlier causes of action; that is, that there was no proper or valid consent to surgery or any of the treatment, including the pre-operative procedures. The evidence of the first defendant would have covered the conduct of the pre-operative procedures as part of his factual defence to the original allegations, including the allegations of the absence of a lawful consent. It will be said by the first defendant that the conduct of the plaintiff during the pre-operative procedures was evidence of, or else corroborative of, the giving of lawful consent.”
Counsel for Mir Bros submitted that as in Becket, the parties are common members of a group, and the causes of action arise from a single interaction (between Mr Cavasinni and John Mir).
In Becket, Garling J also stated at [18]:
“[18] …I am not satisfied that the amendments will cause any actual prejudice to the first defendant or to the fifth defendant. None was the subject of evidence and none was asserted from the bar table.”
Mir Bros submitted that as in Becket, Cavasinni Constructions have not advanced any evidence of, nor have they raised any suggestion that they might suffer, any prejudice from the proposed amendments.
In response, Cavasinni Constructions submitted that the new claims are based upon causes of action which do not arise from the same (or substantially the same) facts. Counsel for the Cavasinni Interests argued that the trespass and nuisance claims involving the stockpiles of excess material and the drainage are entirely new claims independent of the facts already pleaded. In relation to the Trade Practices Act claim, counsel for the Cavasinni Interests submitted that since there is no previously pleaded fact going to the question of reliance or misleading or deceptive conduct, this action also does not arise from substantially the same facts.
It is my view that the new causes of action against Cavasinni Constructions arise out of substantially the same facts. I respectfully adopt the reasoning of Garling J in Becket, all of the claims essentially result from a single interaction (the meeting between Mr Cavasinni and Mr Mir). While the actual relief claimed may differ, the relief arises from the same or substantially the same set of facts set out in the original pleading. Importantly, there is no evidence of any prejudice suffered by the defendants in allowing the new claims to be made. In these circumstances, the new causes of action against Cavasinni Constructions should be allowed pursuant to s 65(2)(c).
For reasons I will briefly set out below, even if I was not satisfied that the statutory criteria for s 65(2)(c) were met, I would allow Mir Bros to add the new causes of action pursuant to s 64. Again, that would leave for determination the issue of limitation periods, which for reasons given below, should be left until final hearing.
Does the justice of the case require leave to amend under s 64?
Leaving issues of limitation periods aside, Mir Bros submitted that the Court should grant leave to amend pursuant to s 64, because the justice of the case requires it: Greater Lithgow City Council v Wolfenden [2007] NSWCA 180. Counsel for Mir Bros referred to Dymocks Book Arcade, where Ward J stated at [7]-[8]:
“[7] The exercise of the discretion to grant or refuse leave must not only be in accordance with s 64(2) of the Civil Procedure Act (Greenwood v Papademetri [2007] NSWCA 221 (at [35])), it must also adhere to the ‘dictates of justice’ (ss 56, 57 and 58 of the Civil Procedure Act). Those matters will generally require consideration of the nature and degree of any prejudice that may be suffered by the grant or refusal of the application (Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104 ; (2002) 54 NSWLR 207). Where the proposed amendment to the pleading satisfies the express criteria in s 65(2) of the Act, it is suggested that it will be unlikely that a person opposing the grant of leave will be able to demonstrate material prejudice (Ritchie's Uniform Civil Procedure at [65.45]).
[8] The exercise of discretion necessarily involves a balancing exercise (Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 at [51] and [66]) having regard to the circumstances of the particular case.”
Mir Bros also referred to Dymocks Book Arcade at [9] and [10] where Ward J discussed Aon Risk Services:
“[9] In Cement Australia, their Honours (Keane CJ, Gilmour and Logan JJ) said… at [51]:
Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.
[10] In Aon at [102], the factors to be weighed in the exercise of this discretion were said to include the nature and importance of the amendments to the plaintiff; the effect of the proposed amendments on the defendant; the delay in making the amendments; and, where there is delay in applying for amendment, whether an adequate explanation for the delay has been given. There, Gummow, Hayne, Crennan, Kiefel and Bell JJ said (at [98]) that the requirements for speed and efficiency “should not detract from a proper opportunity being given to the parties to plead their case” and at [102] that “The objectives stated in [the relevant rule there under consideration] do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will”. One of the factors to be weighed in the balance is the point the litigation had reached, relative to a trial, when the application to amend is made.”
I have taken into account that Mir Bros’ explanation for delay is essentially that it occurred when its former solicitors were acting for it. The proceedings were commenced on 12 February 2013, and while affidavits have been filed, no hearing date has been allocated as yet. These amendments will allow for the ventilation of the true issues relevant to the roles that the Cavasinni Interests played in relation to the works carried out on the Mir Land.
While I accept that there may be presumptive prejudice arising from the passing of approximately 13-14 years, it should be borne in mind that Mr Cavasinni is the controlling mind of both Cavasinni Constructions and Cavasinni Developments. He is the one who possesses the actual knowledge as to which entity was involved in the work carried out on the Mir Land and involved in the land’s remediation. Mr Cavasinni was in a position to outline any material prejudice that would be caused by the amendments, but neglected to do so.
In the exercise of my discretion and taking these above factors into account as well as ss 56, 57 and 58 of the Civil Procedure Act, the dictates of justice are to allow the amendments set out in the PFASC.
Are the amendments futile?
The last topic to be addressed is whether the amendments are futile. Overall, the Cavasinni Interests submitted that they are futile for two reasons. They are firstly, that since the actions claimed were already known in March 2007, they are all now time barred by virtue of s 14 of the Limitation Act; and secondly, that there is no evidence to support the viability of the new causes of action as Mir Bros can only file further evidence by leave of the Court. Mir Bros responded to this argument by saying that the limitation issues are not in the “clearest of cases” and should be determined at trial, that the relief sought is equitable in nature and that they should be given an opportunity to put on further evidence.
Clearest of cases?
Recently, in Issa v Issa & Anor [2015] NSWSC 112, White J (at [2]) referred to the well known passage in Wardley Australia Limited v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, where the High Court stated at 533 that:
“[2] …it is only in the clearest of cases that limitation question of the kind under consideration in that case should be decided in advance of the hearing of the action.”
The Cavasinni Interests accepted that, except in the clearest of cases, a question relating to a limitation period should not be decided at an interlocutory stage in advance of the hearing of the action. (my emphasis). However, they submitted that these circumstances are “clear” and it would be futile to allow the amendments. In support of this proposition they referred to Owners - Strata Plan 68372 v Allianz Australia Insurance Ltd [2012] NSWSC 691 where McDougall J at [5]-[6] and [32] stated:
“[5] Geotech claims that the proceedings against it disclose no reasonable cause of action, or are prejudicial, embarrassing or delaying. It says that this follows from the fact that, at the time the order was made, the relevant limitation period against it had expired. In short, it says that it has an unarguably sound limitation defence.
[6] It is clear that the court may entertain an application of this kind separately from and before the hearing of all issues in dispute. Equally, it is clear that a limitation question should not be decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. See Wardley Australia Ltd v Western Australia (1992) 175 CLR 514. Is this such a clear case?
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[32] The evidence for Geotech suggests that it would be put to very substantial expense to defend the proceedings. Having regard to the scale of the development and the nature of the defects alleged, that is entirely understandable. Thus, where (as in my view it is) the limitation question is clear, I think that the appropriate course is to bring the proceedings, as against Geotech, to an end.”
The Cavasinni Interests submitted that the limitation question in these circumstances falls within the clearest of cases, and that accordingly, it would be pointless for it to exercise its discretion to allow the amendments.
Mir Bros submitted that the Cavasinni Interests have not advanced any evidence to show that the present facts fall within the clearest of cases, nor should the Court should finally determine questions of the limitation periods against it; since those issues depend on factual findings and it should be left to a final hearing.
The above principles apply to all of the proposed amendments (with the exception to those referred to in the judgment at [25]) including the amendment to add Cavasinni Developments and Mr Cavasinni to the breach of contract claim, and the claim of estoppel.
As previously stated, Mir Bros’ claim arises from an oral agreement which took place in 2000. The terms of that agreement can only be ascertained at trial, as can the date of the breach of the agreement (if any) and the date liability (if any) crystallises. While the proposed amendments may raise limitation issues, they do not fall within the “clearest of cases”. Hence, it is arguable that the amendments are not futile and they should be allowed. It is necessary for me to briefly examine firstly, the breach of contract claim and the estoppel claim and secondly, the new claims, in order to ascertain whether the limitation points are arguable.
The breach of contract and estoppel claim
In regards to the breach of contract and the estoppel claim, Mir Bros submitted that both arguably relate to matters within the relevant limitation periods and consequently are not futile amendments. In regards to the proposed amendment to add Cavasinni Constructions and Mr Cavasinni to the breach of contract claim, Mir Bros argued that the structural deficiencies in the compacted fill on the Mir Land and in the wall included latent defects which were not discovered, or discoverable, until recently, and that accordingly, the limitation periods in relation to those defects commence to run from that time: Owners of Strata Plan 50946 v Multiplex Constructions (NSW) Pty Ltd & 4 Ors [2006] NSWSC 377 at [20]. As for the claim of estoppel, Mir Bros submitted that it is, in effect, a response to the failure by Cavasinni Constructions to admit the Agreement as alleged. Mir Bros argued that it does not raise a new cause of action since it is a matter that they could properly have raised in a reply to the defence: HP Mercantile Pty Ltd v Dierickx [2012] NSWSC 1005 at [253].
In line with the reasoning above, these amendments are not futile as it is arguable that the Limitation Act does not apply.
New causes of action
The Cavasinni Interests made specific performance in relation to the three new causes of action pleaded in the PFASC. They are trespass, nuisance and false or misleading conduct.
(i) Trespass
Mir Bros submitted that the new trespass claims are continuing trespasses insofar as they include work which the Cavasinni Interests undertook, and so far as they arise from construction works at the foundation of the wall. Counsel for Mir Bros argued that the limitation period has no present operation to these continuing trespasses, and so accordingly, any limitation defence would fail. Mir Bros further submitted that to determine the issue at this stage, on an interlocutory application, would be inappropriate since such a decision would involve factual findings. He said that the Cavasinni Interests’ submissions are focussed on the time of the agreement and the time when the works were completed but lack any focus on, or evidence regarding, the process which should have taken place under the agreement as envisaged.
Mir Bros submitted that since the trespass is continuing, the relief claimed is equitable in nature, and falls within s 23 of the Limitation Act. I shall refer to the s 23 argument later in this judgment as it applies to the other new causes of action and the relief sought in relation to all the claims.
The Cavasinni Interests disputed the contention that the trespass was continuing, and rather, characterised the conduct as three separate trespasses: (1) the works on the land, (2) the stockpiles and (3) the drainage. It conceded that that the latter two may be continuing based on a failure to remove such material. However, so far as the works on the Mir Land is concerned, Cavasinni Interests submitted that the trespass was now time barred since there was trespass after the end of March 2007.
An action of trespass to a plaintiff’s land will lie against a defendant, who, without the plaintiff’s permission or licence, enters the plaintiff’s land, unless the defendant’s entry is justified in some way: Halsbury’s Laws of Australia, Vol 26 at 787,123 [415-325]. Every unjustified entry directly by a person on land in possession of another, which is carried out either intentionally or negligently, is an actionable trespass, even though no damage is done thereby: Halsbury’s Laws of Australia, Vol 26 at 787,144 [415-480]. There must be physical intrusion onto the plaintiff’s land: Bathurst City Council v Saban (1985) 55 LGRA 165; (1985) 2 NSWLR 704 at 706, and the intrusion must be direct: Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152 at 39.
If chattel is placed on land with a possessor’s consent, the withdrawal of that consent creates a duty to remove that chattel, and a continuing trespass is committed by failure to do so within a reasonable time: Konskier v B Goodman Ltd [1928] 1 KB 421.
In my view, it is at least arguable that there one, single, and continuing trespass that therefore is not time barred. It is arguable that the Cavasinni Interests continued to trespass on the Mir Land by leaving stockpiles there and that this is connected to the works done on the land, which conflicts with the Cavasinni Interests characterisation of its conduct as a series of separate trespasses. Even if that is not the case, in my view it cannot be said that Mir Bros “first trespass claim” faces a limitation defence that is so clear that it is appropriate for the matter to be decided before a final hearing.
If the trespass is continuing, s 14 arguably does not bar the trespass claim by operation of s 23, since “a trespass which continues for a longer period of time may, of itself, be such that damages are not an adequate remedy and equity would grant relief: Blacktown City Council v Sharp (2000) 10 BPR 18,107; [2000] NSWSC 339 per Young J at [17].
(ii) Nuisance claim
Mir Bros submitted that similarly to the claim in trespass, the claim in nuisance is a continuing tort to which the limitation period has no present operation, due to the continuing presence of stockpiles and drainage on its land.
Counsel for the Cavasinni Interests argued that there is no continuing nuisance, and that damage accrued at the time the stockpiles/drainage came onto the Mir Land and that it is now too late to make a claim based on that damage.
The tort of nuisance has been defined as condition or activity which unduly interferes with the use or enjoyment of land (Clark & Lindsell on Torts, 19th ed at 1162). Damages are recoverable in nuisance for the annoyance, inconvenience and discomfort caused by an interference with the use and enjoyment of land which does not cause material physical damage: see Commonwealth v Murray (1988) ATR 80-207. A plaintiff is not, however, entitled to recover damages for a mere inconvenience until actual damage is caused: Young v Wheeler (1987) ATR 80-126 at 68, 971-2 per Wood JA.
An occupier of land “continues” a nuisance if, with actual or constructive knowledge of its existence, he or she fails, within a reasonable period of time, to take reasonable measures to bring it to an end: Robson v Leischke.
The situation here is similar to trespass. The submissions of the parties again “raise questions of fact” about the terms of the oral agreement “which are not suitable for determination before a final hearing”: Owners of Strata Plan 50946 v Multiplex Constructions (NSW) Pty Ltd and 4 Ors [2006] NSWSC 377 White J at [20]. It is arguable that a continuing nuisance exists which is not affected by s 14, so it cannot be said that the limitation defence is, as put by McDougall J in Owners - Strata Plan 68372 v Allianz Australia Insurance Ltd at [5], “unarguably sound”. Further, on the basis that the nuisance is also continuing, it is arguable that the relief claimed is equitable and that s 23 applies. It is my view that the claim for nuisance is not futile.
It is also inappropriate for this Court to determine this issue because a factual finding as to when was reasonable time was for the Cavasinni Interests to comply with the agreement has not occurred. Hence, it is my opinion that this is not a “clearest case”.
(iii) Misleading or deceptive conduct
Mir Bros need to establish firstly, conduct on the part of Cavasinni Interests; secondly, conduct that is misleading or deceptive; thirdly that there was reliance on the conduct; and fourthly, loss or damage caused by the conduct - see Gould v Vaggelas (1984) 157 CLR 215; [1985] HCA 85 and Jebeli v Modir [2005] NSWCA 184.
Mir Bros submitted that the claim for misleading or deceptive conduct under s 82 of the Trade Practices Act did not arise until there was any contravention of that Act, namely, until the Cavasinni Interests resiled from its obligation to be bound by its agreement. Counsel submitted that only then was a loss suffered by reason of the contravention, and that that event did not occur until about the time of the commencement of these proceedings - there was an agreement between the parties, the plaintiff was entitled to rely upon the fact or proceed upon the assumption that the agreement would be complied with and it wasn’t until the contingency that the agreement would not be complied with or disavowed arose that the damage was sustained.
In support of this proposition, Mir Bros referred to the judgment of the Victorian Court of Appeal in Environmental Systems Pty Ltd v Peerless Holdings (2008) 19 VR 358; [2008] VSCA 26, where Nettle J at [105] discussed the different points at which limitation periods can begin to run in misleading or deceptive conduct cases, depending on the circumstances of the case:
[105] …In HTW Valuers the High Court referred to those observations as part of their explanation of the different points at which the limitation period [for misleading and deceptive conduct] begins to run in four different types of cases. As there stated, the first class is the sort considered in HTW Valuers, where misleading and deceptive conduct results in the purchase of an asset at an over value. In such a case, time runs from the date of purchase (subject, perhaps to the plaintiff being able to ascertain the true or real value). The second class of case is of the sort that was dealt with in Wardley Australia Ltd & Anor v The State of Western Australia in which misleading and deceptive conduct results in the incurrence of a contingent obligation (in that case, as a guarantor). In that sort of case, it is said that no loss is incurred and therefore time does not begin to run until the liability crystalises…
[108] I do not suggest that time does not run until the plaintiff discovers, or could on reasonable inquiry have discovered that damage has been sustained. Although the High Court is yet to decide the point squarely, its rejection is implicit in what was said in Wardley about the English approach to the purchase of property at an undervalue, and in what was said in HTW Valuers about the distinction between the purchase of property at an undervalue and a transaction in which loss in no more than contingent at the time of entry into the transaction. Similarly, in Hawkins v Clayton the High Court rejected the idea that, in the case of claims in negligence for economic loss, time does not run until the plaintiff discovers or could by reasonable inquiry have discovered that damage has been sustained (and the High Court recently reiterated that view in Commonwealth v Cornwell). In the absence of more specific guidance, I assume that the same applies to cases for misleading and deceptive conduct.
[109] But as the High Court also emphasised in Commonwealth v Cornwell, with cases for economic loss there has to be some actual damage before the existence of loss is ascertained or ascertainable. So, although the prospect of loss may be inherent in a transaction, it is not until the loss has been necessarily and irretrievably sustained that the cause of action accrues. Accordingly, apart from ‘transaction cases’, where property is sold or acquired at a disadvantageous price, or the opportunity of the lucrative exploitation of contractual rights or of some other commercial opportunity is lost, it is usually not unless and until a transaction generates loss that time begins to run.”
Mir Bros submitted that the circumstances here can be categorised as being in the second class of case, and that accordingly, time does not begin to run until the Cavasinni Interests failed to comply with and to adopt the agreement. The Cavasinni Interests say that the circumstances here do not fall into the second class of case as discussed in Environmental Systems. The Cavasinni Interests submitted that the loss started when the work was demanded, which was no later than January 2007, and that consequently the claim is out of time. For reasons given earlier it is not clear when time starts to run, so it is not clear that the cause of action of misleading or deceptive conduct is futile.
Equitable relief
There is a further reason why Mir Bros says that the limitation periods do not apply to the proposed amendments. That is, because the main relief sought in the PFASC is equitable, the claims are not time barred due to the application of s 23 of the Limitation Act. The relief sought in the PFASC is as follows:
“1. Damages, including equitable damages and damages pursuant to section 236 of the Australian Consumer Law.
2. A declaration that the Defendants are liable to indemnify the Plaintiff in respect of any claim by third parties for damages to the Cavasinni Land, or concerning its use or ownership, resulting from works to the Plaintiff’s Land in respect of backfilling and compaction on the Land and works in relation to the reinforcing of the Wall or the construction of a new retaining wall, to bring the Works into compliance with the Conditions and to remedy the loss and damage suffered by the Plaintiff the subject of these proceedings.”
While Mir Bros conceded that s 23 has not been the subject of uniform views it submitted that this Court should adopt the reasoning of Ball J in Alec Finlayson Pty Ltd v Royal Freemason Benevolent Institution of New South Wales Nominees Ltd [2013] NSWSC 1168 at [31]-[47] where it was held that a claim for specific performance of a contract was not subject to s 14. At [48] Ball J concluded
“[48] …it appears to be generally accepted that, in asking the question whether a limitation period can apply by analogy, it is necessary to consider both the facts which are said to give rise to the cause of action as well as the nature of the relief that is available. That approach is consistent with the wording of s 23, which describes the cause of action in terms of the relief that is granted rather than the facts which must be proved in order to establish a right or obligation recognised by the law. For the reasons given by Moore-Bick LJ in P&O Nedlloyd BV, in my opinion, a cause of action for specific performance of a contract is not analogous to a cause of action founded on contract that is recognised by the common law – that is, a claim for damages for breach of contract. The nature of the relief is completely different and the circumstances in which the relief is available in relation to the two causes of action are not the same. It follows that the limitation period set out in s 14(1)(a) of the Limitation Act does not apply.”
Whether or not the false or misleading claim is statute barred depends on facts and circumstances that will be established at trial. Hence, it is not appropriate to determine whether this claim is statute barred.
The relief sought is specific performance of a contract and for mandatory injunctive and other equitable relief. Section 23 reads:
“23 Equitable relief
Sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy, to a cause of action for specific performance of a contract or for an injunction or for other equitable relief.”
It is my view that as the relief sought is firstly, equitable in nature, and secondly, for specific performance, it is arguable that s 23 applies in relation to the amendments in the PFASC. This is another reason why the amendments are not futile and should be permitted.
Lack of evidence?
Recently in Octaviar Administration Pty Ltd (in liquidation) v Craig [2013] NSWSC 1116, Adamson J at [17] commented:
“[17] Amendments ought be allowed unless they are futile because they are obviously bad in law. However, the threshold for refusing an amendment on this basis is high in that the pleading must be so obviously bad in law that it does not raise an arguable claim. As Dawson J said in Commonwealth v Verwayen [1990] HCA 39; 170 CLR 394 at 456:
‘In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed. But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed. That will be an issue upon trial.’”
The Cavasinni Interests submitted, in a somewhat circular argument, that the amendments are futile on the basis that they cannot be proved on the available evidence, because Mir Bros has served its evidence and is not permitted to serve any further evidence without the leave of the Court and should not be permitted to rely upon supplementary evidence. The Cavasinni Interests submitted that this Court should proceed to assess the strength of the claim on what is currently before it in evidence, as leave to file a FASC should not serve as itself a “springboard” to come back and skirt around the earlier orders as to evidence. I disagree.
While I accept that Mir Bros, to date, has been tardy in prosecuting its case, it has largely explained the cause of its delay. Registrar Kenna’s sanction on the service of further evidence based upon the past delay is appropriate. However, I do not think that Mir Bros should be denied the opportunity to have its case tried on its merits. For it to do so Mir Bros should to be given an opportunity to put on further evidence in relation to the amendments, provided that Mir Bros adheres to a strict timetable with the current sanctions.
Conclusion
Mir Bros is granted leave to file a further amended statement of claim against Cavasinni Constructions pursuant to s 65(2)(c) of the Civil Procedure Act. Mir Bros is also granted to leave to join two additional defendants, Cavasinni Developments and Mr Vittorio Cavasinni, pursuant to s 64 of the Civil Procedure Act.
Costs are reserved.
The Court orders that:
(1)Mir Bros is granted leave to file a further amended statement of claim against Cavasinni Constructions pursuant to s 65(2)(c) of the Civil Procedure Act.
(2)Mir Bros is granted to leave to join the two additional defendants, Cavasinni Developments and Mr Vittorio Cavasinni, pursuant to s 64 of the Civil Procedure Act.
(3)The further amended statement of claim is to be filed and served on or before 30 April 2015.
(4)Costs are reserved.
(5)The matter is listed for directions at 9.00 am before the Registrar on 15 May 2015.
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