FEDERAL COURT OF AUSTRALIA

Practice and Procedure - application to amend pleadings - case management considerations.

Federal Court of Australia Act 1976 - s 22

RONALD IAN McCARTHY & OTHERS V NEVILLE McINTYRE & OTHERS

Ng 672 of 1996

judge:          beaumont j

place:          SYDNEY

date:            6 nOVEMber 1997

ORDERS:

1.         Leave granted to the applicants to file the amended application and amended statement of claim now before the Court. 

2.         Direct that there be a separate trial of the three causes of action alleged in the amended statement of claim.

3.         Direct that discovery proceed separately in respect of each of the three causes of action relied upon by the applicants.

Note:                Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

BEAUMONT J:

Before the Court is a notice of motion filed on behalf of the applicants on 29 October 1997 seeking leave to amend their application and statement of claim.  As the proceedings are presently constituted, the applicants claim damages pursuant to s 82 of the Trade Practices Act 1974 (“the Act”) and relief under s 87 of the Act arising out of a transaction for the sale of shares entered into in August 1993.

Under the amendments now sought, the applicants would, if leave were granted, add two distinct causes of action to the cause of action upon which they presently sue.  The first cause of action sought to be introduced is a claim arising out of a transaction entered into in 1990 involving a transfer of property from the third applicant to the second respondent.  This is a rather complex transaction in the form in which it is proposed to be pleaded.  A claim is made for breach of contract or, alternatively, for unjust enrichment on the part of the second respondent.  The cause of action is said to reside in the third applicant.

The second cause of action proposed to be introduced by the applicants is, on the face of it, a far simpler claim.  In the second cause of action it is alleged that the first respondent owes the sum of $85,895 to the third applicant, pursuant to a loan agreement.  Alternatively, it is said that the first respondent was unjustly enriched in this connection at the expense of the third applicant.

So far as the first cause of action now sought to be introduced is concerned, it is claimed on behalf of the applicants that jurisdiction is vested in this Court to entertain the claim by reason, inter alia, of the provisions of s 1317HA or, alternatively, of s 1317HD of the Corporations Law.  This source of jurisdiction is not seriously challenged on behalf of the respondents.  So far as the second cause of action proposed to be introduced is concerned, it is accepted on behalf of the applicants that the only possible source of this Court's jurisdiction in this respect is the cross-vesting legislation. 

Although there would have been no accrued jurisdiction in this Court to entertain either of the causes of actions now sought to be introduced, there being no common substratum of facts or law involved in either claim vis-a-vis the existing cause of action now sued upon, it is, nonetheless, of course open to the applicants now to invoke the provisions of both the Corporations Law and the cross-vesting legislation as a basis for this Court's jurisdiction to entertain such claims.

By s 22 of the Federal Court of Australia Act 1976, the Court is directed, as far as possible, to determine completely and finally all matters in controversy between the parties, so that all multiplicity of proceedings concerning any of those matters may be avoided.  It seems to me that although I could give effect to this statutory direction in the present case by permitting the two new causes of action to be introduced into the proceedings, a separate question arises as to the proper management of the litigation as it now will be constituted.  As I have indicated in the course of argument, in my opinion, as a matter of proper case management, there should be a separate trial ordered of each of the three causes of action upon which the applicants sue.  As I have already said, there are no common questions of fact or law arising as between the three claims made and, as has been noted, only the third applicant is claimed to be entitled to sue upon the second and third causes of action.

I will, therefore, order a separate trial of the three causes of action alleged in the amended statement of claim.  I have further indicated in the course of argument that each of the three causes of action should go forward separately in all procedural respects.  That is to say, there should be separate discovery and a separate direction should be given for the filing of evidence in each of the three claims.

ORDERS

The orders I make, therefore, on the notice of motion are: 

1.         Leave granted to the applicants to file the amended application and amended statement of claim now before the Court. 

2.         Direct that there be a separate trial of the three causes of action alleged in the amended statement of claim.

3.         Direct that discovery proceed separately in respect of each of the three causes of action relied upon by the applicants.

Associate:

Dated:              6 November 1997