Roddan v Trevor
[2003] WASC 234
RODDAN & ANOR -v- TREVOR & ORS [2003] WASC 234
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 234 | |
| Case No: | CIV:2420/1999 | 19 JUNE, 30 OCTOBER 2003 | |
| Coram: | MASTER NEWNES | 21/11/03 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Application to amend allowed in part | ||
| B | |||
| PDF Version |
| Parties: | LINDSAY GORDON RODDAN KAY NOMINEES PTY LTD (ACN 067 296 173) GARY JOHN TREVOR MAURICE HODGSON LYFORD RAE-LENE MARY SHORE |
Catchwords: | Practice and procedure Application to amend writ and statement of claim to add causes of action Proposed causes of action statute-barred Application of O 21 r 5(5) Turns on own facts |
Legislation: | Limitation Act 1938 Rules of the Supreme Court, O 21 r 5(5) |
Case References: | Blenheim River Board v British Pavements [1940] NZLR 564 Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431 Harry v Rottnest Sight Seeing Cruises Pty Ltd, unreported; FCt SCt of WA; Library No 7128; 13 May 1988 Morgan v Banning (1999) 20 WAR 474 Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 Rendell v Associated Finance [1957] VR 604 Stone James & Co v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 The State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Bill Discount Services Pty Ltd (In Liq) v Dill-Macky, unreported; FCt SCt of WA; Library No 6700; 7 May 1987 Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323 Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255 Packer v Meagher [1984] 3 NSWLR 486 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
KAY NOMINEES PTY LTD (ACN 067 296 173)
Second Plaintiff
AND
GARY JOHN TREVOR
First Defendant
MAURICE HODGSON LYFORD
Second Defendant
RAE-LENE MARY SHORE
Third Defendant
Catchwords:
Practice and procedure - Application to amend writ and statement of claim to add causes of action - Proposed causes of action statute-barred - Application of O 21 r 5(5) - Turns on own facts
(Page 2)
Legislation:
Limitation Act 1938
Rules of the Supreme Court, O 21 r 5(5)
Result:
Application to amend allowed in part
Category: B
Representation:
Counsel:
First Plaintiff : Mr T R Stephenson
Second Plaintiff : Mr T R Stephenson
First Defendant : No appearance
Second Defendant : Ms M R Cowan
Third Defendant : Mr C C Koh
Solicitors:
First Plaintiff : Kevin Burgoyne
Second Plaintiff : Kevin Burgoyne
First Defendant : No appearance
Second Defendant : Hammond Worthington
Third Defendant : Brickhills
Case(s) referred to in judgment(s):
Blenheim River Board v British Pavements [1940] NZLR 564
Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431
Harry v Rottnest Sight Seeing Cruises Pty Ltd, unreported; FCt SCt of WA; Library No 7128; 13 May 1988
Morgan v Banning (1999) 20 WAR 474
Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204
Rendell v Associated Finance [1957] VR 604
Stone James & Co v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
The State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
(Page 3)
Case(s) also cited:
Bill Discount Services Pty Ltd (In Liq) v Dill-Macky, unreported; FCt SCt of WA; Library No 6700; 7 May 1987
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255
Packer v Meagher [1984] 3 NSWLR 486
(Page 4)
1 MASTER NEWNES: I have before me applications by the plaintiffs to amend the writ of summons in the action and to amend the statement of claim by the filing and service of a substituted statement of claim.
2 The most significant effect of the proposed amendments is to introduce a claim for conversion against the second defendant and what has been broadly described as a claim for fraud against the third defendant. In each case, those amendments are opposed on the ground that they seek to raise claims that are statute-barred under the Limitation Act1938. There are additional objections based on the form of the proposed pleading.
3 After the matter was argued before me on 19 June 2003 a question arose as to the capacity of the first plaintiff to bring this action. That came about because the first plaintiff was bankrupt from 20 January 1992 until 22 July 1997, when he was discharged. It was suggested that the property the subject of the first plaintiff's claim would have vested in his trustee in bankruptcy. I therefore adjourned the applications for further argument once the parties had been able to investigate and consider the position. In the meantime, I had given the parties leave to file written submissions on amendments that the plaintiffs sought to make to the indorsement on the writ of summons. Those submissions were subsequently filed.
4 When the matter was relisted for further hearing on 30 October 2003, counsel for the first plaintiff submitted first, that the first plaintiff's title to the property in question was not affected by his bankruptcy by reason of s 116(2) of the Bankruptcy Act 1966 and reg 6.03 of the Bankruptcy Regulations1996 and secondly, that, as evidenced by a letter from the solicitors for the trustee in bankruptcy which was in evidence before me, the trustee expressly makes no claim in respect of the property. I did not understand counsel for either of the defendants seriously to put in issue, at least on this application, the entitlement of the first plaintiff to bring this claim. I will therefore turn to the specific issues raised on the applications.
5 I will turn first to the objections taken on behalf of the second defendant.
6 The writ of summons was issued on 20 December 1999. The claim against the second defendant indorsed on it is as follows:
"The First Plaintiff and the Second Plaintiff (as Trustee of the Roddan Family Trust) ('the Trust') being the property of the
(Page 5)
- First Plaintiff and/or the Trust claim with respect to various personal chattels ('The Chattels'):
…
B. As against the Second Defendant as Liquidator of Marblon Park Pty Ltd appointed on 27 January 1993, for:
1. An account of the Chattels and/or the proceeds of the sale by the Second Defendant (or on his behalf) of the Chattels;
2. Damages for breach of fiduciary duty and/or breach of the Corporations Law;
3. Damages for wrongful seizure and retention of the Chattels;
4. Damages for loss and/or damage of the Chattels;
5. Costs."
8 It is alleged that in 1989 Marblon Park Pty Ltd was the trustee of the Trust and, in that capacity, granted mortgages over two farming properties at Lower Chittering which were assets of the Trust.
9 The plaintiffs plead that, by notice of appointment of 5 November 1991, the mortgagor appointed a receiver and manager of the two properties. At that time grazing, wool production and horse-breeding businesses were conducted on behalf of the Trust on the properties. There was also plant, equipment and chattels belonging to the first plaintiff on the properties.
10 It is alleged that at some time after 27 July 1990, but before 27 January 1993, the Trust property vested in Jucara Pty Ltd.
(Page 6)
11 It is pleaded that, on 27 January 1993, orders were made that Marblon Park Pty Ltd be wound up and the second defendant was appointed as liquidator. The plaintiffs say that by virtue of his appointment the second defendant owed duties to the plaintiff, pursuant to the Corporations Law, to act honestly, with reasonable care and diligence, and not to breach any trust or other duty.
12 The plaintiffs plead that in about August 1993 the receiver and manager retired and passed possession of what then remained of the secured property to the second defendant.
13 They go on to plead both in the existing statement of claim and in the proposed substituted statement of claim as follows:
"6.1 Following his appointment as liquidator, the Second Defendant:
6.1.1 Took possession, as pleaded in paragraph 4.3 hereof, of the farming properties referred to in paragraph 4.2 from the Second Defendant, and later sold the farming properties for prices less than their market value;
6.1.2 Failed to sell the grazing and horse-breeding business, of the Trust which was, after sale of the farming properties referred to in paragraph 10.1.1 [sic 6.1.1] hereof, lost to the Trust;
6.1.3 Failed to secure or insure the moveable property and animals on the farming properties against theft, and, as a result animals and moveable property on the farms, some of which property belonged to the First Plaintiff were stolen or lost.
6.2 The possession, by the Second Defendant, of the farming properties and the chattels and items of property owned by the First Plaintiff which were situated thereon and their subsequent sale and loss, as pleaded in paragraphs 61. - 6.1.3 hereof, was unlawful, and was a wrongful and intentional interference with the Trust property, which property had vested in Jucara, and, of the First Plaintiff's property, or, further, or in the alternative, was in breach of the duties pleaded in paragraphs 5.1, 5.2 and/or 5.3 hereof.
(Page 7)
- 6.3 By virtue of the matters pleaded in paragraphs 6.1 - 6.2 hereof the First and Second Plaintiffs have suffered loss and damage for which the Second Defendant is liable.
6.4 Further, or, in the alternative, following his appointment as liquidator, the Second Defendant:
6.4.1 Took possession of real property at Lot 23 Gnangara Road including chattels, motor vehicles and horses thereon which were assets of the Trust, and, including personal property of the First Plaintiff. At the time of possession of Lot 23 Gnangara Road and the other property thereon, the registered proprietor of the land was Jucara, which held the land on trust pursuant to the Trust, and, the chattels, motor vehicles and horses, other than those owned by the First Plaintiff, had vested in Jucara in its capacity as trustee of the Trust.
6.4.2.1 During the time of possession of the property referred to in paragraph 6.4.1 by the Second Defendant, some of the property was lost, some of the property was sold by the Second Defendant, some of the property was given to the Third Defendant by the Second Defendant, and some of the property was damaged by agents or, in the alternative, employees, of the Second Defendant.
(Particulars of loss and damage will be supplied after receipt of discovery and answers to interrogatories from the Defendants.)
- 6.4.2.2 The taking of the possession of the property referred to in paragraph 6.4.1 by the Second Defendant and the actions of the Second Defendant referred to in paragraph 6.4.2.1 was a wrongful and intentional interference with the property of the Plaintiffs.
6.4.2.3 Further, or, in the alternative, the sale of the property (referred to in paragraphs 6.4.2.1) and
(Page 8)
- the giving of the property to the Third Defendant, was a conversion of the property of the Plaintiffs.
- 6.4.2.4 By virtue of the matters pleaded in paragraphs 6.4.1 - 6.4.2.3 hereof, the Plaintiffs have suffered loss and damage for which the Second Defendant is liable.
- (Particulars of loss and damage will be supplied after receipt of discovery and answers to interrogatories from the Defendants.)
- 6.4.3 Further, or, in the alternative, during his term as liquidator of Marblon Park Pty Ltd, the Second Defendant took possession of chattel property in storage at Unit MM7 at Store - All in Camboon Road Malaga. The property included, alcohol, antiques and 6 Etienne Aigre suitcases, saddlery and bridles, which were assets of the Trust, and, included the personal property of the First Plaintiff, which included a bicycle car rack and sundry personal items, and, the Second Defendant subsequently removed property from the store and arranged the sale of some of the property.
6.4.4 The matters pleaded in paragraph 6.4.3 hereof was a wrongful and intentional interference with the property of the Trust and of the First Plaintiff.
6.4.5 Further, or, in the alternative, the sale of the property pleaded in paragraph 6.4.3 was a conversion of the property of the First Plaintiff and of the Trust to the use of the Second Defendant.
6.4.6 By virtue of the matters pleaded in paragraph 6.4.4 and 6.4.5 hereof, the Plaintiffs have suffered loss and damage for which the Second Defendant is liable.
PARTICULARS OF LOSS AND DAMAGE
(Page 9)
- (Particulars of loss and damage will be supplied after receipt of discovery and answers to interrogatories from the Defendants.)"
15 The second defendant submits that the indorsement in the writ of summons does not encompass a claim in conversion. Accordingly, the pleas in pars 6.4.2.3 and 6.4.5 of the proposed substituted statement of claim should not be allowed and the equivalent pleas in the existing statement of claim should be struck out: Stone James & Co v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 at 238.
16 The plaintiffs sought to meet this contention by applying to amend the indorsement of claim. The proposed amended indorsement is as follows:
"The First Plaintiff and the Second Plaintiff (as present Trustee of the Roddan Family Trust) ('the Trust')
…
2. As against the Second Defendant as Liquidator of Marblon Park Pty Ltd appointed on 27 January 1993, for:
(b) Damages for breach of fiduciary duty and/or breach of the Corporations Law;
(c) Damages for wrongful seizure and retention of the Chattels;
(d) Damages for loss and/or damage of the Chattels;
(e) Costs.
2.1 damages for the wrongful seizure and detention of the Chattels;
2.2 damages for conversion of the Chattels and Trust property owned by the Plaintiffs;
(Page 10)
- 2.3 damages for breach by the Second Defendant of his fiduciary duty, or, breaches of duty under the Corporations Law;
2.4 an account of the Trust assets and of the First Plaintiff's property taken by the Second Defendant and/or of the proceeds of sale of the Trust assets and of the First Plaintiff's property by the Second Defendant.
2.5 interest on any damages payable to the Plaintiffs pursuant to s 32 of the Supreme Court Act from such date/s as this honourable Court shall determine until judgment; and
2.6 costs."
17 That amendment was opposed. It was submitted by the second defendant that any claim in conversion is clearly statute-barred, not having been commenced within six years of the cause of action accruing: s 38(1)(c) of the Limitation Act1935. It was contended that, as the claim was clearly statute-barred at the date of issue of the writ, O 21 r 5 had no application, or, alternatively, that the claim was not within O 21 r 5 as it did not arise out of the same facts, or substantially the same facts, as the existing causes of action.
18 I do not accept the first submission in relation to the claim for conversion of the chattels. Counsel for the second defendant could not point to any evidence that any conversion of the chattels had occurred more than six years before the action was commenced. Although it is alleged in par 8.1.4 of the proposed substituted statement of claim that between 14 and 17 December 1993 arrangements were made to enable the second defendant to hand possession of the chattels to the third defendant, it is specifically alleged in pars 7.1 and 8.1.4 that the third defendant did not in fact take possession until "on or after 20 December 1993". I do not consider it can be said that the claim was clearly statute-barred at the date of the issue of the writ.
19 It is therefore necessary to turn to the second ground of objection, that is, whether the amendment comes within O 21 r 5. It was accepted, as I understood it, by the plaintiffs' counsel that no claim in conversion was made in the original endorsement. What was claimed was an account of the proceeds of sale of the property, damages for breach of fiduciary
(Page 11)
- duty or of the Corporations Act, damages for "wrongful seizure and detention of the Chattels" and damages for loss or damage to the property.
20 What the plaintiffs seek to raise is a claim that, both in selling chattels and in giving chattels to the third defendant, the second defendant converted the chattels concerned to his own use.
21 Order 21 r 5(1) of the Rules of the Supreme Court gives to the Court power, at any stage of the proceedings, to allow a party to amend its writ or pleading, subject, inter alia, to the other provisions of the rules.
22 Order 21 r 5(2) and r 5(5) read, relevantly, as follows:
"(2) Where an application to the court for leave to make the amendment mentioned in par … (5) is made after any relevant period of limitation current at the date of the issue of the writ has expired, the court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it is just to do so.
…
(5) An amendment may be allowed under par (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."
23 It is apparent from the decisions of the Full Court in Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431 and Morgan v Banning (1999) 20 WAR 474 that "cause of action" in this context refers to a factual situation which would entitle a person to approach the Court for relief, rather than the old categories of action, being the "forms of action". It is the "fact or combination of facts which gives rise to a right to sue": Dye v Griffin Coal Mining Co Pty Ltdop cit per Owen J at 434. Order 21 r 5(5) applies, in essence, where there is a "relabelling, addition, modification or clarification of an existing cause of action": Morgan v Banningsupra per Wheeler J at 486. It is no objection that some of the facts out of which the new cause of action arises are peculiar to it and that some of the facts out of which the old cause of action arises are peculiar to it. It is enough if the overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of
(Page 12)
- action. That will essentially be a matter of impression: Dye v Griffin Coal Mining Co Pty Ltdop cit.
24 In my view, the claim in the proposed amended indorsement for conversion of the chattels falls within O 25 r 5. The existing causes of action relate, in part, to the alleged loss or sale of the chattels. The proposed claim in conversion characterises the loss and the sale of chattels as a conversion of the chattels by the second defendant. As expounded in the statement of claim, the loss of some of the chattels is alleged to have occurred, in part, because the second defendant gave them to the third defendant. I therefore consider that the claim arises out of substantially the same facts as the existing causes of action.
25 The proposed claim in conversion in respect of "Trust property", however, raises different issues. "Trust property" is not defined. If it is intended to refer to chattels which were the property of the Trust it would not appear to add anything. If it is intended to refer to the real property referred to in the proposed amended indorsement it is unsustainable on its face. Conversion is a claim in respect of chattels. It does not apply to real property. If it is intended to refer to chattels other than the "Chattels", as defined in the indorsement, it is not apparent what chattels are referred to and the proposed amendment, to that extent, is uncertain.
26 Accordingly, I would allow the amendment to the writ of summons in respect of the claim for conversion of the chattels, but not otherwise.
27 It appears from the proposed amendments to the prefatory words of the indorsement, and by the inclusion of par 2.4, that the plaintiffs seek to extend the claims for the taking of accounts to include accounts in respect of real property. In the written submissions filed on behalf of the second defendant it was contended that the claims in respect of real property are statute-barred and clearly arise out of different facts to the existing claims in respect of chattels.
28 It is not, however, clear that it is necessarily the case that the claims are statute-barred. That may depend upon the basis of the claims for the accounts. That does not emerge from the indorsement, nor with any clarity from the minute of proposed substituted statement of claim. It is alleged in par 6.1 of the latter that the second defendant took possession of certain farming properties, which were assets of the Trust, and sold them for less than their market value. It is alleged that in doing so the second defendant acted unlawfully and that his actions constituted a wrongful and intentional interference with Trust property, giving rise to
(Page 13)
- an entitlement in the plaintiffs to damages. To the extent (if at all) that par 6.4 pleads a claim that the second defendant wrongfully sold real property belonging to the plaintiffs, the relief sought is again damages. A duty to account is not pleaded and no facts are pleaded that suggest that an account of the type claimed is required. The only reference to an account is in the prayer for relief, which reproduces the claim in the proposed indorsement.
29 It is not clear, therefore, what purpose the claim for an account in respect of real property is intended to serve in the proceedings. In those circumstances I would not allow the amendment to the indorsement at this stage.
30 The final objection by the second defendant was in respect of the claim for interest under s 32 of the Supreme Court Act. It was submitted that to allow that claim to be introduced now would be to permit the plaintiffs (if successful) to obtain interest from 21 December 1993 and thus to profit from their delay in prosecuting the action.
31 I do not consider that the amendment should be refused on that basis. It is clear that whether or not interest will be awarded is a matter in the discretion of the trial judge and disqualifying conduct is a relevant factor in the exercise of that discretion: Harry v Rottnest Sight Seeing Cruises Pty Ltd, unreported; FCt SCt of WA; Library No 7128; 13 May 1988. The contention raised by the second defendant in relation to interest is properly one to be raised at the trial, in the event the plaintiffs are successful.
32 I turn then to the amendment sought to be made in respect of the claim against the third defendant.
33 As it stands, the claim against the third defendant indorsed on the writ is as follows:
"The First Plaintiff and the Second Plaintiff (as Trustee of the Roddan Family Trust) ('the Trust') being the property of the first plaintiff and/or the Trust claim with respect to various personal chattels ('The Chattels'):
…
C. As against the Third Defendant, for:
1. An account of the Chattels received by her;
(Page 14)
- 2. Damages for the Chattels retained by the third defendant and converted by her to her own use;
3. Costs."
34 The relevant claim against the third defendant in the existing statement of claim is then pleaded at par 11 as follows:
"11. On a date or dates unknown to the Plaintiffs, until after discovery and answers to interrogatories by the Defendants, but including the 14, 16 and 17 December 1993 the Third Defendant converted some Trust assets and property of the First Plaintiff received by her, in the manner pleaded in paragraph [6.4.2.1 above] hereof, to her own use or benefit.
PARTICULARS OF PROPERTY RECEIVED BY THIRD DEFENDANT AND CONVERTED BY HER
11.1 The Trusts assets released to the Third Defendant included: ladies hats, handbags and shoes, lacquerwares, crockery, cutlery, glass and crystalware, ceramic and glass figurines, kitchenware, table settings, candelabra, clothing, electrical goods and saddlery (including without limitation two Stubben Saddles, one Keiffer Saddle, horse bands, bridles and bits), makeup, perfume, crystal clock, one exercise trampoline and six suitcases.
(further and better particulars will be provided after receipt of discovery and answers to interrogatories from the Defendants)"
"3.1 an account of the Trust assets and First Plaintiffs property received by her;
3.2 damages for conversion of the property of the Plaintiffs;
3.3 interest on any damages payable to the Plaintiffs by the Third Defendant pursuant to Section 32 of the Supreme Court Act from such date as this honourable Court shall determine until Judgment; and
(Page 15)
- 3.4 costs."
36 The plaintiffs seek to amend the indorsement on the writ in the following way:
"The First Plaintiff and the Second Plaintiff (as present Trustee of the Roddan Family Trust) ('the Trust')
…
3. As against the Third Defendant, for:
(b) Damages for Chattels retained by the First Defendant and converted by her to her own use;
(c) Costs.
3.1 an account of the Trust assets and First Plaintiff's property received by her and which remain in the possession of the Third Defendant;
3.2 an order for return of the Trust assets and First Plaintiff's property which remain in the possession or control of the Third Defendant to the First and/or Second Plaintiff;
3.3 damages for conversion of the property of the Plaintiffs;
3.4 a declaration that the Third Defendant was or is a trustee of any assets received and converted by her;
3.5 an injunction restraining the Third Defendant from selling or disposing of any assets received and converted by her and still in her possession or power;
3.6 damages for fraud, including for deceit;
(Page 16)
- 3.7 interest on any damages payable to the Plaintiffs by the Third Defendant pursuant to Section 32 of the Supreme Court Act from such date as this honourable Court shall determine until judgment; and
3.8 costs."
37 The proposed substituted statement of claim, so far as is relevant, is as follows:
"The Conversion Claim
7.1 On a date or dates unknown to the Plaintiffs, until after discovery and answers to interrogatories by the Defendants, but on or after 20 December 1993 the Third Defendant converted some Trust assets and property of the First Plaintiff received by her from the Second Defendant, in the manner pleaded in paragraph 6.4.2.1 hereof, to her own use or benefit.
PARTICULARS OF PROPERTY RECEIVED BY THIRD DEFENDANT AND CONVERTED BY HER
- 7.1.1 The Trusts assets released to and received by the Third Defendant included: ladies hats, handbags and shoes, lacquerwares, crockery, cutlery, glass and crystalware, ceramic and glass figurines, kitchenware, table settings, candelabra, clothing, electrical goods and saddlery (including without limitation two Stubben Saddles, one Keiffer Saddle, horse bands, bridles and bits), makeup, perfume, crystal clock, one exercise trampoline and six suitcases.
7.1.2 The First Plaintiff is unable to state which assets belonging to him were converted by the Third Defendant until after discovery and answers to interrogatories by the Third Defendant.
(further and better particulars will be provided after receipt of discovery and answers to interrogatories from the Defendants)
(Page 17)
- 7.2 At all material times the Third Defendant well knew which of the assets received by the Third Defendant were assets of the Trust and well knew the terms of the Trust.
PARTICULARS OF THIRD DEFENDANT'S KNOWLEDGE OF THE TRUST
- 7.2.1 The Third Defendant had been a director of Marblon Park Pty Ltd, a former Trustee of the Trust, and had made decisions affecting the Trust's assets whilst holding that office;
7.2.2 The Third Defendant was aware, from documents filed and served upon her, or, upon her solicitors, in action 2697 of 1990 in the Supreme Court of Western Australia, which of the assets she received were Trust assets.
7.3 By virtue of the matters pleaded in paragraphs 7.1 and 7.2 hereof the Third Defendant is accountable to the Second Plaintiff, and, to the First Plaintiff (in his capacity as a beneficiary of the Trust) as a trustee of the Trust assets she received.
The Fraud Claim
8.1.1 Further, or, in the alternative, on a date unknown to the Plaintiffs until after discovery and answers to interrogatories from the Defendants, the Third Defendant represented to one Schubert and to one Rowe, both Police Officers, that she was the owner of all of, or, in the alternative, some of, the chattel assets in the possession of the Second Defendant or his servants or agents - as pleaded in paragraph 6.4.1 hereof. In support of such first-mentioned representation the Third Defendant produced to Schubert, a default judgment, or, in the alternative, a copy of a default judgment given in her favour in action 2697 of 1990 in the Supreme Court of Western Australia, which judgment recorded that she was the owner of all of, or, in the alternative, some of, the said chattel assets.
(Page 18)
- 8.1.2 The representations pleaded in paragraph 8.1.1 hereof were made fraudulently, in that, the Third Defendant knew they were untrue, or, in the alternative, the Third Defendant made them recklessly not caring whether they were true or false.
- 8.1.2.1 The Third Defendant was aware, from documents filed and served upon her, or, upon her then solicitors, in action 2697 of 1990 in the Supreme Court of Western Australia, that the default judgment had been set aside.
8.1.2.2 The Third Defendant had been a director of Marblon Park Pty Ltd, a former Trustee of the Trust, and well knew the chattels she proposed to take belonged to the Trust.
8.1.2.3 The Third Defendant well knew which of the chattels she proposed to take belonged to the First Plaintiff as she had previously lived with him as his de facto wife.
8.1.3 The representations pleaded in paragraph 8. 1. 1 hereof were made by the Third Defendant with the intention of procuring the assistance of Schubert and/or Rowe to enable the Third Defendant to effect a fraudulent enterprise, namely, to enable the Third Defendant to obtain possession of, and, to convert to her own use and benefit chattel assets of the Trust and assets of the First Plaintiff then in the possession of the Second Defendant.
8.1.4 On the 14th December 1993 Schubert wrote to the Second Defendant at the behest of the Third Defendant advising, inter alia, he had been satisfied by the Third Defendant that she had '... a reasonable claim to some of the property which is being held. Under the circumstances I would appreciate it if you would contact Gregson's and authorize the release of her property.' A list of assets sought by the Third Defendant and supplied to Schubert by the Third Defendant was attached to the said letter. Between the 14th and 17th of December 1993
(Page 19)
- arrangements were made, in pursuance of the fraudulent enterprise pleaded in paragraph 8.1.3 hereof, whereby the Second Defendant agreed to permit the Third Defendant to take possession of chattels belonging to the Trust and to the First Plaintiff (the Plaintiffs do not know precisely how or when the arrangements were made until after discovery and answers to interrogatories by the Defendants). The Third Defendant, on or after 20 December 1993, converted chattels of the First and Second Plaintiffs to her own use and benefit.
- 8.1.4.1 The Plaintiffs repeat the particulars contained in paragraph 7.1 hereof.
(further and better particulars will be provided after receipt of discovery and answers to interrogatories from the Defendants)
8.1.5 The Plaintiffs repeat paragraphs 7.1 and 7.2 hereof and aver that, by virtue of the matters pleaded therein and in paragraphs 8.1.1 to 8.1.4 hereof the Third Defendant is accountable to the Second Plaintiff, and, to the First Plaintiff (in his capacity as a beneficiary of the Trust and in his personal capacity) as a trustee of the Trust assets and the property of the First Plaintiff she received and converted by her fraud.
8.1.6 The Plaintiffs aver that the fraud of the Third Defendant, pleaded in paragraphs 8.1.1 - 8.1.4 hereof, was concealed from them until after April 1994 and they could not have, with reasonable diligence, discovered the said fraud until after that time.
8.1.7 Further, or, in the alternative to paragraph 8.1.5 hereof, the Plaintiffs aver that, by reason of the fraud of the Third Defendant, they have suffered loss and damage, including tortious damages for deceit, for which the Third Defendant is liable to the Plaintiffs."
38 The third defendant opposed the amendment to introduce par 8, submitting that it was statute-barred and that it did not fall within
(Page 20)
- O 21 r 5(5). The third defendant also contended that pars 7.2 and 7.3 disclosed no arguable cause of action.
39 Counsel for the plaintiffs accepted that, unless the claim in par 8 came within O 21 r 5(5), the application to amend in those terms must fail, the relevant limitation period having expired.
40 The question, then, is whether the proposed plea in par 8 arises out of the same facts, or substantially the same facts, as the facts that would entitle the plaintiffs to the relief they currently seek.
41 The plaintiffs currently seek damages for conversion, as set out in par C(2) of the existing indorsement and pleaded in par 11 of the existing statement of claim. The essence of conversion is a dealing with a chattel in a manner inconsistent with the immediate right to possession of the person who has the property, or special property, in the chattel. It may take the form of a disposal of the goods by way of sale, pledge or other intended transfer of an interest followed by delivery, or the destruction or change of the nature or character of the thing or of an appropriation evidenced by a refusal to deliver or other denial of title. An intent to do that which would deprive a person of their immediate right to possession, or impair it, is the essential ground of the tort: Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 per Dixon J at 229. The required intent on the part of a defendant is therefore to interfere or deal with the goods by exercising dominion over them on their own behalf or on behalf of someone other than the plaintiff. It is not necessary to show any dishonest intent or that the defendant intended to commit a wrong. A defendant may be liable even where they interfere or deal with another's goods through ignorance or an innocent mistake: Rendell v Associated Finance [1957] VR 604; Blenheim River Board v British Pavements [1940] NZLR 564.
42 It is, no doubt, with those principles in mind that the pleader of the current plea against the third defendant in conversion simply alleges that the third defendant obtained property belonging to the first plaintiff and the Trust and converted it to her own use or benefit.
43 It is apparent that the plea in par 8 relies on a number of new facts that were, and are, unnecessary to the conversion plea. What is now sought to be proved is that the third defendant made false representations to two police officers with the intention of procuring their assistance to enable her fraudulently to obtain possession of, and convert to her own use, chattels of the Trust and the first plaintiff. It is alleged that by
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- fraudulently procuring their assistance, the third defendant obtained that property.
44 It is then alleged, in par 8.1.5, that by reason of, among other things, the fraudulent enterprise, the third defendant holds Trust property and property of the first plaintiff on trust and is accountable to the Trustee and the first plaintiff for that property.
45 It is alleged, further or in the alternative, that by reason of the third defendant's fraudulent enterprise, the plaintiffs are entitled to damages for deceit.
46 The prayer for relief in the proposed substituted statement of claim includes a claim for a declaration that the third defendant is a trustee of any assets received and converted by her and seeks "damages for fraud, including for deceit".
47 Although the pleading is not as clear as it could be, it is clear enough that by the plea in par 8 it is sought to introduce allegations of a fraudulent scheme by which the third defendant is to be made liable as trustee of the property procured by her through that fraudulent scheme and, alternatively, liable for damages for deceit. It is unnecessary for present purposes to consider whether the matters alleged are capable of giving rise to the causes of action pleaded. Certainly no point was taken in that regard by the third defendant.
48 In my view, the claim in par 8 of the minute of proposed substituted statement of claim does not arise out of the same facts or substantially the same facts as the existing cause of action. Whilst it apparently relates to the same property as the claim in conversion, and involves elements of the alleged conversion, that is not sufficient to satisfy the requirements of O 21 r 5. The claim of fraud depends substantially upon additional facts that are entirely unnecessary to establish the existing cause of action in conversion. In particular, it involves as primary and essential elements, fraudulent acts and a fraudulent intent on the part of the third defendant. That takes it outside the ambit of the facts relied upon for the current plea.
49 Accordingly, I would not grant leave to make the amendments set out in par 3.6 of the indorsement and par 8 of the minute of proposed substituted statement of claim.
50 The third defendant also takes two objections to the amendments proposed to the claim for conversion. The first complaint is that the plaintiffs do not particularise in par 7.1 the property which they say was
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- received by the third defendant and converted to her own use or benefit. The third defendant says that by deferring the provision of particulars until after discovery and answers to interrogatories by the third defendant, the first plaintiff "is asking the third defendant to establish a case upon which he carries the onus nine and a half years after the event".
51 The statement of claim has, however, stood substantially in this form since July 2000. I do not consider that at this stage it is an appropriate objection to the proposed amendments to the statement of claim. If the third defendant wishes to pursue the issue of the provision of particulars, that is a matter for her to do by the other means available to her under the Rules.
52 The third defendant also complains that pars 7.2 and par 7.3 do not disclose a cause of action. It is said that no cause of action by the first plaintiff is established simply by pleading that he is a beneficiary of the Trust. That would not make the third defendant liable to account to him for Trust assets she received.
53 In my view, the objection is properly taken. In normal circumstances any such claim would lie with the trustee. As the pleading stands, it is not apparent on what basis it is said that the third defendant is liable to account to the first plaintiff, whether in addition to or instead of the trustee of the Trust, for Trust property simply because the first plaintiff is a beneficiary of the Trust. I would not, therefore, allow par 7.3 so far as it refers to the first plaintiff.
54 It was also submitted by both the defendants that the proposed amendments should, in any event, be refused on the ground of delay. It was argued that the amendments have come very belatedly and without explanation for the delay. It was submitted that it would be contrary to case management principles to allow the amendments so long after the action was commenced.
55 It do not consider that the amendments should be refused on that basis. It is true that the progress of the action has been, at best, slow. Although it was commenced in 1999, it has not advanced beyond the pleading stage. Part of the explanation for its slow progress is that the plaintiffs appealed in February 2001 against a default judgment obtained by the third defendant. That appeal was allowed on 27 November 2001. There was then, however, a long period of inactivity from about December 2001 until the action was revived early in 2003.
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56 While the amendments are sought to be made long after the action was commenced, I am not satisfied, having regard to the nature of the amendments, that they would cause any prejudice to the defendants that cannot be remedied by costs. There is no evidence before me that would suggest otherwise. In the light of what was said by the High Court in TheState of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146, I consider that the proposed amendments which I have found to be unobjectionable should be allowed.
57 I would therefore grant leave to the plaintiffs to amend the indorsement to the writ in terms of the minute of amended writ of summons, except for pars 2.5 and 3.6, and the words "and Trust property" in par 2.2. I would grant leave to the plaintiffs to amend their statement of claim in terms of the minute of substituted statement of claim, except for pars 8.1.1 to 8.1.7 and the words "and, to the First Plaintiff (in his capacity as a beneficiary of the Trust)" in par 7.3.
58 I will hear the parties on the form of orders and costs.
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