BETWEEN : WILLIAM GARTH HAMMOND as Executor of the Estate of THOMAS GARFIELD HAMMOND

Practice and procedure - Application for leave to amend statement of claim - Turns on own facts

Limitation Act, s 47A

Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410

Callinan v West Australian Newspapers Ltd [1988] WAR 212

Central Electricity Generating Board v E Halifax Corp (1962) 3 WLR 1313

Cockburn v Colledge [1887] 1 QB 702

Commonwealth v Amann Aviation [1991] HCA 54; [1991] 174 CLR 64

Downs v Williams [1971] HCA 45; (1972) 126 CLR 61

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

Farrow Finance Co Ltd (In Liq) v Farrow Properties Pty Ltd (In Liq) [1999] 1 VR 584

Goldburg v Shell Oil of Aust Ltd [1990] 95 ALR 711

Hamersley Iron Pty Ltd v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] WASC 66

Hammond v Minister for Works [1992] 8 WAR 505

Hobbs v Rawson [1961] WAR 79

Kitchen v Royal Air Forces Association [1958] 2 All ER 241

Metacel Pty Ltd v Ralph Symonds Ltd [1969] 2 NSWR 201

News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410

O'Connor v S P Bray Ltd [1937] HCA 18; (1937) 56 CLR 464

Paldale Insurance Co (In Liq) v L Grollo & Co Pty Ltd [1986] VicRp 41; [1986] VR 408

R v Deputy Governor of Parkhurst Prison; Ex parte Hague [1992] 1 AC 58

Rawson v Hobbs [1961] HCA 72; [1961] 107 CLR 466

Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1995) 13 WAR 323

X (Minors) v Bedfordshire County Council [1995] UKHL 9; [1995] 2 AC 633

Yougarla v Western Australia [1999] WASCA 248

1 MASTER SANDERSON: This is the plaintiff's application for leave to re-amend his consolidated statement of claim. The chamber summons seeks leave with respect to a minute of proposed re-amended consolidated statement of claim filed 10 November 2000. At the commencement of the hearing counsel for the plaintiff produced a further minute which had not been filed and which is dated 25 September 2001. I was advised that this further minute had been produced as a consequence of discussions between counsel for the plaintiff and the defendants. As a consequence of this further minute a number of the issues which were to be argued fell away. What remained to be argued was whether or not the plaintiff should have leave to amend so that a cause of action not presently part of the pleaded case could be raised. To understand the issues raised by the application it is necessary to say something of the facts of the case. Various aspects of the action have been before the Court on a number of occasions. In Hammond v Minister for Works, unreported; FCt SCt of WA; Library No 920383; 21 July 1992 Ipp J, during the course of his judgment provided this summary of the facts as disclosed by the pleadings (at 2 to 4):

"The Public Works Act provides for the resumption of land for public works. The Act however, limits the powers of the Minister in relation to land which, after its resumption, is not required for the work for which it was resumed. While the Minister may sell the land or use it for another public work, his powers in such cases, broadly speaking, are subject to the previous owner of the land being entitled to apply for an option to purchase it back.

In the action brought by the appellant he claims declarations that he is entitled to options to purchase the land of that kind.

Sections 29 and 29A of the Public Works Act provide for the powers of the Minister to sell or use the land for purposes different to that for which it was resumed.

In terms of s 29(1), where any land resumed for any public work is, in the opinion of the Governor, not required for that work, the land may, subject to the provisions of subsections (2) to (6) inclusive, be sold or used by the Minister. In terms of s 29(2), before such land is so sold or used, the Minister shall cause a notice to be published in the Gazette to the effect that the land is no longer required for the work for which it was resumed and shall cause a copy of the notice to be served on such persons as appear to him to have had an estate in fee simple in the land immediately prior to its resumption. In terms of s 29(3)(a) a person who, immediately prior to the resumption, had an estate in fee simple in the land may, subject to certain provisions not presently relevant, within three months after the publication in the Gazette of the notice referred to in subsection (2), apply to the Minister for an option to purchase the land. In terms of ss 29(3)(c) and (d), where the Minister is satisfied that a person, qualified to apply, has applied for an option within the prescribed period, he shall grant an option to that person on such terms and conditions as in his opinion are reasonable."

2 (His Honour then quoted s 29A of the Public Works Act and continued):

"It is alleged in the appellant's statement of claim that certain land (or parts thereof), that was resumed for a particular work, is not being used for public works. It is averred that the appellant is a person who, as contemplated by s 29A(1), would be entitled to an option to purchase that land. In accordance with s 29A(1) he has applied to the Minister for such an option and has requested the Minister to ascertain whether, in the opinion of the Governor, the land is or is not required for the work. The Minister has, however, refused to refer the application to the Governor. The appellant alleges that the Minister is obliged to refer the application to the Governor and claims appropriate relief in this regard."

3 The land in question is located in Yallingup in the south-west of the State. The area concerned is roughly triangular in shape and runs from the Caves House Hotel down to the beachfront at Yallingup. It encompasses an area presently occupied by the Yallingup Caravan Park and camping area. The land was resumed in 1938. Anyone who knows the Yallingup area would quickly realise the land is of immense value. However, under s 29B of the Public Works Act, if the plaintiff is entitled to an option to purchase the land the purchase price can be no more than the compensation paid upon resumption plus simple interest at the rate of 10 per cent per annum from the date of that resumption. In other words, the option, if granted, would allow the plaintiff to purchase the land for a fraction of its present value.

4 The defendants' response to the plaintiff's action was, in part, to rely upon the provisions of the Limitation Act, in particular, s 47A. That section is in the following terms:

"(1) Notwithstanding the foregoing provisions of this Act but subject to the provisions of subsections (2) and (3) of this section, no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority, unless -

(a) the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b) the action is commenced before the expiration of one year from the date on which the cause of action accrued,

and for the purposes of this section, where the act, neglect, or default is a continuing one, no cause of action in respect of the act, neglect or default accrues until the act, neglect or default ceases, but the notice required by paragraph (a) of this sub-section may be given and an action may thereafter be brought while the act, neglect or default continues.

(2) A person may consent in writing to the bringing of an action against him at any time before the expiration of six years from the date on which the cause of action accrued, whether or not the notice as required by subsection (1) of this section has been given.

..."

5 The application of s 47A of the Limitation Act to these proceedings was the subject of a hearing before White AJ (as he then was), Hammond v Minister for Works, unreported; SCt of WA; Library No 918899; 5 June 1991 and a subsequent appeal (the decision I have referred to and quoted from above). Without going to either of these decisions in detail, it is enough if I say that the Court was of the view that s 47A applied and effected the proceedings originally issued in 1988. As a consequence of those decisions, fresh proceedings were issued in 1993. The actions have now been consolidated in these proceedings. The solicitors for the plaintiff then approached the Minister for Lands, seeking his consent to waive the provisions of s 47A of the Limitation Act under subs (2) of that section.

6 The Minister at the relevant time was the Honourable George Cash MLA. Mr Cash has on 27 February 2001 sworn an affidavit which is relied upon by the plaintiff in these proceedings. Mr Cash sets out that as Minister for Lands he had carriage of the defence of the action brought by the plaintiff. He then says (at par 4):

"On or about 2 August 1993 I gave oral instructions to the Crown Solicitor for the State of Western Australia per Brian McMurdo not to rely upon the Limitation Act to defend the Action and to waive any defences available to the defendants under the Act and that the defendants would not rely upon any other defences available to the defendants based on time or delay, including the defence of laches and that all such defences were also waived by the defendants."

7 Mr Cash then refers to a letter sent by him in his capacity as Minister for Lands to the plaintiff's then solicitors (annexure "GC2"). Relevantly, that letter reads:

"Please note that in the interests of expediting the hearing of Mr Hammond's present action, I have recently instructed the Crown Solicitor's Office that, notwithstanding the findings of the Honourable Mr Justice White and the Full Court in respect of certain preliminary issues in the present proceedings, no application should be made to strike out the present proceedings on the grounds of Mr Hammond's failure to comply with s 47A of the Limitations Act. Notwithstanding my instruction, the present litigation or any ensuing litigation concerning the foregoing matters will be vigorously defended."

8 The extent of the waiver offered by that letter is the subject of dispute between the parties. The plaintiff says that the waiver operates in all the circumstances and in relation to all causes of action he may bring against the defendants. The defendants say the operation of the waiver is far more limited. For present purposes I need say nothing further about this dispute. However, it is important to note that it was conceded by counsel for the defendants that based upon Mr Cash's letter and what is contained in his affidavit, there is a real question for determination as to whether and in what circumstances s 47A will apply to claims made by the plaintiff. Once this concession was made, and in my view it was properly made, a number of objections to the amended pleading fell away. But, as I have said, the defendants maintained their objection to what both parties agree is a new cause of action pleaded in the re-amended statement of claim.

9 Because of the importance of these amendments and their central nature to the dispute between the parties, I will quote the relevant paragraphs in full. (Particulars have been omitted as they are not relevant to the defendants' objections. Furthermore, no objection is raised to the form of the pleading - that is to say, it is not said that the pleading is in any way defective because it does not properly articulate the plaintiff's claim.):

"29.1 Alternatively the resumption of the resumed land was for an improper purpose because the resumed land was not required for Public Recreation Grounds, the true purpose for which the resumed land was taken being to protect the commercial interests of Caves Hotel.

29.2 Because of the matters pleaded in paragraph 29.1 above the resumption was therefore void and ought be set aside.

30.1 Further and in any event the resumption of the resumed land was for the purpose of protecting the commercial interests of Caves Hotel which:

(a) was not a purpose for which land could lawfully be compulsorily acquired under the Public Works Act 1902; and

(b) not the purpose of Public Recreation Grounds as stated in the notice published in the Government Gazette on 9 December 1938 referred to in para 7 above.

30.2 Because of the matters pleaded in para 30.1 above, the compulsory acquisition of the resumed land was therefore unlawful and void and should be set aside.

31.1 Alternatively the compulsory acquisition of the land was a fraud on the deceased because of:

...

32.1 Alternatively the resumption of the resumed land was unconscionable on the deceased because of:

...

33. Alternatively because there have been no plans or specifications or proposals prepared for the use of any part of the resumed land as public recreation grounds, the nature or extent of the work or undertaking required to be carried out to give effect to the purpose for which the resumed land was resumed could not and cannot be ascertained and by reason of the uncertainty as to the nature of that work or undertaking, the resumption is void or ought be set aside.

34. Because of the matters pleaded in paragraph 29 the resumed land has at all times from 9 December 1938 been held on trust by the Crown for the deceased, and after his death, for the plaintiff."

10 It is relevant at this point to note that in his prayer for relief the plaintiff claims inter alia the following:

"(e) a declaration the resumed land was not acquired under the notice published in the Government Gazette on 9 December 1938;

(f) an injunction restraining the Defendants and each of them from occupying, selling, leasing or otherwise dealing with the resumed land;

(g) an order the Defendants do all things necessary to transfer to the Plaintiff the resumed land and issuing a Certificate of Title under the Transfer of Land Act 1893 for the resumed land in the name of the Plaintiff."

11 It is worth pausing at this point to note precisely what causes of action are raised by the proposed amendment. It was common ground between the parties that the plaintiff's claim was essentially one of concealed fraud. What is said is that the land was resumed not for the purposes set out in the notice of resumption but for different purposes. The plaintiff says in an affidavit sworn 1 March 2001 and filed in support of this application (par 15) that he only became aware of the facts leading to this claim that the land was resumed for an improper purpose when he inspected documents discovered by the defendants in November 1996. Accepting that to be the case (and it is not conceded by the defendants) any limitation period would commence to run from that time. The defendant says that s 47A is relevant. The plaintiff responds by saying that the waiver of reliance upon s 47A applies as much to this cause of action as to any of the other causes of action raised by the pleading. Counsel for the defendant concedes, and once again in my view properly concedes, the position is arguable. This concession is important in the context of objections made to the plaintiff's proposed amendments to the statement of claim.

12 The defendants raise three separate but inter-related objections to the proposed amendments. First, it was said that any cause of action the plaintiff may have in relation to the concealed fraud arose in November 1996 which was subsequent to the date upon which the writs which gave rise to these consolidated proceedings were issued. This point can be dealt with quite simply. Any cause of action in relation to the concealed fraud arose at the date of the resumption of the land. That was in 1938. The limitation period commenced to run when the concealed fraud was discovered. But that is not to the point. The cause of action, if any, arose in 1938, well before the writs were issued. This ground of objection can be put to one side.

13 Second, it was said by the defendants that leave to amend to introduce the plea of concealed fraud could only be given under the provisions of O 21 r 5. It was said that it was necessary for the plaintiff to establish that the newly pleaded cause of action arose out of substantially the same facts as the cause of action in respect of which relief had already been claimed and that requirement was not satisfied. Order 21 r 5 is, relevantly, in these terms:

"(1) Subject to -

...

...

the Court may ... allow ... any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as the Court may direct.

(2) Where an application to the Court for leave to make the amendment mentioned in par ... (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 circumstances mentioned in that paragraph if it thinks it is 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."

14 The precise meaning and operation of O 21 r 5 has been the subject of much debate over a long period of time. The position has now been clarified by the decision of the Full Court in Morgan v Banning (1999) 20 WAR 474. During the course of their submissions both counsel considered this decision in some detail. In my view there are two points which are relevant in determining the defendants' objection. First, there is a dispute as to whether or not the plaintiff's claim is statute-barred. In other words it is by no means certain that r 5(2) and consequently r 5(5) apply in these circumstances. Before the rule could apply it would require a finding that the relevant limitation period has expired. I am not in a position to make such a finding. That leads on to the second point. Morgan v Banning makes it plain that the Rules of Court, be it O 21 r 5 or otherwise, cannot deprive a defendant of a defence under the Limitation Act. In other words, it is open to the defendants in the face of the plaintiff's amended pleading to plead the Limitation Act and to rely upon s 47A. That being the case, I am not satisfied there is substance in this aspect of the defendants' opposition to the plaintiff's application.

15 Finally, it is said by the defendants that the amendments should not be allowed because the State of Western Australia is not but should be a party to the proceedings. Correctly expressed, what the defendants argued is that the amendments do not disclose a cause of action against the present defendants. The land was resumed by and is in the name of the State of Western Australia. If any declaration is to be made, then the State of Western Australia is a necessary and proper party to the proceedings.

16 For the plaintiff it is argued that the relief sought is a declaration that the proper owner of the land is the plaintiff. It is said that if the plaintiff succeeds with his cause of action, the act of resumption is to be regarded as a nullity and all that is necessary is an amendment to the register to reflect the plaintiff as owner of the land. Any counter-argument to the plaintiff's claim can be put by the second defendant. It was, after all, the actions of the second defendant which led to the resumption of the land, even if it was the actions of the State which eventually led to the property being registered in the name of the State of Western Australia. It was said that if the State wished to intervene in the proceedings it could no doubt do so but it was unnecessary to join the State as a party, at least so far as the making of these amendments is concerned.

17 In my view, the proposed amendments do not disclose any cause of action as against any of the presently named defendants. At present the property is owned by the State of Western Australia. If that situation is to change with the effect that the plaintiff is to become the registered proprietor of the property, the rights of the State of Western Australia are affected. Any declaration will have no impact at all upon any of the three presently named defendants because none has an interest, legal or equitable, in the property. The amendments do not disclose a cause of action against the defendants.

18 On that basis I would refuse to allow the amendments sought by the plaintiff. I will hear the parties as to the appropriate form of order and as to costs.