Allen v Lloyd-Jones

CATCHWORDS: PRACTICE AND PROCEDURE - application for joinder of party to proceedings after expiration of limitation period - Civil Procedure Act 2005 (NSW), ss 64 and 65 - type of mistake to be corrected - existence of discretion even if relevant type of mistake found to exist

Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 64 and 65 LEGISLATION CITED: Limitation Act 1969 (NSW), s 56A Uniform Civil Procedure Rules 2005 (NSW), Part 6 r 6.24(1)

Allen v Lloyd-Jones (No 3) [2010] NSWDC 53 AON Risk Services Australia Limited v Australian National University [2009] HCA 27 CASES CITED: Greenwood v Papademetri [2007] NSWCA 221 Preston v Nikolaidis [2010] NSWSC 427 The Owners of Strata Plan 62658 v Black No Sugar Pty Ltd [2010] NSWSC 408 Webb v Bloch (1928) 41 CLR 331

PARTIES: Plaintiff: Anthony James Allen Defendant: Laurel Lloyd-Jones

Plaintiff: Ms S Chrysanthou COUNSEL: First Defendant: Mr C D Longman (Solicitor) Elm Grove Sanctuary Limited: Mr C Dibb

Plaintiff: Andrew Warren & Associates SOLICITORS: First Defendant: Levitt Robinson Solicitors Elm Grove Sanctuary Limited: Foley Lawyers

[1] The plaintiff on 13 April 2010 brought an application to join Elm Grove Sanctuary Limited ("Elm Grove Sanctuary") as trustee of the Elm Grove Sanctuary Trust ("the Trust") as the second defendant in these proceedings, as these proceedings were initially set down for hearing on 27 April 2010 as a 2-week plus jury trial. As the hearing date was imminent, and no notification had been given to Elm Grove Sanctuary, I made orders for the vacating of the hearing date and, in addition, acceded to the plaintiff's request to strike out the Notice of Intention to Elect Trial by Jury so that the matter will be heard as a judge alone trial: Allen v Lloyd-Jones (No 3) [2010] NSWDC 53.

[2] The matter is now fixed for hearing with an estimate of one week commencing 19 July 2010. The parties knew, when they accepted this adjourned date, that there was a possibility that this adjourned date could cause problems for the proposed new defendant.

[3] The applications before me today are applications to join the proposed new defendant and to strike out the defence of contextual truth pleaded by the existing defendant. By agreement of the parties, the application to strike out the defence of contextual truth has been stood over for argument to the Defamation List on 11 June 2010, as the parties considered the joinder application needed to be considered first.

[4] The application to join Elm Grove Sanctuary as trustee of the Trust is brought pursuant to ss 64 and 65 Civil Procedure Act 2005 (NSW) and Part 6 r 6.24(1) Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). I shall first set out the relevant facts.

[5] The plaintiff relies upon the affidavit of his solicitor, Andrew Warren, sworn on 13 April 2010. Mr Warren's affidavit states that he received a letter on 10 March 2010 from the solicitors for the defendant advising she was "not in a position to contribute to the costs of a mediation" (Exhibit G). Mr Warren made a search of the house in which the defendant (a Franciscan nun) resided, and found that it was owned by the Elm Grove Trust, a Trust for which Elm Grove Sanctuary Limited is the trustee. Prior to this, according to Ms Chrysanthou's submissions, the plaintiff's legal advisers "didn't realise that [the plaintiff] didn't have any money."

[6] Ms Chrysanthou also pointed to the fact that since proceedings were commenced against the defendant on 7 February 2009, the Elm Grove Sanctuary Trust has been placing advertisements in the local newspaper to raise funds for the defendant's legal fees. One such advertisement, inserted in the Bega District News on 30 June 2009, is annexure "O" to Mr Warren's affidavit, which is headed "A warm thank you for the many generous donations":

A warm thank you for the many generous donations to assist Sister Laurel Lloyd-Jones of the Elm Grove Sanctuary Trust in defending proceedings brought against her by Tony Allen, Bega Valley Shire Mayor . [picture] Laurel is a Franciscan Sister and Executive Director of the Elm Grove Sanctuary Trust, a Charitable Foundation working for human rights, social justice, care for the environment and care for all people.

Founded in 1983 the EGS Trust is endorsed by the Australian Taxation Office as a tax exempt charity. All donations are tax exempt. ABN 27 003 317 619

Donations to: Elm Grove Sanctuary Trust c/o PO Box 159 Bermagui Phone: Frances 0428 816 538

[7] Ms Chrysanthou submitted that this meant the Trust was not only aware of the litigation but was "consciously interfering in it", in that it was seeking to raise money to pay the defendant's legal fees. Although this advertisement was published on 30 June 2009 (and there had clearly been other such advertisements beforehand, judging by the "thank you" reference), these advertisements, Ms Chrysanthou said, had only come to the plaintiff's attention recently.

[8] Ms Chrysanthou also pointed to a number of discretionary matters, namely the plaintiff's "real concern" (written submissions, paragraph 13) that the defendant will be unable to meet any costs orders, as the Trust owns the property at which she resides, according to the property search carried out by the solicitors for the plaintiff.

[9] The application the plaintiff brings is to join "Elm Grove Sanctuary Limited", the company which is the trustee of the Trust, as the second defendant to these defamation proceedings.

[10] The plaintiff first submits that the court may order the joinder of a party to proceedings pursuant to r 6.24(1) UCPR.

[11] Rule 6.24(1) UCPR provides: " 6.24 Court may join party if joinder proper or necessary

(1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party." [12] Under the heading "Ought to have been joined", the plaintiff's written submissions set out that the matter complained of appears on Trust letterhead and that the defendant signed the matter complained of as "C.E.O. Elm Grove Sanctuary Trust", which clearly identify the Trust (for which the company is the trustee and relevant legal entity) as a party jointly and severally liable for the publication: Webb v Bloch (1928) 41 CLR 331 at 363 - 5. [13] It is indeed the case that the matter complained of identifies not only the Trust but also (albeit only by its ABN) Elm Grove Sanctuary Limited, the proposed additional defendant. These references can be summarised as follows: (a) the matter complained of is published on the letterhead "ELM GROVE SANCTUARY TRUST" and gives the address, email, telephone and website addresses of the trust;

(b) underneath this letterhead appear the words: "Founded 1983 - the EGS Trust is endorsed by the Australian Taxation Office as an income tax exempt charity. Donations are tax deductible.";

(c) underneath this statement appears the ABN for the proposed new defendant, Elm Grove Sanctuary Limited, namely ABN 27 003 317 619; and

(d) the letter is signed by the defendant as "C.E.O. Elm Grove Sanctuary Trust". [14] The problem is, however, that the limitation period expired on 7 February 2010. Rule 6.24(1) UCPR is not of assistance to the plaintiff in those circumstances: Greenwood v Papademetri [2007] NSWCA 221 at [26].

[15] The submissions concerning r 6.24(1) UCPR are, however, relevant to this application because, as Mr Dibb (for the company which is the proposed second defendant) pointed out, they demonstrate the absence of "mistake" of the kind required for ss 64 and 65 Civil Procedure Act 2005.

[16] There is no application for extension of time pursuant to s 56A Limitation Act 1969 (NSW). Sections 64 and 65 Civil Procedure Act 2005 [17] If a party can be joined under s 64 or s 65 Civil Procedure Act 2005, the amendment takes effect (unless the court otherwise orders) from the date on which proceedings were commenced. A party joined under s 65 who would otherwise have a limitation defence if new proceedings were commenced against that party would not have a limitation defence available; s 65(5) explicitly states that this section is designed to have such an effect. The provisions of s 64 are designed to provide a discretionary basis upon which amendments can be made to a statement of claim in cases that are not covered by s 65: Greenwood v Papademetri at [28]. However, s 64 is clearly restricted to cases not covered by s 65, and the application before me has been framed in terms of s 65. [18] The power conferred by s 65 is explained by Campbell JA in Greenwood v Papademetri at [32] - [36]. At [34] Campbell JA warns: " [34] Section 65(2)(b) does not confer on the court power to correct any and every mistake that has been made in the name of a party to the proceedings. It applies only to a mistake that, in the court's opinion, is neither misleading, nor such as to cause reasonable doubt as to the identity of the person intended to be made a party. In some cases where an amendment is sought under s 65(2)(b) there may be considerable argument about whether a mistake in the name of a party has those characteristics. However, no such argument was put to us on the present appeal." [19] A plaintiff may make a mistake in the name of a party in a number of ways. Ms Chrysanthou took me to two recent examples. In Preston v Nikolaidis [2010] NSWSC 427 a party who had been appearing in court since proceedings were commenced in 1993 without formally being added as a defendant was joined to the proceedings, apparently without objection. In The Owners of Strata Plan 62658 v Black No Sugar Pty Ltd [2010] NSWSC 408 a company was joined on the basis that the plaintiff intended to sue whichever company had provided the relevant design and supervisory services in relation to the hydraulic system in circumstances where there were successive designers, one of whom had not been joined, in circumstances where the amendment amounted to the correcting of a mistake in the proceedings.

[20] No such mistake occurred here. The principles for liability for the Trust as a publisher, conformably with the principles for liability for publication as explained in Webb v Bloch, supra, are factually obvious and legally clear. The letter was written on Trust letterhead and signed by the defendant in her capacity as Chief Executive Officer of the Trust.

[21] Ms Chrysanthou submitted that the company's identity was not apparent from the letterhead and signature of the matter complained of, and that this was why her client made the mistake of only bringing proceedings against the defendant. If the plaintiff was under any misapprehension as to who was legally liable for publications made on the letterhead of the Trust, his lawyers could have searched the register for the ABN appearing on the letterhead and obtained the corporation details or, if there was some difficulty in doing so, brought an application for discovery before suit. [22] The references to "mistake" in ss 64 and 65 is designed to give the court power to correct mistakes made in the name or identity of a party, and apply only to mistakes of the kind explained by the Court of Appeal in Greenwood v Papademetri at [34]. The mistake made in the present circumstances has none of the characteristics required for ss 64 or 65. The "mistake" is not even relevant to the issue of liability; it is merely a doubt about the enforceability of any judgment the plaintiff obtains against the defendant by reason of the defendant not having sufficient assets to meet any award of damages.

[23] I dismiss with costs the application to join Elm Grove Sanctuary Trust Limited as the second defendant to these proceedings. Discretionary matters [24] I have held that the plaintiff has failed to establish that the amendment is for the purpose of correcting a mistake in the name of a party to proceedings or for any other basis upon which relief is available under ss 64 or 65. However, in the event that I have erred in so finding, I set out my findings concerning the discretionary issues to take into account. [25] These discretionary issues are helpfully summarized in Greenwood v Papademetri at [35] as follows: " [35] Even if a proposed amendment is one whose effect could be described by the language in para (b) of s 65(2), there is still a discretion in the court whether to permit that amendment. Section 65(2) contemplates that any amendment made under s 65(2) will be effected through leave granted under s 64(1)(b). Thus, the discretion of the court concerning whether to grant leave to amend under s 65(2) needs to be exercised in accordance with s 64(2). Section 64(2) itself requires the court to exercise its discretion in accordance with s 58, which in turn requires the court to have regard to the provisions of ss 56 and 57. Even if it were not inherent in the grant of a discretion to a judicial officer, s 58(2)(b) enables the court to have regard, in an application for an order under s 65(2)(b), to matters such as the knowledge that the person proposed to be added as a party had of the proceedings during the limitation period, and the nature and degree of any prejudice that the person sought to be added would suffer if the order were made."

[26] Ms Chrysanthou identified the risk to her client of an unenforceable judgment as a discretionary matter (paragraphs 13 - 17 of the written submissions) and also asked me to take into account the conduct of the Trust in advertising fundraising for the defendant (paragraphs 18 and 21).

[27] Mr Longman, the solicitor for the defendant, opposed the joinder of the company on what he called "AON principles", namely the principles concerning late amendment enunciated by the High Court in AON Risk Services Australia Limited v Australian National University [2009] HCA 27. These included the imminent trial date and the likelihood of a further adjournment of the trial if this application was successful. [28] Mr Dibb, for the proposed additional defendant, said his client simply could not be ready for trial in such a short time. In addition, his client would be entitled to be heard on a number of trial-related issues, such as whether the trial should be by judge alone or with a jury. He submitted the only reason the application was brought was because the plaintiff "wanted to sue someone with money" and that it should have been obvious to the plaintiff's legal advisors that nuns (who, Mr Dibb pointed out, take vows of poverty) have no assets.

[29] If I have erred in holding that Elm Grove Sanctuary Limited cannot be joined as a party pursuant to s 65(2), I note I would not have exercised my discretion to grant leave to amend in accordance with s 58 (which in turn refers to ss 56 and 57) Civil Procedure Act for these reasons. The knowledge the plaintiff had of the relevant facts during the limitation period, as well as the nature and degree of the prejudice to be suffered by the defendant if such an amendment is permitted, are clearly matters which would militate against the granting of leave.

(1) Plaintiff's application to join Elm Grove Sanctuary Limited as trustee of the Elm Grove Sanctuary Trust dismissed. (2) Plaintiff to pay the costs of the defendant and Elm Grove Sanctuary Limited of this application. (3) Matter stood on to Friday 11 June 2010 at 9:00am for argument on contextual imputations (1 hour argument).

27/05/2010 - Typographical error - Paragraph(s) [29]

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