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Supreme Court of the ACT |
Last Updated: 19 May 2009
DENNIS LABATHAS v SPORTS CENTRES AUSTRALIA PTY LIMITED (ACN 096 066 901) trading as CANBERRA INTERNATIONAL SPORTS & AQUATIC CENTRE (CISAC) & THE CLUB GROUP PTY LIMITED (ACN 106 378 947) & PATRICK LYONS
[2009] ACTSC 31 (27 March 2009)
PRACTICE AND PROCEDURE – joinder of defendant – joined defendant not served with joinder application – whether joinder a nullity – whether power in court to treat as irregularity – limitation period expiring subsequent to joinder – joinder declared valid
Court Procedures Rules 2006, r 21, 111, 220, 223, 504, 1450, 1451, 6008, 6431, 6432
Court Procedures Act 2004, s 68
Local Court (Civil Claims) Act 1970 (NSW), s 75A
Craig v Kanssen [1943] 1 KB 256
Hoskins v Van Den-Braak (1998) 43 NSWLR 290
Southern Equities Corporation Limited v Bond (unreported)
New Asian Shipping Co Limited v Sultan (unreported)
No. SC 212 of 2008
Judge: Master Harper
Supreme Court of the ACT
Date: 27 March 2009
IN THE SUPREME COURT OF THE )
) No. SC 212 of 2008
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: DENNIS LABATHAS
Plaintiff
AND: SPORTS CENTRES AUSTRALIA PTY LIMITED (ACN 096 066 901) trading as CANBERRA INTERNATIONAL SPORTS & AQUATIC CENTRE (CISAC)
First defendant
AND: THE CLUB GROUP PTY LIMITED (ACN 106 378 947)
Second defendant
AND: PATRICK LYONS
Third defendant
ORDER
Judge: Master Harper
Date: 27 March 2009
Place: Canberra
THE COURT DECLARES THAT:
1. Order 2 made by acting Deputy Registrar Andric on 4 August 2008 is valid notwithstanding the plaintiff’s failure to serve the application dated 23 July 2008 on the third defendant.
2. The third defendant’s application of 5 December 2008 be dismissed.
3. The costs of the application be the first and second defendants’ costs in the cause.
4. That the third defendant file and serve any defence to the amended statement of claim and any defence to the notice of the second defendant claiming contribution and indemnity within 28 days.
1. This is an interlocutory application by the third defendant for orders in the course of an action for damages for personal injury.
2. The plaintiff commenced the proceedings on 14 March 2008 against the first defendant only. The plaintiff’s case as pleaded in the statement of claim was that the defendant owned or operated a gymnasium which provided personal trainers for reward. On or about 12 August 2005, a personal trainer employed by the first defendant, identified as the present third defendant, manipulated the plaintiff’s back negligently, causing injury. The third defendant was an employee, agent or servant of the first defendant. The first defendant’s negligence was said to comprise holding the third defendant out as a physiotherapist when he was not, and causing or allowing the third defendant to manipulate the plaintiff’s back when to the knowledge of the first defendant he was not qualified to do so. The statement of claim did not set out particulars of any negligence on the part of the third defendant, or assert in so many words that the first defendant was vicariously liable for any negligence of the third defendant.
3. The originating claim was served on the first defendant, then the sole defendant, on 20 March 2008.
4. On 23 July 2008 the plaintiff made an application for orders joining the second and third defendants.
5. The application was endorsed as having been made under rules 220 and 504 of the Court Procedures Rules 2006. Rule 220 provides that the Court may order that a person be included as a party to a proceeding if the person ought to have been a party, or if 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. A person so included may be added as a plaintiff or as a defendant (or, presumably, as a third or subsequent party). Rule 504 provides that an originating process may be amended only with the Court’s leave, although the rule is expressed not to apply to a pleading or particular included in an originating process.
6. The solicitor having the conduct of the action on behalf of the plaintiff was unaware of the requirement in rule 223 that an application to include a person as a defendant must be served on the person. Rule 6008 provides that an application to be served on a person who is not an active party must be served personally unless the Court otherwise orders. No point is taken about service on the second defendant, which was presumably properly served under rule 6431 or 6432, rules which provide for service on corporations. However, the third defendant says that he was not served personally, and did not find out about the application until after the orders sought had been made. He was, he says, thus deprived of any opportunity to oppose the application.
7. On 4 August 2008 the acting Deputy Registrar ordered that the second and third defendants be added as parties.
8. An amended originating claim with amended statement of claim, showing the second and third defendants as parties, was filed on 6 August 2008. In summary, the statement of claim now asserts that the first defendant owned the premises from which the gymnasium operated, and the business name under which it operated. The second defendant leased the premises, operated and managed the gymnasium and employed its staff. The business employed the third defendant as a personal trainer (this allegation is unclear: it should be clarified whether the assertion is that the first or the second defendant was the employer). Particulars of the negligence of the second defendant are identical to those earlier pleaded against the first defendant. The third defendant is said to have been negligent in holding himself out as a physiotherapist, manipulating the plaintiff’s back when he was not qualified to do so, and doing so in such a way as to cause injury.
9. The amended originating claim was personally served on the third defendant on 21 August 2008.
10. On 10 September 2008 a conditional notice of intention to respond was filed by the third defendant giving notice that he proposed to assert an irregularity, a procedure prescribed by rule 111. Sub-rule 3 of that rule required him to apply for an order under rule 40 within 28 days. Sub-rule 111(4) provides that if the defendant fails to apply for such an order within time, the conditional notice of intention to respond becomes an unconditional notice. The defendant then has fourteen days to file a defence. The present application was not filed until 5 December 2008, well outside the 28-day period.
11. The first and second defendants filed defences on 28 January 2009. They are represented by the same solicitors. On the same day the second defendant filed a notice claiming contribution or indemnity from the third defendant. There is an inference open from this that if the plaintiff had not joined the third defendant, the second defendant would be likely to have joined him as a third party.
12. Counsel for the third defendant submits that the order made by the acting Deputy Registrar on 4 August 2008 constituted an irregularity, in circumstances where the order was made without evidence of service on the proposed third defendant.
13. Section 68 of the Court Procedures Act 2004 provides as follows:
68 Formal defects to be amended
(1) No proceedings in the Court shall be invalidated by any formal defect or by any irregularity, unless the Court is of opinion that substantial injustice has been caused and that the injustice cannot be remedied by an order of the Court.
(2) The Court may make an order declaring that any proceeding is valid notwithstanding any such defect or irregularity.
14. Rule 1450 relevantly provides as follows:
(1) A failure to comply with these rules in relation to a proceeding is an irregularity and does not make the proceeding, or a document, step taken or order made in the proceeding, void.
(2) If there has been a failure to comply with these rules in relation to a proceeding, the court may—
(a) set aside all or part of the proceeding; or
(b) set aside a step taken or order made in the proceeding; or
(c) declare a document or step taken to be void; or
(d) declare a document or step taken to be valid; or
(e) make another order that could be made under these rules (including an order dealing with the proceeding generally); or
(f) make any order dealing with the proceeding generally that it considers appropriate.
15. Rule 1451 is also relevant:
(1) An application for an order under rule 1450 must be made—
(a) within a reasonable time; and
(b) before the applicant has taken any fresh step in the proceeding after becoming aware of the failure to comply with these rules.
(2) The application must set out details of the failure to comply with these rules.
16. These rules must be applied in the light of rule 21:
(1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense.
(2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving—
(a) the just resolution of the real issues in the proceedings; and
(b) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
(3) The parties to a civil proceeding must help the court to achieve the objectives.
(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.
17. I am satisfied that there has been an irregularity. The question is what should be done now, in the present state of the proceedings, to facilitate the just resolution of the real issues in the proceedings.
18. The third defendant is now in a position where he has been served personally with the amended originating application and statement of claim. His solicitors have more recently been served with a notice claiming contribution and indemnity.
19. The limitation period applicable to the plaintiff’s claim is three years from the date of injury, 12 August 2005. The limitation period expired on 12 August 2008. The amended originating claim was filed on 6 August 2008, within the limitation period. It was served on the third defendant on 21 August 2008. Notwithstanding the requirement in the rules to serve a person sought to be joined as a party with the application, by inference for the purpose of providing the person with an opportunity to be heard in opposition to the application, the fact remains that if the plaintiff had not started proceedings at all until 6 August 2008, and had then started proceedings against all three defendants, no limitation defence would have been available to the third defendant.
20. Nothing in the evidence or the submissions on behalf of the third defendant influences me to doubt that the application to join the third defendant, assuming that he had been served and had taken the opportunity to oppose it, would have succeeded. The application was made within the limitation period and the claim against the third defendant, assuming that the facts pleaded are established at trial, would appear to have arguable prospects of success.
21. Counsel for the third defendant submits that I should deal with the irregularity by setting aside the order made by the acting Deputy Registrar joining his client as a party, with consequential orders setting aside service of the amended originating application upon the third party and removing him from the proceedings.
22. If I were to deal with the matter in that way, I would expect that the second defendant would proceed to join the third defendant as a third party. There would be no limitation difficulty standing in the way of that course of action. The third defendant would thus remain vulnerable to some liability, in theory to liability for the whole of the plaintiff’s damages, in the event that the plaintiff succeeds against the second defendant and that the second defendant succeeds in its claim for indemnity.
23. Counsel for the third defendant relied primarily on the judgment of the Court of Appeal (Lord Greene MR and Goddard LJ) in Craig v Kanssen [1943] 1 KB 256, to the effect that a person who is affected by an order which can properly be described as a nullity is entitled ex debito justitiae to have it set aside, and that an order made against a party who had not been served with the process seeking the order was such a nullity.
24. Counsel for the third defendant also relies on a judgment of the NSW Court of Appeal (Mason P, Priestley and Beazley JJA) in Hoskins v Van Den-Braak (1998) 43 NSWLR 290. The Court of Appeal there set aside a local court judgment against a person who had not been served with the claim, citing the principle in Craig v Kanssen, notwithstanding a statutory provision, section 75A of the Local Court (Civil Claims) Act 1970 (NSW), which provided that a failure to comply with a requirement of the Act or the Local Court Rules was to be treated as an irregularity and was not to nullify the proceedings or any judgment in the proceedings.
25. I accept that the principle applied in Craig v Kanssen is applicable in Australia as part of the common law. The principle must, however, be viewed in the light of section 68 of the Court Procedures Act and rule 1450.
26. The decision in Hoskins v Van Den-Braak is not particularly apposite to the present circumstances. That arose out of a case which had proceeded to hearing and judgment: it was too late for the exercise of any statutory powers which might have got the litigation back onto a proper footing.
27. The only feature of the present case which might be seen as standing in the way of an order validating the joinder of the third defendant is that the limitation period for the plaintiff to commence proceedings against the third defendant has now expired. Counsel for the plaintiff took me to a number of Australian decisions where validating orders have been made in circumstances not dissimilar to the present, including Southern Equities Corporation Limited v Bond (Supreme Court of South Australia, Burley J, 15 March 1999, unreported) and New Asian Shipping Co Limited v Sultan (Supreme Court of Queensland, Wilson J, 9 August 2005, unreported).
28. It seems to me on balance that the fairest outcome would be to declare the joinder of the third defendant valid notwithstanding the irregularity.
29. As I mentioned earlier, the third defendant’s conditional notice of intention to respond became unconditional 28 days after it was filed. If I had acceded to the third defendant’s application, I could have made ancillary orders overcoming that difficulty, but having regard to the conclusion I have reached, there does not seem to me to be anything further I need to do. The notice of intention to respond is now unconditional. I shall provide the third defendant with a period of a further 28 days to file and serve a defence, and also, if so advised, a defence to the claim for indemnity and contribution. The third defendant’s application of 5 December 2008 will be dismissed.
30. As to costs, the plaintiff’s solicitors concede that he was in default in relation to service of the application to join the third defendant. The plaintiff should have applied for the validating order I propose to make as soon as his solicitors became aware of the failure to comply with the rules. This would have brought the parties before the Court in any event at the plaintiff’s cost. As against this, the third defendant has been unsuccessful in this application, which has occupied most of the hearing time. On reflection it seems to me that the fairest outcome is to order that the costs of the application be the first and second defendants’ costs in the cause. This means that the plaintiff and the third defendant will bear their own costs of the application.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.
Associate:
Date: 27 March 2009
Counsel for the plaintiff: Mr SR Hausfeld
Solicitors for the plaintiff: Stacks with Snedden Hall & Gallop
Counsel for the first and second defendants: Mr MD Robinson
Solicitors for the first and second defendants: Hicksons Lawyers
Counsel for the third defendant: Mr GA Stretton
Solicitors for the third defendant: Elrington Boardman Allport
Date of hearing: 13 February 2009
Date of judgment: 27 March 2009
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