Allstate Life Insurance Co & Ors v Australia and New Zealand Banking Group Ltd & Ors [1995] FCA 45

CATCHWORDS Practice and Procedure - claim for contribution - whether leave to file cross-claim should be granted. Federal Court Rules, O.5

In Re La Rosa; Ex parte Norgard v Rodpat Nominees Pty. Ltd. (1991 31 FLR 83 - cons. Australia and New Zealand Banking Group Limited v Turnbull & Partners Limited (1991) 33 FCR 265 - cons. Trade Practices Commission v Manfal Pty. Ltd. (1991) 33 FCR 382 - cons. ALLSTATE LIFE INSURANCE CO. & OTHERS v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & OTHERS

No. G381/94 Beaumont J. Sydney 14 February 1995

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G381 of 1994 ) GENERAL DIVISION )

BETWEEN: ALLSTATE LIFE INSURANCE CO. & OTHERS Applicant AND AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & OTHERS Respondent

CORAM: Beaumont J. DATE: 14 February 1994 MINUTES OF ORDER THE COURT ORDERS: 1. Grant leave to file the cross-claim. 2. Reserve liberty to the cross-respondent to apply, if so advised, to vacate or vary the trial date fixed for the final hearing. 3. Make no order for the costs of the present application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G381 of 1994 ) GENERAL DIVISION )

BETWEEN: ALLSTATE LIFE INSURANCE CO. & OTHERS Applicant AND AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & OTHERS Respondent

CORAM: Beaumont J. DATE: 14 February 1994 REASONS FOR JUDGMENT No. 6 (In relation to the cross-claim against Price Waterhouse) INTRODUCTION In order to understand the context in which the several interlocutory applications now before the Court arise, it will be necessary to refer to the relevant provisions of O.5, which deals with cross-claims and third party claims with a view to facilitating the policy set out in s.22 of the Federal Court of Australia Act 1976 that, so far as possible, all matters in controversy between the parties may be completely and finally determined and that multiplicity of proceedings be avoided. By O.5 r.1(2), a respondent may cross-claim against any person, including a third party, for any relief which is related to or connected with the subject of the proceeding. By O.5 r.1(3), without prejudice to the generality of sub-rule (2), a respondent may cross-claim for contribution or indemnity. By O.5 r.5(1), a respondent may file a pleading by way of cross-claim within the time fixed for filing his defence or any extension thereof. By O.5 r.8(1), subject to sub-rules 9(1) and (2), a respondent may cross-claim against a person other than a party without the leave of the Court. By O.5 r.9(2), a respondent who has not previously obtained directions from the Court in relation to the matter under O.5 r.9(1), shall not cross-claim after the directions hearing without the leave of the Court. (The principal moving parties in the present application are the first, fifth, sixth, seventh, eighth, ninth and eleventh respondents. Since it has been agreed between the parties that their position should be treated as typical for present purposes, it will not be necessary to refer to the cross-claims sought to be brought by other parties.) Before going to the evidence in the present application, reference should be made to some aspects of the history of the litigation as follows. Because of the apparent complexity of the litigation and because of several applications to strike out parts of the statement of claim, many directions hearings have been held with a view to ascertaining and defining the real issues in the principal proceedings. Because of this, and because the proceedings were earlier stood over pending the determination of a related matter by the Supreme Court of New South Wales, it was not until 11 November 1994, that the respondents were directed to file defences by 21 November. The present respondents filed their defence on 24 November and then attempted to file their cross-claim. The Registry rejected the cross-claim as out of time. The cross-claim, a copy of which was informally provided to the solicitors for Price Waterhouse in December 1994, is in the nature of a claim for contribution by statute (Part 3 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW)) and in equity. A copy is annexed to these reasons for ease of reference. Ordinarily, in the absence of any question of limitation of actions, a period of three days would not be decisive for present purposes, at least in non-complex litigation. However, where, as happened here, there had already been several directions hearings, as Gummow J. observed in National Mutual Holdings Pty Ltd v The Sentry Corporation (1989) 22 FLR 209 (at 217-8), leave to file a cross-claim should have been sought at a directions hearing, as O.5 r.9 contemplates (see also Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 55 FLR 108 per Sheppard J. at 110). In principle, especially where the substantive issues are complex, consistent with the Court's policy and practice in managing its litigation, all aspects of the making of any cross-claim should be supervised by the Court at all stages of the litigation. At the same time, it should be noted, as French J. pointed out in Australian Securities Commission v Dalleagles Pty Ltd (1992) 25 ALD 232 at 233 where, as here, the directions hearing is continued with adjournments from time to time, it may be that, strictly speaking, the cross-claimant does not require leave under O.5 r.9(2). But, this is not to say that the Court should not supervise the process by giving appropriate directions once, as here, the Court has undertaken, in a series of directions hearings, the management of all aspects of the litigation. THE EVIDENCE ON THE APPLICATION In his affidavit sworn 9 February 1995 in the present application the solicitor for the present respondents says that, in summary, the cross-claimant relies on the following facts: "(a)That, by the Further Amended Statement of Claim filed on 16 December 1994, the debentureholders make claims against the Cross Claimants on the basis of the following alleged conduct: (i) involvement in misleading and deceptive conduct in contravention of Section 52 of the Trade Practices Act 1974, said to have been engaged in by Linter Textiles (paragraph 74); (ii)aiding and abetting in conduct by Linter Textiles said to amount to the tort of fraud according to the law of New York or alternatively the tort of deceit according to the law of New South Wales (paragraphs 130 and 135 to 140);