FEDERAL COURT OF AUSTRALIA Whirlpool (Australia) Pty Ltd v Discount Electrical Centre (Australia) Pty Ltd [1999] FCA 912 PRACTICE & PROCEDURE – statement of claim – leave sought to amend – whether new cause of action can be pleaded by amendment pursuant to O 11 r 7 – whether new application required. Federal Court of Australia Act 1976 (Cth) s 33K Federal Court Rules O 11 r 7, O 13 r 2(1), O 13 r 2(7) Rules of the Supreme Court of Victoria O 36 r 1(3) Rules of the Supreme Court of New South Wales Pt 15 r 16 Eshelby v Federated European Bank Ltd [1932] 1 KB 254 referred to Baldry v Jackson (1976) 2 NSWLR 415 referred to King v Milpurrurru (1976) 66 FCR 474 at 481 applied Lidden v Composite Buyers Ltd (1996) 139 ALR 549 at 554 applied WHIRLPOOL (AUSTRALIA) PTY LTD (ACN 003 578 023) v DISCOUNT ELECTRICAL CENTRE (AUSTRALIA) PTY LTD (ACN 078 525 327) and STEVEN TATTOS V 206 of 1999 WEINBERG J 16 JUNE 1999 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 206 OF 1999 BETWEEN: WHIRLPOOL (AUSTRALIA) PTY LTD (ACN 003 578 023) Applicant AND: DISCOUNT ELECTRICAL CENTRE (AUSTRALIA) PTY LTD (ACN 078 525 327) First Respondent STEVEN TATTOS Second Respondent JUDGE: WEINBERG J DATE OF ORDER: 16 JUNE 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: The applicant's motion be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 206 OF 1999 BETWEEN: WHIRLPOOL (AUSTRALIA) PTY LTD (ACN 003 578 023) Applicant AND: DISCOUNT ELECTRICAL CENTRE (AUSTRALIA) PTY LTD (ACN 078 525 327) First Respondent STEVEN TATTOS Second Respondent JUDGE: WEINBERG J DATE: 16 JUNE 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 There is before the Court a motion on notice pursuant to which the applicant seeks leave to amend its statement of claim. That application is opposed. 2 The applicant is seeking to introduce by way of amendment what is in substance a new cause of action which is said to have arisen after the initial application was brought. 3 Whether or not such a new cause of action can, in this Court, be pleaded by amendment without a new application being filed is the subject of some uncertainty. The traditional position, as expressed in Eshelby v Federated European Bank Ltd [1932] 1 KB 254, was that a new cause of action could not be pleaded if the facts giving rise to that cause of action did not exist at the date the writ was issued. That was a corollary of the rule that a proceeding could not be commenced in respect of a cause of action which had not accrued. 4 The Federal Court Rules ("the rules"), in dealing with pleadings, provide in O 11 r 7: "A party may plead a new matter which has arisen since the commencement of the proceeding." 5 The rules further provide in O 13 r 2(1): "Subject to the following provisions of this rule, 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." 6 Order 13 r 2(7) provides: "An amendment may be made notwithstanding that the effect of the amendment will be to add or substitute a new claim for relief or another foundation in law for a claim for relief if the new claim for relief or foundation in law for that claim arises out of the same facts or substantially the same facts as those already pleaded to support existing claims for relief by the party applying for leave to make the amendment." 7 The rules differ in this regard from the Rules of the Supreme Court of Victoria. Order 36 r 1(3) of those rules provides: "An indorsement of claim or pleading may be amended under paragraph (1) notwithstanding that the effect is to add or substitute a cause of action arising after the commencement of the proceeding." 8 It is clear that in Victoria the effect of O 36 r 1(3) is that the old rule of procedure whereby the entire cause of action must have arisen before the date of the writ has been superseded. It has also been superseded in the Northern Territory and in Queensland. 9 The position is different in New South Wales, where Pt 15 r 16 of the Supreme Court Rules provides: "A party may plead any matter notwithstanding that the matter has arisen after the commencement of the proceedings." 10 In Baldry v Jackson (1976) 2 NSWLR 415 the New South Wales Court of Appeal decided that the word "matter" in Pt 15 r 16 did not include a cause or causes of action. In King v Milpurrurru (1996) 66 FCR 474 at 481 Jenkinson J, as a member of a Full Court, assumed, without deciding, that O 11 r 7 of the Federal Court Rules likewise did not include a cause or causes of action. Similarly, in Lidden v Composite Buyers Ltd (1996) 139 ALR 549 Finn J at 554 was prepared to accept that O 11 r 7 of the Federal Court Rules should be given the limited construction given to its New South Wales counterpart in Baldry v Jackson (supra). His Honour noted, however, that s 33K of the Federal Court of Australia Act 1976 (Cth) (which deals with representative proceedings) might provide an indication that a wider view should be taken of the operation of O 11 r 7. 11 The applicant in its statement of claim, as presently formulated, already amended once as of right, and once previously with leave, contends that the first respondent has sold to consumers domestic whitegoods under the Whirlpool mark. It is said to have thereby represented, inter alia, that those whitegoods comply with, and are sold in compliance with, all relevant legislation and Australian standards, and that they are of a standard and quality approved by the applicant. The applicant also contends that the first respondent has represented to the first respondent's customers that the goods sold were acquired from the applicant by the first respondent for supply by it to its customers. The applicant then pleads that the goods do not accord with these representations. The plain implication of this pleading is that the first respondent is selling whitegoods marked as Whirlpool whitegoods which were not manufactured by or for the applicant, and which do not meet the relevant legislative and other regulatory requirements. 12 The unusual twist to this application is that the applicant now seeks leave to amend its statement of claim yet again, this time to allege that sometime on or about 18 May 1999, or perhaps a little earlier, the first respondent commenced a practice of labelling its Whirlpool‑marked whitegoods as "second‑hand". It is implied that by doing so, the respondent gained the advantage of complying with a different, and less onerous, regulatory standard which applies to second‑hand goods when, in truth, the goods are not second‑hand, but "seconds". 13 The respondents submit that this is, in effect, a new cause of action and cannot be the subject of an amendment to the original pleading as proposed by the applicant. It requires, rather, a fresh application to be brought. 14 The applicant submits that O 13 r 2, and O 13 r 2(7) of the rules, in particular, dealing with amendments, permit the new claim to be presented even if the facts upon which that claim is grounded did not come into existence until after the original application was filed in this Court. 15 In my view, O 11 r 7 should be construed in the manner which found favour with Finn J in Lidden v Composite Buyers Ltd (supra), and arguably also with Jenkinson J in King v Milpurrurru (supra). 16 The new claim arises from facts which were not in existence, so it is alleged, at the date of the original application. That date was 3 May 1999. Absent consent to the proposed amendment, which is not forthcoming, the new claim requires a new application to be filed in order to enable it to be pleaded. That new application may, of course, be filed forthwith together with an accompanying statement of claim. 17 There remains the question of what is to be done with the dates previously set aside for the hearing of this application. The view which I have taken is that those dates must be vacated so that the respondent may prepare itself adequately to meet the new case which is now proposed. The applicant should be afforded the opportunity, however, to pursue its original application for interlocutory relief against the respondent at the earliest practicable date. In my opinion, both the applicant and the respondent should be in a position to deal with this matter on an interlocutory basis by the date originally fixed for it to be dealt with as a final hearing. 18 It is regrettable that the three days which have been set aside for this matter to be dealt with are now no longer available for that purpose a final hearing. It seems to me that the justice of the case requires that I vacate the original orders made and replace them with orders that the matter proceed as an interlocutory hearing on one or more of those dates. I will hear the parties further as to any consequential orders. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. Associate: Dated: 16 June 1999 Counsel for the Applicant: Mr A Ryan Solicitor for the Applicant: Freehill Hollingdale & Page Counsel for the Respondent: Ms JE Richards Solicitor for the Respondent: Henty Jepson & Kelly Date of Hearing: 16 June 1999 Date of Judgment: 16 June 1999