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  4. Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd - [2014] QDC 284

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Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd[2014] QDC 284

Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd[2014] QDC 284

DISTRICT COURT OF QUEENSLAND

CITATION:

Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd [2014] QDC 284

PARTIES:

WESTPOINT FINANCE PTY LTD (IN LIQUIDATION)

(Applicant/Plaintiff)

v

PRD REALTY PTY LTD

(Respondent/Defendant)

FILE NO/S:

221 of 2007

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

Southport 

DELIVERED ON:

12 December 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

27 July, 2 September and 5 September 2014.

JUDGE:

Rackemann DCJ

ORDER:

1.  The application is dismissed.

2.  The applicant/plaintiff pay the respondent/defendant’s costs of the application.

CATCHWORDS:

PRACTICE AND PROCEDURE – application for leave to amend after the expiration of a limitation period pursuant to r 376 of the UCPR – application for leave to add a plaintiff after expiration of the limitation period pursuant to r 69(3) – whether new cause of action arising out of the same or substantially the same facts – whether an order under r 376(4) would be appropriate – whether joinder under r 69 available – whether joinder ought be denied in the exercise of discretion – where long delay and unsatisfactory explanation

COUNSEL:

P Tucker for the applicant/plaintiff

F Lubett for the respondent/defendant

SOLICITORS:

Rudkin Hitchcock Grant for the applicant/plaintiff

Holman Webb for the respondent/defendant

  1. [1]
    This action arises out of a dispute concerning the marketing of units in a certain apartment development known as Short Street. By its Statement of Claim filed on 9 May 2007 the plaintiff (Finance) pleaded that it was engaged by the defendant (PRD) to provide administration and marketing services in return for a 5% commission on each sale, that it provided those services and is owed $163,824.55 pursuant to that agreement or, in the alternative, on a quantum meruit, or on a restitutionary basis.
  1. [2]
    By its defence filed on 29 August 2007, PRD, inter alia, denied entering into an agreement for Finance to provide administration and marketing services. It pleaded, as is the fact, that a letter relied upon as a foundation of the agreement referred to the “Westpoint Group,” rather than Finance.[1] Further, some commissions were paid to a different entity, Westpoint Realty Pty Ltd (Realty). The Statement of Claim[2] characterised those monies as having been received by Realty as a bare trustee for Finance. The Defence asserted that any payments made to Realty were payments for real estate agent services. The identity of the contracting party was in issue from the outset. Notwithstanding this however, the plaintiff did nothing to join any other party or to amend its pleading until some 7 years after instituting the proceeding.
  1. [3]
    By its application filed on 1 July 2014, the plaintiff sought the following orders:
  1. That Westpoint Realty Pty Ltd (In Liquidation) ACN 050 218 954 be joined as a party to this proceeding pursuant to Rule 69(2) Uniform Civil Procedure Rules 1999 (Qld).
  1. That the Plaintiff have leave to file and serve an Amended Claim and Statement of Claim substantially in the form annexed to the affidavit of Andrew Reginald Yeo sworn 26 June 2014;
  1. Such further order other order as the court deems necessary or appropriate.”
  1. [4]
    No steps had been taken in the proceeding for in excess of 12 months prior to the application being filed and no noticed of intention to proceed was given.[3]  That failure does not render the application a nullity. The failure to give a notice caused no prejudice and I am prepared to permit the application to proceed notwithstanding the non-compliance.[4]
  1. [5]
    After hearing some argument on the first return date, the further hearing of the application was adjourned to permit the plaintiff the opportunity further to consider its proposed amended pleading. I gave some directions which resulted in an amended Statement of Claim and an amended Defence being filed.
  1. [6]
    The Amended Statement of Claim pleads, inter alia, that:
  1. (i)
    Realty is an associated entity of the plaintiff,[5]
  1. (ii)
    the agreement with PRD was formed with Finance and/or with Realty;[6]
  1. (iii)
    the services were supplied by Finance and/or by Realty;[7]
  1. (iv)
    PRD paid 50% of the commission to Finance and/or Realty by remitting that sum to Realty;[8]
  1. (v)
    by a deed of assignment executed on 15 January 2013, of which[9] the defendant was given notice on or about February 2013, Realty assigned to Finance all of Realty’s rights, title and interest in monies owing under the marketing agreement by the defendant, together with all interest therein and any amounts payable by the defendant in respect of legal costs;
  1. (vi)
    the entity owed (the revised amount of) $151,202.05 is Finance;
  1. (vii)
    alternatively,[10] if the agreement was not formed or is unenforceable, the defendant is obligated to make restitution to Finance and/or Realty.
  1. [7]
    The Amended Defence, inter alia:
  1. (a)
    does not admit that Realty is an associated entity of Westpoint Finance;[11]
  1. (b)
    denies that Realty is an additional or alternative party to the Agreement, because correspondence from PRD Realty in April 2005 was issued to “Westpoint Group” rather than to Westpoint Finance or to Westpoint Realty;[12]
  1. (c)
    maintains a non-admission in respect of the steps taken pursuant to the Agreement, complaining that there is no identification as to which of Finance or Realty undertook those steps;[13]
  1. (d)
    contends that no commission is payable under the Agreement, because Finance was not a licensed real estate agent and consequently the Agreement was unenforceable, having regard to ss. 128 and 160 of the Property Agents and Motor Dealers Act 2000 (PAMDA);[14]
  1. (e)
    contends that at the time of execution of the Deed of Assignment, recovery of any commission by Realty or, by assignment, Finance, was statute-barred under s. 10 of the Limitations of Actions Act 1974 (Qld);[15]
  1. (f)
    contends that the plaintiff took a purported assignment of a “statute-barred debt,” and so recovery of such money by Finance is statute-barred;
  1. (g)
    contends that s. 160 of PAMDA precludes any restitutionary claim, and any restitutionary claim is also statute-barred under the Limitations of Actions Act.[16] 
  1. [8]
    To the extent that the plaintiff wishes to rely upon the assignment, it must first obtain leave pursuant to r 376 for its pleading to be amended in that way. Although the Amended Statement of Claim purports to have been filed pursuant to my earlier directions, that did not give leave pursuant to r 376.
  1. [9]
    It was common ground, at least for the purposes of the subject application, that the matter should be approached on the basis that the relevant limitation period in contract has expired.[17] It was also common ground that the restitutionary remedy is subject to a six year limitation period.[18] It was contended, for the plaintiff, that insofar as the restitutionary claim is based on a contract rendered unenforceable by illegality, time only commences to run when the illegality is alleged,[19] however, for the reasons discussed later, that is irrelevant to any claim which Realty had but which might now be vested in Finance.
  1. [10]
    PRD opposed both the grant of leave to amend pursuant to r 376 and the grant of leave pursuant to r 69. It contends that, if leave is granted, orders should be made pursuant to r 387(3) and r 74(5) so that any amendment and any joinder take effect when the further amended Statement of Claim is filed, thereby preserving its limitation defence.

Leave to amend

  1. [11]
    Rule 376 provides for three circumstances in which the Court may grant leave to amend after the expiration of the limitation period. Sub-paragraph 2 relates to an amendment to correct the name of a party. That is not what is sought here. Rather, the plaintiff wishes to amend in order to sue on a cause of action assigned to it by another. Sub-paragraph 3 relates to amendments to change the capacity of which a party sues. That is not presently relevant.
  1. [12]
    Sub-paragraph 4 applies to an amendment to add a new cause of action. That is relevant because, as was submitted for the defendant, reliance upon the deed of assignment involves reliance on new material facts evidencing a new cause of action, rather than just a further particularisation of the plaintiff’s original claim.[20] The plaintiff did not contend to the contrary.[21]
  1. [13]
    Sub-paragraph 4 provides that the Court may only allow such an amendment if:
  1. (a)
    the court considers it appropriate; and
  1. (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.
  1. [14]
    Both limbs were controversial in this case.
  1. [15]
    Thomas JA in Draney v Barry[22] said as follows in relation to the meaning of “substantially the same facts”:

“I do not think that ‘substantially the same facts’ should be read as tantamount to the same facts, and consider that the need to prove some additional facts is not necessarily fatal to a favourable exercise of discretion under Rule 376(4). If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts. In short, this particular requirement should not be seen as a straitjacket.”

  1. [16]
    As was observed in Thomas v State of Queensland,[23] “the story” is a shorthand reference to the matters the plaintiff has to prove. That calls for an examination of the elements of the cause of action and the material facts relied upon to support those elements.
  1. [17]
    To succeed in its debt action, as originally pleaded, Finance had to prove that:
  1. Finance entered into a contract with PRD;
  1. Finance performed pursuant to the contract;
  1. PRD was obliged to pay Finance under the agreement;
  1. the amount claimed is outstanding.
  1. [18]
    To succeed in its debt action based on the assignment, Finance must prove that:
  1. Realty was the (or a) contracting party with PRD;
  1. Realty performed pursuant to the contract;
  1. PRD was obliged to pay Realty;
  1. the amount claimed is outstanding;
  1. Realty’s right to payment of the outstanding amount is now vested at law in Finance pursuant to the assignment.

As was pointed out on behalf of PRD, those cases are different.

  1. [19]
    That an amendment is sought to claim pursuant to an assignment does not necessarily result in an adverse conclusion. In Stone v ACE-IRM Insurance Broking Pty Ltd[24] for example, it was said that a Statement of Claim could have been amended, pursuant to r 376, in circumstances where a cause of action for damages for negligence had, by operation of law, become vested in the plaintiff’s trustee in bankruptcy and where an assignment would have been necessary to support an action which the plaintiff had commenced in her own name. In that case the tort had allegedly been committed against the plaintiff.  It was only the identity of the person in whom that cause of action vested which had altered. This case is different because, insofar as Finance relies upon the assignment, it must do so on the basis that Realty contracted with PRD, performed and remained unpaid.[25]
  1. [20]
    In support of a submission that the facts are nevertheless substantially the same, Counsel for Finance asserted that “the claims fall under the existing claims for services provided under the agreement or for restitution in respect of the provision of those services.” There is an element of truth in that, but an examination of the proposed amended pleading reveals some differences.
  1. [21]
    The plaintiff had always pleaded that PRD had been authorised by its client, the developer of Short Street, to engage Finance to assist in the sale of units. The amendments assert that the authorisation extends to engaging Finance and, or Realty. This involves a different allegation as to the content of the authorisation in circumstances where, as PRD has complained, and continues to complain, there is no particularisation of the asserted “authorisation.”[26]
  1. [22]
    The agreement sued upon is pleaded to have been partly written, partly oral and partly implied and to have included the following terms: (proposed amendments underlined):[27]

“(a) Of the 5% of the purchase price payable by the defendant to the plaintiff and, or alternatively, Westpoint Realty, 50% of the same would be payable upon any contract becoming unconditional and 50% upon settlement of such contract once payment had been received from the vendor.

  1. (b)
    Invoices submitted by the plaintiff, or alternatively, Westpoint Realty, to the defendant before the 14th of each month would be paid by the 30th of that month.
  1. (c)
    Invoices submitted by the plaintiff, or alternatively, Westpoint Realty, to the defendant after the 14th of each month would be paid in the following month.”

Insofar as the agreement is written, it is said to be constituted by a letter dated 26 April 2005 from PRD[28] which relevantly stated:

“PRD Realty Pty Ltd has given express permission to Westpoint Group to sell apartments within this development. Commission payable to Westpoint Group will be 5% of the purchase price of which 50% will be payable upon the contracts becoming unconditional and 50% upon settlement once payment has been received from the vendor. Invoices submitted before 14th of each month will be paid by the 30th of that month, and invoices submitted after the 14th of each month will be paid in the following month.”

  1. [23]
    The acceptance of that is said to have been constituted by “the National Stock Manager of the Westpoint Group signing the same on 29 April 2005.”
  1. [24]
    Whilst the amended pleading alleges[29] that Finance and Realty were part of the “Westpoint Group,” the pleading does not identify what other companies may have been contemplated by that expression. The affidavit of Mr Yeo (one of the liquidators of Finance) says that the group also included KIS Realty Pty Ltd and Westpoint Corporation Pty Ltd. The amended pleading does not plead particulars of any authority of the “National Stock Manager of the Westpoint Group” to contract on behalf of Finance or Realty or for which of those (if any) that person was purporting to exercise any such power. The amendment requires an enquiry as to the nominated person’s authority to bind not just Finance, but Realty also, as well as an enquiry as to which (if any) he was purporting to contract for. It must be acknowledged, however, that it is the same correspondence and the same act of acceptance which is relied upon for Realty as for Finance. 
  1. [25]
    The pleading also places reliance,[30] in relation to the formation of the agreement by implication, on certain documents (including depreciation schedules etc) said to be provided by PRD. The pleading previously alleged that documents so described were provided to Finance but the amended pleading asserts it was to Finance and/or Realty. The particular documents[31] are not specified nor is the means of which they were provided particularised. The pleading does not suggest that the documents provided to Realty were any different to those provided to Finance. It seems likely that the very same actions will be relied upon as constituting the provision of the same documents to either or both entities, but that cannot be known for certain on the current state of the pleading.
  1. [26]
    In relation to the implication of an agreement it is also pleaded that (amendments underlined):

“Such implication further arose out of the relationship between the plaintiff and, or alternatively, Westpoint Realty, and the defendant, and the need to give business efficacy to the marketing agreement.”

 The amendment therefore requires an examination of the relationship (if any) between PRD and Realty. Insofar as the relationship with Finance, the following particulars had previously been provided:[32]

“The defendant had been engaged by the developer for reward. The plaintiff provided administration and marketing services to the defendant. The defendant, notwithstanding the plaintiff provided such administration and marketing services, remitted the agreed fee or 50% of the same to Westpoint Realty Pty Ltd when it did not provide any of the administration and marketing services. The defendant then dealt with the liquidator of the plaintiff with respect to reconciling commissions payable for the administration and marketing services provided by the plaintiff.”

 Those particulars will presumably change given that it is now pleaded that the services were provided by Finance, and/or Realty.

  1. [27]
    Insofar as the agreement was oral, it is pleaded[33] as being constituted as follows (proposed amendments underlined):

“Insofar as the marketing agreement was oral, it was constituted by discussions between Greg Benneworth, an employee or agent of the plaintiff, and Mark Evans, an employee or agent of the defendant, the material substance of which was that the defendant would remit payments pursuant to the marketing agreement to Westpoint Realty Pty Ltd as a bare trustee for the plaintiff, which would then remit the same to the plaintiff.”

  1. [28]
    Two things may be noted. First, the discussion is pleaded as being between an employee or agent of Finance and an employee or agent of PRD. It is not pleaded that any employee or agent of Realty was involved, or that the discussion, insofar as it gave rise to an agreement, was made for the benefit of Realty. Insofar as the amended pleading asserts that Realty was the or a contracting party therefore, the formation of the agreement does not arise out of the same facts as is asserted in the case of Finance, because those alleged contractual discussions were only with Finance.
  1. [29]
    Secondly, the amended pleading deletes the previous allegation that there was an oral agreement that Realty receive moneys as a bare trustee. That could not stand with the new allegation that Realty was a, or the, contracting party. The alleged factual basis for the agreement is to be altered in that respect.
  1. [30]
    For those reasons, whilst the case for Realty being a, or the, contracting party relates, in essence, to an agreement formed in the context of what might broadly be described as a common factual matrix, with the same services to be provided to PRD for the same remuneration, there are differences which either involve or may, depending upon particulars not yet given, involve some change to the material facts relied upon in relation to the formation of the agreement.
  1. [31]
    The things which were done in performance of the agreement by Finance and/or Realty are pleaded in paragraph 10 and more particularly in Schedule B of the Amended Statement of Claim. I note that the services are pleaded as something done by Finance and, or alternatively, Realty, rather than as something done by Finance on its behalf or on behalf of Realty or both. It is the same services which are relied upon in any case.
  1. [32]
    The allegation that Realty performed marketing services is surprising. Not only has it previously been pleaded that the services were provided by Finance, but:
  1. (i)
    the recitals to the assignment state that “Westpoint Finance then provided the services to PRD it was engaged to provide…”
  1. (ii)
    The affidavit of Yeo, filed in support of the subject application deposes that:

“8. At the time of my appointment as an Administrator, Westpoint Finance:

  1. (a)
    operated predominantly as a relate estate marketer and mortgage broker;
  1. (b)
    marketed property developments on behalf of third party developers, and also on behalf of entities within the Westpoint Group, by embarking upon wealth creation marketing campaigns to identify and source prospective purchaser-investors through seminars and telemarketing;
  1. (c)
    assisted these purchaser-investors by conducting consultations with these potential purchasers and during these consultations:
  1. (i)
    explored the financial position and capacity of such potential purchaser-investor;
  1. (ii)
    identified properties that were most suited to the particular investor;
  1. (iii)
    assisted the particular investor to source and obtain finance for their purchases where necessary;
  1. (d)
    secured the agreement of potential purchasers and subsequently referring those purchaser-investors to another entity – which held a real estate agent’s license and who acted as the selling agent in respect of the sale of the property (for example, Westpoint Realty or KIS Realty) – to have the particular investor execute a contract of sale (purchase contract), which was signed under the authority of that other entity as a licensed real estate agent;
  1. (e)
    attended to the administration of purchase contracts;
  1. (f)
    provided pre-settlement support (if necessary);
  1. (g)
    guided the purchaser through the purchase process generally.
  1. Westpoint Finance earned:
  1. (a)
    fees or commission revenue in respect of the sale of lots within property developments;
  1. (b)
    fees or commission revenue from financiers, in respect of loans taken out by purchasers to purchase lots within property developments; and
  1. (c)
    ‘trail’ commission revenue from financiers, in respect of such loans.

…

  1. Westpoint Finance provided marketing and mortgage brokering services in relation to the sale of lots within property developments, although KIS Realty or Westpoint Realty were usually listed on sales contracts as the property developer’s appointed real estate agent, because:
  1. (i)
    Westpoint Finance did not hold a real estate license; and
  1. (ii)
    KIS Realty held a Victorian real estate agent’s license; and
  1. (iii)
    Westpoint Realty held a Queensland real estate agent’s license.
  1. From my investigations of the books and records of Westpoint Finance, I have observed that:
  1. (a)
    commission income earned upon introducing a purchaser of a lot offered within a property development was often received by either KIS Realty or Westpoint Realty;
  1. (b)
    these commission income funds were usually transferred immediately and in full to Westpoint Finance, although there were instances where these monies were no forwarded but utilised instead by another entity within the Westpoint Group. One those occasions, the monies were treated as a reduction in a loan owed to the relevant entity within the Westpoint Group.

…

  1.  As pleaded in the Statement of Claim in this proceeding, I formed the view that:

…

  1. (b)
    PRD was authorised by the developer of Madison to engage Westpoint Finance to assist with marketing and administration in respect of sales of apartments in Madison;
  1. (c)
    pursuant to that authorisation, Westpoint Finance and PRD entered into an agreement (“the Agreement”) under which …
  1. (d)
    Westpoint Finance provided the marketing and administration services to PRD that it was engaged to provide under the Agreement.”
  1. [33]
    The affidavit material does not suggest that Realty actively performed any marketing services. It suggests that its involvement in sales generated by Finance, was limited to being “listed” on sales contracts and to being the vehicle through which money was passed to Finance. That does not mean however, that the plaintiff cannot plead the case differently.
  1. [34]
    Whilst the amended Statement of Claim (and annexed particulars) set out a single list of services, the defendant complains, in its amended pleading, that it has not been particularised whether it was Finance or Realty which allegedly rendered each such service. It is tolerably clear that the allegation is that the services were all done by Finance or by Realty or both. I note however, that the particulars of what was done still do not state which person did what, or whether the person who provided each service was a servant or agent of Finance or Realty or both.
  1. [35]
    The amendments also delete the quantum meruit claim and replead the claim in restitution, which is now for Finance and, or Realty. The services for which claim is made are the same (for Finance and for Realty) as is the amount claimed.
  1. [36]
    The restitutionary claim for Finance can be seen in light of the prospect that any agreement with Finance might be infected with illegality by reason of Finance not holding a real estate agent’s license and in view of the provisions of PAMDA. The restitutionary claim, at least insofar as it relates to a right which Realty had, but assigned to Finance, would not arise consequently on any illegality relating to PAMDA. Realty, it appears, was the holder of a license. The amended Defence understandably limits the PAMDA point to the circumstances where the agreement was with Finance.[34]
  1. [37]
    The new cause of action does not arise out of the same facts. At best for the plaintiff, it might be argued to fall within the outer limits of something which might fairly, albeit generously, be described as arising out of substantially the same facts as the cause of action for which relief has been claimed in the proceeding by the plaintiff. It is, however, unnecessary for me to form a final view about that because, for the reasons which follow, I am not satisfied that it would be appropriate to allow the amendment even if that issue was resolved in the plaintiff’s favour.
  1. [38]
    It is relevant, in considering whether it is appropriate to permit the amendment, to have regard to the delay on the part of the plaintiff. The contracts for the sale of units in relation to which a commission is claimed were entered into in 2005, with pleaded completion dates through to 2006.[35] The subject action was commenced in May 2007 and, at least since the defence was filed in August 2007, the plaintiff must have been aware that there was an issue as to which Westpoint entity (if any) was the correct one to bring a claim against PRD. Further, the plaintiff was aware from the outset of some involvement by Realty, since it initially pleaded that Realty received payment as a bare trustee. It was not until some seven years later and after the expiry of the relevant limitation period, that the subject application was brought. It is true that the assignment upon which Finance wishes to rely was only executed relatively recently, but that should be seen in the light of the delay in dealing with the issue, either by earlier seeking an assignment or an earlier application to join Realty.
  1. [39]
    The situation is different from that in Interline Hydrocarbon Inc v Brenzig Pty Ltd,[36] a case about joinder after expiration of the limitation period (to which Counsel for the plaintiff referred). There at least the first five years of delay was explained by the fact that the relationship between two relevant entities only became clear when matters of which the party was aware could properly be seen in the context of searches conducted some five years after proceedings commenced.
  1. [40]
    The reason for delay in this case was dealt with in the affidavit of Yeo, who became one of the joint and several administrators of Finance in February 2006, one of the joint and several liquidators of Finance in 2006 and has since had the primary conduct of the liquidation. Following investigations, Yeo formed the view that Finance was owed commissions by three entities, being KIS Realty Pty Ltd, Primelight Realty Pty Ltd and PRD. He caused proceedings to be commenced in the County Court of Victoria, the District Court of Western Australia and the District Court of Queensland respectively. In an effort to minimise costs, he decided to focus on advancing the proceedings against Primelight in Western Australia, hoping that a favourable outcome would encourage settlement of the other proceedings. The claim against Primelight Realty was, however, dismissed on 15 October 2010. He then instructed the solicitors to advance the other two proceedings, but nothing was then done about the party issue.
  1. [41]
    On 17 August 2012 the parties to this dispute attended a mediation. That was unsuccessful, however there continued to be an exchange of information and correspondence in an attempt to explore settlement. On 15 January 2013 Yeo caused Finance to enter into the Deed of Assignment. He says that the motivation for the deed was to be able to assure PRD that it would not face a later claim by Realty, if it settled with Finance. It was not until an unspecified later time that Yeo concluded that there would be no settlement and so instructed the solicitors to revise the Statement of Claim and take steps to prepare the proceedings for trial.
  1. [42]
    I accept the explanation for the general delay given by Yeo as genuine, but it does not provide any, let alone any satisfactory, specific explanation as to why the party issue was not addressed either by adding Realty as a party or by obtaining an earlier assignment. I note that, notwithstanding the general delay in the proceeding, the plaintiff did attend to filing and serving a list of document in 2009.[37] The material exhibits a conscious decision, notwithstanding the implied undertaking pursuant to r 5, not to expeditiously advance the subject proceedings for a lengthy period of time, during which the limitation period expired without even the party issue being attended to, in circumstances where the plaintiff was clearly on notice of the issue as to whether Finance was the correct entity to sue PRD.
  1. [43]
    With the lapse of the limitation period PRD was entitled to expect that any exposure it might have had in relation to a cause of action held by Realty was at an end. At the time of the assignment Realty could not have successfully brought an action against PRD in the face of an applicable limitation point being taken. Finance attempts, in effect, to be put into a better position than Realty, its assignor, was in at the time of the assignment, on the basis that it then had proceedings on foot for a claim which, to the extent the cause of action was Realty’s, was bad for being in the name of the wrong entity.
  1. [44]
    PRD understandably objects to Finance now being given leave to amend so that it can advance the claim Realty might otherwise have had, but did not pursue and in respect of which Finance took an assignment only after the expiration for the limitation period, in circumstances where it had been on notice of the parties issues for years. It claims that do so would rob PRD of an otherwise available defence.
  1. [45]
    It was pointed out, on behalf of the plaintiff, that a satisfactory explanation of delay is not a pre-requisite for obtaining leave and it was submitted that PRD cannot point to specific prejudice. I accept that PRD does not point to any specific prejudice in being able to meet the case, although there is inevitably a level of general prejudice in the change and/or expansion of an incompletely particularised claim made so long after the events allegedly giving rise to the cause of action.
  1. [46]
    Whilst I accept that a satisfactory explanation of delay is not a pre-requisite to leave being granted, that is not to say that it is irrelevant or that it may not be decisive in the context of a particular case. Further, limitation periods are important and ought not lightly be overruled.[38] In the circumstances of this case I am not satisfied that it would be appropriate to give leave. The concern about the limitation defence being lost could be accommodated by granting leave to amend, by exercising the discretion pursuant to r 387(3) to order that the amendment take effect only when the amended Statement of Claim is filed (which I would have done had I given leave). There would appear to be no utility in doing so however, since PRD has already elected to take the limitation point.

Joinder

  1. [47]
    The plaintiff’s application was initially for joinder of Realty as a plaintiff after the end of the limitation period. The terms of the assignment included the following:

“(a) The Westpoint Realty Parties for valuable consideration irrevocably appoint the Westpoint Finance Parties as the attorney of the Westpoint Realty Parties in the name the Westpoint Realty parties to:

  1. (i)
    demand, sue for, receive and give effectual discharges for the Debt;
  1. (ii)
    conduct any legal proceedings in relation to the Debt, including proceedings on appeal, as effectually as the Westpoint Realty Parties could or might; and
  1. (iii)
    for any purposes from time to time, appoint any substitute, delegate or sub-attorney.
  1. (b)
    The Westpoint Finance Parties must indemnify the Westpoint Realty Parties against all costs (including an adverse costs as a result of litigation against PRD) and all expenses incurred in connection with anything by the Westpoint Finance Parties as the attorney of the Westpoint Realty Parties pursuant to cl 3(a);”
  1. [48]
    Unsurprisingly, upon being served with the subject application, the liquidators of Realty instructed Finance’s solicitors to seek to have Realty joined as a plaintiff.
  1. [49]
    Adding a party is dealt with in r 69 which relevantly provides:

“69  Including, substituting or removing party

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

…

  1. (b)
    any of the following persons be included as a party—
  1. (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;
  1. (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.
  1. (2)
    However, the court must not include or substitute a party after the end of a limitation period unless 1 of the following applies—
  1. (a)
    the new party is a necessary party to the proceeding because—

…

  1. (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;

…

  1. (f)
    for any other reason—
  1. (i)
    a claim made, or ground of defence raised, in the proceeding before the end of the limitation period can not be maintained; or
  1. (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.”

  1. [50]
    It has been said that such a rule is remedial and should be given the widest interpretation which its language would permit.[39] Rule 69(2)(iv) is not limited to cases of misnomer and may operate in circumstances in which there was, and remains, a good cause of action in relation to a party which is to remain a party.[40]
  1. [51]
    As to r 69, Keane JA (as he then was) said in Althaus v Australia Meet Holdings Pty Ltd & Anor:[41]

[27]  The broad scope of r 69(1)(b), and especially r 69(1)(b)(ii), means that a wide range of plaintiffs seeking to pursue a wide range of causes of action might be joined in a pending proceeding under the authority of these provisions. The command in r 69(2) that “the court must not include or substitute a party after the end of a limitation period unless 1 of the following applies” serves to ensure that a defendant in pending proceedings is not confronted by a plaintiff seeking to pursue a new cause of action raised for the first time by that plaintiff after the end of “a limitation period”. Where the cause of action sought to be agitated by the person seeking to be joined as a new plaintiff is statute-barred, r 69(2) excludes entirely the risk that, under r 74(5), a good defence under the limitation statute would be defeated by the joinder. The particular provisions of r 69(2)(a) to (f) each exhibit a concern to ensure that a time-barred cause of action to be pursued by the new party should be closely associated with a cause of action already the subject of a claim by an existing party.”

  1. [52]
    It was submitted, for the defendant, that in view of the legal assignment, Realty is not a necessary party nor one whose presence would be desirable, just or convenient in the relevant sense, since any cause of action it may have had in relation to the debt is now vested in Finance. It was submitted:

“9. In paragraphs 14A to 14C of the amended statement of claim, the plaintiff pleads that in January 2013 Westpoint Realty as assignor purported to assign all of their “right title and interest” in a “debt” to the plaintiff as assignee.

  1. Written notice of the assignment was given to the defendant in February 2013, fulfilling the notice requirements for a legal assignment under s 199 of the Property Law Act 1974 (Qld) (the Property Law Act). As such, the plaintiff has not pleaded any equitable assignment.
  1. Once notice of the assignments was given to the defendant, Westpoint Finance became the legal owner of the alleged debt and it alone was entitled to enforce any right to recover them. Under a legal assignment only the assignee can sue.
  1. It is therefore impermissible and unnecessary for the plaintiff to seek to join Westpoint Realty to these proceedings given that no legal title or cause of actions vests with them by virtue of the assignment as pleaded.
  1. Furthermore, the defendant also contests whether or not Westpoint Realty had any right or interest in any monies owed by the defendant which it could assign to the plaintiff. This argument, if successful, has the same result as argued at paragraphs 9-11 above: Westpoint Realty is still left without a cause of action against the defendant.”
  1. [53]
    It was submitted, on behalf of the plaintiff, that the joinder of Realty remains appropriate for three reasons. First it was submitted that, even though Realty might now have no cause of action for the debt, it should be added as a plaintiff because there is doubt as to whether the proceedings, when commenced, were in the name of the correct party and the addition of Realty now would overcome any problem with the limitation period.
  1. [54]
    Secondly, it was submitted that PRD’s amended Defence raises questions about the proper construction and effect of the Deed of Assignment, such that it is desirable just and convenient that Realty should be joined. Reference was made to Mount Cathay Pty Ltd v Lend Lease Funds Management & Ors[42] where it was said[43] that  parties against whom no relief was sought could be added because they were entitled to the benefit of an easement the interpretation of which fell for determination.
  1. [55]
    The third basis is that PRD’s pleading of unlawfulness (by reference to PAMDA) provides two other reasons for Realty’s joinder:
  1. (i)
    it might be found that on its proper construction, the Dead of Assignment did not assign restitutionary claims to Westpoint Finance (the result being that such claims still reside with Realty); and, or alternatively,
  1. (ii)
    it may be said that a restitutionary claim founded upon a contract unenforceable on account of illegality does not accrue until illegality is alleged by a defendant in response to claims made in reliance upon contract.[44] At that point, any expectancy as at the date of the Deed of Assignment – such as a restitutionary claim predicated on illegality of the Agreement – is assigned in equity to Westpoint Finance.
  1. [56]
    The second of those bases (re the construction and effect of the assignment) is unpersuasive. The amended Statement of Claim contains the following allegations in relation to the assignment:

“14A. By deed of assignment dated and executed on 15 January 2013 (Assignment):

  1. (a)
    the plaintiff and Westpoint Realty each acknowledged, as was the fact, that they were part of the ‘Westpoint Group’;
  1. (b)
    Westpoint Realty assigned to the plaintiff all of Westpoint Realty’s right, title and interest in monies owing under the marketing agreement by the defendant together with all interest thereon and any amounts payable by the defendant in respect of legal costs.

14B.  By on or about February 2013, the plaintiff gave notice in writing of the Deed of Assignment to the defendant.

14C. In the premises of the matters pleaded in paragraphs 14A and 14B herein, by s. 199 of the Property Law Act 1974 (Qld) the plaintiff is by itself entitled to pursue against, and receive from, the defendant:

  1. any monies payable at any time prior to the Assignment by the defendant to Westpoint Realty in respect of the marketing agreement or the services contemplated under it; and
  1. any other claim whatsoever available, at any time prior to the Assignment, to Westpoint Realty against the defendant concerning or relating to the marketing agreement or the services contemplated under it;

including the unpaid monies referred to in paragraph 12 herein, or any part thereof.”

  1. [57]
    By its amended pleading PRD admitted paragraph 14B. As to paragraph 14A(a), there is no dispute that the assignment contained the recital referred to earlier, but PRD denies that the two companies were in fact part of the “Westpoint Group.” That does not raise any issue of construction of the assignment. As to paragraph 14A(b), PRD says Realty had nothing to assign on the basis that it was not a party to any agreement with PRD. That raises no issue of construction of the assignment. As to 14C, PRD claims that any cause of action which might have purportedly been assigned, was statute barred. That raises no issue of construction. I am not persuaded that PRD’s pleading in this regard renders Realty a party whose presence is necessary or desirable, just and convenient in the relevant sense.
  1. [58]
    The first and third grounds relate to the necessity for Finance to overcome a limitation period if Realty’s previous right of action in debt or its previous or current right in restitution is to be relied upon. The second limb of the third basis is misconceived. The reference to a restitutionary claim founded on a contract rendered unenforceable on account of illegality can only be a reference to a restitutionary claim in the hands of Finance, arising by reference to Finance’s contract with PRD being rendered unenforceable on account of illegality. As has already been noted, the alleged illegality is limited to Finance, because it is the only one which is said not to have had a valid license. Recovery under a restitutionary claim by Realty (which might have been the subject of any assignment) is pleaded to be statute barred rather than subject to illegality. The submission that a restitutionary claim founded upon a contract rendered unenforceable by illegality does not accrue until the illegality is alleged, can only relate to Finance’s claim, not any restitutionary claim made by Finance in reliance on an assignment in law or in equity, from Realty.
  1. [59]
    In relation to the first basis, it was submitted, on behalf of PRD, that a party without a cause of action (because it has been assigned) could not, or ought not, be added as a plaintiff. That this basis is simply a means to overcome the limitation defence is underscored by the plaintiff’s Outline of Submissions, which contemplates that, if all causes had been assigned and there was no other reason for Realty to be a party, joinder, to overcome the limitation problem, could be followed by removal of Realty, as a party. It is however, unnecessary for me to resolve whether that would be appropriate because, even accepting that joinder is potentially available, on some basis or bases (including the first limb of the third basis) under r 69, the orders are discretionary and for the reasons previously given for concluding that it would not be appropriate to make an order under r 367, I am also not persuaded that it would be appropriate now to include Realty as a plaintiff. Had I permitted joinder I would have made an order under r 76(5) that the proceedings by Realty be taken to have commenced only upon filing the amended Statement of Claim.

Footnotes

[1]  paragraph 4 of Defence.

[2]  Paragraph 8 of the Statement of Claim. 

[3]  rule 389(1).

[4]  rule 371.

[5]  paragraph 1(b).

[6]  paragraph 8.

[7]  paragraph 10.

[8]  paragraph 11.

[9]  paragraphs 14A-14C.

[10]  paragraph 17.

[11]  paragraph 1A.

[12]  Paragraph 4.

[13]  Paragraph 7.

[14]  Paragraph 12.

[15]  Paragraph 11A.

[16]  Paragraph 13.

[17]  T2-7 and paragraph 20 of the plaintiff’s further Outline of Submissions.

[18]  T2-16.

[19]  T2-15 and see Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498.

[20]  Borsato v Campbell [2006] QSC 191 at [14].

[21]  See paragraph 23 of the plaintiff’s further Outline of Submissions dated 5 September 2014.

[22]  [1999] QCA 491 at [57].

[23]  [2001] QCA 336 at [193].

[24]  [2004] 1 Qd R 173.

[25]  cf also Rolfe v Investec Bank (Aust) Ltd [2014] VSCA 38. 

[26]  Paragraph 3(c) of the amended Defence.

[27]  Paragraph 9 of the amended Statement of Claim.

[28]  Paragraph 8B of the amended Statement of Claim.

[29]  paragraph 14A(a).

[30]  paragraph 8C.

[31]  e.g. the particular “depreciation schedules” referred to are not identified.

[32]  see paragraph 3.14 of the Further and Better Particulars filed on 31 July 2007, read with the request for particulars exhibited to the affidavit of Roberts.

[33]  paragraph 8D.

[34]  See paragraph 13(d).

[35]  See Schedule A of the amended Statement of Claim.

[36]  [2006] 2 Qd R 454.

[37]  Paragraph 5(e) of affidavit of Roberts.

[38]  Montgomery & Ors v Pickard & Ors [2007] QCA 203 at [34].

[39]  Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 per McHugh at 260, 261.

[40]  Interline Hydrocarbon v Brenzig Pty Ltd (supra).

[41]  (2003) 1 QdR 493.

[42]  [2012] QCA 274.

[43]  at paragraph [32].

[44]  Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 523, 534. 

Close

Editorial Notes

  • Published Case Name:

    Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd

  • Shortened Case Name:

    Westpoint Finance Pty Ltd (in Liquidation) v PRD Realty Pty Ltd

  • MNC:

    [2014] QDC 284

  • Court:

    QDC

  • Judge(s):

    Rackemann DCJ

  • Date:

    12 Dec 2014

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Borsato v Campbell [2006] QSC 191
1 citation
Jump To
Cite 1 - [2006] QSC 191
Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
1 citation
Jump To
Cite 1 - (1991) 173 CLR 231
Draney v Barry[2002] 1 Qd R 145; [1999] QCA 491
1 citation
Jump To
Cite 1 - [1999] QCA 491
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
2 citations
Jump To
Cite 1 - (2012) 246 CLR 498
Cite 2 - (2012) 246 CLR 498
Interline Hydrocarbon Inc v Brenzil Pty Ltd[2006] 2 Qd R 454; [2006] QSC 184
1 citation
Jump To
Cite 1 - [2006] 2 Qd R 454
Interline Hydrocarbon v Brenzig Pty Ltd (supra). (2003) 1 Qd R 493
1 citation
Jump To
Cite 1 - (2003) 1 Qd R 493
Montgomery v Pickard [2007] QCA 203
1 citation
Jump To
Cite 1 - [2007] QCA 203
Mount Cathay Pty Ltd v Lend Lease Funds Management Limited[2013] 1 Qd R 528; [2012] QCA 274
2 citations
Jump To
Cite 1 - [2012] QCA 274
Cite 2 - [2012] QCA 274
Rolfe v Investec Bank (Aust) Ltd [2014] VSCA 38
1 citation
Jump To
Cite 1 - [2014] VSCA 38
Stone v ACE-IRM Insurance Broking Pty Ltd[2004] 1 Qd R 173; [2003] QCA 218
1 citation
Jump To
Cite 1 - [2004] 1 Qd R 173
Thomas v State of Queensland [2001] QCA 336
1 citation
Jump To
Cite 1 - [2001] QCA 336

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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