Box Information Technology Pty Ltd v Crystalaid Manufacture Pty Ltd (No 2) [2012] QDC 214

1-1 [2012] QDC 214 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No 3066 of 2011 BOX INFORMATION TECHNOLOGY PTY LTD Plaintiff and CRYSTALAID MANUFACTURE PTY LTD Respondent BRISBANE ..DATE 21/6/2012 ORDER CATCHWORDS Limitation of Actions Act 1974 s 38 Proceeding on the Commercial List - separate trial on limitation issues raised in the "third defence" refused - such a hearing would likely be lengthy and in the circumstances not necessarily likely to bring the proceeding to an end. -- 1 of 6 -- 1-2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: Mr Hutchinson representing the plaintiff accepts that the plaintiff now actually faces limitation problems, the potential for which was revealed some weeks ago. There's now a defence raising limitations issues which, it seems to me, are serious for the plaintiff in respect of three components of its claim based on invoices of 25th or 26th January 2005. The claim was commenced in court on the 12th of August 2011. I see no justification for ordering a separate hearing in respect of those three matters which on their face are relatively clear. The other invoices in which the plaintiff sues are dated 13 September 2005. In respect of those the plaintiff would seem to be in time, but the limitation period does not necessarily run from the invoice date, as Mr Bowden's authorities establish, in particular Coburn v. Colledge [1897] 1QB 702, Cigna Asia Pacific Limited v. Acker [2000] 23 WAR 159 and Sullavan v. Teare [2010] QCA 70. There at paragraph 28 one reads that the notion that a limitation period does not begin to run unless the plaintiff knows the facts which constitute his cause of action and make it complete is in conflict with the highest authority. Mr Bowden claims as support for his contention on the vital question, (which is whether the limitation issue will be determinative of the remaining two components of the claim, constituting the bulk of it) that the plaintiff's principal, -- 2 of 6 -- 1-3 ORDER 1 10 20 30 40 50 60 Ms Reale, knew more than six years before the claim was commenced, in particular, that there were 56 additional users of software which the plaintiff had licensed to the defendant. Such knowledge, it seems, came to her in about July of 2005, leading to what may seem a demand for the moneys payable in respect of so-called additional users, which the court understands became payable on their being admitted as users of the software, which was to be advised "promptly". The amount had been apparently worked out at least to the plaintiff's satisfaction after an exercise which may have had regard to there being different categories of users, attracting different licence fee levels. An e-mail communication sent by the plaintiff's manager, Mr Boyd, within the last six years before the claim was filed made the relevant demand. It's clear from the foregoing that limitations considerations may defeat the plaintiff. On the other hand it seems to me there are possibilities that they will not, based on the occurrence of what may be held to amount to fraud of the equitable nature which is what I understand to be what's looked at for the purposes of section 38 of the Limitation of Actions Act 1974; see Handford Limitation of Actions, the Laws of Australia, third edition, at paragraph 5.10.2390, more particularly the cases mentioned in footnote 13 which are Bulli Coal Mining Company v. Osborne [1899] AC 350 and Beaman v. A.R.T.S Limited [1949] 1 KB 550. As the author's summaries -- 3 of 6 -- 1-4 ORDER 1 10 20 30 40 50 60 of the case in the footnote show, one concerned surreptitious taking of coal by underground trespass, the other the disposal by a bailee of a bailor’s property without informing the bailor. The relevant concept seems to be concealment by the defendant of things that ought to be revealed. The circumstances may be possibly assessed by the court as ones in which the defendants are considered to have triggered the relevant concept here, leading to the limitation period not running until a later starting date if, indeed, it runs at all. The hearing which the defendant was asking for for the preliminary issue, it said, would take a day. Mr Hutchinson for the plaintiff suggests that it would be longer and my judgment is that he's correct about that. He is dissatisfied with the defendant’s nominating its Mr Groombridge as the person to give evidence from its point of view about numbers of users and dates when they became users. The plaintiff suggests that it was his superior Mr Jaya Ganasan who would know most and whose evidence ought to be taken. That seems to me correct. Considerations of convenience must lead me to the view that there being a possibility that the limitations point will not be decided against the plaintiff, a separate trial on evidence is likely to multiply costs. There's an unacceptable risk -- 4 of 6 -- 1-5 ORDER 1 10 20 30 40 50 60 that that's all that will happen if there were to be a separate hearing. That's certainly the view that's taken by the third party which has declined to turn up today and indicated that it wouldn't attend any preliminary hearing on the limitation issue. That's an odd situation, as Mr Bowden points out: the limitation point is one which the third party itself has taken and it may be a point which one way or another the third party can force the defendant to take. The third party's wishes which coincide with the plaintiff's in this regard have some influence on this morning’s decision. So I decline the defendant's application for a separate issue. I'm conscious that this has come on rather precipitately. Mr Hutchinson has had less than a week to consider and respond to the new defence, raising the limitations issue. It would be unreasonable to expect him to have been properly prepared today to mount an argument against them and, of course, the defendant didn't intend that he should have to do that today. It remains to be seen how the plaintiff in its pleading will respond to the limitations issues as they've now been raised. The raising of them is not suggested by Mr Hutchinson to be improper or impermissible, notwithstanding that it didn't occur until the third defence. There has been mention today of the real possibility that the circumstances are ones in which the defendant as the -- 5 of 6 -- 1-6 ORDER 1 10 20 30 40 50 60 contracting party the only one with knowledge of events occurring to render licence fees payable comes under a responsibility to act in good faith to keep the plaintiff appropriately informed in order that the plaintiff may enjoy the benefits of its contract. See Peden, Good Faith in the Performance of Contracts, (LexisNexis, 2003); Seddon and Ellinghaus, Cheshire and Fifoot’s Law of Contract (6th Aust ed) 10.43ff and Paterson, Robertson & Duke, Principles of Contact Law (4th) 14.5ff. There may be no question of any limitation period running before a time as at which the court can be satisfied that the defendant had disclosed what it should have to the plaintiff. I have made no judgements about such matters and mention these in explanation of why there is little advantage in a separate hearing whose scope is likely to be wide-ranging. ----- -- 6 of 6 --