Raine & Horne Commercial (NSW) Pty Limited v Rozene Pty Limited

[2001] NSWSC 352

CITATION:	Raine & Horne Commercial (NSW) Pty Limited v Rozene Pty Limited [2001] NSWSC 352
FILE NUMBER(S):	SC 12765/89
HEARING DATE(S):	8/11/2000
JUDGMENT DATE:	8 May 2001
PARTIES :	Raine & Horne Commercial (NSW) Pty Limited- Appellant Rozene Pty Limited- Respondent
JUDGMENT OF:	Dowd J at 1

LOWER COURT JURISDICTION :	Supreme Court (Master)
LOWER COURT FILE NUMBER(S) :	12765/89
LOWER COURT JUDICIAL OFFICER :	Malpass M

COUNSEL :	Mr MJ Slattery QC, Mr MJ Walsh- Plaintiff Mr DR Stack- Defendant
SOLICITORS:	Deigan Moore Associates- Plaintiff Phillips Fox Lawyers- Defendant
CATCHWORDS:	Motion to strike out Statement of Claim adding cause of action in negligence and under the Trade Practices Act 1974 - Motion to strike out - Application of Pt 20 SCR
LEGISLATION CITED:	Supreme Court Act 1970 Trade Practices Act 1974
CASES CITED:	Australian & New Zealand Banking Group v Larcos (1987) 13 NSWLR 286. Brimson v Rocla Concrete Pipes Ltd (9182) 2 NSWLW 937. Camden Park v O'Toole (1969) 72 SR (NSW) 188. State of Queensland v John L Holdings Pty Limited (1997) 189 CLR 146. Wardley v State of WA (1997) 175 CLR 514. Weldon v Neal (1887) 9 QBD 394.
DECISION:	1. Application dismissed; 2. Costs reserved.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

DOWD J

8 May 2001

12765/89

Raine & Horne Commercial (NSW) Pty Limited v Rozene Pty Limited

Reasons for Judgment

1    DOWD J: This appeal arises out of a Motion seeking that the Court strike out two causes of action in a Statement of Claim filed by the respondent, Rozene Pty Limited (‘Rozene’), against the appellant, Raine & Horne Commercial (NSW) Pty Limited (‘Raine & Horne’), which motion was heard and refused by Master Malpass in a judgment of 18 August 2000.

2    Rozene, in November 1987, had employed Raine & Horne as agent in respect of the sale of Rozene’s commercial premises in North Sydney, and as a result of that agency, Rozene entered into a contract on 20 May 1988 with Wedna Bulk Pty Ltd to sell the property for $8,250,000, completion taking place on 9 December 1988.

3    On approximately 18 May 1988, an employee of Raine & Horne advised a director of Rozene that the price offered by Wedna Bulk Pty Ltd was the best price which could be obtained for the property, and that Raine & Horne had offered the property to all prospective purchasers, but no purchaser had been prepared to offer a higher sum and that no higher sum would be expected if the property went to sale by auction.

4    Rozene alleged that it relied on the advice given to it by Raine & Horne in agreeing to sell the property for the price offered.

5    On the day of the completion of the sale to Wedna Bulk Pty Ltd on 9 December 1988, a contract for sale of the property to the ANZ Banking Group Ltd for $12,816,000 was settled simultaneously.

6    On 22 June 1989, Rozene commenced proceedings in the Commercial Division of this Court, against Raine & Horne to which Raine & Horne appeared on 19 July 1989, the proceedings later being transferred to the Common Law Division. After a period of total inactivity, Raine & Horne filed a Notice of Motion on 28 April 1997, seeking that the proceedings be dismissed for want of prosecution. That Notice of Motion was dismissed by Master Malpass on 6 July 1999. Registrar Irwin, on 12 July 1999, directed Rozene to file and serve a Statement of Claim, which, after filing, precipitated these proceedings.

7    This Notice of Motion sought, pursuant to Pt 15 r 26 SCR, to strike out the claim for negligence and the claim under the Trade Practices Act 1974 (‘the Act’) as an abuse of process, and also included an issue of particulars which was resolved, except for the matter of costs.

8    The original Summons commencing the proceedings pleaded:

“Damages for breach of an Agreement entered into between the Plaintiff and the Defendant”.

9    In the Summons, Rozene set out the facts relied on and the points in issue, and had particularised in paragraph 4:

“4. The plaintiff relied on the advice given to it by the defendant and in particular the advice that the defendant by its employee … had referred the offer to all interested purchasers”.

10    The Summons further provided, as issues likely to arise, as to whether in pursuance in breach of its obligations as an agent, Raine & Horne had failed to make proper enquiries of all prospective purchasers of which it was aware or should have been aware prior to advising that the price offered by Wedna Bulk Pty Ltd was the best price that could be obtained. The issue further raised was whether Raine & Horne was negligent in the advice which it gave to Rozene. The Summons then alleged failure to offer the property to the ultimate purchasers, ANZ Banking Group Ltd, and several other companies, and that it failed to exercise reasonable care in ensuring all interested purchasers were notified, and that it failed to exercise reasonable care in advising the plaintiff that no higher sum could be obtained if the sale of the property were to go to auction.

11    The Statement of Claim of 19 August 1999 pleaded a claim for:

“…damages for:


(a) Breach of contract.

(b) Breach of duty of care owed to it by Raine and Horne.

(c) Pursuant to section 82 and/or 87 of the Trade Practices
Act”,
which Raine & Horne contend includes two additional causes of action, being a claim for damages based on ss82 and 87 of the Act and a claim in tort alleging negligence.

12    An Amended Statement of Claim, filed on 29 June 2000, alleged that in giving the advice concerning Wedna, “Raine & Horne breached the terms of its agreement.” The Statement of Claim further alleged that by reason of the relationship of principal and agent between the parties and the acceptance of responsibility for the advice concerning Wedna, and knowing that Rozene relied on that advice, that Raine & Horne owed Rozene a duty of care as its agent and negligently breached the duty of care it owed to Rozene.

13    The particulars of the claim in negligence alleged misleading or deceptive conduct in that Raine & Horne had implied that satisfactory enquiries had been made and failing to advise Rozene of the use of auction to attract higher prices.

14 The Statement of Claim further alleged damages under the Act in that the advice and conduct concerning Wedna comprised representations as to future matters within s51A of the Act and Raine & Horne did not have reasonable grounds for making such representations, that Rozene acted on that advice and conduct, and thus Raine & Horne caused Rozene to suffer damage.

15    The Amended Statement of Claim included no amendment of the Statement of Claim of 19 August 1999 that was relevant for these purposes.

16    The Court’s powers to strike out the two additional counts arise under Pt 13 r 5 SCR and Pt 15 r 26(1) SCR.

17    The first of these provisions provide a power to stay or dismiss proceedings generally, or in relation to any specific claim for relief if no reasonable cause of action is disclosed, or the proceedings are frivolous or vexatious, or the proceedings are an abuse of the process of the Court.

18    Part 15 r 26(1) SCR provides that where a pleading discloses no cause of action or has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the powers of the Court, the Court may order that the whole or part of any pleading be struck out.

19    The Learned Master in his judgment of 18 August 2000, found that when the matter came before Registrar Irwin, certain orders and directions were made by consent. The orders and directions included an order that:

“The plaintiff file and serve a Statement of Claim by 19 August 1999”.

20 At the time of the filing of the Statement of Claim, the relevant limitation periods for the causes of actions found in negligence and under the Act. In the application before the Learned Master, Raine & Horne also relied on discretionary considerations such as prejudice and delay as appropriate to entitle it to have the additional counts struck out.

21    Master Malpass found that the hearing before him had been treated by the parties as though it were an application to amend to add a cause of action. The Master said he had some difficulties seeing the matter simply as an application to amend.

22    The Master referred to the fact that Pt 20 SCR confers powers of amendment on the Court in wide terms, and that there are powers that may be exercised, although a relevant limitation period had expired. There was also reference to the power of the Federal Court to amend a Statement of Claim to introduce a statute-barred count and the power of this Court and the finding of Rogers J in ANZ v Larcos (1987) 13 NSWLR 286 at 295, wherein Rogers J held that Pt 20 r 4 SCR deals with procedural matters and not with the substantive law concerning the cause of action under the Act, and that the two regulatory provisions operate in different fields and are not inconsistent.

23    The Master then held that the Statement of Claim was not filed pursuant to Pt 20 SCR but was filed pursuant to the “Consent Orders” and directions of the Registrar and then stated:

“Presumably, the parties took the view that the plaintiff’s claim should be pleaded”.

24    The Learned Master pointed out that the Consent Orders and directions were silent on the point. The Learned Master then said at page 5 of his judgment:

“In addition they made no express provision limiting what may be alleged in the Statement of Claim. In failing to do so, the defendant may be said to have opened the door to its present problems.”

25    The Master then relied on Brimson v Rocla Concrete Pipes Ltd (1982) 2 NSWLR 937 at 941, which held that Pt 15 r 26 SCR provides a remedy limited to cases where there is a defect in the pleadings.

26    The Master then found that all causes of action in the Statement of Claim can be expected to be largely based on the same evidence and there is no evidence of actual prejudice and further time has elapsed and presumptive prejudice must be taken into account. Largely, the Master’s finding was that in the application, a clear and obvious case for relief has not been demonstrated, and as Raine & Horne bears the onus of satisfying the Court of its entitlement of the relief sought, Raine & Horne had failed to discharge its onus and the application was dismissed.

27    Raine & Horne’s grounds of appeal are to the effect that the filing of the Statement of Claim was not as a result of the defendant “having opened the door to the present problem”, and that the Statement of Claim should have been limited to the relief sought in the Summons or that the Master should have found that Raine & Horne was at liberty to challenge any additional relief claimed and have the Court treat such additional relief claimed as an application for leave to amend.

28    The further ground of appeal was that the Master should have found that Pt 20 rules 1 and 4 SCR were invalid as being in conflict with s109 of the Commonwealth Constitution, as the SCR are inconsistent with the clear statutory provisions of the Act, and further that the Master found no prejudice, and that the Master should have exercised his discretion in favour of not allowing the amendment of the rules.

29 On the issue of whether the Learned Master should have treated the application as an amendment Application, under s81 of the Supreme Court Act 1970, the Court has conferred on it an extremely wide expression of power, where there has been a failure to comply with the requirements of the Supreme Court Act or Rules as to any matter of time, place, manner, form or content, or in any other respect. The Court may, on terms,

“set aside, wholly or in part the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings or exercise its powers under this Act and the rules to allow amendments and to make orders dealing with the proceedings generally”.

30    It is submitted on behalf of the Appellant that Registrar Irwin did not order that the matter “continue on the pleadings pursuant to Pt 5 SCR, or grant leave to Rozene to amend its pleadings pursuant to Pt 20 rules 1 & 4 SCR”. This submission is correct. No such adjudication occurred. The order to file the Statement of Claim did not purport to exercise any power to alter the standing of the rights of the parties, or to grant any relief to either party, other than that a Statement of Claim had to be filed. The fact that there was a consent order, or whether that order was consented to or not, does not give rise to the inference that the plaintiff could, at large, amend or add any cause of action by the filing of that Statement of Claim, if it was otherwise not available.

31    The appellant submitted that the rule in Weldon v Neal (1887) 9 QBD 394, to the effect that statute-barred claims cannot be revived by amendment, should apply, but does not question that Pt 20 r 4 SCR operates, which would permit the addition of the action in tort, but that the action would not permit the addition of the other claim under the Act as that claim is not under the common law but is a statutory cause of action, and that the Supreme Court does not have jurisdiction to grant relief where the elements of ss51A and 52 of the Act are made out.

32 The Appellant submitted that ss82(2) and 87(1)(c)(i) of the Act provide that causes of action must be brought within three years.

33    Raine & Horne relies on a minority decision of Toohey J with whom Deane J generally agreed in Wardley v State of WA (1997) 175 CLR 514, that the use of the Court’s incidental powers cannot be used to override a clear statutory prohibition and cannot override a power such as appears in s82(2) of the Act.

34    The Appellant relies on Camden Park v O’Toole (1969) 72 SR (NSW) 188, which held that where there were conflicting decisions of the Supreme Court for various states, and where there is obiter of the High Court then for the sake of conformity the Court should follow the High Court obiter, and should thus apply Wardley v WA.

35    In that respect, I do not consider that that decision governs the matter now before the Court. Camden Park is a matter involving conflict between different States, not that which arises in conflicts between several apparent decisions of Strate and Federal Courts. The judgment of Wardley v WA, relied on, was a minority judgment not obiter dicta of the majority, in any event.

36    The Appellant further says that in the exercise of the Court’s discretion that Rozene has been guilty of gross delay and has caused serious prejudice.

37    In relation to the Trade Practices Act 1974, I consider that the careful examination of the then various authorities by Rogers J in ANZ Banking Group v Larcos (1987) 13 NSWLR 286, demonstrates that the Court, in exercising a power to amend to permit a cause of action which is statute-barred, is acting in pursuance of the decision in I(1976) 2 NSWLR 415 at 419, which held that an amendment, if allowed, takes date from the original document which it amends. Rogers J held that the use of Pt 20 r 4 of the SCR does not extend the limitation provisions of the Act. His Honour held at 295:

“The rule deals merely with a procedural matter which, as a matter of law, has then an impact on what is to be taken as to the date of commencement of proceedings. The two regulatory provisions operate in different fields and are therefore not inconsistent”.

38    And further:

“As I have already said, the authorities establish clearly enough that the effect of the amendment would be to back-date the commencement of the proceedings under the Act”.

39    The Court thus has the power to allow the amendments to add the new causes of action if in fact that were necessary under the decision in ANZ v Larcos, and in any event, the subsequent decision in State of Queensland v John L Holdings Pty Limited (1997) 189 CLR 146, shows that the Court has power to grant amendments that will allow all necessary matters between the parties to be resolved .

40    I consider that the Learned Master erred in holding that the decision of the Registrar in some way implicated the defendant in acquiescing to the amendment.

41    What needs to be examined is the peculiar nature of a Summons under the Commercial Division. This was a matter which commenced in the Commercial Division and was transferred to the Common Law Division after the initial pleadings. In my view, the defendant is not entitled to limit the plaintiff to the words cited above at paragraph 8 of this judgment, as setting out the causes of action in the Summons in the commercial causes jurisdiction.

42 The nature of the pleading of a commercial causes Summons was to set out the nature of the dispute and the issues which arise and the plaintiffs contentions. Clearly, all of the matters in these proceedings arise out of the same factual matrix, and the particulars set out by the plaintiff in the original Summons give rise to an action involving both breach of contract and negligence in tort, and an action based on reliance giving rise to proceedings under the Act.

43    Even if that were not the case, the power of the Court under Pt 20 r4 SCR would in my view permit the raising of the actions in breach of the duty of care and pursuant to the Act if these proceedings had in fact been an application for amendment. I see no particular distinction under the rules as to whether this is treated as a matter of striking out, and a pleading as being an abuse of process, or whether it should be treated as an application to amend to join a cause of action.

44 Prejudice, as alleged by Raine & Horne, does not in fact arise as a cogent fact for consideration in this application, since the original cause of action, although delayed, even if in contract alone, were to oblige the defendant to prepare statements and evidence to deal with the conversation and actions and transactions that occurred, and there has been no demonstration of any significant difference by the defendant if the question arose and if it were necessary to allow the amendment to add the causes of action in tort and under the Act.

45 The Learned Master found, quite correctly, that all causes of action can be expected to be largely not found based on the same causes of action. The witness statements, documentary evidence and other evidence arising from the contract claim, would have obliged the defendant to prepare probably almost identical evidence as will arise in the actions in tort and under the Act.

46    In my view, there is no additional prejudice occasioned by the delay, in addition to the delay which has occurred through the appalling delay of Rozene in conducting these proceedings.

47    I seems to me clear that the Statement of Claim as filed, merely articulates in Statement of Claim form that which was raised under the Summons in the commercial causes jurisdiction, and although expressed under different legal labels, that the issues arising under the Summons arise under the Statement of Claim, although more fully articulated.

48    I consider, in any event, that Rozene is entitled to raise the causes of action, and would be entitled to add the causes of action if it were an action to amend, and is also entitled to resist an application to strike out those parts that Raine & Horne seeks to have deleted. Accordingly, the appellant fails in the appeal.

49    The appellant having failed, I can see no order in respect of this application, as to the application to strike out, Rozene should have costs against Raine & Horne, on that issue.

50    I have not had addressed the costs issues concerning particulars, and I grant leave to the parties to re-list the matter to have that matter of costs argued.

51    The orders therefore that I propose are:

1. That the application be dismissed; and
2. Costs reserved.
oOo

Last Modified: 05/16/2001