Murphy v Overton Investments Pty Ltd

[1999] FCA 1807

FEDERAL COURT OF AUSTRALIA

Murphy v Overton Investments Pty Ltd [1999] FCA 1807

PRACTICE & PROCEDURE - costs - where second respondent seeking costs of proceedings - where second respondent joined as party without prior leave of the Court - where leave to join second respondent subsequently obtained - where applicant’s cause of action against second respondent allegedly time-barred - where applicant asked that proceeding against second respondent be dismissed - whether indemnity costs should be awarded

JOHN JAMES MURPHY v OVERTON INVESTMENTS PTY LTD

N159 OF 1999

EMMETT J
14 DECEMBER 1999
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N159 OF 1999

BETWEEN:	JOHN JAMES MURPHY APPLICANT
AND:	OVERTON INVESTMENTS PTY LTD RESPONDENT
JUDGE:	EMMETT J
DATE OF ORDER:	14 DECEMBER 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The applicant pay the costs of John Edward James of proceedings N159 of 1999. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N159 OF 1999

BETWEEN:	JOHN JAMES MURPHY APPLICANT
AND:	OVERTON INVESTMENTS PTY LTD RESPONDENT

JUDGE:	EMMETT J
DATE:	14 DECEMBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 18 May 1999, I made orders which included an order that the statement of claim filed on 23 February 1999 be struck out.  I gave the applicant leave to file an amended statement of claim and an amended application no later than 8 June 1999.

2. On 8 June 1999, an amended statement of claim was filed.  Mr John Edward James was joined as a second respondent.  No leave had been given for that course.  On 18 June 1999, the matter was restored for directions.  I gave leave to the applicant to file a notice of motion, returnable on 30 June 1999, seeking leave to join any additional party.  On 22 June 1999, the applicant filed a notice of motion seeking orders that leave be granted to join Mr John Edward James as second respondent and to file an amended application in the form annexed to the motion.

3. On 30 June 1999, I heard argument on certain aspects of that notice of motion.  On that day, I ordered that certain paragraphs of the amended statement of claim, filed on 8 June 1999, be struck out.  I also gave leave for the joinder, as applicants, of additional persons and gave the applicant leave to file, no later than 12 July 1999, a further amended application and further amended statement of claim containing amended provisions to take the place of those that I struck out.

4. At that stage, counsel for the applicant acknowledged that the question of leave for the joinder of Mr James was still outstanding.  The proceedings came before me again on 22 July 1999 when I ordered that the motion be stood over.  On 5 August 1999, the matter came before me again when, without opposition at that stage, I granted leave to the applicant to join John Edward James as second respondent, nunc pro tunc, with effect from the date of the filing of the amended application and amended statement of claim on 8 June 1999.  At that stage, the solicitors and counsel for the first respondent had instructions to act for Mr James and an intimation was given that a notice of appearance would be filed as soon as practicable.

5. On 17 August 1999, I made orders in relation to questions that had been argued concerning the application of Part IVA of the Federal Court of Australia Act 1976 (Cth). Specifically, I ordered that the proceedings not continue under Part IVA. I ordered that the further amended statement of claim be struck out, but that leave be given to the first applicant to file a second further amended application and second further amended statement of claim.

6. A second further amended statement of claim was filed on 30 August 1999.  Mr James was not named as a respondent in the second amended statement of claim.  Mr James now asks for his costs of those proceedings and asks for an order that they be paid on an indemnity basis.

7. The claim made against Mr James in the amended statement of claim was as follows:

   ·Since October 1992 Mr James has been the Managing Director of Overton, the first respondent. 

   ·Mr James was aware of various matters pleaded in the further amended statement of claim, which were said to have constituted misleading and deceptive conduct.  However the allegation was limited to conduct after 10 March 1994.  That is the date upon which a letter was written, which was relied upon by the applicant as constituting evidence of knowledge of Mr James that representations alleged to have been made on behalf of Overton were false and misleading. 

   ·It is then alleged that, by reason of the matters I have just set out, Mr James was a person involved in the contravention of section 52 of the Trade Practices Act 1974 (Cth) by Overton within the meaning of section 75B of the Trade Practices Act.

8. There was also, in the amended statement of claim, an allegation of fraudulent misrepresentation against Overton.  It was alleged that the representations that are relied in the amended statement of claim were made in circumstances where Overton knew that they were false or did not care whether they were true or false.  The particulars furnished of such knowledge or indifference were that Mr James, as Managing Director, knew that the representations were false, as from the time of the letter of 10 March 1994.

9. Following the orders which I made on 17 August 1999, fresh proceedings have been commenced by ninety-four of the lessees.  It is accepted on behalf of Mr Murphy that, because of the limitation on the cause of action pleaded against Mr James, Mr Murphy never had a cause of action against Mr James.  For that reason, once the proceedings ceased to be representative proceedings under Part IVA, Mr James was necessarily deleted as a respondent.

10. However, in relation to those lessees whose causes of action are said to relate to representations made after 10 March 1994, Mr James has been joined as a second respondent.  Similar allegations are made against him in relation to his alleged involvement in contravention of the Trade Practices Act by Overton. 

11. The basis upon which it is said that a special order should be made in respect of Mr James' costs, is that his joinder in proceedings N159 of 1999 was made without leave and was irregular.  Secondly, at the time of his joinder, Mr Murphy was the only applicant and Mr Murphy never had any cause of action against Mr James.

12. However, at the time when Mr James was joined in the proceedings, Mr Murphy was purporting to bring the proceedings on behalf of all other lessees pursuant to Part IVA.  The various orders that I have made, striking out successive pleadings, are the result of difficulties in the formulation of alternative claims on behalf of all of the lessees.  Be that as it may, and although the pleading was defective, it must be accepted that there was at least a genuine claim brought against Mr James ,on behalf of some lessees, which is presently being persisted in.  I do not consider, in the circumstances, that any of the grounds upon which an indemnity costs order should be made against Mr James have been made out.

13. However, Mr James was joined in the proceedings and has now been released from them.  He is therefore entitled to an order for costs in his favour.  What those costs are, of course, will be a matter for a taxing officer.  As I have indicated, he was represented by the same legal team that represented the first respondent and the additional costs of his appearance may be minimal.  Be that as it may, he is entitled to an order in respect of his costs.

14. I order the applicant to pay the costs of John Edward James of proceedings N159 of 1999.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             20 December 1999

Counsel for the Applicant:	G.A. Moore
Solicitor for the Applicant:	Wendy Fisher
Counsel for the Respondent:	J.C. Campbell QC and A.J. McInerney
Solicitor for the Respondent:	Gadens Lawyers
Date of Hearing:	14 December 1999
Date of Judgment:	14 December 1999