Verdell Pty Ltd v F and G Nominees Pty Ltd

[1999] WASC 149

VERDELL PTY LTD -v- F & G NOMINEES PTY LTD & ANOR [1999] WASC 149

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[1999] WASC 149
Case No:	CIV:2726/1991	Heard:	20 JULY, 6 & 20 AUGUST 1999
Coram:	MASTER SANDERSON	Delivered:	30/08/99
No of pages:	8	Judgment Part:	1 of 1
Result:	Leave to amend granted
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Parties:	VERDELL PTY LTD F & G NOMINEES PTY LTD MALLESONS STEPHEN JAQUES
Catchwords:	Practice and procedure Application to amend reply to plead limitation defence Amendment under O 21 r 5(2) and (5) Defendant's objection to limitation defence Date from which amendments take effect Form of pleading of laches
Legislation:	Supreme Court Rules, O 21
Case References:	Adam v Shiavon [1985] 1 Qd R 1 Baldry v Jackson [1976] 2 NSWLR Brook v Flinders University of South Australia (1987) 47 SASR 119 Dye v The Griffin Coal Mining Co Pty Ltd, unreported; FCt SCt of WA; Library No 980404; 23 July 1998 Liff v Peasley [1980] 1 WLR 781 Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 Timor Transport Pty Ltd (In Liq) v Murlroam Pty Ltd (1992) 110 FLR 553 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Weldon v Neal [1887] 19 QBD 394 Berno v Green's Steel Constructions (1991) 103 FLR 133 Briggs v Curtis Quick & Associates, unreported; FCt SCt of WA; Library No 980141; 30 March 1998 Cameron v Cole (1944) 68 CLR 571 Cohen v Cohen (1929) 42 CLR 91 Commonwealth v Verwayen (1990) 170 CLR 394 Gosvenor Mortgage Management Pty Ltd v Younan Permanent Trustee Australia Ltd, unreported; SCt of NSW (Young J); 23 August 1990 Issa v Berisha [1981] 1 NSWLR 261 James Hardie v Seltsame (1998) 159 ALR 268 Ketteman v Hansel Properties [1987] AC 189 Southern Equities Corporation v Western Australian Government Holdings Ltd (No 2) (1993) 10 WAR 351 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : VERDELL PTY LTD -v- F & G NOMINEES PTY LTD & ANOR [1999] WASC 149 CORAM : MASTER SANDERSON HEARD : 20 JULY, 6 & 20 AUGUST 1999 DELIVERED : 30 AUGUST 1999 FILE NO/S : CIV 2726 of 1991 BETWEEN : VERDELL PTY LTD

Plaintiff

AND

F & G NOMINEES PTY LTD
Defendant

MALLESONS STEPHEN JAQUES
Third Party

Catchwords:

Practice and procedure - Application to amend reply to plead limitation defence - Amendment under O 21 r 5(2) and (5) - Defendant's objection to limitation defence - Date from which amendments take effect - Form of pleading of laches

Legislation:

Supreme Court Rules, O 21

Result:

Leave to amend granted

(Page 2)
Representation:

Counsel:

Plaintiff : Mr C D Belyea
Defendant : Mr M A R Blundell
Third Party : No appearance

Solicitors:

Plaintiff : Clayton Utz
Defendant : Solomon Brothers
Third Party : No appearance

Case(s) referred to in judgment(s):

Adam v Shiavon [1985] 1 Qd R 1
Baldry v Jackson [1976] 2 NSWLR
Brook v Flinders University of South Australia (1987) 47 SASR 119
Dye v The Griffin Coal Mining Co Pty Ltd, unreported; FCt SCt of WA; Library No 980404; 23 July 1998
Liff v Peasley [1980] 1 WLR 781
Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Timor Transport Pty Ltd (In Liq) v Murlroam Pty Ltd (1992) 110 FLR 553
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Weldon v Neal [1887] 19 QBD 394

Case(s) also cited:

Berno v Green's Steel Constructions (1991) 103 FLR 133
Briggs v Curtis Quick & Associates, unreported; FCt SCt of WA; Library No 980141; 30 March 1998
Cameron v Cole (1944) 68 CLR 571
Cohen v Cohen (1929) 42 CLR 91
Commonwealth v Verwayen (1990) 170 CLR 394
Gosvenor Mortgage Management Pty Ltd v Younan Permanent Trustee Australia Ltd, unreported; SCt of NSW (Young J); 23 August 1990
Issa v Berisha [1981] 1 NSWLR 261
James Hardie v Seltsame (1998) 159 ALR 268

(Page 3)

Ketteman v Hansel Properties [1987] AC 189
Southern Equities Corporation v Western Australian Government Holdings Ltd (No 2) (1993) 10 WAR 351
Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

(Page 4)

1 MASTER SANDERSON: This is the plaintiff's application for leave to amend its reply and defence to counterclaim. The minute of proposed substituted reply and defence to counterclaim is dated 3 August 1999. The defendant objects to par 14(b) of the proposed amendment. Otherwise, amendment in terms of the minute is not opposed.

2 For the purposes of this application it is unnecessary for me to detail the matters in issue between the parties. It will be sufficient if I say that by par 24 of its counterclaim the defendant seeks rectification of a document referred to in the pleadings as the "Deed of Variation". In response to that claim the plaintiff pleads par 14(b), which is in the following terms:

"14 Further, or in the alternative to paragraphs 2 to 13 of this Defence to Counterclaim, the Plaintiff says

(a) …

(b) the Defendant's claim in paragraph 24 of the Counterclaim is statute barred by reason of the said claim (if any) having arisen more than 6 years from the date the claim was first pleaded (18 April 1997), alternatively, the Defendant is barred by its own laches from maintaining this claim


Particulars of Laches

Notwithstanding that at all material times from or about June 1990 [1989], the Defendant knew the Deed of Variation did not contain the terms sought to be included in paragraph 24 of the Counterclaim, the Defendant was guilty of prolonged, inordinate and inexcusable delay in seeking the relief claimed and acquiesced in the matters of which it complained and further the Defendant thereby caused or permitted the Plaintiff to believe, as in fact it did, that the Defendant did not intend to assert the claim pleaded such that the Plaintiff has been or would now be unfairly prejudiced and/or the Defendant unjustly advantaged in that:

(Page 5)

(i) evidence supporting the averments in its Defence to Counterclaim has, or is likely to have been, lost as it has not been able to obtain proofs of evidence from witnesses having or likely to have a recollection of the events relating to the 1986 period described in paragraph 6 of the Counterclaim;

(ii) the discovery process has after lengthy argument, been concluded on the basis that the terms of the agreement between the parties is as stated in the Deed of Variation;

(iii) these proceedings have been ongoing since 25 October 1991 and the Plaintiff has prepared for trial on the basis that the agreement between the parties is as stated in the Deed of Variation."

3 The defendant raises a number of objections to this amendment. The first, and perhaps the most important objection, arises in this way. On 3 June 1997 the solicitors filed a consent order under O 43 r 16 which granted to the plaintiff leave to amend its statement of claim in terms of a minute annexed to the order and granted the defendant leave to amend its defence, set-off and counterclaim in terms of its minute. It was by this amendment that the defendant first introduced its claim for rectification. The defendant now says that, although made by consent, the amendment was in fact made pursuant to O 21 r 5(2) and (5). It is submitted that the effect of this rule is that the amendments take effect from the date of issue of the writ - that is to say, they take effect from 1991 when these proceedings were issued. On that basis, it is said that no limitation defence, at least so far as statute is concerned, is available to the plaintiff and the pleading in par 14(b) cannot stand.

4 Order 21 r 5(2) and (5) are in the following terms:

" (2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such

(Page 6)

leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

…

(5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."

5 Central to the defendant's submission is the assumption that amendments, once made, relate back to the date of the issue of proceedings. But this may not be correct. This question was considered in some detail by Brandon LJ in Liff v Peasley [1980] 1 WLR 781. In that decision His Lordship expressed reservations about whether or not amendments made to pleadings in circumstances where a new cause of action is added relate back to the date of the issue of the writ. In Western Australia there is no authority directly on the point. In Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 Franklyn J, at 249, appears to implicitly accept the so-called relation back theory. In Dye v The Griffin Coal Mining Co Pty Ltd, unreported; FCt SCt of WA; Library No 980404; 23 July 1998, Owen J considered the operation of O 21 r 5 and the effect it had on the rule in Weldon v Neal [1887] 19 QBD 394. However, his Honour does not appear to have considered whether or not the relation back theory provides the basis for declining to allow a party to plead a cause of action where the limitation period has expired. It would appear then that the question is still open in this State.

6 Elsewhere in Australia opinion seems divided as to whether or not the relation back test applies. In Adam v Shiavon [1985] 1 Qd R 1 the Full Court of the Supreme Court in a decision which was clearly obiter approved the relation back test. In Baldry v Jackson [1976] 2 NSWLR the Full Court of the Supreme Court of New South Wales reached the same conclusions. That appears to be a substantive decision, although it may relate to the particular provisions of the New South Wales Supreme Court Rules then applying. In South Australia, von Doussa J, sitting as a single Judge of the Supreme Court, doubted the relation back theory: see Brook v Flinders University of South Australia (1987) 47 SASR 119 at 122. The position appeared to be left open by Martin J in Timor Transport Pty Ltd (In Liq) v Murlroam Pty Ltd (1992) 110 FLR 553 at

(Page 7)



64. There may be other cases of which I am not aware, but the divergence of views expressed in the cases mentioned indicates that there is no uniform view throughout the country.

7 It is not necessary for me to express a view one way or the other in relation to this matter. In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 the High Court warned against limitation questions being resolved at an interlocutory stage. In opposing these amendments the defendant is arguing that the plaintiff has forfeited its right to rely on a limitation defence. In my view, it is open to the plaintiff to argue that it does have a limitation defence and this is a matter which should be determined by the trial Judge.

8 It is very much an open question as to whether or not a limitation defence will, in any circumstances, be a relevant consideration in this case. Paragraph 14(b) of the minute is designed to meet the defendant's claim for rectification. Rectification is a purely equitable remedy. The statute of limitations by its terms does not attempt to prescribe a time limit for the bringing of such an action. It may be that by analogy to like causes of action some support for a defence of laches may be drawn from a statute of limitations. But that would not require pleading of the statute itself. During the course of his submissions counsel for the plaintiff referred to the pleading as being drawn from precedent and in fact the pleading bears an uncanny resemblance to the precedent to be found in Bullen, Leek and Jacobs: Precedents of Pleadings, 13th ed at 1254. No mention is made in that precedent of the statute of limitations.

9 While I have some doubt that any reference to the statute of limitations is necessary, I am prepared to allow the pleading to stand. If a question arises as to the right of the plaintiff to rely on the statute, then that is a matter which can be determined by the trial Judge.

10 The second complaint made by the defendant is as to the form of the pleading itself. In fact the matters appearing under "Particulars of Laches", save for items (i), (ii) and (iii), should all be pleaded as material facts. The precedent to which I have referred makes that point clear. It was contended on the part of the defendant that the particulars of laches could not support the plea. It was submitted that the particulars were at odds with the evidence already to be found on the Court file.

11 There may well be substance to the defendant's complaints. But this is a pleading summons and it is not appropriate to measure the pleading against evidence to ascertain whether or not at trial the plaintiff will be

(Page 8)

able to make out its claims. The question is whether the pleading allows the defendant to understand the case it has to meet. In my view, the pleading achieves that aim. Subject to the heading "Particulars of Laches" being repositioned within par 14(b) of the defence to counterclaim, I am prepared to allow the pleading to stand in its present form.

12 I will hear the parties as to the form of the order and as to costs.