Wilson v Allen
[2023] ACTSC 257
•13 September 2023
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Wilson v Allen |
Citation: | [2023] ACTSC 257 |
Hearing Date: | 3 August 2023 |
Decision Date: | 13 September 2023 |
Before: | Curtin AJ |
Decision: | (1) Leave is granted to the plaintiff to join Ivor Harold Nyman and KPW Lawyers to these proceedings. (2) The statement of claim filed on 30 January 2023 is struck out. (3) Leave is granted to the plaintiffs to file and serve an amended statement of claim in accordance with this judgment on or before close of the Registry on 6 October 2023. (4) Costs reserved. (5) The proceedings are listed for mention before Curtin AJ at 9.30 am on 16 October 2023. |
Catchwords: | PRACTICE AND PROCEDURE – PLEADINGS – Application to amend statement of claim – Application to join additional defendants – whether amendments are made for the purpose of deciding the real issues in the proceeding – whether the party is necessary to enable the court to adjudicate effectively and completely – leave granted to join additional defendants – statement of claim struck out – leave granted to re-plead statement of claim |
Legislation Cited: | Court Procedures Act 2004 (ACT), s 5A |
Cases Cited: | Allen v Wilson [2023] ACTSC 10 |
Parties: | Kevin Wilson ( First Plaintiff) Tranquillity Homes Canberra Pty Ltd (Second Plaintiff) Tabula Rasa Holdings Pty Ltd as Trustee for the TR Wilson Family Trust (Third Plaintiff) John Thomas Allen ( Defendant) |
Representation: | Counsel WDB Buckland ( Plaintiffs) R Size ( Defendant) |
| Solicitors Gabbedy Milson Lee ( Plaintiffs) HWL Ebsworth ( Defendant) | |
File Number: | SC 41 of 2023 |
CURTIN AJ:
Introduction
1․This is an application by the plaintiffs seeking leave to amend the statement of claim and for leave to join two additional defendants.
2․The application has its genesis in the withdrawal by the first plaintiff, Mr Wilson (as counterclaimant in earlier proceedings between he and Mr Allen and some related parties [the first proceedings]), of a counterclaim for compensation for the alleged wrongful lodging of a caveat by Mr Allen on the title of a property in the ACT owned by Mr Wilson.
3․That application for withdrawal was made during the hearing of the first proceedings in September 2022 on the basis of evidence which it was said first arose in cross-examination of a witness and which led Mr Wilson to the view that he needed to join two additional plaintiffs and two additional defendants (who were not then parties to the first proceedings) to the claim he wished to make in relation to the caveat.
4․The withdrawal application was successful, and the first proceedings proceeded to judgment which was delivered on 27 January 2023: see Allen v Wilson [2023] ACTSC 10 (Allen).
5․On 30 January 2023, the plaintiffs (which included the two additional plaintiffs mentioned in the withdrawal application) commenced these proceedings (the second proceedings) for compensation for the alleged wrongful lodging of the caveat by Mr Allen.
6․However, in these second proceedings the plaintiffs did not name as defendants the additional two parties he had said in the first proceedings’ withdrawal application that he wanted to join.
7․On 23 March 2023, Mr Allen filed an application for a permanent stay of the second proceedings, essentially because Mr Wilson had not done what he told the Court in the first proceedings that he wanted to do (namely, to sue additional defendants) as a reason for seeking leave to withdraw the counterclaim.
8․On 12 July 2023, and in response, the plaintiffs filed an application to amend the statement of claim to add the two defendants he had said in the first proceedings that he wished to sue.
9․The two applications were initially listed for hearing before me on two different days. When I became aware of that fact, I made an in-chambers order that they be heard on the same day, namely 3 August 2023.
10․On that day it was decided that the plaintiffs’ application be heard and determined first because the hearing of the defendant’s permanent stay application would be affected by the outcome of the plaintiffs’ application.
11․This then is my judgment on the plaintiffs’ application to amend the statement of claim and to join two parties.
12․Some further background is necessary.
Background
13․The first proceedings between Mr Wilson and Mr Allen and several related entities arose out of an attempt to develop property in Queensland for profit.
14․The first proceedings were heard and determined by McWilliam AsJ (as her Honour then was) in Allen.
15․In that case Mr Wilson (now the first plaintiff) was the first defendant, and Mr Allen (now the defendant) was the first plaintiff.
16․Her Honour summarised the broad background to the parties’ disputes as follows:
[1] Mr John Allen and Mr Kevin Wilson had known each other for about 15 years. They had dreams of developing residential property in a particular property market in Queensland. Mr Allen was a mortgage broker who was able to supply some money. Mr Wilson was a builder and former mortgage broker, able to supply the skill. Land was purchased, but ultimately, they could not get the finance together to proceed with the different developments they had planned. Mr Allen now claims he and two associated corporate plaintiffs, Allegro Financial Pty Ltd (Allegro Financial) and Allegro Beach Pty Ltd (Allegro Beach) are owed money.
[2] The plaintiffs claim they loaned or guaranteed money (or both) to the three defendants, being Mr Wilson, his brother Justin Wilson (referred to hereafter as Justin to avoid confusion), and an associated family trust company, named Burra Unity Pty Ltd (Burra Unity). Either Kevin Wilson or Justin has been the director of Burra Unity at various times.
[3] Mr Wilson disputes any loan. He claims the money was provided by Mr Allen pursuant to a joint venture which failed. As a result, he says the moneys provided are part of the losses of the joint venture and he is not liable to repay them to the plaintiffs. This case requires the Court to unravel what happened and to work out what the various legal arrangements between the two men and their associated corporate entities were.
17․In the first proceedings Mr Wilson had, in addition to filing a defence, filed a counterclaim against Mr Allen.
18․In that counterclaim Mr Wilson alleged that Mr Allen had wrongfully lodged a caveat on real property in the ACT owned by Mr Wilson. He alleged that the wrongful lodgement of the caveat caused him loss and damage. His claim was based on s 108 of the Land Titles Act 1925 (ACT) (the LTA).
19․Section 108 of the LTA says:
Compensation for lodging caveat without reasonable cause
Any person lodging any caveat with the registrar-general without reasonable cause shall be liable to make to any person who has sustained damage thereby such compensation as is just, and the compensation shall be recoverable in an action at law by the person who has sustained damage from the person who lodged the caveat.
The application to withdraw the counterclaim
20․During the hearing of the first proceedings Mr Wilson sought leave to withdraw the counterclaim in relation to the caveat.
21․The asserted basis for the withdrawal of the counterclaim in the first proceedings was that a Mr Ivor Nyman, the solicitor acting for Mr Allen in the first proceedings, had given evidence in those proceedings which led Mr Wilson to the view that others (in addition to Mr Allen) should be sued in relation to the caveat.
22․The “others” were Mr Nyman himself and the firm with which he was then involved (I use that term neutrally), KPW Lawyers. In addition, it was asserted that other plaintiffs would perhaps need to be added to that claim.
23․For reasons that need not be explored here, Mr Wilson did not wish to add those four parties to the existing counterclaim.
24․McWilliam AsJ granted the leave sought. Her Honour said (Ex 2 p 541):
So leave is granted pursuant to rule 1161(b) to withdraw paragraphs 20 to 27 of the amended defence and counterclaim (being the claim relating to the wrongful lodgement of the caveat or wrongful lodgement of caveat [sic]) subject to the following conditions:
(a) any claim advancing or any proceedings advancing the substance of that claim is to be commenced on or before 1 February 2023; and
(b) the first defendant / cross-claimant is to pay the costs thrown away of the first plaintiff.
25․On 30 January 2023, the plaintiffs commenced the second proceedings and filed an originating claim and statement of claim which sought compensation under s 108 of the LTAfrom Mr Allen for the alleged wrongful lodgement of the caveat.
26․In addition to Mr Wilson, the two other plaintiffs named were companies of which Mr Wilson is the director and sole shareholder.
27․The originating claim and statement of claim named Mr Allen as the only defendant.
28․On 23 March 2023, Mr Allen filed an application in proceeding seeking an order that the second proceedings be permanently stayed.
29․On 12 July 2023, Mr Wilson filed an application in proceeding seeking leave to join two additional defendants to the second proceedings, being Mr Nyman and KPW Lawyers, and to amend the statement of claim.
30․On 3 August 2023, the two applications came before me, and it was decided that the application to amend the statement of claim and to join the two additional defendants would be determined first.
31․There is no dispute that the withdrawal of the counterclaim in the first proceedings does not give rise to any defence in the second proceedings: see r 1167(1) of the Court Procedures Rules 2006 (ACT) (CPR).
32․The question before me is simply whether leave should be granted to join additional two defendants and to amend the statement of claim.
The proposed claims
33․The original statement of claim in these second proceedings was pleaded as a claim by all three plaintiffs against Mr Allen on the basis of s 108 of the LTA.
34․The proposed amendments (against the proposed additional defendants) also plead:
(a)a s 108 claim against each and both of Mr Nyman and KPW; and
(b)a claim against them in negligence.
35․The proposed pleading is defective in many respects and is liable to being struck out were it to be filed in its present form. Amongst many other defects, it does not plead all of the elements of the causes of action relied on, the facts are not chronologically ordered, and more than one fact is alleged in a number of paragraphs. I shall return to this matter at the end of this judgment.
36․Be that as it may, it is tolerably clear (at least for an application to amend and join) that the pleading asserts a claim against Mr Nyman and KPW for breach of s 108 of the LTA and in negligence.
37․The pleading (in a very defective and obscure way) asserts that Mr Nyman and KPW were in breach of s 108 of the LTA when they lodged the caveat on behalf of Mr Allen.
38․The proposed pleading alleges that Mr Nyman owed a duty of care to Mr Wilson and that the content of that duty of care was to:
(a)provide advice to the lodging party as to the existence or otherwise of a caveatable interest;
(b)take all reasonable and appropriate steps to ensure that the caveatable interest described in the caveat was a legitimate and defensible caveatable interest; and
(c)ensure that a caveat was lodged only on instructions from the person claiming the caveatable interest, and only in accordance with those instructions.
39․It was pleaded that it was foreseeable that if a solicitor in the position of Mr Nyman did not take the steps outlined at [31] above then Mr Wilson could suffer loss or damage.
40․It was then pleaded that Mr Nyman breached his duty of care by:
(a)failing to provide Mr Allen with the appropriate, or any, advice as to the existence or nature of Mr Allen’s caveatable interest in the property;
(b)lodging the caveat in circumstances where such advice had not been given;
(c)lodging the caveat without Mr Allen’s authority; and
(d)lodging the caveat for a purpose other than that stated in the caveat, being the desire to preserve the assets of Mr Allen for recovery in the event that Mr Allen was successful in the first proceedings.
41․It was pleaded that Mr Nyman was a director of KPW and held himself out as a solicitor acting on behalf of and as part of KPW. It was pleaded that those facts made KPW vicariously liable for the acts and omissions of Mr Nyman.
42․Exhibit 3 on the application (tendered by the plaintiff) was an email from Mr Nyman to the plaintiff’s present solicitor. In that email Mr Nyman denied he was ever a director of KPW, and asserted he was at all times an employee of that firm. He asserted that he did not draft the offending caveat, but it was “drafted/approved” by counsel. He asserted that he should not be a party to the second proceedings.
The principles
43․A number of general principles are relevant.
44․The first to note is that all necessary amendments of a document must be made for the purpose of deciding the real issues in the proceeding or avoiding multiple proceedings: see r 501(a) and (c) of the CPR.
45․As all would know, that rule was the subject of examination by the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27.
46․In that case Gummow, Hayne, Crennan, Kiefel and Bell JJ held that:
(a)to be regarded as a real issue for the purposes of r 501(a), and for amendment therefore to be necessary, the relevant dispute or controversy had to exist at the time of the application; and
(b)when considering whether an amendment was necessary to avoid multiple proceedings under r 501(c), the court was entitled to consider whether reasonable diligence on the part of the moving party would have led to the bringing of the claim in the existing proceedings, so that any further proceedings might be barred on grounds of abuse of process or estoppel.
47․The general discretion to amend is dealt with in r 502(1): see Aon at [67].
48․Rule 502(1) says:
At any stage of a proceeding, the court may give leave for a party to amend, or direct a party to amend, an originating process, anything written on an originating process, a pleading, an application or any other document filed in the court in a proceeding in the way it considers appropriate.
49․In Aon, reference was made to the then r 21 of the CPR which provided that the purpose of the rules was to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense, and that the rules were to be applied by the Court with the objective of achieving the just and timely resolution of the real issues in the proceedings at a cost affordable by the respective parties.
50․Rule 21 no longer exists, it having been replaced by s 5A of the Court Procedures Act 2004 (ACT) (the CPA). Section 5A says that the rules must be interpreted and applied, and any power or duty imposed by them must be exercised or carried out, in the way that best promotes the main purpose of the rules which is the facilitation of the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. The main purpose also includes the efficient use of the judicial and administrative resources, the efficient disposal of a court’s overall caseload and the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
51․Another general principle is that each person whose presence as a party is necessary to enable the court to adjudicate effectively and completely on all issues in dispute in a proceeding must be included as a party to the proceeding: see r 210 of the CPR.
52․There is some degree of overlap between those rr 501(a), 502(1) and 210, at least as a matter of substance.
53․That overlap is made apparent in this case because of the overlap between the allegations against Mr Nyman, KPW and Mr Allen. The (proposed) alleged acts and omissions of Mr Nyman/KPW are caught up and intertwined with the (existing) allegation that Mr Allen lodged the caveat without reasonable cause. That is so because the “reasonable cause” element of s 108 will, it seems at this early stage, involve the examination of what advice was given to Mr Allen by Mr Nyman/KPW, and what instructions Mr Allen gave Mr Nyman/KPW.
54․The plurality in Aon then addressed a number of discretionary considerations at [92]-[103] but which need not be repeated here.
The submissions
Mr Wilson
55․In short, Mr Wilson relied on rr 210, 501(a) and (c) and 502(1) and says the amendments should be allowed in accordance with the terms of those rules.
56․He submitted that what is proposed now is what was proposed before McWilliam AsJ. The explanation for the absence of Mr Nyman and KPW (and their attendant pleadings) from the original statement of claim was that Mr Wilson’s present solicitor was not present at the trial before McWilliam AsJ.
57․As had been foreshadowed before McWilliam AsJ, two additional plaintiffs had been added to the s 108 claim, and the claim had been filed in the time allowed by McWilliam AsJ.
58․Mr Wilson submitted that the application had been made early in the proceedings, albeit after Mr Allen had filed his permanent stay application. He submitted that no prejudice would be occasioned to Mr Allen if Mr Wilson’s application were granted.
59․One relevant issue raised by me with Mr Wilson during his submissions-in-chief was the proposed claims’ prospects of success. That is, whether the joinder of Mr Nyman and KPW should be refused because the case against them is doomed to fail.
60․In David v David [2009] NSWCA 8, a case to which I drew the parties’ attention during argument, an allegation was made that a solicitor owed a duty of care to persons other than the solicitor’s client. Allsop P, with whom Hodgson JA and Handley AJA agreed, said:
[92] … In the circumstances here, there was plainly no duty owed to persons not clients of the solicitor to undertake steps that would have been contrary to the interests of the solicitor’s client. It is unnecessary to discuss the circumstances in which a solicitor may come under a duty of care in the effecting of his or her retainer to his or her client to take into account the interests of third parties. However, save for circumstances of assumption of duty (and leaving to one side knowledge of fraud), it would be an extraordinary development of the law to impose upon the solicitor a duty to take some step or give some advice to a third party that was inconsistent with the interests of his primary client. That is what it was asserted here. It was asserted that Mr Isho was legally obliged not distribute the contract. This would have been entirely contrary to his client’s instructions.
[93] The duty of care case fails.
61․Mr Wilson submitted that there was no conflict between the duty owed by Mr Nyman and KPW to Mr Allen and the (asserted) duty they owed Mr Wilson. That is, the duty owed to Mr Allen was the duty to provide competent advice with a cognate duty being owed to Mr Wilson that such advice was given (to Mr Allen) and proper instructions be obtained. Mr Wilson accepted that such was a novel proposition, and he had no authorities to support it.
Mr Allen
62․Mr Allen opposed the application on a number of grounds.
63․First, that granting leave to amend the statement of claim would be inconsistent with the leave granted by McWilliam AJ in the original proceedings. Mr Allen drew my attention to her Honour’s orders where it was said leave would be granted on the condition that “any claim advancing or any proceeding advancing, the substance of that claim is to be commenced by 1 February”. Counsel submitted that her Honour’s expression “that claim”, was referring to the claim that then counsel for Mr Wilson had said would be advanced, namely the joining of Mr Nyman and KPW.
64․Mr Allen submitted that he was prejudiced because granting the application would weaken Mr Allen’s permanent stay application, an application brought because Mr Wilson had not done what he told McWilliam AsJ he proposed to do.
65․Second, that leave should not be granted to amend the statement of claim because the s 108 case against Mr Nyman and KPW Lawyers had very low prospects of success.
66․Mr Allen drew my attention to Boensch v Pascoe (2019) 268 CLR 593. In that case, the Court unanimously confirmed the test regarding a caveat having been lodged or maintained without “reasonable cause” in relation to s 74P(1) of the Real Property Act 1900 (NSW). In short, the Court approved the holding in Beca Development Pty Ltd v Idameno (No 92) Pty Ltd (1990) 21 NSWLR 459.
67․Kiefel CJ, Gageler and Keane JJ held at [12]:
… To sustain a claim that a caveat was lodged or maintained without “reasonable cause”, a claimant for compensation under the section must establish, in the language of Clarke JA in Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd, that “the caveator neither had a caveatable interest nor an honest belief, based on reasonable grounds, that he had one”, the existence of a caveatable interest, without more, supplies “reasonable cause” for lodging and maintaining the caveat. Beca Developments pre-dated the amendment of the section to take its current form in circumstances indicating legislative advertence to and endorsement of the test for the absence of “reasonable cause” it expounded. The test in Beca Developments should not be disturbed.
(citations omitted)
68․Bell, Nettle, Gordon and Edelman JJ also held that Beca Developments described the correct test, rejecting the submission that Beca Developments was wrongly decided (at [112]-[113]).
69․Mr Allen submitted that it is clear that he had a caveatable interest because there was a deed of agreement in evidence in the first proceedings which purported to grant a right which would support a caveat, and McWilliam AsJ had found that that agreement was enforceable. He also submitted there was no evidence that he did not hold an honest belief, based on reasonable grounds, that he had a caveatable interest. As Mr Nyman and KPW lodged the caveat on Mr Allen’s instructions, Mr Allen was the relevant person (and not Mr Nyman or KPW) so far as concerned s 108.
70․Mr Allen drew my attention to Lanciana v Alderruccio [2020] VSCA 152 in which the Victorian Court of Appeal held that solicitors who lodged a caveat on behalf of a client were agents of the client and were not “a person” within the meaning of that term in s 118 of the Transfer of Land Act 1958 (Vic). Section 118 said:
118 Compensation for lodging caveat without reasonable cause
Any person lodging with the Registrar without reasonable cause any caveat under this Act shall be liable to make to any person who sustains damage thereby such compensation as a court deems just and orders.
71․By parallel reasoning, Mr Allen submitted that neither Mr Nyman nor KPW could be held to be “a person” within s 108 of the LTA.
72․Third, Mr Allen submitted the pleading was defective in that it did not plead a case that could be responded to. That is, it did not plead the necessary elements of a s 108 claim, namely the lack of a caveatable interest or the lack of an honest belief, nor did it plead the essential fact of who was the “person” for the purposes of s 108. I accept that submission.
73․Fourth, he submitted that the negligence case again the solicitors was novel and weak.
74․Fifth, Mr Allen submitted that since Aon the High Court had consistently advocated a stricter approach to amendments and an unwillingness to tolerate conduct that caused delay and wasted public resources. I think that submission is a little overstated, although not by much, and the terms of s 5A of the CPA take precedence over common law considerations.
75․Lastly, Mr Allen submitted that if the application was granted considerable prejudice would be occasioned to Mr Allen in terms of the stress of litigation, the costs involved, the effect on his emotional wellbeing, health and his ability to advance in life.
Mr Wilson’s reply
76․Mr Wilson submitted that although McWillIam AsJ held that the relevant agreement was binding and enforceable, her Honour did not find (nor, I might add, was her Honour required to find) that the agreement gave rise to a caveatable interest. He submitted that the agreement, on its proper construction, did not grant any caveatable interest.
77․Alternatively, Mr Wilson submitted that, assuming the agreement may have supported a caveatable interest, that was not the interest claimed in the registered caveat. He submitted that the only arguable caveatable interest would have been in relation to the sum found owing by McWilliam AsJ, namely approximately $2,300.
78․Mr Wilson submitted that the difference between what the agreement provided, and the interest claimed in the caveat, was so great as to amount to more than a mere technical difficulty which Bell, Nettle, Gordon and Edelman JJ said in Boensch did not demonstrate that the caveat was lodged without reasonable cause.
79․In relation to Lanciana, Mr Wilson submitted that the legislation in Victoria and NSW was relevantly different to s 108 of the LTA, and that there was a reasonable argument that s 108, on its proper construction, extended to persons such as Mr Nyman and KPW. Mr Wilson accepted that there were no authorities which supported that submission.
Decision
80․In my opinion the application should be allowed.
81․In my view the application of rr 210 and 501(a) of the CPR, and the exercise of the general discretion given in r 502(1), with those rules being applied and their powers being exercised by me (per s 5A of the CPA) in the way I judge best to facilitate the just resolution of disputes raised according to law and as quickly, inexpensively and efficiently as possible, favour the granting of the application.
82․I have taken into account the efficient use of the available judicial and administrative resources of the Court, the efficient disposal of the Court’s overall caseload and the resolution of the disputes at a cost proportionate to the importance and complexity of the matters in dispute. Those matters, in my view, do not militate against granting the application.
83․It is important to keep in mind that this application, held within its proper bounds, does not involve a re-agitation, wholly or in part, of the application to withdraw the counterclaim heard and determined by McWilliam AsJ.
84․The second proceedings were regularly commenced on 30 June 2023 and this application, filed on 12 July 2023, sought to amend the statement of claim by adding two parties, adding pleadings against those two parties and making some uncontroversial and minor changes to the existing pleading against the existing defendant.
85․The proceedings are at an early stage.
86․The dispute or controversy raised in the proposed amended pleadings existed at the time of this application (per Aon) and therefore fall within the terms of r 501(a).
87․There is an obvious overlap in the s 108 case brought against Mr Allen and the s 108 cases sought to be brought against Mr Nyman and KPW. The substance and effect of any communications between those parties (assuming those communications are not privileged, or the privilege is waived) has not yet been fully explored. But that overlap is sufficient to attract r 201 of the CPR.
88․In terms of r 501(c), reasonable diligence by the plaintiff’s solicitor would have led to the bringing of these additional claims in these proceedings as originally commenced, and that is a matter to be taken into account against the granting of the application.
89․But there is an explanation for the failure to name Mr Nyman and KPW as parties when the originating claim and statement of claim was first filed. Had the plaintiff’s solicitor engaged in proper communication with counsel who represented his client in the first proceedings, or read the transcript of the application to withdraw, Mr Nyman and KPW would have been named as parties when these proceedings were commenced. However, in my view those omissions should not be visited on Mr Wilson personally.
90․I accept there is some prejudice to Mr Allen, in that it will delay the resolution of the second proceedings, and make them more complex, length and costly because of the addition of the solicitors. I accept that that will cause him a degree of further stress and I have taken that matter into account.
91․However, those matters should not, in my view, prevent the resolution of the real issues in dispute between the plaintiffs on the one hand, and Mr Allen, Mr Nyman and KPW on the other.
92․I have significant doubts about the prospects of success of Mr Wilson’s proposed case against the solicitors, and Mr Wilson will be at risk as to significant costs if he pursues that case and fails. Nevertheless, I cannot say at this stage of the proceedings that either the s 108 case or the negligence case are so devoid of merit that Mr Wilson should be denied the opportunity to agitate them before the Court after a full exploration of the relevant facts and circumstances and full argument on the issues of law posed.
93․Having read the evidence of My Nyman in the first proceedings (and which caused Mr Wilson to make the withdrawal application) I was initially attracted to the proposition that the plaintiff’s case against him (and KPW) on the count in negligence was doomed to fail. However, on reflection, I do not think I should make that finding in this application.
94․It is safe to assume that more evidence will be adduced on this issue than came out in the first proceeding when there was no claim against the solicitors. In the first proceedings the evidence came out somewhat tangentially to other matters which were in issue in those proceedings. In the present proceedings the relevant issues will be more front and centre and thus will attract more attention, both in the pre-trial preparations and the subsequent evidence-in-chief and cross-examination of witnesses.
95․The owing of a duty of care and the content of the duty of care are very fact-based issues, and I have come to the view that even though the claim may appear weak on the material presently at hand, there will likely be evidence of further facts relevant to those issues and it would be wrong of me to summarily prevent the plaintiffs from a proper hearing on those issues before all of the relevant evidence has been adduced.
96․I do not consider that the granting of leave would be inconsistent with the leave granted by McWilliam AsJ in the first proceedings. It is true that her Honour made the order she did, but that does not tie the hands of another judge to subsequently exercise the power granted under the rules to amend pleadings and join parties where it is appropriate to do so.
97․It is true, as Mr Allen submitted, that granting the application may weaken his application for a permanent stay, but such forensic prejudice arising out of the chronology of the filing of the competing applications is not a relevant type of prejudice to consider.
98․I was in some doubt initially what I should do with Exhibit 3, the email from Mr Nyman tendered by the plaintiffs and in which he said that he was never a director of KPW and was at all times an employee of that firm since that email seemed contrary to at least part of the asserted case. However, in the end I have decided that I should not place any weight on those statements made at this early stage of the proceedings.
Miscellaneous Matters
99․The issue of costs of the application may be deferred. As the matter is to return before me in relation to the permanent stay application, and because the outcome of the amendment application may have a bearing on the permanent stay application, both parties desired that the issue of costs in relation to the amendment application be deferred.
100․There are two further matters.
101․First, KPW is named as “KPW Lawyers” in the proposed amended pleading. That would not appear to be the name of a legal entity, in that it is not the name of a person nor of a corporation. Nor is there any pleading that that name is a registered business name which may attract r 290 of the CPR or an unregistered business name which may attract r 291. The plaintiffs should consider that matter and, assuming there is another (proper) name for that firm, use that proper name in the amended pleading to be filed. Therefore, the orders I make below should be understood as including a reference to the proper name of “KPW Lawyers”.
102․Second, the proposed amended pleading has many deficiencies, and Mr Allen’s submissions about its deficiencies have much force. Not all of the arguments put by the plaintiff on this application are reflected in the proposed pleading.
103․Therefore, in an attempt to fast-track at least part of the proceedings, I will strike out the whole of the existing pleading and grant leave to the plaintiffs to file an amended statement of claim. That leave should be understood as including leave to re-plead the entirety of the s 108 case proposed to be made against Mr Allen, Mr Nyman and KPW, and the negligence case against Mr Nyman and KPW.
104․If, pursuant to what I have said above, the plaintiffs file another pleading which contains more than minor defects, then the defendants will be at liberty to take whatever course they are advised, and any application will be decided in the context that the plaintiffs have been given this opportunity to get their pleadings in order.
Orders
105․I make the following Orders:
(1)Leave is granted to the plaintiff to join Ivor Harold Nyman and KPW Lawyers to these proceedings.
(2)The statement of claim filed on 30 January 2023 is struck out.
(3)Leave is granted to the plaintiffs to file and serve an amended statement of claim in accordance with this judgment on or before close of the Registry on 6 October 2023.
(4)Costs reserved.
(5)The proceedings are listed for mention before Curtin AJ at 9.30 am on 16 October 2023.
| I certify that the preceding one hundred and five [105] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Curtin. Associate: Date: |
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