ENERGY POWER SYSTEMS AUSTRALIA PTY LTD (ACN 055 274 514)

Practice and procedure - Application for leave to amend statement of claim when defendants say amendments plead new cause of action which is statute-barred - Turns on own facts

Amendments to operate from date determined by trial Judge

ABB Service Pty Ltd v Hetherington [2001] WASCA 417

Allstate Life Insurance Co & Ors v ANZ Banking Group Ltd & Ors (1995) 57 FCR 360

Associated Leisure Ltd (Phonographic Equipment Co Ltd) v Associated Newspapers Ltd [1970] 2 QB 450

Barclays Bank v Cole (1967) 2 QB 738

Bater v Bater (1951) P 35

Beach Petroleum v Johnson [1993] FCA 283; (1993) 115 ALR 411

Brickfield Properties Ltd v Newton [1971] 1 WLR 862

Bristow v Anor v Moffat-Virtue (Qld) Pty Ltd [1962] Qd SR 377

Brownlie v Campbell (1880) 5 App Cas 925

City of South Melbourne v Black [1964] VicRp 53; [1964] VR 403

Derry v Peek [1889] UKHL 1; (1889) 14 App Cas 337

Do Carmo v Ford Excavations Pty Ltd [1984] HCA 17; (1984) 154 CLR 234

Goode v Martin [2001] 3 All ER 562

Hall Chadwick Corp Finance (WA) Pty Ltd v Axiom Properties Ltd [2002] WASC 179

Hammond (as Executor of the Estate of Hammond) v Minister for Works [2001] WASC 284

Hornal v Newberger Products Ltd (1957) 1 QB 247

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566

Jones v Dumbrell [1981] VicRp 21; [1981] VR 199

Kalgoorlie Consolidated Gold Mines Pty Ltd & Ors v F L Smidth Inc & Ors [2003] WASC 52

Karedis Enterprises Pty Ltd v Antoniou [1995] FCA 1356; (1995) 59 FCR 35

Krakowski v Eurolynx Properties Ltd (1995) 130 ALR 1

Millington v Loring (1880) 6 QBD 190

Neat Holdings Pty Ltd v Karagan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449

Nocton v Lord Ashburton [1914] AC 932

Palmdale Insurance Co (In Liq) v L Grollo & Co Pty Ltd [1986] VicRp 41; [1986] VR 408

Paragon Finance PLC & DB Thakerar & Co [1998] EWCA Civ 1249; [1999] 1 All ER 400

Patterson v Richards [1963] VR 779

Piermay Shipping Co SA and Brandts v Chester (1979) 2 Lloyd's Rep 1

Renowden v McMullin [1970] HCA 24; (1970) 123 CLR 584

Robertson & Moffat v Belson [1905] VLR 555

Ron Hodgson (Trading) Pty Ltd v Belvedere Motors (Hurstville) Pty Ltd [1971] 1 NSWLR 472

Simonds v Sure Air Pty Ltd [2001] WASCA 172

Speidel v Plato Films Ltd [1961] AC 1090

State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499

Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233

Temwood Holdings Pty Ltd v Oliver & Ors [1998] WASC 26

The State of Western Australia v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245

United Bank Ltd v Hussein (2000) 3 CPLR 270

Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409

With v O'Flanagan [1936] 1 Ch 575

1 MASTER SANDERSON: This is the plaintiff's application for leave to amend the statement of claim in terms of a Minute of Amended Statement of Claim ("the minute") dated 19 May 2003. The application raises again the proper approach to be adopted to amendments when there is a dispute as to whether the proposed amendment pleads a cause of action arising out of substantially the same facts as earlier pleaded, when, if the amendment actually raises a fresh cause of action, that cause of action would be statute barred. Determination of these questions involves consideration of O 21 r 5(2) and (5) of the Rules of the Supreme Court 1971, and the operation of the so-called rule in Weldon v Neal (1887) 19 QBD 394. In this Court, the question has been considered in a number of cases, including Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431, Morgan v Banning (1999) 20 WAR 474, The Bell Group Ltd (In Liq) v Westpac Banking Corp [2001] WASC 315 and BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18. In Morgan v Banning, Owen and Wheeler JJ discussed the applicable principles and the operation and effect of the rule in Weldon v Neal. In the Bell and in the BHP cases, the proper approach in a case such as this is foreshadowed. Before applying these principles it is necessary to say something of the nature of the amendments sought to be made by the plaintiff.

2 This case has already been the subject of one successful strike-out application: see Byass v Energy Power Systems [2002] WASC 181. In the course of his reasons, Master Bredmeyer set out the background to the dispute between the parties and made certain determinations with respect to the then statement of claim. Insofar as it is necessary to do so, I would incorporate by reference but without repeating the relevant parts of Master Bredmeyer's reasons.

3 The nature of the dispute between the parties can be illustrated by reference to par 2 of the minute. In marked up form, it is in the following terms:

(a) Are and were at all material times duly incorporated pursuant to the Corporations Law and trading corporations pursuant to the Trade Practices Act, 1974 (the 'TPA');

(b) At all material times carried on business as local agents for the manufacturer, the Third Defendant, and were commercial distributors in Western Australia, of Caterpillar engines and in particular Caterpillar diesel engine Model 3408;

(c) Held themselves out to the Plaintiff as having expertise in the performance capabilities, supply and operation of Caterpillar Engines including model 3408E, by, inter alia, providing oral information and advice and making representations and assurances to the Plaintiff as a prospective purchaser of Caterpillar engines as to the suitability of such engines and in particular Model 3408E rated to 800 hp for use in commercial Rock Lobster fishing vessels operating in the Rock Lobster Fishery of Western Australia, such as the Vessels;

(d) The oral advice and representations pleaded in subparagraph 2(c) above took place from on or about 22 April 1994 to 13 May 1994 between the Plaintiff and Rick Finch, Marine Sales Engineer, of the First Defendant and/or of the Second Defendant, including at a meeting at the Newmarket Hotel, Hamilton Hill, between the Plaintiff and Rick Finch during which conversations Mr Rick Finch recommended that the Plaintiff purchase Caterpillar model 3408E for installation in the Vessels.

PARTICULARS OF ADVICE AND REPRESENTATIONS

(i) The Caterpillar model 3408E was a very good, reliable and efficient engine;

(ii) The Caterpillar model 3408E was the most suitable make and model in all respects for installation in and use by the Vessels and was superior to other makes or models and should be purchased by the Plaintiff, and would be fit for the Intended Use pleaded in paragraph 12;

(iii) Of the 3 models of Caterpillar 3408 engines available, the Plaintiff should purchase model 3408E which was rated to 800 hp as that was the most suitable model for the Intended Use pleaded in paragraph 12;

(iv) The engines would reduce fuel consumption and increase fuel efficiency resulting in cost savings to the Plaintiff;

(v) The Caterpillar 3408E engines had 'get up and go' meaning they would have adequate power for the Vessel's Intended Use and would provide the Vessels with a high degree of acceleration;

(vi) Effective after-sale service and support would be provided by the Second Defendant and the Second Defendant would rectify any defect or deficiencies in the engines;

(vii) In response to the Plaintiff's expressed concern about the cost of the engines, Rick Finch advised the Plaintiff that the additional cost involved in purchasing the 3408E engines would be recovered within 3 years of operation given the fuel savings due to the superior efficiency and operating qualities of the 3408E engine;

(viii) Caterpillar engines had successfully been used without any significant problem in fishing operations similar to that of the Plaintiff including in the Western Australian Rock Lobster Fishery and in other commercial vessels elsewhere in the world and were suitable for those uses.

(e) Held themselves out to the Plaintiff to be the providers of all engine warranty, parts, repair, maintenance and after sale support services to the purchasers of Caterpillar engines.

PARTICULARS OF HOLDING OUT

(i) Rick Finch for and on behalf of the First and Second Defendants approached the Plaintiff without solicitation, and knowing that the Plaintiff was in the process of having the Vessels designed and built, and persuaded the Plaintiff to install Caterpillar 3408E engines in the 2 Vessels.

(ii) Rick Finch for and on behalf of the First and Second Defendants handed to the Plaintiff a brochure produced by and/or on behalf of the Third Defendant covering the specifications of the Caterpillar 3408E engine, and represented verbally and by his conduct in providing the said brochure, that the First Defendant was the local agent providing all Caterpillar engine parts, repairs, maintenance, support and warranty.

The matters pleaded in paragraphs 2(d) and 2(e) are collectively referred to as 'the Pre-Sale Representations'."

4 The first to fourth defendants object to this paragraph because they say it involves new facts and amounts to a significant departure in substance from the plaintiff's original complaint against the defendants. Furthermore, they say that the matters complained of in the amended pleading raise a cause of action which is statute-barred. They therefore say that leave to plead par 2 in the terms proposed ought be refused. Similar objections are made to a number of paragraphs of the statement of claim which are amended by the minute.

5 I must say I have some doubts as to whether or not the amended par 2 and indeed other paragraphs which are amended in the minute, actually plead "a new cause of action" (as that expression is used in Morgan v Banning (supra)). That view is reinforced when regard is had to the particulars that were provided by the plaintiff pursuant to a request made by the first and second defendants. But there is a difficulty in making a determination on that question at an interlocutory stage. What is required is a detailed consideration of the facts and the circumstances which, it is said, give rise to the causes of action. Moreover, it requires a determination at an interlocutory stage as to when any limitation period may have expired. The High Court has warned against such determinations even in cases which on their face appear clear: see Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 per Mason CJ, Dawson, Gaudron and McHugh JJ at 533 - 534.

6 In my view, the proper approach is to allow the plaintiff to amend the statement of claim in terms of the minute but to preserve the defendants' rights with respect to any limitation defence. This can be done in one of two ways. First, the amendment can be permitted with an order that the amendments will operate only from the date upon which they are made. This was the order made by Master Bredmeyer at first instance in Morgan v Banning and such an order was approved by the Full Court in BHP Iron Ore Pty Ltd v Westraint (supra) per Steytler J at 97 - 98. The alternative approach is to leave the question of the date from which the amendments take effect to the trial Judge. This was the approach adopted by Justice Owen in the Bell decision (see par 278 - par 279). Although Steytler J was speaking for the Full Court in the BHP decision, his Honour modified his comments by referring specifically to the circumstances of that particular case. In other words, it would seem open to make either order, depending on the circumstances.

7 This seems to me to be a case where the proper order is that the question of the date from which any amendments to the statement of claim operate should be reserved to the trial Judge. That will allow the defendants to plead their limitation defence and when all the evidence is led, the pleading issues can be debated. As part of the overall determination of the dispute between the parties, the effect of the amendments and the date from which they operate can be considered.

8 There then remained a number of what might be called technical pleading issues raised by each of the defendants against the proposed statement of claim. I do not intend to deal with these objections in detail. It is sufficient if I say that I am satisfied that the statement of claim in its amended form is easily understood and provides a proper coherent narrative. The defendants are well able to plead to the amended statement of claim and none of the objections taken by the defendants are sufficient to refuse the grant of leave.

9 Subject to hearing from counsel, the orders that I would propose are as follows:

(1) The plaintiff have leave to amend the statement of claim substantially in terms of the minute of proposed amended statement of claim dated 19 May 2003.

(2) The question of the date from which the amendments to the statement of claim are to operate be reserved to the trial Judge.

(3) The plaintiff pay the defendants' costs of this application, including reserved costs, and any costs thrown away by reason of the amendment.