Italiano Oliveri v Invocare Australia Pty Limited

Supreme Court of NSW|2008-03-26

CITATION : Italiano Oliveri v Invocare Australia Pty Limited [2008] NSWSC 1138

HEARING DATE(S) : 26 March 2008 JUDGMENT OF : McLaughlin AsJ

DECISION : 1. Order that the notice of motion filed by the defendant on 20 August 2007 be dismissed. 2. Order that the defendant pay the costs of the plaintiff of the aforesaid notice of motion.

CATCHWORDS : PRACTICE and PROCEDURE - summary dismissal - specific performance - whether reasonable cause of action is disclosed - limitation period - whether provisions of Limitation Act 1969 apply by analogy

LEGISLATION CITED : Limitation Act 1969 Uniform Civil Procedure Rules

Knox v Gye [1872] LR 5 HL 656 Hasham v Zenab[1960] AC 316 General Steel Industries Incorporated v The Commissioner for Railways [1964] 112 CLR 125 Matai Industries Ltd v Jenson [1989] 1 NZLR 525 Wardley Australia Limited v Western Australia [1992] 175 CLR 514 KM v HM ; Women's Legal Education and Action Fund, Intervener (1992) 96 DLR (4th) 289 CASES CITED : Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497 Nelson v Rye [1996] 1 WLR 1378 Paragon Finance plc v D B Thakerer & Co [1999] 1 All ER 400 Cassis v Kalfus [2001] NSWCA 460 Young v Waterways Authority of New South Wales [2002] NSWSC 612 The Duke Group Ltd (in liq) v Alamin Investments Ltd [2004] SASC 415 Hewitt v Henderson [2006] WASCA 233 P&O Nedlloyd BV v Arab Metals Co & Ors [2007] 1 WLR 2288; [2007] 2 All ER (Comm) 401

TEXTS CITED : Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th ed (2002)

PARTIES : Italiano Oliveri (Plaintiff) Invocare Australia Pty Limited (Defendant)

COUNSEL : Mr R. Harper SC and Mr S. Aspinall (Plaintiff) Mr G. Sirtes (Defendant)

SOLICITORS : Tully & Co Solicitors (Plaintiff) Jones King (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2339 of 2007 ITALIANO OLIVERI -v- INVOCARE AUSTRALIA PTY LIMITED JUDGMENT 1 HIS HONOUR: By Notice of motion filed on 20 August 2007, the defendant, Invocare Australia Pty Ltd, seeks summary dismissal of the proceedings brought by the plaintiff, Italiano Oliveri. 2 I observe in passing that the orders sought in the notice of motion are stated to be the sought by the plaintiff. But that is obviously incorrect, and the relief sought in the Notice of motion is being sought by the defendant. 3 The substantive proceedings were instituted by statement of claim filed by the plaintiff on 19 April 2007. That statement of claim seeks, inter alia, specific performance of a contract alleged to have been entered into between the plaintiff and the defendant in respect to the provision to the plaintiff by the defendant of a vault suitable for the interment of nine persons, with a floor of no less than 300 millimetres above the surrounding kerb and gutter. 4 The pleading also seeks damages to enable the removal and re-interment of the remains currently interred in the vault and, in the alternative, seeks damages alternatively to the foregoing relief. 5 A defence was filed on 1 August 2007. 6 The present application by the defendant for summary dismissal of the plaintiff's claim is brought firstly under the provision of Pt 13 r 4 of the Uniform Civil Procedure Rules. 7 Subrule (1) of that rule provides: If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or

(c) the proceedings are an abuse of the process of the court. the court may order that the proceedings be dismissed generally or in relation to that claim. 8 Although not specifically referred to in the notice of motion itself, Counsel for the defendant has stated that the defendant in making the present application for dismissal of the proceedings relies upon paragraph (b) of the foregoing provisions of Part 13 rule 4 (1), and submits that no reasonable cause of action is disclosed. 9 The basis for that submission is, as is argued by the defendant, that the limitation period appropriate to the cause of action asserted by the plaintiff had already expired before the commencement of the proceedings. 10 The defendant relies upon the provisions of the Limitation Act 1969 and, in particular, upon the provisions of section 23 of that statute. 11 I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties. Those documents will be retained in the Court file. 12 Section 23 of the Limitation Act addresses the matter of equitable relief. It provides that sections 14, 16, 17, 18, 20 and 21 do not apply, except so far as they may be applied by analogy to a cause of action for specific performance of a contract or for an injunction or for other equitable relief. 13 Section 14 (1) of the Limitation Act provides, relevantly, that: An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims: (a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed. 14 It is submitted on behalf of the defendant that the claim of the plaintiff is a claim being a cause of action founded on contract not being a cause of action founded on a deed. 15 It is submitted on behalf of the defendant that the effect of section 23 of the Limitation Act is that section 14 of that statute applies as far as it may be applied by analogy, to the present cause of action for specific performance of a contract. 16 I have been taken to a number of authorities by the respective parties concerning the construction to be given to section 23 of the Limitation Act, and to the manner in which the provisions of section 14 of the Act may be applied by analogy to a cause of action for specific performance of a contract. 17 Essentially, it is the submission of the defendant that the present claim of the plaintiff is a claim for damages for breach of contract, which (to use the words of Counsel for the defendant) has been 'dressed up as a claim for specific performance', and that the Court should therefore apply, by analogy, the provisions of section 14 (1) (a) and impose upon the plaintiff the limitation period of six years. 18 There appears to be no dispute between the parties that, whatever be the nature of the contract between them, that contract was entered into more than six years before the institution of the present proceedings. 19 It will be appreciated that the principles relating to summary dismissal of proceedings upon the various grounds set forth in subrule (1) of Part 13 rule 4 are well recognised. I should need refer only to the decision of the High Court of Australia in General Steel Industries Incorporated v The Commissioner for Railways [1964] 112 CLR 125 (in particular the judgment of Barwick CJ, at 129). 20 The power of the Court to bring proceedings to an end in a summary fashion should be exercised with caution and only in the clearest of cases. 21 The defendant submits this is a case of such clarity and allows itself of so little dispute that it is appropriate that the Court should exercise its power to effect such summary dismissal. 22 However, it is submitted on behalf of the plaintiff that the question of applying by analogy the provisions of section 14 of the Limitation Act is by its very nature a question which requires the full consideration of all of circumstances of the case. 23 It is submitted on behalf of the plaintiff that the question of analogy, is a difficult conceptual exercise, which is not possible to be determined at this stage of the proceedings. 24 The application by analogy of the limitation provisions of section 14 to a cause of action for specific performance of a contract has been considered in a number of decided cases. 25 Those cases have been conveniently collated in the English Court of Appeal in P&O Nedlloyd BV v Arab Metals Co & Ors [2007] 1 WLR 2288; [2007] 2 All ER (Comm) 401, in the judgment of Moore-Bick LJ, with whom Buxton LJ and Jonathan Parker LJ agreed. 26 Moore-Bick LJ commenced his review of the appropriateness of the relevant authorities relating to what can be described as limitation by analogy, by referring to the decision of Lord Westbury, the Lord Chancellor, in Knox v Gye [1872] LR 5 HL 656. At 674 -675 his Lordship said: For where the remedy in Equity is correspondent to the remedy at Law, and the latter is subject to a limit in point of time by the Statute of Limitations, a Court of Equity acts by analogy to the statute, and imposes on the remedy it affords the same limitation. ... Where a Court of Equity frames its remedy upon the basis of the Common Law, and supplements the Common Law by extending the remedy to parties who cannot have an action at Common Law, there the Court of Equity acts in analogy to the statute; that is, it adopts the statute as rule of procedure regulating the remedy it affords.

27 His Lordship Moore-Bick LJ also referred in P&O Nedlloyd BV to more recent English decisions, including the decision of the English Court of Appeal in Paragon Finance plc v D B Thakerer & Co [1999] 1 All ER 400 and Nelson v Rye [1996] 1 WLR 1378. His Lordship then said, at paragraph 38: These passages support the conclusion that if a statutory limitation provision, properly interpreted, applies to the claim under consideration, equity will apply it in obedience to the statute, as indeed it must. However, even if the limitation period does not apply because the claim is for an exclusively equitable remedy, the Court will nonetheless apply it by analogy if the remedy in equity is "correspondent to the remedy at law". In other words, where the suit in equity corresponds with an action at law, a court of equity adopts the statutory rule as its own rule of procedure.

28 After referring to a number of other relatively recent authorities, His Lordship continued, at paragraph 43: It is not surprising that equity should apply by analogy the limitation periods applicable to claims at law for an account and for damages for breach of duty, whether in contract or tort, to claims for an account and for equitable compensation. In each case the same facts give rise to a claim, whether at law or in equity, and the same kind of relief is obtainable. A claim for specific performance raises different considerations, however, both because relief comparable to that available from the courts of equity was not available from the common law courts and because the facts needed to support a claim for specific performance are not in all respects the same as those necessary to support a claim for breach of contract. The latter point is demonstrated by the case of Hasham v Zenab [1960] AC 316. 29 His Lordship then continued at paragraph 44 - 45: The fact that the common law courts could not grant a coercive remedy comparable to a decree of specific performance strongly suggests that there is no case in which (to use the language of Lord Westbury in Knox v Gye ) "the remedy in equity is correspondent to the remedy at law" or "the suit in equity corresponds with an action at law". At most it can be said that there are some cases in which the facts giving rise to a claim at law for damages for breach of contract will also be sufficient to justify the intervention of equity.

However, in cases where the facts capable of supporting a claim for equitable relief differ from those capable of supporting a claim at law, or where the equitable remedy differs in a material respect from that available at law, there is not the same reason to deprive the court of the power to grant equitable relief in an appropriate case by adopting the statutory limitation period by analogy. 30 After again referring to the decision of the House of Lords in Hasham v Zenab[1960] AC 316, His Lordship further said at paragraph 47: It is therefore wrong in principle to treat specific performance as merely an equitable remedy for an existing breach of contract. Moreover, since a claim for specific performance may be made as soon as the contract has been entered into, it is very arguable that, if the limitation period were to be applied by analogy, it would be necessary to regard the cause of action as accruing at that moment with the unfortunate result that the claim could become time-barred before any need for relief had arisen. This lends further support to the conclusion that the application of the limitation period by analogy is not appropriate in relation to claims for specific performance. 31 His Lordship concluded his review of various cited authorities by stating at paragraph 52: In my view that question must be answered by reference to the nature of the remedy and the circumstances in which it is available. Both factors point to the conclusion that claims for specific performance fall outside the scope of the principle identified by Lord Westbury in Knox v Gye and applied by this court in Companhia de Seguros Imperio v Heath [2001] 1 WLR 112. The remedy is available in circumstances where no cause of action exists at law, so the factual circumstances giving rise to a claim need not be the same as those which would support a claim for breach of contract, and no comparable remedy is available at law. 32 I have also been taken to the decision of the Court of Appeal of Western Australia in Hewitt v Henderson [2006] WASCA 233 (8 November 2006) in which the leading judgment was delivered by Buss JA (with whom Steytler P, and Pullin JA agreed). 33 His Honour at paragraphs 16 to 25 considered the matter of the application of limitation periods by analogy. His Honour commenced his consideration by referring to the foregoing extracts from the judgment of Lord Westbury in Knox v Gye, which I have earlier quoted. 34 Buss JA at paragraph 21, summarised the Canadian decision of KM v HM ; Women's Legal Education and Action Fund, Intervener (1992) 96 DLR (4th) 289, as standing for the proposition that, even if statutes of limitation are applicable by analogy in the exclusive jurisdiction of equity, the analogy will be governed by the parameters of the equitable doctrine of laches, and equity retains a "residual discretion" as to whether the statute should apply. 35 In KM v HM (1992) 96 DLR (4th) 289 La Forest J (with whom Gonthier, Cory and Iacobucci JJ agreed) said at 332: However, even if an analogy could be drawn that is not to say that it must be applied. 36 The judgment of La Forest J was referred to with approval in the decision of New South Wales Court of Appeal in Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497. Kirby P (as he then was) said at 509 - 510: Analogous application of the statute does not necessarily mean exact application of its terms…

I see no reason to conclude that the principles expressed by the Supreme Court of Canada would not be applicable in this jurisdiction

37 It should be observed, however, that that statement has not been without criticism. 38 In Meagher, Gummow and Lehane's Equity Doctrines and Remedie, 4th ed (2002) the learned authors state at [34-075]: No authority was cited in support of this view. Justice Powell expressed sturdy disagreement, demonstrating that Justice Kirby's view was inconsistent both with what the Lord Chancellor said in Knox v Gye and with what Justice Dixon, as he then was, said in Cohen v Cohen [1929] 42 CLR 91. 39 The Court of Appeal of Western Australia, in Hewitt v Henderson referred to a decision of this Court, Cassis v Kalfus [2001] NSWCA 460, where the Court had occasion to consider the provisions of section 23 of the Limitation Act. 40 In The Duke Group Ltd (in liq) v Alamin Investments Ltd [2004] SASC 415, Doyle CJ considered the principles developed by equity in relation to the application of limitation periods by analogy, including the circumstances in which equity will decline to apply an analogous limitation period. His Honour said at paragraph 135: Before applying the statutory time limit by analogy, I must be satisfied that in all the circumstances it is just to do so. It is not just a question of finding a sufficient similarity between the equitable claim and the claim that is subject to a statutory time limit. This point has not attracted a great deal of attention in the cases referred to. Nevertheless, in accordance with basic principle it is necessary for me to consider whether it is just in all the circumstances to apply the statutory time limit. 41 A similar view was expressed in the New Zealand case Matai Industries Ltd v Jenson [1989] 1 NZLR 525. Buss JA in Hewitt v Henderson states at paragraph 25: In my opinion, the authorities which I have reviewed support the proposition that equity will not apply a limitation period by analogy where there are circumstances which make the application of the statute unconscionable. 42 The conclusions of Buss JA concerning an application for dismissal of proceedings in circumstances such as those in the instant application, where it is submitted the claim must be defeated by the expiry of the appropriate limitation period, referred to the salutary admonition in the joint judgment Dawson, Gaudron and McHugh JJ in Wardley Australia Limited v Western Australia [1992] 175 CLR 514, where their Honours emphatically said at 533: We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question. 43 That statement was referred to by Burchett AJ in Young v Waterways Authority of New South Wales [2002] NSWSC 612, where His Honour said at paragraph 27: These principles have only to be stated for it to be clear that their implementation involves the very kind of concern with the whole of the evidence which underlies the admonition delivered by the High Court in Wardley Australia Limited v Western Australia . An application of the statute by analogy could very rarely indeed lead to a summary dismissal of an action.

44 Likewise, the Court of Appeal of Western Australia in Hewitt v Henderson [2006] WASCA 233 also took heed of the foregoing passage from the High Court of Australia in Wardley. Buss JA said at paragraph 29: I agree, with respect, with those observations. An application which is or is analogous to a strike-out application will rarely be a satisfactory process for determining whether equity should apply a statutory limitation period by analogy.

45 In the instant case I am in agreement with the submission of Counsel for the plaintiff that the question of application by analogy of the limitation period to a cause of action for specific performance of a contract by its very nature must require full consideration of all the circumstances of the case and a consideration of the question whether the plaintiff is ultimately entitled to specific performance. 46 It is not possible to determine the entitlement of the plaintiff to that remedy until all the evidence in the case is complete and at the end of a final hearing of the proceedings. The remedy by way of specific performance is a discretionary remedy, although that discretion must be exercised in accordance with established principles. It cannot be known at this stage of the proceedings whether the plaintiff will be entitled to obtain that remedy. If he is entitled to obtain the remedy for specific performance, then on my understanding of the effect of section 23 of the Limitation Act the Court must look to whether or not by analogy the provisions of section 14 have application. 47 If a plaintiff is entitled to specific performance of a contract I do not see how the provisions of section 14 can have application by analogy, since the provisions of section 14 expressly apply to a cause of action founded on contract. Such a cause of action appears to me to be a cause of action at common law, which would result only in an award of damages to a successful plaintiff. 48 There can be no analogy between such an award of damages and the equitable remedy of specific performance. If, therefore, the plaintiff is ultimately entitled to that remedy of specific performance, the limitation period contained in section 14 does not apply. But it is not possible at this stage of the proceedings to determine that question. 49 Therefore, not only do I consider that the defendant has not established that the plaintiff has no reasonable cause of action, but I also consider that the salutary admonition of High Court of Australia in Wardley should be borne in mind, and that an interlocutory application for summary dismissal based upon the asserted expiry of an appropriate limitation period will very rarely be a satisfactory procedure for determining whether or not there is such a reasonable cause of action. 50 It follows, therefore, that the present application will be dismissed. 51 I make the following orders: 1. Order that the notice of motion filed by the defendant on 20 August 2007 be dismissed. 2. Order that the defendant pay the costs of the plaintiff of the aforesaid notice of motion. **********

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