St Barbara Ltd v Hughes [No 2]
[2011] WASCA 235
•1 NOVEMBER 2011
ST BARBARA LTD -v- HUGHES [No 2] [2011] WASCA 235
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASCA 235 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:102/2008 | 17 & 18 AUGUST 2011 | |
| Coram: | MARTIN CJ PULLIN JA MURPHY JA | 1/11/11 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | ST BARBARA LTD ZYGOT LTD BRYAN KEVIN HUGHES (As Trustee of the Kingstream Steel Creditors' Trust) |
Catchwords: | Interlocutory appeal Appeal against order granting leave to amend writ and statement of claim Whether a 'new' cause of action Leave to appeal granted Appeal dismissed |
Legislation: | Rules of the Supreme Court 1971 (WA), O 21 r 5(5) |
Case References: | Dallas Development Corporation Pty Ltd v Western Australian Land Authority (Unreported, WASCA, Library No 980245, 7 May 1998) Morgan v Banning (1999) 20 WAR 474 Weldon v Neal (1887) 19 QBD 394 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : ST BARBARA LTD -v- HUGHES [No 2] [2011] WASCA 235 CORAM : MARTIN CJ
- PULLIN JA
MURPHY JA
- First Appellant
ZYGOT LTD
Second Appellant
AND
BRYAN KEVIN HUGHES (As Trustee of the Kingstream Steel Creditors' Trust)
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : NEWNES J
Citation : HUGHES -v- ST BARBARA MINES LTD [No 3] [2008] WASC 220
File No : CIV 1913 of 2002
(Page 2)
Catchwords:
Interlocutory appeal - Appeal against order granting leave to amend writ and statement of claim - Whether a 'new' cause of action - Leave to appeal granted - Appeal dismissed
Legislation:
Rules of the Supreme Court 1971 (WA), O 21 r 5(5)
Result:
Leave to appeal granted
Appeal dismissed
Category: B
Representation:
Counsel:
First Appellant : Mr C R C Newlinds SC & Mr I Pike
Second Appellant : Mr C R C Newlinds SC & Mr I Pike
Respondent : Mr R M Smith SC & Mr T O Coyle
Solicitors:
First Appellant : Tottle Partners
Second Appellant : Tottle Partners
Respondent : Lavan Legal
Case(s) referred to in judgment(s):
Dallas Development Corporation Pty Ltd v Western Australian Land Authority (Unreported, WASCA, Library No 980245, 7 May 1998)
Morgan v Banning (1999) 20 WAR 474
Weldon v Neal (1887) 19 QBD 394
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1 MARTIN CJ: This application for leave to appeal should be granted, but the appeal dismissed for the reasons given by Pullin JA with which I agree.
2 PULLIN JA: This is an application for leave to appeal against an order granting the respondent leave to amend his writ and statement of claim. The amendment introduced into the writ a cause of action against the appellants for damages for breach of contract. The indorsement introduced into the writ by the amendment asserted that the contract arose on or about 29 January 1999. The respondent contended that this contract had the effect of varying an option deed (as amended by a supplemental deed) between the first appellant (St Barbara) and the respondent's predecessor in title (Kingstream). The respondent contended that this contract arose out of a letter sent by the first appellant's solicitor on 29 January 1999 (Letter Agreement). The breach of the Letter Agreement by St Barbara and/or the second appellant (Zygot) was alleged to have occurred on 19 September 2001.
3 The appellants contended before the primary judge and in this court that leave should not have been granted because the cause of action for damages for breach of the Letter Agreement arose more than six years before the date of the application to amend and because it was not 'new' within the meaning of O 21 r 5(5) Rules of the Supreme Court 1971 (WA).
Chronology of relevant events
4 The relevant events are as follows:
(a) 19 September 2001: The breach of the alleged Letter Agreement occurred.
(b) 2 July 2002: The writ issued and the indorsement included a claim for damages based on a cause of action alleging the breach of the Letter Agreement. The writ was issued within the six year limitation period.
(c) February 2003: The respondent amended the writ to add a claim for rectification of the option deed (as amended by the supplemental deed). The 29 January 1999 letter referred to above, was relied on as a particular supporting the rectification claim. This amendment to the writ was well within the limitation period.
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- (d) 22 December 2004: The respondent amended the writ and deleted the breach of the Letter Agreement cause of action. This amendment also introduced a claim for damages for breach of a term in the contract which came into existence when the option referred to in the option deed (as amended by the supplemental deed) came into existence, a claim distinct from the claim for damages for breach of the Letter Agreement.
(e) 10 October 2008: The respondent applied for, and an order was made, granting the respondent leave to amend the writ and statement of claim to reintroduce the claim for damages for breach of the Letter Agreement. This date was outside the period of six years from the date of breach of the Letter Agreement. This is the order under appeal.
5 The application was made relying upon O 21 r 5(5) of the Rules of the Supreme Court 1971 (WA), which reads as follows:
An amendment may be allowed … 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.
Reasoning of the primary judge
6 The primary judge, in his reasons, made obiter observations on the law about circumstances which were not directly comparable to the current circumstances: see [91] - [99]. It is not necessary to comment upon those observations. At [100] the primary judge turned to the circumstances of this case and after setting out the terms of O 21 r 5(5), he said:
The plaintiff says that the proposed cause of action arises out of the same or substantially the same facts as the extant rectification claim and therefore O 21 r 5(5) permits it to be made. Moreover, it is not simply the resuscitation of an abandoned claim, being different in nature to the original claim, but even if it was, it is still a 'new claim' for the purposes of O 21 r 5(5).
The defendants, on the other hand, contended that the amendment is not a 'new' cause of action within the meaning of O 21 r 5(5) because it was previously included in the writ; that is, it is not (as it must be) new to the action. It was submitted that there is no difference in substance between the cause of action in par 1.1 of the original indorsement and that in the proposed amendment to the writ. The amendment did not, therefore, raise
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- a 'new' cause of action; it recycled an old cause of action and accordingly O 21 r 5(5) had no application [102] - [103].
7 The primary judge then referred to Dallas Development Corporation Pty Ltd v Western Australian Land Authority (Unreported, WASCA, Library No 980245, 7 May 1998), only then to disregard it on the basis that it did not provide any guidance to the outcome in this case. Finally, the primary judge said:
There does not seem to me to be any warrant for construing the terms of the rule so as to exclude an amendment of the nature now sought by the plaintiff. Order 21 r 5(5) is concerned with the circumstances in which a cause of action may be added to a writ or pleading by amendment after any relevant limitation period has expired. The focus of the rule is on the expiry of the limitation period. The effect of the rule is to limit such amendments to those where the cause of action to be added or substituted arises out of the same, or substantially the same, facts as an existing cause of action. The rule is not otherwise concerned with the nature of the amendment, and in particular, whether such a claim had previously been made in the writ.
In my view, O 21 r 5(5) is not restricted to circumstances where the cause of action sought to be added to the writ has not previously been included in the writ. A 'new' cause of action is one that is not contained in the writ at the time the amendment is sought to be made. It is not to the point that it was once contained in the writ. In my view, therefore, the proposed amendment (to the extent it is to the same effect as par 1.1 of the original indorsement) is a 'new' cause of action for the purposes of O 21 r 5(5).
The fact that a cause of action has previously been deliberately abandoned is, however, a matter going to the exercise of the court's discretion under O 21 r 5(5) [107] - [109].
8 Finally, his Honour said:
The remaining question in respect of the application of O 21 r 5(5) is whether the cause of action in these proposed amendments arise out of the same, or substantially the same, facts as an existing cause of action. Order 21 r 5(5) applies where the amendment adds, not a new cause of action arising from quite different facts, but is 'rather a re-labelling, addition, modification or clarification of an existing cause of action raised in the indorsement': Morgan v Banning (486). Whether or not the cause of action in question can be said to arise out of the same, or substantially the same, facts as an existing cause of action is essentially a matter of impression based on the degree of overlap: Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431.
I did not understand it to be contested by the defendants that the proposed amendment arises out of substantially the same facts as an existing claim;
(Page 6)
- the defendants simply argued that it was not a 'new' cause of action [111] - [112].
The appellants' submissions
9 The point advanced by the appellants before the primary judge and advanced again in this appeal was that the claim for damages for breach of the Letter Agreement was not 'new' because it had once been in the writ, was dropped, and then by applying to reintroduce it by amendment, the respondent was seeking to introduce, as it were, an 'old' cause of action. The appellants submitted that the word 'new' in O 21 r 5(5) means 'new to the proceedings' and that the cause of action based on the Letter Agreement was not new to the proceedings.
10 The appellants conceded that the claim for damages for breach of the Letter Agreement which had been in the writ in 2002, dropped in 2004 and which the respondent sought to reintroduce in 2008, arose out of the same facts or substantially the same facts as an existing cause of action. This was the rectification cause of action which had been in the writ before the limitation period expired. In view of that concession, and there now being no argument on appeal that the discretion conferred on the court should not have been exercised, the sole issue was whether the breach cause of action was, or was not, 'new'.
11 This is a short point. It allows for little more by way of debate beyond assertion on either side about the correct construction of O 21 r 5(5). No authority on the point was referred to by the parties.
Resolution of the appeal
12 Speaking generally, O 21 r 5(5) cannot be employed to defeat the provisions of the Limitation Act 1935 (WA): Morgan v Banning (1999) 20 WAR 474, 476, 483. It was introduced to cure the unduly rigid and narrow interpretation of Weldon v Neal (1887) 19 QBD 394: Morgan v Banning (486). The decision in Morgan v Banning made it clear that the rule in Weldon v Neal only applied where the cause of action to be introduced by amendment was 'truly new' (486) (meaning not arising out of the same or substantially the same facts as an existing cause of action) and outside the limitation period. In a sense, all O 21 r 5(5) does is to clarify the application of the rule in Weldon v Neal.
13 The issue in this case is more specific. It is concerned with the meaning of the word 'new' in O 21 r 5(5). The primary judge did not err. The cause of action (that is, the basket of facts giving rise to a claim to relief - see Morgan v Banning (484)) based on breach of the Letter
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- Agreement was new to the writ as it stood at the time the application was made before the primary judge. There is no reason to read into O 21 r 5(5) the extra words 'to the proceedings' after the word 'new'.
14 The cause of action arose out of the same facts or substantially the same facts as the rectification cause of action in respect of which relief was already claimed (and had been claimed in the writ before the limitation period expired). Thus, in the words of Wheeler J in Morgan v Banning (486), the application to amend was to 'add to' the rectification cause of action raised in the indorsement in the writ. Once it was conceded that the proposed amendments arose out of the same facts or substantially the same facts as a cause of action in respect of which relief had already been claimed in the writ, no limitation issues could arise: Morgan v Banning (483). If the breach of the Letter Agreement cause of action had not arisen out of the same facts or substantially the same facts as the other cause of action in respect of which relief was claimed in the writ (the rectification claim), then O 21 r 5(5) would not have applied but that was not the case.
15 Leave to appeal should be granted but the appeal should be dismissed.
16 MURPHY JA: I agree with Pullin JA that leave to appeal should be granted, but the appeal should be dismissed.
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