Joinder, Fast Track Directions and Pleadings
14 All parties accepted that if Foresters was joined to the proceeding then it would no longer be appropriate for the proceeding to be the subject of Fast Track Directions. In other words, it would be a matter in the general list. They also accepted that if the matter was placed in the general list then it would be appropriate that it proceed on pleadings.
15 Rule 9.05(1) of the Federal Court Rules 2011 relevantly provides:
(1) A party may apply to the Court for an order that a person be joined as a party to the proceeding if the person:
(a) ….
(b) is a person:
(i) …
(ii) whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined; or
(iii) who should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings.
16 It is unnecessary for me to discuss these grounds for joinder in any detail. As I have said, Foresters neither consented to nor opposed the application that it be joined. The existing respondents advanced a number of matters in opposition to the application for joinder, but they did not suggest that joinder in a case such as the present was not within one or other of the above paragraphs in Rule 9.05 (1)(b)(ii) and (iii). Plainly, it is because the applicants' proceeding against the existing respondents and their proposed proceeding against Foresters are closely related. Furthermore, there are considerable advantages in Foresters being joined as a respondent rather than the applicants pursuing Foresters in a separate proceeding. Those advantages are the well known advantages in cases where there is an overlap between what are potentially two proceedings and include avoiding two trials, avoiding inconsistent findings of facts and avoiding the additional costs involved in two trials. There were powerful arguments in favour of the joinder of Foresters.
17 The existing respondents opposed joinder having regard to the history of the proceeding. They pointed to the fact that it was the applicants who commenced the proceeding as one subject to Fast Track Directions and that by notice of objection pursuant to 2.4 of Practice Notes CM 8 (Fast Track) dated 29 May 2012 they objected to the proceeding being subject to Fast Track Directions. That objection failed. They pointed to the fact that the proceeding had been in the Court for some time, was substantially advanced, if not ready for trial, as a case between the applicants and the existing respondents, and they submitted that substantial costs would be wasted if Foresters was joined and the proceeding placed in the general list. The respondents also pointed to the fact that the applicants sought and obtained pre-action discovery against Foresters in the Supreme Court of South Australia in June 2012. Furthermore, Foresters gave the applicants permission to use the discovered documents for the purposes of this proceeding.
18 One issue of importance on the application for joinder was the reason the applicants had not applied to join Foresters earlier. They had sufficient evidence to issue a pre-action discovery application in the Supreme Court of South Australia in June 2012. The applicants identified an affidavit of Mr Kerry Hughes sworn on 15 March 2013 as the reason they sought to join Foresters, but they did not say that the affidavit made the difference in terms of the evidence they had against Foresters. They put the matter differently. They said that it became apparent from Mr Hughes' affidavit that they could not quarantine the issues between them and the existing respondents and between them and Foresters. In his affidavit in support of the application Mr Bunting said:
11. I refer to the First Walsh Affidavit. At the time of commencing this proceeding I see that the Applicants had documents to indicate that Foresters was at least liaising with Mr Woff and Mr Corby during 2010, while both remained employed by the Lifeplan, but only limited evidence which illuminates the nature and extent of Foresters' involvement in the misconduct alleged against the First, Second and Third Respondents in this proceeding.
12. The Applicants took steps to investigate the evidence available regarding potential causes of action against Foresters as a result of Foresters' involvement in the First to Third Respondents' conduct including by application for pre-action disclosure in the Supreme Court of South Australia. The content of the Hughes FCA Affidavit (filed on behalf of the First to Third Respondents) puts facts relevant to those causes of action into issue in this proceeding, and because it appears the most appropriate course for the effective disposition of issues in dispute, the Applicants now seek to prosecute the claims against Foresters in this Honourable Court.
…
18. The Hughes FCA Affidavit is advanced as proposed evidence in chief by the First to Third Respondents and, given its content, the First to Third Respondents have chosen to introduce directly into issue in this proceeding Mr Hughes' and Foresters' role in their conduct before and immediately following the conclusion of Mr Woff and Mr Corby's employment with the Applicants. I am of the view that, given the evidence filed by the First, Second and Third Respondents, it is no longer practical or appropriate to contemplate quarantining the trial of any causes of action which they May (sic) have against Foresters from this proceeding as those causes of action arise from the same matrix of facts which will be tried in this action. To have separate proceedings would involve essentially the same issues and facts, being adjudicated by different courts. Accordingly, the Applicants seek orders for permission to join Foresters to this action.
…
19 In their written submissions counsel for the applicants wrote:
15. As explained in paragraphs 10-12 of the Bunting Affidavit, the Hughes Affidavit puts into issue in these proceedings facts relevant to at least the following causes of action, which the Applicants now seek to prosecute against Foresters:
(a) accessorial liability for breaches of fiduciary duties by the Existing Respondents;
(b) accessorial liability for breaches of confidence by the Existing Respondents;
(c) accessorial liability for breaches of the Corporations Act 2001 (Cth) by the Existing Respondents;
(d) accessorial liability for breaches of the Copyright Act 1968 (Cth) by the Existing Respondents;
(e) passing off; and
(f) civil conspiracy in combination or agreement with the Existing Respondents.
20 The applicants knew of Foresters' involvement and of potential causes of action against it and it is difficult to resist the conclusion that Mr Hughes' affidavit caused a re-examination by a fresh pair of eyes (the applicants changed solicitors in January 2013) of the earlier decision not to join Foresters and a greater emphasis by the applicants' advisers on the possibility of an Anshun plea (Port of Melbourne Authority v Anshun Proprietary Limited (1980) 147 CLR 589) by Foresters in any subsequent proceedings. It seemed to me that a realistic appraisal of the position was that as far as the applicants were concerned, the degree of overlap emerged more clearly after Mr Hughes' affidavit was filed.
21 The existing respondents' submissions against joinder by reference to the history of the proceeding had considerable force. However, there were some matters to be placed in the scales on the other side. They were as follows. On 18 December 2012, another judge of the Court made a number of orders, including an order that the existing respondents file and serve their affidavit evidence by 14 February 2013, other than of any proposed witness who will be required by subpoena to attend the hearing and give evidence, and reserving to any party liberty to apply at the hearing for parts of the evidence of a particular witness or witnesses to be given orally. On 5 February 2013 I made an order that the matter be listed for hearing on 12 - 15 March 2013 and 18 - 19 March 2013 with further time for hearing during the week commencing 25 March 2013 if necessary. Until 22 January 2013 the existing respondents were represented by a large legal firm. That firm ceased to act for the existing respondents and the firm filed a notice of ceasing to act on 22 January 2013. It may well be, as Mr Woff asserts, that the existing respondents could no longer afford to pay the legal fees they were being charged, but the fact is that from 22 January 2013 the existing respondents were unrepresented.
22 On 22 February 2013 I conducted a directions hearing. I vacated the trial date on the application of the existing respondents and I ordered that they pay the applicants' costs occasioned by the vacation of the trial dates. The existing respondents had not filed their affidavit evidence in accordance with previous orders and I made an order extending the time within which they were to do so to on or before 4pm on 15 March 2013. As between the applicants and the existing respondents, it was the latter's conduct and actions which led to the vacation of the trial date.
23 At a directions hearing on 19 March 2013 the applicants foreshadowed that they would bring an application to join Foresters.
24 I considered that the arguments in favour of joinder were strong. The applicants' case is that the existing respondents and Foresters are co-contraveners or, that Foresters is liable as an accessory to contraventions or breaches by the existing respondents. In addition, I had not fixed another trial date. To be weighed against those matters was the way in which the proceeding had proceeded so far and the delay associated with how the proceeding may have proceeded if Foresters was joined. I considered the matters in favour of joinder outweighed the matters against an order for joinder.
25 I considered that, if there were any, the existing respondents' costs thrown away by the joinder of Foresters should be paid by the applicants. The joinder of Foresters made two things inevitable. One was the removal of the case from the Fast Track "list" and two, was that the proceeding would now proceed on pleadings. Any wasted work or duplication in those respects gave rise, in my opinion, costs thrown away which should be paid by the applicants. There is force in the applicants' submission that there are no costs thrown away because most of the work already performed will not need to be duplicated because it is relevant to the proceeding as it will be with Foresters as a respondent. However, I cannot rule out the possibility that there will be some costs thrown away. For example, if there are additional costs in terms of the preparation of a Defence as distinct from the Fast Track Response which had already been prepared, then they are costs thrown away as between the applicants and the existing respondents. The former should pay the costs thrown away because it is their conduct which has resulted in costs thrown away. However, I did not think it appropriate to order that the costs be fixed or taxed and paid before the proceeding continues. The ordinary rule is that interlocutory costs are not taxed until the proceeding is finished and I did not consider that there were any grounds to depart from the rule (see Federal Court Rules 2011 r 40.13 and Rafferty v Time 2000 West Pty Limited (No 3) [2009] FCA 727 at 508 - 509 [19] - [24] per Besanko J). Furthermore, the fact that I did not consider that any costs thrown away could be assessed at this stage of the proceeding was an additional reason not to make such an order. It was for these reasons among others that I declined to accept the tender by the existing respondents of the affidavit of Melanie Jane Crow.