Wood, Graham v Seabord Aircrew Ltd

[1997] FCA 848

IN THE FEDERAL COURT OF AUSTRALIA	)
)
QUEENSLAND DISTRICT REGISTRY	)  QG 191 of 1995
)
GENERAL DIVISION	)

BETWEEN:              

GRAHAM WOOD
First Applicant

PIERRE ALLARD
Second Applicant

JANET SWEETAPPLE
Third Applicant

KEN TREVILLIEN
Fourth Applicant

  AND:  

SEABORD AIRCREW LTD
First Respondent

SEABORD EXPRESS LTD
Second Respondent

SEABORD AVIATION LTD
Third Respondent

CHRISTOPHER CASSIDY
Fourth Respondent

JUDGE(S):

MADGWICK J

PLACE:

BRISBANE

DATED:

1 JULY 1997

MINUTES OF ORDER

THE COURT DECLARES THAT:

1. The proceedings were irregularly commenced because Order 6 Rule 2(a) of the Federal Court Rules would not have authorised the joinder of the applicants in the one proceeding.

THE COURT ORDERS THAT:

1. (a)       Leave be granted nunc pro tunc to the applicants to join in one proceeding within 14 days;

   (b)The applicant file and serve a single statement of claim, and thereafter ordinary times for response;

   (c)The respondent to the notice of motion dated 22 May 1997 pay the applicant’s costs of that application.

IN THE FEDERAL COURT OF AUSTRALIA	)
)
QUEENSLAND DISTRICT REGISTRY	)   QG 191 of 1995
)
GENERAL DIVISION	)

BETWEEN:              

GRAHAM WOOD
First Applicant

PIERRE ALLARD
Second Applicant

JANET SWEETAPPLE
Third Applicant

KEN TREVILLIEN
Fourth Applicant

  AND:  

SEABORD AIRCREW LTD
First Respondent

SEABORD EXPRESS LTD
Second Respondent

SEABORD AVIATION LTD
Third Respondent

CHRISTOPHER CASSIDY
Fourth Respondent

JUDGE(S):	MADGWICK J
PLACE:	SYDNEY
DATED:	21 JULY 1997

REASONS FOR JUDGMENT

MADGWICK J:       This is an application by the fourth respondent, Mr Cassidy, that in effect, the proceedings be dismissed as incompetent.  The fate of the application, and the entire proceedings, depends on Order 6 Rule 2 of the Federal Court Rules, which provides:

“Two or more persons may be joined as applicants . . . in any proceedings -

(a)where -

(i)if a separate proceeding were brought by . . . each of them . . . some common question of law or fact would arise in all the proceedings; and

(ii)all rights to relief claimed in the proceedings . . . are in respect of or arise out of the same transactions or series of transactions; or

(b)where the Court gives leave so to do.”

It will be convenient to refer to the applicants in the proceedings as “the pilots”, and to the first three respondents respectively as “Aircrew”, “Express” and “Aviation”. Mr Cassidy was a director of the three respondent companies (“the companies”).  Aircrew and Aviation were subsidiaries of Express.  Express intended a joint venture with another company to conduct an airfreight service in the South Pacific.  The factual background, where it is not common ground, is taken from the pilots’ allegations.

Buying a job

On 29 October 1993 an advertisement was placed in a national newspaper inviting pilots to treat in respect of employment and investment in Express’ venture.  Through negotiations conducted on behalf of the three companies by Mr Cassidy, it transpired that, in order to be employed, pilots would need to invest.  In the result, the pilots each entered into an employment agreement with Aircrew and an investment (“shareholders”) agreement with Aviation.  Two of the pilots invested $50,000 and two invested $100,000.  They each dealt individually and separately with Mr Cassidy.  Between 17 January and 21 March 1994 each signed the employment contract and between 2 February and 21 March 1994, though not in the same order, each signed the shareholders agreement.  Their respective negotiations commenced on dates ranging between August 1993 and January 1994.

The general form of the employment contracts which the pilots signed was very similar in all cases and, as I understand it, identical in the cases of Mr Allard and Mr Trevillien; some relatively minor but real differences were negotiated individually by Mr Wood and Ms Sweetapple. The shareholders agreements that each signed were identical, except for the amounts of the investment. The pilots claim that each of them suffered loss and damage as a result of representations made to each of them by Mr Cassidy on behalf of the companies in contravention of ss 52, 51AA and 53B of the Trade Practices Act 1974 (Cth).

The problem

The pilots commenced the proceedings on 15 December 1995 by a single application claiming general damages accompanied by four Statements of Claim, each outlining the case of one of the pilots and claiming a specified sum of money and “damages”.  It is conceded that the claim of each of the pilots raises questions of law and/or of fact common to each of the other pilots’ claim.  However, Mr Cassidy submits that the additional requirement of Order 6 Rule 2(a)(ii) has not been complied with, in that the several rights to relief claimed in the proceeding are not “in respect of or arise out of the same transaction or series of transactions”.  His solicitors made that view known to the pilots’ solicitors over two months before the hearing of this application.  On the day before the hearing, the pilots indicated that they maintained their claim to satisfy Order 6 Rule 2(a) but that, if the Court should hold otherwise than pursuant to Order 6 Rule 2(b) they would seek leave nunc pro tunc to regularise the proceedings.  On the hearing of the application, Mr Cassidy did not argue that leave should not be so given but proposed that costs would be saved for the future if a single statement of claim were substituted for the four separate ones.  The pilots agreed that a single statement of claim should be substituted.  No point was taken by the pilots as to any lateness of Mr Cassidy’s application.  The questions then are:

(a)       is leave necessary to permit the pilots to be joined as applicants? and

(b)       who should bear the costs of the instant notice of motion?

Conclusions

It appears to me that the reasoning of the justices of the High Court who comprised the majority in Payne v Young (1980) 145 CLR 609, as applied and explained by Tadgell J in Marino v Esanda Ltd [1986] VR 735 (see also Bishop v Bridgelands Securities Limited (1990) 25 FCR 311) is fatal to the pilots’ contention that they have proceeded as of right.

Counsel for the pilots no doubt foresaw the likely force of Tadgell J’s point, if I may paraphrase it, that separate causes of action arising out of a series of similar transactions cannot be said to give rise to rights to relief arising out of the “same series of transactions”, as Mason J had held in Payne, that “series of transactions” ought be construed in the identical High Court Rule.  His primary submission, therefore, was that, “transaction” being a word of “vague import”:  Birtles v Commonwealth [1960] VR 247 at 249, and rules such as this traditionally having been interpreted liberally: Re Beck (1918) 87 L.J. (Ch.) 335; Payne v British Time Recorder Co [1921] 2 KB 1; Payne v Young op. cit. at 611 (per Aickin J) at first instance, the process of recruiting pilots for the joint venture should be seen as a single transaction out of which the relief sought by each applicant, because of the features common to all cases, could be said to arise.

I agree that “transactions” is a word apt to have a broad meaning and that Order 6 Rule 2(a) should be liberally interpreted.  That which tends to aid flexibility in litigation and reduce costs ought, of course, to be encouraged.  However, it is clear from Mason J’s judgment in Payne at 618, that for a transaction or series of transactions to be one out of which relief claimed may arise, there must be a transaction or series, respectively, in which the plaintiff has had “participation” or has been “interested”. Each of the pilots had no participation in the entire process nor any interest in it, even up to or after a certain time, insofar as it involved the other pilots. Looking at the matter not simply by observing the activities of the companies and Mr Cassidy, but by considering too the role of each of the pilots, it cannot be said that there was a single transaction. Nor, in my view, for the reasons spelled out in Marino, could it be said that the relief claimed was “in respect of or arose out of the [same] series of transactions”.

Leave will therefore be necessary and, not being opposed, will be given.

As to costs, there is much to be said for the view that they should have been made Mr Cassidy’s costs in the cause.  However, reasonable timeliness on the pilot’s part would have saved the costs of the application.  Mr Cassidy was not obliged to do nothing when his correct legal contention was not conceded in a timely way.  He should have his costs of the notice of motion.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment of the Honourable Justice Madgwick.

Associate:

Dated:             21 July 1997

Counsel for the Applicants:               D Cooper

Solicitors for the Applicants:             Wilson Redmond

Counsel for the Respondent:             J Gallagher

Solicitors for the Respondent:           Hopgood and Ganim

Date of Hearing:  1 July 1997