Cameron v National Mutual Life Association of Australasia Ltd [1990] QSC 61 [1991] 2 Qd R 601

Rc:v,~-t:~' cn::;f'.::("'. l"C'.I •(:ri I l- ..._. !,_, • '-~• l • • _ .,_.., I ,_), . _, ~- ._ t \:?(q/}.; IN THE SUPREME COURT OF QUEENSLAND CIVIL JURISDICTiON Co~rt Rcpcrtln2 CJ:·::t;u ; Dste,.131 ~7.0C\o /1 b r No. 4778 of 1988 10 20 30 50 BEFORE MR. JUSTICE DOWSETT BRISBANE, 5 MARCH 1990 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN: IAN DOUGLAS CAMERON, GWENDOLINE MARGARET EMELINE CAMERON, CYRIL NAUSBAUM, LIAPA PTY. LTD., REES FREDERICK ROWE, NOLA MARION ROWE, GEOFFREY KERSHAW, PATRICIA KERSHAW. TREVOR WILLIAM SHAW, LORRAINE CLARE SHAW, BLANCHE ABRAHAMS, BARBARA GRACE SPROULE and BARRY JAMES SPROULE ON BEHALF OF AND FOR THE BENEFIT OF THEMSELVES AND THE OTHER PROPRIETORS OF LOTS IN BUILDING UNITS PLAN 5451 Plaintiffs -and- NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED -and- GRAHAM EVANS & CO. (QLD) PTY. LTD. -and- COMALCO FABRICATORS LTD. -and- THE DAVIS HEATHER (N.S.W.) PTY. LTD. FINDINGS AND ORDER First Defendant Second Defendant Third Defendant Fourth Defendant HIS HONOUR: By writ issued on 22 December 1988 certain named plaintiffs purported to claim certain relief for themselves and for "the other proprietors of lots in building units plan numbe:r:r5451". The relief claimed in the writ included 10 20 30 40 50 60 60 Govt. Printer, Qld. 1 -- 1 of 9 -- 10 20 30 -lO 50 60 damages for breach of contract, being the contracts pursuant to which certain of the plaintiffs had acquired their lots, and also damages for negligence. In order to understand the causes of action it is necessary to understand a little about the facts of the case. It seems that a company called T & G Mutual Life Society Ltd. was responsible for the development of the block of units in question at the Gold Coast. The first defendant, by statute, subsequently took over the relevant assets and undertaking of T & G. The second defendant was the builder of the block, the third defendant provided certain windows which were installed in the premises, and the fourth defendant was the architect. It seems that the design and/or installation of the windows were or was defective, or so it is alleged, with the consequence that some or all of the units leak or have leaked on occasions in the past. The thrust of the plaintiff's case is that the whole of the window structure in the building must be replaced, obviously at substantial cost. The plaintiffs seek to establish liability of the defendants or some of them for that cost. There are a large number of units in the building, and the plaintiffs have purported to sue as representatives :pursuant to 0.3 r.10 which provides as follows: "When there are numerous persons having the same interest 10 :::o 30 40 in the subject matter of a cause or matter, one or more of such persons may sue, and the Court or a judge may authorise one or more of such persons to be sued, or may 50 direct that one or more of such persons shall defend, in such cause or matter, on behalf or for the benefit of all persons so interested." Application was brought before the Master on behalf of the first and fourth defendants to strike out the action or some part thereof upon the basis that it was improperly brought as Govt. Printer, Old. 2 60 -- 2 of 9 -- 10 a representative action pursuant to 0.3 r.10. The second and third defendants supported the application before the Master so that it is, I think, fair to say that they joined in the ,application. All four defendants have also appeared before me to support the Master's decision which was to allow the application. The proceedings before me are by way of appeal from that decision. The submission made on behalf of the plaintiffs on appeal has been that the Master took too narrow a view of the circumstances which fall within O. 3 r. 10. Whilst accepting 10 20 ~n 'that the Master's analysis of the cases up to and including ✓--·~ 30 40 Markt & Co. Ltd. v. Knight Steamship Co. Ltd. (1910) 2 K.B. 1021 was substantially correct, the plaintiffs assert that there has thereafter been a liberalisation of the circumstances in which such an action will · be permitted in jurisdictions having rules of practice similar to ours. In support of this proposition, the plaintiffs rely upon certain authorities which were cited in the Master's reasons but not followed by him, including in particular EMI Records Ltd. v. Riley [1981] 2 All E.R. and R.J. Flowers Ltd. v. Byrnes [1987] 1 N.Z.L.R. 260. I must say that other than in his discussion of those cases, I find the Master's reasoning to be most persuasive. It may be that the Master's comments as to those latter cases should be seen as relating to the way in which the judges in 30 40 so 50 60 question applied the law as they understood it to the particular facts before them. However there has been a recent decision of the English Court of Appeal in a case known as "The Irish Rowan", Irish Shipping Ltd. v. Commercial Union Assurance Co. plc v. Govt. Printer, Old. 3 60 -- 3 of 9 -- 10 Alliance Assurance Co. [1989] 2 Lloyd's Law Reports 144. In that case, the Court of Appeal at least did not disapprove the approach taken in EMI Records Limited v. Riley (supra). To some extent, the Master's criticism of the later cases was dependent upon his acceptance of the view apparently expressed in Prudential Assurance Co. Ltd. v. Newman Industries Ltd. [1979] 3 All E.R. 507 that in such proceedings it was necessary that there be some common relief claimed. Thus the Master considered that where individual plaintiffs or parties said to ,have similar interests claim only damages, it was not possible· 20 I representative action. Vinelott 30 50 to commence a J. says something very close to this in Prudential (supra) at p.520. It seems that the decision of the Court of Appeal in The Irish Rowan is to the contrary, ahd it should no longer be taken as good law that individual claims for damages may never be brought in the representative form contemplated by 0.3 r.10. Nonetheless, it is clear from all of the cases that it is still necessary that there be amongst the various persons "the same interest in the subject matter of the cause or matter". In The Irish Rowan this test was satisfied because in that case, the plaintiff/ship owner sought to recover an amount pursuant to a contract of insurance which had been accepted by all of the persons from whom relief was sought. They had each accepted part of the risk. Thus once the quantum of the plaintiff's loss was established, it was a simple matter of apportioning liability for the various parts of it between the various insurance companies. Further, the agreement as between the plaintiff and the defendants was in identical terms in each case since they had, in fact, each simply accepted part of the risk as offered. There was in the policy what was 10 30 40 50 60 ------------ 60 Govt. Printer, Old. 4 -- 4 of 9 -- 10 20 30 40 called a "leading underwriter clause" which, in effect, allowed the leading underwriter to resolve all matters which might be in dispute as between the insurers and the insured. It was apparently this matter more than anything else which led the Court of Appeal to the conclusion that there was a sufficient common interest to permit a representative action. In the present case, some of the persons whom the plaintiffs seek to represent derived their interests in units from the T & G company; others derived their interests from the first defendant; others did not have contractual relations with either of those companies, but rather have become owners of units by purchase from intermediate owners. It seems to me that notwithstanding attempts to cast the cause of action or the causes of action in a variety of different ways, what each of the unit owners must say and show is that his unit has in some way been devalued as a result of defective design or defective construction. It may be that had the building been built in a different way, all of these problems might have been avoided, but that is not neces~arily the point for present purposes. If a unit owner bought his unit pursuant to a contract which contained warranties by the vendor as to the quality of the unit, that owner is entitled to be put in the same position as he would have been in had the warranties been made good. That will entitle him to a cash payment either sufficient to carry out rectification works on 10 20 30 40 50 50 60 his unit or alternatively, equivalent to the difference in value between the unit as it is and as it would have been had it complied with the alleged warranty. To the extent that the unit holders claim in negligence, the measure of damage will be the difference between what each paid for his unit and what it Govt. Printer, Old. 5 60 -- 5 of 9 -- 10 20 30 40 was, in fact, worth. Again, this might be measured either by a valuation exercise or by the cost of rectification. In some cases, it will be necessary to look at the extent to which rectification is necessary in a particular unit, or so one would expect. In other circumstances, it will be necessary to take account of the fact that a particular owner may have bought at a very favourable price. In the case of each owner, however, it seems to me that the subject matter of his cause of action is his unit and, in the case of the actions in contract, the contract pursuant to which he bought. The interest referred to in 0.3 r.10 is not curiosity or even self-interest. Interest, when used in that context, refers to a legally recognised right which the plaintiff seeks to enforce. I am of the view, therefore, that there is not the same interest in the subject matter binding the various unit holders together which would be required in order to justify an action pursuant to 0.3 r.10. Thus I am of the view that the Master's decision was correct, notwithstanding the subsequent decision of the Court of Appeal in The Irish Rowan. It is submitted that if I am of that view, I should consider giving leave to amend the writ and statement of claim to add the names of the various parties who were represented wrongly by the nominated plaintiffs. In support of this proposition, I am referred to the 50 60 decision of the Court of Appeal in Moon v. Atherton (1972), 2 Q.B. 435. That case appears to be authority for the proposition that where persons are represented by a nominal plaintiff in a representative action, they are parties in the proceedings, and in the event that the nominal plaintiff does Govt. Printer, Old. 6 10 20 30 40 50 60 -- 6 of 9 -- not proceed with the action, they may ask to be joined, even after the expiry of the limitation period. This seems to be a very sensible result, although in the present case it leads to considerable awkwardness. The writ named the nominal plaintiffs as suing on their 10 own behalf and on behalf of the other proprietors of lots in the building. I consider, therefore, that all of the other owners at the time of issue of the writ were parties in the broad sense discussed in Moon's case. Some support for this 'is to be found in the definition of the term "party" in the Judicature Act which is similar to that contained in England at the relevant time as referred to in Moon's case. If this is so, there seems to be no injustice in joining as a plaintiff somebody who is already a party to the proceedings, and I would ~e minded to allow the addition of 10 20 30 the names of all of the unit proprietors as at 22 December 30 1988, subject to each of them filing a consent in writing as contemplated by 0.3 r.11. 50 60 The joinder of those persons as plaintiffs will also be without prejudice to the rights of the defendants or any of them to plead the Limitation of Actions Act in bar in accordance with such rights as they would have had to do so had the plaintiffs been joined at the time of issue of the original writ. Since it seems to me that the defendants should not be kept waiting around to see which of the numerous plaintiffs wants to come in and become parties in the action, exposing themselves to orders for costs, I will limit the time within which any potential plaintiff may file his consent to a period of 21 days from today. Govt. Printer, Old. 7 40 50 60 -- 7 of 9 -- 10 20 30 J HIS HONOUR: Before I pronounce the formal order, I should just add something else. In the course of reply, Mr. Harrison pointed out to me that some part of the claim may be attributable to the interests which the unit owners hold in common in the common property. This would seem to relate to the outer half of the walls and windows. In other words, strictly speaking, the unit holders own in common the outer : half of the outer wall whereas unit owners individually own the inner half. When one looks at the statement of claim, it seems quite clear to me that there was no intention to claim on behalf of the unit owners in common. The action is, on its face, an action to enforce the individual contracts and individual claims in tort, al though such claims may include sums for rectification of defects in common property. For that reason, I have not thought it necessary to deal separately with any additional action which may relate to the outside of the building. It is not necessary or appropriate for me to consider that matter further on an application of this kind. The formal orders will therefore be that the appeal 10 20 30 ~o 40 50 60 against the decision of the Master is dismissed. I give leave to all persons who were, as at the 22nd day of December 1988, proprietors of lots in building unit plan 5451 I and who were not then named as plaintiffs to elect to be joined [ as plaintiffs in the action by filing in the Registry a written 50 consent to being so joined, provided that such consent is filed 1 on or before the 26th day of March 1990 or within such extended time as may be allowed by the Commercial Causes Judge or the Master upon good cause being shown for any such extension. I give leave to the plaintiffs to amend the writ to Govt. Printer, Qld. 8 60 -- 8 of 9 -- 10 20 30 reflect the joinder of those plaintiffs. What else do we need? MR. DOUGLAS: I would ask for costs of today's hearing, Your Honour. HIS HONOUR: I order the plaintiffs to pay the defendant's costs of the appeal. I will order the defendants to make any application for the severance of any issue pursuant to 0.3 r.1 within 21 days, on or before 16 April 1990 and thereafter perhaps it can go back to the Commercial Causes Judge, can it? HIS HONOUR: I think when I pronounced the formal order I didn't add the bit about the Limitation Act. I just say again the j oinder of any further plaintiffs is to be without prejudice to the right of the defendants and each of them to plead the Limitation of Actions Act in bar to any claim as if each of the plaintiffs to be joined had been a plaintiff at the time the writ was issued. HIS HONOUR: I don't normally give leave to appeal from appeals against decisions of the Master. It seems to me that 10 20 30 .:io the structure is designed to bring about final resolution of 40 these things but I think in this case I will. It does seem to me that there are reasons which would make it desirable that it be a representative action if possible under the rule. I have come to the conclusion it is not. I so can understand people might want to take it further. I give leave to appeal. 60 Govt. Printer, Old. 9 50 60 -- 9 of 9 --