~The Fractice and Frocedure - application under ».82 of the Trade Practices Act 1374 - motion to amend statement of claim - ccmmon law claims introduced in proposed amendments - scope of power to amend in Federal Court Rules 0.13 r.2(1) - whether subtect to rule eras t in Weldon v. Neal - whether amendments raise new causes of action - meaning of 'cause ot action' - whether claims statute-barred Federal Court Rules 0.13 r.2 WA BRADS v. HAIR TRANSPLANT PTY. LTD. and z - LTD. and WAYNE BRADSHAW and s MOS TOOHEY J. PERTH 26 NOVEMBER 1986 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION S No. WA ced of 1985 BETWEEN: WAYNE WILLIAM BRADSHAW Applicant and HAIR TRANSPLANT PTY. LTD. Respondent and HAIR TRANSPLANT PTY. LTD. Cross-Claimant and WAYNE BRADSHAW First Cross-Respondent and FS} C. MOS Second Cross-Respondent CORAM: TOOHEY J. 26 November 1986 REASONS FOR JUDGMENT On 19 June 1985 Wayne William Bradshaw lodged an application in this Court against Hair Transplant Pty. Ltd. The application claimed damages pursuant to s.82 of the Trade Practices Act 1974 ("the Act") "in relation to the Respondent's breaches of Section 52 of the Act". The statement of claim, filed with the application, recites a verbal agreement made "in or around July of 1980" for the use by the applicant of certain surgical and medical procedures and methods in the conduct of hair transplant surgery. It alleges various representations by the respondent concerning those procedures and methods, which representations are pleaded as constituting misleading or deceptive conduct within s.52 of the Act. Consistent with the application, the statement of claim seeks damages pursuant to s.82 of the Act by reason of the respondent's breach of s.52. Although the application and statement of claim refer to any further or other order the Court may think appropriate, anyone reading either document would conclude that all that was being alleged against the respondent was conduct in contravention of 8.52, thereby giving rise to a Claim for damages under 8.82. The respondent did not seek particulars of the statement of clain. But various interlocutory steps were taken and the matter proceeded towards a hearing, a trial date being fixed for 11 November 1986. There is a cross-claim made, not only against the applicant but also against Samuel Carl Moschella who, the respondent contends, was a party together with the applicant to a deed undated but stamped on 8 May 1985 whereby the respondent granted to Drs. Bradshaw and Moschella a licence to use the respondent's surgical and medical procedures and methods in the conduct of hair transplant surgery. The cross-claim is for damages for repudiation of that agreement. The motion presently before the Court is by the applicant to amend his statement of claim and to join Dr. Moschella as an applicant. The hearing on 11 November was Ley) . adjourned and in its place counsel arqued in support of and in opposition to the proposed amended statement of claim. Questions arise in regard to the costs of the adiournment but' those questions depend in large part upon the outcome of the motion to amend and are better left until the fate of the motion is known. The proposed amended statement of claim is in effect a substituted pleading, it being a very different document from that filed. It now sets up a written agreement, pleads in much greater detail the representations said to have been made and pleads a number of common law causes of action. Nevertheless, counsel for the applicant contended, the facts proposed to be pleaded are substantially those pleaded in the existing statement of claim, only more elaborate. The respondent opposed amendment of the statement of claim on the ground 'hat the new pleading would permit the applicant to rely upon causes of action that were statute barred. Even in its present form the statement of claim invites a plea of limitations because, though not filed until 19 June 1985, it pleads misleading and deceptive conduct by reason of what was said by the respondent in or around July 1980. Sub-section 82(2) of the Act permits an action under sub-s.(1) to be commenced "at any time within 3 years after the date on which the cause of action accrued". The defence originally filed made no reference to sub-8s.82(2). On 7 April 1986 the respondent, by consent, was given leave to amend its defence to plead that, by virtue of sub-s.82(2), the applicant was "barred from bringing in (sic) any action under Section 82(1) in relation to payments made to the Respondent prior to 13 June 1982". Since what the applicant 1s claiming is damages, this defence 1s rather curlously worded. And I express no view as to the likelihood of 1ts success; I mention 1t only to point out that the question of limitations first arose on the pleadings in April this year. The Federal Court Rules express the power of the Court to amend a pleading in the broadest of terms. Order 13 r.2(1) reads: "The Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit". There is no reference in the rules to the situation in which leave is sought to amend a statement of claim after a relevant limitation period has expired. In contrast, some 'Supreme Court rules make express provision for that situation. See for instance 0.20 r.5 of the Supreme Court Rules of New South Males, discussed in McGee v. Yeomans (19771 1 N.S.W.L.R. 273, and 0.21 r.5 of the Sypreme Court Rules of Western Australia, discussed in Stone James v. Pioneer Concrete (W.A.) Pty. Ltd. £19851] W.A.R. 233. There is one difference of some importance between the New South Wales rule and the Western Australian rule. Both begin by conferring power to amend in general terms. They then proceed to confer, in specific terms, a power to amend notwithstanding that the limitation period has expired, so long as any new cause of action arises out of the same or substantially the same facts. However the New South Wales rule goes onto provide that the rule conferring the specific power does not limit the general power. There 1S no counterpart in the Western Australian rule. In Metropolitan Oils (Pty.) Limited v. Beringer (unreported decision delivered 8 April 1986) I discussed the relationship between these rules and 0.13 r.2 of the Federal Court Rules, though in the context of an application to amend the name of the applicant after the period mentioned in sub-s.82(2) of the Act had expired. Having referred to the rule in Weldon v. Neal (1887) 19 Q.B.D. 394 (the rule that a plaintiff will not be allowed to amend by setting up fresh claims in respect of causes of action which since the issue of the writ have become barred by the Statute of Limitations), I said at p.8: "It may be that, even in the absence of rules dealing expressly with the question of limitations, the rule in Weldon v. Neal has been displaced by the broad language of 0.13; but that is a matter I need not determine in disposing of this motion". However the matter is one that must be considered in order to deal with the present motion. In doing s0, cases such as McGee v. Yeomans, Stone James v. Pioneer Concrete (W.A,) Pty. Ltd. and a number of English decisions under 0.20 r.5 of the English rules of the Supreme Court are not directly in point for they turn upon the existence of a specific rule dealing with a specific situation. At the same time, in some of those decisions are to be found dicta as to the continued operation of the rule in Weldon v. Neal in the absence of such a specific rule. For instance, in Braniff v. Holland & Hannen and Cubitts (Southern) Ltd. €19693 1 W.L.R. 1533 at 1541 Widgery L.J. spoke of a different climate prevailing by reason of 0.20 r.5 Dut rejected the argument that there had been a general relaxation of the rule i.e. a relaxation outside the operation of the specific provision. A wider view of 0.20 r.5 was taken by Lord Denning M.R. in Chatsworth Investments Ltd. v. Cussins (Contractors) Ltd. £19691 1 W.L.R. 1 at 5 and again in Sterman v. E.W. & W.J. Moore £19703 1 Q.B. 596 at 604 and also by Sachs L.J. in Brickfield Properties Ltd. v. Newton £19713 1 W.L.R. 862 at 874-875. It may be argued that 0.13 r.2 was cast in the widest terms to avoid these niceties. On the other hand the rule was not framed in a vacuum and it must be looked at against the background of the existing law. See for instance the approach taken by the Full Court of this Court in Jess v. Scott (unreported decision delivered 4 November 1986) when considering the operatidn of 0.52 r.15. This too was the approach taken by Lush J. in ulLo v. Rowntree & Co. (Australia) Pty. tg. £19713 V.R. 378. His Honour was dealing with a rule similar to, though not identical with, 0.13 r.2(1) of the Federal Court Rules. There was no rule relating specifically to amendments when the limitation period had expired. At p.380 his Honour said: "It is well established by long lines of authorities both in England and in this country that in considering what is just for the purposes of that rule the Court or judge or master must treat as a relevant consideration the possibility that to allow a new case to be made under the guise of the amendment of an existing statement of claim may have the effect of enabling a plaintiff to put forward a statute-barred claim and so of depriving the defendant of a protection from suit to which he had by virtue of the Statute of Limitations become entitled. Accordingly, 1t has been held that leave to amend will not be granted to enable a plaintiff to raise a new cause of action' if that cause would, 1f£ proceedings in relation to 1t were then started for the farst time, be barred: Weldon v. Neal (1887), 19 Q.B.D. 394". In my respectful view, that is how I should approach the present motion. It is not for me, sitting at first instance, to fly in the face of formidable authority that the rule in Weldon v. Neal still exists. Thus the question to be answered is - will the amendments, if granted, raise a new cause of action against the respondent? This question invites another - what is meant by a cause of action? As to the latter, I repeat some remarks made by me in Arcadi v. Colonial Mutual Life Assurance Society Ltd. £1984] A.T.P.R. 40~473 at 45,454: "A cause of action means 'every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court' Cooke v. Gill £18731 L.R. 8 C.P. 107 at p.116; see also Read Ri, Brown (1888) 22 Q.B.D. oo at p.131, Patterson ve ds rds 119633 V.R. 179 at pp.186-187, Be Carmo v (1984) 52 A.L.R 231 at 240, The cause of action established by sub-sec.82(1) has particular elements - conduct by a person in contravention of a provision of Pt VI or V of the Act and the suffering of loss or damage by reason of that conduct". As the statement of claim stands, there is a pleading of facts which, if established, would show conduct by the respondent in contravention of Pt V of the Act and loss or damage by reason of that conduct. Is there a pleading of facts which, if established, would entitle the applicant to succeed on some other ground against the respondent? In particular, are facts pleaded which it would be necessary for the applicant to prove in order to support his right to judgment for damages for fraudulent misrepresentation, the return of moneys paid for a consideration which has wholly failed or payments made under a mistake of fact, or damages for breach of contract? These are the claims' the applicant wishes to make in the proposed amended statement of claim. In my view the existing statement of claim does not plead the facts which it would be necessary for the applicant to prove to support his right to a judgment on any of the proposed new grounds. It pleads no more than representations said to have been misleading or deceptive or to have been likely to misiead or deceive. It is true that para.6 of the statement of claim pleads that the representations were false, but in context the* paragraph does no more than particularise the conduct said to have. been misleading or deceptive. Conduct may be misleading or .. deceptive without any intention on the part of the person whose conduct is attacked to mislead or deceive or without any recklessness on his part. See Bell v. Australasian Recyclers (W.A.) Pty. Ltd. £1986] A.T.P.R. 40-644 where the relevant authorities are noted. There is no plea of breach of contract; furthermore the contract now relied upon is a written not an oral one. There is in the existing statement of claim a plea of recission by reason of misrepresentation but there is nothing pointing to a total failure of consideration or to payments having been made under a mistake of fact. There 1s of course another aspect of this matter. If leave were given to the applicant to amend the statement of claim as proposed, would the amendments let in claims that would otherwise have been statute barred? So far as the common law causes of action are concerned, the relevant limitation period is six years. See Limitation Act 1935 (W.A.) 3.38. If the applicant was to lodge now an application in which those common law claims were made, would they be statute barred? Counsel for the applicant did not argue that they would not be and of course, if they would not be statute barred, a great deal of time was. taken by counsel on both sides arguing a point that did not really arise. In the light of what was said by counsel at the hearing, I must take it that, with one qualification, the causes of action clas qualification is in regard to the return of moneys applicant; it is possible that some of these moneys within the six year period. With that reservation, the <j Ratement of claim, so far as it introduces new causes of oR action, :aould be refused. "To so hold does not mean that the proposed amendments must be refused in their entirety. Some paragraphs merely elaborate the misleading or deceptive conduct relied upon. There is no reason why the applicant should not now be permitted to rely upon a written rather than an oral agreement, particularly as it was the respondent that pleaded the written agreement in its defence. There is a proposed para.1ll which should be refused 10. along with the other paragraphs introducing new causes of action. In any event 1t 1s an immaterial averment for it pleads that the applicants did not become aware of the falsity of the representations or breaches of warranty or breaches of contract until in or about May 1983. The applicant's state of mind has no relevance to any issue raised by the pleadings. I should add that although I have rejected the claim for the repayment of moneys paid on the basis of a total failure of consideration or mistake of fact, 8.87 of the Act gives the Court wide powers and there is no reason why the applicant should not invoke these in relation to the 8.52 claim. Paragraphs 1, 2, 3, 6, 8 and 13 (as to sub-paras.(i)(a) and (1ii)) of the proposed statement of claim are unobjectionable. But there is overlap and there will have to be some tidying up to give cohesion to the paragraphs that may stand. In the circumstances it is best to refuse leave to amend at this stage but give the applicant e chance to reformulate a new pleading in accordance with these reasons. One matter remains and that is the proposal to add Samuel Carl Moschella as an applicant. This is resolved by the decision made in relation to the amended statement of clain. Because I have refused paragraphs that plead new causes of action, the addition of Dr. Moschella as an applicant can cause no prejudice to the respondent. To that extent the motion will be granted. ll. So far as costs are concerned, the respondent must have any costs occasioned by the addition of Dr. Moschella as an applicant and by amendments to the statement of claim. But it 15s also entitled to the costs of the adjournment of the hearing. It would have been quite unsatisfactory to have kept the proceeding in the list and see what happened to the motion to amend. On each side there was a witness to come from the Eastern States. The amendments proposed were substantial and controversial and, as it happened, argument on them took up what would have been the first morning of the hearing. I felt it necessary to reserve ny decision and it would have been unwise to proceed to a hearing without the fate of the motion being known. The adjournment was necessitated by the motion to amend and the applicant must pay those costs. I certify that this and the preceding ten pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Toohey. Associate Dated: 26 November 1986