Emmanuel Makas as executor of the estate of the late Peter Makas and Grigoria Makas v Peter Enders Building Consultant Pty Limited (CAN 008 586 310) [2009] ACTSC 107 (4 September 2009)

Last Updated: 22 September 2009

EMMANUEL MAKAS AS EXECUTOR OF THE ESTATE OF THE LATE PETER MAKAS AND GRIGORIA MAKAS v PETER ENDERS BUILDING CONSULTANT PTY LIMITED (ACN 008 586 310) [2009] ACTSC 107 (4 September 2009)

CIVIL LAW – procedure – application for leave to continue proceedings against defendant company in voluntary liquidation – r 231 Court Procedures Rules 2006 (ACT) not applicable – s 500(2) Corporations Act 2001 (Cth) applicable – reasons for not requiring plaintiffs to start with proof of debt – comparative costs of two processes – delays caused by proof of debt process – significance of witness’s credit to claim in negligence.

CIVIL LAW – application for leave to amend statement of claim after pleadings closed to add claim under s 52 Trade Practices Act 1974 (Cth) – limitation period for s 52 action expired before date of application – original statement of claim alleged negligence and breach of contract, including under warranties implied by s 74 Trade Practices Act.

CIVIL LAW – application for leave to amend statement of claim to add claim under s 52 Trade Practices Act – whether amendments required for purpose of “deciding the real issues in the proceeding” – real issues adequately decided through claims already pleaded – whether amendments required for the purposes of “avoiding multiple proceedings” – no other proceedings initiated, and likely to be barred in any case due to expiry of limitation period.

CIVIL LAW – application for leave to amend statement of claim to add claim under s 52 Trade Practices Act – amendment would cause delay, is unnecessary to determine the real issues, and would not assist plaintiffs – no explanation for late application to add new claim – leave refused.

CIVIL LAW – procedure – application for leave to join a second defendant – application not for purposes of correcting name or identity of party – application covered by rules on joinder not rules on amendment of pleadings.

CIVIL LAW – application for leave to join a second defendant – proposed second defendant a director of defendant company – defendant company went into voluntary liquidation shortly before trial – whether joinder required under r 210 Court Procedures Rules – r 210 an exhortation to parties to get pleadings right.

CIVIL LAW – application for leave to join a second defendant – proposed second defendant a director of defendant company – defendant company went into voluntary liquidation shortly before trial date – whether joinder required under r 220 Court Procedures Rules – whether joinder “necessary to enable the court to adjudicate effectively and completely on all issues in dispute in proceeding” – issues in dispute between original parties can be adequately decided without adding second defendant.

CIVIL LAW – application for leave to join a second defendant – proposed second defendant a director of defendant company – defendant went into voluntary liquidation shortly before trial date – whether joinder required under r 211 Court Procedures Rules to allow common issues of law or fact, or issues arising out of the same transactions or events, to be dealt with in proceedings involving multiple parties – r 211 permits but does not require joinder – whether discretion under r 211 should be exercised.

CIVIL LAW – application for leave to join a second defendant – proposed second defendant a director of defendant company – defendant went into voluntary liquidation shortly before trial date – joinder where action against proposed new defendant is barred by expiration of limitation period – whether r 242 permits joinder despite expiration of limitation period – operation of r 242(3) – comparison of r 242 with rr 69 and 74 Uniform Civil Procedure Rules 1999 (Qld) – r 242 does not permit joinder of party to avoid expiration of limitation period.

CIVIL LAW – application for leave to join a second defendant – proposed second defendant a director of defendant company – defendant went into voluntary liquidation shortly before trial date – whether joinder required under r 212 Court Procedures Rules – r 212 not relevant to whether to join new defendant.

CIVIL LAW – operation of s 74 Trade Practices Act – s 74 implies warranties into relevant contracts – s 74 not capable of being contravened – s 74 does not provide basis for action under s 82 Trade Practices Act.

Corporations Act 2001 (Cth), ss 500(2), 440D,

Court Procedures Rules 2006 (ACT), rr 231, 507, 501, 502, 503, 21, 210, 211, 212, 220, 242

Supreme Court of Queensland Act 1991 (Qld)

Supreme Court Rules 1937 (ACT), O 19, r 14; O 32, r 1

Supreme Court Rules (Vic), r 36.01(4)

Trade Practices Act 1974 (Cth), ss 74, 52, 82, 75

Uniform Civil Procedure Rules 1999 (Qld), rr 74, 69

Explanatory Statement for the Court Procedures Rules 2006

Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 83 ALJR 951

Arturi v Zupps Motors Pty Ltd [1980] FCA 164; (1980) 49 FLR 283 at 284-287

Birtles v The Commonwealth [1960] VR 247

Bridge Shipping Pty Limited v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231

Dwyer v O’Mullen (1887) 13 V.L.R. 933

Etna v Arif [1999] VSCA 99; [1999] 2 V.R. 353

Greig v Stramit Corportion Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503

Matheson Engineers Pty Ltd v El Raghy [1992] FCA 417; (1992) 37 FCR 6

Meehan v Stockmans Australian Café (Holdings) Pty Ltd (1996) 22 ACSR 123

Ogilvie-Grant v East (liquidator of Gordon Grant and Grant Pty Ltd) (1983) 7 ACLR 669

Philip Morris Ltd v Bridge Shipping Pty Ltd [1994] 2 VR 1

Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

No. SC 767 of 2007

Judge: Penfold J

Supreme Court of the ACT

Date: 4 September 2009

IN THE SUPREME COURT OF THE )

) No. SC 767 of 2007

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: EMMANUEL MAKAS AS EXECUTOR OF THE ESTATE OF THE LATE PETER MAKAS

First plaintiff

AND: GRIGORIA MAKAS

Second plaintiff

AND: PETER ENDERS BUILDING CONSULTANT PTY LIMITED (ACN 008 586 310)

Defendant

ORDER

Judge: Penfold J

Date: 4 September 2009

Place: Canberra

THE COURT ORDERS THAT:

(a) Leave to amend the statement of claim to add a claim under s 52 of the Trade Practices Act 1974 (Cth) against Peter Enders Pty Ltd is refused.

(b) Leave to amend the statement of claim to particularise negligence, to change the damages sought, and to make certain other minor changes is granted, but I will hear the parties on the exact amendments permitted to be made to the statement of claim.

(c) Leave to join Peter Enders as a defendant and to add a claim against him under ss 52 and 82 of the Trade Practices Act 1974 (Cth) is refused.

Introduction

The facts

1. Late in 2001, Peter Makas and his wife Grigoria Makas bought a commercial building in Fyshwick. Before deciding to buy the building, they obtained, and claim to have relied on, a building report provided by Peter Enders Building Consultants Pty Ltd (PE Pty Ltd), which said that the building had no significant defects. The sole employee of PE Pty Ltd was Peter Enders, who was also one of the two directors of the company.

2. PE Pty Ltd was retained by Mr and Mrs Makas in late November 2001; on 11 December that year it provided its report. It is not disputed that the report was prepared by Mr Enders. Contracts of sale were exchanged on 20 December. In early August 2002, the managers of the building notified Mr and Mrs Makas of serious defects in the building, specifically that some of the floors were excessively uneven. Between 2005 and 2007 the defects were rectified at a cost of around $500,000. Mr Makas died on 16 July 2005.

3. The plaintiffs, Mrs Makas and her late husband’s executor, Emmanuel Makas, took action against PE Pty Ltd for negligence and breach of contract, relying among other things on implied warranties under s 74 of the Trade Practices Act 1974 (Cth) (the TPA).

4. The matter was certified as ready for hearing on 6 August 2008, and a trial was listed to start on 30 October 2008. Shortly before that, on or about 22 October, the defendant company went into voluntary liquidation; it appears that the company is uninsured, has virtually no assets and has a debt in the order of $50,000 to the two directors of the company.

The processes

5. On the day set down for trial, the plaintiffs made several applications. In the course of argument on applications for leave to amend the statement of claim to add new causes of action and a new defendant, the defendant submitted that the amendments were barred by the expiry of applicable limitation periods. This appeared to take the plaintiffs by surprise. Argument followed about whether the limitation periods were applicable and whether they had in any case expired, these latter arguments reflecting different views about the dates on which the several causes of action had arisen. Counsel for the plaintiff sought an adjournment to enable the gathering of evidence about the circumstances in which, and in particular the dates on which, the claims arose. The adjournment was granted, since it was by then apparent that the trial would not be completed in the time allowed even if it was able to start.

6. Before the matter was adjourned, orders were made requiring the parties to file and serve written submissions (by 19 December 2008) and affidavits concerning the limitation period issues. A date for the hearing of any necessary evidence was set for 16 February 2009—this was the earliest date then available in my lists.

7. In December 2008, the parties provided written submissions, and on 19 December they advised by email that no further evidence would be provided, that some of the applications were not to be pursued, that the February hearing date was vacated and that the applications could be determined on the basis of the earlier oral argument and the written submissions. On 25 February 2009, counsel for the defendant provided another submission mentioning several more authorities for my consideration.

The applications

8. The applications made by the plaintiffs on the first day scheduled for the trial (30 October 2008), were as follows:

(a) An application expressed to be made under r 231 of the Court Procedures Rules 2006 (ACT) (the CPRs) for leave to continue proceedings against PE Pty Ltd (presumably, although it was not stated, as required by s 500(2) of the Corporations Act 2001 (Cth)—an earlier application had been filed on 24 October 2008 relying on s 440D of that Act, which relates to companies under administration, but by 30 October the company was in liquidation).

(b) An application to include Peter Enders as the second defendant in the proceedings.

(c) An application for leave to file and serve an amended statement of claim by 12 noon on the day of the hearing of the application; a draft amended statement of claim was handed up at the hearing, which showed that the main amendments were:

(i) to add a claim under s 52 of the TPA and to particularise the misrepresentations relied on for that claim; and

(ii) to reduce the quantum of damages sought from nearly $540,000 to just over $475,000.

(d) An application for an order that Mr Enders file and serve a defence by 4.00 pm on 30 October.

Leave to continue proceedings against the liquidator

9. The application for leave to continue the proceedings against the company following the voluntary liquidation was expressed to be made under r 231 of the CPRs. I am inclined to agree with counsel for the defendant that r 231 applies to natural persons only and was not relevant in this case, but since the oral application also relied on s 500(2) of the Corporations Act, which clearly does apply, there was no need to pursue this point. The plaintiffs’ application was resisted by the defendant.

10. The alternative to permitting the action to proceed against the liquidator would have been to leave the plaintiffs to prove their debt in the liquidation, by lodging a verified proof of debt which the liquidator could either admit or reject, that decision of the liquidator being subject to appeal to a judge. The cases of Ogilvie-Grant v East (liquidator of Gordon Grant and Grant Pty Ltd) (1983) 7 ACLR 669 and Meehan v Stockmans Australian Café (Holdings) Pty Ltd (1996) 22 ACSR 123 were cited by counsel for the defendant. Both cases involved the refusal of leave to proceed against a company in liquidation, but both were sufficiently distinguishable on their facts not to be determinative in this case.

11. After argument, late in the first morning of the hearing, I indicated that I would give leave for the plaintiffs to proceed against the liquidator of the defendant, for reasons that were provided at the time and can be summarised as follows (the order was formally made on the following day):

(a) There was a real possibility that the liquidator would reject the proof of this debt and therefore require the plaintiff to come back before this court in any case.

(b) Allowing this action to proceed against the liquidator would reduce the assets available to the creditors, but on the other hand:

(i) it was not clear that the liquidator’s costs would need to be a substantial addition to the basic costs of defending this action, especially noting the possibility that Mr Enders would be added as a defendant; and

(ii) the major creditor in this liquidation would be, in any case, this claim, so there was no significant issue, as there might be in other liquidations, of fairness to other creditors.

(c) The extra costs of the proof of debt process may not have been substantial in the larger context, but they were definitely real, as was the delay that would have been caused by requiring the plaintiff to go through the proof of debt process—no evidence had been put before me of timings, but if the proof of debt process were begun, I expected it would be at least six months before the matter could come back to this court for a hearing, and in treating the delay as relevant I noted that the defendants certified the matter as ready for hearing in August 2008 and that the liquidation began only a week before the trial date.

(d) It was not clear what would be the impact of this action proceeding against the putative second defendant at the same time as a proof of debt process was being run with the liquidator in respect of effectively the same claim.

(e) Finally, even if the liquidator could have handled a proof of debt involving contract and TPA claims, there was also a negligence claim, and my preliminary assessment of the case was that one of the pivotal issues would be Mr Enders’ credit, in particular whether the building inspection described by Mr Enders actually took place as he describes, and the court would be better placed to determine that issue than the liquidator.

The remaining applications

12. Argument then moved to the other applications which, to the extent that they related to amending the pleadings, were clearly covered by r 507 of the CPRs (requiring the leave of the court for amendments after the close of pleadings, which were conceded to have closed in early 2008).

13. As already mentioned, in the course of that argument the issue of limitation periods was raised, with the result that after argument on the applications concluded early on the second day, the trial date was effectively vacated and an adjournment was granted to permit the gathering of relevant evidence.

14. The proposed amendments to reduce the quantum of damages claimed, and others required to particularise the claim in negligence added, as a result of discussion in court, in the amended statement of claim lodged with written submissions, were not contentious, and do not require further comment, although they will be addressed in the orders.

Leave to amend the statement of claim after close of pleadings

15. One contentious set of amendments sought to the statement of claim were amendments required to add a claim under s 52 of the TPA (the TPA claim) against the original defendant. I have considered these amendments by reference to the following questions:

(a) Is the Court obliged to give leave for the amendments to be made?

(b) If not, should the Court’s discretion be exercised to allow the amendments to be made?

(c) If so, is there anything that would prevent the Court from exercising its discretion accordingly?

Is the Court obliged to allow the amendments?

16. Rules 501 and 502 both of which are set out in the Appendix to this judgment, are relevant.

Rule 501

1"> 17. Rule 501 requires “necessary amendments of a document” to be made for several specified purposes. There is no suggestion that r 501(b), relating to defects or errors in the proceeding, applies in this case. Whether r 501(a) or (c) applies is a more complex question.

18. Rule 501(a) requires amendments for the purpose of “deciding the real issues in the proceeding”. In Etna v Arif [1999] VSCA 99; [1999] 2 V.R. 353, Batt JA (with whom Charles and Callaway JJA agreed), reviewing the meaning of the phrase “real questions in controversy between the parties”, noted that there were few cases in which the meaning of that expression or like expressions had been expounded. However, at 364 he referred to the decision of the Full Court of the Supreme Court of Victoria in Dwyer v O’Mullen (1887) 13 V.L.R. 933, which included the following comments by Williams J at 940:

[The words “for the purpose of determining the real questions in controversy between the parties”] mean that the amendment is to be allowed to determine some question which the parties have been agitating between themselves before the day of trial. I do not say that that question must necessarily appear upon the pleadings in some form, but that it should be one that has been in dispute or agitated between the parties before the trial, and which they intended to raise, but by some slip did not. The learned judge to whom the application is made has to decide upon the materials before him whether the matter as to which amendment is sought be such question or not.

19. There is no suggestion in any of the material before me that the parties had previously recognised a TPA claim as part of this action but that the claim had simply failed to make it into the pleadings (although counsel for the plaintiff did suggest that the defendants ought to have realised that a TPA claim would be part of the proceedings). Nor is there anything in the pleadings as they stand that suggests that the TPA claim would better address the real issue of what PE Pty Ltd should have done for the plaintiffs and whether that task was done properly.

20. I am satisfied that the real issues in this proceeding, namely whether PE Pty Ltd is liable to the plaintiffs for failings in the report provided by PE Pty Ltd, can be adequately decided on the bases already pleaded, namely breach of contract and negligence. In reaching this conclusion I note that the issue of liability is quite separate from the issue of a defendant’s capacity to meet an award of damages arising out of that liability.

21. Rule 501(c) requires amendments for the purpose of “avoiding multiple proceedings”. This is only relevant in the current matter if there is scope for a separate proceeding being initiated against PE Pty Ltd, or against Mr Enders, in reliance on s 52 of the TPA. There is no suggestion that separate action is being contemplated. If any such action is initiated, an application to consolidate the proceedings could be made. However, the initiation of such proceedings would raise the limitation issues already mentioned, and may therefore not be available, so I do not consider that r 501(c) obliges me to permit the amendment under consideration in order to avoid multiple proceedings that may not in any case emerge. This does not, of course, rule out permitting the amendment concerned under another provision.

22. Accordingly, I find that r 501 does not require the making of the amendments to the statement of claim that would be necessary to add the TPA claim against the current defendant.

Rule 502

23. Rule 502(1) empowers me, if I am persuaded that there are amendments of the statement of claim that should be made, to grant the necessary leave, but there is nothing in the rule that of its own force appears to support the plaintiffs’ claim for leave to make the amendments.

24. Furthermore, r 502(6) specifies that r 502 is subject to r 503, which deals with the impact of limitation periods on amendments.

Should the Court’s discretion be exercised to allow the amendments?

25. Counsel for the plaintiffs submitted that there were four criteria relevant to the application to amend the statement of claim, being that the proposed amendment:

(a) must not be obviously futile;

(b) must be made for a proper purpose;

(c) must not cause prejudice that cannot be compensated by other orders including costs; and

(d) must not be contrary to the administration of justice.

26. Counsel for the plaintiffs did not cite authority for these criteria, but counsel for the defendants did not dispute them, and also conceded that, as to the proposed amendment to add the TPA claim, all these criteria were satisfied except that relating to prejudice.

27. Counsel for the plaintiff asserted that there would be no prejudice if the amendments sought were allowed, because the essential content of the plaintiffs’ case would be no different. This, she said, is because the material on which the TPA claim is based is already set out in the affidavits that have been provided by Mr Enders on behalf of the defendant company, and no further evidence would need to be gathered on behalf of the defendant.

28. It may be true that no further evidence would be required for the determination of the proposed TPA claim. On the other hand, a claim of misleading or deceptive conduct under the TPA seems to me to raise legal issues that are quite different from the legal issues raised by a breach of contract or negligence claim, and I reject the plaintiff’s submission that the trial could have proceeded immediately after the TPA claim was added. Rather, if the TPA claim had been added on the first morning of a trial set down for only two days, it would have been necessary to vacate the trial date and grant the defendant an adjournment for further preparation.

29. Counsel for the plaintiffs made submissions about fairness to the plaintiffs in the context of whether Mr Enders should be joined as a party. They will be discussed in that context, but they do not seem to be relevant to the current application. It is not clear how adding a TPA claim against PE Pty Ltd will improve the plaintiff’s position as against that company. Nor is it clear that adding the claim would improve the plaintiffs’ position in relation to joining Mr Enders as a defendant or successfully pursuing any claim against him. It is however clear that proceedings may be taken against persons allegedly involved in a contravention of s 52 of the TPA even though there are no proceedings against the allegedly contravening corporation; see Matheson Engineers Pty Ltd v El Raghy [1992] FCA 417; (1992) 37 FCR 6, in which French J said at 9:

Section 82 of the Trade Practices Act creates a cause of action for loss or damage suffered by a person by conduct of another in contravention of a provision of Pt IV or Pt V which the person who has suffered the loss or damage may recover “by action against that other person or against any person involved in the contravention”. The words of the section in this respect are clear and do not impose as a condition of accessorial liability a requirement that the primary contravenor be a party to the action. It may be that in many cases a primary corporate contravenor should be joined as a respondent so that the entire dispute may be determined. In other cases the primary contravenor may be a company in liquidation or just insolvent. There may be no point to the joinder of that company in those circumstances ...

30. In considering whether to exercise my discretion to grant leave to amend (at the last minute and nearly seven years after the events giving rise to the action), I have taken account of:

(a) my view that the real issues between the plaintiffs and the original defendant can be adequately decided on the existing causes of action (see [20] above);

(b) my conclusion that giving leave for the amendments would have required the trial date to be vacated, with consequential impacts on other matters awaiting hearing; and

(c) the fact that the plaintiffs offered no explanation at all for seeking to add the TPA claim against the original defendant at such a late stage (as indicated above, it does not seem that this was a necessary preliminary to adding Mr Enders as a defendant, and nor was it suggested that any relevant circumstances had recently changed, that earlier relevant changes in circumstances had recently come to light, or that there would be any particular point in adding the TPA claim against PE Pty Ltd in terms of improving the plaintiffs’ position).

Conclusions on discretion

31. For these reasons, I consider that it would be inappropriate to exercise my discretion in the plaintiffs’ favour in this part of the matter, and the application for leave to make amendments to add a claim under s 52 of the TPA against the original defendant must be dismissed.

32. Leave will be granted under rule 502 to the non-contentious amendments of the statement of claim, but I will need to hear the parties on the identification of exactly which changes to the statement of claim are to be permitted.

Is there anything that would prevent the Court from exercising its discretion?

33. My conclusion set out in [31] above means that I do not need to consider the impact of any limitation period in relation to this application. However, since the plaintiff made extensive submissions about the effect of r 503, which deals with limitation periods, it is appropriate to make some brief comments on that issue.

34. Rule 503, which is set out in the Appendix, is expressed to apply in relation to an application for leave to make amendments mentioned in the rule if a relevant limitation period has ended (r 503(1)). Counsel for the plaintiffs conceded that the relevant period of limitation had ended for the purposes of r 503(1). The rest of the rule set outs the circumstances in which three kinds of amendments may be made. Rule 503(2) refers to amendments correcting mistakes in the name or identity of a party. Rule 503(3) refers to amendments changing the capacity in which a party sues. Rule 503(4) deals with amendments that include new causes of action.

35. Counsel for the plaintiff says that r 503(4) is applicable in this case, and I note that this implies a concession that the s 52 claim is a new cause of action. I accept counsel’s submission that the new cause of action in this case arises “out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding”.

36. I accept that, apart from the impact of the limitation period under the TPA, I would have been empowered to exercise a discretion under r 503(4) to permit amendments of the statement of claim to include the TPA claim. However, since I have already decided on other grounds that the discretion should not be exercised, it is unnecessary to consider further at this stage the real scope for exercising the discretion under r 503(4) or, in particular, the effect of the limitation period set out in s 82(2) of the TPA.

Impact of Aon v ANU

37. After written submissions had been exchanged but before this judgment was finalised, the High Court handed down its decision in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 83 ALJR 951 (Aon v ANU), a case also involving an application for leave to make substantial amendments to a statement of claim, albeit amendments that would have required significant extra evidence to be considered and that were sought three days into a four-week trial. In that case, all members of the High Court expressed firm views about, in effect, the weight to be given to the various interests sought to be balanced in r 21 of the CPRs. French CJ said at [5] to [6]:

In the proper exercise of the primary judge’s discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU’s statement of claim should not have been allowed. The discretion of the primary judge miscarried.

It appears that a factor in the decision of the primary judge and of the Court of Appeal was the decision of this Court in JL Holdings. That case arose out of an entirely different factual setting. However, to the extent that statements about the exercise of the discretion to amend pleadings in that case suggest that case management considerations and questions of proper use of court resources are to be discounted or given little weight, it should not be regarded as authoritative.

38. That decision supports the conclusion I had reached on the s 52 amendment rather than changing it—in those circumstances, and having regard to the fact that Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 had not been cited by counsel anyway, I saw no need to invite the parties to make submissions about the impact of Aon v ANU.

Leave to join Mr Enders as a party

39. The other contentious amendments were those that would operate to add Mr Enders as a party. I note that in their written submissions, the plaintiffs indicated that the only remaining claim is to add Mr Enders as a defendant to a claim under ss 52 and 82 of the TPA. Foreshadowed amendments against Mr Enders in tort and in reliance on an alleged contravention of s 74 of the TPA would not be pursued. I take the opportunity to point out that s 74 of the TPA, which implies certain warranties into relevant contracts, is not capable of being contravened, and therefore does not provide any basis for an action under s 82, which requires a contravention of a relevant provision (Arturi v Zupps Motors Pty Ltd [1980] FCA 164; (1980) 49 FLR 283 at 284-287).

40. The first point to make, which needs to be made because of an odd excursion by both counsel in the course of oral argument, is that this application must be treated in the way it was formulated, namely as an application to join Mr Enders as a party, and therefore covered by the rules on joinder, rather than the rules on amending a statement of claim.

41. In the case of Bridge Shipping Pty Limited v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231, the High Court made it clear that although some changes to the names of parties were permissible in reliance on the rules relating to amendments, other more substantive changes relating to parties were not. McHugh J at 260-261 said of Rule 36.01(4) of the Supreme Court Rules (Vic), which said “A mistake in the name of a party may be corrected ... whether or not the effect is to substitute another person as a party”:

Rule 36.01(4) is a remedial rule and should be given a beneficial interpretation. It is proper to give it the widest interpretation which its language will permit. It should be interpreted to cover not only cases of misnomer, clerical error and misdescription but also cases where the plaintiff, intending to sue a person he or she identifies by a particular description, was mistaken as to the name of the person who answers that description. In my opinion, Evans v Charrington and Lloyd Steel were correctly decided.

To give the rule the meaning for which Bridge contends does not mean that a person can sue any person and then at a later time substitute another person for the original defendant. The rule imposes three limitations on a person’s right to amend. First, there must be a mistake. Secondly, the mistake must be “in the name of a party”. Thirdly, the court may only make the order where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise: r 36.01(6). [reference omitted]

42. The equivalent rule in the ACT is r 502(4). However it is irrelevant in this case. There is no mistake in the name or identity of any party in this case, and no amendment is necessary to correct any such mistake. The omission from the original statement of claim of a reference to Mr Enders may have been ill-judged, but it is not a mistake in the name or identity of a party. Rule 503(4), cited by counsel for the plaintiff in response to the submissions by counsel for the defendant knocking down the straw man of r 502, is equally irrelevant.

43. I have considered the application to join Mr Enders as a defendant by reference to the following questions:

(a) Is there any obligation on the Court to permit the joinder?

(b) If not, should the Court’s discretion be exercised to permit the joinder?

(c) If so, is there anything that would prevent the Court from exercising its discretion accordingly?

Is the Court obliged to give leave for Mr Enders to be joined as a defendant?

44. The claim the plaintiffs seek to make against Mr Enders arises out of a contravention of s 52 of the TPA. That section (set out in the Appendix) prohibits a corporation, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 75B(1) of that Act (also set out in the Appendix) defines a person “involved in” a contravention of provisions which include s 52, and s 82 (the relevant provisions of which are set out in the Appendix) permits a person who has suffered loss or damage by conduct of another person in contravention of provisions including s 52 to recover the amount of the loss or damage by action against that other person or any person involved in the contravention. The claim is that Mr Enders was involved in a contravention of s 52 constituted by conduct of PE Pty Ltd, and that the plaintiffs are entitled to recover from Mr Enders the amount of the loss or damage caused by the contravention.

45. Division 2.4.2 deals with joinder of parties. Rules 210, 211(1), 212 and 220(1), were identified as possibly relevant.

Rules 210 and 220(1)

46. Rule 210 requires the inclusion as parties of all persons “whose presence as a party is necessary to enable the court to adjudicate effectively and completely on all issues in dispute in a proceeding”. This rule applies to all proceedings from the start of those proceedings, not just when amendments are contemplated. I do not read it mainly as a direction to the court about the exercise of a judicial discretion but as an exhortation to the parties to get the pleadings right. Of course, this does not mean that the court need not take account of that exhortation in deciding on applications to join parties.

47. Rule 220(1)(b) empowers the court to order the inclusion of a person as a party where this is “necessary to enable the court to adjudicate effectively and completely on all issues in dispute in the proceeding”.

48. This power may also be exercised if “the person ought to have been included as a party” (r 220(1)(a)); this seems to be a reference back to the r 210 requirement about persons whose presence as a party is necessary, and for present purposes does not seem to add to r 220(1)(b).

49. In relation to the application to add a s 52 claim against the original defendant, I indicated at [20] above that I was satisfied that the real issues in this proceeding, namely whether PE Pty Ltd is liable to the plaintiffs for failings in the report provided by the company, can be adequately decided on the bases already pleaded, namely breach of contract and negligence. In relation to the statement of claim in its original form, and for similar reasons, I am not persuaded that the presence of Mr Enders as a party is necessary to enable the Court to adjudicate effectively and completely on all issues in dispute in the proceeding. The proceeding was initiated against the consultancy company, PE Pty Ltd, which was the party to the contract and the entity which provided a service that was allegedly provided negligently and in breach of contract (and possibly in a way that was misleading or deceptive). Mr Enders would clearly be a significant witness in such a proceeding, but there is nothing in the original statement of claim nor in the defence that would require him to become a party.

50. Here, issues concerning Mr Ender’s liability were not on any argument in dispute under the original statement of claim (which of course related only to actions in tort and contract).

51. Thus, nothing in rr 210 and 220 seems to require the joinder of Mr Enders as a party in respect of the original statement of claim.

52. I consider that this finding about the effect of rr 210 and 220 would still be correct even if I had decided to give leave for the amendment sought to add a claim under s 52 of the TPA against the original defendant. No argument was made that s 52 TPA claims against corporations can only be properly decided if everyone who might be “involved” for the purposes of s 82 of the TPA is joined in the proceeding.

Rule 211(1)

53. Rule 211 is said by the plaintiffs to be the appropriate rule under which the plaintiffs’ application to join Mr Enders should be decided. Rule 211 permits common issues of law or fact, or a variety of issues arising out of the same transactions or events, to be dealt with in proceedings involving multiple parties each of whom has a particular dispute with another party or parties. Rule 211(1) would permit a dispute between the plaintiffs and Mr Enders over the building report to be joined in the same proceedings as the dispute between the plaintiffs and PE Pty Ltd about the building report, but the rule does not of itself require the two disputes to be dealt with together. This may be contrasted with the way in which r 210 requires a party to be joined as a party to a proceeding in the very specific circumstances referred to in that rule.

54. Counsel for the plaintiff in written submissions said, in relation to the possible joinder of Mr Enders under r 211:

... the combination of claims (ss 52, 75B and 82 of the TPA) which have common questions of law and fact and arise out of precisely the same transaction/events as the existing causes of action pleaded (in contract and tort), require the joinder of Mr Enders, because without him as a party they cannot otherwise be brought.

55. I note first that the three TPA sections mentioned permit one claim against Mr Enders, namely that Mr Enders, being an involved person as defined in s 75B, is liable under s 82 for PE Pty Ltd’s contravention of s 52. It is clearly correct that unless Mr Enders is joined in the proceedings this claim against him cannot be made in the proceedings. I cannot see, however, that this identifies a reason for joining Mr Enders as distinct from a consequence of not joining him.

Rule 212

56. Rule 212 was mentioned by counsel for the defence. That provision appears to say that a person may be included as a defendant in a proceeding whether the person is sued jointly, severally or in the alternative. No doubt this rule has a role to play in setting the framework for civil actions in the ACT courts, but it does not seem to add anything in the current context. In particular, it does not seem to require or permit Mr Enders to be joined as a defendant, whether jointly, severally or in the alternative, unless there is some other basis for joining him at all.

Significance of multiple TPA claims

57. Neither party canvassed the possibility that I might refuse leave to add a s 52 TPA claim against the original defendant but be inclined to give leave to add Mr Enders as the defendant in a TPA claim arising under s 82 in relation to the original defendant’s contravention.

58. In the absence of such submissions, and noting my comments on the application of rr 210 and 220, I can see no reason why such a TPA claim against Mr Enders would be required to be joined with a proceeding against the alleged contravening corporation involving different causes of action and not including a TPA claim, notwithstanding that the two proceedings arise out of the same general circumstances (in this case the report prepared by Mr Enders and supplied to the plaintiffs by PE Pty Ltd).

59. I am satisfied that none of rr 210, 211, 212 and 220, and nothing in the TPA, require Mr Enders to be joined as a party in the original proceedings, and no other basis was suggested for a finding that the Court was obliged to give leave to join Mr Enders.

Should the Court’s discretion be exercised to allow the joinder?

60. The next question for consideration is whether there is any basis for exercising the discretion under r 211 to join a TPA claim by the plaintiffs against Mr Enders with the existing contract and tort claims by the plaintiffs against PE Pty Ltd.

61. Counsel for the plaintiffs sought to address any argument that adding Mr Enders as a defendant would prejudice him in a way that could not be compensated, by pointing out:

(a) that the case the plaintiffs would bring against Mr Enders is effectively the same case as the one that has been brought against the defendant company;

(b) that Mr Enders has been aware of that case since it was initiated; and

(c) that Mr Enders has been instructing on that case on behalf of the original defendant all along.

62. I have already found (at [28] above) that the legal issues raised by a s 52 claim are different from the issues raised by a breach of contract or negligence claim, and to that extent I reject the plaintiffs’ submission that the case against Mr Enders is “effectively the same case” as the existing case against PE Pty Ltd. It is arguable, however, that the need to develop a defence to a new claim arising out of the same facts is something that could largely be compensated by an adjournment and costs.

63. As to the suggestion that Mr Enders had been giving instructions on behalf of the defendant, counsel for Mr Enders noted that Mr Enders is only one of two directors of the company, but he declined to make any further response on that issue.

64. Counsel for the plaintiffs also pointed out that if a s 52 claim could be made out against PE Pty Ltd, then Mr Enders might also be liable for that contravention under 75B and 82(1) of the TPA. The fact that both PE Pty Ltd and Mr Enders might be found liable in respect of the same contravention of s 52 of the TPA would favour of the joinder of Mr Enders, except that the s 52 claim against PE Pty Ltd is not now to go ahead.

65. Counsel for the plaintiffs cited Birtles v The Commonwealth [1960] VR 247 (Birtles) at 251 as authority for the proposition that joining additional parties in an action might have been permitted under the applicable rules (Rule 11, which was in similar terms to r 220(1) of the CPRs) where the transactions on which the action was based would raise the question whether, “if the original defendant was not liable to compensate the plaintiffs for damage suffered by him, some other person proposed to be added as a defendant might be considered liable in the circumstances”. This, she said, favoured the exercise of my discretion to allow Mr Enders to be joined as a party following the voluntary liquidation of the defendant company. Birtles related to an application to join into an action for personal injuries a firm of solicitors whose negligence might have been responsible for the personal injuries action falling foul of limitation provisions.

66. Birtles is not harmful to the plaintiffs’ arguments, but seems to be only peripherally relevant. In particular, the current case does not seem to raise issues of whether the original defendants or the proposed new defendant are more likely to be found liable to the plaintiffs; the problem for the plaintiffs is not whether the original defendant might not be liable to the plaintiffs, so as to make it appropriate to add another party who might be liable, but whether, if the original defendant is found to be liable, it has any assets to meet an award against it.

67. Finally, in support of her argument that it would be unfair that the plaintiff’s claim in damages might be effectively defeated, irrespective of its merits, by the voluntary liquidation of the defendant corporation after the limitation period for action against Mr Enders had expired and only days before the scheduled trial, counsel for the plaintiffs submitted that:

... the material facts and allegations pleaded originally would always have been understood by the defendant company and its advisors as potentially giving rise to ss. 52, 75B and 82 claims. They should be taken to have known that as soon as the defendant company revealed that it had no assets to satisfy any judgement that the plaintiffs were likely to recover from it, the plaintiffs would seek to attach accessorial liability to Mr Enders pursuant to the TPA. It is submitted [that] neither the defendant company nor its advisors could credibly assert that the defendant company was confused as to what the plaintiffs’ claim against it and Mr Enders might be when fully informed (and in a timely manner) as to the apparently relevantly always parlous financial state of the defendant. The reality was that from a practical point of view there was no other claim that the plaintiffs in their position might pursue.

68. On the other hand, it seems equally clear that the plaintiffs were aware that the defendant company effectively consisted only of Mr Enders himself, and therefore that the plaintiffs might reasonably have anticipated the voluntary liquidation of that company when it faced a damages claim well in excess of its assets; my view is not altered by counsel’s comment that because of Mr Enders’ claim to be “the pioneer of Australian building consultancy”, the plaintiffs had no reason to suspect that the company had no assets. Indeed, the plaintiffs might reasonably have wondered from the beginning of this proceeding about the capacity of PE Pty Ltd to meet any award against it, or, even earlier again, about whether the defendant was properly insured in respect of the professional services it provided.

69. All of this suggests that much earlier consideration should have been given to the potential for pursuing Mr Enders personally as well as through his company. It is hard to see why the defendant, or more accurately Mr Enders, should have been obliged to infer that the plaintiffs would at some stage wish to make other claims against either of them, instead of being entitled to assume that the claims the plaintiffs wished to make were the claims that the plaintiffs had specified in the statement of claim.

70. In contrast to the application to add a TPA claim against the original defendant, the application to join Mr Enders is explained by the original defendant’s action in going into voluntary liquidation a week before the trial date in circumstances which make it unlikely that the original defendant will meet any judgment in favour of the plaintiffs. Despite my suggestion above that the plaintiffs might have been expected to anticipate this, and despite the fact that this also would have required vacation of the trial date, I would in all the circumstances have been inclined to exercise my discretion to permit the joinder of Mr Enders as a defendant if that discretion had been available.

71. However, for reasons set out below, I do not consider that discretion is available.

Is there anything that would prevent the Court from exercising its discretion?

What is the applicable limitation period?

72. The claim sought to be made against Mr Enders arises under s 82(1) of the TPA. Section 82(2) of the TPA (which is set out in the Appendix) specifies a limitation period, by permitting action to be commenced “at any time within 6 years after the day on which the cause of action that relates to the conduct accrued”.

What is the relevant date for limitation purposes?

73. At the hearing, there was argument about the date on which the various causes of action had arisen, but in written submissions the plaintiffs conceded “that the s 82 claim accrued on 6 August 2002” (this was the date when the plaintiffs were first advised of the defects in the building).

74. There seems to be no argument that a new proceeding under the TPA could not now be instituted against Mr Enders. The question therefore is whether the limitation period specified in s 82 can be effectively avoided by the giving of leave for Mr Enders to be joined as a party in the action against PE Pty Ltd.

Restrictions on joinder arising from limitation provisions

75. Counsel for the plaintiffs relied on r 242 to permit the joinder of Mr Enders despite the expiration of the limitation period. That rule (set out in the Appendix), says that where a person is included or substituted under division 2.4.2 (which includes rr 210, 211, 212 and 220), the start date of the proceeding in relation to that person is the date of the joinder order or another date stated in the order (r 242(2)). Rule 242(2) is subject to r 242(3), which is as follows:

However, an earlier date must not be stated in the order if the inclusion of ... the person on that date would be outside a limitation period applying to the person. [emphasis added]

76. Counsel for the plaintiffs submitted that r 242(3):

operates so as to confer on the Court the discretion, where a limitation period has expired, to nominate an earlier effective date within the applicable period so as to render a claim within time.

77. Rule 242 is not easy to interpret.

78. It is clear that if leave is given for a party to be joined under s 242(1), the effective date specified could be the date on which leave is given or a later date. These options are permitted by r 242(2) and not excluded by r 242(3). The operation of r 242(3) in relation to earlier dates is not so clear, but what is clear is that it does not expressly provide as contended on behalf of the plaintiffs.

79. The expression “limitation period” does not seem to be defined for the purposes of the CPRs, but it is used in r 503 (Amendment—after limitation period), where there is a reference to “a relevant period of limitation [having] ended”, and it is apparent that r 503 applies after the expiry of any limited period within which a particular proceeding may be commenced. That is, the “limitation period” is the period within which the relevant action could be commenced (rather than, for instance, the period after the time limit has expired). On this basis, r 242(3) expressly prevents the court specifying an earlier date that is a date on which the proceeding would already have been time-barred (that is, a date outside the limitation period). If that is all the provision does, then it is an unobjectionable (if possibly unnecessary) prohibition; unnecessary in that specifying an earlier date that would still leave the action involving the new party time-barred would be a pointless exercise and is therefore unlikely to be considered even in the absence of r 242(3).

80. However, there are two other possible approaches to r 242(3). One, presumably the one relied on by counsel for the plaintiffs but not made explicit by her, is that, as well as expressly imposing the unnecessary prohibition described above, r 242(3) also by implication permits, or even requires, an earlier date to be specified provided that the date is within the limitation period—that is, it permits or requires the court to specify an earlier date so as to overcome the effect of a time-bar. The other and, I consider, more likely explanation of r 242(3) is that there is a mistake in the drafting, in that the rule was intended to prohibit the specification of an earlier date such that “the inclusion of ... the person on that date would be within a limitation period applying to the person”. That is, the drafter has simply picked the wrong preposition (“outside” instead of “inside” or, more elegantly, “within”).

81. In choosing among possible interpretations of r 242(3) I note two matters in particular.

The Queensland rules

82. In support of her argument about the operation of r 242(3), counsel for the plaintiffs referred to rr 74(4) and (5) of the Uniform Civil Procedure Rules 1999 (Qld) (the Queensland rules), and submitted that these rules are comparable to r 242 in the ACT.

83. The Uniform Civil Procedure Rules 1999 (Qld) include rr 69 and 74(4) and (5), which are currently as follows:

69 Including, substituting or removing party

(1) The court may at any stage of a proceeding order that—

(a) a person who has been improperly or unnecessarily included as a party, or who has ceased to be an appropriate or necessary party, be removed from the proceeding; or

(b) any of the following persons be included as a party—

(i) a person whose presence before the court is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in the proceeding;

(ii) a person whose presence before the court would be desirable, just and convenient to enable the court to adjudicate effectually and completely on all matters in dispute connected with the proceeding.

(2) However, the court must not include or substitute a party after the end of a limitation period unless 1 of the following applies—

(a) the new party is a necessary party to the proceeding because—

(i) property is vested in the party at law or in equity and the plaintiff’s or applicant’s claimed entitlement to an equitable interest in the property may be defeated if the new party is not included; or

(ii) the proceeding is for the possession of land and the new party is in possession personally or by a tenant of all or part of the land; or

(iii) the proceeding was started in or against the name of the wrong person as a party, and, if a person is to be included or substituted as defendant or respondent, the person is given notice of the court’s intention to make the order; or

(iv) the court considers it doubtful the proceeding was started in or against the name of the right person as a party, and, if a person is to be included or substituted as defendant or respondent, the person is given notice of the court’s intention to make the order;

(b) the relevant cause of action is vested in the new party and the plaintiff or applicant jointly but not severally;

(c) the new party is the Attorney-General and the proceeding should have been brought as a relator proceeding in the Attorney-General’s name;

(d) the new party is a company in which the plaintiff or applicant is a shareholder and on whose behalf the plaintiff or applicant is suing to enforce a right vested in the company;

(e) the new party is sued jointly with the defendant or respondent and is not also liable severally with the defendant or respondent and failure to include the new party may make the claim unenforceable;

(f) for any other reason—

(i) a claim made, or ground of defence raised, in the proceeding before the end of the limitation period can not be maintained; or

(ii) relief sought in the proceeding before the end of the limitation period can not be granted;

unless the new party is included or substituted as a party.

(3) If the court makes an order including or substituting a party, the court may give directions about the future conduct of the proceeding.

74 Amendment of proceedings after change of party

(4) If an order is made including or substituting a person as a defendant or respondent, the proceeding against the new defendant or respondent starts on the filing of the amended copy of the originating process.

(5) However, for a limitation period, a proceeding by or against a new party is taken to have started when the original proceeding started, unless the court orders otherwise.

84. There is nothing in the Queensland rules that appears to support the plaintiffs’ argument about r 242(3).

Are the Queensland rules comparable to r 242?

85. I am not convinced that there is any basis for accepting that the effect of rr 74(4) and (5) of the Queensland rules is comparable to that of r 242. It is true that a note to r 242 refers to r 74(4) and (5) of the Queensland rules, being a note which, as explained in r 8 of the CPRs, draws attention to “equivalent or comparable (though not necessarily identical)” provisions of other legislation “for comparison”. However, a comparison may reveal that provisions are similar, or that they are in fact significantly different.

86. First, there is no particular similarity between r 74(5) (Qld) and r 242(3) in the ACT. Rule 74(5) says explicitly (subject to the rather odd “for a limitation period”) that the proceeding against the new party is taken to have started when the original proceeding started. This provision is a rational element of a scheme that also includes rr 69 and 74(4), which together permit joinder of new parties in carefully defined circumstances where those parties should be treated as having been parties from the beginning. In contrast, r 242(3) explicitly says that the start date of the proceeding is not to be backdated to specified dates if a limitation period has expired. There is no basis at all on which to read r 242(3) as intended, alone and unassisted, to create either a scheme equivalent to the Queensland scheme or another scheme permitting backdating of joinder so as to avoid limitation periods in general.

87. Secondly, even if I were prepared to accept that the ACT scheme for joinder of parties after a limitation period has expired was intended to be identical with the Queensland scheme, I do not see that this would advance the plaintiffs’ case.

Operation of Queensland rules

88. My interpretation of the Queensland provisions as they would apply in the instant case is as follows:

(a) Rule 69(1) permits the court to add a party to a proceeding.

(b) Rule 69(2) restricts the circumstances in which a new party can be added after the end of a limitation period to those set out in r 69(2)(a) to (f).

(c) Rule 74(4) specifies that generally a proceeding against an added defendant starts on the filing of an amended copy of the originating process.

(d) Rule 74(5) says that “for a limitation period”, a proceeding against an added defendant is taken to have started when the original proceeding started, unless the court orders otherwise.

(e) It is not clear what “for a limitation period” means exactly, but whatever it means, r 74(5) applies to the addition of a party as mentioned in r 74(4), and the addition of a party must have been achieved under another provision, apparently r 69; r 74(5) does not confer a separate power to add a party.

(f) Thus, r 74(5) says, in effect, that if a party is added outside a limitation period in circumstances specified in r 69, then the proceeding in relation to the party is taken to have started when the original proceedings started and therefore within the limitation period.

89. Rule 74(5) does not provide a general power to add a party after a relevant limitation period has expired. That power is conferred by r 69 and is limited by r 69(2), which carefully defines a set of circumstances in which a new party needs to be added to give proper effect to, or to correct in some way, the original proceedings. None of the circumstances set out in r 69(2) would cover the circumstances of the instant case.

90. I note that the Queensland rules, and a related provision in the Supreme Court of Queensland Act 1991, have been amended since they were enacted, and in their original form were the subject of some criticism in Greig v Stramit Corportion Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17. In that case the Queensland provisions were found not to assist liquidators who had sought, out of time, to join a company as a respondent to an application for an extension of time within which to bring proceedings in respect of voidable transactions of the company in liquidation.

A rational approach to legislative drafting

91. The second matter I take into account is that, if the aim of r 242(3) was really to permit or require the specification of an earlier date so as to avoid a time-bar, there is no rational explanation for doing this not explicitly but by way of an implication that might be drawn from a provision that in explicit terms has a different operation (albeit a fairly pointless operation).

Conclusions about r 242(3)

92. Accordingly, I decline to read r 242(3) as, by implication, permitting or requiring the court to specify an earlier date so as to overcome the effect of a time-bar.

Operation of r 242(2)

93. This finding does not rule out the possibility that r 242(2) gives the court unlimited scope to set a date of effect for joinder, except as limited by r 242(3), and therefore includes scope to set a date of effect so as to defeat a limitation period. However, I am satisfied that if r 242(2) were to be read this way, the rule would have made a substantial change to the position that previously obtained in the ACT (and which was reflected more broadly in Australia), and that there is no basis on which to adopt such a reading.

94. In reaching that conclusion I note several matters.

95. The position in the ACT before the CPRs took effect in 2006 seems to have been that, relevantly, proceedings against an added defendant started only when the defendant was added, subject to an order of the court (O 19, r 14 Supreme Court Rules 1937), that leave to amend to correct a mistake in the name or identity of a party could only be given after the expiration of a relevant limitation period if the court considered it just (O 32, r 1), and that there was no other express power to add a new defendant with a date of commencement so as to avoid the effect of a limitation period.

96. In the case of Philip Morris Ltd v Bridge Shipping Pty Ltd [1994] 2 VR 1, Ashley J noted (at 14):

Counsel for the plaintiff and Bridge were unable to refer me to any case where an order for joinder of a party had been made in a way that operated to defeat a limitation defence otherwise available to the added party. Such a step is one of very great significance. It would involve, in substance, the court abrogating the effect of an Act of Parliament. In my opinion, it is not open. In other words, the power of the court under r. 1.14(1)(b) or upon joinder under r. 9.06 does not extend to ordering that the proceedings against an added party be deemed to have commenced at a date prior to the making of the order, so as to preclude the added party availing itself of a limitation defence otherwise available.

97. There was nothing in the Explanatory Statement for the Court Procedures Rules 2006 that even hinted at an intention to empower the ACT courts in general terms to join a new defendant with a date of effect that would defeat the effect of a limitation period; in fact that Explanatory Statement said, of Part 2.4, that it:

... brings together various rules that are relevant to different types of parties, as well as to removing and including parties. It also includes rules on separating and joining claims. This part generally follows the current practice of both Courts, with provisions being expressed in clearer and more modern terms.

98. The plaintiffs submit that it was in fact the legislature’s intention to give the courts the discretion to permit “the joinder of parties with the effect of defeating a limitation defence in appropriate circumstances”, but provides no basis for her submission. In particular as already mentioned, I can find no basis for assuming that the intention in the ACT was to replicate the Queensland scheme, whatever the effect of that scheme was or is.

99. If the intention was to empower the ACT courts to permit the joinder of a defendant with a date of effect that would defeat a limitation period, then the power needs to be conferred more explicitly than has been done so far.

Interaction of Commonwealth limitation periods and ACT court rules

100. Having found that there is no power in the ACT to permit joinder of a defendant to be back-dated so as to avoid the operation of a limitation period, there is no need for me to examine the various cases dealing with the operation of s 82(2) of the TPA and its interaction with rules of court in the States and Territories. I do note, however, that in John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, held at [99] to [100] that:

... “rules which are directed to governing or regulating the mode or conduct of court proceedings” are procedural and all other provisions or rules are to be classified as substantive.

These principles may require further elucidation in subsequent decisions but it should be noted that giving effect to them has significant consequences for the kinds of case in which the distinction between substance and procedure has previously been applied. First, the application of any limitation period, whether barring the remedy or extinguishing the right, would be taken to be a question of substance not procedure ... [reference omitted]

Conclusions on limitation issue

101. I find that while r 242 might permit me to give leave to add Mr Enders as a defendant in the current action, this could only be done with a current or prospective date of effect, and so the claim would be immediately defeated by the conceded expiry in August 2008 of the limitation period imposed by s 82 of the TPA. In those circumstances, there is no point in permitting the joinder and the application must be refused.

Orders

102. The orders are as follows:

(a) leave to amend the statement of claim to add a claim under s 52 of the TPA against PE Pty Ltd is refused;

(b) leave to amend the statement of claim to particularise negligence, to change the damages sought, and to make certain other minor changes is granted, but I will hear the parties on the exact amendments permitted to be made to the statement of claim;

(c) leave to join Peter Enders as a defendant and to add a claim against him under ss 52 and 82 of the TPA is refused.

I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Penfold.

Associate:

Date: 4 September 2009

Counsel for the first and second plaintiffs: Ms H L Donohoe SC

Solicitor for the first and second plaintiffs: Wood Fussell

Counsel for the defendant: Mr G Blank

Solicitor for the defendant: Pamela Coward Higgins Lawyers

Dates of hearing: 30-31 October 2008

Dates of written submissions: 8, 12, 22 December 2008; 25 February 2009

Date of judgment: 4 September 2009

Appendix—Legislation

Trade Practices Act 1974 (Cth)

52 Misleading or deceptive conduct

(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

Note: For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

75B Interpretation

(1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 75AU, 75AYA or 95AZN, shall be read as a reference to a person who:

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention.

(2) In this Part, unless the contrary intention appears:

(a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter;

(b) a reference to the Federal Court is a reference to the Federal Court of Australia; and

(c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory.

82 Actions for damages

(1) Subject to subsection (1AAA), a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

...

(2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.

Note: Part VIB restricts awards of compensation for death or personal injury, and sets out time limits for commencing actions for damages for death or personal injury.

Court Procedures Rules 2006 (ACT)

210. Necessary parties

(SCR o 19 r 12; NSW r 6.24 (1); Qld r 62)

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.

211. Including parties—common issues of law or fact

(SCR o 19 r 1 (1), r 2 and r 5; MC(CJ)R s 142; NSW r 6.19; Qld r 65 (1))

(1) Two or more people may be included as plaintiffs or defendants in a proceeding—

(a) if—

(i) separate proceedings by or against each of them may give rise to a common issue of law or fact; and

(ii) any of the rights to relief claimed in the proceeding (whether joint, several or alternative) are in relation to, or arise out of, the same transaction or event or series of transactions or events; or

(b) if the court orders that they be included.

(2) A person included as a plaintiff under subrule (1) must not start a proceeding against the defendant in relation to the same cause of action unless the court gives leave.

(3) If an application for an order under subrule (1) (b) or leave under subrule (2) is made during the proceeding, the application must be made in accordance with part 6.2 (Applications in proceedings).

(4) For the Supreme Court, if an application for an order under subrule (1) (b) or leave under subrule (2) is made before the proceeding starts, the application must be made by originating application.

212. Including parties—defendants may be sued jointly, severally, or in alternative

(SCR o 19 r 5)

(1) If a plaintiff claims a right to relief against a person in a proceeding (whether jointly, severally or in the alternative), the person may be included as a defendant in the proceeding.

(2) The court may enter judgment against any defendant found to be liable in accordance with the defendant’s proportionate liability.

(3) This rule is subject to the Civil Law (Wrongs) Act 2002, chapter 7A (Proportionate liability).

220. Court may include party if appropriate or necessary

(SCR o 19 r 3 and r 12 (2) (b) and (3); MC(CJ)R s 147 (1); NSW r 6.24 and r 6.27; Qld r 69)

(1) The court may order that a person be included as a party to a proceeding if—

(a) the person ought to have been included as a party; or

(b) including the person as a party is necessary to enable the court to adjudicate effectively and completely on all issues in dispute in the proceeding.

(2) The court may make an order under this rule—

(a) at any stage of the proceeding; and

(b) on application by the person or a party to the proceeding or on its own initiative; and

(c) whether the person to be included should be a plaintiff or defendant.

Note 1 Pt 6.2 (Applications in proceedings) applies to an application for an order under this rule.

Note 2 Rule 6901 (Orders may be made on conditions) provides that the court may make an order under these rules on any conditions it considers appropriate.

242. Included or substituted parties—date proceeding taken to start

(SCR o 19 r 14 (2) and o 21 r 2 (8); MC(CJ)R s 150 (3); NSW r 6.28; Qld r 74 (4) and (5))

(1) This rule applies if the court orders that a person be included or substituted as a party in the proceeding.

(2) The date the proceeding starts in relation to the person is taken to be—

(a) the date when the order is made; or

(b) if another date is stated in the order—that date.

(3) However, an earlier date must not be stated in the order if the inclusion or substitution of the person on that date would be outside a limitation period applying to the person.

501. Amendment—when must be made

(SCR o 32 r 1 (2))

All necessary amendments of a document must be made for the purpose of—

(a) deciding the real issues in the proceeding; or

(b) correcting any defect or error in the proceeding; or

(c) avoiding multiple proceedings.

502. Amendment—of documents

(SCR o 32 r 1 (1), (3) and (8); MC(CJ)R s 126 (1) and (3); Qld r 375)

(1) 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.

(2) The court may give leave, or give a direction, on application by the party or on its own initiative.

Note 1 Pt 6.2 (Applications in proceedings) applies to an application for leave or a direction under this rule.

Note 2 Rule 6902 (Leave may be given on conditions) provides that, if the court gives leave under these rules, it may give the leave on the conditions it considers appropriate.

(3) The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started.

(4) If there is a mistake in the name or identity of a party, the court must give leave for, or direct the making of, amendments necessary to correct the mistake, even if the effect of the amendments is to substitute another person as a party.

(5) This rule does not apply in relation to an amendment of an order.

Note See r 6906 (Mistakes in orders or court certificates) for amendment of orders.

(6) This rule is subject to rule 503 (Amendment—after limitation period).

503. Amendment—after limitation period

(SCR o 32 r 1 (3), (5) (6) and (7); Qld r 376)

(1) This rule applies in relation to an application for leave in a proceeding to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.

Note Pt 6.2 (Applications in proceedings) applies to an application for leave under this rule.

(2) The court may give leave to make an amendment correcting a mistake in the name or identity of a party, even if the effect of the amendment is to substitute a new party, only if—

(a) the court considers it appropriate; and

(b) the court is satisfied that the mistake sought to be corrected—

(i) was a genuine mistake; and

(ii) was not misleading or likely to cause any reasonable doubt about the identity of the person intending to sue or intended to be sued.

(3) The court may give leave to make an amendment changing the capacity in which a party sues, whether as plaintiff or counter-claiming defendant, only if—

(a) the court considers it appropriate; and

(b) the changed capacity in which the party would then sue is a capacity in which the party might have sued on the day the proceeding was started by the party.

(4) The court may give leave to make an amendment to include a new cause of action only if—

(a) the court considers it appropriate; and

(b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.

507. Amendment—of pleadings after close of pleadings

(Qld r 380)

A party may amend the party’s pleadings after the close of pleadings only with the court’s leave.

Note 1 Pt 6.2 (Applications in proceedings) applies to an application for leave under this rule.

Note 2 The registrar may make an order amending a pleading if the parties affected by the order consent to it and the registrar considers it appropriate (see r 1611 (Orders—by consent)).