The Presbyterian Church of Victoria Trusts Corporation v Anstee, Nuske, Evans, Holman, Kerss (No 3)
[2017] VSC 520
•15 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
S CI 2013 03222
BETWEEN
ATTORNEY-GENERAL OF VICTORIA on the relation of THE PRESBYTERIAN CHURCH OF VICTORIA TRUSTS CORPORATION
| THE PRESBYTERIAN CHURCH OF VICTORIA TRUSTS CORPORATION | Plaintiffs |
| and | |
| DOROTHY RAE ANSTEE, JAMES FREDERICK NUSKE, BRUCE CHARLES EVANS, HELEN ANNE HOLMAN and PAUL LINDSAY KERSS as Trustees of the Scots’ Church Properties Trust and as Trustees of the Assembly Hall of the Presbyterian Church of Victoria | First to Fifth Defendants |
| and | |
| HARRY MEARES HEARN | Third Party |
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JUDGE: | SIFRIS J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 August 2017 |
DATE OF JUDGMENT: | 15 September 2017 |
CASE MAY BE CITED AS: | The Presbyterian Church of Victoria Trusts Corporation v Anstee, Nuske, Evans, Holman, Kerss & Ors (No 3) |
MEDIUM NEUTRAL CITATION: | [2017] VSC 520 |
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PRACTICE AND PROCEDURE – Pleading – Application to amend third party statement of claim after principal proceeding largely determined – Leave granted.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms C. G. Rome-Sievers | Lewis Holdway Lawyers |
| For the Defendants | Mr D. Guidolin | Marsh & Maher |
| For the Third Party | Mr C. Caleo QC with Mr D. Luxton | Minter Ellison |
HIS HONOUR:
Introduction
By summons filed 3 August 2013, the First to Fifth Defendants (‘the Trustees’) seek leave to amend their Third Party Statement of Claim. The Third Party (‘Hearn’) opposes the grant of leave. Each party has filed an affidavit[1] and written submissions. The proposed Amended Third Party Statement of Claim (‘PAC’) is exhibited to the Nunnink Affidavit.[2]
[1]The Trustees rely on the affidavit of Ingrid Maria Nunnink sworn 3 August 2017 (‘Nunnink Affidavit’). The third party relies on the affidavit of Cameron John Oxley sworn 11 August 2017 (‘Oxley Affidavit’).
[2]Exhibit IMN 13.
The reason for the amendments is, it was submitted, to bring the PAC into line with the findings of the court in the claim by the plaintiff (‘PCVTC’) against the Trustees (‘the Principal Proceeding’). Other than costs, the Principal Proceeding has largely been determined.
It will be recalled that in the Principal Proceeding I found the Trustees in breach of trust in relation to the acquisition and renovation of the Assembly Hall.[3] In a later judgment I held that each of the charitable objects of the Scots’ Church Property Trust (‘SCPT’) were entitled to an equitable proprietary interest in the Assembly Hall.[4] I will assume familiarity with the Judgments. Defined terms bear the same meaning.
[3]The Presbyterian Church of Victoria Trusts Corporation v Anstee, Nuske, Evans, Holman, Kerss & Ors (No 1) [2016] VSC 297.
[4]The Presbyterian Church of Victoria Trusts Corporation v Anstee, Nuske, Evans, Holman, Kerss & Ors (No 2) [2017] VSC 102. The charitable objects are PCV and BOM.
The Amendment
For convenience and ease of reference the PAC is attached as a schedule to this ruling.
The PAC pleads the breach of three retainers –
· The Assembly Hall retainer (para 6);
· The Mortgage retainer (para 41);
· The Renovation costs retainer (para 54(c)).
An alternative claim in negligence is also pleaded. A fourth retainer, namely Failure to advise of risks, was abandoned. It is pleaded in paragraphs 67-77 of the current pleading but has been deleted from the PAC.
The pleading in relation to the three retainers follows a similar format and it is only necessary to deal with one. I propose to deal with the Assembly Hall retainer.
Paragraphs 33, 34 and 39 of the existing pleading (filed 25 August 2014) are entirely orthodox. They plead, not surprisingly, a contingent claim. Before exploring the claim as pleaded and the PAC, or the amendments, it is necessary to note that the existing particulars to paragraph 39, which pleads loss, are in the following terms –
The Defendants are not presently able to particularise their loss and damage, but would do so following the delivery of particulars as to loss and damage from the Plaintiffs.
Further and better particulars were provided by the Trustees on 23 July 2015. The particulars relating to paragraph 39 refer to and specifically include the matters and amounts particularised in paragraph 39 of the PAC.
In my opinion the amendments should be allowed. Essentially they do little more than move from the contingent position to the actual position, following the Judgments.
Paragraph 33A pleads the finding by the court of the breach as alleged by the Plaintiffs in paragraphs 33(a) and (d). It is this breach, now established (hence the deletion in paragraph 34), that gives rise to a breach of the Assembly Hall retainer or breach of duty of care (negligence). The loss that flows is then pleaded in paragraph 39.
Accordingly, the amendments to paragraphs 33 and 34 and the introduction of paragraph 33A are obvious and desirable. Paragraph 33B is not strictly necessary but does no harm. It is really paragraph 39 that is the main concern.
Consideration
Senior Counsel for Hearn raised a number of matters and objections to the application for leave to amend.
The first and primary submission was that the claim against Hearn was wholly contingent on the Trustees’ personal liability to restore the trust estate. As there has been and will not following the Judgment be any obligation to restore the trust estate or any part thereof—a personal liability[5]—the pre-condition or contingency underpinning the claim has, it was submitted, gone. Consequently there is, it was submitted, no basis for the claim.
[5]In fact, at the commencement of the trial, Senior Counsel for the plaintiff indicated that no claim would be made for personal liability against the Trustees.
It was submitted further that the costs claim, being the costs of the proceeding, was a new claim of loss falling under the loss associated with the breach of the Assembly Hall retainer. Senior Counsel pointed to the express abandonment of the fourth retainer, which presumably did relate to legal costs and disbursements of this proceeding.
Finally it was submitted that if the claim was a freestanding claim it was open to the Trustees to progress the claim and their failure to do so has caused such difficulties that they should not now be permitted to do so.
I do not accept the submissions. In my opinion the assumption that the third party claim was entirely contingent on the Trustees being obliged to replenish the trust estate or make payment of a monetary sum—which as it transpired is not the case—is not correct. Rather, the contingency was loss and damages flowing from a breach of trust, namely the acquisition of the Assembly Hall.[6] The claim was always that any damages flowing from this breach—which the court has now found—would be pursued. The fact is that the claim is now far narrower and limited as it excludes what was thought to be the main claim, namely the liability to make good the trust estate. However, the other claims and in particular the costs of the proceeding were always part of the claim and the contingency referred to.[7] The adequacy of the pleading is of course another matter.
[6]See paragraphs 33(a) and 39 (together with the particulars referred to) of the existing pleading.
[7]The decision of Kheirs Financial Services Pty Ltd & Anor v Aussie Home Loans Pty Ltd & Anor [2010] VSCA 355 is consequently of limited relevance.
The next submission was that the claim is statute barred. The position, particularly in relation to (ongoing) costs, is far from clear and I propose to heed the advice in Wardley[8] and leave consideration of limitation issues until the trial.
[8]Wardley Australia Limited and Another v Western Australia (1992) 175 CLR 514.
The next submission attacked the adequacy of the PAC particularly in relation to causation. In light of the lengthy period between the advice and the proceeding, to which the costs relate, it was submitted that there needed to be more precision in relation to the causal nexus. The question posed was this: why are the costs of the proceeding, or potentially adverse costs orders, the result of (negligent) advice provided at a much earlier stage?
In my opinion there is some substance in this submission. Although the PAC (and the existing pleading and particulars) adequately pleads the necessary elements of the claim, including loss,[9] the causal nexus should be identified with more specificity and precision. This may be done either in the pleading or by the provision of further and better particulars.
[9]Nrma Ltd and Ors v Morgan and Ors [1999] NSWSC 407 at [1529].
The final submission related to delay and the difficulties that Hearn faces in proceeding through the interlocutory and trial stages of what, it was contended, was in fact a new case. However, as pointed out it is not a new case. The case was always pleaded. Further, the delay was entirely explicable and indeed desirable. From a case management point of view the best disposition was to put the third party proceedings on hold until the key issues in the main case were decided. This is indeed what has transpired and as a consequence the third party case is far more limited and unfortunately and regrettably relates essentially to costs. So be it. Although the position is unfortunate, there has been no ‘want of prosecution’ and this ground must fail.
Subject to paragraph 20 I will grant the Trustees leave to file and serve the PAC. I will hear from the parties as to further directions both with regard to the Principal Proceeding and the Third Party Proceeding.
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