JUDGMENT No.. 44:5%,.88. | NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G574 of 1987 GENERAL DIVISION ) CORAM: DATE: PLACE: BETWEEN: PHILIP ANTHONY THORS AND THUNDER INVESTMENTS PTY LIMITED Applicants AND: JOHN ROBERT WEEKES First Respondent AND: PATRICIA WEEKES Second Respondent AND: BRIAN PAUL WEEKES Third Respondent AND: LESLIE FRANCIS WEEKES Fourth Respondent AND: R. AND P. WEEKES PTY LIMITED Fifth Respondent AND: THE MOORINGS DEVELOPMENT LIMITED Sixth Respondent, Davies J. wt Lf 9 June 1988 Sydney MINUTES OF ORDER THE COURT ORDERS THAT: 1. 2. The joinder and amendment be allowed. The applicants pay the costs thrown away by the amendments. The costs of this motion be reserved. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. 15° NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) .No. G574 of 1987 ) ) GENERAL DIVISION BETWEEN: PHILIP ANTHONY THORS AND THUNDER INVESTMENTS PTY LIMITED Applicants AND: JOHN ROBERT WEEKES First Respondent AND: PATRICIA WEEKES Second Respondent AND: BRIAN PAUL WEEKES Third Respondent AND: LESLIE FRANCIS WEEKES Fourth Respondent AND: R. AND P. WEEKES PTY LIMITED Fifth Respondent AND: THE MOORINGS DEVELOPMENT LIMITED Sixth Respondent CORAM: Davies J. DATE: 9 June 1988 PLACE: Sydney REASONS FOR JUDGMENT The statement of claim in these proceedings raises aes sr ons eer 2. matters under the Trade Practices Act 1974 (Cth) and associated Matters under State law with respect to a transaction involving an option to acquire land near Mosey Point, New South Wales. On 3 December 1982, the owners of the property, Allan Charles Annetts, Neville John Annetts and David Lyall Annetts ("the Annetts") granted to the first, second, third and fourth respondents ("the Weekes") an option to acquire the property. The option fee was $9,000.00. A further $51,000.00 was to be paid on the exercise of the option and the balance of $540,000.00 was to be paid on settlement. A form of contract to apply to the sale was annexed to the option agreement. The option agreement imposed an obligation upon the Weekes to take steps with respect to the subdivision and rezoning of the land. Subsequently, on 30 August 1985, only two days before the option expired on 1 September 1985, a joint venture agreement was executed between the applicants and the respondents, pursuant to which Weekes agreed, in consideration of the sum of $75,000.00, to exercise on behalf of Tefalka Pty Limited ("Tefalka""), now known as Tomaga Waters Pty Limited, the third named applicant, the option to purchase the property in accordance with the terms of the deed of option. The first three applicants warranted that they had made the necessary financial arrangements to enable Weekes in their capacity as trustee to complete the purchase of the property on 1 December 1985 and that they would pay the moneys to the vendor on that date. It was a term of the agreement that, as soon as possible, a development application for a canal subdivision of the property should be lodged with the Shire Council. 2pO03 Pursuant to that arrangement, the $75,000.00 fee and the option exercise sum of $51,000.00 were paid to the Weekes. The $51,000.00 was paid by the Weekes to the Annetts on 1 September 1985 on the exercise of the option. The exercise of the option brought into existence a contract for the sale of the property. However, a search of the title being undertaken, it was ascertained that there was a Crown reservation on part of the property which precluded its development as a canal subdivision. The sale of the property did not go ahead and on 12 August 1986, the Annetts purported to rescind their option of 3 December 1982, by virtue of the failure of the grantees the option to make 2? application to the Shire Council for approval of a grant of subdivision. They purported to terminate the deed of option and any contract deemed to have come into existence by reason of the purported exercise thereof and they gave notice that the deposit of $60,000.00 paid was forfeited. These proceedings were then commenced against the present respondents based upon claims of representations made to the applicants by one or more of the respondents that the property had an absolute waterfront, that there was no reserve on the waterfront and that the land was suitable for a canal subdivision. The applicants now seek to amend the proceedings so as to join the Annetts as respondents and to amend the statement of claim to allege that, the contract of sale having been terminated, the duty of the Annetts was to repay the $51,000.00 Ver 4, deposit to the Weekes and the duty of the Weekes to recover the same to it and to repay the same to the applicants. I do not propose to discuss that claim in any detail, as to do so could prejudice the further conduct of these proceedings. In my opinion, the joinder and amendments sought should be allowed. Of the moneys paid by the applicants to the Weekes, $51,000.00 was paid by the Weekes to the Annetts on the exercise of the option which the Weekes were to hold in trust for Tefalka Pty Limited. This is a matter sufficiently connected with the matters already raised to be joined in the proceedings. It arises out of the transactions and facts were germane to the claims made under the Trade Practices Act. See Philip Morris Incorporated & Another v. Adam P. Brown Male Fashions Pty Limited (1981) 148 C.L.R. 457 and Fencott & Others v. Muller & Another (1983) 152 C.L.R. 570. It does not appear that the joinder of the Annetts will unduly delay the proceedings. Whatever occurred between the grant of the option and the date of its exercise is likely to be the subject of evidence at the trial of this matter in any event. Moreover, if the claims based upon representations should fail, the applicants will still have an arguable case for the return of the $51,000.00. The Court's discretion to permit the joinder and amendments should therefore be exercised favourably. Application is also made to amend the proceedings so as to join as respondents the partners of the firm of solicitors who a nye ae gerne - tee 5. now act for the respondents and and who acted for the respondents on their entry into the joint venture agreement of 30 August 1985 and for the Weekes on the exercise of the option with the Annetts. The claim against the solicitors is founded upon professional negligence. Mr I. Wales, of counsel, who appeared for the respondents, submitted that the solicitors should not be joined in the proceeding because their duty had been to the respondents, not to the applicants, and that they had no duty to make a title search of the property between the date of the joint venture agreement, 30 August 1985, and the time of the exercise of the option on 1 September 1985. Mr Wales submitted that their clients, the Weekes, were by then contractually bound to exercise the option. It is undesirable that I should say more about this matter and that it appears to me that the respondents have an arguable case that the solicitors owed a duty to them in the transaction as it was one of the applicants, Tefalka, on whose behalf the option was to be exercised. Again, I think that this matter is intimately connected with the other claims in these proceedings and that it is within the accrued jurisdiction of the Court. I have a little more concern about these amendments on the basis of discretion, firstly because the persons sought to be joined are the solicitors for the respondents and, secondly, because the joinder of the solicitors will involve the consideration of the claim of a character different from that heretofore on foot. However, if the amendment is sought bona orkeee aeemen eee ees Yo. 6. . fide, and I have no reason to doubt that it is, then it appears a to me that it is for the applicants and their advisers and not for the Court to judge whether the joinder is in the best interests of the parties. As the matter claimed arises out of the events of which evidence will inevitably be given, I think that I should not, as a matter of discretion, refuse to permit the amendment sought. For these reasons, I shall allow the joinder and amendment sought. The applicants should pay the costs thrown away by the amendments. The costs of this motion should, however, be reserved. The subsequent course of the proceedings will throw better light upon the question whether the costs should be costs ° in the cause or costs paid by the applicants or by any of the respondents. I certify that this and the 5 preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Davies. Associate: a AS _ Date: 9 \June! 1988 t Counsel for the applicants: Mr P. Brereton bi! t r Solicitors for the applicants: Messrs Barwick and Company Counsel for the respondents: Mr I.M. Wales . Solicitors for the respondents: Messrs P.G. Truman, Stocker & i Scutts Date of hearing: 19 May 1988 wee ws oe oo