Kirby v. Sanderson Motors Pty. Limited [2002] NSWCA 44

Court of Appeal (NSW)|2002-02-26|Before: Mason P, Handley JA, Hodgson JA

CITATION : Kirby v. Sanderson Motors Pty. Limited [2002] NSWCA 44 revised - 28/08/2002 FILE NUMBER(S) : CA 40113/02 HEARING DATE(S) : 26 February 2002. JUDGMENT DATE : 1 March 2002

PARTIES : James Stewart Kirby - claimant Sanderson Motors Pty. Limited - opponent JUDGMENT OF : Mason P at 1; Handley JA at 2; Hodgson JA at 3

COUNSEL : Mr. M. Holmes QC with Mr. J. Chippindall for claimant Mr. R. Burbidge with Mr. A. Casselden for opponent SOLICITORS : Peter M. Wayne & Associates, Sydney for claimant Corrs Chambers Westgarth, Sydney for opponent CATCHWORDS : PROCEDURE - Pleading - Amendment - Requirement to plead material facts - Whether pleading should state causes of action. D. District Court Act s.134 LEGISLATION CITED : District Court Rules Pt.1 r.5, Pt.5 r.6A, Pt.9 rr3 & 9, Pt.17 r.4, Pt. 20. Supreme Court Rules Pt.15, rr.7 & 13. In the Will of Gilbert (1946) 46 SR NSW 318 at 322-3. Konskier v. B. Goodman Limited [1928] 1 KB 421 at 427 Walker v. European Electronics Pty. Limited (1990) 23 NSWLR 1 CASES CITED: Federated Engine Drivers & Firemen's Association of Australasia v. Broken Hill Proprietary Co. Limited (1911) 12 CLR 398 at 415 R v. Blakeley (1950) 82 CLR 54 at 90-1 Workers Compensation (Dust Diseases) Board v. Veksans (1993) 32 NSWLR 221 Khatu v. Price (1999) 95 FCR 287 at 289-90 Commonwealth Bank of Australia v. Hadfield [2001] NSWCA 440 DECISION : 1.Leave to appeal granted 2. Appeal allowed, subject to the filing of a Notice of Appeal within 14 days; 3. Opponent's application to amend its cross-claim by adding pars.26A, 26B and 26C refused with costs; 4. Opponent to pay claimant's costs of the appeal, and to have a suitors' fund certificate if otherwise eligible.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P HANDLEY JA HODGSON JA

Friday 1 March 2002. KIRBY V. SANDERSON MOTORS PTY. LIMITED Judgment

1 MASON P: I agree with Hodgson JA. 2 HANDLEY JA: I agree with Hodgson JA. 3 HODGSON JA: During the fourth week of a hearing in the District Court, Walmsley DCJ granted to the cross-claimant Sanderson Motors Pty. Limited (SMPL) leave to amend its cross-claim against the plaintiff James Kirby, who was sued as representative of all partners of a firm of accountants formerly known as Nelson Parkhill BDO (BDO). BDO now seeks leave to appeal from that decision. 4 The District Court proceedings were commenced in 1990 by a Statement of Claim in which the plaintiff, suing as representative of the partners of BDO, claimed from SMPL over $80,000.00 for fees for accounting services alleged to have been provided between January 1987 and December 1989. As well as putting on a Defence, SMPL in April 1991 put on a cross-claim claiming $100,000.00 damages from BDO in respect of alleged negligence in preparing SMPL's accounts. This cross-claim was amended in February 1997, and again in January 1999. 5 In October 1999, SMPL gave notice of a further amendment to the cross-claim, introducing for the first time a claim relating to an option which a company Aztec Insurance Pty. Limited (Aztec) had to acquire the shares in companies owning properties at Rose Bay and Rushcutters Bay for the benefit of SMPL, and alleging that, by reason of some breach of duty by BDO or by Mr. Wenham, a partner thereof, SMPL had to pay more than $800,000.00 over and above the option price to acquire the properties. The proposed Amended Cross-Claim claimed $750,000.00 from BDO, abandoning any damages in excess of the jurisdictional limit of the District Court. It appears that SMPL obtained leave to make this amendment on 3rd October 2000; and on 7th November 2001, BDO put on a defence to this cross-claim as amended, relying inter alia on laches, the Limitation Act, a release given by Mr. Wenham in December 1997, and an Anshun estoppel arising from certain Supreme Court proceedings. 6 On 26th November 2001, the matter came before Walmsley DCJ for hearing as a two-week fixture. On that day, BDO applied for an order under District Court rule Pt.17 r.4(5A) to the effect that the 2000 amendment to the cross-claim should operate from 3rd October 2000 rather than 11th April 1991, the date of the original cross-claim. In making that application, BDO relied inter alia on an argument that the District Court did not until 1997 have jurisdiction to hear a claim such as that introduced by the amendment. Walmsley DCJ dismissed the application because of BDO's delay in making it, but did not decide the question of jurisdiction. 7 In the fourth week of the hearing, SMPL applied to further amend the cross-claim, by introducing new paragraphs 26A, 26B and 26C. On 19th February 2002, Walmsley DCJ granted that application. In the result, the cross-claim took the following form (omitting paragraphs 22-26, and 27-35, which are not relevant to this claim): 1. The Cross-Claimant is a company duly incorporated in the State of New South Wales and capable of suing in and by its corporate name and style.

The Cross-Defendant is sued as the representative of all the partners of the firm of chartered accountants, formerly known as Nelson Parkhill BDO, at the time of the happening of the matters hereinafter complained of and references hereafter to the Cross-Defendant should be read as reference to the said partners.

FIDUCIARY DUTY/NEGLIGENCE 3. In 1984 Starshell Pty Limited, a company of which James Stuart Kirby was a director and which was controlled by Paul Wenham, a senior partner and at all material times the managing partner of the Cross-Defendant ("Wenham") became a 49% shareholder in the Cross-Claimant, which thereupon became the principal vehicle for a joint venture between Wenham and Starshell Pty Limited on the one hand and Gregory Lauchlan Sanderson and Elizabeth Ann Sanderson ("the Sandersons") on the other hand.

Between 1984 and 1989 and at all material times the Cross-Defendant was the trustee, auditor, accountant and financial advisor to the Cross-Claimant.

Particulars In or about early 1984 Wenham as agent for the Cross Claimant and for the joint venture retained the Cross Defendant as auditors, financial advisors and accountants to the Sanderson interests and the joint venture, which role the Cross Defendant accepted and purported to execute until December 1989.

It was a consequence of the relationship between the parties that the Cross-Defendant had a fiduciary duty and a duty of care to the Cross-Claimant.

From time to time between 1984 and 1989, in the circumstances hereinafter set out, the Cross-Defendant, by Wenham, other partners and employees proffered advice to the Cross Claimant, prepared and completed accounts and other documents for the Cross-Defendant, undertook trusteeship of a company acquired to further the objects of the joint venture, and undertook accountancy and audit functions for the Cross-Claimant but in breach of the said duties, performed such work negligently, failed to advise the Cross Claimant of matters which the Cross-Defendant knew and was bound to disclose, acted whilst in a position of conflict of interest and acted contrary to the interest of the Cross Claimant.

THE CIRCUMSTANCES 7. At all material times the Cross-Defendant was a trustee, accountant and financial advisor to Starshell Pty Limited and Wenham both in his private interests and in his role in the joint venture.

At all material times the Cross-Claimant occupied and carried on its business from premises known as 751 New South Head Road, Rose Bay ("the Rose Bay premises") and 62 McLachlan Avenue, Rushcutters Bay ("the Rushcutters Bay premises") pursuant to leases.

In the years 1985 and 1986 with the objective of acquisition by the Cross-Claimant of the freehold interest in the Rose Bay and Rushcutters Bay premises, Macquarie Bank Limited ("MBL"); through wholly owned subsidiaries Thaxted Pty Limited and Parlon Pty Limited (a) purchased the freehold of the Rose Bay premises and the Rushcutters Bay premises; (b) by property lease with call option, leased the same to Aztec Insurances Pty Limited ("Aztec"), which thereupon sub-leased them to the Cross-Claimant; and (c) granted Aztec a call option to purchase the Rose Bay premises and the Rushcutters Bay premises in or about 1989 at the price for which MBL had purchased them ("the Option").

The issued shares in Aztec were all held by Nelac Nominees Pty Limited ("Nelac") an in-house trustee company owned and controlled by the Cross-Defendant, on behalf of Wenham and the Sandersons equally.

In 1988 Wenham was indebted to the Cross-Defendant in the sum of $200,000.00, was in financial difficulties, and was seeking to sell his interest in the joint venture to the Sandersons.

In late March 1988, a dispute arose between Wenham and Starshell on the one hand and the Sandersons on the other hand.

Particulars In March 1988 Wenham presented the Sandersons with a draft Deed prepared by his solicitors, which draft Deed provided for Starshell's shares in the Cross-Claimant to be sold to the Sandersons but did not acknowledge any interest on their part in Aztec and provided for the Cross-Claimant to lease the Rose Bay premises and the Rushcutters Bay premises from Aztec after the sale.

In 1988 the Sandersons and Wenham were agreed in principle that the joint venture would be brought to an end by the sale of Wenham's interest in the Cross-Claimant to the Sandersons, and negotiations as to price were proceeding.

In 1989, whilst negotiating for the sale of Starshell's shares in the Cross-Claimant, Wenham asserted, contrary to the fact, that the shares in Aztec held in trust by Nelac were shares in which the Sandersons had no beneficial interest.

Some time prior to 6 September 1989 Wenham, without the knowledge of the Sandersons, consented to the charging of the Option to MBL as part security for a private loan to him of $3,250,000.00 by MBL ("the private loan").

In consequence of the said charge neither the Cross-Claimant nor Aztec in 1989 or thereafter was able to exercise the Option save on terms which required repayment to MBL of the private loan, whereby the Option lapsed and its benefit was lost to Aztec, the Cross-Claimant and the Sandersons.

17 At least by 2 October 1989, Wenham had informed the Cross-Defendant of the existence of a Declaration of Trust, made in 1984, whereby Nelac became a trustee for the Sandersons of half the issued shares in Aztec.

18 The Cross-Defendant knew each of the matters set out in paragraphs 3 and 7 -17 above.

It was a consequence of the relationship between the parties that the Cross-Defendant was under a duty of care and owed a fiduciary duty to the Cross-Claimant to (a) act solely in the interest of the Cross Claimant (b) act with professional objectivity free of any conflict of interest; and (c) disclose to the Cross-Claimant matters affecting its interest of which the Cross-Defendant was aware.

In consequence of the matters set out in paragraphs 3 and 7-17 above, the Cross-Defendant was subject to a conflict of interest and a conflict of interest and duty but, in breach of the said duties the Cross-Defendant (a) failed to advise the Cross-Claimant of the matters of which the Cross-Defendant was aware (b) continued to act for the Cross-Claimant, Wenham, Starshell, Aztec and the Sandersons (c) failed to take any steps or any adequate steps to resolve the said dispute or to enable Aztec to exercise the Option (d) failed to disclose to the Cross-Claimant the existence of the conflict of interest; and (e) failed to disclose Wenham's admission that Nelac was a trustee of half of the Aztec shares for the Sandersons. (f) Preferred the interest of Wenham to that of the Cross-Claimant.

Particulars of (f) Knowing that Wenham was in financial trouble, that he was seeking to sell his interest in the Cross-Claimant to the Sandersons at the best price he could, that the Sandersons asserted that Wenham had misappropriated considerable sums, that Wenham was putting pressure on the Sandersons by denying their entitlement to the benefit of the Option and knowing that Wenham had acknowledged to them that Sandersons were in truth half-owners of Aztec, the Cross Defendant did not inform the Cross Claimant of the said acknowledgment, nor did the Cross-Defendant require Wenham to acknowledge to the Sandersons their said entitlement.

As a result of the said matters the Cross-Claimant was unable to avail itself of the benefit of the Option or to implement the objective of the joint venture save by agreeing (which it did in early 1993) with Wenham and MBL to pay MBL the original Rose Bay and Rushcutters Bay properties' acquisition prices plus a further sum of $825,642.00 in reduction of Wenham's indebtedness to MBL under the private loan.

26A. By reason of the circumstances particularised below, Aztec acquired rights to options to purchase the freehold of the Rose Bay and Rushcutters Bay premises (the Options Agreement)which rights it was bound by law to exercise for the benefit of the Cross-Claimant.

Particulars of Circumstances (a) Those set out in paragraphs(7)-(26) hereof. (b) The beneficial shareholders of Aztec at the time of the said acquisition, Starshell Pty Ltd and GL and EA Sanderson so intended. (c) The cost of all obligations of Aztec under the Options Agreement and all other outgoings of Aztec were met by the Cross-Claimant.

26B. The said options fell due for exercise on 26 November 1989 and the Cross-Claimant that time desired Aztec to exercise its said rights at the expense of the Cross-Claimant.

26C. In breach of its said obligations James Kirby and Paul Wenham the directors of Aztec in September 1989 encumbered the said rights for the personal benefit of Paul Wenham, asserting falsely that Aztec held the said entitlements solely for the benefit of Paul Wenham, and did not exercise the said rights whereby the said options lapsed and their value was lost to the Cross-Claimant.

Particulars (a) These are set out in paragraphs (14)-(21) hereof.

The Cross-Claimant claims damages of $750,000 against the Cross-Defendant and abandons all damages in excess of that amount, being the jurisdictional limit of the Court. 8 In making his decision, the primary judge noted a submission of Mr. Holmes QC for BDO that the amendment was defective in not identifying the source of the obligation on Aztec alleged in paragraph 26A, and the contrary submission of Mr. Burbidge QC for SMPL that it was only necessary to plead facts not causes of action. The primary judge continued: As I have noted, it was already alleged in paragraph 21 that the cross-claimant, by reason of what were said to be wrongful acts, was unable to implement the objective of the joint venture. Thus, what is alleged, it seems to me, is a breach of the joint venture agreement, the joint venture having first being referred to in paragraph 3.

It is an underlying assumption, it seems to me, in the allegations in the second further amended cross-claim, though not specifically pleaded, that but for the alleged wrongful acts of Mr Wenham, and possibly Mr Kirby, Aztec would have had the ability to exercise the MBL options. This seems to flow from 9C.

It seems clear enough to me that the fact that Aztec would ultimately be obliged to exercise the option for the benefit of the cross-claimant is to be drawn from the reference to the joint venture in paragraph 3, and the contents of paragraph 9. So the addition of the words, "it was bound by law to exercise for the benefit of the cross-claimant", seems to me to add little to the pleading, because it seems to me to be an underlying assumption in what is already in the pleading.

The allegation is not one which is made against the cross-defendant, it is in effect an assertion that but for what occurred, the cross-claimant would have been able to call on Aztec to exercise the MBL options for its benefit.

In a general way, that is already in issue. The cross-defendant has indicated that it will be asserting that the cross-claimant, even if it satisfies me of all other matters, would not have been able to get Aztec to exercise the option without having to pay the 825,000-odd dollars.

Accordingly, it seems to me that the amendments are of use in giving some greater particularity to the existing claim, and are not of the kind which can cause any relevant or significant prejudice to the cross-defendant. I think it is in the interests of justice that I give leave to amend, and I do give that leave. I will reserve the question of costs. 9 Before this Court, Mr. Holmes QC for the claimant submitted that the Court of Appeal should intervene, because the primary judge had misapplied the law, and the order was likely to lead to a miscarriage of justice: cf. In the Will of Gilbert (1946) 46 SR NSW 318 at 322-3. 10 He submitted that the amendment introduced for the first time an allegation that Aztec "was bound by law" to exercise certain rights, without specifying the nature of the obligation or properly specifying its basis, in circumstances where there were a number of conceivable alternatives, including knowing participation in breach of trust, intent of joint venturers, equitable inhibition and contract. If the basis of the obligation was equitable in nature, that raised a question of jurisdiction under s.134 of the District Court Act. If the basis was legal, there were limitation questions. 11 Mr. Holmes referred to the District Court rules, Pt.5 r.6A, which relevantly provides as follows: A statement of claim lodged to commence an action shall contain (a) a statement of each cause of action in respect of which the action is brought, and a statement of the amount of debt or damages, or other relief, claimed in respect of each cause of action … 12 He pointed out that this rule applied to cross-claims. In relation to pre-1997 cross-claims, see the pre-1997 Pt.20 r.1(3). In relation to post-1997 cross-claims, see the post-1997 Pt.20 r.6. 13 Mr. Holmes noted that, under Pt.1 r.5, compliance with rules could be dispensed with. However, he submitted, no application to that effect had been made and no ground to dispense with this rule had been shown. 14 Mr. Holmes submitted that this Court should discourage the leaving of issues at large to be developed in the course of the trial, because that was conducive to injustice. 15 Mr. Burbidge QC for the opponent submitted that it plainly emerged from the pre-amendment pleading that Aztec was a bare trustee, enlivened solely for the purpose the joint venture, and with no other business. The additional allegation in paragraph 26A that SMPL paid all of Aztec's outgoings merely confirmed that Aztec held the rights associated with the option on behalf of SMPL. The amendments only clarified what was already alleged. 16 Mr. Burbidge also submitted that SMPL was not bound to state the legal effect of the facts on which it relied: see Konskier v. B. Goodman Limited [1928] 1 KB 421 at 427. He submitted that there was no requirement that a pleading show on its face that the claim is within the jurisdiction of the District Court. 17 Mr. Burbidge submitted that this was not a matter for interference by the Court of Appeal. No injustice was shown. It was not a matter for the grant for leave to appeal. The case was not one of any special importance. 18 In my opinion, the case does raise a question of some general importance, namely the extent to which a cause of action must be spelt out in District Court pleadings. 19 Quite apart from Pt.5 r.6A, to which Mr. Holmes referred, and which does not have any equivalent in the Supreme Court rules, there are relevant District Court rules which do have equivalents in the Supreme Court rules. Firstly, in District Court rule Pt.9 r.3(1), it is provided that "a pleading of a party shall contain, and contain only, a statement in a summary form of the material facts on which he relies …". This is similar to Supreme Court rule Pt.15 r.7(1). District Court rule Pt.9 r.9(1) provides that "the plaintiff shall, in his originating process, plead specifically any matter which, if not pleaded specifically, may take the defendant by surprise". There is a similar provision in Supreme Court rule Pt.15 r.13(1). 20 It might appear that these rules do not require that causes of action be stated in pleadings: the requirement is to have a statement of material facts, and indeed to have only such a statement. However, in my opinion - (1) "Material" means material to the claim, that is, to the cause or causes of action which are relied on. (2) The requirement of a statement of material facts does not exclude the allegation of legal categories, such as duty of care, fiduciary duty, trust and contract. (3) The general requirement to avoid surprise means that material facts must be stated in such a way that a defendant can understand the materiality of the facts, that is, how they are material to a cause of action. 21 Accordingly, even on the basis of these rules which are common to the District Court and the Supreme Court, I do not take cases such as Konskier as establishing that there is never any requirement to do more than set out facts. Where there is a danger of surprise, which arises particularly where there is lack of precision and clarity in the pleading, it may well be appropriate to require a plaintiff, either in a statement of claim or in particulars, to explicitly relate the facts it pleads to specified causes of action. 22 In the District Court, Pt.5 r.6A(a) directly requires the statement of causes of action. I see this not as contradicting Pt.9 r.3(1), but as making it clear that the statement of material facts should be so presented as to amount also to a statement of a cause or causes of action. That is, the statement should convey just what cause or causes of action are being relied on. The statement should also convey exactly what relief is claimed in respect of each cause of action. 23 In this case, the cross-claim as amended could be taken to allege that Aztec held rights associated with the option as a trustee for SMPL (see paragraph 6, 9, 26A), though not I believe to allege any other legal basis for Aztec "being bound by law" in relation to such rights. However, the cross-claim is apparently alleging causes of action against BDO, so it is necessary to see how an allegation of Aztec's trusteeship relates to causes of action against BDO. 24 The pre-amendment paragraphs 15-20 seem to allege that BDO was in breach of fiduciary duty in not giving information to SMPL and otherwise not enabling Aztec to exercise the option, though not in being itself in any way responsible for the giving of the charge referred to in paragraph 15, which appears to have been the main cause of the problem that arose. It may be accordingly that damages for that breach of fiduciary duty could only be for the loss of a chance to do something earlier to overcome the problem of the charge. 25 Paragraph 26C alleges that Mr. Kirby and Mr. Wenham encumbered the rights in question. This could amount to an allegation that they knowingly participated in a breach of trust by Aztec; but this of itself would at best give SMPL a cause of action against them, not against BDO. No relief is claimed against them, as distinct from BDO as a whole, and there is a question whether under the pre-1997 Pt.20 (relating to cross-claims) relief could be claimed in a cross-claim against some only of a number of partners sued as such. 26 In order to make paragraph 26C part of a statement of a cause of action against BDO, it would be necessary to allege to the effect that what Mr. Kirby and Mr. Wenham did was done as agents for BDO, and to allege material facts supporting that allegation; or alternatively, at least, to extend the allegations in paragraphs 18 and 20 to paragraphs 26A-26C as well as the earlier paragraphs referred to. 27 In my opinion, there were errors of law by the primary judge which could lead to a miscarriage of justice. For the reasons I have given, paragraphs 26A-26C do not amount to a statement, or part of a statement, of a cause of action against BDO, and so do not comply with the District Court rules. They do no more than give particularity to an existing claim. 28 If the amendment stands, Mr. Burbidge QC frankly admits that he would submit, if the evidence went that far, that what Mr. Kirby and Mr. Wenham did was done as agents for BDO, so that BDO is itself guilty of knowing involvement in a breach of trust; and, if the evidence does not go that far, that SMPL should recover damages against Mr. Kirby and Mr. Wenham without recovering damages from the rest of the partners of BDO. Relief on either basis would go well beyond anything in the pre-amendment cross-claim, and would be relief not explicitly claimed even in the amendments themselves. Yet if the amendments stand, BDO, and Mr. Kirby and Mr. Wenham, would be at risk that, at the conclusion of the case, the trial judge would say that the relief was sufficiently within the pleading having regard to the way the case was conducted. 29 In my view, having regard to the errors by the trial judge, the significance of the question of the extent to which causes of action need to be stated, and the significant possibility of injustice, I would grant leave to appeal, allow the appeal (subject to the filing of a Notice of Appeal), and refuse the amendment. 30 In my opinion also, SMPL should pay the costs of BDO of the application below and of the appeal, but have a Suitors Fund certificate in respect of the appeal costs if otherwise eligible. 31 If a further application to amend is made, the proposed amendment may either allege that the acts of Mr. Kirby and Mr. Wenham referred to in paragraph 26C were done as agents for BDO, or claim relief against Mr. Kirby and/or Mr. Wenham as individuals, or both. 32 As regards the first alternative, this would be the first time that a claim had been made that BDO was responsible and liable for the actual encumbering of the properties, as distinct from failing to take steps to inform SMPL or otherwise to deal with the problem. It would raise for the first time the capacity in which Mr. Kirby and Mr. Wenham were acting in enabling the encumbrance to be effected, presumably raising issues like those discussed in Walker v. European Electronics Pty. Limited (1990) 23 NSWLR 1. It would be necessary to decide whether it is fair to allow such issues to be introduced at this stage of the hearing. It would also raise again the related questions of limitation defences and the jurisdiction of the District Court. 33 If the amendment is allowed with no order being made under Pt.17 r.4(5A), the proceedings on this claim would be treated as having commenced at a time when the District Court did not have the jurisdiction granted by s.134(1)(h), so there would be a real question about jurisdiction which, if this would save the parties unnecessary risk and expense, should preferably be dealt with immediately: see Federated Engine Drivers & Firemen's Association of Australasia v. Broken Hill Proprietary Co. Limited (1911) 12 CLR 398 at 415, R v. Blakeley (1950) 82 CLR 54 at 90-1, Workers Compensation (Dust Diseases) Board v. Veksans (1993) 32 NSWLR 221, at 238, Khatu v. Price (1999) 95 FCR 287 at 289-290. I accept that s.134(1)(h) should not be given a narrow construction (see Commonwealth Bank of Australia v. Hadfield [2001] NSWCA 440), but I note that the amendment introducing paragraph (h), while it applies to existing causes of action, is not expressed to apply to pending proceedings. If an order is made under Pt.17 r.4(5A) to date the amendment from the commencement of paragraph (h) in 1997, or later, this could give rise to limitation questions. 34 As regards the second alternative, this would introduce for the first time into the case a claim for relief against Mr. Kirby and/or Mr. Wenham as individuals, as distinct from claims against all the partners of BDO together. This could raise questions under the two versions of Pt.20 of the District Court rules, and also questions of fairness, limitation defences and jurisdiction, which would need to be considered. 35 Finally, I note that there was some discussion during argument as to whether, in a claim by a beneficiary against a person other than the trustee for damages for knowing participation in a breach of trust, the trustee is a necessary party. It seems to be common ground that Aztec has been de-registered and no longer exists; and in my opinion, whatever the general position may be, in this case it would not be necessary to have Aztec restored to the register simply to make it a party to these proceedings. 36 I propose the following orders: 1. Leave to appeal granted. 2. Appeal allowed, subject to the filing of a Notice of Appeal within 14 days. 3. SMPL's application to amend its cross-claim by adding pars.26A, 26B and 26C refused with costs. 4. SMPL to pay BDO's costs of the appeal, and to have a suitors' fund certificate if otherwise eligible. **********

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