The test for joinder
51It is settled law that a person who is directly affected by the orders sought in a proceeding is a necessary party, and that the obligation to join that person rests upon the plaintiff or applicant or person applying for those orders.
52In the Superleague case (News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410) at 524-526, the Federal Court (Lockhart, von Doussa and Sackville JJ) applied the test stated by Lord Diplock delivering the advice of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 criticising the dichotomy between "legal" and "commercial" interests. His Lordship said at 56:
"A better way of expressing the test is: will [a non-party's] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?"
53That test has very regularly been followed. Most recently, in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; 241 CLR 1 at [131], a unanimous High Court said:
"Walker Corporation submitted that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. That submission is correct.
54Sometimes it is said, as it was said in the present appeal, that merely giving notice to the person affected by the order is sufficient. It will be necessary to return to this in more detail below, but it should be recognised immediately that joinder, not notice, is the default position. In the Superleague case, their Honours said at 526:
"In our opinion, the notice given to the players before trial does not, and could not, extend the jurisdiction of the Court to make orders which offend the test stated in Pegang Mining. Absent an application for joinder by a defendant, or by a third party who claims to be directly affected by the proposed orders, it is for the party prosecuting the proceedings to choose who are the necessary parties to enable the Court to make the orders sought. Generally speaking, to permit [the party prosecuting the proceedings] to transfer to others who might be affected by the outcome of the proceedings the responsibility of deciding whether or not they should apply to be joined could be productive of uncertainty and inconvenience. At times, it could lead to the need to halt expensive litigation part-way through, because a third party insufficiently understood the proceedings, or, through impecuniosity or some other reason, was not adequately advised." (emphasis added)
55In John Alexander's Clubs the last two sentences of that passage were reproduced, and endorsed by the High Court in these terms at [140]:
"News Ltd v Australian Rugby Football League Ltd was a case where players who had not been joined in the proceedings but only informed of them were not debarred from attacking the orders made. There is no doubt that Walker Corporation was aware of the first proceedings, and it informed the Court of Appeal of that fact. Walker Corporation said there was a reasonable explanation for its delay in seeking to be joined. Whether or not that is so, it had no duty to seek to be joined, and its delay does not in this case call for explanation."
56It is clear that Council formed the view that the delayed transfer of title was another device to frustrate the Council's enforcement proceedings. It contended that "the whole purpose of the transfer to [Ms Chami] was to try and defeat the proceedings". That in turn led to submissions directed to ss 56-59 of the Civil Procedure Act 2005 (NSW).
57Contrary to Council's submission that "the line of authority from the Super League case must be read in the context of the overriding purpose set out in the Civil Procedure Act", nothing in ss 56-59 of the Civil Procedure Act undermines this principle, at least in its application to the present case. The joinder of a party directly affected by an order is not, at least not ordinarily, a matter of discretion: it is a matter of obligation upon the party seeking the order. That is why the High Court referred to the position of the non-party Walker Corporation in John Alexander's Clubs at [153] as depending on "matters of right affecting non-parties which rest on general law principles of natural justice".
58For that proposition, the High Court cited Victoria v Sutton [1998] HCA 56; 195 CLR 291 at [77], where McHugh J said:
"The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order."
59Council relied on CTI Joint Venture Company Pty Ltd v CRI Chatswood Pty Ltd (in liq) (No 2) [2011] NSWLEC 91, where Craig J had been taken to that passage (at [12]), but held that there was a discretion to be exercised in accordance with s 56 (at [16]). Ultimately, his Honour did order the joinder of the parties said to be necessary parties, some five weeks before the matters was listed for final hearing. The same approach may be seen in Australian Catholic University v Minister for Planning and Infrastructure [2013] NSWLEC 174 at [38] where, once again, joinder was ordered.
60Council did not take this Court to any decision where the considerations in ss 56-59 of the Civil Procedure Act had resulted in a party directly affected by orders not being joined. Ultimately, however, it is not necessary to reach a concluded view as to the role of ss 56-59 of the Civil Procedure Act. It is plain from the transcript and reasons of the primary judge that her Honour was never asked to, and did not, address the question whether Ms Chami was a necessary party by reason of the potential for the orders sought by Council to affect her. This is not a case where challenge is made to a discretionary decision of a primary judge not to order joinder because of the matters identified in ss 56-59. Nor is it a case where it could be said that had the question of joinder been brought to her Honour's attention, the only course available to her would have been to proceed in the absence of Ms Chami. It is not clear what Ms Chami might have said, but her pending appeal from Council's refusal of a building certificate (mentioned by the primary judge at [74]) is likely to have been at the forefront of her submission, and the nature and timing of that appeal would undoubtedly be relevant to the exercise of discretion. In short, Council's reliance on any impact ss 56-59 might have had, had the question of parties been considered by her Honour, is no answer to the complaint that it was not considered by her Honour.
61All of that said, because the underlying concern is (as McHugh J said in Victoria v Sutton) natural justice, joinder is not always necessary. That reflects a very old approach. Although the common law knew nothing of the joinder of a party merely for the purpose of having that party bound by the judgment, equity was not so strict. Where no prejudice would be suffered by a party not being joined, his or her presence could be dispensed with: see for example Smith v Brooksbank (1834) 7 Sim 18; 58 ER 743, where the non-joinder of the executors who were alleged to have assented to the bequest was held not to be fatal. The direct ancestor of the rules in the UCPR governing joinder of parties is the rule of procedure contained in O XVI r 13 in the First Schedule to the Supreme Court of Judicature Act 1875 (UK). That in turn reflected chancery practice. In particular, and relevantly for present purposes, UCPR r 6.23 "Proceedings are not defeated merely because of the misjoinder or non-joinder of any person as a party to the proceedings" is merely a modern formulation of the chancery practice.
62The positive assent to an order by the executors who were not joined in Smith v Brooksbank has its modern counterpart in the course adopted by Preston CJ in Woollahra Municipal Council v Sahade. His Honour, recognising that the owners corporation was directly affected by the proposed demolition of a staircase which extended onto the common property, proceeded on the basis that the practical impact was low and its attitude to the orders was abundantly clear (the owners corporation was notified of the proposed order, and informed the Court through the applicant local council that it wished neither to be joined nor heard, but had passed a resolution supporting the orders proposed).
63The primary judge was expressly taken to [65]-[72] and [88] of the reasons in Sahade, but not to the matters at [78]-[79] which deal with precisely the issue before her. The same selectivity was adopted in Council's written submissions in this Court. When it was drawn to the parties' attention, Council made no submission that it was an approach that ought not to be followed. It is an approach which is, with respect, plainly correct.