Younger v 360 Private Wealth BY Design Pty Ltd - [2021] SADC 71

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
YOUNGER v 360 PRIVATE WEALTH BY DESIGN PTY LTD
[2021] SADC 71
Judgment of her Honour Judge Bochner
23 June 2021
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA
Appeal against a decision of a District Court Master - Master refused to grant leave to join a number of parties and to commence a cross-claim.
Held: appeal allowed.
Housing Commissioner of New South Wales v Tatmar Pastoral Co Pty Ltd & Anor [1983] 3 NSWLR 378; Adelaide Brighton Cement Ltd v Hallet Concrete Pty Ltd [2020] SASC 161; House v King (1936) 55 CLR 499, considered.

YOUNGER v 360 PRIVATE WEALTH BY DESIGN PTY LTD
[2021] SADC 71

Civil

Mr Younger appeals against a decision of a District Court Master, whereby the Master refused to grant leave to Mr Younger to join a number of parties to the action, and to commence a cross-claim. To make sense of this appeal, it is necessary to go into the background and the interlocutory history of the matter in some detail.
Background
Mr Younger and John Waters (Mr Waters) ran an accounting practice in partnership in Coober Pedy. In 2016, they sold the practice to 360Private Wealth By Design (“360Private”), on the basis that 360Private would employ Mr Younger as a consultant. The business sale agreement (“BSA”) provided that the purchase sum would be paid in two tranches: the first on completion as defined in the BSA, and the second, of $120,000, on 4 December 2017. 360Private says that the BSA also fixed Mr Younger’s remuneration as a consultant to 360Private. The BSA contained a restraint of trade clause, which prevented each of Mr Younger and Mr Waters from acting for any of their former clients, or from soliciting or otherwise seeking the custom of certain clients, for specified periods of time. Mr Younger’s employment with 360Private was governed by a Consultancy Agreement, which also contained a restraint of trade clause in similar terms.
In December 2017, Mr Younger resigned from his employment with 360Private. 360Private makes three fundamental allegations in respect of Mr Younger’s behaviour, both during and after the cessation of his employment. First, it alleges that he was overpaid. Second, it says that, after he ceased his employment with it, he solicited clients, in breach of the restraint of trade clauses in the BSA and the Consultancy Agreement. Third, it says that he took client files, and misused 360Private’s confidential information.
360Private filed its claim against Mr Younger in the District Court of South Australia on 18 July 2018. It pleaded that Mr Younger was overpaid by the amount of $82,045.00 for the period of his employment. It says that it proposed to Mr Younger that it offset the amount he had been overpaid, against the second tranche of the purchase sum, which was due in December 2017. It says that Mr Younger rejected this proposal.
360Private further pleaded that, after the end of his employment, Mr Younger refused to return papers to 360Private, removed files from its premises and commenced carrying out work for clients of 360Private. In Schedule A to the statement of claim, 360Private listed fifteen clients whom 360Private said had been contacted by Mr Younger, in breach of their agreement.
Mr Younger filed his defence on 6 November 2018. He pleaded that 360Private was in breach of the BSA, as it had refused to make payment of part of the second tranche of the purchase sum. He acknowledged that 360Private had paid half of the second tranche. He denied that there was any basis for a set off as alleged by 360Private. He said that 360Private, by refusing to pay the outstanding moneys, had repudiated the BSA, which repudiation he accepted. He pleaded that the restraint of trade clauses in the BSA and the Consultancy Agreement were void, but, in any event, he was not bound by them after 360Private’s repudiation of the contract. He denied that he was overpaid by 360Private.
On 4 May 2020, 360Private was granted leave to file a second statement of claim. In this document, 360Private expanded on its plea in respect of its retention of half of the second tranche on account of the overpayment to Mr Younger, and pleaded that, on 13 December 2017, it advised Mr Waters that it would pay him half of the second tranche ($60,000) while retaining the other half on account of the overpayment to Mr Younger. It said that Mr Waters “raised no objection” to this proposal.[1] In addition, 360Private named clients, referred to as the “Small Audit Clients”, for whom it alleged that Mr Younger performed work, in breach of the restraint clauses. It replaced the list of fifteen clients that made up Schedule A in the first statement of claim, with a list of ninety-six clients.
[1] FDN 35, [25.3] DCCIV-18-801.
On 11 June 2020, Mr Younger filed his revised defence. In respect of the plea as to payment of half of the second tranche to Mr Waters, Mr Younger pleaded:
…Waters agreed or alternatively raised no objection…[2]
[2] FDN 39 [25] DCCIV-18-801.
On the same day, Mr Younger filed an interlocutory application, (FDN 40) seeking leave to file a cross-claim against Mr Waters, in which he alleged (among other things) that:
·Mr Waters either agreed or did not object to 360Private’s proposal that it pay half of the second tranche to Mr Waters and withhold the other half, and, in any event, acted on it to his advantage;
·By withdrawing the payment from the partnership bank account, Mr Waters misappropriated funds which had been paid on account of the partnership between Mr Waters and Mr Younger; and
·Mr Waters acted in breach of his fiduciary duty as a partner, and was guilty of dishonest and fraudulent conduct.
He pleaded that Mr Waters was liable to repay the payment to the partnership, and sought an account, and equitable compensation and damages.
Mr Younger filed a further affidavit in support of this application (FDN 51 DCCIV-18-801), in which he deposed:
24. Mr Waters role has only recently been clarified by the Applicant.
25.On 1 April 2020 the applicant filed an Interlocutory Application for permission to file a second Statement of Claim. It included a new Annexure A. It contained no particulars of loss and damage. It contained a pleading in paragraph 25.3 which was a new pleading and about which I was previously unaware. There was no explanation to provided as to the delay in bringing the application or why it was pleaded.
26.On 8 April and 17 April 2020 I sought particulars of the damages claimed against me and the experts reports upon which the Applicant relied. Now produced and shown to me and marked with the letters “RY11” is a true copy of the letter dated 8 April 2020. I was not provided with either.
27.On 4 May 2020 leave was granted to the Applicant to amend the Statement of Claim including as to loss and damage by adding a new annexure A which was not the same as that in the interlocutory application of 1 April 2020 and which was provided to me for the first time during correspondence leading up to the directions hearing on or about 4 May 2020 despite my requests.
28.On 5 May 2020 the Applicant filed the second Statement of Claim and serve a copy on me that day.
29.On 8 May 2020 and 20 May 2020 I requested by email to Mr Evans discovery of documents that the Applicant was relying upon for paragraphs 1.4.1 and 25.3.2 of the second Statement of Claim.
30.The documents were provided to me by email on 20 May 2020 and included a letter dated 13 December 2017 from the Applicant to Mr Waters. Now produced and shown to me and marked with the letters “RY12” is a copy of the letter dated 13 December 2017. That was the first time that I had seen the letter referred to in paragraph 25.3.2 of the Second Statement of Claim from the Applicant to Mr Waters. It was first discovered in the Applicant’s second List of Documents which was filed later.
Thus, he said that his application to file the cross-claim arose directly out of the revised statement of claim filed by 360Private on 5 May 2020, which referred to information and correspondence of which he had previously been unaware.
On 23 June 2020, Mr Younger filed an interlocutory application (FDN 46) by which he sought leave to file a cross-claim against 360Private, which also named Mr Waters as an interested party. In the cross-claim, he sought to pursue two claims. The first claim is in respect of payment by 360Private of the retained portion of the second tranche. He sought to join Mr Waters as interested party, because the retained portion was owed to the partnership, rather than to Mr Younger personally, and Mr Waters had refused to assist Mr Younger to recover it.
The second claim is in respect of an alleged defamation and injurious falsehood by 360Private against Mr Younger. He pleaded a series of statements allegedly made by 360Private to various individuals during 2018. For the purpose of this appeal, it is not necessary to outline the nature of the statements.
On 20 July 2020, Mr Younger filed two further interlocutory applications, FDNs 52 and 54, seeking to file two further cross-claims, against a barrister and solicitor respectively (jointly referred to as “the lawyers”). Mr Younger pleaded that he sought advice from the lawyers in respect of the restraint clauses in the BSA and the consultancy agreement, and that they represented him in the South Australian Employment Tribunal in proceedings involving 360Private. He alleged that the advice that he received was negligent, and that, in the event that he were found liable to 360Private, he sought a full indemnity from the lawyers. It appears from exhibit RY5 to FDN 53 and RY8 to FDN 55 that Mr Younger was prompted to file these cross-claims as a result of the expanded Schedule A, attached to the second Statement of Claim.
Mr Waters and 360Private opposed the orders sought in FDNs 40 and 46. 360Private also opposed the orders sought in FDNs 52 and 54. In respect of FDNs 52 and 54, however, the solicitor for the lawyers agreed to the filing of the cross-claims, after they had undergone substantial amendment.
All four applications came on for hearing on 24 August 2020. At the commencement of the hearing, Mr Rostron, who appeared on behalf of the lawyers, advised the Court that amendments to the relevant cross-claims had been agreed between himself and Mr Younger, and that he did not oppose the orders that were sought by Mr Younger. He was then excused from any further attendance in respect of the applications. 360Private and Mr Waters were represented and opposed the making of the orders in respect of all four applications.
The Master dismissed all four applications.
The Master’s reasons
The Master commenced by outlining the events leading up to the institution of this action, and then provided a summary of the interlocutory history of the action. In respect of the filing of the second statement of claim, he said:
Leave to file a second statement of claim was granted. It was filed on 5 May 2020 (FDN 35). The only amendment which is relevant to the matters before me arise in 2 SOC 25.3 to the effect, that the applicant advised Mr Waters that he would be paid the sum of $60,000 representing half of the second instalment due to the partnership under the Business Sale Agreement and that the applicant would not be paying the balance of $60,000 under the second instalment to Mr Younger by reason of the matters referred to in paragraphs SOC 25.1 and 25.2.
The reason that Mr Younger was not to be paid was because he had received an over‑payment under the employment type consultancy agreement (to which Mr Waters is not a party).
In other words, the applicant was off-setting the amount of the over-payment against the amount which was otherwise due to Mr Younger, and not Mr Waters.[3]
[3] Decision No 16 of 2020, [36] – [38].
From [45], the Master dealt with the filing of FDNs 40 and 46. He said, by way of introduction:
In the affidavit of Mr Younger (FDN 46) and to explain why this is a relevant matter to deal with in the main action, bearing in mind that it has been two and a quarter years since the proceedings were issued, he attaches a draft pleading but does not deal with any discretionary matters such as delay.[4]
[4] Ibid, [45].
He then said, in respect of FDN 46:
The conflating of causes of action gives rise to confusion and unnecessary complexity. However, paragraph 5 of the draft cross-claim asserts that the applicant wrongfully withheld $60,000 to the partnership of Waters and younger and wrongfully sought to off-set that sum against a claim against the respondent personally.[5]
[5] Ibid, [48].
He went on:
The issue is whether there is a proper basis to establish that an over-payment was made to the respondent and, if so, whether that can be off-set against the money the applicant owed the respondent on the Second Instalment.
Leaving aside the termination of the agreement by the respondent, if the applicant were to fail in the action and could not establish that it over-paid the respondent (and thereby raising no defence to the obligation to make the Second Instalment) then a cross-claim could be made to that effect. In other words, he would simply claim the amount due under the Second Instalment[6]
[6] Ibid, [54] – [55]
In respect of the joinder of Mr Waters, he said:
Thereby, the respondent alleges that the actions of the applicant, through its directors, amounted to knowing assistance in Mr Waters’ breach of his fiduciary duty to the respondent.
As a consequence, at paragraph 39, the respondent pleads that the applicant held the sum of $60,000 on trust as a constructive trustee for Mr Younger and that it is liable to him in that sum. Such a claim does not need Mr Waters to be a party.
The respondent also alleges that the applicant induced a breach of contract in the partnership agreement between Waters and Younger by paying $60,000 to Mr Waters and advising that Mr Waters should appropriate that amount to himself.
If, of course, the applicant is correct and there was an over-payment to the respondent and it is entitled to off-set that amount against monies otherwise payable to the respondent, then the applicant will have no liability to the respondent. If on the other hand, the applicant inappropriately off-set $60,000 and paid a $60,000 to Mr Waters, then Mr Waters, in his capacity as a partner, might be answerable to the respondent.
It follows therefore, that simply joining Mr Waters as an interested party, does not achieve what the respondent seeks to achieve. It also means that the respondent can also achieve the same result if his defence of the applicant’s over-payment claim is successful.[7]
[7] Ibid, [60] – [64].
In respect of the pleading dealing with defamation and injurious falsehood, the Master noted that Mr Younger had not dealt with the question of why he would be entitled to an extension of time to bring that action. He further noted that the injurious falsehood claim was “devoid any particularity”.[8]
[8] Ibid, [66] – [70].
The Master then summarised the evidence before him, and the arguments of the parties.
In dismissing FDNs 52 and 54, the Master said:
It is completely obvious that there is no adequate basis to join Messers Blewett and Oak Law Pty Ltd as third parties to the action on FDNs 52 and 54. The degree of cross‑over between issues raised in the claim and the matters raised against them is not defined at all or is of minor moment. Any advice given by the legal advisors is after the date of ?? (sic) of the Business Sale Agreement. If the respondent is then in breach of the Agreement by taking on former clients, then there would be an agreement that the advice contributed to his breach of conduct.
However, no particulars are given of the consequence of that advice or circumstances that would suggest that the advice was wrong in the circumstances or alternatively negligent, or in breach of the retainer. The pleading is simply not adequate. At best it may give rise to a consequential action.[9]
[9] Ibid, [118] – [119].
He dismissed the application in relation to the defamation and injurious falsehood claim on the basis that it was out of time, with no explanation for the delay in bringing proceedings, and because “the issues it raises are so tangentially related to the main proceedings that it does not warrant the level of additional time and complexity that will flow from the joinder.”[10]
[10] Ibid, [123].
In respect of FDNs 40 and 46, the Master found that there was a “minor overlap of issues”[11] but that the risk of inconsistent verdicts if they were dealt with in separate trials was small.[12] He went on to say:
The primary and significant issue is the allegation that the respondent breached the terms of the consultancy agreement by acting in breach of his fiduciary duties and “enticing” or taking on former clients who had become clients of the applicant. There are related matters about the respondent’s particular conduct (and again not involving Mr Waters at all) which led the applicant to assert that the respondent had been over-paid during his consultancy work. This is said to have occurred partly over two financial years.
No aspect of those issues involves Mr Waters. The respondent denies that there was any alleged over-payment. To that point, Mr Waters has no involvement. Thereafter, the applicant made a decision to pay to the partnership, half of the ‘Final Instalment’ of $60,000 solely on the basis of the dispute between the applicant and the respondent.
The dispute with Mr Waters only arises separately when he chooses to appropriate the $60,000 out of the partnership overdraft account. In reality, the dispute involving the respondent and Mr Waters is unrelated, except in this tangential issue of the payment of the $60,000 which is the genesis for the respondent’s joinder application. This is not related at all to the applicant’s over-payment claim and the set-off against half of the Final Instalment.[13]
[11] Ibid, [124].
[12] Ibid, [125].
[13] Ibid, [127] - [ 129].
He concluded that the proposed action against Mr Waters was irrelevant and unrelated to the principle proceedings.[14]
[14] Ibid, [145].
One factor that appeared to weigh heavily with the Master was the lack of explanation by Mr Younger for his delay in seeking to bring the cross-claims. He found that, but for the applications, the matter was ready to be set down for trial. He concluded:
The third-party proceedings, as proposed, are likely to have significant ramifications on this matter proceeding in the short-term. In that context, the efficiency intended by the rules, advancing matters to trial as quickly as possible would be lost.[15]
The appeal
[15] Ibid, [149].
Preliminary Issues
Mr Younger sought to rely on the amended notice of appeal which was provided to 360Private and to the solicitors for Mr Waters and the lawyers on 18 December 2020. It appears that Mr Younger had difficulty lodging his notice of appeal, having attempted to do so on 4 December 2020, the last day to file his notice. On 6 December 2020, he emailed the solicitors for 360Private, Mr Waters and the lawyers, explained that he had unsuccessfully attempted to file the appeal within time, and sought their approval for an extension of time until close of business on 7 December 2020. Mr Younger says that each of them asked for a copy of the proposed notice of appeal and agreed to the extension of time.
Mr Younger attended the court registry on 7 December 2020; he was advised, however, that he could not include Mr Waters and the lawyers as interested parties to the appeal as they were not parties to the action. He then amended the documents to remove reference to them. On 9 December 2020, he received notification from CourtSA that the documents had been accepted for filing and that a case number had been allocated. On 10 December 2020, he served a copy of the filed documents on 360Private and also sent copies to the solicitors for Mr Waters and the lawyers. On 18 December 2020, Mr Younger emailed the parties and ask them to agree to his filing the amended notice of appeal. He says that he has not received any response to this request.

Subsequently, it appears that there was correspondence between the parties as to the fact that none of Mr Waters or the lawyers had been named as respondents to the appeal. Mr Rostron indicated that his clients did not wish to be heard on the appeal, and would abide the event.
On 16 December 2020, Mr Verlato, on behalf of Mr Waters, wrote to Mr Younger in the following terms:
John Kyle Waters (“Waters”) whether for himself personally or as a partner in the defunct but not dissolved partnership going in the firm style or name of Waters & Younger (“the partnership”) has not been served with any instituted proceeding as engages him in either capacity and is consequently not on notice as to the appeal proceeding Case Number CIV‑20-006129.[16]
[16] CIV-20-006129, FDN 12, RY25.
Two days later, Mr Younger provided the amended notice of appeal to all of the parties, including Mr Verlato on behalf of Mr Waters, and asked them to advise at their earliest convenience if they “agree with this notice”.[17]
[17] Ibid, RY26.
On 22 February 2021, Mr Evans, for 360Private, wrote in the following terms:
We cannot speak on behalf of the non-parties and hence we have copied this email to the solicitors acting for the non-parties. It will be a matter for them as to whether, despite your non-compliance with the Rules, they wish to be heard at the Appeal hearing. However, we reserve all of our client’s rights in relation to your failure to name the non-parties as respondents or interested parties in our Notice of Appeal.[18]
[18] Ibid, RY27.
In response to this email, Mr Rostron again advised that his clients did not wish to be heard on the appeal and would abide the decision of the Court.[19] It appears that Mr Verlato did not reply to Mr Evans’ message.
[19] Ibid, RY28.
Thus, it is the case that all of the parties were served with the notice of appeal on 10 December 2020, and with the proposed draft amended notice on 18 December 2020. Mr Younger was not permitted to file a notice of appeal that included Mr Waters and the lawyers in any capacity; they were, however, on notice that he intended to appeal all of the orders made by the Master, including the ones that affected them. They were aware of the reason for the failure to include Mr Waters and the lawyers on the notice of appeal. Mr Rostron has indicated that he does not take any point in respect of the lateness in filing the appeal or the failure to include his clients on the document.
Mr Evans indicated that he did not intend to object to the late filing of the notice of appeal, nor did he indicate any objection to Mr Younger’s reliance on the amended notice. He did take issue with the failure to name Mr Waters and the lawyers as parties, however did not make submissions on this orally or in writing, save for 360Private’s counsel, Ms Hamlyn, indicating that her client reserved its rights on the question of costs in the event that Mr Waters objected to the orders made.
An extension of time will be granted to Mr Younger to institute this appeal. It is clear that he made real efforts to file his documents within time; further, he ensured that 360Private, Mr Waters and the lawyers were kept informed as to what was happening. The delay is so short that it cannot be (nor has it been) suggested that any of 360Private, Mr Waters or the lawyers suffered any prejudice as a result of it. I will also grant Mr Younger leave to rely on the amended notice, for the same reasons.
The failure to join Mr Waters and the lawyers is more problematic, in respect of Mr Waters’ position. Mr Rostron made it clear that his clients did not intend to appear at the hearing, and would abide by the decision of the Court. Mr Waters, however, participated no further after Mr Verlato’s email of 16 December 2020, and there was no appearance on his behalf at the hearing.
In my view, Mr Waters should be bound by the outcome of this appeal. He was well aware that it was listed, and that Mr Younger intended to appeal the orders that affected him. He was aware of the reason for Mr Younger’s failure to name him as a party. He had, in fact, been provided with a copy of the notice of appeal before it was filed, which named Mr Waters as a party to the appeal. He was advised of the lawyers’ attitude to Mr Younger’s difficulty in naming them as parties. In the face of all of that, he elected not to attend at the hearing.
Mr Waters was clearly on notice that the appeal was to be heard, and that there was a real prospect that orders would be made that would affect his interests. It was incumbent on him to attend the hearing, at the very least as a courtesy to the Court, if not to the other parties. Despite the fact that Mr Younger was representing himself, he was entitled to the same level of courtesy as a represented party. Indeed, it appears that Mr Waters sought to take advantage of the fact that he was unrepresented by not attending, despite the fact that he was well aware that Mr Younger intended to appeal against the orders affecting him, but was precluded from naming him as a party by the Court Registry. In the circumstances, I have no hesitation in deciding this appeal, in the absence of submissions on behalf of Mr Waters.
The notice of appeal
The essence of the appeal is that the Master failed to recognise that the issues in dispute between the parties extended further than those pleaded only by 360Private. It was necessary for the Master to consider the relationships and interactions between all of the parties to the appeal, not to look at the actions of Mr Younger in isolation.
The grounds of appeal can be summarised in the following way.
In respect of the applications involving Mr Waters, the Master erred in failing to take into consideration the role of Mr Waters in the non-payment of the second tranche in full to the partnership, and the complicity between 360Private and Mr Waters in this regard. He erred in failing to find that this issue was relevant and closely connected to the causes of action pleaded by 360Private.
The Master further erred in that he allowed 360Private to plead that the amount should be offset against the amount that it alleged it had overpaid Mr Younger, without allowing Mr Younger to claim that amount, in the event that the overpayment claim was not made out. This amounted to an outcome which was illogical and unfair.
In respect of the failure to allow the cross-claim against the lawyers, Mr Younger said that the Master failed to take into consideration the fact that part of his defence to 360Private’s claim that he had breached the restraint of trade clause was that he had relied on advice from the lawyers. Given that there were common issues of law and fact between the causes of action pleaded by 360Private against Mr Younger, and those that Mr Younger sought to prosecute against the lawyers, the need to hold separate trials in respect of them would increase costs and delay, and risked leading to inconsistent findings in respect of factual matters or the law. It would also mean that the principles of res judicata and estoppel would present significant complications in the second trial. He also failed to consider that the lawyers themselves did not object to their joinder, or to the form of the proposed statement of claim.
In relation to the claims for defamation and injurious falsehood, Mr Younger contended that the Master failed to give adequate reasons.
In relation to the referral to a listing conference, Mr Younger contended that the Master wrongly accepted the submission of 360Private that the matter was ready for trial, when, in fact, it had itself received leave to further amend its statement of claim on 13 November 2020, there were outstanding issues in relation to discovery, and significant and new issues were raised by it in its amendments to the statement of claim in May 2020.
In relation to the question of delay, Mr Younger said that the Master wrongly attributed all delay to him.
Mr Younger also appealed against the orders of the Listing Officer, in that the matter was listed for trial, when it was not ready, and in the absence of a certificate of readiness.
Mr Younger’s position
Dealing first with the claim against the lawyers, it is Mr Younger’s case that, after he left his position as a consultant with 360Private, he sought advice from the lawyers, to determine what he was allowed to do pursuant to the restraint clauses. In its first statement of claim, 360Private named only fifteen clients in relation to whom it alleged that Mr Younger breached the restraint clauses. That position changed substantially, however, in May 2020, when it filed its second statement of claim. In this document, it replaced the fifteen clients with ninety-five, and, for the first time, quantified its loss, in the sum of $82,000.00. It is on the basis of this pleading that Mr Younger sought to file the cross-claim against the lawyers, and to seek an indemnity from them, in the event that the Court found that, having acted on their advice, he breached the restraint clauses. His case is that, if he did indeed breach the restraint clauses, he only did so on the basis of incorrect advice. This is a matter that is clearly related to the claim brought by 360Private against Mr Younger, and is one that should be dealt with in the same proceedings.
This is a matter that clearly arose out of the amendments made by 360Private in May 2020; Mr Younger then promptly set about filing his application to join the lawyers. His application was, in fact, filed on 20 July 2020, only two months after 360Private filed its second statement of claim. If there was any delay, it was on the part of 360Private, in amending its statement of claim nearly two years after it commenced this action.
Mr Frayne QC, on behalf of Mr Younger, submitted that, if the claim against the lawyers was not dealt with in this action, there was a real risk that there would be conflicting findings of fact, and inconsistent judgments. This is a situation that should not be permitted to arise.
Mr Frayne particularly criticised the Master’s reasons at [119], where he said:
However, no particulars are given of the consequence of that advice or circumstances that would suggest that the advice was wrong in the circumstances or alternatively negligent, or in breach of the retainer. The pleading is simply not adequate. At best it may give rise to a consequential action.
He submitted that this paragraph was clearly wrong. Mr Younger particularised the advice about which he complained, pleaded his reliance on that advice, and set out the nature of the loss he said that he suffered as a result of the reliance. He adequately pleaded his allegations of negligence and sought indemnity to the extent that he is found to be in breach of the restraint clause.[20] Mr Rostron was satisfied with this pleading.
[20] See [17]-[ 18B] of RY9 to FDN 62 in respect to the barrister, and [18]–[19B] of RY11 to FDN 63 in respect of the solicitor DCCIV-18-801.
Mr Frayne submitted that the conclusions reached by the Master suggested that he had not considered the affidavit material, or the amended drafts of the third party claims against the lawyers. He further submitted that the Master’s finding that the claim against the lawyers was tangential demonstrated the Master’s failure to understand the issues in dispute between the parties, and the fact that a major component of 360Private’s claim against Mr Younger was exactly that in respect of which Mr Younger seeks indemnity from the lawyers.
Mr Frayne submitted that the issues of res judicata and issue estoppel were also significant matters that should have been taken into account by the Master, when determining whether to allow the cross-claims to be brought. He submitted that these will arise as real issues if the various aspects of this dispute were dealt with in the piecemeal fashion proposed by the Master.
In relation to the joinder of Mr Waters and the cross-claim against 360Private, Mr Frayne again pointed to the filing of the second statement of claim as the catalyst for Mr Younger’s applications. He submitted that the addition of [25.3] to the second statement of claim raised, for the first time, Mr Waters’ complicity in the payment of half of the second tranche to the partnership in such a way as to deprive Mr Younger of its benefit. This was the first time that this had become part of 360Private’s pleaded case, and makes it clear that it is seeking to use an asset of the partnership to offset an amount it alleges that Mr Younger owes in his personal capacity. The entirety of the second tranche was owed to the partnership, not owed in equal shares to Mr Waters and Mr Younger, and yet 360Private seeks to avoid its liability to pay this amount completely.
Mr Frayne argued that 360Private’s amended pleading clearly raised two issues: first, the liability of 360Private to fulfil its contractual obligations with the partnership, and second, Mr Waters’ breach of a range of partnership duties and his complicity in 360Private’s breach of its contractual obligations. He submitted that as Mr Waters had refused to assist Mr Younger to bring an action on behalf of the partnership to recover the outstanding payment, it was reasonable to seek to join him in this action, and to have all of these matters litigated together. It is clear that the claim for the balance of the second tranche is intrinsically linked to the claim brought by 360Private against Mr Younger.
In respect of the claim for defamation and injurious falsehood, Mr Frayne submitted that the Master gave no reasons for his rejection of these claims. In particular, Mr Frayne referred to [117] of the reasons, where the Master said that “I have already rejected the proposed third party defamation proceedings”. He submitted that, in fact, there was no previous rejection of this proceeding, and thus no reasons have been given for reaching that conclusion. At [123], the Master again refers to having previously rejected Mr Younger’s application to bring the cross‑claim in respect of the defamation action, despite the fact that he not done so.
In respect of the referral to a listing conference, Mr Frayne submitted that it was clear that the matter was not ready for trial. There were outstanding issues of discovery, of which 360Private was aware, as there had been correspondence between Mr Evans and Mr Younger during July and August 2020, which should have been brought to the attention of the Master. Further, Mr Frayne submitted that, once the Master was aware of the institution of this appeal, it was inappropriate to list this matter for trial.
Mr Frayne submitted that, if the decision of the Master was allowed to stand, it would result in a multiplicity of proceedings, increased costs, and the risk of inconsistent findings. All of the delay in the matter was incorrectly attributed to Mr Younger. The Master only considered the issues raised in the statement of claim, and not the issues raised in Mr Younger’s defence, when considering the issues in dispute between the parties, and the relevance of the matters raised in the various cross-claims. These all amount to fundamental errors.
360Private’s position
I have already addressed 360Private’s submissions in respect of the improper constitution of the appeal. I note that Ms Hamlyn advised that she did not intend to address me on the amended notice of appeal, as no leave had been granted to file it. She submitted that this document was part of a calculated attempt on the part of Mr Younger to cause delay.
I must reject this submission. Mr Younger served all of the parties with the amended notice on 18 December 2020, and specifically sought their advice as to whether they opposed his relying on this document. He received no response to this request from Mr Evans. In the circumstances, it is too late, at the hearing of the appeal, for 360Private to advise, for the first time, that it does not consent to his reliance on this document.
Ms Hamlyn submitted that, to succeed on the appeal, Mr Younger must demonstrate an error in the House v The King[21] sense. She said that the grounds of appeal fail to do this. She submitted that the decisions that the Master reached were clearly open to him on the evidence before him. This is on the basis that the facts giving rise to Mr Younger’s applications had been known to him for more than two years, the pleadings had closed, Mr Younger was almost two years late in seeking to join additional parties, discovery was complete, and both the Master and 360Private considered that the matter was otherwise ready for trial.
[21] (1936) 55 CLR 499.
Ms Hamlyn further submitted that the Master appropriately considered all of the discretionary factors required of him, including Mr Younger’s explanation for his delay in filing the applications, the impact that the cross-claims would have on the orderly conduct of the litigation between Mr Younger and 360Private, the risk of inconsistent findings, and the desire to avoid a multiplicity of actions. He gave appropriate weight to these factors, and in particular what he saw as the lack of an explanation of the delay, the fact that the matter was ready for trial, and that joinder of new parties would cause substantial delay.
In respect of the reasons themselves, Ms Hamlyn submitted that, while perhaps not presenting a unified approach to the different applications, they address all of the relevant discretionary factors at one place or another. She relied on the case of Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd & Anor,[22] where Mahony J said:
In determining whether, in a particular case, there is a duty to give reasons and the extent of it, regard should, in my opinion, be had to the function to be served by the giving of reasons. Thus, the statement of reasons may be necessary to enable a party to exercise his right of appeal or such other rights as he may have to contest the decision …
…
But, subject to matters such as these, the basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it.[23]
[22] [1983] 3 NSWLR 378.
[23] Ibid, 386.
Ms Hamlyn submitted that the Master’s reasons clearly fulfilled this function: the basis on which he reached his conclusions was clear.
In relation to the question of delay, Ms Hamlyn submitted that each of the applications should have been filed two years earlier, albeit noting that different factors applied to each of them. While Mr Younger said that there was a material change in 360Private’s case with the filing of the second statement of claim, this was not in fact the case. The new pleading at [25.3] merely provided additional context to the existing allegations. Further, she noted that Mr Younger deposed in FDN 51, that this was the first time that he was aware of the matters pleaded in this paragraph. In fact, this is not the case, as the communication referred to in [25.3] was discovered by 360Private in its first list of documents, which was filed on 13 December 2018, and was produced to Mr Younger on a USB with all of 360Private’s discovered documents on 11 January 2019.[24] Ms Hamlyn further referred to correspondence between Mr Younger and Mr Waters which sets out the issues in dispute between them.[25] She said that this is clear evidence that the matters which Mr Younger sought to bring into the action had been well-known to him since February 2018.
[24] FDN 59, [23]–[26] DCCIV-18-801.
[25] FDN 59, TSE19.
In respect of the new schedule to the second statement of claim, Ms Hamlyn submitted that this amounted to no more than further particularisation of the claim already made against Mr Younger. It quantified the amount claimed against Mr Younger; Ms Hamlyn argued that, as Mr Younger was well aware of the amount that he had charged the clients listed in the schedule, this quantification should have come as no surprise to him.

In respect of the defamation claim, Ms Hamlyn argued the only reason for delay identified by Mr Younger was that he had been busy dealing with this proceeding and unable to afford to bring the claim. She submitted that this, in itself, would not justify the grant of an extension of time. Further, there was no relation between these claims and the subject matter of this claim.
Ms Hamlyn submitted that, if the cross-claims were allowed, the issues in dispute between the parties would be substantially expanded. In regard to Mr Frayne’s argument that, in determining the issues in dispute, it was necessary to look at the surrounding context, she submitted that this was not an appropriate way of determining whether causes of action were related, or sufficiently related so as to make joinder a reasonable step. The matters in issue between the parties are only those identified in the pleadings; the Master was correct in his approach, in confining his consideration of the issues in the way that he did. The issues in dispute are two: the breach by Mr Younger of the restraint of trade clauses; and the overpayment of Mr Younger, against which half of the second tranche was offset. Ms Hamlyn argued that Mr Younger’s cross-claim in relation to this issue is an unnecessary corollary of the existing pleaded case. Mr Younger has denied the entitlement to offset half of the second tranche; if he succeeds in this argument, then 360Private will be required to make good this payment. This is not in dispute, and so it is unnecessary to join additional parties in a complex cross-claim.
As to the claim against Mr Waters, Ms Hamlyn argued that this bore no relationship to the existing claim. 360Private accepts that the payment was made as between it and Mr Waters; what Mr Waters did with the money after that is not a matter in which 360Private has any involvement. The Master was correct in his view that this was a matter solely between Mr Younger and Mr Waters, with no overlap with this proceeding.
Ms Hamlyn made a similar argument in respect of the claim against the lawyers. She submitted that while there was a degree of interrelationship, the advice given by the lawyers to Mr Younger is not a substantive defence to the claim brought against him. Neither the substance of the advice, nor Mr Younger’s reliance on it, is raised as an issue in dispute between 360Private and Mr Younger on the pleadings. She further argued that, even if this was an appropriate topic for a third party claim, it should have been pursued by Mr Younger at the outset of the proceedings. She submitted that there was a further complexity, in that it was not clear whether the conduct complained of by 360Priavte as amounting to a breach of the restraint of trade clauses in fact predated the advice received from the lawyers. The complexities raised by the cross-claim against the lawyers were such that it should not be allowed, given that the matter was otherwise ready for trial, and in fact has been allocated a trial date.
Ms Hamlyn argued that there could be no benefit in holding up the disposal of this action, by allowing the cross-claims to be filed. Any efficiencies which might be achieved would be lost, given the stage to which this action has progressed. This action would have the ability to be finalised by the middle of this year; if the cross-claims were allowed, the parties would be thrust back into the interlocutory process, which, given that Mr Younger may well be unrepresented again after this appeal is dealt with, may last for some considerable time.
Ms Hamlyn submitted that there was no likelihood that Mr Younger would encounter problems with the issues of res judicata and issue estoppel, if the cross‑claims were not allowed. Because of the lack of relatedness between the current action and the cross-claims, there will be no attempt to reagitate the substance of this action in subsequent proceedings based on the cross-claims. Further, different parties would be involved in the litigation. Indeed, Ms Hamlyn argued that the findings made in these proceedings may well assist the parties to the later claims by narrowing the issues in dispute.
Finally, Ms Hamlyn submitted that the principles set out in rr 1.5 and 3.1 of the Uniform Civil Rules 2020 (“UCR”), as explained by Doyle J in Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd[26] were appropriately applied by the Master. She submitted that there was nothing in Mr Younger’s applications which would facilitate a resolution of this action, narrow the dispute between the parties, or would otherwise be in the interests of justice. They would in fact broaden the dispute in a way that would be disproportionate to the issues currently in dispute between the parties.
[26] [2020] SASC 161.
Ms Hamlyn submitted that it was not inappropriate to have listed the matter for trial, and that, in any event, listing a matter for trial is an administrative action, and not one which is properly the subject of an appeal such as this. The Court clearly has the power to dispense with a certificate of readiness in an appropriate case. This is such a case, where there is a reluctant defendant, and a matter that is ready for trial.
Consideration
Ms Hamlyn is correct in her submission that, to succeed in this appeal, Mr Younger must demonstrate an error of the House v The King type, that is:
… that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed … It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. …[27]
[27] (1936) 55 CLR 499, 505.
I will deal with each of Mr Younger’s applications in turn.
FDN 40 – application to file a cross-claim against Mr Waters
The proposed cross-claim against Mr Waters is exhibited to FDN 41 at RY1. I will refer to this document as RY1. Mr Younger deposes that FDN 40 arises directly out of the filing by 360Private of its second statement of claim on 4 May 2020. He says that he had previously been unaware of the matters raised in [25.3] of the second statement of claim, and that this had “clarified” Mr Waters’ role in 360Private’s retention of half of the second tranche.[28] FDN 40 was filed on 11 June 2020.
[28] FDN 51, [24].
In his consideration of FDN 40, the Master emphasised what he saw as unexplained delay in its filing. An example of this is the passage set out at [20] hereof. He emphasised the two and a half years since the institution of the action, but failed to mention that it was filed within six weeks of 360Private’s filing of the second statement of claim. In doing so, I am of the view that he made an error of the House v The King kind. He placed significant weight on a factor that was not relevant in the circumstances. The appropriate reference date for the filing of FDN 40 (and, indeed, all of the applications being dealt with in this appeal) is the date that the second statement of claim was filed, as this is the document that Mr Younger says prompted the filing of the applications. The date of the institution of the proceedings is not relevant, in determining whether Mr Younger had delayed unduly in bringing FDN 40.
In determining that there was only a minor overlap between the issues in this action and RY1, the Master focused only on 360Private’s allegations against Mr Younger. This is demonstrated by the passage set out at [28] hereof. He did not take into consideration the matters raised in Mr Younger’s defence, namely that there was no basis for 360Private to set off half of the second tranche against an alleged overpayment,[29] and that it was, in fact, 360Private that had breached the BSA, which led to repudiation of it. Nor did he take into consideration the matters pleaded by Mr Younger in respect of Mr Waters’ involvement in the non-payment of half of the second tranche.[30]
[29] FDN 39, [7.A1].
[30] FDN 39, [25]–[26].
In my view, these matters pleaded in Mr Younger’s defence, when read in the context of the second statement of claim make it clear that the issues in dispute between the parties are far broader than those taken into account by the Master. They clearly encompass the entitlement of 360Private to set off half of the second tranche against the alleged overpayment, and the role of Mr Waters in causing Mr Younger to bear that loss, rather than the partnership. It follows, therefore, that I am of the view that the Master erred in finding that there was only a minor overlap between the issues raised in the second statement of claim and RY1. It is clear that Mr Waters’ role is intrinsically bound up with 360Private’s withholding of the payment. It is clearly a payment that was due to the partnership and not to Mr Younger personally, just as the half of the second tranche that was paid was due to the partnership and not Mr Waters personally. It is clear that 360Private seeks to offset a debt allegedly owed personally by Mr Younger, against an amount that it undoubtedly owes to the partnership. Mr Waters has refused to assist Mr Younger to recover what is an asset of the partnership.
Mr Younger deposed that the inclusion of [25.3] in the second statement of claim was the catalyst for his filing FDN 40. While he may have been mistaken as to his awareness of the communication referred to in that paragraph, that does not change the fact that it had not previously formed part of 360Private’s pleaded case. By including it as part of its case, and by explicitly making Mr Waters’ role a plank in its case against Mr Younger, 360Private has opened the door to Mr Younger’s inclusion of Mr Waters and his role in the issues to be considered in this action. In finding otherwise, the Master erred in such a way that, in respect of FDN 40, the appeal must be allowed.
The Master further erred in finding that the issues in dispute would be significantly broadened by the introduction of the cross-claim against Mr Waters. By pleading Mr Waters’ involvement as it has now done, it has raised the issue of the alleged inappropriate off-setting of a partnership debt against an alleged personal liability, which was done with the complicity of Mr Waters. The matters which Mr Younger needs to prove to succeed in his claim against Mr Waters will already be ventilated in 360Private’s claim against Mr Younger. While the issues will be somewhat broadened, the factual basis on which the allegations rest will already be before the Court.
FDN 46
FDN 46 seeks to do two things. The first is to recover from 360Private the retained portion of the second tranche. Mr Younger seeks to join Mr Waters to this claim, as Mr Waters has otherwise refused to assist him in recovering what he believes is a partnership asset. I will refer to this as the recovery action. The second is to make a claim in respect of defamation and injurious falsehood against 360Private. I will refer to this as the defamation action.
The recovery action is the corollary of 360Private’s claim to offset the retained portion of the second tranche against the alleged overpayment. In my view, the Master made an error when he found that Mr Younger would achieve the same result as the cross-claim, if his defence to 360Private’s action in respect of the retained portion is successful, and so did not need to bring the cross-claim. Earlier in his reasons, the Master found:
… if the applicant were to fail in the action and could not establish that it over-paid the respondent (and thereby raising no defence to the obligation to make the Second Instalment) then a cross-claim could be made to that effect. In other words, he would simply claim the amount due under the Second Instalment.[31]
[31] Decision No 16 of 2020, [55].
Yet, having reached this conclusion, he prevented Mr Younger from bringing the very cross-claim that he found that Mr Younger would be entitled to bring. He erred where he found the same result would be achieved simply by succeeding in his defence. Success for Mr Younger in defending the overpayment claim does not by itself create an enforceable right to recover the retained portion from 360Private. If it refused to make the payment, he would be required to bring a further court action to obtain an order to this effect. This would result in a duplication in proceedings, delay, and significant expense. It would also create the risk of conflicting decisions. Despite the first Court having found that 360Private was required to pay the retained portion to the partnership, by relitigating the question, there is always the possibility that a different answer may be obtained.
This is an error that can only be remedied by allowing the appeal in respect of the recovery action. The recovery action is the step that Mr Younger must take to ensure finality in this litigation in the event that his defence is successful. Joinder of Mr Waters is warranted, as the payment is owed to the partnership, not to Mr Younger personally, and his conduct vis-à-vis the partnership is called into question.
The appeal is allowed in respect of the recovery action.
The Master found that the defamation action should not be allowed, firstly because no explanation had been given for the delay in commencing it, and secondly, because “the issues that it raises are so tangentially related to the main proceedings that it does not warrant the level of additional time and complexity that will flow from the joinder.”[32]
[32] Ibid, [123].
In my view, the Master was correct in this conclusion. While the clients to whom the defamatory statements were allegedly published appear in Schedule A to both the second and third statements of claim, there is no overlap of issues in respect of the defamation claim and the claims brought by 360Private against Mr Younger. While the parties are the same, and some of the witnesses in any trial of each action may be the same, there is no overlap in respect of the issues in dispute, the causes of action prosecuted, or the defence of one claim vis-à-vis the other.
Mr Frayne’s main complaint of the Master’s conclusion in respect of the defamation action was that there was an insufficiency of reasons. I am of the view that this complaint is not made out. I accept that the reasons of the Master are disjointed, difficult to follow, and somewhat haphazard in their order; nonetheless, the Master does articulate his view that the issues raised in the defamation action are not sufficiently related to the action brought by 360Private against Mr Younger as to justify inclusion in this action. In my view, he is correct in this conclusion.
The appeal in respect of the defamation action is dismissed.
FDNs 52 and 54
I will deal with these applications together.
At [26] hereof, I set out the findings of the Master in relation to the cross‑claims against the lawyers. I am of the view that his conclusion that “The degree of cross-over between issues raised in the claim and the matters raised against [the lawyers] is not defined at all or is of minor moment” is simply wrong. He also appears to have misunderstood the pleading, where he says “Any advice given by the legal advisors is after the date of ?? (sic) of the Business Sale Agreement.”[33]
[33] Ibid, [118].
Mr Younger’s case against the lawyers is that, after he entered into the BSA, and, indeed, after he ceased employment with 360Private, he sought advice from the lawyers. He acted on that advice, and yet is now facing this action from 360Private for breach of the restraint clauses in the BSA and the Consultancy Agreement. His case is based on the fact that he retained the lawyers after he ceased employment with 360Private, to obtain advice on the effect of the restraint clauses, and, having followed that advice, now seeks indemnity from them to the extent that he is found liable to 360Private. The cross over between 360Private’s claim against him, and his claim against the lawyers is clearly not “of minor moment”. It was a fundamental error on the part of the Master to find that it was. In my view, the cross-claim against the lawyers is clearly and materially related to the issues in dispute between 360Private and Mr Younger, and to require separate litigation to be brought would offend against the principles set out in r 1.5 of the UCR. It would result in a multiplicity of litigation dealing with the same factual substratum, with consequent delay and expense.
I am of the view that the Master also made an error of the House v The King type, where he found that the pleading was inadequate. The amended cross-claims are pleaded sufficiently to articulate the causes of action relied on, the facts that Mr Younger says underpin those causes of action, and the loss and damage that he says he suffered.
The appeal in respect of FDN 52 and 54 must be allowed. In respect of each of the lawyers, he outlines the retainer, including its implied terms giving rise to a duty of care, the advice that he received, his reliance on that advice, and the particulars of the breaches of duty that he alleges. He sets out the loss and damage that he suffered as a result of his reliance.[34] Further, it is significant that Mr Rostron, on behalf of the lawyers, did not take issue with the form of the statement of claim, nor did he object to its being filed (while maintaining a denial of liability on behalf of his clients).
[34] See, for example, FDN 63, RY11, [18]–[19B].
The appeal in respect of FDNs 52 and 54 must be allowed.
Conclusion
It is necessary to say something about Mr Younger’s delay in seeking to issue these cross-claims. This is a matter which clearly weighed heavily on the Master, and it is one which featured heavily in the submissions made on behalf of 360Private.
I do not consider that there has been any undue delay by Mr Younger in filing the various applications which were the subject of this appeal. In my view, save for the defamation action, they stem clearly from the filing of the second statement of claim, which pleaded for the first time Mr Waters’ role in the retention of part of the second tranche, substituted 96 clients for the 15 originally pleaded in respect of the breach of the restraint clauses, and, for the first time, quantified 360Private’s alleged loss. These are not matters that he could have, or should have foreseen earlier, as forming an integral part of 360Private’s case. Even though he may have been aware of these issues previously, they had not formed part of 360Private’s pleaded case. If there was any delay, it was 360Private’s in amending its statement of claim in such a way, at a time when it maintained that the matter was ready for trial.
I have not dealt specifically with the issues of res judicata and issue estoppel. I have found that there is a significant degree of interrelatedness between the various claims, such that there would be a risk of inconsistent findings if the trials were to be held separately. I do not consider that I need go further than this to dispose of this appeal.
It is no doubt clear from the conclusions that I have reached that I consider that the matter should not have been referred to a listing conference. The matter was obviously not ready for trial, and no amount of 360Private’s asserting that that was the case would make it so.
I conclude as follows:
·Mr Younger is given an extension of time to bring this appeal;
·Mr Younger is permitted to rely on his amended notice of appeal;
·The appeal in respect of FDN 40 is allowed;
·The appeal in respect of FDN 46 is allowed, except in respect of the defamation claim;
·The appeal in respect of FDN 52 is allowed;
·The appeal in respect of FDN 54 is allowed;
·The appeal in respect of the referral to a listing conference is allowed.

I do not consider that I need to deal with the appeal in relation to the listing for trial. Having allowed the appeal in respect of the referral to the listing conference, the trial date must necessarily be vacated.
I will hear the parties on the question of costs.