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Greystone Distributions (Qld & NSW) Pty Ltd v Rostron Carlyle Solicitors QDC 227
DISTRICT COURT OF QUEENSLAND
Greystone Distributions (Qld & NSW) Pty Ltd as trustee for BR & SK Maidment Trust & Ors v Rostron Carlyle Solicitors & Anor  QDC 227
GREYSTONE DISTRIBUTIONS (QLD & NSW) PTY LTD (ACN 121 440 908) AS TRUSTEE FOR BR & SK MAIDMENT TRUST
(first applicant/first plaintiff)
KURSHONBROOKE PTY LTD (ACN 122 429 298)
(second applicant/second plaintiff)
BRADLEY RALPH MAIDMENT
(third applicant/third plaintiff)
SUZANNE KAY MAIDMENT
(fourth applicant/fourth plaintiff)
ROSTRON CARLYLE SOLICITORS (ABN 19 135 739 537)
(first respondent/first defendant)
GREGORY STEPHEN ROSTRON
(second respondent/second defendant)
BD No 4607 of 17
Application – Civil
District Court at Brisbane
15 November 2019
27 and 30 September 2019
The application is dismissed.
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JOINDER OF CAUSES OF ACTION AND OF PARTIES – PARTIES – GENERALLY – where the plaintiffs retained the defendants in a Supreme Court proceeding for misleading and deceptive conduct, misrepresentation, and breach of contract – where the plaintiffs claim that the defendants omitted the first plaintiff as a party to the Supreme Court proceeding with the result that the Supreme Court proceeding was improperly constituted and had to be compromised for a nominal sum – where the plaintiffs commenced the present proceeding claiming that the defendants were negligent and/or in breach of retainer – where the plaintiffs applied to include as new parties, both the firm of solicitors who prepared, and the counsel who settled, the claim and statement of claim in the present proceeding – whether the new parties are necessary parties, and whether the court can adjudicate effectually and completely on all matters in dispute in the present proceeding without the new parties – whether it is desirable, just or convenient for the new parties to be joined
Uniform Civil Procedure Rules 1999, r 69
China First Pty Ltd v Mount Isa Mines Limited  QCA 350
Giannarelli v Wraith (1988) 165 CLR 543
Kestrel Coal Pty Ltd v Longwall Roof Supports Ltd  QSC 187
Leda Holdings Pty Ltd v Caboolture Shire Council  1 Qd R 467
C Wilson for the applicants
E Baker (sol) for the first and second respondents
R J Anderson QC for the third respondent
J R Green for the fifth respondent
Roche Legal for the applicants
Hill & Wilcox for the first and second respondents
Moray & Agnew for the third respondent
Shine Lawyers for the fourth respondent
DLA Piper for the fifth respondent
- The plaintiffs seek to join Shine Lawyers and barrister Mr David Turner as additional defendants to current proceedings involving recovery of damages in negligence and for breach of contract of retainer against the plaintiffs’ former solicitors, Rostron Carlyle.
- The present action against Rostron Carlyle is said to arise from their conduct in earlier proceedings brought on behalf of Mr and Mrs Maidment (the third and fourth plaintiffs) and a related company Kurshonbrooke Pty Ltd (the second plaintiff) in the Supreme Court of Queensland against Mr and Mrs Oberhofer, Monet Designs Pty Ltd and Greystone Vacuums USA Inc. For convenience and unless otherwise specifically stated in these reasons, I shall refer to those proceedings as the Oberhofer proceedings and the defendants in the Oberhofer proceedings as the Oberhofer interests.
- The Oberhofer proceedings commenced in 2010. In it, Kurshonbrooke and Mr and Mrs Maidment claimed damages and other relief in respect of losses incurred by them as a result of breach of contract and misleading conduct by the Oberhofer interests.
- In the present action, the plaintiffs contend that Rostron Carlyle was negligent in omitting the first plaintiff as a party to the Oberhofer proceedings, with the result that those proceedings were improperly constituted and had to be compromised at a discount. The Oberhofer proceedings resolved on terms the plaintiffs say were unsatisfactory to them as a consequence of Rostron Carlyle’s negligence.
- Between 2017 and 14 August 2019, Shine Lawyers acted for the plaintiffs. Mr Turner also acted for the plaintiffs as he was instructed by Shine Lawyers to settle the initial pleadings in the present action.
- In this application, the plaintiffs assert that Shine Lawyers and Mr Turner allowed relevant limitation periods to expire with respect to “unpleaded but good arguable claims” by the plaintiffs against Rostron Carlyle arising out of their conduct of the Oberhofer proceedings. The plaintiffs contend they have lost valuable opportunities to recover damages against Rostron Carlyle.
- UCPR rule 69 permits the inclusion of an additional party. It relevantly states:
“69Including, substituting or removing party
- The court may at any stage of a proceeding order that—….
- any of the following persons be included as a party—
- 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;
- 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.
- To determine whether rule 69(1)(b)(i) or (ii) applies, it is necessary to consider, inter alia, the proposed pleading to be advanced against the prospective parties.
- The plaintiffs submitted that the additional defendants ought be joined in light of rule 69(1)(b)(i). Further and in regards to joining Mr Turner, the plaintiffs submitted that if he is not added as a defendant, they risk failing in any subsequent action against him on ‘issue estoppel’ grounds.
- Mr Turner resisted the application for joinder unlike Shine Lawyers (by their insurer Lexon Insurance) who took no active role in it.
Can the court adjudicate effectually and completely on all matters in dispute in the proceeding?
- It is convenient at this juncture to outline the following brief circumstances of the hearing of this application:
- (a)The initial hearing of this application involved all relevant parties, including the proposed third, fourth and fifth defendants on 27 September 2019. The application proceeded on the basis of the proposed pleadings as against the proposed third, fourth and fifth defendants.
- (b)At the request of the applicants, further argument took place on 30 September 2019 in relation to a revised proposed pleading against the proposed third, fourth and fifth defendants.
- (c)I was then notified by the applicants’ solicitors (absent notification given to the proposed fourth and fifth defendants) that the application between the applicants and the proposed third defendant settled, but that I should proceed to determine the application as against the remaining proposed defendants, being Shine Lawyers and Mr Turner.
- (d)After consideration of the proposed pleading on 21 October 2019 in chambers, I sought submissions from the applicants as to how the proposed pleading disclosed a viable cause of action against Shine Lawyers and Mr Turner, given the application was no longer pressed against the proposed third defendant.
- (e)On 30 October 2019, the applicants’ solicitors sought to rely upon a further proposed pleading said to have been consequent upon releasing the proposed third defendant. Not unsurprisingly, Mr Turner’s solicitors objected to the proposed pleading given:
- (i)The application had already been the subject of two hearings, with judgment reserved; and,
- (ii)The proposed pleading did not sufficiently respond to my enquiry as to how the plaintiffs envisaged the remaining part of their application should be dealt with now that the claim against the proposed third defendant had settled.
- I agree with the submissions advanced on Mr Turner’s behalf. Consequently I have determined this application having regard to the proposed pleading first filed in support of the application.
- The proposed pleading makes, inter alia, the following allegations:
- (a)In 2006, Mr and Mrs Maidment entered into agreements with Monet Designs granting them agency rights in Queensland and New South Wales in relation to the sale of vacuum devices.
- (b)Also in 2006, Mr Maidment engaged with Greystone USA (a related company to Monet) and the persons behind it (Mr and Mrs Oberhofer) in relation to a proposed capital raising for Greystone USA. Those communications, it is asserted, included false and misleading claims by the Greystone USA interests about the value proposition presented by their offer.
- (c)Induced by those false claims, Greystone and Kurshonbrooke (by Mr Maidment) entered into agreements that, inter alia, would require them to pay a total of $630,000.00 in return for which they (alternatively, Mr and Mrs Maidment) would receive a sole agency for 10 years in relation to the sale of the devices in Queensland and New South Wales (Part A of the agreement), together with 20 per cent of the shares in Greystone USA and an income stream arising out the sales of the devices in the USA, Canada and Europe (Part B of the agreement).
- (d)Between 14 September 2006 and January 2007, Mr and Mrs Maidment paid $330,000.00 on behalf of Greystone to recover the benefit of part A of the agreement and Kurshonbrooke paid $300,000.00, money that had been loaned to it by Mr and Mrs Maidment.
- (e)The agreement failed leaving the plaintiffs substantially out of pocket. The principle and necessary allegation is that Greystone, Kurshonbrooke, and alternatively Mr and Mrs Maidment would not have entered into the agreement or made any payment pursuant to it had they known the truth behind the otherwise misleading representations as to financial matters.
- (f)In about 2010, the plaintiffs engaged Rostron Carlyle and counsel was retained by them (namely the then proposed third defendant) to act for them in relation to the said claims against the Oberhofer interests.
- (g)In October 2010, a claim and statement of claim on behalf of Kurshonbrooke and Mr and Mrs Maidment, settled by the then proposed third defendant, was filed in the Oberhofer proceeding.
- (h)Applicable limitation periods with respect to “good arguable claims” in the plaintiffs’ claim against the Oberhofer interests variously expired on 14 September 2012, “in early December 2012 and January 2013” and 28 September 2013, but in any event during the period that Rostron Carlyle and the then proposed third defendant were acting for the plaintiffs in the Oberhofer proceeding.
- (i)Rostron Carlyle and the then proposed third defendant did not add Greystone as a plaintiff, plead available claims against the Oberhofer interests on its behalf, plead available claims on behalf of Kurshonbrooke or properly plead available claims on behalf of Mr and Mrs Maidment before the expiry of the applicable limitation periods.
- (j)Therefore the gist of the complaint against Rostron Carlyle and the then proposed third defendant is that a statement of claim was drawn that wrongly claimed that the primary action was at the suit of Mr and Mrs Maidment when in fact the part A claim was at the suit of Greystone, and the part B claim was at the suit of Kurshonbrooke.
- The claim against Rostron Carlyle and the then proposed third defendant in this respect is premised on the argument that they owed Greystone a duty to advise it as to its rights in respect of the part A claim, the limitation periods of which expired in September 2012 (under the statutory causes of action) and September 2013 (under the breach of contract claim) and similarly failed to advise Kurshonbrooke in relation to its rights under the part B claim, the limitations periods for which expired ‘in late 2012 and early 2013’.
- By the actions of Rostron Carlyle and the then proposed third defendant in not adding Greystone as a plaintiff before the expiry for applicable limitation periods, the expiry of the relevant periods of limitation meant, it is asserted, that by the time of the trial, the errors in the pleading could not be remedied and the proceeding had to be compromised for, effectively a nominal sum ($15,000.00).
- In pleading the plaintiffs’ claims in this proceeding, Shine Lawyers and Mr Turner did not add the proposed third defendant as a defendant or plead “good arguable claims” against him or Rostron Carlyle before the expiry of the applicable limitation periods with respect to such claims.
- In addition to a claim that Mr and Mrs Maidment wasted costs in pursuing claims that did not belong to them, Mr and Mrs Maidment also claim that they had another claim against the Oberhofer interests (that had not been made the subject of the Oberhofer proceeding) to the effect that the losses of Greystone and Kurshonbrooke were also their own, because the money advanced by Greystone and Kurshonbrooke to Greystone was their own money that had been loaned to them.
- Further, because the plaintiffs alleged that their action against the then proposed third defendant is now time barred, the plaintiffs seek to join Shine Lawyers and MrTurner on the basis that each breached their respective retainers and duties of care to the plaintiffs by failing to advise that the then proposed third defendant:
- (i)was a concurrent wrongdoer; and,
- (ii)ought to be joined as a party to these proceedings.
- One issue which is difficult for me to reconcile appears in paragraphs 98 and following of the proposed pleading. The plaintiffs assert they in fact are precluded from suing the then proposed third defendant because of the expiry of the limitation period for claims against him. Notably, they are pleaded as positive assertions. At paragraph 108 for example, the plaintiffs plead that “the Limitation Period for the First Plaintiff’s claim against the [proposed] Third Defendant expired no later than 14 September 2018”. At paragraph 111, it is pleaded that the “Limitation Period for the Second Plaintiff’s claim against the [proposed] Third Defendant expired no later than about 14 September 2008 or alternatively no later than December 2018 and January 2019”. I consider those paragraphs ambiguous when regard is had to the pleading as a whole, sufficient to question the veracity of the proposed pleading (or at least that part of it).
- Having considered the proposed pleading, I have formed the view that Mr Turner is not a necessary party and that the court can adjudicate effectually and completely on all matters in dispute in the proceeding without him. Indeed the allegations levelled against him in the proposed pleading are, what I consider to be, ancillary to the real issues in dispute. The plaintiffs have not disclosed any basis upon which Mr Turner could participate meaningfully in the underlying dispute between the plaintiffs and Rostron Carlyle.
- In China First Pty Ltd v Mount Isa Mines Limited  QCA 350, Gotterson JA (with whom the other members of the Court of Appeal agreed) stated at :
“These cases reveal a systematic approach taken by courts to the determination of whether orders made or sought have had, or if made, will have, a direct effect on a legal right or liability. That approach has involved an identification of the specific legal right or liability said to have been affected or liable to be affected, and an assessment of its legal characteristics. Next, the court has inquired into whether the right or liability itself has been affected, or is liable to be affected. Typically, the inquiry has sought to establish whether there is an effect on the existence of the right or liability or on its legal characteristics; or whether there is an effect on the legal environment in which the right might be exercised or the liability discharged, such as would impact upon its exercise or discharge from a legal perspective. An effect of either kind has been regarded by courts as a direct effect on the right or liability for the purposes of the test.”
- In my view, the current proceedings between the plaintiffs and Rostron Carlyle does not “directly effect” any liability between the plaintiffs and Mr Turner. The majority of the allegations concern Rostron Carlyle who deny liability and assert, in part, that the then proposed third defendant is a concurrent wrongdoer.
- I agree with the submissions advanced on Mr Turner’s behalf that, at most, the imposition of liability upon Rostron Carlyle may be relevant to an assessment of the quantum of damages (if any) suffered by the plaintiffs in respect of the breaches alleged by them against Mr Turner. The determination of the present proceedings should not, however, result in any determination of liability (if any) between the plaintiffs and Mr Turner, nor should it determine the merits of any defences available to Mr Turner in any subsequent proceedings between him and the plaintiffs. For the most part, it does not concern Mr Turner. As stated, the allegations levelled against him in the proposed pleading are, what I consider to be, ancillary to the real issues in dispute. Mr Turner’s presence is not necessary for the court to adjudicate effectually and completely on all matters in dispute in the proceeding.
Is it desirable, just or convenient for Mr Turner to be joined?
- Additionally, I consider that it is not just, desirable or convenient to join Mr Turner. Rule 69(1)(b)(ii) allows joinder of a person whose presence before the court would be desirable, just and convenient to do so. The discretion conferred by the provision reflects a concern that the determination of proceedings ought to be conducted in accordance with the rules of natural justice. Joining Mr Turner to the present proceedings is likely to be productive of unnecessary delay and expense and would not assist with the timely disposition of the proceedings because Mr Turner would be required:
- (a)to plead to the proposed pleading in circumstances where the majority of the allegations made concern Rostron Carlyle; and,
- (b)to participate in a trial as to the conduct of the proceedings in which Mr Turner was not responsible (namely the Oberhofer proceedings).
- Further the merits of the case proposed to be advanced after joinder is also a relevant consideration as to whether joinder should be allowed. In doing so, I note his Honour Justice Muir’s authoritative guidance in Kestrel Coal Pty Ltd v Longwall Roof Supports Ltd  QSC 187 at  that:
“As the joinder application requires the exercise of a discretion, the merits of the case proposed to be advanced after joinder is a relevant consideration, at least where there are significant doubts concerning its prospects of success.”
- The matters sought to be advanced against Mr Turner involve advocates’ immunity. That calls into consideration principles enunciated in Giannarelli v Wraith (1988) 165 CLR 543 (especially 559-560). It is possible, albeit not at this stage of these proceedings that same could potentially be a complete defence for Mr Turner which the plaintiffs now seek to join, given Rostron Carlyle have pleaded it in their defence. I consider it is best left for this issue to be dealt first within the current litigated action, before involving other potential parties.
- All in all, I am of the view that the joinder serves no useful purpose. It is, what I consider to be, an attempt to join two separate trials and it is not desirable that both be resolved within the current litigated proceeding. For those reasons, the application to join Mr Turner should be dismissed.
- Even if I committed an error in not allowing the applicants the opportunity to rely upon what was the third revised proposed pleading, I am not satisfied inclusion of Mr Turner is warranted for the reasons already explained. To complicate matters further that proposed pleading involves a person to whom the plaintiffs no longer seek to include. Rostron Carlyle in its defence has pleaded that the then proposed third defendant is a concurrent wrongdoer, to which the plaintiffs in their reply, currently deny.
- As for Shine Lawyers (by their insurer), I would have appreciated a more robust and thoughtful consideration of the merits to the application notwithstanding “Shine and [their insurer] Lexon does not wish to appear at the application and neither consent nor oppose to the joinder of Shine Lawyers”. Despite such a passive stance, I think it does not substantially affect the need for the discretion to be judicially considered irrespective of whether consent or opposition is made to the application. The allegations sought to be levelled against Shine Lawyers are similar to that of Mr Turner and for the reasons articulated in disposing of this application against Mr Turner (absent issues of advocate immunity), I consider the application should also fail against Shine Lawyers.
- Therefore the application is dismissed.
- As for costs, and unless submissions are received to the contrary, I propose to order that the plaintiffs pay Mr Turner’s costs of, and incidental to, the application and there be no order as to costs involving Shine Lawyers. Accordingly I invite written submissions, within 14 days, to the contrary.
 At the hearing of the application the plaintiffs sought to include a further additional party as the proposed third defendant, but that issue was subsequently resolved without the need for determination by this court.
 See affidavit of Christopher Roche sworn 20 September 2019, Exhibit CR-1, A64-A83.
 I was directed to the authorities of Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, 602-613; Interchase Corporation Ltd (in liq) v FAI General Insurance Co Ltd  2 Qd R 301, 306-07.
 Despite an appearance from a solicitor from Shine Lawyers on day 1 indicating that Shine Lawyers consented to the order, the position of Shine Lawyers and their insurer Lexon Insurance, was that it “neither consent nor oppose the joinder of Shine Lawyers”: exhibit 1 tendered on day 2.
The reason for the two day application was that on 30 September 2019, a revised draft amended claim and further amended statement of claim was filed by leave following the plaintiffs’ urgent request to relist this matter. On that day, I was required to rule with respect to an impeding expiry of a limitation period. I ruled that the period of limitation for  of the proposed pleading arose in early 2007 following an act of repudiation in light of the Oberhofer proceedings at  and  (cf 108(b) of the proposed pleading).
The proposed pleading contemplated the inclusion of the additional party (which was then subsequently resolved) as per footnote 1 above.
 Affidavit of Christopher Roche sworn 20 September 2019 at CR-1 at A39-A93.
 Affidavit of Christopher Roche sworn 29 September 2019 at CR-2 at A39-A93. See also footnote 4.
 Affidavit of Sean Joseph Roche sworn 24 October 2019 at CR-3.
 Affidavit of Christopher Roche sworn 20 September 2019 at CR-1 at A39-A93.
 Paragraphs 9 and 10 of the proposed statement of claim.
 Paragraphs 13 – 19 of the proposed statement of claim.
 Paragraphs 23 and 24 of the proposed statement of claim.
 Paragraphs 39 and 40 of the proposed statement of claim.
 Paragraph 57 of the proposed statement of claim.
 See for example paragraph 62 of the proposed statement of claim.
 Paragraph 67A(b) of the proposed statement of claim. However if Greystone and Kurshonbrooke were to recover against the Oberhofer interests, Mr and Mrs Maidment could not recover what would be the same amount, and if Greystone and Kurshonbrooke did not succeed, then there was no course of action for Mr and Mrs Maidment to attach to it in any event.
 See also generally the defence filed 26 February 2018.
 Leda Holdings Pty Ltd v Caboolture Shire Council  1 Qd R 467, 470.
 (1988) 165 CLR 543, 559–560 (per Mason CJ).
- Published Case Name:
Greystone Distributions (Qld & NSW) Pty Ltd as trustee for BR & SK Maidment Trust & Ors v Rostron Carlyle Solicitors & Anor
- Shortened Case Name:
Greystone Distributions (Qld & NSW) Pty Ltd v Rostron Carlyle Solicitors
 QDC 227
15 Nov 2019