Fair Trading Act 1987, s 10, s 79(2)

Limitation Act 1935, s 38

Rules of the Supreme Court 1971, O 21 r 5(2), r 5(5)

BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VicRp 72; [1985] VR 756

Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431

Re WM Train & Co Pty Ltd, unreported; SCt of VIC (Beach J) No 8341/94; Library No BC 9507164; 24 January 1995

Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40

Wilson v Metaxas [1989] WAR 285

1 JUDGMENT OF THE COURT: This is an application for leave to appeal against the decision of a Commissioner of the District Court. At the conclusion of the hearing of argument on the application we dismissed the application and said that we would later publish our reasons for doing so. These are those reasons.

2 The applicant is the defendant in proceedings instituted against him by the respondent. The writ was issued on 30 April 1997. The statement of claim which was endorsed on the writ pleaded various causes of action against the applicant, who had been a director of the respondent. These included causes of action for money had and received, debt, breach of fiduciary duty and breach of contract.

3 On 9 September 1997 the respondent filed an amended statement of claim introducing, inter alia, claims for misleading and deceptive conduct in contravention of s 10 of the Fair Trading Act 1987. The respondent alleged that the applicant had made a number of misrepresentations to it to the effect that expenses incurred by him were business expenses and, by that means, obtained money to which he was not entitled.

4 The applicant applied to strike out the claims for misleading and deceptive conduct in respect of transactions which took place prior to 10 September 1994 upon the ground that they were time barred. He relied, in this respect, upon the provisions of s 79(2) of the Fair Trading Act although he appears to have referred, in his application, to the Trade Practices Act 1974.

5 This application came on for hearing before the Commissioner on 26 September 2000. It was heard together with an application which had been lodged by the respondent to further amend its statement of claim. By this last application the respondent sought to add claims in deceit arising out of the same facts as had been pleaded in support of the misleading and deceptive conduct claims. The applicant opposed the application upon the ground, inter alia, that the amendments amounted to new causes of action which were, by then, statute barred by virtue of the provisions of s 38 of the Limitation Act 1935. The respondent relied, in answer, upon the provisions of O 21 r 5(2) and (5) of the Rules of the Supreme Court 1971, which provide that:

"(2) Where an application to the Court for leave to make the amendment mentioned in paragraph ... (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

...

(5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."

6 The Commissioner, on 19 October 2000, dismissed the application to strike out the misleading and deceptive conduct claims and allowed the respondent's application to amend.

7 The Commissioner's reason for dismissing the application to strike-out was that the question of when the alleged loss or losses arose, and therefore when each cause of action arose, was one which should be answered at trial and not in the course of a strike-out application. As to the application for leave to amend, his Honour ruled that, while the causes of action in deceit were new to the statement of claim, they might be added pursuant to the provisions of O 21 r 5 because each of them arose out of the same facts or substantially the same facts as the causes of action in respect of which relief had already been claimed in the action by the respondent.

8 The applicant did not appeal against that decision. However, he brought an oral application for an order that the amendment, which was allowed on 19 October 2000, take effect from that date. The basis for this, seemingly, was that if, as the applicant contended, the misleading and deceptive conduct claims were time-barred then so, too, should be the deceit claims, and this would not happen if those claims were treated as having been advanced on the same day as the introduction of the misleading and deceptive conduct claims. He relied, in this respect, on what had been said in Morgan v Banning (1999) 20 WAR 474, in particular by Wheeler J (with whom Ipp J was in agreement) at 484 as follows:

" ... if the defective indorsement appearing on the writ when issued, is not of a type which is capable of encompassing amendments sought to be made after the expiry of the limitation period, so that the amendments truly 'add' an additional and time barred cause of action (rather than particularising, clarifying or expanding one already instituted) then, whether leave to amend is granted or not, the new action remains time barred. Whatever the rules of court may provide, an action which is in fact instituted out of time is able to be defeated by reliance upon the Limitation Act, which the court has no power to override, whether by a procedural rule of 'relation back' or otherwise."

9 The Commissioner refused the oral application. He said that it amounted, in effect, to a re-arguing of the applicant's opposition to the respondent's application for leave to amend its statement of claim and that this should not be countenanced. He went on to say that he would, in any event, refuse the application because the respondent had not introduced any new facts by its amendment raising the deceit claim against the applicant.

10 It was against this decision that the applicant sought leave to appeal.

11 We are not persuaded that the decision of the Commissioner was attended with sufficient doubt to justify the grant of leave. If, as was conceded to be the fact, the deceit claims arose out of the same facts as had been pleaded in support of the misleading and deceptive conduct claims, then it seems to us undoubtedly to have been open to his Honour to allow the application to amend, notwithstanding that the relevant period of limitation in respect of those claims had or might have expired. That is the plain effect of sub-rules (2) and (5) of O 21 r 5. Once the amendments were allowed by his Honour they took effect, for limitation purposes, as if they had been made at the date at which the facts relied upon in support thereof had first been pleaded. There was no basis upon which the Commissioner could properly order that the amendments should take effect only from 19 October 2000.

12 This simple proposition is entirely unaffected by the fact that claims which had been made for damages for misleading and deceptive conduct on the strength of those facts were, or might be, time barred. As the Commissioner had earlier found (and this finding was not challenged by way of appeal), the new causes of action still arose "out of the same facts as a cause of action in respect of which relief ... [had] already been claimed in the action ... " (O 21 r 5(5)). There is nothing in Morgan v Banning, above, which might be taken to support the applicant's contentions. This is not a case of a defectively endorsed writ of the kind apparently contemplated by Wheeler J in the above quoted extract from her Honour's judgment in that case. Rather, it is a case in which there is a valid and sufficient writ which, at the time of the application for leave to amend, was endorsed with a statement of claim which pleaded facts which are accepted as being the same as those which were relied upon as giving rise to the cause of action for deceit.

13 It followed, in our opinion, that the application should be dismissed.