Two guiding principles should be seen as lying behind the need to distinguish between substantive and procedural issues. First, litigants who resort to a court to obtain relief must take the court as they find it … Secondly, matters that affect the existence, extent or enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason CJ in McKain (1991) 174 CLR 1, 26-27 'rules which are directed to governing or regulating the mode or conduct of court proceedings' are procedural and all other … rules are to be classified as substantive … laws that bear upon the existence, extent or enforceability of remedies, rights and obligations should be characterised as substantive and not as procedural laws."
127 The relevant provisions do not affect the existence or the extent of the rights of the Queensland claimants, or the duties of the defendants. These are defined by the TP Act and the common law. The defendants argued that the relevant provisions affect the enforceability of the rights of the Queensland claimants and any duties owed to them by the defendants.
128 The joint judgment in Rogerson describes (at 543) as substantive those rules which affect "the existence, extent or enforceability of the rights or duties of the parties to an action". The relevant provisions operate before an action can be validly commenced, and attempt to prevent this occurring until they have been complied with. They literally do not "affect … the rights and duties of the parties to an action" once it has been validly commenced. However the case should not be decided on a literal interpretation of that statement of principle as if it were a statutory formula.
129 The joint judgment described the matters that should be characterised as procedural as (543-4) the "rules which are directed to governing or regulating the mode or conduct of court proceedings". Read literally this would treat as substantive any rules which requires steps to be taken by an intending litigant prior to commencing proceedings but again it would not be appropriate to decide the case on that basis. Literal constructions of the two statements does not assist because both refer to the position in an action, and neither to the position before one is commenced.
130 The only further guidance provided by the joint judgment was the direction (544) that "any limitation provision, whether barring the remedy or extinguishing the right, would be taken to be a question of substance not procedure" because (543) "all limitation provisions can affect whether a plaintiff recovers". Accordingly the limitation provisions of the law of the place of the tort apply to an action brought anywhere in Australia for a tort committed in Australia.
131 Limitation provisions "affect the … enforceability of the rights and duties of the parties to an action" (543), and bar proceedings which are "too late". The relevant provisions bar proceedings which are "too early" because mandatory preliminaries have not been completed. However the relevance of this analogy needs further consideration.
132 The High Court considered the distinction between substantive and procedural matters in Maxwell v Murphy (1957) 96 CLR 261 in connection with the presumption that an Act affecting substantive rights is not retrospective. The Act in question extended a limitation period and the question was whether it applied where the former period had expired. Dixon CJ said at 267:
"… given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities … notwithstanding that before the change in the law … the accrual or establishment of the rights [or] liabilities … was complete and rested on events or transactions that were otherwise past and closed … The distinction [between matters of substance and matters of procedure] is clear enough in principle and its foundation in justice is apparent. But difficulties have always attended its application … In [some] cases the difficulty has been traceable to the inveterate tendency of English law to regard some matters as evidentiary or procedural which in reality must operate to impair or destroy rights in substance."
133 The preliminary steps mandated by the relevant provisions, in the words of Dixon CJ, appoint or regulate the manner in which the rights and duties of the parties are to be enforced or their enjoyment secured by judicial remedy. The question of characterisation may be tested by considering whether the Court would apply the presumption against retrospectivity to their repeal. It seems to me to be self evident that their repeal, without transitional provisions, would allow plaintiffs with accrued causes of action to commence proceedings without further ado.
134 Rights and liabilities fixed by reference to past facts, matters or events not only identify a matter of substance; they also define a cause of action. Compliance with the relevant provisions is not part of a plaintiff's cause of action and a plaintiff is not required to allege it in his statement of claim. Prima facie therefore time commences to run in respect of causes of action for personal injury torts governed by Queensland law as soon as damage is suffered.
135 This is confirmed by the Queensland Act which makes it clear that time runs for limitation purposes on accrual of a cause of action and not on compliance with the relevant provisions. Time continued to run for causes of action in existence when the Act commenced. See ss 9(9), 59(1), 59(3), and 77D.
136 Section 37 of the Solicitors Act 1837 (Eng) provided that a solicitor could not commence an action to recover his costs, charges and disbursements for work done as a solicitor "until the expiration of one month after such … solicitor … shall have delivered unto the party to be charged … a bill of such fees, charges and disbursements …". A similar provision has been part of the law of this State for well over a century. In Coburn v Colledge [1897] 1 QB 702 a solicitor who completed legal work for the client did not sue until more than six years later. He argued that time ran from delivery of his bill of costs but the Court of Appeal held it ran from completion of the work and the solicitor's claim was statute barred. Lord Esher MR said (706):
"… to what extent does the statute alter the right of the solicitor in such a case, and does the alteration … affect … the cause of action? It takes away, no doubt, the right of the solicitor to bring an action directly the work is done, but it does not take away his right to payment for it, which is the cause of action. The Statute of Limitations itself does not affect the right to payment, but only affects the procedure for enforcing it in the event of dispute or refusal to pay. Similarly, I think s 37 … deals, not with the right of the solicitor, but with the procedure to enforce that right. It does not provide that no solicitor shall have any cause of action in respect of his costs … til the expiration of a month from his delivering a signed bill of costs, but merely that he shall not commence … any action for the recovery … until then."
137 Lopes LJ said (708):
"The delivery of the bill form no part of the plaintiff's cause of action. Upon proof that the work had been done, prima facie the plaintiff was entitled to recover. It was for the defendant to set up by his pleading that no bill had been delivered. How, then, can it be said that the cause of action is not complete before the delivery of a signed bill? … Section 37 … appears to me to assume that there is a cause of action, and merely to postpone the bringing of an action upon it until the period of one month from the delivery of the bill."
138 Chitty LJ said, referring to the section, (710):
"That enactment, like the Statute of Limitations, appears to me only to establish a limitation with regard to the remedy; it in no way affects the cause of action, which is money payable for work done, but only postpones the right of action upon it for at least one month from the delivery of the bill."
139 At the time the settled construction of the English limitation provisions for causes of action in contract and tort was that they were procedural because they affected the remedy and not the right. The decision cannot be applied automatically to the present cases because such limitation provisions are now characterised as substantive. This reflects the reality that in the absence of a power to extend time a statute barred cause of action cannot be enforced, and is worthless. This was recognised in Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 56, 65 in a joint judgment where the Court said:
"… it is relevant to note that it has long been recognised that to speak of even traditional limitation provisions as merely 'procedural' or as 'barring the remedy and not the right' is misleading in that such provisions will, at least in some circumstances, entail consequences which are substantive in that, by barring the remedy, they will effectively extinguish both rights and liabilities."
140 The relevant provisions have no such effect. A plaintiff's substantive rights can still be enforced, and are not worthless. However certain procedures, for that it was they are, must be followed before he can commence proceedings. The analogy of Coburn v Colledge no longer applies because limitation provisions are now substantive.
141 Another possible analogy is provided by the position under Scott v Avery clauses (1856) 5 HLC 811 [10 ER 1121]. The arbitration clause in that case provided that "no member … shall … maintain any action at law, or suit in equity, on his policy, until the matters in dispute have been referred to, and decided by, arbitrators … and then only for such sum as the said arbitrators shall award. And … the decision of such arbitrators … is hereby declared to be a condition precedent to the right of any member to maintain any such action or suit" (10 ER at 1123).
142 Arbitrators are bound to give effect to legal defences, including those arising under statutes of limitation. An arbitration was commenced in November 1923 arising out of a casualty in July 1917. A limitation defence relied on by the defendant was rejected by the House of Lords in Board of Trade v Cayzer, Irvine & Co Ltd [1927] AC 610 because the submission was in the Scott v Avery form. Viscount Cave LC said at 614-5:
"The arbitration clause … in the charter party … provides that an arbitration under the clause shall be a condition precedent to the commencement of any action at law. The effect of that condition, as interpreted in Scott v Avery … is that, until the arbitrator has performed his duty … the claimant cannot even commence to enforce his claim at law - or (in other words) that until an award is made he has no complete cause of action … Under the [statute of limitations], which applies to this case, time runs from the cause of action; and it seems to me to follow beyond question that under the clause which we are considering … time runs not from the date of the loss of the steamship but only from the making of the award."
143 Since the relevant provisions of the Queensland Act do not prevent a cause of action in tort accruing as soon as damage is suffered, and time running from that date, one may conclude, in the language of Dixon CJ [para 132] that at that date there are "rights and liabilities fixed by reference to past facts, matters or events". It follows, in my judgment, that under New South Wales law, the relevant provisions are procedural because they appoint or regulate "the manner in which [those rights] are to be enforced or their enjoyment is to be secured by judicial remedy"; although, as in Coburn v Colledge [para 136] proceedings cannot be commenced until they have been complied with.
144 The application of Commonwealth law leads to the same conclusion. Section 79 of the Judiciary Act provides that the laws of each State relating to procedure shall, subject to the Constitution and the laws of the Commonwealth, be binding on all courts exercising Federal jurisdiction in that State. The characterisation of a law as procedural for the purposes of this section is governed, in the first instance, by the section, and subject thereto by the law of the forum. Under s 79 a court exercising Federal jurisdiction in a State cannot be bound to treat provisions as substantive which, properly characterised, are procedural, merely because they are deemed to be substantive by legislation of the place of the tort.
145 Constitutional considerations require the same conclusions. The jurisdiction invoked is Federal and State law, as such, cannot prevent the commencement of proceedings in a Federal court or a State court invested with Federal jurisdiction to enforce causes of action under Federal law. So much, in my judgment, was decided in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65. That case involved the application of a State limitation statute to proceedings that could only be brought in the High Court to enforce a Federal cause of action.
146 Walsh J said (84) that a State statute of limitations "could never operate, in relation to an action based on a Commonwealth Act, directly and by its own force as a law of a State". Gibbs J said (87) that:
"The legislature of South Australia has no constitutional power to prescribe a limit of time within which proceedings may be brought in this Court or in any other federal court."
147 He added (89):
"If a State statute of limitations, enacted in general terms, would on its proper construction apply to an action brought under a Commonwealth statute in a State court, it would be applied by force of s 79 if the action were brought in a court exercising federal jurisdiction."
148 Question 1 asks whether the Queensland Act forms part of the law which must be applied by a New South Wales court. For the reasons given I would answer this question, No. Question 2 therefore does not arise.
149 After both actions were removed to this Court the plaintiffs filed notices of motion on 9 September 2005 seeking leave to amend their statements of claim. They were properly made returnable in this Court because in each case the whole proceeding had been removed from the Division. In most cases this Court, having answered the questions referred, would remit the proceedings to the Division without determining the notices of motion. However in this case we have been persuaded that, exceptionally, we should do so.
150 The defendants object to the amendments because of the risk of prejudice arising from the three year limitation periods under Queensland and New South Wales law for actions for personal injuries. The amendments add further causes of action and plead more fully the facts, including the facts to establish that these are representative proceedings under UCPR Pt 7 r 7.4. If the original statements of claim did not validly constitute representative proceedings pursuant to then SCR Pt 8 r 13, the only persons protected against the further running of time would have been the named plaintiffs. Time would continue to run against the other claimants until the amendments take effect.
151 If the amendments would validly constitute representative proceedings for the first time, and would take effect from the date of the original statement of claim the defendants could be prejudiced by the loss of accrued limitation defences against some of the persons in the Schedules, or claimants as yet unidentified.
152 In Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203 [paras 144-6, 150-1] Mason P followed the judgment of McPherson J in Cameron v National Mutual Life Association of Australasia [No 2] [1992] 1 Qd R 133 which establishes that if representative proceedings are properly commenced the limitation clock is stopped for the whole group. Fostif is under challenge in the High Court, special leave having been granted, but it is not known whether the challenge extends to this part of the decision.
153 As a general rule amendments to a statement of claim take effect from the date of commencement of proceedings: Baldry v Jackson [1976] 2 NSWLR 415, although a court can order that they take effect at a later date: Middleton v O'Neill (1943) 43 SR (NSW) 178. There is an exception in the case of amendments which add new parties because, under UCPR Pt 19 r 19.2(4), proceedings in relation to such persons are commenced on the date the amended document is filed. Where the application to add additional parties is filed close to the expiration of a limitation period the delay before the amendment has been allowed, and the amended statement of claim filed, could cause hardship and injustice.
154 Any such problem, in the case of additional plaintiffs or claimants, can be dealt with by the Court exercising its power under UCPR Pt 36 r 36.4(3) to order that the amendment take effect as from an earlier date. Thus the court could order that the amendments take effect as from the date the notices of motion for leave to amend were filed.
155 The Court was informed by both senior counsel that the defendants had stated that they will take no point in relation to time running after the return date for the notices of motion on 19 September 2005. This was amended orally to 9 September, when the notices of motion were filed (T 5, 69, 77). If there was no consideration for the defendants' promise, but the claimants and their lawyers have acted upon it and changed their positions, it will become binding, like an agreed extension of the limitation period, under an estoppel by convention. The Court should nevertheless exercise its powers to back date any order which has the effect of adding claimants.
156 If the decision in Fostif on the effect of properly constituted representative proceedings is correct, the persons represented are not parties. If that is so amendments which have the effect of properly constituting representative proceedings for the first time will not add parties, and those amendments will, prima facie, relate back to the commencement of the original proceedings. This could prejudice the defendants if the claims of any of the persons represented have become statute barred in the meantime.
157 The original statement of claim in the first action comprised three pages of 25 paragraphs. The proposed amendments would delete the existing paragraphs and substitute a new statement of claim comprising 23 paragraphs on nine pages. The situation in the second action is much the same. The proposed statements of claim plead new causes of action for misleading and deceptive conduct contrary to s 52 of the TP Act, and for the supply of unsuitable goods contrary to s 74B. Under s 65(2)(c) of the Civil Procedure (CP) Act amendments to allow new causes of action may be allowed although the relevant limitation period may have expired, if they arise "from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief".
158 Under s 82(2) of the TP Act the limitation period for actions for contravention of s 52, s 74B (unsuitable goods), and s 74D (unmerchantable goods) is six years. Under s 75AO(1) the limitation period for actions for contravention of s 75AD in respect of defective goods is three years after the plaintiff becomes aware or ought reasonably to have become aware of the alleged loss, the defect, and the identity of the manufacturer.
159 Amendments to add new causes of action which were not statute barred would readily be granted. So would amendments to add new causes of action which met the requirements of s 65(2)(c) of the CP Act. If the original statements of claim did not validly commence representative proceedings, and the amendments cure the defects, and could relate back to defeat limitation defences that have accrued in the meantime which are not defeated by s 65(2)(c), the Court would hesitate to allow the amendments to take effect from the commencement of the proceedings. Argument would be required to establish that there was no such prejudice either in respect of some causes of action or claimants who became represented for the first time as a result of the amendments.
160 If the amendments are allowed as sought their effect and the effect of the original statements of claim would not be issues at the trial. Those issues would have to be determined on these applications before the amendments could be allowed. The matter is complicated by the pending High Court appeal in Fostif.
161 During argument the Court suggested that the new statements of claim be added to, instead of substituted for, the original statements of claim to stand as an alternative pleading. If that course were adopted, the position although unusual and inelegant, would not differ in substance from that which would have applied if the solicitors for the plaintiffs had commenced fresh proceedings by filing the proposed statements of claim, and all actions were consolidated and heard together.
162 If the amendments are allowed on that basis the question of election between the first and the second statements of claim will not arise unless and until the plaintiffs became entitled to final judgment: United Australia Ltd v Barclays Bank Ltd [1941] AC 1. The amendments can properly be allowed to add the proposed new statements of claim, by way of addition to the existing statements of claim, with effect from 9 September 2005. The paragraphs added by way of amendment will be pleaded in the alternative to the original paragraphs, and some editorial changes will be necessary.
163 Since preparing the above I have had the benefit of reading the judgment of the Chief Justice in draft and I agree with his additional reasons.
164 I would therefore propose the following orders: