Thomas v National Australia Bank Ltd

[2000] QCA 425

[2000] QCA 425

COURT OF APPEAL

DAVIES JA
HELMAN J
DOUGLAS J

Appeal No 6048 of 1998

GRAHAM ARNOLD PRANCE THOMAS (Plaintiff)        Respondent

and

NATIONAL AUSTRALIA BANK LIMITED
ACN 004 044 937  First Defendant

and

LLOYDS BANK NZA LIMITED
ACN 000 931 760  Second Defendant

and

ARTHUR ANDERSEN (a firm) (Third Defendant) First Appellant

and

JOHN EBBAGE (Fourth Defendant)           Second Appellant

BRISBANE

..DATE 12/10/2000

JUDGMENT

DAVIES JA:  On 9 June 1998 a chamber judge, amongst other things, directed that a draft amended statement of claim be delivered by 4 p.m. on 12 June 1998 and refused to make any order as to costs in respect of the application before him which had been one for leave to deliver the amended statement of claim.

The appellants who are the third and fourth defendants in the action appeal against, in effect, the order giving leave to amend the statement of claim in a specific respect and also against the refusal of the learned primary judge to make an order as to costs, the learned primary judge having granted leave to appeal against the order as to costs.

The primary appeal is against leave granted by the learned primary judge to amend the statement of claim in a way which would add a new cause of action outside the limitation period.  It is common ground that the question here is whether that new cause of action arises out of the same facts or substantially the same facts as the cause of action in respect of which relief had already been claimed in the action.

It is also common ground that that question should be determined under order 32 rule 1 subrule 5 of the Rules of the Supreme Court as they then were. Mr Morris conceded that as Mr Bain contended that that rule applied to this action at least unless this Court were to hold that his Honour was wrong, in which case Mr Morris contended for a wider discretion pursuant to rule 376 subrule 5 of the Uniform Civil Procedure Rules. The statement of claim in the various forms in which it had been framed since it was first delivered on 19 September 1996 pleaded in effect the following:

1. The respondent owned a property described in certificate of title 4099 folio 154 and situated at Moons Lane, Brookfield;

1. The respondent gave a mortgage over the Moons Land property as partial security for monies advanced by the first defendant to certain companies;

1. The first defendant served a notice on 8 June 1990 demanding immediate repayment of the loan;

1. The first defendant subsequently appointed the second appellant, who was a partner in the first appellant firm to sell the Moons Lane property;

1. The second appellant sold the Moons Lane property; and

1. As a result of the second appellant's failure to sell the Moons Lane property with due care, or in breach of the relevant provisions of the Property Law Act, the respondent has suffered damage.

In its defence in response to those allegations, which was delivered on 13 February 1998, the first defendant denied that the second appellant sold the Moons Lane property and admitted and alleged that the first defendant sold the property.  It also served and filed a notice of contribution against the appellants alleging that the first defendant had relied on the recommendations of the second appellant in selling the property.

That is apparently what prompted the respondent to seek leave to make an amendment alleging, in the alternative to the allegation that the second appellant sold the Moons Lane property without due care, an allegation that the first defendant sold the property acting in reliance on recommendations of the second appellant and in effect that the recommendation was negligently made.

However, the statement of claim neither in the form in which it was before his Honour on 9 June nor in the form in which it was amended and delivered as it appears it was later on 29 June 1998 in consequence of his Honour's direction alleged the second of these.  That is, that the recommendation was negligently made or consequently any particulars of that negligence.

When that failure was pointed out by the Court, it was agreed by the parties subject to any question of costs and the argument on the question to which I've already referred, that the respondent should have the opportunity to reformulate the statement of claim to make those allegations.  This resulted in the handing up by Mr Morris of yet another amended statement of claim which I have marked "A" and will place with the Court papers.  That further amended statement of claim proposes further amendments adding paragraphs 7A, 11A and 15A and making consequential amendments to paragraphs 17 and 19 of the statement of claim.

In my opinion as now formulated, that alleges a claim based on negligent recommendations by the fourth defendant, the second appellant, and that as Mr Bain has in effect conceded, as alleged and particularises, arises out of substantially the same facts as the allegations based on the negligent sale.  In those circumstances, it now seems to me that this Court should grant leave to amend in accordance with that statement claim as now formulated, notwithstanding that it permits a cause of action to be raised outside the period of limitations.

It does not follow from the fact that this formulation comes within the provisions of order 32 rule 1 subrule 5 that that amendment should necessarily have been allowed, this Court and the learned primary judge of course having a discretion in the matter.  However, no prejudice was pointed to other than the inability to rely upon the limitation period.  The basis put forward by Mr Bain for resisting this really is the fact that the report upon which the respondent relies for the allegations with respect to the recommendation appears to have been within the possession of the respondent by 4 April 1997, as appears from the respondent's letter of that date which refers to that report.  That's true, but there is no suggestion that there was any prejudice arising on the plaintiff's part from the failure of the defendants to plead immediately and indeed, the report did not go as far as to allege with the same particularity as the cross claim to which I have already referred did, which did not emerge until 13 February 1998.

It was this, as I have already indicated, which appears to have prompted the proposed amendments which went before his Honour on 9 June.  The amendments in accordance with the proposal by Mr Morris in effect answers the principal argument which the appellant otherwise puts forward to this Court.  However, if they had not been made, it is my view that the appellant would have been entitled to succeed.  Whether it is correct to put it solely on the basis of the fact that the allegation was not sufficiently particularised or whether one puts in terms of the argument put by Mr Bain, that is, that it does not appear from the statement of claim that the matters arise out of substantially the same facts does not in my opinion matter greatly.

Indeed, it seems to me that on neither of those views could the respondent have resisted the success of this appeal without formulating amendments which it now makes.  The result, it seems to me, is that the orders that I would make with respect to the principal point is that I would grant leave to amend in terms of the statement of claim which I have marked with the letter "A" and I would set aside the order which the learned primary judge made below, and I would order the respondent to pay the appellants' costs of the proceedings below.

As Mr Bain point out, there were many other matters raised below in addition to the matter which became the principle point before this Court, and in most of them it appears that the appellant in effect won and did so because the matter had been inadequately pleaded.  In those circumstances, it seems to me the appellant should have obtained his costs below and consequently, I would order that that order be substituted.  It also follows, in my opinion, that the appellant should have his costs of this appeal, the respondent seeking yet a further indulgence from this Court in order to reformulate the statement of claim once again. 

So those are the orders which I would make granting leave to amend the statement of claim in the manner in which I have indicated, allowing the appeal, setting aside the order made below with respect to costs and substituting an order that the appellant have his costs of that application and I would order that the respondent pay the appellants' costs of this appeal.

HELMAN J:  I agree.

DOUGLAS J:  I agree.

MR BAIN:  Your Honours, there is one minor matter.  In the latter part of your Honour, the presiding judge's reasons and naturally given that we spoke about the fourth defendant as effectively the act all throughout your Honour spoke in the singular about the appellants' costs.  We understand that to be the third and fourth defendants, the appellants' plural costs.  I'm sure there would be no problem about that, but I‑‑‑‑‑

DAVIES JA:  I'm sorry.  Yes,

MR BAIN:  We, in the latter part of the arguments referred to Mr Ebbage and the fourth defendant as the appellant throughout.

DAVIES JA:  No, you can take it that will be corrected,
Mr Bain, thank you.  Mr Morris?

MR MORRIS:  Two very minor matters which I should also raise.  One is in relation to the leave to amend.  It occurs to me that the first and second defendants have not been given an opportunity to be heard about that.  I can't frankly see how they could be interested in it but I'm sure the Court wouldn't wish to make an order that might preclude their rights if they had some interest.

DAVIES JA:  All right, subject to any application which the first and second defendants might make, leave to amend is granted.

MR BAIN:  We can tell, your Honours, the second defendant is now out of the case as far as I understand it's been a matter of compromise.

MR MORRIS:  Yes, it's really the first defendant.

DAVIES JA:  All right.  Leave to amend subject to any application which the first defendant may make.  Does that cover it?

MR MORRIS:  It does, your Honour.  The other matter I wanted to mention and I have to confess I raise this solely on my own behalf.  There were aspects of your Honours - the presiding Judge's reasons in which you referred, for example, to my seek it, further indulgence and so on.  If your Honour were thinking of reviewing the reasons for publication‑‑‑‑‑

DAVIES JA:  Don't blame you personally?  All right, Mr Morris, I'll bear that in mind.

MR MORRIS:  Thank you, your Honours.

DAVIES JA:  You are welcome.

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