Doolan v Bosag Pty Ltd[2016] QDC 254

[2016] QDC 254

DISTRICT COURT OF QUEENSLAND

CIVIL JURISDICTION

JUDGE DORNEY QC

No 2363 of 2016

JOSEPHINE ELLEN MARY DOOLANAppellant

and

BOSAG PTY LTDRespondent

BRISBANE 

10.27 AM, WEDNESDAY, 5 OCTOBER 2016

JUDGMENT

HIS HONOUR: This is an appeal to this Court from the Brisbane Magistrates Court, filed 17 June 2016. It seeks - among the orders that are sought - that the appeal be allowed and the decision of the Magistrates Court, made 20 May 2016, be set aside. The sole ground for the appeal is the Magistrate erred in holding the “new” cause of action pleaded by the amendments to paragraphs 4 and 7 of the proposed second amended statement of claim (“SOC”) arises out of the same facts or substantially the same facts as a cause of action for relief which has already been claimed in the proceeding.

The reasons of the learned Magistrate given on 20 May 2016 are, it must be acknowledged, very brief. It probably arose as a result of a busy list that day. Nevertheless, after simply referring to Draney v Barry [1999] QCA 491, he noted that, whether the pleadings constituted one or two or more agreements, it was quite apparent from the pleadings that there were discussions between the parties at the same time, more or less, resulting in the loan of some substantial amount of money. He noted, further, that in order to prove one agreement, clearly, the plaintiff will need to go into evidence with respect to all of the discussions and the agreements had between the parties. He therefore formed the view that the amendments constituted a cause of action that arises out of substantially the same facts that need to be proven in any event to prove the original cause of action. A closer analysis of the facts shows something a little different.

The original pleading to be amended was a pleading which sought findings, by those particular paragraphs: firstly, from paragraph 4, that on 22 December 2009 William Doolan, on behalf of the plaintiff company, entered into a verbal loan agreement with the defendant wherein the plaintiff agreed to loan to the defendant $30,014.00 to assist her in refinancing bank liabilities, called “the second loan agreement”;  and, secondly, from paragraph 7 (which simply recites these facts), that, on that date (22 December 2009), the plaintiff loaned to the defendant that sum in accordance with the second loan agreement. There was no reference at all in that statement of claim and seemingly no reference in any further amended statement of claim prior to the expiry of the relevant  period - which is agreed to be 24 December 2015 - of the sum of $23,008.00.

That sum of $23,008.00 arose in the defendant’s response to the request for the further and better particulars of the defence, dated (and apparently filed) on 25 February 2016. In that document, which is signed by the defendant’s solicitors, dated 19 February 2016, it is asserted in paragraph 5(i) that:

Mr Doolan paid to the defendant $23,008 through the provision of 14 cheques deposited 24 December 2009 –

and I interpolate here that’s a different date from the 22^nd of December 2009 –

in the following sums –

the sums which are then listed. A request for those further and better particulars had been delivered at some time earlier, although the document does not appear on the Magistrates Court file given to this Court. That response, as noted from its date, was given after the expiry occurred for any new cause of action based upon the sum of $23,008.00.

The affidavit filed on behalf of the plaintiff by Alistair John Tindall on 18 May 2016 sets out the history of the allegations about these amounts of money. In paragraph 5, it refers to instructions given by William Doolan, the director of the plaintiff, on or before 8 April 2015, of two matters. Firstly, matters with respect to the first loan agreement, which are not in issue here. (You may sit down.)  And, secondly, on or about 22 December 2009, that the plaintiff made a payment of $30,014.00 to the defendant, pursuant to a loan agreement, which was there also termed “the second loan agreement”. Paragraph 6(b)(ii) of the same affidavit indicates that, despite those instructions, the (what are called) “accurate facts” are now that the plaintiff did not make a payment in the amount of $30,014.00 around about 22 December 2009, but rather made a payment of $30,000 - a sum that is almost identical to the $30,014.00 - on 22 December 2009 and, additionally, that there were further payments totalling $23,008.00 to the defendant, pursuant to what was there called “the second loan agreement”.

Nevertheless, it is clear from the notice to admit facts, which was dated 15 December 2015, that the admission which was sought to be required pursuant to that notice issued by the plaintiff’s solicitor to the defendant was that, on 22 December 2009, the defendant received money in the amount of $30,000.00 from the plaintiff. One can see that 15 December 2015 is a week before the limitation date of 22 December 2015. It is clear that that figure was based upon an ANZ Bank statement of the plaintiff which itself referred to, very specifically, the sum of $30,000.00 paid on 22 December 2009.

What the plaintiff sought in this case in the application before the learned Magistrate was to amend both the claim and the latest statement of claim. The draft of the amended statement of claim is contained as an exhibit to that affidavit (that I’ve referred to just a moment ago) of Mr Tindall. Before I turn, though, to paragraphs 4 and 7 of it, which are the subject of the present appeal, it should be noted that paragraphs 7A to 7E, inclusive, deal specifically with the sum of $30,000.00, formerly termed “the second loan agreement” at an almost identical sum, though now asserted to be “moneys had and received”. It is clear from those particular paragraphs that the $30,000.00 referred to there is exactly the same $30,000.00 that is referred to in the notice to admit facts concerning the second loan agreement.

It is not being disputed in this appeal that those particular facts, as pleaded there, set up a new cause of action (namely, for moneys had and received). It is also clear that that new cause of action is based upon the same or substantially the same facts which were alleged to be what was originally the basis of the so-called second loan agreement (namely, the sum of $30,014.00) and how it was dealt with. Accordingly, it cannot be open to the plaintiff in this case to allege that what was called the second loan agreement at all times actually referred to the cheques which total $23,008.00. It does not make any sense in terms of the pleading; and it does not make any sense in terms of the authorities to which I will now turn.

The first of those authorities is the Queensland Court of Appeal decision of Jetcrete Oz Proprietary Limited v Conway and Another [2015] QCA 272, for which the major decision was given by Applegarth J. In paragraph [13] he referred to what he called:

The frequently-cited judgment of McMurdo J in Borsato v Campbell –

in its consideration of the term “cause of action” in r 376. It is undisputed in this case that it is to r 376(4) that this application, both at first instance and on appeal, is directed.

The extract from the judgment reads as follows:

The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which a plaintiff’s case is described.

Applegarth J then added:

Not every newly pleaded fact raises a new cause of action.

In paragraph [14], he then turned to the determination of three separate questions. As he noted:

As was observed in Thomas v the State of Queensland –

I omit the citation –

there will commonly be three separate questions to consider in an application for leave to amend:

(a)  is there a new cause of action?

(b)  (does it arise) out of substantially the same facts? (and)

(c)  (the matter of) prejudice –

which, of course, goes to the issue of appropriateness (which is, of course, paragraph (a) in r 376(4)).

Before I turn to other decisions, I’ll just turn briefly, then, to paragraphs [29] and [30] of the decision of Applegarth J in the appeal case. Referring to the words “substantially the same facts”, he indicated that it was:

…unnecessary to deploy metaphors about whether the additional facts arise out of “substantially the same story as that which would have been told to support the original cause of action”.

He noted that:

In some cases, a useful test is to inquire what would have happened if, at trial, the plaintiff sought to lead evidence of a certain matter, without having made  the amendment in question, and to ask whether the evidence would have been objectionable on the ground that it was simply irrelevant to the breach of duty raised by the pleading.

Of course, they were concerned there with breaches of duty. We’re concerned with a different cause of action.

In paragraph [30], he then noted, with respect to that, that the facts:

…might be said to have arisen out of substantially the same story as that which would have been told to support the original cause of action. Further, it would not have been irrelevant to prove, as a matter of evidence, these things at trial in order to establish the existing cause of action for negligence.

What that highlights is that what happened in this case, with respect to the $23,008.00, is that the facts are such which really do tell quite a different story from the facts with respect to the matter of $30,000.00.

I then turn to two further decisions. The first is the decision of Applegarth J (at first instance) of Menegazzo v Pricewaterhousecoopers (A Firm) and Others [2016] QSC 94. I refer to it for two particular matters. But, initially, I will refer to it with respect to the issue of amendment. At paragraph [43] he referred to the fact that:

In Murdoch v Lake, Peter Lyons J–

or Justice Peter Lyons –

(with whom Morrison JA agreed) cited authority that a “cause of action is the combination of facts which gives rise to a right to sue”.

Applegarth J then noted that Lyons J in that case went on to observe as follows:

… if an amendment introduces a new material fact, then a new cause of action is introduced, even if the cause of action is of the same type or category as one pleaded before the amendment. However, if the material facts remain the same, then no new cause of action is introduced.

I’ll just mention, at this stage, that the material facts – the new material facts - which I have addressed in detail in argument, are substantially different:  that is, in this case, with respect to the $23,008.00 they involve 14 cheques, each cheque made out to the plaintiff’s director’s name, Mr Doolan. There are also other clear differences.

Then, at paragraphs [48], [49], [50], [51] and [52], he then dealt with the issues of “substantially” the same facts, and appropriateness. I do not intend to repeat those, because they really set out, again, the issue of the discerning of whether the story is the same story which has been told and, as Applegarth J noted, it:

…is a shorthand reference to the matters that the plaintiff has to prove.

He did, however, indicate that it was exemplified in Thomas v State of Queensland that, on occasions, the judge can use “rather too broad a brush”. In paragraph [50] he referred to those as being “practical tests” which of course apply in reaching conclusions about whether the requirements of r 376(4)(b) is satisfied. As he noted, a question of degree is involved. The following paragraphs, [51] and [52], deal with appropriateness; and in the circumstances I need not refer to them. Clearly they are a little wider than simply prejudice. I’ll come back to that case in a moment for other reasons.

The last case is Pacific National Proprietary Limited v Aurizon Network Proprietary Limited [2016] QSC 218 – a decision of Jackson J, who also considered this particular matter. He referred, of course, to r 376 now being supported by s 16 of the Civil Proceedings Act 2011. He also went back to the case law prior to both the amendments to the old Rules of the Supreme Court 1900 and now onto the Uniform Civil Procedure Rules 1999, remarking of course that these rules are facultative because they have the remedial purpose to permit amendments which would have been prohibited under the “old rule” in Weldon v Neal (1887) 19 QB 394.

His references then are to the matter of a new cause of action arising from the same or substantially the same facts. He remarked, of course, that in his view it could not be the same facts, because to get a new cause of action you would actually have to allege some different fact. It’s unnecessary in this case to engage in that discussion. He then referred to the decision of Thomas J in Draney v Barry [2002] 1 Qd R 145 at 164, paragraph [57] - and I will simply read that comment: 

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 the discretion under r 376(4). If the necessary additional facts to support a new cause of action arise out of substantially the same story as that which would have been told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not itself prevent a finding if the new cause of action arises out of substantially the same facts. In short, this particular requirement should not be seen as a straightjacket.

: at [24]. Then, in following paragraphs, he dealt with the issue of discretion.

What I intended to come back to in Menegazzo is this:  at paragraph [45] he noted that, in some cases – this is Applegarth J – it would be inappropriate to decide a contested issue of whether a relevant period of limitation has ended and therefore whether r 376 applies because that issue cannot fairly be determined. As he went on to remark, though, this does not mean that issues under r 376(4) cannot be determined. In fact, he suggested they should be so determined to allow the effective date of the amendments to be determined. As he further stated: 

If the circumstances demonstrate that the requirements of r 376(4) are satisfied, then leave may be granted … (but) (i)f, on the other hand, they are not, then an order may be made that the amendments take effect, not from the date of the document which is being amended, –

which in this case would be the claim and the statement of claim as originally dated –

…but from some other date, such as the date where the amendments were foreshadowed or the date when the application to amend was made or the date that leave is granted to make them.

The reason why that is important is because it seems to me that it is distinctly arguable that the statement made by the defendant through her agent in the further and better particulars with reference to the sum of $23,008.00 could well be determined at a trial to be an “acknowledgement of debt”. The issue of acknowledgement of debt arises, of course, from ss 35(3) and 36(2) of the Limitation of Actions Act 1974, respectively, concerning this particular matter. They deal with circumstances where rights of action have accrued to recover a debt or other liquidated pecuniary claim and the person liable acknowledges the claim, whereupon the right shall be deemed to have accrued on and not before the date of the acknowledgement – that’s s 35(3) – and then by the latter section, any acknowledgement made by the agent of the person to whom it is required to be made under section 35 shall be made to the person whose title is being acknowledged. This permits reference to statements made by agents.

Whether or not, of course, it is an acknowledgement is discussed by learned authority, including that by Gibbs CJ in The Stage Club Limited v Millers Hotels Proprietary Limited (1981) 150 CLR 536 at 544. It is unnecessary for me, in fact, to refer to that particular consideration other than, of course, to state that it may well be, in this case, that that test could be met.

In the circumstances of this case, having been satisfied that, in this proceeding, there is error in that the new cause of action which is alleged with respect to the loan of $23,008.00 is based on certain facts which are not the same or substantially the same facts as those originally alleged, that must mean that the new cause of action, although sought to be called “the second loan agreement” – which, of course has no relationship to the sum of $30,000.00 originally alleged as the second loan agreement – may be statute barred on the expiry of six years pursuant to s 10 of the Limitations of Actions Act, namely, 24 December 2015.

Nevertheless, it is only at trial that the issue can be determined as a live issue. If it is in issue on the pleadings that there has been such an acknowledgement as that which I have referred to, then it is open, if I make an order that the amendments to paragraphs 4 and 7 of the latest statement of claim take effect on and from the date of the decision of the learned Magistrate, for the issue to be determined either as one in which the limitation has expired (if there is no such acknowledgement) or, if there is an acknowledgment, that it is within the limitation period. The effective date in question is 20 May 2016.

Accordingly, I will allow the appeal to the extent of adding the following term to the order made. The order was originally made by a draft which was initialled by the learned Magistrate and dated the 20^th of May 2016. I will make a further order called 1A in the following terms:  That the amendments to paragraphs 4 and 7 of the amended statement of claim be taken to be effective on and from 20 May 2016.

Right. I then move to the issue of costs in this particular case. It seems to me to be a case in which neither party really has succeeded on the matters they have raised, and accordingly – although I’ll hear argument as to the issues – that there ought to – as in the hearing at first instance – be no order as to costs. I’ll first hear from you, Ms Kinchina.

MS KINCHINA: Your Honour, we would ask for the costs of the appeal, but if that’s not successful we’d ask at least for the costs of the amendments to the pleadings.

HIS HONOUR: No. All I think I’ll do in the circumstances is order that the costs of the appeal be the parties’ costs in the cause. Therefore, if you win and establish there is no acknowledgement, all right, you get the costs. If your opponent wins then – because there is an acknowledgment – it gets the costs of the appeal. Otherwise I will order no order as to costs. So your choice is costs of the cause or no order as to costs.

MS KINCHINA: And the same goes with respect to amendments?  The costs of amendments? 

HIS HONOUR: Well, I’m not changing the order which was made at first instance. It was – it was no order to costs in the first instance.

MS KINCHINA: Yes, your Honour.

HIS HONOUR: That wasn’t appealed, as I understand it. And, in any event, I really have not upheld your appeal. So which particular order of costs do you favour? 

MS KINCHINA: Well, out of the two options given, we’d favour the costs in the cause.

HIS HONOUR: Costs in the cause?  All right. What’s your submission, Mr Smith? 

MR SMITH: Happy with costs in the cause, your Honour.

HIS HONOUR: All right. I further order that the costs of the appeal be each party’s costs in the cause.

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