Supreme Court of Tasmania|2002-09-12|Before: Cox CJ

The applicant does not contend that it ought to have been joined as a party, but does contend that its presence may be necessary to enable the Court to adjudicate on and settle all the questions involved in the proceeding.

7 In this case, the plaintiff resists the application for joinder but the defendant supports it. In Amon v Raphael Tuck & Sons Ltd [1956] 1 All ER 273, Devlin J (as he then was) considered the English RSC O16, r11, which in its then form was substantially the same as our r184. At 286 - 287, he said:

8 A much wider approach was taken in the Court of Appeal in Gurtner v Circuit [1968] 1 All ER 328 where, at 332, Lord Denning MR expressed his disagreement with the "narrow construction" given the rule by Devlin J and said:

"I prefer to give a wide interpretation to the rules, as LORD ESHER, MR, did in Byrne v Brown (1889), 22 QBD 657. It seems to me that, when two parties are in dispute in an action at law and the determination of that dispute will directly affect a third person in his legal rights or in his pocket, in that he will be bound to foot the bill, then the court in its discretion may allow him to be added as a party on such terms as it thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in dispute 'to be effectually and completely determined and adjudicated upon' between all those directly concerned in the outcome."

A year later in the Court of Appeal in deciding the case of Re Vandervell Trusts [1969] 3 All ER 496 at 499, Lord Denning MR said:

"We will in this court give the rule a wide interpretation so as to enable any party to be joined whenever it is just or convenient to do so. It would be a disgrace to the law that there should be two parallel proceedings in which the selfsame issue was raised, leading to different and inconsistent results. It would be a disgrace in this very case if the Special Commissioners should come to one result and a judge in the Chancery Division should come to another result as to who was entitled to these dividends."

This decision was reversed in the House of Lords sub nom Vandervell Trustees Ltd v White [1970] 3 All ER 16, where Viscount Dilhorne, at 24, rejected the proposition that the rule gave the court power to add a party whenever it is just and convenient to do so. In respect of the case at hand, he said:

"All matters in dispute in the action will, it seems to me, be effectually and completely disposed of without the commissioners [of Inland Revenue] being added as a party. Their presence is not necessary to ensure that the court can effectually and completely determine whether Mr Vandervell was entitled to the beneficial interest in the shares and whether, if he was, the deed operated retrospectively so as to deprive his executors of a right to the dividends paid before its execution." (Ibid)

9 The English rule and similar ones in some Australian jurisdictions (eg, Queensland and Victoria) have been modified to permit joinder of another person in certain circumstances where it is just and convenient to do so; but the Tasmanian rule remains in substance the same as that considered by the House of Lords in Vandervell Trustees Ltd v White (supra) and as the High Court rule O16, r4(2) and the Federal Court rule, O6, r8(1). Such a rule was considered by the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52. At 55 - 56, Lord Diplock, delivering the opinion of the Judicial Committee, said:

"The cases illustrate the great variety of circumstances in which it may be sought to join an additional party to an existing action. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases.

It has been sometimes said as in Moser v Marsden [1892] 1 Ch 487 and in In re I G Farbenindustrie AG Agreement [1944] Ch 41 that a party may be added if his legal interests will be affected by the judgment in the action but not if his commercial interests only would be affected. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between 'legal' and 'commercial' interests helpful. A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?"

This test was adopted by the Full Court of the Federal Court in News Limited v ARL [1996] FCA 870; (1996) 64 FCR 410, where at 525 the court said:

"In our opinion, the question should be decided according to the test proposed by Lord Diplock. The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317, at 322, per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential."

It was also adopted by the Full Court of the Supreme Court of Western Australia in Homestyle Pty Ltd v City of Belmont & Anor [1999] WASCA 59 at par30.

10 While the plaintiff's objection to the joinder is relevant, it is not determinative (Amon v Raphael Tuck & Sons Ltd (supra) at 366 and Boral Resources (Vic) v Robak Engineering & Construction Pty Ltd [1999] VSCA 66; [1999] 2 VR 507 at 525. It is not fatal to the application that the plaintiff makes no direct claim against the applicant and does not think it has any cause of action against it.

11 The plaintiff relied on Australian Tape Manufacturers Association Ltd v The Commonwealth [1990] HCA 38; (1990) 64 ALJR 530, where Dawson J dismissed an application for joinder as a defendant by an applicant which, having an interest in the benefits of the levies imposed under the Copyright Amendment Act 1989 (Cth) sought standing to resist a challenge to the validity of that legislation. At 532, Dawson J said:

"It cannot, in my view, be successfully argued that merely because a person may have had sufficient standing to contest the validity or invalidity of legislation in a separate action, that person falls within the terms of O16, r4(2) as a necessary party in an existing action brought to determine the validity or invalidity of the same legislation. ...

The applicants do not seek to have the Court adjudicate upon any question other than that already arising in the action. Indeed, the plaintiffs have no claim against the applicants. All that the applicants seek to do is to support the defendant in its contentions, in particular by calling evidence in support of its case. For all I know, the evidence which the applicants seek to place before the Court is essential to the defendant's case. But that does not make the applicants necessary parties in the action, even if it makes them, or those they seek to put forward, necessary witnesses. Perhaps it is convenient that the applicants be joined as defendants. The existing defendant regards it as so and for that reason supports the application. But however convenient it is, that does not make the joinder of the applicants as parties necessary to determine the question which arises.

In the end, all that the applicants are able to demonstrate is that they have an interest in the outcome of the litigation, which I have assumed to be sufficient to support an action of their own, and that they wish to ensure that the case in favour of the validity of the legislation is adequately presented."

This is a far cry from the present case. The applicant has an interest in the crane, the subject of the challenged agreement. If the agreement is declared to be void as the plaintiff claims, the plaintiff seeks orders which include restoration of sums totalling almost $M13, together with interest, or for the acquisition by the plaintiff of the crane with or without a requirement that the plaintiff make a payment for it to the defendant. Alternatively, should the agreement not be void, the plaintiff seeks a declaration that the effect of cl 22 of the agreement is that it may elect to renew the agreement, or is deemed to have renewed the agreement, after 31 January 2004 and will have no obligation to pay any further rent for the crane to the defendant. In either event, the applicant would be unable to obtain any benefit from cl 26 of its contract with the defendant for, in the former event, it would be unable to exercise its option to purchase the crane for $1, and in the latter, if the applicant does exercise its option, the plaintiff will be entitled to retain indefinite possession of the crane without paying for it.

12 The Australian Tape Manufacturers Association Ltd case is further distinguishable in that the defendant Commonwealth had a clear interest in resisting the challenge to its legislation and constituted as effective a contradictor as the parties seeking joinder, whereas in the present case, the possible ultimate fate of the crane is of little significance to the defendant. It would have no obvious interest other than the receipt of $1 in ensuring that its ownership went to the applicant and no interest in whether the plaintiff could retain possession of it against the applicant without payment of rent. There are parts of the claim which make the presence of the applicant appropriate as a proper contradictor (cf Gurtner v Circuit (supra) and Macquarie Bank Ltd v Fu-Shun Lin [2001] QSC 341).

13 In my opinion, this is an appropriate case for joinder to be ordered. I am reinforced in my conclusion that this is appropriate by the views expressed by courts when declaratory relief has been claimed but joinder had not been sought either by the original parties to the action or by any person potentially affected by the declaration. In London Passenger Transport Board v Moscrop [1942] AC 332, Viscount Maugham said at 345:

"The present appellants were not directly prejudiced by the declaration and it might even have been thought to be an advantage to them to submit to the declaration, but, on the other hand, the persons really interested were not before the court, for not a single member of the Transport Union was, nor was that union itself, joined as a defendant in the action. It is true that in their absence they were not strictly bound by the declaration, but the courts have always recognized that persons interested are or may be indirectly prejudiced by a declaration made by the court in their absence, and that, except in very special circumstances, all persons interested should be made parties, whether by representation orders or otherwise, before a declaration by its terms affecting their rights is made."

In Australasian Oil Exploration Ltd v Lachberg [1958] HCA 51; (1958) 101 CLR 119, the High Court insisted on a company which would be affected by a declaration being joined as a party so as to have the opportunity of being heard before any final declaratory order was made (at 133 - 134). In Dairy Farmers Co-operative Milk Co Ltd v The Commonwealth [1946] HCA 49; (1946) 73 CLR 381, Latham CJ, Rich, Dixon, McTiernan and Williams JJ, in a joint judgment, said at 392:

"If we had been of opinion that there was any substance in the contentions submitted on behalf of the plaintiffs we would have hesitated before making any of the declarations sought in the absence of the State of New South Wales, which is the other party really interested in the issue raised in this litigation."

Although referred to as a "party", the State of New South Wales was not a party to the litigation then before the court. A declaration being a discretionary remedy (Declaratory Orders, P W Young, 2 ed, Butterworths, par702), it seems to me that in any event the concept of justice and convenience as factors in the exercise of the discretion to grant the remedy might well, of itself, render the presence of the applicant "necessary" within the meaning of r184(1)(b).

Burnie Port Corporation Pty Ltd v Bank of Western Australia Ltd [2002] TASSC 66 (12 September 2002)

Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52; News Ltd v ARL [1996] FCA 870; (1966) 64 FCR 410, followed.

Australian Tape Manufacturers Association Ltd v The Commonwealth [1990] HCA 38; (1990) 64 ALJR 530, distinguished.

Burnie Port Corporation Pty Ltd v Bank of Western Australia Ltd [2002] TASSC 66

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Cases Cited (9)

Burnie Port Corporation Pty Ltd v Bank of Western Australia Ltd [2002] TASSC 66 (12 September 2002)