Street & 7 ors v Luna Park Sydney Pty Ltd & 1 or

Street & 7 ors v Luna Park Sydney Pty Ltd & 1 or - [2006] NSWSC 230 - NSWSC 2006 case summary — Zoe

[4]

Agtrack (NT) Pty Ltd v Hatfield (2003) 7 VR 63 Agtrack (NT) Pty Ltd v Hatfield (2005) 218 ALR 677 Air Link Pty Ltd v Paterson (2005) 218 ALR 700 Application Des Gaz SA v Falks Veritas Ltd [1974] Ch 381 Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79; [1999] FCA 18 Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 Ascot Investments Pty Limited v Harper (1981) 148 CLR 337 Baldry v Jackson [1976] 2 NSWLR 415 Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 Boyce v Paddington Borough Council [1903] 1 Ch 109 Council for the City of the Gold Coast v Pioneer Concrete (Qld) Pty Ltd and Others (1998) 157 ALR 135 Fernance v Nominal Defendant (1989) 17 NSWLR 710 Gould v Vaggelas (1985) 157 CLR 215 Henderson v Pioneer Homes Pty Ltd (No 2) (1980) 29 ALR 597 Hutchinson v Jauncey [1950] 1 KB 574 ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 Janssen Pharmaceutical Limited v Pfizer Pty Ltd (1986) ATPR 40-654; 6 IPR 227 CASES CITED : Ketteman v Hansel Properties Ltd [1987] AC 189 Kirela Pty Ltd v Westfield Holdings Ltd [2002] FCA 1223 Liff v Peasley [1980] 1 All ER 623 (CA); [1980] 1 WLR 781 McDowell v Baker (1979) 144 CLR 413 McGee v Yeomans [1977] 1 NSWLR 273 Maritime Services Board v Murray (1993) 52 IR 455; NSWCA, 22 December 1993 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 Morgan v Banning (1999) 20 WAR 474 O D Transport Pty Ltd v Western Australian Government Railways Commission (1987) 13 FCR 500 Osgaig Pty Ltd v Ajisen (Melbourne) Pty Ltd (2004) 213 ALR 153; [2004] FCA 1394 Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 R v Dovey; Ex parte Ross (1979) 141 CLR 526 Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (1995) 183 CLR 552 Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 Thomson Publications (Australia) Pty Limited v Trade Practices Commission (1979) 27 ALR 551; (1979) 17 ALR 551 Tiley & Tiley (1980) 6 Fam LR 528 Walker v Noosa Shire Council [1985] 1 QdR 387 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Wenham v General Credits Ltd (NSWSC, McLelland J, 16 December 1988, unreported), Wilson v Dagnall [1972] 1 QB 509

[11]

3 In about August 1999, the Luna Park Reserve Trust and MEPL entered into a Deed of Agreement for Lease, whereby the Trust agreed to grant MEPL a lease of Luna Park upon certain terms and conditions. In 2000 and 2002, MEPL lodged Development Applications and Statements of Environmental Effects in respect of Luna Park. In about December 2002, the Trust, MEPL and LPS entered into an amended Deed of Agreement for Lease whereby the Trust agreed to grant LPS a lease of Luna Park upon the same terms and conditions. LPS (and/or MEPL) commenced operation of Luna Park as an amusement park, including the thrill rides, on or about 1 April 2004. 4 The first plaintiff Joan Street, the second plaintiff Ros Dwyer, the third plaintiff Michael Hesse, and the fourth plaintiff Glen Eight Pty Limited instituted these proceedings by summons filed on 5 April 2005, claiming an order restraining LPS from operating certain thrill rides in the area north of Coney Island at Luna Park. Ms Street, Ms Dwyer and Mr Hesse were the registered proprietors and occupiers of home units adjacent to and overlooking Luna Park. Glen Eight was the proprietor of a property adjacent to Luna Park, formerly a 10 level commercial building known as "Yellow Pages House", which since 2003 it has been refurbishing and converting into 75 residential strata units now known as "Azure". 5 The matter proceeded on pleadings, and those plaintiffs filed a statement of claim on 17 June 2005, by which they alleged that the noise generated by and associated with the thrill rides constituted a nuisance to them. An amended statement of claim was filed on 1 July 2005, which added the fifth plaintiff Susan Hesse, a joint owner and occupier with Mr Hesse of his unit. A second amended statement of claim was filed on 15 September 2005; the amendments that it effected are immaterial for present purposes. 6 Thereafter, the Noise Amendment Act intervened and the hearing was vacated. Subsequently, on 14 December 2005, without opposition, and on the application of the plaintiffs, MEPL was joined as second defendant; the sixth plaintiff Robert Simpkins, and the seventh and eighth plaintiffs Glen and Fiona Billington, were joined as plaintiffs; and the plaintiffs were granted leave to file the Third Amended Statement of Claim, which reformulated their claim. Although it will be necessary to return to aspects of it later, the reformulated claim may, for present purposes, be sufficiently described as comprising:

[16]

10 The gravamen of the Misrepresentation Claim is an allegation that in connection with the Development Applications and Statements of Environmental Effects lodged in 2000 and 2002, MEPL represented that children's rides (as distinct from thrill rides) would be operated in the area north of Coney Island, when in truth it intended that thrill rides would be operated in those areas. This is said to have been misleading and deceptive conduct, in contravention of Trade Practices Act, s 52. 11 The draft amended claim alleges that Mr Hearne and Mr Doughty were "persons involved", within the meaning of Trade Practices Act, s 75B, in the contraventions alleged to have been committed by MEPL. MEPL holds 50%, and Metro on George Pty Ltd ("MoG") holds 34%, of the shares in LPS. Mr Hearne and Mr Doughty are the sole directors and hold all the shares in MoG. Between 29 April 1998 and 29 November 2002 (when the alleged contravening conduct took place) they were directors of MEPL. They became directors of LPS upon its incorporation on 21 November 2002 and remain two of its four directors. Thus MEPL, Mr Doughty and Mr Hearne together hold 84% of LPS. 12 The defendants' objection is not to the sufficiency of the pleading of material facts in this respect, but to the relief claimed, and in particular to the claims for injunctions restraining Mr Hearne and Mr Doughty from causing or permitting LPS to locate and operate the relevant thrill rides north of Coney Island, at all or outside certain hours [paragraphs 15.9, 15.10]. A similar objection is taken to claims for injunctions restraining MEPL from causing or permitting LPS to locate and operate the relevant rides north of Coney Island, at all or outside certain hours [paragraphs 15.7, 15.8]. 13 The injunctions are claimed pursuant to Trade Practices Act, s 80, which relevantly provides as follows: - 80 Injunctions (1) Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute: (a) a contravention of any of the following provisions: (i) a provision of Part IV, IVA, IVB, V or VC; (ii) section 75AU or 75AYA; (b) attempting to contravene such a provision; (c) aiding, abetting, counselling or procuring a person to contravene such a provision; (d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; (e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or (f) conspiring with others to contravene such a provision; the Court may grant an injunction in such terms as the Court determines to be appropriate. … (4) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind. (5) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised: (a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; (b) whether or not the person has previously refused or failed to do that act or thing; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing. …

[17]

14 The injunctions sought in the present case would not restrain the contravening conduct (which was constituted by the making of the alleged misrepresentations in the development applications), but would restrain conduct inconsistent with those representations. Although the context and content of s 80 suggest that its primary focus at least is the restraint of conduct which contravenes provisions of the Trade Practices Act - indeed, prior to the 1983 amendment to s 80, jurisdiction was limited to restraining conduct that constituted or would constitute a contravention of Part IV or Part V - since that amendment it empowers the court to grant injunctions on such terms as it determines to be appropriate, though the discretion to grant relief is confined by reference to the scope and purpose of the Act [O D Transport Pty Ltd v WA Government Railways Commission (1987) 13 FCR 500], so that the injunction must at least have a relationship with contravention of the Act [ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, 267 (Gummow J)], in that there must be a "sufficient nexus" between the contravention and the injunction granted [Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 (Merkel J)]. But s 80(5), when compared with s 80(4), makes clear that orders other than injunctions restraining contravening conduct are authorised. The wide view which has been taken of s 80 is illustrated by the circumstance that, prior to the insertion in 2001 of ss 86C and 86D, mandatory corrective publication orders were made under s 80 [Janssen Pharmaceutical Limited v Pfizer Pty Ltd (1986) ATPR ¶40-654; 6 IPR 227 (Burchett J); Osgaig Pty Ltd v Ajisen (Melbourne) Pty Ltd (2004) 213 ALR 153; [2004] FCA 1394; Australian Competition and Consumer Commssion v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79; [1999] FCA 18, (French J)]. 15 The injunctions claimed here seek, in effect, to hold the relevant defendants to the representations made. Such injunctions are not unknown in equity, when injunctive relief may be granted in aid of an equitable estoppel. In any event, while drawing attention to some of the difficulties which the plaintiffs may encounter in obtaining injunctive relief, Mr Parker SC for the defendants did not submit that insofar as they sought to restrain conduct inconsistent with the alleged representation, the injunctions did not have a sufficient nexus with the alleged contravention to be within s 80. [Even if not within s 80, it is at least arguable that such an injunction would be authorised by s 87(1) or (1A) as an order preventing or reducing loss or damage]. 16 Rather, the Defendants' objection is that insofar as the amended claim would include claims for injunctions restraining MEPL, Mr Hearne and Mr Doughty from "causing or permitting" LPS to operate the thrill rides (in substitution for equivalent injunctions previously sought directly against LPS, which was not incorporated when the alleged contravening conduct took place), the amendments are futile and should not be permitted, because, so it is said, it could never be proper to grant an injunction which fettered the proper exercise by company directors of their powers and the proper performance of their duties in the interests of the company, and because such an injunction would make the parties bound liable for contempt in respect of matters beyond their control. Mr Parker submits that "it would never be proper for an injunction to be granted which fettered the proper exercise of their powers" as directors, which I take to be a submission that there is no jurisdiction to grant such an injunction, or alternatively that as a matter of discretion such an injunction must inevitably be refused. 17 I do not accept this submission. For the reasons which follow, the circumstance that an injunction binding a person who is a company director or shareholder restrains him or her in that capacity from exercising his or her voting power in a particular way, though it may have a practical impact on the company, and even if it indirectly affects the rights of the company, is not beyond power, though those circumstances are relevant to the exercise of discretion to grant the injunction. And once it is accepted that there is power to grant the injunction, it cannot be said at this stage that that discretion could only reasonably be exercised by declining to grant an injunction.

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18 In R v Dovey; Ex parte Ross (1979) 141 CLR 526, Gibbs J (as he then was) said, of the broad statutory power in the Family Law Act 1975 (Cth), s 114(3), to grant an injunction "in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate", (at 533): … it was submitted that the circumstance that the home was owned by the company meant that the court lacked jurisdiction. It was said that there is no jurisdiction in the Family Court to restrain a third party (even a family company) from dealing with its own property, and no jurisdiction to achieve that object by restraining a husband, in his capacity as a director or shareholder, from exercising his voting power as such in a particular way. However, it is not right to say that the order sought by the wife and made by the learned judge in the present case prevents the company from dealing with its own property. The order is not directed to the company and does not bind it. It is true that the practical effect of the injunction will be that there will be no sale, but that will be because the husband, who controls the company, is prevented from exercising his control in such a way as to bring about a sale, and not because the company is forbidden to do anything which those who control it have resolved to do. Even if the injunction did indirectly affect the rights of the company, that would not mean that it was beyond power: see Sanders v Sanders (1967) 116 CLR 366; [1968] ALR 43 and Antonarkis v Delly (1976) 51 ALJR 21 at 23-4; 10 ALR 251 at 255; 1 Fam LR 11,334 at 11,337, which, although decisions on the Matrimonial Causes Act 1959 (Com), provide a guide to the meaning of the present Act. The alternative argument on behalf of the husband was that there is no jurisdiction to make an injunction which would circumscribe the performance by the husband of his fiduciary duties as a director of the company - which, it was said, include a duty to take account of the interests of the creditors of the company: see Walker v Wimborne (1976) 50 ALJR 446 at 449. There is no justification in the words of the Act, or in principle, for limiting the jurisdiction of the Family Court in the manner suggested. Once the proceedings are found to be of the kind referred to in para (c) or para (e) of the definition, the court has jurisdiction, and the fact that the husband may be affected in the performance of other duties which do not arise out of the matrimonial relationship, although relevant to the question how the jurisdiction should be exercised, is no ground for holding that jurisdiction does not exist. In a case such as the present the argument has an air of unreality. It is impossible to suppose that the Parliament intended that a husband might place the matrimonial home beyond the jurisdiction of the Family Court simply by vesting it in a private company which he himself controls: such a result would make it impossible for the Family Court properly to perform its functions in many cases. 19 In Tiley & Tiley (1980) 6 Fam LR 528, the Full Court of the Family Court (Evatt CJ, Emery SJ and Treyvaud J) said (at 535): It is established by Re Dovey; Ex parte Ross … that the court has power to restrain a party from using his powers of control over a company to the detriment of his spouse. It seems logical to conclude also that the court could, in an appropriate case, issue a mandatory injunction requiring a party to exercise his powers of control over a company in a particular way, if this was necessary to protect the interests of the other spouse. It does not follow, however, that the court could order the transfer of assets held by a company [ Suli v Suli (1974) 25 FLR 113] or alter the interests of shareholders in the assets of the company, other than those of the husband and wife. The power to make orders which affect the assets or interests in a company must be used with caution. … 20 Although, in Ascot Investments Pty Limited v Harper (1981) 148 CLR 337, the High Court identified constraints on the ability of the Family Court to make orders which increased the obligations or reduced the rights of third parties, it did not overrule Dovey. The Court held that, although in some circumstances the court had power to make an order or injunction directed to a third party, third parties may not - except in the case of shams or alter egos - be ordered, either directly or indirectly, to do what they are not legally bound to do, so that a company and its directors (not parties to the marriage) could not be ordered to do something in relation to the shareholding which the husband, by dint of his shareholding, could not compel them to do. But the court did not depart from the position adopted in Dovey that it was permissible to order a party to a marriage to do whatever was within his power to comply with an order of the court, even if what he was required to do may have some effect on the position of third parties. Thus a party to a marriage may be ordered to do whatever is within his or her power to cause a third party (including a company) to do or refrain from doing something, and to exercise his or her voting power to that end, even though to do so may have some effect on the position of the third party. It is true that in Ascot, Gibbs J said that the concluding sentence of the first paragraph cited above from Dovey was unnecessary for the purposes of the decision of that case, "since it does not appear that the rights of the company were in any way affected by the order made against the husband", and that the use of the word "rights" in that sentence, taken from the two earlier cases, was not strictly accurate. But while this might suggest that an injunction could not even indirectly impinge on the rights of a third party, it is notable that his Honour expressed no reservation about any part of the second paragraph from Dovey cited above. Moreover, as the order in Dovey did constrain how the husband could exercise his voting power as a director, it must follow that his Honour did not regard such a constraint as impermissibly infringing the legal rights of the company. This is unsurprising. In the context of the duties of company directors, while a director is bound to act with reasonable care and diligence, and bona fide in the best interests of the company for a proper purpose, that does not mean that the company has a legal right to have the director vote in any particular way on any proposal. No legal right of the company is infringed by an injunction which requires the director to exercise his vote in a particular manner.

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21 These are not quaint idiosyncrasies of the family law, but reflect a general principle, namely that where there is a wide power to grant injunctive relief, and the conditions for its exercise are attracted, then although the circumstance that an injunction may affect the party bound in the performance of other duties and obligations is relevant to the question of how the discretion to grant or withhold relief should be exercised, it is no basis for holding that jurisdiction does not exist. 22 This approach is consistent with that which was taken to Trade Practices Act, s 80 in Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150, in which the High Court said that it was no objection to the grant of an injunction or the acceptance of an undertaking that damage would be occasioned by it to a third party, so long as that damage does not constitute an infringement of that third party's legal rights. Gibbs CJ, Stephen, Mason and Wilson JJ said (at 164): Nevertheless we should make some comment on the suggestion that, if the Federal Court had power to make the orders, it should have taken into account as a reason for declining to make an order the damage which would be occasioned to the appellant's business. The appellant is bound to accept any damage to its business which is consequential upon the enforcement by the Commission against the defendants of the provisions of the Trade Practices Act so long as that damage does not constitute an infringement of the appellant's legal rights, if any. As it has not been suggested that the appellant possesses any relevant legal rights against the defendants it is necessarily bound to sustain such damage as may be caused to it by any agreement made between the Commission and the defendants whereby the defendants agree not to accept the appellant's Liquor Guide. There is no legal basis on which the appellant can prevent the defendants from exercising their freedom of action in such a way as will entail business loss of the kind in question to the appellant. 23 In the proceedings in the Federal Court [Thomson Publications (Australia) Pty Limited v Trade Practices Commission (1979) 27 ALR 551; (1979) 40 FLR 257], Deane and Fisher JJ explained that the circumstance that injunctive relief granted in favour of one party against the other in adversary proceedings might result in damage (short of an unlawful injury) to a third party was not a bar to the granting of the injunction. Their Honours said (at ALR 565-566): Injunctive relief granted in favour of one party against the other in adversary proceedings will not infrequently result in damage to the legitimate commercial interests of a third party. An undertaking given by one party in favour of the other party in such proceedings may have the like result. In circumstances where compliance with the injunction or the undertaking does not involve any unlawful injury to the third party, such resulting injury to the interests of a third party does not constitute a bar to the granting of the injunction or the acceptance of the undertaking. … In the absence of consequential illegality or infringement of legal rights, the fact that some third party might suffer financial damage if the injunction is granted … does not constitute a valid reason for the court to refuse the injunction or to decline to accept the undertaking. 24 These passages, like the qualification by Gibbs J in Ascot of his Honour's remarks in Dovey, leave open what is the position if the injunction would require the party bound to act inconsistently with obligations owed by it to a third party, although the unqualified passage in Dovey suggests that that is not an absolute objection to the grant of such an injunction. It is not unknown for injunctive relief to be granted in equity which requires the infringement of legal rights of a third party, or which may put the party bound in breach of obligations to a third party. One common illustration of this is an injunction restraining a breach of a covenant in restraint of trade, compliance with which often requires that the party bound breach an employment contract already entered into with a new employer, and could expose him or her to liability for breach of contract to that new employer. Mareva injunctions may result in the party bound being forced into default of obligations that it owes to third parties. That the party bound may effectively be required to default in obligations to a third party does not deny jurisdiction to grant such an injunction, though it is a significant discretionary consideration. Parties may, voluntarily or otherwise, assume or incur obligations to different obligees which, in the events that happen, cannot both be performed. That performance of one will result in default in respect of the other is not an absolute objection to specific enforcement of the first.

[21]

26 Accordingly, the circumstance that the relief claimed against Mr Hearne and Mr Doughty might constrain them in the performance of their functions as directors of LPS, while relevant to the court's discretion to grant such an injunction, is not an absolute objection to such an injunction. Given the extent of the interest and control which MEPL and Mr Doughty and Mr Hearne together have in and over LPS, and that it appears arguable that LPS is the operating vehicle for implementation of the original design of MEPL (formed while Mr Hearne and Mr Doughty were directors of MEPL), it cannot at this stage be said that the only reasonable exercise of the Court's discretion would be to decline such an injunction. I do not accept that the pleading is liable to be struck out on that basis. 27 It may be that an injunction in the precise form presently framed is excessive, insofar as it goes beyond requiring Mr Hearne and Mr Doughty, or MEPL, to use their best endeavours and their voting power in a particular way, and compels them to achieve a particular outcome - so that there would be a contempt if, despite their best endeavours, LPS continued to operate the thrill rides. The evidence may show that it is not within the power of Mr Hearne and Mr Doughty, or MEPL, to prevent LPS from operating the relevant amusement rides; though it is also conceivable that the evidence will reveal the contrary. But it does not follow that an injunction restraining them from voting otherwise than against any decision to operate the rides would be impossible of performance or compliance. If, in principle, an injunction may be granted against Mr Hearne or Mr Doughty that would govern their conduct as directors of LPS, it would not be appropriate to strike out the claims for injunctive relief against them based on their precise form at this stage. On an application of this type, it is inappropriate to take too rigid a view of the form of the claims for injunctive relief, the precise formulation of which will often have to be refined during or at the conclusion of the trial, in the light of the evidence that emerges.

[52]

48 It is in the second category that controversy has emerged. Some cases have suggested that the relation-back doctrine does not apply to an amendment which adds a new cause of action, so as retrospectively to deprive a defendant of a limitation defence in respect of the new cause of action [Liff v Peasley; Morgan v Banning; Agtrack v Hatfield (VCA)]. And in Agtrack v Hatfield, Ormiston JA suggested that relation-back was not a principle of law at all, but a matter or convenient practice applicable only for some purposes. His Honour said (at 85-86): - [39] Undoubtedly, the consequence that amendment, once effected, relates back to the issue or filing of process is well accepted: see esp per Phillips JA, with whom Brooking and Charles JJA concurred, in Anglo Irish Beef Processors International v Federated Stevedores Geelong [[1997] 2 VR 676 at 680-1] and the authorities therein cited [see also, in the High Court, Wigan v Edwards (1973) 1 ALR 497; 47 ALJR 586]. But what does that statement mean? To my way of thinking it means no more than this: amendment [conventionally (ie by virtue of the terms of most relevant rules) the court does not itself amend a pleading, but merely gives leave to a party to effect the amendment, so the necessary step is taken by the party itself . Ordinarily a court effects an amendment through a court officer only when the document to be amended is an order or some other document brought into existence, by the court. See esp r 36.03. Compare J Leavey & Co Ltd v George H Hirst & Co Ltd [1944] KB 24; Loutfi v C Czarnikow Ltd [1952] 2 All ER 823] involves making an alteration to an existing document and that document will have come into existence at some time in the past; whoever amends such a document is not normally creating an entirely different document, but is merely effecting a change or changes to that which is already in existence, which itself has a known date upon which it came into effect. One could "substitute" a new document of the relevant kind and that might connote the creation of a document taking effect only at a later date. In fact, as a matter of practice, where some special problem has arisen, occasionally judges have directed that certain amendments to pleadings only take effect as at the date of the making of the amendment, but that ordinarily comes about by a specific order [in fact in New South Wales, in cases where amendments add new causes of action, when not dependent upon the same or substantially the same facts, an order may be made "to add or substitute" a claim, but the new cause of action shall be treated as commencing on the date on which the amendment is made: see Pt 20 r 1(3A): cf Pt 20 r 4. In this State, though there is no similar rule, similar orders have been made from time to time. But cf Nesnah Nominees Pty Ltd v Blackwell [1998] VSC 130, though I would not, with respect, necessarily subscribe to the conclusion there reached].

[56]

50 There are two elements in considering whether a pleading may be amended to add a statute-barred cause of action. The first is one of power. The relation-back doctrine is not relevant to this element. As Toohey J, with whom Deane J agreed, explained in Wardley Australia Ltd v Western Australia (at 559-562), a court, when considering an amendment to introduce a new cause of action, has no power to ignore any statutory limitation period governing the bringing of that cause of action [see also Morgan v Banning, 483E-F]. But as Wheeler J recognised in Morgan v Banning (at 483G), in New South Wales amendments adding new causes of action after the limitation period had expired were permitted, because there was statutory authority to do so. As Moffitt P explained in Proctor v Jetway (at 170-173), it was basic to McGee that by the operation of Supreme Court Act 1970 (NSW), s 6, Supreme Court Rules 1970 (NSW) Pt 20 r 4 (see now Civil Procedure Act 2005 (NSW), s 65) had the effect of a statute later in time than the Limitation Act 1969 (NSW). That is no less the case now that the authority for amendments is contained, not in Rules of Court, but in the Civil Procedure Act, ss 64 and 65. In other words, because the statutory authority to permit amendments notwithstanding the Limitation Act is sourced in an Act later in time than the Limitation Act, it prevails. The High Court has recently, in Air Link Pty Ltd v Paterson (2005) 218 ALR 700, [17] - an appeal heard concurrently with Agtrack v Hatfield, in both of which it was held that the relation-back doctrine could not validate an amendment pursuant to Victorian State rules of court adding a cause of action which had been extinguished by a limitation provision contained in a Commonwealth statute - recognised that the basis of Proctor v Jetway was that the amendments in it were authorised by state legislation which supervened the earlier state limitation legislation, and did not suggest that in this respect Proctor v Jetway was other than correct. Thus in New South Wales - where formerly the Supreme Court Rules, which contained the authority for amendments introducing new causes of action despite the Limitation Act, were given statutory effect superseding prior enactments (which included the Limitation Act), and now the Civil Procedure Act contains similar authority - there is power to permit such an amendment.

[57]

51 The second element, and the one to which relation-back is relevant, is whether amendment to add the new cause of action would, despite power to permit it, be futile, because a limitation period could be pleaded in answer to the new cause of action. In Proctor v Jetway, Moffitt P (at 174-175) explained that such an amendment was not futile, because of the relation-back doctrine. In Fernance, Clarke JA explained that, notwithstanding the contrary suggestion of Brandon LJ in Liff v Peasley, there was a distinction, in the application of the relation-back doctrine, between amendments which added a party and those which added causes of action, in that it did not apply to the former, but it did to the latter. His Honour said: - Subsequent to Baldry the correctness of this principle, at least in so far as it concerned the addition by amendment of a new party or a new cause of action, was questioned by Brandon LJ in Liff v Peasley [1980] 1 WLR 781, at 802-804; [1980] 1 All ER 623 at 641-643. While his Lordship accepted that there was a substantial body of case law which supported the theory that the settled rule of practice was based on the principle, which he described as the "relation back" doctrine, he expressed the provisional view that it was more appropriately based upon the "no useful purpose" theory. That is, that as the new party added by amendment would be able to defeat the cause of action raised against him by reliance upon the expiry of the relevant limitation period no useful purpose would be served by granting the amendment. Likewise there would be nothing gained in granting an amendment adding a new cause of action after the expiry of the relevant limitation period as a defence raising the statute would defeat it. This view denied the universal applicability of the principle that an amendment took effect from the date of the filing of the originating process. Indeed Brandon LJ expressly said that that principle should not apply to amendments adding parties or new causes of action. The specific question whether the principle applies in the case of the joinder by amendment of a new party to the action was recently considered by the House of Lords in Ketteman v Hansel Properties Ltd [1987] AC 189. The House unanimously concluded that in computing the period of limitation the date of joinder was not to be related back to the date when the original writ was issued and that accordingly time only ceased to run from the date of joinder. Lord Keith of Kinkel expressed his conclusion in terms which I find persuasive. He said (at 200): "... A cause of action is necessarily a cause of action against a particular defendant, and the bringing of the action which is referred to must be the bringing of the action against that defendant in respect of that cause of action. The causes of action here against Mid-Sussex and the architects were separate and distinct from the cause of action against Hansel. In my opinion there are no good grounds in principle or in reason for the view that an action is brought against an additional defendant at any earlier time than the date upon which that defendant is joined as a party in accordance with the rules of court." In my opinion there is a clear distinction between a case in which a defendant is added and a case in which an additional cause of action is raised against an additional defendant. In the latter instance a party who is put on notice of proceedings before the expiry of the limitation period is required to widen the ambit of his defence whereas in the former a person may be brought into the proceedings years after the expiry of the relevant limitation period without any prior notice. This distinction is, I think, recognised in Pt 8, r 11(3), which leaves it open to any defendant who is joined pursuant to an order made under Pt 8, r 8 or r 10, to defend the action upon the basis that the relevant limitation period had expired before he was joined. Alternatively it provides the person who is sought to be joined as a defendant with the argument that no useful purpose would be served in making an order joining him.

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