"Thus a plaintiff, having two inconsistent claims, who elects to abandon one and pursue the other may not, in general, afterwards choose to return to the former claim and sue on it; but this rule of election does not apply where the two claims are not inconsistent and the circumstances do not show an intention to abandon one of them." (Footnotes omitted)
32 In Commonwealth v Verwayen (1990) 170 CLR 394 at 421-2 Brennan J said:
"Election consists in a choice between rights which the person making the election knows he possesses and are alternative and inconsistent rights. A doctrine closely related to election, and sometimes treated as a species of election, is the doctrine of approbation and reprobation. This doctrine precludes a person who has exercised a right from exercising another right which is alternative to and inconsistent with the right he exercised as, e.g., where a person "having accepted a benefit given him by a judgment, cannot allege the invalidity of the judgment which conferred the benefit". An election is binding on the party who makes it once it is made overtly - or, at all events, not later than on the communication of an election to the party or parties affected thereby. It is binding whether or not others who are affected by the election have acted in reliance on it. In this respect, election is to be distinguished from estoppel." (Footnotes omitted)
33 There can be no doubt that the doctrines of election and of approbation and reprobation are alive and well in this country. As to the application of the principles set out above see Verschures Creameries v Hull and Netherlands Steamship Co Ltd [1921] 2 KB 608 at 611; Randwick Municipal Council v Broten [1964-5] NSWR 1445; Bienvenu v Royal Society for Protection of Animals [1967] VR 656 at 664; Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275; Express Newspapers Pty Ltd v News (UK) Limited [1990] 3 All ER 376; and VACC Insurance Limited v BP Australia Limited (1999) 47 NSWLR 716 at 724-5.
34 I do not accept that the applicants' actions in having entered into a deed of settlement with the Firm upon the basis of the pleadings as they presently stand prevent them from alleging against Bendigo Bank that Green, acting without authority, withdrew the monies from the Bendigo accounts. It is clear that notwithstanding the language of pars 13, 14 and 15 of the statement of claim, the terms of the deed of settlement do not involve any acknowledgment on the part of the surviving partners of the Firm that they had acted in any way dishonestly. Nor do the terms of the deed of settlement involve any acknowledgment on their part that they permitted Green to withdraw those monies knowing, or being reckless as to, what he might do with the funds.
35 It need hardly be said that any dispute may be settled without there being any acknowledgment of liability. The partners of the Firm were all potentially liable for Green's actions irrespective of whether or not they authorised him to make the withdrawals. Any allegation that the Firm transferred the monies, or caused the monies to be transferred (assuming contrary to my findings that pars 13, 14 and 15 contain such an allegation), was unnecessary in order to give rise to liability on the part of the partners. The settlement of the dispute between the applicants and the Firm has not resulted in any finding of fact, or any admission, to that effect.
36 I regard the deed of settlement together with the various indemnity insurance policies to which I was taken by counsel for Bendigo Bank as being of peripheral relevance to the question whether leave to amend should be granted.
37 There is no inconsistency in my view between an allegation on the part of the applicants against Bendigo Bank that it committed a breach of the mandate of the Firm, and an allegation against the Firm that the surviving partners are liable for Green's defalcations. The fact that these partners are neither willing, nor able, in their own names, to take proceedings against Bendigo Bank, means that the applicants must rely on their right to enforce claims which are available to the partners in their capacity as trustees for the applicants. Procedurally, that is a course which I believe is open to them.
38 The doctrines of election, and of approbation and reprobation are closely related. Both depend for their operation upon there being an inconsistency between the rights which are available to be enforced. A choice must ultimately be made in any proceeding between rights which are, in truth, inconsistent. There being no inconsistency, however, between the rights available to the applicants against Bendigo Bank, and the rights available to them against the Firm, these doctrines are, in my opinion, inapplicable in the present case. They represent no bar to the proposed amendments.
39 Bendigo Bank did not contend that it would suffer any prejudice if the applicants were granted leave to amend their further amended statement of claim. Nor did NAB, which did not, in any event, oppose the application. The surviving partners of the Firm, who remain parties to this proceeding notwithstanding that they have agreed to settle with the applicants, do not oppose the application.
40 In the circumstances, including the fact that the trial of this proceeding will not now commence before 3 October 2000, and giving due weight to the principles which underlie O 13 r 2 of the Federal Court Rules, I propose to grant leave to the applicants to amend their further amended statement of claim by deleting from each of pars 13, 14 and 15 the words "the Firm by its partner" and by deleting from par 82 the reference to pars 13, 14 and 15.
41 The respondents will, of course, have leave to amend their defences and cross-claims in response to these amendments, if considered necessary. Any such amendments should be made on or before 4 August 2000.
42 The normal rule is that a party seeking leave to amend a pleading should pay the costs thrown away by reason of the amendment. I will, however, give the parties an opportunity to be heard before I pronounce final orders in relation to costs.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.