Montgomery v Pickard[2007] QCA 203

SUPREME COURT OF QUEENSLAND

1. WILLIAMS JA: On an application bought by the first plaintiff, William Fraser Montgomery, the learned judge at first instance ordered that William Fraser Montgomery and Sally Teoh Montgomery as trustees for the Montgomery Superannuation Fund be added as second plaintiff and Nan-Frae Holdings Pty Ltd be added as third plaintiff.  But it was also ordered that the action taken by those added plaintiffs "be taken to have started when the amended statement of claim is filed."  From that order each of the three plaintiffs has appealed essentially seeking an order that the order of the primary judge be amended so that the proceeding by the new parties be taken to have started when the original proceedings started (cf r 74(5) of the UCPR).

2. It should be recorded that because the submissions on behalf of the appellants possibly impacted upon the limitation period fixed by s 82 of the Trade Practices Act 1974 (Cth), the solicitors for the respondents served notices pursuant to s 78B of the Judiciary Act 1903 (Cth), but no Attorney-General sought to appear at the hearing. 

3. The original claim and statement of claim were filed on 5 March 2003. W F Montgomery was then the sole plaintiff, and the defendants were Pickard, MTW No. 2 Pty Ltd and MTW No. 1 Pty Ltd.  The claim then made against Pickard was for the sum of $308,528 being:

"1.as damages for negligent and/or fraudulent misstatement;

2. as damages negligence ;
3. as equitable compensation being for breach of fiduciary duty;
4. pursuant to s 82 or alternatively s 87 of the Trade Practices Act 1974 (Cth)."

4. The claims against the other two defendants were for the same amount as being:

"As damages for negligent and/or fraudulent misstatement;

Pursuant to s 82 or alternatively s 87 of the Trade Practices Act 1974 (Cth)."

5. The original statement of claim alleged the following facts relevant for present purposes:

1. Early in 1997 Pickard was Montgomery's accountant whose role included the giving of investment advice;

2. At that time Pickard was a director and shareholder of the other defendants;

3. On a weekend in early February 1997 Pickard approached Montgomery and encouraged him to invest his superannuation funds in the business conducted by the second and third defendants;

4. Pickard made various representations about the business in order to induce Montgomery to invest in it;

5. In reliance upon those representations on 2 April 1997 Montgomery made an investment in the business by outlaying $150,000 for the purchase of units in the business;

6. Consequent upon representations made at intervals by Pickard between April 1997 and June 1999 Montgomery invested further funds totalling $158,528;

7. The representations were false and misleading, the business was not profitable, Pickard could have had no reasonable belief that the business would be a profitable one, and in consequence Montgomery has suffered loss and damage in the amount of $308,528 being the total amount invested by him in the business.  Essentially the allegation was that the business became worthless in 1999.

6. On 18 April 2003 the solicitors for the defendants wrote to the solicitors for Montgomery stating inter alia:

"Whilst we have prepared a draft defence, it is incomplete because it is necessary for our client to review a number of very old files in order to respond to the allegation that the plaintiff made the various further investments pleaded in paragraph 17 of the statement of claim.  It is our present understanding that the allegation is incorrect because the investments were made by various entities related to the plaintiff rather than by the plaintiff himself.  We anticipate that we will need a further week to enable our client to complete those investigations and file a defence.  On the other hand, your client may wish to review those allegations and amend the statement of claim now rather than incur a liability to pay the costs of an amended defence at a later stage."

7. That elicited the following reply from the solicitors for Montgomery:

"We advise that we are prepared to grant an extension of a further seven (7) days from the date of this letter for your client to file their defence.

We advise that no further extensions will be granted, and in the event your client fails to file a defence by 29 April 2003, we are instructed to take steps to enter the default judgment without further notice."

8. The defence of the defendants was then served on 29 April 2003. Relevantly for present purposes that defence pleaded the following:

1. There was a meeting between Montgomery and Pickard in February 1997 but Pickard denies that he approached the plaintiff to encourage him (or him and his wife) to invest superannuation funds in the business;

2. Alleges Montgomery approached Pickard to discuss investment in the business after Montgomery had first discussed the business with one John Dooley;

3. Admits that in February 1997 Pickard was Montgomery's accountant;

4. Denies that Pickard was retained to give investment advice generally to Montgomery but admits that from to time he had given advice to the plaintiff in relation to investments Montgomery was considering;

5. Alleges that "one Steven Roley was retained for reward to give investment advice in relation to the investment of [Montgomery's] superannuation fund";

6. Denies that Montgomery "purchased 700 units in the Unit Trust because the units were purchased by the plaintiff and his wife in their capacity as trustees of the Montgomery Superannuation Fund";

7. Alleges that Montgomery made his own enquiries as to the viability of the business and the appropriateness of the investment;

8. Alleged that Montgomery loaned to MTW No. 2 Pty Ltd the following sums:

A.25 January 1997 – $11,578;

B.2 January 1998 - $5,400;

C.14 January 1998 - $13,650;

D.5 February 1998 – $5,400;

E.18 September 1998 - $30,000;

F.29 December 1998 - $12,500;

(Those sums are particularised in the original statement of claim as being further investments in the business);

9. Alleges that a payment of $15,000 made on 30 March 1998 (being another amount alleged in the original statement of claim as an investment by Montgomery in the business) was not made by Montgomery but was made "by way of loan to the second defendant by the plaintiff and his wife as trustees of the Montgomery Superannuation Fund";

10. Alleges that the payment in the sum of $62,500 made on 15 June 1999 (another amount alleged in the statement of claim to be a further investment by Montgomery in the business) "was made to Leeturn 146 Pty Ltd … in payment for 25% of the issued share capital of Leeturn"; the defendants denied that payment was made by the plaintiff because they believed the payment was made by Nan-Frae Pty Ltd.

9. That defence also contains denials with respect to the misrepresentations and pleads other matters relating to the financial standing of the business in question, but it is not necessary to set out such allegations for present purposes.

10. There was no response to that defence for more than two years. On 27 September 2005 the solicitors for Montgomery wrote to the solicitors for the defendants enclosing a copy of Montgomery's reply. In that letter it was also stated that it was proposed to include a second plaintiff in the proceeding "namely the Trustees of the Montgomery Superannuation Fund in respect of the sums of $150,000 … and $15,000." That letter also suggested that the parties should embark upon a mediation process.

11. In the reply Montgomery admitted that "Steven Roley provided advice in relation to the investment of superannuation funds, but says that, in respect of each of the investments referred to in the Statement of Claim, [Montgomery] relied upon the advice provided by the defendants and referred to therein." The reply also admitted the allegation in the defence that the 700 units in the Unit Trust were purchased by Montgomery and his wife in their capacity as trustees of the Montgomery Superannuation Fund. With respect to the allegation in the defence that Montgomery loaned the second defendant the specified amounts, the reply pleaded that Montgomery was "unable to reply to that factual assertion until after disclosure." The reply also admitted the allegation made in the defence that the sum of $15,000 paid on 30 March 1998 was by way of a loan to the second defendant by Montgomery and his wife as trustees of the Montgomery Superannuation Fund. Finally the reply also admitted that the $62,500 was paid by Nan-Frae Pty Ltd for 25% of the issued share capital of Leeturn.

12. The solicitors for the defendants replied to the letter of 27 September 2005 by a letter dated 5 October 2005 asserting, so far as is relevant for present purposes, the following:

"We … note your client's intention to add the trustees of the Montgomery Superannuation Fund to the proceeding as a second plaintiff. 

Given that your client has claimed that the alleged loss arose no later than June 1999, we confirm that the relevant limitation period has expired and that therefore your client cannot in fact add any party to the proceedings as a plaintiff.

There does not appear to be any reason for seeking to join the trustees to the proceeding at this late stage, particularly given the fact that our client's defence was served upon you more than 2½ years ago. 

Could you therefore please clarify the basis on which your client seeks to join the trustees as plaintiffs to the proceedings."

13. There followed some correspondence between the solicitors relating to mediation.

14. By way of disclosure Pickard had furnished a list of documents on 1 September 2005. There was also correspondence between the solicitors indicating some dispute about Pickard complying with requests to supply copies of documents and particulars of further documents. That ultimately led to the letter of 13 October 2006 from Pickard's solicitor to Montgomery's solicitor which relevantly stated:

"We have received further instructions from our client in relation to the additional documentation sought on behalf of your client.  Our client has instructed us that the task of identifying the documents you have requested has been made difficult given the passage of time since the affairs of the company and various trusts involved were wound down.  Our client has no intention to withhold any information from your client but asks that your client appreciates that locating the documents requested involves not only inspection of his storage facilities in Townsville but also an inspection of all documentation held on behalf of our client in storage facilities in Brisbane. 

Our client has now attended upon both storage locations and has instructed us that he expects that he will be able to complete the review of all documentation obtained from those storage facilities within the next three weeks."

15. Then on 9 November 2006, Pickard's solicitors wrote to S Rowley in Melbourne asking could he "advise as a matter of urgency whether you still hold any documentation in relation to the advice you provided to Mr and Mrs Montgomery as trustees of the Montgomery Superannuation Fund in relation to the Fund's proposed investment in the unit trust." The reply from Rowley's solicitors dated 10 November 2006 was to the effect that he was currently checking old records to determine whether he held any documents of the type mentioned. 

16. It should also be noted that in an affidavit by Montgomery's solicitors in support of the joinder application it was stated that in about 1995 Pickard introduced Montgomery to Rowley who was a financial planner and a manager of self-funded superannuation funds. It also asserted that since that time Rowley "has attended to administrative matters associated with the management of the Montgomery Superannuation Fund and Mr Pickard handled the balance of the plaintiff's business affairs until the professional relationship ceased".

17. One of the documents disclosed in Montgomery's list of documents was a facsimile received from Pickard on 25 March 1997 enclosing a copy of a letter sent by Pickard to Rowley. That letter to Rowley was also disclosed. Prima facie those documents suggest that Rowley played some role in the initial investment.

18. The application seeking the joinder of the additional plaintiffs was filed on 10 October 2006, some three and a half years after the defence had questioned the sufficiency of parties to the proceeding and 12 months after the joinder of the second plaintiff had been foreshadowed.  The return date was 17 November 2006.

19. Pickard swore an affidavit in response to that application. In it the following relevant assertions are made:

"I have not … acted for the plaintiff and his associated entities in respect of all of the plaintiff's business affairs.  I have only ever provided accounting and taxation advice and services to the plaintiff and some of his associated entities.  Whilst I accept that the plaintiff and I have discussed informally some of the plaintiff's businesses over the years, this has never been by way of investment advice to the plaintiff.   At all times the plaintiff has sought and relied on investment advice from specialist investment advisors, including Mr Rowley of London Partners, … JB Were and ABN Amro Morgans.

It is incorrect to say that Mr Rowley only attended to administrative matters associated with the management of the Superannuation Fund.  I always understood Mr Rowley had been retained by the plaintiff (in his capacity as trustee of the Superannuation Fund) to invest funds, provide investment advice and reports to the trustees of the Superannuation Fund; 

…

It is now difficult for me to recall specifically the events surrounding my appointment as director of Nan-Frae and the acquisition of one share in the company, which I held non-beneficially, because of the passage of more than thirteen years since I acquired the share.  I recall being asked by the plaintiff to act as director and to hold a share in the company to ensure the company had at all times, two directors.  I recall that this occurred at or about the time the plaintiff and his wife separated, however there may have been other reasons which I cannot now recall.

My recollection of the events leading to the acquisition of shares in Leeturn 146 Pty Ltd … not only by the plaintiff but also by me and other parties associated with the business of the second and third defendants, was that the plaintiff was to acquire the shares through Nanfrae and not in his personal capacity.  I have been unable to locate any documents to verify why, if it did, this proposal changed. …

In the light of the difficulties I have to locate any further documents relevant to the claim(s), I can only assume that the records were either destroyed after seven years in accordance with my usual business practice, retained by Mr Claussen [the former accountant for the MTW businesses] or handed the plaintiff at some time.

I am concerned that if given leave to join the trustees and Nanfrae as plaintiffs to the claim I will be unable to defend the claims in any meaningful way due to my inability to recall specific details of conversations I had with the plaintiff (in his capacity as trustee and generally) and the plaintiff's advisor(s) due to the passage of almost ten years since the events occurred and my inability to refresh my memory of those events by reference to documents created at the time. 

In relation to the proposed joinder of the trustees as plaintiffs to the proceeding, I recall having a number of discussions with Mr Rowley in the time leading up to the acquisition of units in the Unit Trust by the Superannuation Fund particularly in relation to the rationale for the acquisition of units in the Unit Trust by the Fund.  I believe I would have recorded each conversation in writing in accordance with my usual business practice.  In the absence of my documents, including my notes of conversations with the plaintiff (as trustee) and Mr Rowley in particular, I am concerned as to how I am to defend the claims now proposed given the amount of time which has passed since the events occurred.

In particular I say that I have been unable to locate:

(a)Copies of correspondence passing between me and other persons involved in the business with Mr Rowley;

(b)Copies of diary notes and other records recording numerous discussions I had with the trustees of the Superannuation Fund, Mr Rowley and other investors in the Unit Trust;

(c) Correspondence and other documents which I sent to and received from the trustees and Mr Rowley prior to the trustees' acquisition of units in the Unit Trust, including the business financial and accounting records.

…

I am also concerned with the proposal by the plaintiff to join Nanfrae to the proceedings because again, despite my extensive enquiries, I have been unable to locate documents to clarify the capacity in which the plaintiff acquired shares in Leeturn or in relation to the circumstances surrounding the plaintiff's acquisition of those shares."

20. Prior to the hearing of the application the person Claussen was located by the plaintiffs' solicitors and spoken to by the solicitor for Pickard. Claussen informed the solicitor for Pickard that the name Leeturn rang a bell but he could not recall how or if Leeturn was involved in the business of the second and third defendants. He had no recollection of an entity known as Nan-Frae Holdings Pty Ltd. He did not have any documentation in his possession relating to the business and did not know where that documentation might be. He would not feel confident about giving evidence in relation to the proceeding other than in a general sense and did not feel able to give any evidence as to the claim by Nan-Frae in particular. He was able to recall the plaintiff or entities associated with the plaintiff acquiring an interest in the business but he was unable to say how or when those interests were acquired.

21. A proposed amended statement of claim was exhibited to the solicitor's affidavit of 9 October 2006, but the matter was adjourned from the return date to 5 December 2006 to enable a further draft to be prepared. That further draft was exhibited to the solicitor's affidavit of 29 November 2006.

22. The relevant changes affected by the final amended statement of claim can be summarised as follows:

1. The amount claimed against each defendant was reduced from $308,528 to $305,950;

2. At the meeting in February 1997 S T Montgomery was present;

3. At all material times Pickard was accountant for each of the three plaintiffs;

4. The payment of $150,000 on 2 April 1997 was made by both W F and S T Montgomery as trustees of the superannuation fund;

5. The following payments (particularised in paragraph 17(b)) were made by W F Montgomery to the second defendant either by way of loan or alternatively by way of capital advance:

1. 25 September 1997 $11, 500;

2. 2 January 1998 $5,400;

3. 14 January 1998 $13,650;

4. 5 February 1998 $5,400;

6. On 30 March 1998 the second plaintiffs made a payment (particularised in paragraphs 17(c)) of $15,000 by way loan or, alternatively, capital advance to the second defendant;

7. The third plaintiff made the following payments (particularised in paragraph 17(d)) by way of loan to the second defendant:

1. 18 September 1998 $30,000;

2. 29 September 1998 $12,500;

8. On or about 15 June 1999 W F Montgomery, or alternatively Nan-Frae Holdings Pty Ltd, paid $62,500 (particularised in paragraph 17(e)) in exchange for a 25 per cent shareholding in Leeturn 146 Pty Ltd as part of a re-arrangement involving:

1. Clearance/or reduction of the second defendant's indebtedness to the Commonwealth Bank of Australia and others;

2. Transfer of the business to a corporate purchaser in which Leeturn would acquire and hold 25 per cent shareholding and an unrelated party the remaining 75 per cent shareholding;

1. Generally the representations alleged in the original statement of claim to be false and misleading were made to each of the three plaintiffs and were relied on by each of the three plaintiffs in making the payments particularised;

10. The following is alleged to be the consequence of the conduct of the defendants:

1. The first, second and third plaintiffs have suffered loss and damage in that they have not been repaid or recouped or realised any part of the investments, loans or capital advances particularised in the pleading;

2. The first plaintiff has suffered loss or damage in the amount of:

1. $98,450 being the total of the amounts referred to in paragraphs 17(b) and 17(e) of the pleading;

2. alternatively $35,950 being the total of the amounts referred to in paragraph 17(b) of the pleading;

3. The second plaintiff has suffered loss and damage in the total amount of $165,000;

4. The third plaintiff has suffered loss or damage in the amount of:

1. $105,000 being the total of the amounts referred to in paragraphs 17(d) and 17(e) of the pleading;

2. alternatively $42,500 being the total of the amounts referred to in paragraph 17(d) of the pleading;

23. That resulted in the final claims being as follows:

"The First Plaintiff claims the following relief:

A.as against the first defendant $98,450 or, alternatively $35,950:

(a)being for negligent and/or fraudulent misstatement;

(b)being for negligence;

(c)as equitable compensation being for breach of fiduciary duty;

(d)pursuant to s 82 or alternatively s 87 of the Trade Practices Act.

B.as against the second and third defendants, $98,450 or, alternatively, $35,950:

(a)being for negligent and/or fraudulent misstatement;

(b)pursuant to s 82 of the Trade Practices Act.

The second plaintiffs claim the following relief:

C.as against the first defendant $165,000:

(e)being for negligent and/or fraudulent misstatement;

(f)being for negligence;

(g)as equitable compensation being for breach of fiduciary duty;

(h)pursuant to s 82 or alternatively s 87 of the Trade Practices Act.

D.as against the second and third defendants $165,000:

(c)being for negligent and/or fraudulent misstatement;

(d)pursuant to s 82 or alternatively s 87 of the Trade

Practices Act.

The third plaintiff claims the following relief:

E.as against the first defendant $105,000 or, alternatively $42,500:

(i)being for negligent and/or fraudulent misstatement;

(j)being for negligence;

(k)as equitable compensation being for breach of fiduciary duty;

(l)pursuant to s 82 or alternatively s 87 of the Trade Practices Act.

F. as against the second and third defendants $105,000 or, alternatively, $42,500:

(e)being for negligent and/or fraudulent misstatement;

(f)pursuant to s 82 of the Trade Practices Act."

24. It was against that background that the application was heard by the judge at first instance on 5 December 2006. For reasons published on 8 December 2006 the order indicated at the outset of these reasons was made.

25. There was no oral evidence called at the hearing at first instance; significantly that meant that Pickard was not cross-examined on his affidavit.

26. The applicant at first instance relied principally on r 69(2)(a)(iii) of the UCPR as providing the basis on which the joinder could be made.  Pursuant to r 69(1)(b) the court may at any stage of a proceeding order that:

"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 proceedings;

(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."

27. Those provisions are of general import, and prima facie would be wide enough to cover the application in question. But r 69(2) provides that the court must not include or substitute a party after the end of a limitation period unless one of the conditions thereafter set out is satisfied.  The expression "limitation period" is defined in Schedule 4 to mean "limitation period under the Limitation of Actions Act 1974".   As noted at first instance the applicant relied on r 69(2)(a)(iii) as providing the ground on which the court could make the joinder not withstanding the expiration of the limitation period.  That condition is in the following terms:

"the proceeding was started in … the name of the wrong person as a party…".

28. The defendants at first instance submitted that r 69(2)(a)(iii) had no application, as it was aimed at cases of misnomer and not at circumstances in which the position is that although the existing plaintiff was a correct party it also should have joined someone else as a further plaintiff.

29. The learned judge at first instance rejected that submission referring to the decision of the High Court in Bridge Shipping Pty Ltd v Grand Shipping S.A. (1991) 173 CLR 231 and the decision of Muir J in Interline Hydrocarbon Inc v Brenzil P/L & Ors [2006] QSC 184 and concluded that the rule in question was not limited to cases of misnomer.  That is obviously correct.

30. That led his Honour to say that the "position then so far as a proposed claim by the trustees is concerned is that no additional issue in the pleadings is now raised by the addition of the trustees." But he went on to say that the position in relation to the claim by Nan-Frae Holdings Pty Ltd is "a little less clear". In that regard the learned judge at first instance summarised what was said by Pickard in his affidavit as to his inability to recall events concerning the Leeturn transaction and the fact that relevant documents can no longer be located. The learned judge at first instance quoted extensively from the affidavit of Pickard the passages I have summarised above. He then made the observation that this "evidence is not altogether satisfactory, although it was unchallenged."

31. His Honour also noted that it was "difficult to accept that any relevant records would have been destroyed after the seven years with the action on foot in which the first defendant had raised the defence that he did not advise the then plaintiff about his or the superannuation fund's investments but that was done by Mr Rowley." But the judge did refer to the specific contention in Pickard's affidavit that he had an "inability to locate specific documents relating to dealings between himself and Rowley and himself and trustees of the superannuation fund and other correspondence and documents."

32. Then the judgment went on:

"So far as the claim by the trustees are concerned it does not seem that the addition of the applicants as plaintiffs would itself create any difficulties for the respondents.  As I have said, all of these issues were live issues in the pleading as they stood after the delivery of the defence.

One suspects that the difficulties as to documentation are not now substantially greater than they would have been at the time when the action was commenced. 

However some eight or nine years has passed since the relevant events.  This passage of time necessarily impacts upon the capacity to obtain a fair trial.  In addition the matter cannot simply be approached by comparing the position at that time and now."

33. It was at that stage in his reasoning that the learned judge at first instance referred to the decision of the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, especially passages from the reasoning of McHugh J at 552, 554 and 555. 

34. That reasoning at first instance was specifically challenged on the hearing of the appeal. Senior counsel for the appellants contended that it was wrong for the judge at first instance to hold himself bound by what was said in Taylor, given that the situations were entirely different.  Taylor involved an attempt to extend a limitation period relying on s 31 of the Limitation of Actions Act 1974 whereas this was an application to join a plaintiff after the expiration of the relevant limitation period.  The learned judge at first instance specifically acknowledged that Taylor was concerned with a different type of application but he said that "the same considerations must apply here".  In my view it was not wrong for him to approach the matter in that way.  The judge at first instance did not say he was specifically bound by Taylor to arrive at any particular decision; rather he acknowledged that considerations recognised as being relevant in the reasoning in Taylor were also relevant here.  Those considerations can be shortly stated.  First, as time goes by, relevant evidence is likely to be lost.  Second, it is oppressive to a defendant to allow an action to be bought long after the circumstances giving rise to it have passed.  Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them once the limitation period has expired.  In other words limitation periods are important and ought not lightly be overruled.  Such considerations are clearly relevant to the question of whether or not in the exercise of discretion the new parties should be joined, and if so, on what terms.

35. The learned trial judge then returned to what Pickard had to say about the transaction involving Nan-Frae Holdings Pty Ltd and Leeturn Pty Ltd and concluded:

"So far as this claim is concerned, the case is one in which the delay in raising it, is said to itself to give rise to possible prejudice in addition to the general prejudice which is said to affect the defendant's capacity to have a fair trial on the issues already raised concerning the relationship between the first defendant and the present and proposed plaintiffs."

36. The learned judge at first instance then went on to note that whilst explanation for delay is not essential it is a relevant consideration on the exercise of discretion and in this case he concluded that there was "no explanation at all for the delay between the period when the solicitors for the defendants invited the solicitors for the applicants to consider the question of the appropriate parties and the making of this application." In my view that conclusion was clearly open on the evidence.

37. It was in those circumstances that the learned judge at first instance concluded that "at least in relation to some important aspects of the matter … serious issues of possible prejudice including prejudice in relation to specific documents" had been established and in consequence he was persuaded that the applicants had not made out a case justifying the exercise of discretion granting the relief sought.

38. The conclusion reached by the learned judge at first instance was with respect to an interlocutory matter and involved the exercise of a discretion. Whilst the applicant could bring himself within r 69(2)(a)(iii) it was held there was nevertheless such prejudice to the defendants if an order adding the plaintiffs was made that it was appropriate, in the exercise of discretion, to refuse to make the order.

39. From the time the proceedings were commenced in March 2003 the defendants have alleged some prejudice because of the time lapse since the events in question occurred. In the letter of 18 April 2003 the solicitors for the defendants referred to the necessity for the defendants "to review a number of very old files in order to respond to the allegation" that Montgomery made the further investments alleged in the original statement of claim. Then in the letter from the defendants' solicitors of 13 October 2006 reference was made to the difficulty of identifying documents requested by the solicitor for the plaintiffs "given the passage of time since the affairs of the company and various trusts involved were wound down." There was reference in that letter to searches at various "storage locations". In the reply delivered 27 September 2005 there was an admission by Montgomery that Rowley had provided some advice in relation to the investment of superannuation funds. The documents disclosed by Montgomery, being a letter from Pickard dated 25 March 1997 enclosing a copy of a letter sent by Pickard to Rowley, suggest some possible involvement by Rowley in the investments the subject of these proceedings.  It is also relevant to note again the statement in the affidavit of Montgomery's solicitors in support of the joinder application that in about 1995 Pickard introduced Montgomery to Rowley who was a financial planner and manager of self-funded superannuation funds.  That affidavit also asserted that since that time Rowley "has attended to administrative matters" associated with the fund in question.  The material reveals Rowley was first approached about the issues raised in these proceedings by the letter of 9 November 2006 from the defendants' solicitors.  So far as the material presently reveals the only response from Rowley has been to the effect that he was checking old records to determine what, if any, documents he held.  Further, so far as the material reveals, Claussen, the former accountant for the corporate defendants, cannot assist either with documentation or recollection of matters surrounding the events in question.

40. Given the state of the pleadings a critical issue at any trial would be the advice given by Pickard and/or Rowley with respect to some or all of the investments in question. Not only would the terms of any representation made by either of those persons be of critical importance, but the Court would also have to determine on what representations reliance was placed by one or more of the plaintiffs in making the investments in question. Causation is a critical issue raised on the pleadings and could only be finally determined in the light of the evidence relating to each of the investments pleaded. In his affidavit sworn in connection with the joinder application quoted above, Pickard has specifically alluded to the difficulties he has in recollecting the subject matter of conversations and in particular events involving Nan-Frae Holdings Pty Ltd.

41. The problems referred to in the two preceding paragraphs of these reasons become of even greater significance when the nature of the claims made by the plaintiffs in the final amended statement of claim are analysed. Even after three attempts at preparing a statement of claim the plaintiffs are still not able to plead with certainty the nature of the transactions in question. That is highlighted by the extracts from the final amended statement of claim I have set out in paragraphs [22] and [23] of these reasons. In paragraph 17(b) of that statement of claim it is alleged that Montgomery paid to the second defendant a total of $35,950 either by way of loan or by way of capital advance. Then in paragraph 17(e) it is alleged that either Montgomery or Nan-Frae Holdings Pty Ltd paid $62,500 in exchange for a 25 per cent shareholding in Leeturn 146 Pty Ltd. That suggests that the plaintiffs are unable to prove on what basis Montgomery made the payments to the second defendant alleged in paragraph 17(b) and who made the payment referred to in paragraph 17(e). It should be noted that there is also a clear conflict between the admission in the reply that the $62,500 was paid by Nan-Frae Holdings Pty Ltd to Leeturn 146 Pty Ltd and the allegation in paragraph 17(e) that that sum was paid to Leeturn 146 Pty Ltd either by Montgomery or Nan-Frae Holdings Pty Ltd. It is also of significance that the payments referred to in paragraphs 17(b) and (c) were said to be by way of loan or alternatively capital advance, whereas the payments referred to in paragraph 17(d) are said to be by way of loan only to the second defendant.

42. Some of the issues raised in the preceding paragraphs apparently explain why the final claims made by the plaintiffs, set out in paragraphs [23] above, are expressed in many instances to be in the alternative. The pleading itself demonstrates that the plaintiffs are unable to particularise with any precision the nature of the transactions allegedly giving rise to the claims for relief. That prejudices the defendants even further; they are being called upon to respond to indefinite claims made some ten years after the events allegedly giving rise to the causes of action.

43. The above analysis demonstrates that the learned judge at first instance was clearly entitled to come to the conclusion that the defendants had established actual prejudice. That prejudice is not so obvious with respect to the joinder of the second plaintiffs, but on careful analysis it also applies to the claim by that plaintiff. When a claim is made close to the expiration of a limitation period the defendant is frequently at a significant disadvantage, but the defendant must wear that. But when an application is made to make some alteration to such a claim after the expiration of the applicable limitation period the defendant is entitled to rely on not just prejudice which has arisen since the claim was originally made, but also on the prejudice which existed at the time the claim was initially made. In other words prejudice over the whole period since the events giving rise to the cause of action occurred becomes relevant in that situation. Here, as is amply evidenced by the pleadings, the representations made by Pickard and/or Rowley in February/March/April 1997 will be of critical importance to the claim made by the second plaintiffs and Pickard has deposed, without challenge, to the fact that in the absence of documents made at the time recording the conversations he is not in a position to give accurate detailed evidence as to what was said in the course of those conversations. The issue of reliance can only be addressed once specific representations have been identified. That is sufficient to demonstrate, given the findings of the judge at first instance, that Pickard has established actual prejudice with respect to the claim by the second plaintiffs.

44. It was in all of those circumstances that the learned judge at first instance came to the conclusion that he was "not persuaded that the applicants have made out a case for the grant of the relief sought". He was clearly entitled to reach that conclusion. But he then went on to note that so far as there was a claim based on breach of fiduciary duty there was no applicable limitation period. Because of that he concluded that he should make an order permitting the joinder but on the basis that the action taken by the joined plaintiffs (the second and third plaintiffs) should be taken to have started when the amended statement of claim was filed. That meant that all of the plaintiffs were free to pursue the claim for breach of fiduciary duty, and also could pursue any of the other claims if they were able to prove (contrary to what appeared to be the position when the joinder was argued at first instance) that one or more of the other causes of action sued upon arose within an applicable limitation period.

45. Given all of those findings it is not necessary for this Court to determine whether reliance on r 69(2) of the UCPR can result in a plaintiff being joined in a claim pursuant to the Trade Practices Act outside the limitation period fixed by s 82 of that Act.  In those circumstances it is preferable that this Court does not consider the detailed submissions made on that point by senior counsel for the appellants.  It is better if a resolution of that issue is left to a matter in which the issue is decisive.  Given the order made at first instance, which this Court has upheld, the second and third plaintiffs would be able to pursue any claim pursuant to the Trade Practices Act which accrued within six years from when the amended statement of claim was filed.

46. It follows that the appeal must be dismissed with costs.

47. JERRARD JA:  In this appeal I have read the reasons for judgment of Williams JA, and the order proposed by His Honour, and respectfully agree with that.  This appeal was from a discretionary decision in an interlocutory matter, in which the solicitors for the respondent defendants advised those for the plaintiff that some of the claims made against the defendants were pleaded in the name of the wrong plaintiff.  Despite that, the plaintiff’s solicitors took no steps for three years to remedy the deficiency in the pleadings, and a limitation period applicable at the time the claim was filed had expired by the date of the application for leave to amend the pleading.  There was no explanation for any of the delay.

48. The discretionary judgment by the learned trial judge was a sensible one, which did not take away any limitation defence available against the newly added plaintiffs. Particularly, it did not take away any limitation defence available under the Trade Practices Act 1974 (Cth). Confirming those orders on this appeal makes it unnecessary for this Court to consider the source and limitations of power on a court in this State to add a party with a claim under the latter Act, after the end of the limitation period, in proceedings which had begun within the limitation period provided in that Act, and in which similar claims were advanced.  I agree with Williams JA that it is better if resolution of that issue is left to a matter in which it is decisive.

49. The parties presented wide ranging submissions as to which of the laws of Queensland relating to procedure were picked up and applied in these proceedings by s 79 of the Judiciary Act 1903 (Cth), and whether the limitation period in s 82 of the Trade Practices Act had “otherwise provided” as to adding plaintiffs after that limitation period expired.  The submissions included that Uniform Civil Procedure Rules 1999 (Qld) (“the UCPR”) r 69(2) and UCPR r 74(5) were so picked up, albeit with the meaning of “limitation period” appearing in those rules properly construed (differently from the definition) so as to allow their application in proceedings in which State courts were exercising Federal jurisdiction.  Those submissions relied on remarks in Pedersen v Young (1964) 110 CLR 162 by Menzies J at 168, by Mason J in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 95 and Gibbs J at 88; and statements in Australian Securities and Investment Commission v Edensor Nominees (2001) 177 ALR 329 at [68].  It was contended that those rules, so picked up and modified, could be applied to authorise the addition of new parties with claims under the Trade Practices Act 1974 (Cth), and in the absence of orders under UCPR r 74(5), with a result that that would defeat an otherwise available limitation defence under the Trade Practices Act.

50. Irrespective of whether UCPR r 69(2) and UCPR r 74(5) could be thus picked up, contrary to the conclusion of this Court in Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17,^[1] or whether applicable State law relating to procedure was to be found in s 81 of the Supreme Court Act 1991 (Qld), or – arguably – UCPR r 69(1), any applicable State law as to procedure involved a discretionary decision.  Irrespective of the specific law applicable, a strong case existed for declining to add new parties after the end of the Trade Practices Act limitation period, or any limitation period, in the absence of any explanation for the delay as described by Williams JA.  The objections to the addition of a new party as a defendant after a limitation period expired were described in Greig v Stramit Corporation, and apply equally to the addition of new plaintiffs in the same position.  In this proceeding the result is that the orders of the trial judge should be upheld. 

51. FRYBERG J: The plaintiff claims to have advanced some $308,000 in reliance upon Mr Pickard's representations.  The largest part of that, $150,000, is alleged to have been advanced in 1997.  The action was not commenced until 2003, almost six years after that first advance and nearly four years after the last alleged advance.  By commencing the action the plaintiff undertook to the court and the other parties to proceed in an expeditious manner.^[2]  He did not do so.  His solicitor advised him "of the steps necessary to reactivate these proceedings" in late February 2005, but the action continued on its leisurely way.  There is no suggestion in the solicitor's affidavit that the delay was due to any fault on the part of the solicitors.  The plaintiff himself did not make an affidavit.

52. At first instance the judge exercised his discretion adversely to the plaintiff. He gave weight to the overall prejudice which delay of that magnitude would necessarily inflict on any litigant. While not everything that was said in Brisbane South Regional Health Authority v Taylor^[3] can be applied in the present circumstances, I can detect no error of principle in the use which the judge made of that case.

53. The action is misconstituted, a matter which the plaintiff has known since 2003 when the defendants pointed it out. Not until about October 2006 did the plaintiff takes steps to address that deficiency. The judge rightly took into account the absence of any explanation for the delay in making the application. He did not take into account, at least in so many words, the absence of any explanation for the overall delay in progressing the case and for the circumstances which gave rise to the original error. I would probably have done so, but that would not have helped the plaintiff. Also, the analysis by Williams JA of the nature of the plaintiff's claims exposes further matters detrimental to the plaintiff's case.

54. The judge below found and took into account possible prejudice to the defendants in the particular circumstances of the case. I would have given less weight to that possible prejudice than he did, even to the point of reaching a different conclusion; but that is a matter of impression and degree. The discretion did not miscarry in this regard.

55. No error has been demonstrated in the judgment below. The appeal should be dismissed with costs.