Donald Ernest Thompson v Kevin Victor Chandler
[1995] QDC 91
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- Unreported Judgment
- Donald Ernest Thompson v Kevin Victor Chandler[1995] QDC 91
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Donald Ernest Thompson v Kevin Victor Chandler[1995] QDC 91
Donald Ernest Thompson v Kevin Victor Chandler[1995] QDC 91
DISTRICT COURT | No 23 of 1994 |
APPELLATE JURISDICTION
JUDGE O'BRIEN
DONALD ERNEST THOMPSON and KELVIN NORMAN THOMPSON and ELIZABETH JUNE THOMPSON | Respondents |
and
KEVIN VICTOR CHANDLER | Appellant |
TOWNSVILLE
DATE 24/02/95
JUDGMENT
The incurring of accountancy fees by the respondents in order to negotiate with the Commissioner of Taxation.
By an amended plaint and summons filed on 24 June 1994 the respondents sought to add the following allegations against the appellant:
- (1)That he advised the respondents not to pay the income tax as assessed.
- (2)That he failed to advise the respondents that by not paying the income tax as assessed and the late lodgment penalties as assessed the respondents would be liable for late payment penalties.
- (3)That, in breach of contract, he failed to answer requisitions by the Commissioner of Taxation of July 1982 in relation to the business expenditure for the taxation years 1980 and 1981 by reason of which income tax was assessed as allowable deductions. Further, as a consequence of this breach of contract the respondents are alleged to have incurred accountancy fees.
The first matter to be determined is whether the amendments which were allowed by the Stipendiary Magistrate merely constitute particulars of the existing cause of action or whether they in fact raise further and distinct causes of action.
HIS HONOUR: This is an appeal from a decision of the Stipendiary Magistrate at Tully on 13 October 1994 by which the respondents to this appeal were given leave to amend a statement of particulars of claim in accordance with an amended plaint and summons filed by the respondent on 23 June 1994. It is now contended by the appellant, who was the defendant in the proceedings below, that the effect of the amendment was to allow the addition of a new cause of action and thus deprive the appellant of defences which would otherwise be available to him under the Limitation of Actions Act.
It is necessary to make some reference to the history of the litigation. The appellant is an accountant who handled the respondent's tax affairs and it is the manner in which those affairs were handled which gives rise to the litigation. By plaint and summons filed on 13 March 1992, the respondents sought to recover damages, “For breach of contract and negligence”, by reason of the following acts of the appellant:
- (1)A failure to lodge the respondents' income tax returns for the years 1983 and 1984 on time.
- (2)Advice given to the respondents not to pay the penalties as assessed by the Commissioner of Taxation in relation to the late lodgment and the late payment of the 1983 and 1984 income tax assessments.
In Read v. Brown (1888) 22 Q.B.D., 128 at 131, Lord Esher MR with whom Fry L.J. and Lopes L.J. agreed, adopted the following definition of a cause of action:
“...Every fact which it would be necessary for the plaintiff to prove if traversed in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.”
In Letang and Cooper (1965) 1 Q.B., 232 at 242, Diplock Lord Justice defined a cause of action as:
“Simply a factual situation, the existence of which entitled one person to obtain from the Court a remedy against the other.”
In the present case the effect of the amendments was to introduce allegations that the appellant had failed to answer a requisition of July 1982, that he had wrongfully advised the respondents not to pay income tax as assessed, and that he failed to advise the respondents that they would be liable for late payment penalties. Plainly in my view, these represent new facts or new allegations of facts and omissions which were not previously complained of and which, if established, would entitle the respondents to obtain judgment against the appellant.
In my view the amendments which were allowed in this case represent much more than a mere particularisation of the acts or omissions previously alleged. They constitute a new cause of action.
The next matter to be considered is the power of the Stipendiary Magistrate to have allowed such amendments given, as is accepted in this case, that the time limit prescribed by the Limitations of Actions Act, had expired prior to any amendment being sought. The power to amend a statement of particulars of claim is set out in Rule 100 of the Magistrate's Court Rules. The relevant part of which provides as follows:
- “(1)Subject to the subsequent provisions of this Rule the plaintiff may file and serve an amended statement of particulars of claim and a defendant may file and serve an amended entry of appearance and defence or an amended counter-claim at any time before the day of hearing without any order, and any party may increase the amount of his claim or counter-claim on payment of the difference between the fees paid and those payable on the largeramount.
Provided that at the hearing the Court may for any sufficient cause disallow the amendment or give effect thereto on such terms as to costs or otherwise as may be just.
- (2)In an amended statement of particular of claim or counter-claim a new cause of action may be added or substituted with the leave of the Court and on such terms as to costs or otherwise as the Court thinks fit, but not otherwise.”
Although the above rule plainly provides a wide power of amendment it contains no express provision permitting an amendment after the expiration of any relevant period of limitation. That being so, counsel for the appellant has submitted any such amendment should only be allowed in, “Very peculiar circumstances.” See Weldon v. Neal (1887) 19 Q.B.D. 394.
In advancing this argument counsel also place reliance on the following comments of Campbell CJ in Adams v. Shiavon (1985) 1 Q.R. 1, at 4.
“Although the Magistrate's Court Rules give a wide power to amend a statement of particulars of claim by 10 filing and serving an amended statement, ‘at any time before the day of hearing without an order’, there is no provision in Rule 100 corresponding to paragraph 2 of Order 32(1) permitting an amendment to be made after the expiry of any relevant period of limitation. So if the proceedings had remained in the Magistrate's Court, the respondent would have succeeded in having his cause of action for damages for personal injuries joined, only if he were able to make a successful application pursuant to section 31 of the (Limitations of Actions Act, 1974) or could base such application on, ‘Very peculiar circumstances’, within the meaning of those words in Weldon v. Neal (1887) 19 Q.B.D. 394.”
Mr Pope who appears for the respondents has argued that the above comments, in so far as they refer to the Magistrate's Court Rules, are merely obiter and he submits that the real effect of the decision in Adams v. Shiavon is to permit any amendment, “whenever justice so requires.”
In advancing this argument Mr Pope has referred to the following comments of McPherson J in Neilson v. Bundaberg Sugar Company Limited (1985) 1 Q.R. 313, at 316:
“Before me it has been necessary to consider the matter in the light of the decision and reasoning in Adams and Shiavon...” “...In the course of his judgment in that case the Chief Justice with whose reasons both Sheehan J and I agree, had occasion to consider at some length both Order 32, Rule 1 and decisions in England and New South Wales involving comparable provisions of the rules in those two jurisdictions. His Honour's reasoning in that case may in my view, be taken as authority for the following propositions. First that the decision in McGee v. Yoemans (1977) 1 NSWLR 273, establishes that in New South Wales the relevant rules have displaced the, ‘Settle rule of practice’, in Weldon v. Neal. Secondly that in that State the relevant rules have excluded the operation of that rule of practice, not only in relation to cases specifically covered by provisions corresponding with sub rules (3), (4) and (5) of Queensland Rules of the Supreme Court, Order 32, Rule 1, but also from the general power to amend conferred by the equivalent in this State of Order 32, Rule 1(1).
Thirdly that by doing so the rules in New South Wales have substituted a general discretion to allow an amendment notwithstanding that it raises a time barred cause of action, ‘Whenever justice requires’. Fourthly that the omission from Queensland Order 32, Rule 1.1 of the introductory words, ‘Subject to...the following provisions of this rule...’, found in the corresponding English rule, coupled with the decision of the full Court in Archie v. Archie (1980) Q.R. 546, means that the view adopted in New South Wales is to be preferred in Queensland to the approach taken in the English cases. It follows that in Queensland it is under Order 32, Rule 1, ‘Permissible to make amendments which go beyond the general rule stated in Weldon v. Neal.”
In Adams v. Shiavon as well as in Neilson v. Bundaberg Sugar Company Limited, reference was made to the decision of the New South Wales Court of Appeal in McGee v. Yoemans (1977) 1 NSWLR 273. In Adams v. Shiavon, Campbell CJ, made particular reference to the judgment of Glass JA, in that case.
Glass JA had referred to Weldon v. Neal before comparing the relevant New South Wales rules with the corresponding English rules and concluding that the New South Wales rules on their proper construction displaced the settled rule of practice laid down in Weldon v. Neal. At page 280 of the report, His Honour said:
“By providing Rule 4, (3) - (5) that an amendment may be authorised which allows the substitution of a new party, the suing by the plaintiff in a new capacity and the substitution of a new cause of action, the rule was in those circumstances totally destroyed. I am unable to accept that it continued nevertheless to operate in circumstances outside their terms with undiminished vigour. When it is further provided that the abrogation of the settled rule of practice in certain defined situations shall not in any way abridge the width of the general power to amend, there is in my view an implication that other amendments might, in the exercise of discretion, be properly allowed in situations not expressly dealt with by the rule. Notwithstanding that they may introduce new causes of actions then barred by the expiry of a period of limitation.
I am driven to the conclusion that the Supreme Court rules, upon their proper construction, displace the settle rule of practice laid down in Weldon v. Neal and all the fine spun distinctions which it engendered. In it's place there has been substituted a general discretion to allow an amendment notwithstanding that it raises a barred cause of action whenever justice requires.”
It is apparent from the above that central to the reasoning of Glass JA in McGee and Yoemans, were the particular provisions of the New South Wales rule which correspond with Rule 1, (2) - (5), of Order 32 of the Queensland Rules of the Supreme Court. It is significant in my view that there are no such corresponding provisions in Rule 100 of the Magistrate's Court Rules.
Moreover it would seem to me that the decisions in both Adams v. Shiavon and Neilson v. Bundaberg Sugar Company Limited were dependent upon a consideration of those provisions of Order 32 which have no equivalent in Rule 100 of the Magistrate's Court Rules.
It follows in my view that the, “Settled rule of practice”, expressed in Weldon and Neal must still be regarded as having application under the Magistrate's Court Rules. I consider therefore that the Stipendiary Magistrate has erred in allowing the amendment as he did in this case and that the appeal should therefore be allowed with costs to be taxed. This appeal has been concerned solely with the amended pleading and it is therefore appropriate that the matter should be remitted to the Magistrate for his decision on the merits of the case. That is my decision.