Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [No 2]
[2022] WASC 460
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: TRANS PETROLEUM (AUSTRALIA) PTY LTD -v- UNITED PETROLEUM (WA) PTY LTD [No 2] [2022] WASC 460
CORAM: SMITH J
HEARD: 29 SEPTEMBER 2022
DELIVERED : 23 DECEMBER 2022
FILE NO/S: CIV 2608 of 2016
BETWEEN: TRANS PETROLEUM (AUSTRALIA) PTY LTD
Plaintiff
AND
UNITED PETROLEUM (WA) PTY LTD
Defendant
Catchwords:
Practice and procedure - Joinder of proposed additional defendant - Application to amend writ to join and plead causes of action against proposed additional defendant
Practice and procedure - Joinder of a defendant - Whether proposed causes of action and apportionable claim within the meaning of s 5AI and s 5AN of the Civil Liability Act 2002 (WA)
Practice and procedure - Whether proposed causes of action are statute barred - Whether open to extend time - Whether failure to commence the action was attributable to fraudulent or other improper conduct of the proposed additional defendant, or for whom the proposed additional defendant is vicariously liable within the meaning of s 38(2) of the Limitation Act 2005 (WA)
Practice and procedure - Limitation - Accrual of time - Principles considered
Legislation:
Civil Liability Act 2002 (WA) s 5AI, s 5AN
Limitation Act 2005 (WA) s 38(2)
Rules of the Supreme Court 1971 (WA) O 18, r 6, O 20, r 10, O 21, r 5
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | A P Hershowitz |
| Defendant | : | M J Sims |
| Proposed Additional Defendant | : | M J Sims |
Solicitors:
| Plaintiff | : | Robertson Hayles Lawyers Pty Ltd |
| Defendant | : | K & L Gates |
| Proposed Additional Defendant | : | K & L Gates |
Cases referred to in decision:
21st Century Promotions Australia Pty Ltd v Telstar Corporation Ltd [2000] SASC 353
AME Hospitals Pty Ltd v Dixon [2015] WASCA 63; (2015) 48 WAR 139
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341
Brandsma & Crockett Pty Ltd v Heindal Pty Ltd [2002] WASCA 96; (2002) 26 WAR 323
Bryan v Maloney (1995) 182 CLR 609
Cartledge v E Jopling & Sons Ltd [1963] AC 758
Catlin v National Australia Bank Ltd [2004] WASC 135
Central Electricity Board v Halifax Corporation [1962] 3 WLR 1313
Christopoulos v Angelos (1996) 41 NSWLR 700
Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415
Coburn v College [1897] 1 QB 702
Cooke v Gill [1873] LR 8 CP 107
Do Carmo v Ford Excavations Pty Ltd [1984] HCA 17; (1984) 154 CLR 234
Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539
Herridge Parties v Electricity Networks Corporation [2021] WASCA 111
Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084 [2021] WASC 450
Lowe Pty Ltd v Belgravia Nominees Pty Ltd [2020] WASCA 180
Ooranya Pty Ltd v ISPT Pty Ltd [No 2] [2019] WASC 453
Permanent Custodians Ltd v Shannon [No 2] [2018] WASC 295
Read v Brown (1888) 22 QBD 128
Superline Enterprises Pty Ltd v Palassis Architects [2019] WASC 414
Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154
Trower & Sons Ltd v Ripstein [1944] AC 254
Vandervell Trustees Ltd v White [1971] AC 912
Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233
Williams v Milotin [1957] HCA 83; (1957) 97 CLR 465
Willoughby v Clayton Utz [2007] WASCA 5
Wurth Australia Pty Ltd v Burgess [2012] WASC 504
Table of Contents
1.0 Application to join a second defendant and leave to amend the writ
2.0 The result
3.0 Background
3.1 The material matters pleaded in the plaintiff's amended statement of claim filed on 17 August 2017
3.2 The material matters pleaded in the defendant's amended defence dated 21 August 2017
3.3 Third party proceedings against Quickstop Pty Ltd
3.4 The result of an application by the plaintiff for production and inspection of documents and an application by defendant to set aside a subpoena issued to Quickstop Pty Ltd on 24 August 2018
4.0 The proposed amendments to the writ and the proposed endorsed substituted statement of claim
4.1 The proposed amendments to the writ, including the addition of a defendant
4.2 The plaintiff's grounds of the application to join the proposed additional defendant and to plead the proposed causes of action
4.2.1 The first proposed cause of action
4.2.2 The second proposed cause of action
5.0 The defendant and proposed additional defendant's submissions as to why the application should be dismissed
6.0 The plaintiff's response to the limitation point and whether it is open to join the proposed additional defendant pursuant to s 5AN(1) of the Civil Liability Act
7.0 Disposition
7.1 Are the proposed causes of action statute barred, and should joinder be refused on this basis?
7.1.1 Can or should the court decide a limitation point in an interlocutory application for joinder and amendment of a writ?
7.1.2 Accrual of time ‑ principles
7.1.3 The proposed causes of action did not accrue in June 2019
7.1.4 Is it open to extend time to bring the proposed causes of action pursuant to s 38(2) of the Limitation Act?
7.2 If the proposed causes of action were not statute barred, would it be open to join the proposed additional defendant and amend the writ to plead the new causes of action?
7.2.1 If causes of action accrued after the proceedings were instituted the writ cannot be amended
7.2.2 If the causes of action accrued before proceedings were instituted and were not statute barred or time to institute proceedings was extended, could the proposed additional defendant be joined pursuant to s 5AN of the Civil Liability Act or pursuant to the general discretion conferred by O 18 r 6 of the Rules of the Supreme Court?
8.0 Orders
SMITH J:
1.0 Application to join a second defendant and leave to amend the writ
The plaintiff filed an application by chamber summons on 3 June 2022, which was subsequently amended by a minute filed on 28 September 2022. The plaintiff in its amended chamber summons seeks the following orders:
(1)United Petroleum Pty Ltd (ACN 085 779 255) of 600 Glenferrie Road, Hawthorn in the State of Victoria be joined as the second defendant in these proceedings, pursuant to O 18 r 6 of the Rules of the Supreme Court 1971 (WA), or alternatively, pursuant to s 5AN of the Civil Liability Act 2002 (WA).
(2)The plaintiff has leave to amend the writ of summons with the indorsed statement of claim set out in Attachment 'MW-11' of the affidavit of Mr Wong.[1]
[1] Affidavit of Chyi Shin Melvin Wong affirmed 31 May 2022, 390 ‑ 436.
The plaintiff also seeks consequential orders for service and for costs of the application.
2.0 The result
For the reasons that follow, it is clear that the proposed causes of action against the proposed additional defendant are statute barred, and the application for joinder and amendment of the writ should be dismissed.
Even if it could be found that the proposed causes of action were not statute barred, the preconditions for the exercise of the power to join a defendant pursuant to s 5AN of the Civil Liability Act cannot be met, nor is the test of necessity met to invoke the general discretion to join a defendant pursuant to O 18 r 6 of the Rules of the Supreme Court.
3.0 Background
3.1 The material matters pleaded in the plaintiff's amended statement of claim filed on 17 August 2017
On 15 September 2016, the plaintiff commenced proceedings against the defendant by filing a writ of summons claiming breach of the terms of a lease, which breaches included a failure to pay rent, unlawful removal of the plaintiff's equipment upon termination of the lease on or about 26 June 2016, and failing or refusal to remedy damage to a car wash affixed to the plaintiff's land. The relief sought in the writ is damages for breach of lease, and further and alternatively, damages for conversion.
The plaintiff at all material times carried on business as a service station operator and a commercial lessor of service stations. The defendant also carries on the business of operating service stations.
The plaintiff was the owner and lessor of the land situated at 2 The Gateway, Edgewater from June 1997 (Edgewater service station).
In an amended statement of claim filed on 7 July 2017, the plaintiff claims that from June 1997 it had plant, equipment and chattels installed in or on the land and all services to the land on which the Edgewater service station was built.
The defendant became the lessee of the Edgewater service station on or about 31 October 2006 when the existing lease was assigned to it by the previous lessee, Quickstop Pty Ltd, until the vacation of the premises by the defendant on or about 24 June 2016.
The plaintiff currently pleads:
(a)prior to the time the plaintiff became the owner of the land the original lessor of the land (also the owner of the land) had constructed, and placed, on the land buildings to be used for the purposes of a service station, which included:[2]
[2] Plaintiff's amended statement of claim, pars 11.1 ‑ 11.3.
(i)4 x Gilbarco MPP 6 hoses fuel bowsers (bowsers);
(ii)pump counter communication system and computers (including the surge protectors and main electrics to the pump box) (pump systems); and
(iii)the car wash including all relevant components (car wash);
(b)on or about 11 July 1996, the original lessees assigned the right, title and interest in the lease (of the land and original lessors' fixtures, plant, equipment and chattels installed in or on the land) to Mobil Oil Australia Pty Ltd (Mobil);[3]
(c)on or about 1 December 2004, Mobil, with the consent of the plaintiff, assigned the lease of the land to Quickstop;[4]
(d)from on or about 1 December 2004 to about 31 October 2006, Quickstop was the lessee of the land;
(e)on or about 31 October 2006, Quickstop, with the consent of the plaintiff, assigned the lease of the land to the defendant;[5]
(f)the defendant vacated the premises on or about 24 June 2016;[6]
(g)prior to the expiration of the lease of the land (and the vacation of the premises) by the defendant, as and from 3 June 2016 the defendant;
(i)without the consent of the plaintiff, removed from the land the bowsers and the pump system;[7] and
(ii)without notifying the plaintiff or rectifying the damage, caused significant damage to the car wash and other plant and equipment on the land.[8]
[3] Plaintiff's amended statement of claim, par 12.
[4] Plaintiff's amended statement of claim, par 14.
[5] Plaintiff's amended statement of claim, par 16.
[6] Plaintiff's amended statement of claim, par 20.
[7] Plaintiff's amended statement of claim, par 45.
[8] Plaintiff's amended statement of claim, pars 52 ‑ 56.
The plaintiff seeks the following relief in its amended statement of claim, against the defendant which relief includes:[9]
[9] Plaintiff's amended statement of claim, pars 69 ‑ 72.
(a)rent in arrears in the amount of $2,478,141.56, alternatively $254,690.64;
(b)damages for conversion, alternatively detinue, with respect to the bowsers and the pump systems, alternatively damages for breach of lease;
(c)damages for breach of the lease with respect to the car wash; or
(d)further, and alternatively, a declaration that:
(i)the bowsers, pump systems and car wash are fixtures upon the land; and
(ii)the defendant is estopped from asserting ownership to the disputed property and an order for equitable damages or compensation;
(e)damages for delay or lost profits from rental payments not recovered from Vibe accruing from 26 June 2016.
3.2 The material matters pleaded in the defendant's amended defence dated 21 August 2017
The defendant denies the plaintiff acquired the disputed property from the original lessors. In par 39A of the defendant's amended defence filed on 21 August 2017, the defendant claims:[10]
[10] Defendant's amended defence, pars 39A.1 ‑ 39A.3.
(a)on or about 13 December 2006, the defendant agreed to purchase from Quickstop, and Quickstop agreed to sell to the defendant, amongst other things, the assets owned by Quickstop and used to conduct its business from the premises (including the disputed property);
(b)the defendant paid consideration to Quickstop for the purchase of the assets; and
(c)in selling the assets to the defendant, Quickstop warranted that it was the legal and beneficial owner of, and had good and valid title to, the assets and that the assets would, on completion, be free of all encumbrances the particulars of which are:
(i)the assets purchased by the defendant and sold by Quickstop are those assets referred to in the list at annexure A to the amended defence;
(ii)the agreement to purchase the assets and Quickstop's ownership of the assets is contained in:
(A)a Heads of Agreement ‑ Sale of Business between Quickstop and the defendant dated 18 October 2006;
(B)an Interdependency Agreement between Quickstop and the defendant (amongst others); and
(C)a Sale of Business Agreement between Quickstop and the defendant (amongst others) dated 13 December 2006;
each of which are confidential commercial agreements in the possession of the defendant's solicitor.
(collectively the Quickstop agreements)
The defendant admits that it removed the bowsers and pump systems from the land, and says that it was entitled to do so as they formed part of the assets purchased by the defendant.[11]
[11] Defendant's amended defence, par 45.
The defendant claims it owned the car wash and admits it removed components from the car wash when it vacated the premises.[12]
3.3 Third party proceedings against Quickstop Pty Ltd
[12] Defendant's amended defence, par 53.
On 20 February 2017, the defendant brought third party proceedings against Quickstop seeking contribution, indemnity, or alternatively damages, in the event that the plaintiff was successful in its claim against the defendant.
In or about November 2017, the defendant and Quickstop entered into a settlement or compromise of the third party proceedings by way of a settlement agreement, and on 13 November 2017, the third party proceedings were dismissed by consent.
3.4 The result of an application by the plaintiff for production and inspection of documents and an application by defendant to set aside a subpoena issued to Quickstop Pty Ltd on 24 August 2018
On 8 March 2019, the court heard an application made by the plaintiff for production and inspection of the following documents:[13]
1.1Heads of Agreement ‑ Sale of Business between Quickstop Pty Ltd and the defendant dated 18 October 2006 (at paragraph 39A.3(i) of the Amended Defence);
1.2Interdependency Agreement between Quickstop Pty Ltd and the defendant (amongst others) dated 13 December 2006 (at paragraph 39A.3(ii) of the Amended Defence);
1.3Sale of Business Agreement between Quickstop Pty Ltd and the defendant dated 13 December 2006 (at paragraph 39A.3(iii)(sic) of the Amended Defence); and
1.4Settlement Agreement between Quickstop Pty Ltd and the defendant in or about November 2017 (subject of correspondence between the solicitors for the parties;
[13] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154 [1].
At the same time the court heard an application by the defendant to set aside a subpoena to Quickstop which sought production of a number of documents, including the four Quickstop documents the plaintiff sought to be produced by the defendant in the plaintiff's application for production.[14] As set out in [11] of these reasons, the Quickstop documents were referred to in par 39A of the defendant's amended defence.
[14] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154 [61] ‑ [64].
The Quickstop agreements were a suite of three agreements for the sale of the businesses and assets of a number of service stations comprising good will, intellectual property, materials, land (of some sites), equipment and the benefit and burden of the businesses of each leased site.
Of importance for the disposition of application presently before the court, prior to the applications for production and setting aside the subpoena were made, discovery had been given of redacted copies of the Quickstop documents, and pursuant to an agreed confidentiality regime the plaintiff's solicitors were provided with access to and were able to view unredacted copies of the documents.[15] In addition, the redacted copies of the Quickstop documents, essentially, only redacted the schedule of list of assets and prices paid for the assets of the Edgewater service station and two other service stations which are unrelated to the dispute between the plaintiff and the defendant.[16]
[15] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154 [16] ‑ [18].
[16] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154 [15] and [19].
Prior to the hearing of the application on 8 March 2019, the plaintiff's counsel had prepared a confidential schedule of an argument to be advanced at trial if regard was able to be had to the information contained in the unredacted Quickstop agreements.[17]
[17] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154 [31].
The plaintiff sought to extend the confidentiality regime to the plaintiff's sole director, Mr Jimmy Wong, to enable him to review the documents and provide the company's solicitors with proper instructions.
Within the agreements the defendant, in purchasing the Edgewater assets, paid Quickstop Pty Ltd a specified sum for particularised equipment (which included the disputed Equipment). The plaintiff sought to inspect the unredacted agreement to compare the amount the defendant paid for the assets it purchased at the Edgewater location with the price paid for the assets at the Padbury and Mindarie sites.
The defendant claimed that, despite pleading that consideration was paid for the purchase of the assets, the amount of the consideration was not material (relevant) to the plea;[18] the plea was expressly directed to the legal effect of the other terms and provisions of the agreements and was run as a matter of construction of the contracts.[19]
[18] Defendant's outline of submissions in opposition to the plaintiff's O 26 application, filed 27 February 2019 [13].
[19] Defendant's outline of submissions in opposition to the plaintiff's O 26 application, filed 27 February 2019 [13].
The defendant also claimed the redacted information was confidential, commercially sensitive and contained irrelevant information regarding the other sites. The basis for this claim was the fact that the plaintiff and the defendant were trade rivals, as both entities that own and operate active West Australian petrol stations and should, therefore, not be required to share commercially sensitive information; the plaintiff had not demonstrated any persuasive reason why it was necessary to provide the plaintiff's directors with the unredacted agreements.
However, the court found the redacted information in the documents was not commercially sensitive and confidential as the only evidence provided to support this claim was a mere assertion in an affidavit sworn by a solicitor and legal counsel employed by the defendant. In addition, was there sufficient material before the court as to why and how 12-year-old information would remain commercially sensitive, or what prejudice the defendant would suffer if the plaintiff's principal was allowed to inspect the unredacted information.
After delivery of reasons for decision on 13 May 2019,[20] the defendant and Quickstop were ordered to produce for inspection unredacted copies of the documents.
[20] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154.
4.0 The proposed amendments to the writ and the proposed endorsed substituted statement of claim
4.1 The proposed amendments to the writ, including the addition of a defendant
The plaintiff seeks leave to join the proposed additional defendant as a defendant.
The plaintiff also seeks leave to amend the writ of summons by deleting the indorsed statement of claim and substituting a substituted statement of claim. This procedure is unusual, and not to be encouraged. It appears the plaintiff not only seeks to make amendments to the indorsement to plead a case against the proposed additional defendant, but also has included amendments to the statement of claim which do not require leave. Without a marked up version clearly depicting amendments it is difficult to ascertain from the proposed substituted statement of claim precisely what are the amendments sought which are not within the scope of the matters pleaded within the original writ.
The plaintiff did, however, file on 19 September 2022 a minute of marked up amendments which show the proposed amendments to the amended statement of claim filed on 17 July 2017. It is clear from this minute that some of the proposed amendments are amendments that could be made without leave as they are matters pleaded only against the defendant and are within the metes and bounds of the causes of action pleaded in the original writ.
As currently framed in the amended statement of claim, the plaintiff pleads that the defendant is liable for damages for the removal of the bowsers and the pump systems on the basis of conversion/detinue, or alternatively, breach of lease (made between the defendant and the plaintiff by way of deed of assignment of lease dated 2 February 2006, which lease came to an end on or about 26 June 2016. However, the date the lease came to an end is not entirely clear because in the proposed substituted statement of claim, the plaintiff seeks to plead that the defendant vacated the premises on or about 24 June 2016 at the end of the second renewed term.[21]
[21] Proposed substituted statement of claim, par 23.
From the minute of marked up amendments to the amended statement of claim, it emerges that the plaintiff seeks to join, and plead two causes of action against the proposed additional defendant as follows:
(1)The proposed additional defendant is liable in tort as a wrongdoer, or alternatively vicariously liable for the acts of the defendant in breach of its obligation under the lease, for the conversion, or alternatively detinue, of unlawfully and without the consent of the plaintiff removing from the premises and converting the bowsers and pump systems to its (the defendant's) benefit in or about July 2016.[22]
(2)The proposed additional defendant is liable in tort for interference with contractual relations (the lease), in particular:
(a)is liable for the arrears of rent by knowing at all material times of the lease and the defendant's obligations under it to pay rental, wrongfully and with intent to injure the plaintiff, directly withheld rent and indirectly procured and induced the defendant to breach its obligations to pay the rental under the lease; and
(b)wrongfully and with intent to injure the plaintiff, procured and induced the defendant[23] to breach its obligations under the lease by causing and allowing the defendant to remove the bowsers, pump systems and critical components of the car wash from the premises.[24]
[22] Proposed substituted statement of claim, pars 52 and 53.
[23] Should read 'plaintiff' - typographical error.
[24] Proposed substituted statement of claim, pars 85 and 88.
The plaintiff also seeks to plead that the proposed additional defendant is estopped from claiming ownership to the air‑conditioning system, cool room and car wash.[25]
[25] Proposed substituted statement of claim, par 56.
In the proposed prayer for relief, the plaintiff seeks to claim against the proposed additional defendant:
(a)damages for conversion, alternatively detinue with respect to the bowsers and pump systems, alternatively damages for breach of lease;
(b)damages for breach of lease with respect to the car wash; and
(c)damages for delay or lost profits from rental payments not recovered from Vibe accruing from 26 June 2016.
It should be noted that the proposed plea of the tort of interference with contractual relations is an entirely new cause of action which the plaintiff does not seek to plead against the defendant.
4.2 The plaintiff's grounds of the application to join the proposed additional defendant and to plead the proposed causes of action
In respect of the first cause of action (conversion, detinue and breach of lease which the plaintiff claims arises from the removal of the bowsers and pump systems) the plaintiff seeks to join the proposed additional defendant pursuant to O 18 r 6 of the Rules of the Supreme Court or a joint tortfeasor as a concurrent wrongdoer, pursuant to s 5AN of the Civil Liability Act.
Insofar as the plaintiff wishes to plead as against the proposed additional defendant the second cause of action (the tort of interference with contractual relations) the plaintiff seeks to join the proposed additional defendant pursuant to O 18 r 6 of the Rules of the Supreme Court.
The plaintiff obtained the Quickstop documents after the court's determination on 13 May 2019. It was provided with unredacted copies of the Heads of Agreement for Sale of Business between Quickstop, IGA Distribution Pty Ltd dated 18 October 2006 (Heads of Agreement) and the proposed additional defendant and the Sale of Business Agreement between Quickstop, Metcash Trading Limited, IGA and the defendant dated 13 December 2006 (Sale of Business Agreement). On 5 June 2019, the plaintiff also obtained inspection of due diligence material from Quickstop in compliance with the subpoena.[26]
[26] Affidavit of Chyi Shin Melvin Wong affirmed 31 May 2022, pars 10 and 11.
Having received those materials the plaintiff sought advice from, on or about August 2019, its former counsel regarding a possible cause of action against the proposed additional defendant. In or about May 2021, the plaintiff engaged new counsel and sought advice regarding a possible cause of action against the proposed additional defendant.
After obtaining advice, the application was filed on 3 June 2022. It is to be noted, however, that the plaintiff did not seek to have the application heard and determined urgently.
4.2.1 The first proposed cause of action
The plaintiff claims once the unredacted copies of the Heads of Agreement and the Sale of Business Agreement were provided to the plaintiff in June 2019 it was disclosed that the plaintiff's bowsers and pump systems were in effect purchased by the proposed additional defendant which then nominated the defendant as the buyer.
It is submitted that, on the face of the available material, after the production of the unredacted Quickstop documents, the proposed additional defendant and the defendant acted together to remove the bowsers and pump systems from the premises and there is a casual connection between the removal and the loss, the subject of the claim.
Fiona Garvey and David Hopwood were directly concerned with the removal of the bowsers and the pump systems from the premises. Although the plaintiff currently pleads in the amended statement of claim that Ms Garvey was the defendant's regional property manager and Mr Hopwood was the defendant's legal counsel,[27] the plaintiff intends to plead in the proposed substituted statement of claim that both Ms Garvey and Mr Hopwood were, at the relevant time the bowsers and pump systems were removed, employees of the proposed additional defendant.[28] Accordingly, the plaintiff claims it intends to run a case that the proposed additional defendant is vicariously liable for their actions.
[27] Amended statement of claim, particulars to par 52.
[28] Proposed substituted statement of claim, particulars to par 52.
Thus, the plaintiff claims that the defendant, alternatively the proposed additional defendant, is liable to the plaintiff for damages related to unlawful removal of the bowsers and pump systems, or the defendant and the proposed additional defendant are joint tortfeasors in the conversion or detinue claim.
The plaintiff claims that the court should allow the joinder application because the intended first cause of action and relief it seeks against the proposed additional defendant is inextricably linked to the plaintiff's existing claim against the defendant.
In addition, the plaintiff claims case management principles also favour a joinder of the proposed additional defendant as a defendant on the basis of efficiency, proportionality and an overall just determination of litigation. If the proposed additional defendant was not to be so joined, the plaintiff would then be required to commence separate proceedings. That course would see an inefficient duplication of court and party resources, involve the undesirable need to determine identical issues in distinct proceedings and risk inconsistent findings.
The plaintiff argues the joinder is necessary because if the court's determination is that the removed bowsers and pump systems were never the defendant's asset, it is the plaintiff's second argument that it was the proposed additional defendant that took the steps to remove the bowsers and pump systems.
Therefore, the plaintiff says it follows that it is necessary to join the proposed additional defendant to the action to determine whether the defendant, the proposed additional defendant, or both are responsible and liable for the unlawful removal of the bowsers and pump systems. This is said to be because the court needs to decide which party was responsible for the conversion; as it could not have been both, it must have been either the defendant or the proposed additional defendant.
4.2.2 The second proposed cause of action
The plaintiff claims that a review of the unredacted copies of the Heads of Agreement, the Sale of Business Agreement and the due diligence material revealed to the plaintiff that the proposed additional defendant at the material times would have had knowledge of the defendant's lease obligations, the breaches of those obligations and it was the proposed additional defendant who was paying the rental amounts each and every month to the plaintiff.[29]
[29] ts 56.
In oral submissions, counsel for the plaintiff referred to a letter from Quickstop to the plaintiff dated 31 October 2006, which letter was produced by Quickstop in response to the subpoena. The plaintiff says the contents of the letter gave (together with the contents of the Quickstop documents) rise to the plaintiff identifying the cause of action in respect of the tort of interference with contractual relations.
The letter records that Quickstop was the tenant of the premises, the plaintiff the owner of the premises and Quickstop had agreed to sell the business carried on from the premises together with Quickstop's assets, which included Quickstop's interest in the premises as tenant pursuant to the terms of the lease to the defendant. The purpose of the letter was to record the consent of the plaintiff to the assignment of the lease.[30]
[30] Affidavit of Chyi Shin Melvin Wong affirmed 31 May 2022, Annexure 'MW-9', 367 ‑ 369.
Counsel referred specifically to pars 5 and 6 of the letter which made a statement about the solvency and financial position of the proposed additional defendant:[31]
The United Petroleum Group is happy to provide you with a letter from its bankers confirming its strong financial position if requested.
The Directors of United Petroleum Pty Ltd, Mr Eddie Hirsch and Mr Avi Silver, are directors of the Incoming Tenant. Mr Hirsch and Mr Silver are the founding directors of United and have in excess of 30 years experience in the petroleum industry.
[31] Affidavit of Chyi Shin Melvin Wong affirmed 31 May 2022, Annexure 'MW-9', 367 ‑ 369.
Counsel then went on to also refer to the following acknowledgement at the foot of the last page of the letter which provided:[32]
By signing and returning the attached copy of this letter, the Landlord confirms that the Landlord Consent is given subject to the execution of the deed of assignment (in the form of the Draft Deed), the payment of the Landlord's reasonable costs in respect of Quickstop's request for the Landlord Consent and the Alternative Security being provided to the Landlord.
[32] Affidavit of Chyi Shin Melvin Wong affirmed 31 May 2022, Annexure 'MW-9', 369.
The plaintiff acknowledges that this statement was not made by the proposed defendant, but by Quickstop who sought consent of the landlord to an incoming tenant, who set out the financial position of the United Petroleum Group.
5.0 The defendant and proposed additional defendant's submissions as to why the application should be dismissed
The defendant and the proposed additional defendant raise three grounds as to why the application should be dismissed.
First, the plaintiff's application for joinder should be refused because all of its proposed claims against the proposed additional defendant are clearly statute barred and joinder would therefore serve no useful purpose.
The defendant and the proposed additional defendant relevantly point out that:
(a)s 13 of the Limitation Act 2005 (WA) provides:
(1)An action on any cause of action cannot be commenced if 6 years have elapsed since the cause of action accrued.
(2)Subsection (1) does not apply to an action if Division 3 provides for a different limitation period for that action;
(b)none of the different limitation periods (exceeding 6 years) provided for in div 3 of the Limitation Act apply in relation to the plaintiff's proposed claims against the proposed additional defendant.
The defendant and the proposed additional defendant also point out that it is established that:
(a)joinder of a party takes effect from the date on which the party is joined,[33] and joinder of a party as a defendant under O 18 r 6 only takes effect from the date of service upon it of the amended writ;[34]
(b)joinder will not circumvent any statutory limitation defence that would otherwise be available to the proposed additional defendant; and
(c)joinder of the proposed additional defendant cannot be made pursuant O 18 r 6(2) of the Rules of the Supreme Court. Although O 18 r 6(2) is to be interpreted beneficially, the test imposed by the rule is one of necessity. A party cannot be joined under that rule merely because it is thought to be just or convenient.
[33] Brandsma & Crockett Pty Ltd v Heindal Pty Ltd [2002] WASCA 96; (2002) 26 WAR 323 [5] (Murray J), [26] (McLure J); applied in Willoughby v Clayton Utz [2007] WASCA 5 [32] (Wheeler JA) ([1] (Steytler P).
[34] Brandsma & Crockett Pty Ltd v Heindal Pty Ltd [2002] WASCA 96; (2002) 26 WAR 323 [26] (McLure J).
The defendant and the proposed additional defendant also argue that joinder cannot be made under s 5AN(1) of the Civil Liability Act. None of the plaintiff's claims in this action (or its proposed claims against the proposed additional defendant) fall within either limb of the definition of an 'apportionable claim' in s 5AI.
6.0 The plaintiff's response to the limitation point and whether it is open to join the proposed additional defendant pursuant to s 5AN(1) of the Civil Liability Act
First, the plaintiff claims the limitation period has not expired as time began to accrue in June 2019 when the plaintiff was given access to the unredacted Heads of Agreement and the Sale of Business Agreement.
In addressing the limitation issue, the plaintiff argues that it could not reasonably have known of a potential cause of action about a tort of interference of contractual relations until such time as they had knowledge of the proposed additional defendant's knowledge of any involvement in the lease arrangements, its obligations and its participation in breaching the lease.
It is submitted that such time was on 5 June 2019 when the plaintiff was provided access to unredacted copies of the Heads of Agreement and Sale of Business Agreement.
The plaintiff claims that prior to the production of the Heads of Agreement and the Sale of Business Agreement, all they would have known was that the proposed defendant was paying the lease amounts each month.
The plaintiff accepts that if the matter was not deemed to be an apportionable claim the argument falls away for leave to join under the provisions of s 5AN of the Civil Liability Act. However, if there is a contractual requirement to return certain equipment the subject matter of the lease, the plaintiff argues there is a duty of care arising to preserve the assets and not do anything with them; if the bowsers and pump systems were removed with knowledge of this duty, then the proposed additional defendant failed to take reasonable care.
Second, and in the alternative, the plaintiff claims that if time began to accrue in September 2016 and has subsequently expired, the court has the power to grant an extension of time due to fraudulent or other improper conduct.
7.0 Disposition
7.1 Are the proposed causes of action statute barred, and should joinder be refused on this basis?
7.1.1 Can or should the court decide a limitation point in an interlocutory application for joinder and amendment of a writ?
Order 21 r 5 of the Rules of the Supreme Court provides:
The Court may at any stage of the proceedings, without determining whether any relevant period of limitation has expired, allow the plaintiff to amend the plaintiff's writ, or any party to amend that party's pleading, on any terms as to costs or otherwise that may be just and in the manner (if any) that the Court may direct.
Limitation questions should only be decided in interlocutory proceedings in advance of the hearing of an action in the clearest of cases.[35] In Belgravia Nominees Pty Ltd v Lowe Pty Ltd, the Court of Appeal stated that:[36]
(a)in a case in which a defendant indicates an intention to plead a limitation defence to a cause of action barred by statute at the time it is proposed to be added by amendment, the court will disallow the amendment if there is no doubt that such a defence would defeat the claim;
(b)generally speaking, however, limitation issues are best decided at trial, with the consequence that an amendment will only be disallowed on the basis of such a defence in the clearest case.
7.1.2 Accrual of time ‑ principles
[35] Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 533 (Mason CJ, Dawson, Gaudron & McHugh JJ).
[36] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341 [46(f)] and [47].
A cause of action accrues when all the facts have occurred which the plaintiff must prove in order to succeed.[37] Where loss and damage is the gist of the action, the cause of action does not accrue until actual loss or damage is sustained.[38]
[37] Cigna Insurance Asia Pacific Ltd vPacker [2000] WASCA 415 [31] (Malcolm CJ); applying Do Carmo v Ford Excavations Pty Ltd [1984] HCA 17; (1984) 154 CLR 234, 245 (Wilson J); Cooke v Gill [1873] LR 8 CP 107, 116 (Brett J); Read v Brown (1888) 22 QBD 128, 129; Coburn v College [1897] 1 QB 702, 706 (Lord Esher MR); Trower & Sons Ltd v Ripstein [1944] AC 254, 263; Williams v Milotin [1957] HCA 83; (1957) 97 CLR 465, 474; and Central Electricity Board v Halifax Corporation [1962] 3 WLR 1313, 1323 (Lord Guest).
[38] Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525 (Mason CJ, Dawson, Gaudron & McHugh JJ); applied in Superline Enterprises Pty Ltd v Palassis Architects [2019] WASC 414 [41].
For claims of breach of contract, the cause of action accrues at the time of the breach of contract. Further, a cause of action for damages for negligence accrues when the plaintiff suffers actionable damage in which its identification requires consideration of the precise interest infringed by the negligent act or omission.
Generally, causes of action in unintentional torts are complete when the injury or loss has been suffered, even when the plaintiff is unaware of suffering the loss or damage.[39] In AME Hospitals Pty Ltd v Dixon, Buss JA explained:[40]
A cause of action in tort for negligence (including in respect of a personal injury) is not complete until the plaintiff first suffers damage caused by the defendant's breach of duty. The damage must be measurable or more than negligible. Subject to that qualification, whether and when a plaintiff has suffered damage is a question of fact. See Williams v Milotin [1957] HCA 83; (1957) 97 CLR 465, 474 (Dixon CJ, McTiernan, Williams, Webb & Kitto JJ); GRE Insurance Ltd v Bristile Ltd (1991) 5 WAR 440, 451 (Nicholson J, Pidgeon & Murray JJ agreeing); Scarcella v Lettice [2000] NSWCA 289; (2000) 51 NSWLR 302 [13] ‑ [14] (Handley JA); Cheney v Duncan [2001] NSWCA 197; (2001) 34 MVR 28 [24] ‑ [26] (Ipp AJA, Meagher & Handley JJA agreeing); Wilson v Rigg [2002] NSWCA 246; (2002) 36 MVR 451 [23] (Giles JA, Santow JA & Foster AJA agreeing).
…
In general, a cause of action accrued and time began to run, for the purposes of s 38(1) of the 1935 Act, whether or not the plaintiff knew that the cause of action had accrued. The accrual of the cause of action and the running of time were not dependent on the plaintiff knowing that all of the facts comprising the cause of action had occurred. See Cartledge v E Jopling & Sons Ltd [1963] AC 758, 771 ‑ 772 (Lord Reid, Lord Hodson agreeing); Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539, 587 ‑ 588 (Deane J, Mason CJ & Wilson J relevantly agreeing); Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] 1 VR 27, 67 (Brooking, Tadgell & Hayne JJ).
[39] Cartledge v E Jopling & Sons Ltd [1963] AC 758.
[40] AME Hospitals Pty Ltd v Dixon [2015] WASCA 63; (2015) 48 WAR 139 [137] ‑ [139].
As Le Miere J pointed out in Permanent Custodians Ltd v Shannon [No 2], it is established that time begins to run for limitation purposes when the loss or damage is suffered in the absence of a statutory provision to the contrary. It makes no difference that the plaintiff is unaware of the true position and there is no general rule that time does not begin to run until a claimant discovers, or could have discovered upon making a reasonable enquiry, that they have suffered loss.[41]
[41] Permanent Custodians Ltd v Shannon [No 2] [2018] WASC 295 [135].
However, tortious claims have a few exceptions to this general rule of time accrual, such as those concerning latent defects in buildings. Time starts to run when the defects become manifest or otherwise discoverable.[42] This principle has been extended to include latent defects in title when defects were not ordinarily discoverable during a conveyance.[43]
[42] Bryan v Maloney (1995) 182 CLR 609.
[43] Christopoulos v Angelos (1996) 41 NSWLR 700.
When the extent of damage is unknown, time begins to accrue when the latent defect was actually discovered or became manifest, in the sense of being discoverable by reasonable diligence.[44]
7.1.3 The proposed causes of action did not accrue in June 2019
[44] Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539 (Deane J) (Mason CJ & Wilson J agreed).
In respect of the proposed causes of action, the plaintiff claims it was not until June 2019 that it became aware of the proposed additional defendant's alleged involvement in the matter, and that consequently, the second cause of action did not accrue until June 2019, because it was only at the time the unredacted Heads of Agreement and the Sale of Business Agreement were provided to the plaintiff that the causes of action were ascertainable.
As to the first proposed cause of action, it is evident that the plaintiff was aware of the full extent of the damage it incurred when the bowsers and pump systems were removed from the premises, in or about 24 June 2016.
The plaintiff does not plead any further damage was discovered following the removal of the bowsers and pump systems on this date. At all times, the loss suffered by the plaintiff was discovered and became manifest in or about July 2016. This sets the expiration of the limitation period in July 2022.
Therefore, the latent defect principle is not applicable to the plaintiff's claim in respect of the first proposed cause of action; the time began to accrue on or about 24 June 2016 when the damage was suffered by the plaintiff.
The first proposed cause of action is the conversion and not the discovery of it. The same applies to the second proposed cause of action. It is when the damage occurred, by the interference with contractual relations and, not the discovery of the interference and damage by the plaintiff.
Consequently, on the plaintiff's case it seeks to plead in the proposed substituted statement of claim:
(a)the first proposed cause of action against the defendant and the proposed additional defendant accrued (and time began to accrue) when the bowsers and pump systems were removed from the premises on or about 24 June 2016 (being the date the defendant vacated the premises);[45]
(b)the second proposed cause of action against the proposed additional defendant accrued (and time began to accrue) at the latest when the last second renewal payments of rent were paid for the period ending 26 June 2016, being a date in July 2016.[46]
7.1.4 Is it open to extend time to bring the proposed causes of action pursuant to s 38(2) of the Limitation Act?
7.1.4.1 Legal principles
[45] Proposed substituted statement of claim, pars 23, 46 ‑ 57.
[46] Proposed substituted statement of claim, pars 21, 23, 24 ‑ 45 and 85.
Section 13 of the Limitation Act provides, an action on any cause of action cannot be commenced if six years have elapsed since the cause of action accrued.
Section 38(2) of the Limitation Act enables a plaintiff to apply to the court to extend the time within which an action can be commenced by up to three years if the court is satisfied that the failure to commence the action was attributable to fraudulent or other improper conduct of the defendant, or for whom the defendant is vicariously liable.
Section 38(1) and (2) of the Limitation Act provide:
38.Court may extend time to commence actions in cases of fraud or improper conduct
(1)A plaintiff may apply to a court for leave to commence an action on a cause of action even though the limitation period provided for under this Act has expired.
(2)On an application a court may extend the time in which the action can be commenced up to 3 years from when the action ought reasonably to have been commenced if the court is satisfied that the failure to commence the action was attributable to fraudulent or other improper conduct of the defendant or a person for whom the defendant is vicariously liable.
An extension application may be made in an existing action. The application can be sought or determined at any time before or after the issue, or close of, pleadings.[47] The plaintiff has the burden of proving that a court should extend the relevant limitation period.[48]
[47] Limitation Act 2005 (WA) s 43(1)(a).
[48] Limitation Act 2005 (WA) s 43(5).
Before the power in s 38 can be enlivened, the provision requires the plaintiff to establish two elements:[49]
(1)the defendant (in this matter the proposed additional defendant) or a person for whom the defendant (the proposed additional defendant) is vicariously liable engaged in fraudulent or other improper conduct; and
(2)the plaintiff's failure to commence the action was attributable to that fraudulent or other improper conduct.
[49] Lowe Pty Ltd v Belgravia Nominees Pty Ltd [2020] WASCA 180 [180].
In Lowe Pty Ltd v Belgravia Nominees Pty Ltd, the court went on to state principles that are to be applied in establishing fraudulent or other improper conduct:[50]
[50] Lowe Pty Ltd v Belgravia Nominees Pty Ltd [2020] WASCA 180 [181] ‑ [191] (footnotes omitted).
If the court is satisfied as to these matters, it may extend the time in which the action can be commenced up to three years from when the court considers the action ought reasonably to have been commenced. In this respect, when the power is enlivened by satisfaction of the preconditions, the court has a discretion whether to grant an extension.
Thus, understood in its context, s 38(2) is concerned with conduct on the part of a prospective defendant that is liable or intended to impede or delay the commencement of an action by the prospective plaintiff. Often, although not invariably, conduct by or on behalf of a defendant that engages s 38(2) will involve preventing, impeding or delaying a plaintiff from becoming aware of the existence of the claim, or of facts critical to the existence of the claim.
The dictionary definition of 'improper' refers to something that is 'not proper' or 'not in accordance with propriety of behaviour'. In its ordinary meaning, 'improper' is not limited to conscious wrongdoing, conduct akin to fraud or to conduct with an element of moral turpitude. We are not persuaded that the statutory context warrants reading it as being so limited.
It should be observed at the outset that the proper construction of the phrase 'other improper conduct' does not involve a binary choice between conduct with an element of moral turpitude, on the one hand, and conduct involving a breach of contract, breach of duty of care or breach of fiduciary duty, on the other hand. The 'fraud or other improper conduct' enlivening s 38 need not be, and often will not be, the conduct giving rise to the claim itself. For example, conduct dishonestly concealing the facts or evidence giving rise to a claim from a prospective plaintiff will, ordinarily at least, fall within the ambit of fraudulent or other improper conduct. A breach of contract, duty of care or fiduciary duty is neither necessary nor sufficient to establish fraudulent or other improper conduct. Reference to a 'mere' breach of contract, duty of care or fiduciary duty may fairly be seen as a distraction from the proper construction and application of s 38(2).
Whether a person's conduct is properly characterised as improper within the meaning of s 38(2) does not direct attention to impropriety in the abstract, divorced from the context that is the concern of s 38.
Caution is needed in applying statements attributing meaning to the word 'improper' in other contexts to the construction of s 38. In particular, what was said by the plurality in R v Byrnes, concerning with the meaning of 'improper' in s 229(4) of the Companies (South Australia) Code, must be understood in its context. The offence created by s 229(4) involved an officer of a company making improper use of his or her position as such. The reference by the plurality, in the passage set out above, to standards of conduct expected of a person in the position of the alleged offender, makes sense in that context.
In our view, care is needed before transposing those observations to the present context. The primary judge posed the question of what standards of conduct were expected of Lowe as project manager or joint project manager. In our respectful view, that was not the critical inquiry. Whether a person's conduct is improper within the meaning of s 38(2) is, in our view, to be judged in the context of that person's conduct as a prospective defendant to an action by the prospective plaintiff.
As already noted above at [181], s 38(2) has as its focus conduct by a prospective defendant which has a purpose or likely effect of preventing, impeding or delaying the commencement of an action by the prospective plaintiff against that person. In our view, on the proper construction of s 38(2), the phrase 'other improper conduct' carries its ordinary meaning - conduct not in accordance with propriety, or what is proper in the circumstances - understood in this context. In that context, the impropriety must, at least ordinarily, relate to the purpose or tendency of the conduct to deprive a prospective plaintiff of the reasonable opportunity to commence proceedings within the limitation period, or to divert the prospective plaintiff from doing so.
Whether fraudulent or other improper conduct has been established is an evaluative judgement to be made in all the circumstances of the case. In that respect, the position is analogous to whether given conduct in a given set of circumstances amounts to unconscionable conduct.
In our view, to substitute for the statutory words other words such as 'conduct involving moral turpitude' is to put an unjustified gloss on the statutory language. Nor is there any sufficient justification to limit 'other improper conduct' to conduct that is akin to fraud.
…
Further, s 38(2) does not give a presumptive right to an extension of time once the conditions for the existence of the discretion to extend time are satisfied. Rather, it confers a broad discretion to be exercised by reference to the interests of justice in all the circumstances of the case, having regard to the matters referred to in s 44 of the Limitation Act. This context counts against reading down the ordinary meaning of the language used to define the conditions for the existence of the discretion.
In Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084, Archer J importantly observed in respect of the second precondition:[51]
[T]hat the failure to commence the action was attributable to that fraudulent or other improper conduct. In this context, the 'failure to commence the action' is the failure to commence the action prior to the date on which the limitation period expired.
The test of attributability may be satisfied by 'a causal link alone or a causal connection … without any qualifications conveyed by such terms as sole, dominant, direct or proximate'.
[51] Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084 [2021] WASC 450 [203] ‑ [204] (footnotes omitted).
In Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084, the plaintiff claimed that a party had engaged in improper conduct in two respects. First, it did not tell him the name of a third party insurer of a company. Second, it did not tell him until January 2021 that the action should have been bought in the plaintiff's name.[52]
[52] Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084 [2021] WASC 450.
The name of a third party insurer of the company was initially requested by the plaintiff's solicitors in 2016. Two years later a request was made again and then, despite multiple requests, the name of the third party insurer was not provided. The company was subsequently deregistered and by the time the name of the third party insurer was provided the limitation period for bringing the action had expired.
Archer J found that the conduct of failing to disclose the name of the third party insurer until the limitation period had expired was conduct liable to impede or delay the commencement of the action against the insurer, and it was, within the meaning of s 38(2), improper conduct.[53]
7.1.4.2 Are the preconditions of s 38(2) of the Limitation Act met?
[53] Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084 [2021] WASC 450 [222].
In deciding whether the first precondition is met in this matter, the court must consider:
(a)whether it was the proposed additional defendant who opposed inspection or is the proposed additional defendant vicariously liable for the defendant's acts in opposing inspection of unredacted copies of the Heads of Agreement, the Sale of Business Agreement (and inspection of the due diligence material); and
(b)if so, whether there was no proper basis for the defendant to oppose inspection to the unredacted documents and the due diligence material, and whether the conduct of the defendant concealed the facts of evidence giving rise to a claim against the proposed additional defendant, which conduct constituted fraudulent or other improper conduct.
To meet the second precondition, the court must be satisfied that the failure of the plaintiff to commence the action prior to the date on which the limitation period expired was attributable to fraudulent or other improper conduct by the defendant, and that the proposed additional defendant is vicariously liable for the acts of the defendant.
In the plaintiff's supplementary outline of submissions dated 7 October 2022, the plaintiff claims the improper conduct was conduct of the defendant and was as follows:
In redacting the suite of agreements for the sale of the business, which included the HOA and SBA referred to in the Wong Affidavit, by opposing inspection of the unredacted documents, when there was no proper basis to do so, and by seeking to set aside the subpoena to Quickstop, the defendant engaged in conduct to conceal the facts of evidence giving rise to a claim against the proposed defendant.
The deliberate commission of a wrong in circumstances in which it is unlikely to be discovered for some time will amount to deliberate concealment of a wrong.
The plaintiff did not raise this point until it filed a supplementary outline of submissions dated 7 October 2022.
This conduct even if found to be improper conduct within the meaning of s 38 could only be found to apply to the first proposed cause of action and not the second proposed cause of action, because it is only in respect of the first cause of action that the plaintiff seeks to plead that the proposed additional defendant was vicariously liable for the acts of the defendant in removing the bowsers and pump systems from the premises.
However, I am not satisfied that the conduct complained of could be found to be improper conduct within the meaning of s 38 of the Limitation Act.
In the application for production and inspection of unredacted copies of the Heads of Agreement and the Sale of Business Agreement heard in 2019, no evidence was put before the court that the defendant had improperly objected to the production of these documents.[54] It is not open to draw an inference that it was improper to withhold the unredacted documents because the defendant and Quickstop believed the unredacted versions were confidential and commercially sensitive, despite being mistaken. Importantly, parts of the redacted parts of the documents related to the sale of the businesses of other service stations that were not owned by the plaintiff.
[54] Trans Petroleum (Australia) Pty Ltd v United Petroleum (WA) Pty Ltd [2019] WASC 154.
Further, and also importantly, under an agreed confidentiality regime, the plaintiff's solicitors had been provided with unredacted copies of these documents.
When regard is had to these circumstances, I cannot be satisfied that improper conduct has occurred by opposing inspection of the unredacted documents in 2019.
In addition, I am not satisfied that the plaintiff has established failure of the plaintiff to bring and obtain orders for joinder and amendment of the writ to plead the proposed causes of action against the proposed second defendant prior to the date on which the limitation period expired, is attributable to the conduct of the defendant in opposing inspection.
The plaintiff was provided with copies of the documents in June 2019, which was three years prior to the expiration of the time to plead the causes of action that it now seeks to plead against the proposed additional defendant. Given the substantial period of time between the expiry of the limitation period and the date of which the documents were provided no causal link can be found to arise.
For these reasons, the preconditions for an extension of time pursuant to s 38(2) of the Limitation Act have not been met, the proposed causes of action are statute barred, and the application for joinder should be dismissed.
7.2 If the proposed causes of action were not statute barred, would it be open to join the proposed additional defendant and amend the writ to plead the new causes of action?
7.2.1 If causes of action accrued after the proceedings were instituted the writ cannot be amended
Order 20 r 10 of the Rules of the Supreme Court provides that subject to r 8(1) and r 11, a party may in any pleading, plead any matter which has arisen at any time, whether before or since the issue of the writ.[55]
[55] Catlin v National Australia Bank Ltd [2004] WASC 135 [9]; citing Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233.
In Wurth Australia Pty Ltd v Burgess, Corboy J observed that a cause of action must be complete when the proceedings are instituted and O 20 r 10 does not permit a cause of action that has arisen after the inception of proceedings to be introduced.[56] His Honour explained it is settled that the provision does not allow a plaintiff to amend the indorsement or statement of claim to plead causes of action that accrued after the proceedings had been commenced by writ.[57]
[56] Wurth Australia Pty Ltd v Burgess [2012] WASC 504 [36]; citing Catlin v National Australia Bank Ltd [2004] WASC 135; Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233.
[57] Wurth Australia Pty Ltd v Burgess [2012] WASC 504 [36]; citing Catlin v National Australia Bank Ltd [2004] WASC 135 [9] and Water Authority of Western Australia v AIL Holdings Pty Ltd [No 2] (1992) 10 WAR 233. Similar findings have been made in other jurisdictions, for example, in South Australia in 21st Century Promotions Australia Pty Ltd v Telstar Corporation Ltd [2000] SASC 353.
The consequence of the application of this principle in this matter is that if the plaintiff's contention is correct at law that time only accrued when the damage claimed to be caused by the proposed additional defendant was revealed after the production of the Heads of Agreement and the Sale of Business Agreement in June 2019, the causes of action cannot be pleaded in the existing writ filed in 2016 because the writ was filed before the causes of action arose.
The plaintiff could have, if the causes of action were not statute barred, without leave being required, issued a new writ against the proposed additional defendant, and then applied for consolidation of the present action pursuant to O 83 r 1.
7.2.2 If the causes of action accrued before proceedings were instituted and were not statute barred or time to institute proceedings was extended, could the proposed additional defendant be joined pursuant to s 5AN of the Civil Liability Act or pursuant to the general discretion conferred by O 18 r 6 of the Rules of the Supreme Court?
7.2.2.1 The first proposed cause of action is not an apportionable claim
The plaintiff only seeks to join the proposed additional defendant pursuant to s 5AN of the Civil Liability Act in respect of the first cause of action being the claim of conversion, detinue and breach of lease.
Section 5AN empowers a court to join a non‑party concurrent wrongdoer in an action. Section 5AN provides:
(1)The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.
An 'apportionable claim' is defined in s 5AI to mean:
(a)a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury); or
(b)a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 2010 based on misleading or deceptive conduct;
In this matter, s 5AI(b) has no application. Consequently, to succeed in an application for joinder a cause of action sought to plead against a defendant who a plaintiff seeks to join must be an action for damages that arises from a failure to take reasonable care within the meaning of par (a) of s 5AI.
In Herridge Parties v Electricity Networks Corporation, the court found that the phrase 'an action for damages' in par (a) of s 5AI refers to any civil proceeding for the recovery of damages and a civil proceeding for the recovery of damages will arise 'from a failure to take reasonable care', within the definition of 'apportionable claim', where establishing liability in the action for damages requires the plaintiff to prove that the defendant failed to take reasonable care in some respect.[58]
[58] Herridge Parties v Electricity Networks Corporation [2021] WASCA 111 [323].
The plaintiff accepts that it is not an element of the tort of conversion and detinue that it prove a breach of reasonable care.
However, as set out above in [64], the plaintiff argues that if there is a contractual requirement to return certain equipment in the lease, there is a duty of care arising to preserve the assets of the plaintiff, and if the bowsers and pump systems were removed with knowledge of this duty, then it can be found the proposed additional defendant failed to take reasonable care. The difficulty with this submission is that the proposed substituted statement of claim indorsed on the proposed amended writ do not plead any breach of a duty to take reasonable care.
Consequently, even if the first cause of action was not statute barred it is not open to the plaintiff to seek to join the proposed additional defendant pursuant to s 5AN of the Civil Liability Act.
7.2.2.2 Is it 'necessary' to join the proposed additional defendant so as to invoke the discretion under O 18 r 6?
Order 18 r 6(2)(b) provides:
(2)At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application -
…
(b)order that any person who ought to have been joined as a party or whose presence before the court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, be added as a party,
but no person shall be added as a plaintiff without his consent signed in writing or in such other manner as may be authorised.
In Wurth Australia Pty Ltd v Burgess, Corboy J set out the principles to be applied in determining an application made pursuant to O 18 r 6(2)(b) as follows:[59]
[59]Wurth Australia Pty Ltd v Burgess [2012] WASC 504 [57] (footnotes omitted); applied in Ooranya Pty Ltd v ISPT Pty Ltd [No 2] [2019] WASC 453 [44] (Kenneth Martin J).
I consider the following propositions to be relevant to the determination of an application made pursuant to O 18 r 6(2)(b):
(a)The rule is designed to avoid unnecessary technicality so that the parties may litigate the real issues between them in an expeditious, efficient and cost effective way: Elovalis v Elovalis [2008] WASCA 141 (S) [6]. Consequently, the phrase 'all matters in dispute' should be given a beneficial interpretation. The phrase should be afforded the widest interpretation that the language of the rule will permit.
(b)Further, the phrase gives the rule an 'elastic' application. The rule is not to be construed so that the matters in dispute are limited to matters arising on the existing pleadings. The disputed matters for the purpose of the rule may include disputed issues of fact that are 'subjacent' to the pleadings: Elovalis [7].
(c)In Amon v Raphael Tuck & Sons Ltd [1956] 1 QB 357, Devlin J observed that the expression 'the cause or matter' in the then equivalent English rule referred to the action 'as it stands between the existing parties' - '[i]f it were otherwise, then anybody who showed a cause of action against either a plaintiff or defendant could, of course, say that the question involved in his cause of action could not be settled unless he was made a party' (369; see also, at 378). Similarly, Adams J in Birtles v Commonwealth of Australia [1960] VR 247 held that the reference to 'cause' in the then equivalent Victorian rule referred to the existing cause or matter against the original defendant (251).
(d)Although O 18 r 6(2) is to be interpreted beneficially, the test imposed by the rule is necessity; a party cannot be joined merely because it is thought to be just or convenient: The Hancock Family Memorial Foundation Ltd v Fieldhouse[No 3] [2010] WASC 223; Vandervell Trustees Ltd v White [1971] AC 912, 935 ‑ 936 (Viscount Dilhorne).
(e)The rule requires the court to consider whether the proposed parties' rights against or liabilities to any existing party in respect of the subject matter of the action will be directly affected by any order that may be made in the action: Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52, 55 ‑ 56; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410, 524 and Homestyle Pty Ltd v City of Belmont [1999] WASCA 59 (Templeman J, with whom Malcolm CJ and Owen J agreed). In a passage that was cited with approval in Homestyle and more recently by the Court of Appeal in Cheng Chih Tiao v Sheng Chin Lai [No 2] [2010] WASCA 189, the Full Court of the Federal Court in News Ltd v Australian Rugby Football League observed, in relation to the test identified by the Privy Council in Pegang Mining, that (525):
'The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 at 322 per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non‑parties can be characterised as only indirect or consequential.'
(f)The focus in considering an application to join a defendant is on the rights and liabilities of the proposed defendant and not on 'some looser concept of "interests"': Alinta Asset Management Pty Ltd v Essential Services Commission [2007] VSC 32 (Hollingworth J) (and see Amon at 379 and the comments of Edelman J in Martin Bruce Jones as Receiver and Manager of Miami Waterfront Developments Pty Ltd v Miami Waterfront Developments Pty Ltd [2012] WASC 483 [13] ‑ [14]). An order that directly affects a third person's rights against or liabilities to a party should not be made unless the person is also joined as a party: News Ltd (524). Consequently:
'Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. (News Ltd at 525).'
To meet the test for necessity, the question to be answered is not whether it is just or convenient to join the proposed additional defendant but whether, if the proposed additional defendant is not added as a party to these proceedings, its rights will be directly affected by any order which may be made in the action.
The plaintiff claims the proposed additional defendant should be joined to the action because:
(a)there is a common question of law or fact that arises in both claims;
(b)the intended cause of action is inextricably linked to the existing action;
(c)the court will need to determine whether both the defendant and the proposed additional defendant are joint tortfeasors in relation to the conversion claim if a separate proceeding against the proposed additional defendant is commenced and subsequently consolidated; and
(d)the language in O 18 r 6(2)(b) suggests the provision is wide enough to adopt a modern case management approach, reduce time and costs, and increase efficiency and proportionality through the avoidance of determining identical issues in separate proceedings.
The plaintiff's reasons for joining the proposed additional defendant to the proceedings, are matters which simply go to convenience. This convenience does not provide the court power to join the proposed additional defendant as a party to either proposed causes of action.[60]
[60] Vandervell Trustees Ltd v White [1971] AC 912, 935 ‑ 936 (Viscount Dilhorne).
The plaintiff has provided no evidence establishing that joining the proposed additional defendant as a party to the current proceedings is necessary for the 'effectual and complete determination and adjudication upon all matters' that are currently pleaded against the defendant.[61]
[61] Vandervell Trustees Ltd v White [1971] AC 912, 935 ‑ 936 (Viscount Dilhorne).
Consequently, the test for necessity is not met. It cannot be found that if the plaintiff's pleaded case against the defendant succeeds, that any order of the court that could give effect to the relief sought by the plaintiff could affect any right of the proposed additional defendant. Put another way, it cannot be found that the proposed additional defendant's rights or liabilities to either the plaintiff or the defendant in respect of the subject matter of the action that is within the scope of the current writ will be directly affected by any order that can be made in the action.
For these reasons, even if the proposed causes of action against the proposed additional defendant are not statute barred, the application for joinder should be dismissed.
8.0 Orders
The application for joinder and amendment of the writ should be dismissed. I will hear the parties further as to the orders that should be made to give effect to these reasons including orders as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TS
Associate to the Honourable Justice Smith
23 DECEMBER 2022
4
36
0