Savva v Fairfield and Alphington Fish Protection Society and Anglers Club Trust

[2005] VSC 88

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 5741 of 2003

ANDREW PHILLIP SAVVA & ANOR	Plaintiffs/Respondents
v
FAIRFIELD AND ALPHINGTON FISH PROTECTION SOCIETY AND ANGLERS CLUB TRUST & ORS	Defendants/Appellants
and
AUGHTERSONS (A FIRM)	Third Party

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JUDGE:	TEAGUE J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 February 2005
DATE OF JUDGMENT:	1 April 2005
CASE MAY BE CITED AS:	Savva & Anor v Fairfield and Alphington Fish Protection Society and Anglers Club Trust & Ors
MEDIUM NEUTRAL CITATION:	[2005] VSC 88

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PRACTICE and PROCEDURE – Appeal from Master dismissing application for joinder of second third party – Discretion and relative prejudice – Appeal dismissed

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs/Respondent	Mr M. Wise	Dellios, West & Co
For the Second, Third and Fifthnamed Defendants/Appellants	Mr J. R. Dixon	Wainwright Ryan

HIS HONOUR:

1. This appeal against a decision of Master Wheeler dismissing an application to join a third party came before me in the Practice Court.  After hearing submissions, I said that I was satisfied that the appeal should be dismissed with costs, and that I would provide reasons later.  I regret the longer than usual delay in providing my reasons.  The date of these reasons  will operate as the date of the decision for the purposes of the Rules.

1. The appeal, under Rule 77.05 which proceeded as a rehearing, was brought by the second, third and fifth defendants (“the appellants”) in the proceedings, and resisted by the plaintiffs, Andrew and Tina Savva (“the Savvas”).  The Savvas have at all times been represented by the law firm of Dellios, West & Co.   The appellants, represented by the law firm of Wainwright Ryan, applied to the Master for leave to join Dellios, West & Co as a third party to the proceeding.  The appellants had earlier joined as a third party the law firm of Aughtersons, which had acted for the appellants on the sale of land in Rathmines Road, Fairfield (“the property”). The Savvas, as purchasers under a contract of sale of the property, sought damages from the appellants as the vendors of the property, claiming to have suffered loss and damage as a result of delay in their being registered on the title to the property. 

1. The following chronologies as to the events leading up to the proceedings and as to steps in the proceedings are based on draft pleadings and documents placed before me on the hearing.  I believe there is no dispute as to them. 

1. On 19 June 1964, the following endorsement was made on the title to the property: 

“Memo No.1811 Act 6359 The land comprised herein is now held by the trustees for the time being of Fairfield and Alphington Fish Protection Society and Anglers Club Trust which is registered in the Register of Successory Trust Folium 519”

1. On 20 September 2000, the Fairfield and Alphington Fish Protection Society and Anglers Club Trust was incorporated under the Associations Incorporation Act 1981. In 2001, the Savvas planned to purchase to develop as flats, two adjoining blocks. One of those adjoining blocks is the property. In June 2001, Aughtersons were engaged to act for the vendors. Aughtersons prepared a contract of sale. Attached to the contract was a statement under s.32 of the Sale of Land Act 1962. Also attached was a copy of the certificate of title to the property, which bears the endorsement noted above. In the contract, where the vendor is named, there was typed in: “Fairfield and Alphington Fish Protection Society and Anglers Club Trust”. Handwritten above those words later were the words: “Douglas Charles Milroy Lacy of 8 Cherry Orchard Rise Box Hill North and Barry McNally of 12 Morris Road Upwey as Trustees of the”. The contract bears the signature: “Douglas C Lacy”. On 18 July 2001, Dellios, West & Co wrote to Aughtersons asking for evidence of the vendor’s right to sell. On 31 July 2001, Aughtersons replied, providing the names and addresses of Messrs Lacy and McNally, asked for the contract to be amended, and indicated that records were being checked to obtain evidence of their appointment as trustees. On 6 August 2001, Aughtersons wrote again enclosing some minutes which referred to Messrs Lacy and McNally. On 7 August 2001, Dellios, West & Co. forwarded requisitions, that included one which asked whether the vendor was under a legal disability. In a response, dated 16 August 2001, the relevant requisition was answered: No. On 4 April 2002, at settlement, Dellios, West & Co. accepted a transfer naming as vendor: Fairfield and Alphington Fish Protection Society and Anglers Club Trust. The Registrar of Titles declined to register the transfer. The rectification of the problem ultimately was achieved only by an order made in the Practice Court in May 2003. The order directed the Registrar of Titles to register the Savvas as registered proprietors. The Savvas claim to have been prejudiced by the delay in becoming registered. They make a claim for increased building costs, holding costs, loss of profits and loss of rental.

1. On 9 May 2003, the proceedings were initiated by originating motion against the first four defendants. On 19 May 2003, an order was made for the joinder of the fifth defendant. The fourth defendant, the Registrar of Titles, has not entered an appearance. On 3 September 2003, an appearance was entered by Aughtersons on behalf of the other four defendants. On 3 October 2003, an order for directions was made. On 21 November 2003, Wainwright Ryan gave notice that they were then acting for the other four defendants. Thereafter, documents filed by Wainwright Ryan refer to them as acting only for the appellants. On 20 February 2004, a Third Party Notice was filed, naming Aughtersons as third party. On 1 March 2004, Ebsworth & Ebsworth entered an appearance for Aughtersons. Between that date and 3 December 2004, various interlocutory steps were taken. On 3 December 2004, a summons was taken out on behalf of the appellants seeking leave to join Dellios, West & Co as a second third party. Exhibited to an affidavit relied on before the Master was a proposed amended Third Party Notice, wherein the appellants sought damages and an indemnity, alternatively, contribution in respect of any sum which the Savvas may recover against the appellants of any of them. It was the sort of claim to which s.23B of the Wrongs Act 1958 might be seen to apply, provided there was “the same damage” as provided for in that section.

1. In paragraph 7 of the order of the Master made on 8 December 2004, it is ordered that the application for leave to join Dellios, West & Co. is dismissed.  Under “Other Matters”, there appears: “This application must be rejected having regard to Alexander & Others and Perpetual Trustees WA Ltd (2004) 204 ALR 417.”

1. Most of the submissions made to me by Mr Dixon for the appellants and Mr Wise for the Savvas were based on what had been decided, as to s.23B of the Wrongs Act, in Alexander and in a case cited in Alexander, namely Royal Brompton Hospital NHS Trust v Hammond [2002] 2 All ER 801. I subsequently had occasion to review what was said as to Alexander in Andar Transport Pty Ltd v Brambles Ltd (2004) 78 ALJR 907. There was debate before me as to matters such as whether the proposed claims for breach of duty by the Savvas as clients as against Dellios, West & Co. as their solicitors gave rise to the same damage as that claimed by the Savvas as purchasers as against the appellants as vendors. Put shortly, what was decided in the Brompton Hospital case, was that the damage claimed by an owner against an architect for negligently certifying for more time was not the same damage claimed against a builder for damages for delay in completion.  In Alexander, six judges were split as to whether the damage claimed for breach of one trust, set up by solicitors as directed by a trustee company for investors, was or was not the same damage claimed under a different trust that had also been set up by those solicitors for investors. 

1. Messrs Dixon and Wise took me to different parts of Alexander and the Royal Brompton case, to suggest how and why the propositions there propounded ought to be applied in the present context.  Mr Wise took me to passages in MacGregor on Damages and to Lake v Bushby [1949] 2 All ER 964. Inter alia, he argued that the damages were not the same because a quite different result, namely no contract at all, might be found to have been the consequence of a proper performance of Aughterson’s retainer.

1. Mr Wise also contended that the joinder should not be ordered in the exercise of my discretion.  There are a number of cases where consideration was given to factors relevant to the exercise of the discretion.  They include: Chatsworth Investments v Amoco (UK) Ltd [1968] Ch 665 at 690, Myers v Sherick Ltd & others [1974] 1 All ER 81 at 86, Wasley v Frost [1974] 7 SASR 506 at 508, and Lammers v Dura (Australia) Constructions Pty Ltd (unreported, Batt J, 10 February 1995) at 11 and 12. The ultimate criterion is the interests of justice.  The court must weigh up the prejudice, hardship and inconvenience to all the parties to the proceedings arising from a decision to join or not join the proposed third party.  There are advantages to the appellants in a joinder.  They include that the appellants could well suffer prejudice if the issues are not resolved in the same proceeding.  A joinder avoids the potential for conflicting findings on the part of two different judges.  Only to some extent will the disadvantages be mitigated if the appellants issue separate proceedings and take appropriate steps to expedite the hearing of those separate proceedings to maximise the prospect that they are listed for hearing before  the same trial judge as the current proceedings.

1. In the instant case, I am troubled by the potential prejudice to the Savvas arising from further delay if a joinder order were made.  The delay from the appellants entering an appearance to applying to join Dellios, West & Co. has been considerable. From the perspective of the Savvas, this ought to be a relatively straightforward case.  Moreover, while I am conscious that, as to where liability as between the potential parties is ultimately likely to lie, there are too many factors which are not and could not adequately be assessed by me, a very preliminary assessment based on the materials before me points strongly to the respondents having a very strong case against the appellants.  That consideration alone would probably not suffice to warrant the discretion being exercised against the joinder.

1. There is more.  I am troubled about what I assess to be the strong potential for there to be prejudice to the Savvas in having to lose their solicitors.  It seems clear to me that, if a joinder order were made, it would not be appropriate for the same solicitors to be both on the record for the Savvas and also a party.  I say that even though the practical position is that it is highly likely that lawyers for professional indemnity underwriters would come onto the record as solicitors for  Dellios, West & Co as party.  Whether there is only the perception or there is the reality of a conflict of interest, the problem is preferably addressed, in my view, by the alternative of allowing the claim to be brought in separate proceedings that could be heard, if and as the trial judge considers it appropriate, either at the same time or immediately after the current proceeding.

1. There is more.  I am also troubled as to the potential for prejudice to the Savvas in having to be a party to a proceeding, in which there is the added complexity of addressing issues of the kind canvassed in Alexander. It is apparent from the reasons in Alexander, the Brompton Hospital case and Ardan that there is considerable scope for different approaches to the issue of what amounts to the same damage. The different approaches are linked at least in part to whether a broader or narrower interpretation is to be given to s.23B of the Wrongs Act. Although my review of the authorities was necessarily a limited one, I formed two impressions.  One was that on balance, a resolution of the issue as to how the propositions in the cases were to be applied was probably more likely to be favourable to the appellant than to the Savvas.  The other was that, because the jurisprudence is far from settled, predictability of result is far from assured, but complexity is guaranteed.    I am satisfied that the potential prejudice to the Savvas from a joinder would considerably outweigh that to the appellants from not being given leave to join.

1. For these reasons I was satisfied that the proper order was that the appeal against the order of Master Wheeler should be dismissed, with the usual order as to costs.