Williams, William Robert v Gandel, Aaron Jonna
[1998] FCA 97
•5 FEBRUARY 1998
FEDERAL COURT OF AUSTRALIA
TRADE PRACTICES - Limitation of action - when cause of action accrued - when time begins to run for limitation period - whether Court may extend time.
PRACTICE AND PROCEDURE - interlocutory proceeding - strike out application based on limitation period - whether time bar limitation should be determined in interlocutory proceeding - circumstances where power to order summary judgment should be exercised.
PRACTICE AND PROCEDURE - costs - whether costs should be awarded on a solicitor client basis.
Trade Practices Act 1974 (Cth) s 82
Limitation of Actions Act 1958 (Vict) s 27
James v ANZ Bank (1986) 64 ALR 347, applied
Jobbins v Capel Court Corporation (1989-90) 91 ALR 314, applied
Hawkins v Clayton (1988) 164 CLR 439, applied
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, applied
Webster v Lampard (1993) 177 CLR 598, applied
WILLIAM ROBERT WILLIAMS v AARON JONNA GANDEL
VG 008 of 1998
MARSHALL J
MELBOURNE
5 FEBRUARY 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 0008 of 1998
BETWEEN:
WILLIAM ROBERT WILLIAMS
APPLICANTAND:
AARON JONNA GANDEL
RESPONDENTJUDGE(S):
MARSHALL J
DATE OF ORDER:
5 FEBRUARY 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
The proceeding be struck out.
The proceeding be permanently stayed.
The applicant pay the respondent’s costs, including reserved costs, on
a solicitor and own client basis of the proceeding, including the notice
of motion.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 0008 of 1998
BETWEEN:
WILLIAM ROBERT WILLIAMS
APPLICANTAND:
AARON JONNA GANDEL
RESPONDENT
JUDGE(S):
MARSHALL J
DATE:
5 FEBRUARY 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
On 13 January 1998 the applicant filed an application in this Court pursuant to s 52 of the Trade Practices Act 1974 (Cth) (the TP Act). He also relied upon s 11 of the Fair Trading Act 1985 (Vict) (“the State Act”) in the associated jurisdiction of the Court. Claims were also made in apparent reliance on the accrued jurisdiction of the Court in respect of negligence and breach of contract.
The action under s 52 of the TP Act was based upon an allegation that a 1988 Supreme Court of Victoria (“Supreme Court”) action brought by a company of which the applicant was a member was settled on 10 May 1989 for a sum of $150 000, as a result of undue influence or misleading and deceptive conduct by a company of which the respondent was chairman at all material times.
Paragraph 10 of the statement of claim alleged that the application was made within the time provided by the law. The particulars subjoined to the paragraph in effect asserted that s 82(2) of the TP Act, in providing a three‑year time limit for applications under that Act, is directory only.
Section 82 of the TP Act provides as follows:
“(1)A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(2)An action under sub-section (1) may be commenced at any time within 3 years after the date on which the cause of action accrued.”
The cause of action under s 82 of the TP Act accrues when loss or damage is suffered as a result of the breach. See James v ANZ Bank (1986) 64 ALR 347 at 392 per Toohey J where his Honour said:
“As yet there has been no definitive statement as to the meaning and operation of s 82(2) of the Trade Practices Act. I made some comments about the matter in my ruling on the ‘no case’ submission by the second and third respondents and that ruling is an appendix to these reasons. However the defence goes to the very heart of the applicant's claim against the second and third respondents and I propose to deal with it fully here even though some of what is said echoes what appears in the earlier ruling.
Section 52 of the Trade Practices Act prohibits conduct that is misleading or deceptive or is likely to mislead or deceive. The section does not confer any right of action on a person injured by conduct prohibited by the section. Such a right of action is conferred by s 82(1) and it is conferred on a person ‘who suffers loss or damage by conduct of another person’ done in contravention of s 52. Loss or damage is the gist of the action. In my view, a cause of action under s 82 accrues, not when there is a contravention of s 52, but when loss or damage is suffered in consequence: see Arcadi v Colonial Mutual Life Assurance Society Ltd [1984] ATPR 40-473. In that case I said (at p. 45, 454): ‘There may be several distinct losses, flowing from conduct in contravention of the Act and the cause of action is not complete until those losses have occurred.’ This statement was not meant to suggest that a cause of action is kept alive so long as any loss or damage is being suffered. Once an applicant has suffered loss or damage relevant to his claim, time begins to run.”
See also Jobbins v Capel Court Corporation (1989-90) 91 ALR 314 at 317 and Hawkins v Clayton (1988) 164 CLR 539 at 561 - 562 and 587 - 588.
If the application before the Court is soundly based and the relevant loss or damage was suffered as a result of a breach of s 52 of the TP Act that loss or damage was suffered on 10 May 1989 when the terms of settlement were signed. Consequently, in my view, the claim under s 52 of the TP Act is statute barred. There is no discretion in the Court to extend the time period provided in the statute. See Jobbins at 318.
Identical considerations apply to the claim under the State Act. See s 37(2) thereof which mirrors the provisions of s 82(2) of the TP Act.
There remains to be considered the submission of the applicant that s 27 of the Limitation of Actions Act 1958 (Vict) (“the Limitation Act”) applies such that the applicant’s common law claims can be raised before this Court.
Section 27 of the Limitation Act provides as follows:
“Where, in the case of any action for which a period of limitation is prescribed by this Act -
(a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or
(b) the right of action is concealed by the fraud of any such person as aforesaid; or
(c) the action is for relief from the consequences of a mistake -
the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:
...”
In relation to the claims in the accrued jurisdiction of the Court under common law, s 5 of the Limitation Act would otherwise apply but for the possible application of s 27, such that a six-year limitation would apply.
The applicant contended that his common law claim is an action based upon the fraud of the respondent and that the fraud was only recently discovered. I reject that contention. Such fraud as alleged has been adverted to by the applicant in documents filed in Supreme Court proceedings where the allegation said to constitute the fraud has been adumbrated. Further, there was no equitable basis upon which time could be extended.
In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, it was held that it is undesirable, except in the clearest of cases, to determine a limitation question in interlocutory proceedings. The High Court considered that at the interlocutory stage, there is generally insufficient known of the damage and the circumstances in which it was sustained, to enable “ ... a confident answer to the [limitation] question.” Here, if damage was sustained, it was unambiguously sustained on 10 May 1989 when the terms of settlement were signed. A clearer case for the striking out of an application on a limitation ground will be difficult to find. As the Full Court of this Court said in Jobbins at 319:
“... where it is clear that an applicant cannot succeed upon the case pleaded because s 82(2) will be a complete answer to the claim, the court should not merely defer the inevitable.”
In Webster v Lampard (1993) 177 CLR 598 to 602, Mason CJ and Deane and Dawson JJ said as follows:
“The power to order summary judgment must be exercised with ‘exceptional caution’ and ‘should never be exercised unless it is clear that there is no real question to be tried’.”
I have taken exceptional caution in my consideration of this matter but remain of the view that there is no real question to be tried as the application is hopelessly out of time. The application must be dismissed.
The court will make the following orders:
(1) The proceeding be struck out.
(2) The proceeding be permanently stayed.
(3)The applicant pay the respondent’s costs, including reserved costs, on
a solicitor and own client basis of the proceeding, including the notice
of motion.
The final order is made in the following circumstances. The application was filed at a time when the applicant was representing himself in the matter. Within a fortnight of the filing of the application solicitors acting for the applicant entered an appearance. At the first directions hearing counsel represented the applicant. Despite these two occurrences the application remained on foot and unnecessary expense and inconvenience was incurred by the respondent.
This is an appropriate case for the departure from the ordinary practice as to costs, having regard to the special circumstances of the application being persisted in when it was obviously hopeless. Once solicitors and counsel became involved in the matter it should not have continued with their concurrence or with them remaining as representatives of the applicant on the Court record.
In my view costs should be paid on an indemnity basis having regard to the foregoing.
I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall
Associate:
Dated: 5 February 1998
Counsel for the Applicant: Mr R Johnstone Solicitor for the Applicant: McNamaras Counsel for the Respondent: Mr S Marks Solicitor for the Respondent: Arnold Bloch Leibler Date of Hearing: 5 February 1998 Date of Judgment: 5 February 1998 (ex-tempore as revised from transcript)
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