Wardley Australia Ltd & Anor v State of Western Australia

[1992] HCATrans 62

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P26 of 1991

B e t w e e n -

WARDLEY AUSTRALIA LTD

and WARDLEY AUSTRALIA

SECURITIES LTD

Appellants

and

STATE OF WESTERN AUSTRALIA

Respondent

MASON CJ
BRENNAN J
DEANE J

DAWSON J

TOOHEY J
GAUDRON J

MCHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 5 MARCH 1992, AT 10.15 AM

(Continued from 4/3/92)

Copyright in the High Court of Australia

Wardley(2) 101 5/3/92

MASON CJ: Yes, Mr Heenan?

MR HEENAN:  May it please Your Honours, we have handed to

each of Your Honour's associates a copy of the

Schlosser article from XXV Alberta Law Review,

which was referred to by Justice Deane and

Justice Gaudron in Hawkins v Clayton. I shall not

occupy Your Honours in going through the article, but it does show that in Canada, even in economic

loss cases, the discoverability test in Kamloops is

adopted.

At the adjournment, I was at paragraph E of the outline of submissions dealing with the

criticisms of the Forster v Outred doctrine. I had

come to subparagraph (d) dealing with the reliance

by the Lord Justices of Appeal in Forster itself on

what is suggested to be a misconstruction of the

reasoning in Nocton v Ashburton.

I shall not deal with this matter in any

detail. The explanation of the suggested fallacy

is developed by the Full Court in Wardley in the

appeal book at page 130. It is also discussed in

the Kaye article at 100 LQR and in the Mullany

article in the Modern Law Review.

Mr Justice Hill in Magman seeks to reject the

criticism on the grounds that Nocton v Ashburton

was only one of a series of authorities which were

relied on to bring the Court of Appeal to its

conclusions, but a reading of the judgment in

Forster v Outred will show that there was

considerable prominence given to that reasoning, as

appears from the judgments of
Lord Justice Stephenson at page 96, and
Lord Justice Dunn at page 100, with whom

Sir David Cairns agreed at page 100.

The next criticism is that the likelihood of

financial loss is treated as damage in itself, and

this, we suggest, is contrary to the distinction

between the two which is recognized in the Trade

Practices Act itself in sections 82 and 87, a

submission which I have already developed.

The next criticism is that the doctrine will

lead to erroneous compensation. In a case where

the value of the chance of the contingency falling

in has to be assessed, the damages will, of

necessity, always be too great or too little. If

the contingency falls in then the plaintiff will be

under compensated because at the time of assessment

there will have been a discount in the assessment

process against the uncertainty of the contingency

occurring. If the contingency never occurs, the

Wardley(2) 102 5/3/92

plaintiff will be overcompensated because he will
be rewarded for a loss which does not materialize

and that, in our respectful submission, would

appear to be a very unfortunate consequence.

Your Honours, there is a very helpful but as

yet unpublished paper on damages under the Trade

Practices Act which has been written by

Mr J.D. Heydon, QC, of the Sydney Bar and which, so

I understand, was delivered at a seminar here in

Canberra in about August of last year on the

subject of damages. I do have one copy of that

article which was sent to me by facsimile, and

unfortunately the quality is not good enough to

offer it in reproduction. I would hope that

Your Honours may be able to attain access to that

article, but if not, arrangements can be made to

supply the Court with one. I expect it will be

published in due course along with other such
papers in the series of collections of these

seminars that the Law Book Company produces. In

that paper Mr Heydon makes the point that this

method of assessment of damages by valuation of a
chance is a very undesirable approach, and that the

valuation of chances is an act of last resort and

not first resort in the law.

The next criticism of the Forster v Outred

doctrine is that it fails to provide a test for a

situation where a client abstains from executing a
document on negligent advice. One has to postulate

what would occur if the situation were that instead

of entering into a document involving certain
consequences the client abstains from doing so, how

could it be said that his requisite interests are

affected in the sense that have been identified in

the Court of Appeal decisions? There does not

appear to be any judicial decision dealing with

that possibility.

other cases dealing with it, they all involved Also in the case of Forster v Outred and the	situations where the solicitor or the adviser, as
the case may be, was in breach of a contractual
duty at the time when the advice was given. So an
accrual of a cause of action in contract would accrue at that first date and in conformity with the principle of limitation provisions that once
time begins to run it keeps running, the earlier
date for the ascertainment of the breach would be
selected. The next criticism - not so much - - -

DEANE J: Mr Heenan, does not that abstaining example count

against your argument? One can understand that if

somebody does not execute a document and thereby

loses a bargain because of misrepresentation that

Wardley(2) 103 5/3/92

he sustains the damage when he loses the bargain,

but how would you put it?

MR HEENAN:  Your Honour, we would see that the cause of

action accrues for some reason other than the

execution of the document, and it is that the loss

was experienced because the chance was missed.

DEANE J:	But take the case where, as I say, he does not execute the document and thereby loses the bargain.
MR HEENAN:	It is the loss of the bargain which is the

damage, thus signifying - - -

DEANE J: It is the abstaining from entering into the

transaction, is it not, which constitutes - - -

MR HEENAN:  The difficulty about the example is that it is

hard to postulate a delay in the loss in the case

of abstention.

DEANE J: That was the point I was making. I just do not

see how it helps your argument. It sort of raises

an example that somehow has to be reconciled with

your argument.

MR HEENAN:  Your Honour, we endeavour to put it this way,

that the Court of Appeal cases concentrate

attention upon the execution of a document being an

act in reliance and an act which affects property

rights, et cetera. We, however, suggest that that

is not the proper test; that the proper test is to

identify the point at which real tangible loss

occurs.

In the case of abstention, one still has to look for the occasion when the loss falls in but

that is an exercise which is done without regard to

the execution of documents, obviously.

DEANE J: Except the real argument against you is not

execution of the document, it is entering into an

unfavourable transaction. On abstaining it would be

not entering into an unfavourable transaction.

MR HEENAN: Or a favourable transaction. But, in those

cases, Your Honour, we would suggest that actual

loss would not occur until the opportunity were

missed and it may well be the case that there would

be some locus paenitentiae in which the opportunity

could be retrieved.

DEANE J: But if you get away from all these cases, there

seems to me to be no compelling argument favouring

either view, that is, saying that if you entered

into an unfavourable transaction, you do not

sustain the loss until it is established that it

Wardley(2 104 5/3/92

was unfavourable or the alternative view that you

sustain the loss when you entered into a

transaction that can be seen to be unfavourable or

it can be seen to be probably unfavourable.

MR HEENAN:  Yes, Your Honour. We can accept that there must

be many cases at the margins where there are

difficulties, but the focus of the exercise must

always, we suggest, be to identify some form of

tangible loss and, having regard to the
consequences of selecting a date, particularly

where there is a risk that the loss will not be

perceived, one should not choose a date which

maximizes the risk of it going undetected.

Admittedly there has to be a commencing point

somewhere and plaintiffs' opportunities cannot be

kept open indefinitely, but it would be undesirable

to pick a commencing time which increases the

chance of a defendant employing an unmeritorious

defence.

DEANE J: But when you get away from the cases, what has

been put against you is essentially an intellectual argument, and what you are putting is essentially a
practical or common sense argument. It is very

hard to get the two meeting, which is what I was

leading up to. In all these academic discussions,

what was - not from the point of view of your

argument, but from the point of view of examining

the pros and cons - the best that you came across?

MR HEENAN:	The approach that has been favoured by the English cases does seem to reflect
Mr Duncan Wallace's comment that the law is loaded
in favour of defendants. If one is being
objective, then one has to pick a time which will
serve the policy that litigants should be able to
vindicate their rights with reasonable promptitude.

That policy, carried to its logical extent,

would produce a discoverability test, but because

many torts are of slow or imperceptible onset, some

compromise needs to be made, and hence the

Cartledge v Jopling decision. But that is a

decision which has to be made because of the

extremes of the possibilities, and it is not a

conclusion which a court of ultimate authority,

with respect, ought resort to first.

So in the ordinary run of case, there ought be

a reasonable opportunity for the damage to be

identified. I am not sure if I can take the matter

very much further, Your Honour.

DEANE J:  I have delayed you enough, you.

Wardley( 2) 105 5/3/92

MR HEENAN:  Yes, but just continuing through these

criticisms, they are of variable impact, I

appreciate. The next one is that the rule itself

is not of universal application, and in Forster's

case itself, the Court of Appeal acknowledged that

and it has been acknowledged in subsequent

authority, and there is the criticism by

Mr Justice Sheppard, at first instance, in Magman

which has been noticed and, finally, its

application under the Trade Practices Act involves

a very substantial dependence on common law

concepts.

Might I next turn to the question of a matter

under section 86. I intend to do no more than

refer to the authorities which are listed and to

make the observation that, as is generally and
uncontroversially accepted, a matter is the entire

range of issues in controversy - - -

MASON CJ: There is no contest about that, is there?

MR HEENAN:  No. That brings us to the Weldon V Neal points.

Can I say in relation to this that by virtue of

section 82 the only legislative requirement is the
commencement of an action within the three year
period. Once the action has been commenced within
that period the matter is entirely in the hands of
the court, and when I say the matter is entirely in

the hands of the court, that is the effect of

section 86, all matters associated with the action.

And what a court will do with the conduct of the

action under its scrutiny is a matter for the

decision by the court as a matter of procedure, and

it is apparent that Parliament has entrusted the

responsibility for that management, utterly, to the

court. And next, the court's power, in this

regard, is ample and without any express restraint

Order 13 rule 2 is to that effect in the Federal

Court rules, it is reproduced in the appeal book in

a judgment of the Full Court at page 132, and in

the judgment of Justice French at pages 65 to 66,

and the ability is to amend, at any stage of the

proceeding, and in such manner as the court thinks

fit.

Now we suggest, with respect, that that ample power should be given an unrestricted meaning, and

in cases of contest it should be given a purposive

construction in conformity with the precepts in the

Commonwealth Acts Interpretation Act, section lSAA,

which expressly applies to by-laws, rules and

regulations by section 46, and that may be a point

of distinction between any occasion for the modern

application of the rule, and that which existed

before the Interpretation Act was amended in that

fashion.

Wardley(2) 106 5/3/92

Our submission is that the rule as framed would appear to confer the broadest of discretions,

but doubtless a court should be vigilant to see

that its use does not pervert the policy implicit

in section 82(2) that an action must be commenced

within the three year time limit, and that a court

ought not allow amendments of such a kind that

would significantly or radically change the

essential nature of a claim so as to convert it to

something fundamentally new.

BRENNAN J:  What do you say about so as not to alter the

legal position of the defendant which flows from

the application of 82(2)?

MR HEENAN:  Your Honour's question raises what has sometimes

been called "the vested right" concept about the

defendant's position being the position to rely on

the limitation statute. Now, the vested right

doctrine in a sense begs the question because it

may not always be legitimate for a defendant to

rely on the limitation point, and that gives rise

to the next question of whether the limitation

provision is of substance or is of procedure.	If
it is of substance, P+esumably that is the end of
the matter, subject to doctrines of fraud and so
on, or even then on McNeil's case those doctrines
may not apply.

TOOHEY J: But, Mr Heenan, is there not also an element of

begging the question in the word "amend"? What

does it mean to say that the court may amend a

document in terms of the time from which the

amended pleading speaks? Do the Federal Court

rules throw any light on that point?

MR HEENAN:  We would suggest that the well accepted meaning

of the word in that context is to make any desired

alteration, and in a situation that does not have a

limitation prominence, amendments of the most

extreme and radical kind are often sought and allowed.

TOOHEY J: But the amendment having been made, does that

necessarily dispose of the limitation question or

does the limitation question remain a live one in

relation to the amended pleading?

MR HEENAN:  That raises the question of from what date t"le

question, may I just complete an answer to	amendment may operate. But before I address that limitation provision is procedural rather than substantive then there should be an ability for the
plaintiff to plead in reply, raising issues which
may prevent reliance on the limitation provision,
such as unconscientious reliance on legal rights,

Wardley(2) 107 5/3/92

which was referred to by Justice Deane in Hawkins v

Clayton, and waiver, which was accepted by the

Court in Verwayen.

The question, therefore, is if there is a

possibility that some such adequate answer might be

made to the limitation period, can the amendment be

allowed on terms? The conventional view is -

although there is some discussion in the

authorities - that the amendment - I am addressing

Justice Toohey's question now - takes effect from the initial proceeding for commencement of the

action. That is subject to a number of

qualifications and exceptions: in Ketteman, in the

House of Lords, it is recognized that when there is

the introduction of a new party to the action, who

is brought in for the first time by way of the

amendment, the case against the new party accrues

only at the date that he or she or it is joined;

and that has significance for this case because in

the amendment we have brought in Mr Yong.

The general view, subject to that, seems to be

that it dates back to the commencement of

proceedings but that the Court has power to impose

terms, including terms as to the date from which

the amendment will operate. So if one recognizes

the limitation period as being procedural, so that
there is a possibility for a successful reply, a

common term might be to direct that the amendment

takes effect from the date of the application to
amend, leaving the position of the defendant

unimpaired in relying on the statute unless a

successful reply can be proved.

There have been a number of flexible

applications of this principle. There is a case in

the Supreme Court of New South Wales in which

Mr Justice Rogers, in the commercial division, gave liberty to amend, in a proceeding for damages in

common law causes of action in the commercial

court, to a defendant to permit the defendant to

plead a cross claim for damages arising from breach
of section 82 and 52 of the Trade Practices Act
although the operation of the cross claim at the
date .of the amendment was after the three year

period, and that was dated back. It was not dated

back to the commencement of the proceedings in the

Supreme Court of New South Wales, however, because at that time the Federal Court had exclusive

jurisdiction in trade practices claims and was only

dated back to the occasion in which the Trade

Practices Act was amended so as to confer

jurisdiction on State Supreme Courts to deal with

trade practices claims.	So that is a half-way
house.

Wardley(2) 108 5/3/92

That decision is the AHP Society v Specialist

Funding Consultants. I am sorry, I am not certain

of that, Your Honour; I think it may be another case

and we will clarify that in a moment. And the other

decision on this point, again of Justice Rogers in

the Supreme Court of New South Wales, is that a

cross claim and a defence, relying on an equitable

set off was permitted, although the cross claim and

the equitable set off relied on a section 82/52

claim for damages which was initiated in the sense
of being the subject of a cross claim, after the

three year period, and His Honour took the view that

all that section 82 required was the commencement of

an action and that a set off and cross claim was not

an action and that possibility was therefore open.

TOOHEY J:  I am not clear. Are you saying that in cases

where the rules do not expressly provide for the

operation or the date of operation of the

amendment, as most rules do these days, that a

general power to amend enables the court to impose

as a condition of amendment a date from which the

amended pleading is said to operate?

MR HEENAN:  Yes, Your Honour.

BRENNAN J: That only delays the determination, does it not,

of whether or not, where a defendant is seeking to

rely upon a statute, it would be futile to allow

the amendment to occur?

MR HEENAN:  Yes, it does, Your Honour, but the need to

preserve that question will arise in a situation

where there is a possibility for the plaintiff to

make a successful reply to the pleading, relying on

unconscientious reliance, waiver, concealed fraud,

~nfancy, all of those matters.

BRENNAN J:  Have we got any evidence in this case which makes this a live question?

MR HEENAN:  Your Honour, we would respectfully submit - and

some of our submissions so far have implied - that

the discovery of the State's damage or position has

been delayed by the non-disclosure of some or all

of the respondents, and it has been the misleading

conduct which has been responsible for the

non-disclosure of the facts giving rise to the

cause of action, at least for some time. If

section 82 were pleaded against us, we would seek

to raise a reply such as was adverted to by

Justice Deane in Hawkins v Clayton.

BRENNAN J: Is that an issue which falls for consideration

by this Court for the first time?

Wardley(2) 109 5/3/92

MR HEENAN:  Yes, I think it does, Your Honour. There have

been a series of cases in the Full Federal Court in

which the doctrine of concealed fraud and infancy

have been held not to apply to claims under the

Trade Practices Act relying on section 82. But I

am not aware, at least of any decision of this

Court, in which that issue has been vindicated one

way or the other.

BRENNAN J:  I did not mean raising itself as an issue of law

for the first time in this Court. I meant in these

proceedings has that matter previously been

considered?

MR HEENAN:  Yes, it was the subject of submissions to the

Full Federal Court and was commented on in the judgment, but was deferred on the basis that it was not an issue which could be seriously entertained in the absence of a defence pleading the statute

and a formal reply making specific allegations.

There is discussion in the Full Court judgment to

that effect.

BRENNAN J:  If you were to fail on all other issues save

this, what order would you seek?

MR HEENAN:  That the amendment be allowed on terms that it

date from the day the application was before

His Honour Justice French.

BRENNAN J: Thank you.

MR HEENAN:  But this, of course, depends on the view one

takes of section 82(2), whether it is a matter of

substance or whether it is procedural. If it were

a matter of substance we could not raise a reply to

it.

TOOHEY J:  How could you determine a strike-out application

without resolving that question? In the particular

circumstances we are concerned with, the plaintiff

seeks to add an allegation of a representation

which it is said ought not to be added because it

raises a cause of action which is statute barred.

The plaintiff comes back and says, "Well, even if

it is otherwise statute barred, there is an answer

in terms of whatever it may be; estoppal or

unconscionability or the like". How does the

pleading get struck out without resolving that

question?

MR HEENAN:  That very predicament is the reason to avoid

ruling on limitation questions on a strike-out
application in situations where there is any

possibility that there may be a successful reply.

Many of the cases which deal with the limitation

Wardley(2) 110 5/3/92

points on a strike-out or preliminary application

are utterly devoid of this possibility.

TOOHEY J: But if the possibility exists on your argument,

is that not enough to dispose of the strike-out

application?

MR HEENAN: It should be, Your Honour.

TOOHEY J:  What is the state of that argument in its

passage, if it had a passage, through the Federal

Court?

MR HEENAN:  There were very considerable submissions made to

the Full Federal Court that a plea of concealed

fraud may be raised by the State. The problem was

whether that could properly be raised against

Wardleys, as distinct from against Mr Connell, and

that gave rise to a question of the degree to which

Wardleys could be regarded as agents for Connell or

vice versa. The Full Court made express reference

to the possibility that notwithstanding that the

position might not come within the doctrine of

concealed fraud, it may nevertheless be a case of

unconscientious reliance on legal rights and that a

reply on those grounds could be made, but, as I

have said a moment ago, left it open to await the

delivery of pleadings so that the issue could be

raised squarely.

In answer to Your Honour Justice Toohey's

question, I respectfully submit that where there is

a real possibility that that could occur, the

amendment ought not be disallowed or struck out;

it should be allowed on terms which would preserve

the interests of the parties, they being the terms

I indicated to Justice Brennan a moment ago.

BRENNAN J:	Mr Heenan, I am just a bit puzzled about the course of proceedings here. Looking at the index
in the front, there is an amended statement of
claim dated 14 January - I presume delivered on
that date?
MR HEENAN:	Yes.

BRENNAN J: There is an application for striking out which

is dated 19 December.

MR HEENAN:	Yes.
BRENNAN J:	To strike out a statement of claim that had not

been delivered?

MR HEENAN:  No, there had been a statement of claim delivered in December.

Wardley(2) 111 5/3/92

BRENNAN J: What was the order that was made here: to

strike out paragraph 16(c)?

MR HEENAN:	Yes, among some others.
BRENNAN J:	It is not an application to amend a statement of claim to include a claim; it is an application to
strike out a claim that has been made?
MR HEENAN:	What had happened, Your Honour, was that a

statement of claim had been delivered on or shortly
after the application; it contained allegations

against Bond Corporation which were the subject of

attack by the solicitors and counsel for Bond.

That was heard before His Honour Justice French

towards the end of 1990 and part of the statement
of claim was struck out with leave to replead

generally.

A fresh statement of claim was put in to meet

the points which had been raised in that strike-out

application and to raise other matters as well and

that was filed pursuant to the general liberty to

amend. It was that statement of claim, the one

delivered on 14 January, which contained, for the

first time, the allegations in paragraph 16(c).

The amendment having been made, there was then the

strike-out application. The case dealing with the

half-way house, of the dating back of the amendment

is the Australian & New Zealand Banking Company

Group Limited v Larcos, (1987) 13 NSWLR 286.

Just returning to Order 13 rule 2 and the

power to amend and the operation for the Weldon v

Neal rule, we suggest that it is important to

recall that there is no legislative provision which

forbids the court to amend in this way. And the

Parliament has left it entirely to the courts as a

matter for their responsibility and judgment in

each case. And the judgment on whether or not to

allow an amendment, we suggest, should be a matter

of fact and degree within the discretion of the

court.

The settled practice of which Weldon v Neal is

perhaps the most prominent example, if strictly

applied, would change that discretion into an

inflexible rule or, at least, it would render the

discretion very sclerotic. But the rule itself is

no more than one of practice and admits of

exceptions.

We submit that in this case the reasoning of

the Full Court on the question of what is a matter
before the court should be taken as meaning that if
the proposed amendment involves a sufficiently
close resemblance to the essential features of the

Wardley(2) 112 5/3/92

original case, or the matter, it should be allowed,

even if, strictly speaking, the cause of action is

new. And we would say, with respect, that that is
not contrary to the spirit of Weldon v Neal, even

if it may be regarded as a somewhat tolerant

approach to those accustomed to the strict and

inflexible application of the rule.

That rule has been referred to as a

regrettable rule by Mr Justice Hill in Zoneff v

Elcom, at page 475. It has been referred to as a rule which may have been displaced by the operation

of Order 13 rule 2 by Justice Toohey in the Federal

Court, in Metropolitan Oils Pty Limited v Fortron,

(1986) 11 FCR 335, the particular observation being

at page 338; His Honour, however, feeling

constrained as a judge at first instance to apply

the accepted practice. Weldon v Neal was itself

obviously not the first example of the application of the rule but it was an example which was termed a very strict interpretation of the rule by

Lord Wright, then Master of the Rolls in Marshall v

London Passenger Transport Board,

(1936) 3 All ER 83, the particular passage being at

page 88.

Now the substance of the rule has been

recognized by this Court on at least two occasions:

in Bainbridge-Hawker v The Minister of State for

Trade and Customs for the Commonwealth, (1958)

99 CLR 521, a case dealing with customs

prosecutions and the correct description of the
prosecutor. The case raised questions of misnomer,
but it was eventually held that the application was

adequately brought in the name of the minister.

Justice Williams at page 532 discussed three

separate occasions in which the rule could apply.

The first being:

Where there is a proper plaintiff but it is

sought to add to the causes of action being

sued upon a new cause of action which is out

of time at the date of the application. In

this category a leading case would appear to

be Marshall v London Passenger Transport

Board, where Lord Wright said that where it

was sought to amend the existing causes of

action the rule was interpreted very strictly

and a very strict limitation was placed upon

what was meant be a cause of action or a new

cause of action.

The matter has also been applied by this Court

in the decision of Renowden v McMullin, (1970)
123 CLR 584, a case on appeal from the

Supreme Court of Victoria, where a majority of the

Court comprising Justices Kitto, Menzies and Owen,

Wardley(2) 113 5/3/92

with Chief Justice Barwick and Justice McTiernan

dissenting, refused to allow a statement of claim

to be amended to introduce a cause of action after

the expiration of the requisite limitation period

in circumstances where the endorsement on the writ

was broad enough to allow the cause of action to be

advanced, but where the original statement of claim had not advanced the particular cause of action, it

being held that the statement of claim took

precedence to the endorsement and that the cause of

action had been abandoned and it could not be

reintroduced.

Speaking, admittedly in dissent of the

strictness of the application of the rule in those

circumstances, Chief Justice Barwick and

Justice McTiernan, at page 600, said:

However, we are quite unable to accept

the proposition. For our part, we think that
the judicature rules did relegate such
technicality to the limbo of forgotten things

and did provide against the possibility, of an

injustice occurring by the slip, or for that

matter, by the blunder of a legal adviser.

Now, I do not attempt to argue against the

result in Renowden v McMullin, but there is a lot

to be said for the policy implicit in those

observations and if one is concerned with the

essential merit of the case, I suggest, with

respect, that while obviously it has been nothing

less but of the utmost propriety for the

respondents, Wardleys, to make this application.

The close resemblance between what occurred on the

Sunday and on the Saturday, whatever its legal

significance may mean, can confer little merit on

the suggestion that that matter cannot be pursued 'if introduced into the statement of claim as part of the totality of the allegations.

DEANE J: But what if you read "action" in 82(2) as meaning

an action on the particular cause of action? Do

you say t.hat if you read 82 ( 2) in that way that a

matter cannot involve two distinct causes of

action?

MR HEENAN:  No, Your Honour, the authorities are to the

effect that "matter" can extend over variety of

causes of action.

DEANE J: If "matter" involves two distinct causes of

action, and "action" in 82(2) involves an action or

a suing on the particular cause of action, why is

that not the end of it?

Wardley(2) 114 5/3/92

MR HEENAN:  Your Honour, it is because of the amplitude of the power to amend, and the policy -

DEANE J: If we are looking about an arid exercise as to

whether an amendment should be made to allow a suing

or an action to be brought after 82(2) says it

should not be brought, that is one thing, but that

is not what I am asking you about.

MR HEENAN:  Your Honour, our submission is that we have

complied with section 82 by commencing the action

within time.

DEANE J: But the question is, if 82(2) means an action on a

particular cause of action, the concession, as I

understand it, is that the amendment raised a new

cause of action, why did not the action on that

particular cause of action commence at the time

when the amendment was made?

MR HEENAN:  Your Honour, if, in answering Your Honour's

question, I have been taken to make a concession,

that section 82 only applies to the particular

cause of action, I would like to withdraw that.

DEANE J:  I did not understand you to concede that all. I

was asking you about, really, why does not one read

in the context of section 82 an action being an

action in the sense of the suing on that particular

cause of action, as distinct from reading it as a
proceeding in relation to a matter involving

innumerable causes of action.

MR HEENAN:  The answer we make, Your Honour, is that the

term action, in that context, is not a word of

precise definition or clear limitation, and there

must be many amendments which can be made after the

expiration of the limitation period which are
permissible. It is essentially a question of fact

and degree. It is not, in our respectful

submission, sufficiently clear to adopt the

interpretation which Your Honour raises because the
everyday application of that rule would involve

endless disputation on fine distinctions as to what

was the boundary of any particular cause of action

and whether alteration of facts or particulars

transcended it or whether some different legal

conclusion being sought to be drawn from the

conclusion offended the rule. Against the

possibility that this power might lead to endless

disputations of the finest distinction, the policy
implicit in the rules and in the post judicature

approach seems to be to leave a broad discretion to the Court, leaving it to the Court in such a way as

to ensure that fairness, including fairness to a

defendant, will not be broached, having regard to

the significance of the particular amendment.

Wardley(2) 115 5/3/92

DEANE J:  I suppose your answer to me is simply that my

approach that pleadings should identify causes of action is a 19th century approach which continued

in some places into this century.	I do not know
whether it is a convincing answer.

MR HEENAN: There are a lot of decisions in the

Supreme Court of New South Wales in which very fine distinctions on this point have been developed, but

I am sure that that would be seen as an achievement

in some quarters.

The nicety of the distinctions and the fine

reasoning involved in selecting between them can be seen in the various cases that we have listed under paragraph G, particularly under subparagraph (a).

I do not intend to take Your Honours through the

detail.	The decisions have been very fully
reviewed in Golski v Kirk.	The facility to allow

an amendment has been endorsed by

Chief Justice Barwick in Black v City of South

Melbourne, admittedly where the matter only goes to

particulars. I have already submitted that the

Court may depart from the rule as a matter of

discretion. I have dealt with this question of

whether or not the amendment necessarily should

relate back, and in answer to Mr Justice Toohey's

question I refer to Ketteman v Hansel Properties in

the House of Lords, and I have referred to

Justice Rogers' decision in Larcos. But the

doctrine also applies in cases of prosecutions as

is apparent from Chaudory v Ducret which I will

simply refer the Court to.

There is one final matter I should address on

this topic, and that is the question of the

concession before Mr Justice French in the Full

Court. I do not wish to in any way retract or

alter what has been said. Our position was that we

admitted from the commencement that this was a new

allegation.	I think when pressed, we accepted that
it was a new cause of action.
I have some doubts now as to whether that

concession was accurate but, in a large way, events

have overtaken us, because there have been more

changes to the statement of claim in the current

pleading. So in our respectful submission, the

reasoning of Justice French and the reasoning of
the Full Court have not proceeded entirely on the

concession, but have analysed the point of

principle. The point of principle is of importance

for the continued conduct of the action and

generally.

BRENNAN J:  I am not sure that I understand what that

submission leads to.

Wardley(2) 116 5/3/92

MR HEENAN:  It means, in our respectful submission, that the

fate of paragraph 16(c) will be governed by the

concession.

BRENNAN J:  So it will be treated as the raising of a new

cause of action.

MR HEENAN:  Our position essentially is that that particular

plea has now been overcome by events, and it is

important, in our respectful submission, for the

Court to rule on the question of whether or not the approach which we are advancing, namely that if the

desired amendment is sufficiently close to the

matter before the Court, that there is a close

resemblance, either a fact of law in the issues
which have been raised, then the rule in Weldon v

Neal will permit the amendment or if it does not,

the rules, in conformity with the purpose of
construction, should permit the amendment,
regardless of the fact that on a very strict

construction, the cause of action might be new.

BRENNAN J:  Mr Heenan, our concern is with paragraph 16(c)

and not with subsequent events.

MR HEENAN:	Yes, Your Honour.
BRENNAN J:	Now, the proceedings below were taken on a

particular footing, as I understand it.

MR HEENAN:  Yes, Your Honour.

BRENNAN J: Must we not be bound by that footing?

MR HEENAN:  I would not entertain any prospect of being able

to persuade Your Honours otherwise.

TOOHEY J: But putting it another way, Mr Heenan, if there

were common ground so that it were not a new cause

of action, well then, obviously, we would not be

here, or you would not be here.

MR HEENAN:  Yes, Your Honour, my learned friend has made

that point well.

TOOHEY J: Yes. So, the whole matter has an air of

unreality about it, unless we proceed on what is

acknowledged to be a clear basis upon which the

matter was argued below.

MR HEENAN:  Yes, Your Honour. I am not attempting to

persuade the Court otherwise.

TOOHEY J:	No.
MR HEENAN:	But I am suggesting that in examining this

point, having regard to the importance of the

Wardley(2) 117 5/3/92

matter and the fact that special leave was granted

generally in this case, not limited to any

particular issue, it is desirable to address the

principal point and to address our submissions that

amendments under Order 13 rule 2 can be made,

within or without the rule in Weldon v Neal.

TOOHEY J: Yes.

DEANE J: But if one reads "action" in 82(2) as meaning what

I put to you, that is, a suing on the particular cause of action, the concession is the end of the

case in so far as 16(a) is concerned.

MR HEENAN:  Yes, I expect it is, Your Honour, but an

examination of the cases and, in particular, the

Victorian case of Hristeas will show that if there

is a resemblance, a close resemblance of fact

between what is originally being advanced and what

is sought to be introduced in the amendment, even though the factual alterations may be significant

in that case, the difference between a man claiming

damages, originally said to be on the basis of an

electrocution, being amended to a claim for damages
relying on what an effect was tenosynovitis, it

qualified for amendment within the rule.

DEANE J: But that would really, in this context, if you

took the approach I was asking you about, lead you

to say, "Well, it does not introduce a new cause of

action".

MR HEENAN:	Yes, it would.	It would.
TOOHEY J:	I am not clear about this.	In the rule, the

power to amend cannot override a clear statutory

provision, but I rather took you to be saying a
while ago that the power to amend, in a sense,

could indirectly meet the statutory provision

because the power to amend allowed an amendment

which would operate from the date on which the

amendment was granted.

MR HEENAN:  Yes.

TOOHEY J: So, is that the argument?

MR HEENAN: Well, that is part of - - -

TOOHEY J:	And where that is done it, in effect, overrides the - perhaps "overrides" is the wrong term, but it
meets the statute in an indirect way.

MR HEENAN:  Yes. Your Honour, I have attempted to be at

pains to submit that there is no statutory

constraint on the amendment, but the rule as framed

implies that there is. All that section 82

Wardley(2) 118 5/3/92

requires is the commencement of an action within

time subject, of course, to the gloss which

Justice Deane has suggested should be put on the meaning of the word "action" in that context. If

that were not to be made then the power to amend is

unconfined, except by anything other than judicial

supervision, which is a discretion which ought to

be exercised as a matter of fact and degree, having

regard to the merits of the particular case and not

circumscribed by a discretion which has atrophied

over the years.

Your Honours, corning to the question of the limitation provisions and the substance procedural

distinction, I have already addressed the Court on

the significance of the distinction for the

purposes of the present case and they raise the

questions of the ability to make a reply. We

suggest, with respect, that the reasoning in the
recent decision of the Court in McKain, the
reasoning of the majority, would lead this section

to be regarded as procedural, and that the

comparison should be between section 82(2) and the

Limitations Act of because the Limitations Act provision could be regarded as something separate from the creation of

limitation provision not in the

a special right. But the workers compensation

right of action conferred by special legislation is

a right sui generis and if the limitation period

relating to that can be regarded as procedural,

then we would say, with respect, that the same

reasoning applies to section 82.

The question of the effect of the limitation

proceedings in section 82 of the Trade Practices

Act was before this Court in Sent v Jet Corporation

'of Australia Pty Ltd, (1986) 160 CLR 540, a case

which is not on our list, I am afraid. That was a

case of whether or not there was a limitation in

relation to claims under section 87 where at that

date there was no express limitation in the statute

and it was decided that by analogy with section 82,

the same time limit applied. But there is no

suggestion in that decision that the limitation was

one of substance rather than procedure, and perhaps

the issue did not arise. But there is nothing in
that contrary to our contentions and so far as

practice or experience is of any value, I suggest

that it would be seldom that in claims for damages

under section 52 and 82 of the Trade Practices Act

there would be specific pleas that the action has

been brought within three years, although of course
the rules of court which provide that any matter
regarded as a condition precedent in the bringing

of the action shall be implied in a pleading, but

that approach to the action has not apparently been

Wardley(2) 119 5/3/92

generally pursued in the conduct of these

proceedings to date.

On the question of concealed fraud, I have

already indicated to the Court how we were raising

an argument before the Full Federal Court that the

possibility of there being a form of concealed

fraud may be a reason to allow the amendment or

avoid the striking out. We were met by a rejection

of those submissions based on the decision of the

Supreme Court of New South Wales in Metacel.

Essentially the reasoning went this way, that

in the absence of express statutory provisions
conferring a general doctrine of exception to
limitation periods on the grounds of concealed
fraud such as exist in some jurisdictions, notably

Britain, the doctrine of concealed fraud is

entirely an equitable doctrine and it can be

pleaded only in relation to the defence of

equitable claims, either in the exclusive

jurisdiction or in the concurrent jurisdiction, and

that it has been relied on in the concurrent

jurisdiction where there have been cases of fraud,

because equity will always address fraud, but that

it cannot be pleaded in relation to an entirely

common law claim or a claim devoid of an equitable

content, and that therefore the submissions raising

the possibility of a claim of concealed fraud in

this case should not be accepted.

That is unquestionably the effect of Metacel.

It was a decision decided in pre-judicature period

in New South Wales, and the decision of the English

Court of Appeal in Eddis v Chichester Constable,

(1969) 2 Ch 345, was cited to the Full Federal

Court but not relied on in the judgment. There is a passage in Eddis v Chichester Constable in the

judgment of Lord Denning, Master of the Rolls, that

concealed fraud could successfully be pleaded in

relation to an entirely common law claim and had

been successfully pleaded in the past, rejecting	the suggestion that it was a remedy exclusively
confined to the equitable jurisdiction.
So this really raises a question about the fusion fallacy, as some people would call it, and
we would suggest, with respect, that a doctrine of
concealed fraud ought be allowed to be pleaded in response to a claim based on section 82(2).

Whether or not it would come to anything in

this case depends on events which are yet to unfold but a conclusion that section 82(2) is substantial, rather than procedural, would exclude the
possibility forever of any of these defences being

successfully raised to a limitation point and that

Wardley(2) 120 5/3/92

would cause, in our respectful submission,
injustice and is a policy reason against

interpreting section 82(2) in a substantial way.

The same applies in relation to questions of
infancy, although there is a decision of the court

at first instance indicating that infancy cannot be

raised in relation to a limitation plea under the

statute. Then there is the question of

unconscientious reliance and waiver that have been

dealt with in Hawkins v Clayton and Verwayen.

There is only one final submission that I wish

to make, Your Honours, and that addresses one of
the submissions made by my learned friend,

Mr Pullin, in relation to this question of matter

and the ability for a court to deal with all

matters before the court under its power to amend.

My learned friend suggested that the argument contended for would mean that instead of there

being an issue estoppel or a question of res

judicata emerging from any decision on a case

before the court one would have to coin a new

phrase "matter estoppel" so that the parties would

be precluded from again raising any matter which
could have been brought before the court within the
amplitude of section 86.

But we suggest, with respect, that that is the situation which already obtains by virtue of the

rule in Henderson v Henderson - this is not on our

list because we were not aware of this

proposition - (1843) 3 Hare 100, pages 114 to 115;

also at 67 ER 313 and 319, a decision which was

applied in this court in the Port of Melbourne

Authority v Anshun, (1981) 147 CLR 589. That case

and· other cases to similar effect were mentioned in

the judgment of the Full Federal Court, at page 136

of the appeal book.

Subject to the formulation of any orders,

should the appeal be allowed, Your Honours, those

are the submissions which we would make. As to the

term of orders, they would depend to a large degree

on conclusion which the Court reaches. If the

Court should decide in favour of the respondent

then it would appear that nothing further is
required but to confirm the decision of the Full

Federal Court. If the Court were to decide against

us then a question would arise as to whether or not

the amendment should be permitted on terms, the terms being those which I have indicated in the course of argument. That, in turn, will depend on

the substantive procedural characterization of
section 82(2). Those are our submissions, may it

please Your Honours.

Wardley(2) 121 5/3/92

MASON CJ: Thank you, Mr Heenan. Mr Rose.

MR ROSE: If the Court pleases, the constitutional point

here only arises if the main issue and a number of

other issues are decided in certain ways, but I

cannot assume in what way they will be decided and

would wish to make some brief submissions on the

constitutional point. One, a submission to provide

another reason why, in our submission, the

constitutional point is irrelevant in these

proceedings and another submission to the effect

that in any event the proposition is wrong. May I

hand to the Court an outline of those submissions.

MASON CJ: Yes.

MR ROSE:  If the Court pleases I have set out for the

convenience of the Court the proposition as appears

in the appellants' outline and the course of

reasoning in which the appellants suggest that that

proposition is relevant. I am not concerned with

the steps in that argument, but solely with the

constitutional proposition itself.

So, if I can turn quickly then to paragraph 3

of the outline, the first proposition is that, even
if the appellants were correct in that proposition
set out in paragraph 1, it would not be relevant

here; the proposition only concerns claims arising

under State statutes or at common law. This appeal

does not involve any such claims; it only involves
the question of the addition of a claim which is
under the Trade Practices Act and I have given the
references to the paragraphs of the amended
statement of claim in the appeal book. There was,

of course, a claim in deceit, but that only applied

to Mr Connell who is not involved in this appeal.

In any case, the relevant Commonwealth

legislation which includes the Federal Court Rules,

in particular Order 13 rule 2, could be read down

those at common law or under a State statute. So,	so as to permit the addition of claims other than	in my submission, the correctness of the
proposition really does not arise for those reasons
in these proceedings. But if it were thought that
there were any problem about reading down and so
on, we would submit that in any event the
constitutional proposition is not correct.

My submission will be concerned with it only

in relation to proceedings in the Federal Court in

accrued jurisdiction. The Court will see that the

proposition is a much broader one. The

Commonwealth Parliament has no constitutional

authority to legislate so as to bar remedies

available at common law or under a State statute.

Wardley(2) 122 5/3/92

We need not here, I submit, concern ourselves with

anything but the particular situation of claims in

the Federal Court in its accrued jurisdiction.

In our submission, the Commonwealth Parliament

does have power to impose limitation periods on

remedies as distinct from curtailing the underlying

rights in those proceedings in the accrued

jurisdiction in the Federal Court whatever the

causes of action may be, whether they arise under

Commonwealth legislation, State legislation or at

common law. The source of constitutional power is

found in section 77 read with sections 75 and 76,

and with section 5l(xxxix) as the incidental power.

Commonwealth legislation on those limitation

periods is, in my submission, the only source of

such periods, since State limitation periods in

relation to remedies cannot apply of their own

force in federal courts, as distinct from being
applied by section 79 of the Judiciary Act. That

proposition was endorsed by several Justices in the

John Robertson v Ferguson Transformers case, in

particular Justice Menzies, Justice Walsh,

Justice Gibbs and the present Chief Justice, at the

pages I have indicated there.

Justice Fullagar, I might add, in Commonwealth v Anderson, 105 CLR 313, took the proposition

further into the exercise by State courts of

federal jurisdiction, but as I said earlier, we are

concerned here only with the position in the

Federal Court. In relation to the Commonwealth

powers in relation to State courts, we can get into

some rather large issues, and especially if we

start drawing upon United States analogues, the

task could be a very great one.

Perhaps just to complete the constitutional

context, it might be worth noting, as I have in

paragraph 4.3, that the barring of remedies in the

does not prevent those claims from being pursued in Federal Court of claims in accrued jurisdiction a relevant State court within any applicable State
limitation period.

Perhaps to complete the constitutional picture

with one other proposition: if the Commonwealth
were not to have any limitation period on what I

will call State and common law causes of action in

the federal courts in their accrued jurisdiction

and if the States did not like it, they could
always legislate to terminate the underlying rights in the way in which some limitation statutes do. I

think in particular the New South Wales one not

only bars the remedy, but also bars the right. Of

course, that was the subject of extended discussion

Wardley(2) 123 5/3/92

by the Court in McKain v Miller, which I have noted

in the submissions towards the bottom of the second

page. If the Court pleases, I do not wish to add

to that.

MASON CJ: Thank you, Mr Rose. Mr Pullin?

MR PULLIN:  Your Honours, my learned friend pointed out that

the draft balance sheet that we prepared did not

show an amount of $70 million which Mr Connell was

to contribute. We would acknowledge that. The

whole point about that document, though, is simply

that it is clear enough, we would submit, that

Rothwells position was hopeless. So it brings us

to the position that Mr Justice Hill was talking

about in Magman where he said that Forster v Outred

was a clear position where the Court of Appeal had

assumed that the son was hopelessly insolvent at

the time the guarantee was given. So that is

really the only point that is made of that

document.

My learned friend referred to the concept of

discoverability of damage being an important aspect

and, I suppose, a basis for determining when the

cause of action might accrue. Now, of course,

Mr Justice Deane saw discoverability as relevant, I

think, in the Haymen's case on the basis that until

the defect in the building was discovered there

could be no economic loss, so that the economic

loss does not come into existence because if no one

knows about it, then the value of the building has

not diminished.

Of course, in all of those building cases,

what one is concerned about is discovering the

defect and therefore the damage; they are occurring

·at the same time. But, of course, typically in

deceit cases that is not the case because, in

deceit cases, often you take the person who buys

the delicatessen under the influence of a

misrepresentation about turnover, he buys the

delicatessen and notices immediately that turnover

is right down, so he has discovered his damage but

he does not know that he has a cause of action

because he does not know about the falsity of the

representation. That is likely to be what comes

much later in many deceit cases.

Of course, that is why legislatures all over

the place have recognized this fact and legislated

so that a plaintiff's cause of action does not

accrue, or there is a protection, until the

plaintiff knows all the material facts, and that

covers - for example, in the deceit case it would

cover the situation where falsity was not

discovered until much later.

Wardley(2) 124 5/3/92

So, we would submit, there is no need for what

must be judicial legislation simply to say that
discoverability is the point when the cause of

action accrues, and we would say that there is no

need for that in this case because of the clear

steps that have been taken by legislatures

everywhere on this subject.

My learned friend mentioned S.W.F. Hoists and

the Zoneff case, which are the insurance cases,

where policies had been arranged with a

representation about what they covered when in fact

they did not provide the cover as represented, and
in those cases the result suggested is that the

cause of action does not accrue until there is a

loss, and that would seem to be an argument against

Forster v Outred. But in fact, in those cases, the

person who takes the policy has the opportunity of

taking out another policy between the time when he

gets his, what I call the defective policy, and the

time when the loss occurs, and if he has a cause of

action based on damage which occurs when the loss

is suffered which is not covered by the policy, it
is because there is a continuing misrepresentation

which produces reliance which means that the person

does not go and take out a new policy. That is a

completely different situation from the case here where, once a State had entered into its contract or had signed its letter of indemnity, there was

nothing it could then do, it was irretrievably

committed and had no chance of then saying, "Well,

we will do something about it", as could the

persons who were insured in the case of

s.w.F. Hoists and Zoneff.

My learned friend also referred to a case of

Wright v Borzi and suggested that some comfort

could be gained there. But that was a case about
personal injury in the end and, of course, there

had been a duty of care and a breach of that duty

and there was not any damage until loss was

suffered. It is not a case of deferring the cause

of action for any policy reasons. There just was

not any damage in those circumstances. The

question is in economic loss cases, and in

particular in this one, "Was loss suffered when we

say it was or not?"

If there is to be some exception made in relation to those cases where there is a

contingency, and my learned friend said there was a
difference between those cases where there was a
deferred liability and one where there is a

contingent liability, and if a decision is reached

that there is a distinction and that damage is not

suffered until the contingency occurs, one can well

understand that that will produce many parties in

Wardley(2) 125 5/3/92

the future claiming that by analogy that even

applies to an asset case.

Let me take the situation of somebody who,

say, buys a lunch bar under the influence of a

representation that there is to be a new 50 storey

building erected next door and which will provide a

tremendous trade for the lunch bar. So an amount

is paid for that under the influence of that

representation. Does that mean that no damage is

suffered until the building is not - in fact, the

representation is false and there is no building

planned for next door at all. If there is to be a

special rule about liabilities and the fact that

there is no damage until the contingency occurs,
then why in that case should it not be argued

successfully that Potts v Miller is wrong, and that

on the authority of this new decision in Wardleys
in fact, the cause of action does not accrue until

the new 50 storey building is not built at the time

when it was expected that it would be built.

BRENNAN J:  And the answer is because the plaintiff was

parted with his money.

MR PULLIN: Yes, Your Honour, but he knew when he parted

with his money that in fact the trade for the

period up until the construction of the building

would be much lower than he expected and that he

does not in fact suffer loss, it might be argued,

until, in fact, the building does not go up and

then, of course, it is only then that you recognize

that, in fact, he did pay too much; because there

might be some argument about whether or not the

building goes ahead.

Take the situation of the person who

represents, "There will be a new building in a

year's time", you have to analyse that in terms of

what his state of mind was, did he have reasonable

grounds for making that representation? So then it

could easily become a matter of judgment as to

whether or not the building is going to go up or

not and there might be some doubt about it and the
court might argue it on the authority of the kind
of result that my learned friend would like to

achieve, "Well, it's going to generate

unsatisfactory results because the building, in

fact, might go up; contrary to the belief of the

person who made the representation, the building

might go up and therefore it is no good us

compensating him when, in fact, that's a

possibility".

So my learned friend's concern about the practical effects generates that kind of

unsatisfactory result, in our submission.

Wardley(2) 126 5/3/92

BRENNAN J: It is just a problem of proof of falsity.

MR PULLIN: Perhaps I can extend the example a bit,

Your Honour. Say, immediately after - let us say

it was false; there were no reasonable grounds;

but immediately after the contract was entered into

there was a plan for a building to go up, contrary
to the expectations of the representer who was

telling fibs at the time that he was trying to

induce the purchaser to enter into the contract. I

mean, does the court then say, "Well, you might not

in the end actually suffer loss so we've got to

wait to see what happens and we'll defer the

accrual of the cause of action. You haven't got a

cause of action until you see whether this building

does go ahead" .

BRENNAN J:  You cannot prove that the representation was

false.

MR PULLIN: Yes, Your Honour, that example is not a good one

then; I concede that. My learned friend made the

point that in practical terms there is something

unsatisfactory about saying that there is a cause

of action at the time that we say that the cause of

action accrues because there is going to be under

or over compensation. That should not weigh too

heavily because the reality is that by the time

litigation comes to trial the position is

clarified, so if we are talking - in most cases, I

am not saying in all cases; there will be

occasional cases where it is still not clear, but

given that there is a period of time, three years

in these sorts of cases, in a very large percentage

of the cases that is not going to be a problem. So we would throw that in as a practical consideration

to answer the complaint on practical grounds that

my learned friend makes.

So far as section 82 is concerned, my learned

that an action be commenced" and then, with friend said this: "All that section 82 requires is	respect, he leaps across, as did the Full Court, to
say that the Court has jurisdiction with respect to matters, and that is the same fallacy of reasoning
as one finds in the Full Court's decision because
quite clearly the section talks about - - -

MASON CJ:  I think you made your position quite clear in chief on this, Mr Pullen.

MR PULLEN:  Yes, Your Honour. Then there was talk about

what is the effect of the other side raising the

possibility, assuming that we pleaded a limitation

defence and had not applied to strike out, that my

learned friend said, "Well, we might raise some matters in reply by way of concealed fraud", or

Wardley(2) 127 5/3/92

that kind of thing. The first point is that it is

only Connell who is said to have been fraudulent.

There is no fraud cause of action completed against

Wardleys and furthermore my learned friend, in the

Full Court, actually conceded that there would be

no attempt made to plead fraudulent concealment by

Wardleys, and it is recorded by the Full Court at appeal book 140 line 55, where the Court said:

Nor, the court was told by counsel, did the

State contend that the existence of the causes

of action was fraudulently concealed from the

State by Wardley or Wardley Securities -

although they did record, on page 141, that my

learned friend was making a submission which we

would say cannot be reasonably sustained as an

argument, that somehow or another the consequences

of Connell's fraud would, as the Full Court said,

in some way be visited upon Wardley and Wardley

Securities, so as to make the equitable doctrine

applicable to them and thereby provide a reply to

any reliance by Wardley upon the time limitation

provisions in section 82(2). In my submission,

there has to be more than just a generalized

assertion, which we say is unsustainable, to save

the State by reference to what we say is not a

sustainable proposition.

Now, I recognize that there is then the

of the wrongful acts themselves having some effect,

further possibility of matters mentioned by

and we have pondered the effect of all that to

think, well, we would not want the whole case to fall over in this place because of that, and the

solution seems to be this, that assuming that there

is a conclusion that section 82(2) is not a

substantive matter, that it is procedural, that the

amendment should be allowed to run from the date of

the amendment - in the particular case from

January 1991 and, of course, in later cases which

do not concern us, they will run from the date of

their amendment. It will then be up to the State

to raise in its reply any of these matters,

therefore trying to bring itself within the three

year period which commences three years before the

date of the amendment.

So they are still free. We can still have a

decision of this Court and the State is not
prejudiced, because that three year limitation

period is, in effect, established as though they

had sued on the date of their amendment, commenced

proceedings then, and it is a matter for the State,

they are not precluded from attempting to run any

Wardley(2) 128 5/3/92

of these arguments to bring them within that three

year period. So we would see that as the solution.

We had a minute of proposed orders prepared, but it has been somewhat tampered with as we have

listened to what has been said, and could I just

read what we would propose, and this can be done by

virtue of - I think it is section 37 of the

Judiciary Act which can make appropriate orders,

rather than just restoring the order of Mr Justice

French, and what we would propose is something like

this: number one, if we are successful on the

accrual of cause of action argument occurring when

the letter of indemnity was signed, we would seek a

declaration that any cause of action for damages
the State of Western Australia might have against

the appellants under section 82 of the Trade Practices Act, based upon a contravention of

section 52 and arising out of the appellants'

representation to the respondent on Sunday,

25 October 1987, accrued on 26 October 1987.

Now then to deal with what I might call the

Weldon v Neal area. Secondly that the State of

Western Australia is not entitled to amend its

statement of claim to add any cause of action for
damages against the appellants, under section 82 of

the Trade Practices Act, which accrued more than

three years before the date of amendment.	Now that
will suit us if the Court concludes that

section 82(2) is substantive in its effect. If the

Court concludes that section 82(2) is procedural,

then it would be that same order, save the

declaration would allow the State of Western

Australia to raise such matters as it may wish in

reply in answer. And there is one other

qualification and that is that the amendment date

from the date of the amendment and not relate back

to the date of the application.

Your Honour Mr Justice Deane mentioned the idea that perhaps cause of action is an unfortunate

tag, or words to this effect, something that

concerns people only last century but, of course,

Lord Diplock in Letang v Cooper, which is on our

list of authorities as one of that group of cases

dealing with what cause of action means, explained

how one relates cause of action in modern times.

What it really is is simply a convenient tag

for a necessary collection of facts which have to

be proved to establish an entitlement to a remedy.

So that in a case of tort, one has to plead the

duty, the breach of the duty and the damage. So

when one is talking cause of action, it is indeed

the language of last century but it is a convenient

Wardley(2) 129 5/3/92

way to talk of material facts which must be pleaded

and required by the rules to produce a response

from the court by providing a remedy in relation to

that set of facts if established. Letang v Cooper

is quite useful where it explains this.

The only other matter was just to deal with

two points arising out of my learned friend,

Mr Rose's, submissions. One was that in

paragraph 3 of his outline, it was said that the

legislation might be read down:

to permit the addition of claims other than

those at common law or under a State statute.

But that will result in a very strange result of a

meaning of matters for the purpose of section 86

which encompasses all causes of action, State or

federal, whereas, when you get to section 82, if

you somehow read "cause of action" as a reference to matters, which we say is unsustainable, but if that is accepted by the Court, my learned friend is

really submitting that there "matters" means

matters which support only federal causes of

action, and that is the result of reading down the

meaning of matters there. As we say, there is no

word, "matters", to be read down anyway in

section 82.

We would say also in relation to point 4 that

if section 82(2) is substantive in effect, then the

provision cannot be justified by reference to the sections from the Constitution which are referred

to by Mr Rose. They are my submissions in reply,

may it please the Court.

MASON CJ: Thank you, Mr Pullin. The Court will consider

its decision in this matter.

AT 11.56 AM THE MATTER WAS ADJOURNED SINE DIE

Wardley(2) 130 5/3/92