Relative Networks Pty Ltd v Ovviare Pty Ltd - [2023] WADC 65

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   RELATIVE NETWORKS PTY LTD -v- OVVIARE PTY LTD [2023] WADC 65
CORAM:   BOWDEN DCJ
HEARD:   13 JUNE 2023
DELIVERED          :   Ex tempore
PUBLISHED           :   16 JUNE 2023
FILE NO/S:   CIV 3422 of 2021
BETWEEN:   RELATIVE NETWORKS PTY LTD
Plaintiff
AND
OVVIARE PTY LTD
First Defendant
ROSALBA VICARIO-ADAMS
Second Defendant

Catchwords:

Practice and procedure - Application for leave for joinder of extra defendant - Joinder opposed - Rules of the Supreme Court 1971 (WA) O 18 r 4 and O 18 r 6 - 'Whether necessary' to join extra defendant - Joinder under Civil Liability Act 2002 (WA) s 5AN - Leave granted under Civil Liability Act 2002 (WA) s 5AN

Legislation:

Civil Liability Act 2002 (WA), s 5AN
Rules of the Supreme Court 1971 (WA), O 18 r 4, O 18 r 6(2)

Result:

Appeal dismissed

Representation:

Counsel:

Plaintiff	:	Mr A Norwood
First Defendant	:	Mr W Vogt
Second Defendant	:	In person

Solicitors:

Plaintiff	:	Trinix Lawyers
First Defendant	:	Vogt Graham Lawyers
Second Defendant	:	Not applicable

Case(s) referred to in decision(s):

Anthony Leslie John Woodings (as Receiver and Manager of Elcos Australia Pty Ltd (in liq)) v Jay A Stevenson and Philip G Jefferson (as liquidators of Elcos Australia Pty Ltd (in liq)) [2001] WASC 174
Elovalis v Elovalis [2008] WASCA 141 (S)
Hunter Automotive Group Pty Ltd v Range Motors Pty Ltd [2021] WASC 122
Lois Nominees Pty Ltd v Hill [2011] WASC 53
Ooranya Pty Ltd v ISPT Pty Ltd [No 2] [2019] WASC 453
Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [No 2] [2019] WASC 154
Wurth Australia Pty Ltd v Burgess [2012] WASC 504

BOWDEN DCJ:

[The judgment in this matter was delivered ex tempore on 13 June 2023. These reasons are edited from the transcript with minor amendments to grammar and in the insertion of case references.]

The background

On 24 January 2023 Registrar Kingsley made orders joining Mrs Vicario-Adams as a party to the proceedings and giving leave to amend the writ of summons in terms of the amended writ of summons annexed to her affidavit of 21 December 2022.
This is an appeal from that decision.

The appeal

The appeal is a hearing de novo by way of a new hearing of the matter. I am not confined to material and submissions presented to the registrar and I can decide the issue on the materials before me.

The original application

The plaintiff's application was made pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 8 r 4(1) and O 18 r 6(2) to join Mrs Vicario‑Adams as a defendant and amend the writ of summons.
When the matter came on for hearing on 24 January 2023, Registrar Kingsley made the orders sought as neither the defendant nor its representatives attended the hearing.
The reasons for their non-attendance are set out in the affidavit of Mr Vogt dated 12 April 2023 and basically relate to mistakes in diarisation and communication within the defendant's solicitor's office caused in part by the regrettable ill health of the defendant's solicitor's father.

The merits

The application to amend the writ of summons and to join Ms Vicario‑Adams is to add a claim of misleading or deceptive conduct against Ms Vicario‑Adams and the existing defendant.
The affidavit of Mr Vicario enclosing the re‑amended statement of claim filed on 27 January 2023 shows that the subject of the additional claims against the defendant and Ms Vicario‑Adams results from the same conduct as the original claim against the defendant.
The additional claims come from the same transaction and the same facts, basically being founded in Ms Vicario-Adams providing invoices from the defendant to the plaintiff. This conduct has already been pleaded in the existing statement of claim.
An amendment of the writ requires leave pursuant to RSC O 21 r 1.
The court's power to allow the amendment is conferred by RSC O 21 r 5 which is expressly subject to O 18 r 6.

Rules of the Supreme Court O 18 r 4

Although one of the basis for the plaintiff's application is RSC O 18 r 4, as it was made clear in Hunter Automotive Group Pty Ltd v Range Motors Pty Ltd [2021] WASC 122 by Allanson J, there are several decisions of single judges holding that O 18 r 4 does not give the power to the court to grant leave for additional parties to be joined to existing proceedings.
This accords with similar decisions of Martin J in Ooranya Pty Ltd v ISPT Pty Ltd [No 2] [2019] WASC 453 and Beech J in Lois Nominees Pty Ltd v Hill [2011] WASC 53.
The plaintiff respondent accepts those cases correctly state the law.

Rules of the Supreme Court O 18 r 6(2)

The other basis for the plaintiff's application is RSC O 18 r 6(2) which provides the essential question is whether the proposed defendant is a person who ought to have been joined as a party or whose presence before the court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon.
In Elovalis v Elovalis [2008] WASCA 141 (S) the court stressed that the rule should be given a beneficial interpretation and given its widest interpretation that language permits.
Owen J in Anthony Leslie John Woodings (as Receiver and Manager of Elcos Australia Pty Ltd (in liq)) v Jay A Stevenson and Philip G Jefferson (as liquidators of Elcos Australia Pty Ltd (in liq)) [2001] WASC 174 stated that modern notions of case management and the desire to minimise time and costs in litigation are encompassed by the rule.
The expression 'all matters in dispute' has elastic application and should not be construed as limited to matters arising on the existing pleadings. It properly includes disputed issues of fact which are subjacent to the proceedings.
Whilst it is accepted that RSC O 18 r 6 is a remedial rule and should be given a beneficial interpretation, the heart of the rule is whether the rights or liabilities of the proposed party will be directly affected.
A party cannot be joined merely because it is thought to be just and convenient.
The court must consider whether the proposed party's rights against or liabilities to an existing party in respect of the subject matter of the action will be directly affected by any order that may be made in the action.
In Wurth Australia Pty Ltd v Burgess [2012] WASC 504 Corboy J set out the following:
1.The rule was designed to avoid unnecessary technicalities so parties may litigate the real issues expeditiously, efficiently and in a cost-effective way. Thus, all matters in dispute should be given a beneficial interpretation and afforded the widest interpretation that language will permit.
2.The rule should be given elastic application, in other words, not to be construed so that matters in dispute are limited to matters arising on the existing pleadings. The disputed matters may include disputed issues of fact that are subjacent to the pleadings.
3.The reference to the cause or matter relates to the action as it stands between the existing parties.
4.Although the rule may be interpreted beneficially, the test imposed by the rule is necessity. A party cannot be joined because it is thought to be just and convenient.
5.The rule requires the court to consider whether the proposed party's rights against or liabilities to any existing party in respect of the subject matter of the action will be directly affected by any order that may be made in the action.
6.The test requires you to consider the practical realities of the case, the nature and value of the rights and liabilities of the third party which might be directly affected.
7.The requirement that the third party's rights or liability to any party to the proceedings be directly affected is an important qualification that recognises that many orders of the court are likely to affect other people to a greater or lesser extent.
8.There must be a direct effect on the rights or liabilities as opposed to an indirect or consequential effect.
9.The focus is on the rights and liabilities of the proposed defendant and not on some looser concept of interest.
10.The test is not whether the conduct of the third party is raised in the pleadings or whether the third party is a party to a contract, the test for necessity is whether if the proposed additional defendant is not added its rights will be directly affected by any order made in the action.
In Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [No 2] [2022] WASC 460 Smith J was of the view that the test for necessity is not whether it is just or convenient to join the proposed additional defendant but whether if the proposed additional defendant is not added as a party its rights will be directly affected by any order made in the action.
In that case the plaintiff said the additional defendant should be joined because:
(a)there is a common question of law;
(b)the facts were mixed;
(c)there were joint tortfeasors; and
(d)the O 18 r 6 is wide enough to include modern case management, reduce time and costs and increase efficiency.
Her Honour said that these reasons go to convenience which does give the court the power to join an additional defendant.
Her Honour found that the necessity test was not met because on the plaintiff's pleaded case, any order the court could make would not affect the right of the proposed additional defendant.
In this case, the writ of summons shows that the claim against the defendant is for breach of contract, unjust enrichment and negligence, and the order sought is an award of damages against the defendant.
An order for damages against the existing defendant does not affect the rights or liabilities of Ms Vicario-Adams.
However, the amended writ against the existing defendant includes a claim for misleading or deceptive conduct under the Australian Consumer Law (Cth) and Australian Consumer Law (WA) collectively referred to as the ACL.
The proposed defendant is the only director and shareholder of the existing defendant.
The plaintiff says the test of necessity is met because there is a claim of misleading or deceptive conduct against the existing defendant, based on the conduct of Ms Vicario-Adams, and it is possible that any award against the existing defendant in relation to that conduct could enliven claims by the existing defendant against Ms Vicario-Adams. I reject that submission.
The plaintiff say that it is open to them to commence separate proceedings against Ms Vicario-Adams arising from the same transaction and facts and that unnecessary time and costs would be saved and the court has limited resources reserved if she was joined.
The orders currently sought against the current defendant are for damages. There is no order that could be made against the current defendant which would affect the rights or liabilities of the proposed defendant.
I agree that it is more convenient and practical to join the proposed defendant, however that is not the test. The test of necessity is not met.
Therefore, under RSC O 18 r 6, I would not allow the amendment because it is not 'necessary'.
However, that does not end the matter.

The Civil Liability Act

Under s 5AN of the Civil Liability Act 2002 (WA) (the Act), sub‑section (1):
The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.
An apportionable claim is defined by s 5AI meaning:
(a)a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care …; or
(b)a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 2010 based on misleading or deceptive conduct; …
A claim for economic loss is a claim for loss not resulting from damage to property or personal injury.
The existing claim against the existing defendant includes a claim for negligence.
The amended statement of claim against the existing defendant adds a claim for misleading or deceptive conduct under s 18 of the ACL or ACL (WA). That is a claim under s 18 and s 19 of the Fair Trading Act2010 (WA), which provides that the Australian Consumer Laws are laws that apply to this jurisdiction.
Clearly, the power under s 5AN to join a defendant is designed to facilitate the joinder of the proceedings of another concurrent wrongdoer even though the plaintiff or defendant has not joined that person as a defendant.
The power to join the concurrent wrongdoer is discretionary.
Matters that must be considered include whether:
•It is in the interest of justice for the court to have before it all the relevant material to enable it to determine what is just.
•The extent to which a joinder would add complexity and delay.
•The attitude of the existing parties.
•The need to avoid multiplicity of suites.
•The need to avoid inconsistent findings.
The question is to determine whether having regard to the issue of litigation, it is in the interest of justice to grant leave to join a defendant under s 5AN(1) of the Act.
A joinder under s 5AN(1) is not confined by the rules of the court.
Kenneth Martin J summarised the position in Ooranya Pty Ltd v ISPT as:
(a)power of the court under s 5AN(1) to join a defendant is designed to facilitate the joinder to the proceedings of a concurrent wrongdoer where the plaintiff has not joined that party as a defendant;
(b)the joinder contemplated is not confined by the rules of court; and
(c)the power to join a concurrent wrongdoer is discretionary and the joinder accords with what is just and cost effective.
The joinder would add very little in terms of future issues to manage.
Clause 5AK allows the apportionment between concurrent wrongdoers who are defined as a person who is one of two or more persons whose act or omission caused independently of each other or jointly the damage or loss the subject of the claim.
I am persuaded to grant leave pursuant to s 5AN of the Act to permit joinder of the second defendant.
The proposed defendant is the only director and shareholder of the existing defendant. The proposed defendant's acts and conduct form the basis of the potential liability of the existing defendants, the facts and law applicable in both actions are common to the existing defendant and the proposed defendant can be said to be concurrent wrongdoers.
Having granted that leave to join the proposed defendant, I would also grant leave pursuant to RSC O 21 r 5 for the writ and indorsed statement of claim to be amended in respect of the joinder of the second defendant.
Therefore whilst the joinder is not justified under RSC O 18 r 6, I do allow it under the provisions of the Act, s 5AI and s 5AN(1).

Costs

The first defendant applies for costs on the basis that although the plaintiff was ultimately successful, the plaintiff accepted that O 18 r 4 did not provide sufficient basis for the joinder and O 18 r 6(2) was not met insofar as a necessity test is concerned.
The first defendant correctly pointed out that the only reason the plaintiff was successful was because of a last-minute application of which the first defendant was not given any notice of the following suggestions by the court and the provision by the court of the appropriate authority.
In those circumstances the first defendant says in light of the late application and the fact that they had no notice the appropriate order should be that the plaintiff pays the first defendant's costs and incidental costs of the application before the registrar and the costs of the appeal.
The plaintiff says that the orders they had originally sought were made and even though the basis of the orders was different to what they sought they were the successful party. The plaintiff says that it cannot be overlooked that the first defendant failed to appear at the chamber summons before the registrar, and that at the end of the day they should have their costs or the worst position being that costs be in the cause.
Costs are discretionary.
The reality is that the first defendant did not appear at the matter before the registrar. I have accepted the reasons given in Mr Vogt's affidavit dated 12 April 2023 which explains the reasons why they did not appear but the reality is that it was an error of some form on behalf of the first defendant.
Secondly, although the plaintiff was successful insofar as they were successful on a basis that of which they had not given notice to the first defendant and that was raised at the last minute after the issues was raised by the court, and the court provided the authority to both parties and the matter was adjourned to allow the parties to consider the authority.
Ultimately the plaintiff was successful. In the exercise of my discretion the appropriate order that I make is that costs are in the cause in relation to the matter before the registrar and in relation to the appeal being ordered to be paid by the plaintiff for the hearing before the registrar including incidental and ancillary costs and the costs of the appeal.
The orders that I make therefore are as follows:
1.The appeal be dismissed.
2.The plaintiff have leave to join the additional defendant and file a re‑amended statement of claim limited to claims within the limitation period specified under the Limitation Act 2005 (WA) within 14 days.
3.There be costs in the cause.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
KH
Associate
19 JUNE 2023