New South Wales Supreme Court CITATION : MARONIS HOLDINGS LTD & ANOR v. NIPPON CREDIT AUSTRALIA LTD & ORS [2000] NSWSC 507 CURRENT JURISDICTION: EQUITY FILE NUMBER(S) : SC 1946/94 HEARING DATE(S) : 22/05/2000 JUDGMENT DATE : 9 June 2000 Maronis Holdings Limited (First Plaintiff) Girvan Corporation (New Zealand) Ltd (In Liq.) (Second Plaintiff) Nippon Credit Australia Ltd (First Defendant) PARTIES : Paul Francis Petersen (Second Defendant) Warren Alexander Duncan (Third Defendant, Fifth Cross-claimant) Alan Raymond Ambler (Fourth Defendant, Fourth Cross-claimant) Brian Wilson & 46 Ors t/as Clayton Utz (Seventh Defendant, Third Cross-claimant) John Spencer Boscawen (Cross-defendant) JUDGMENT OF : Bryson J at 1 J.E. Marshall for Plaintiffs COUNSEL : P. Durack for Seventh Defendant W. Muddle for Cross-defendant Henry Davis York for Plaintiff Minter Ellison for Third Cross-claimant SOLICITORS : Thompson Eslick for Fourth Cross-claimant Peter Hopkins for Fifth Cross-claimant Deacons Graham & James for Cross-defendant CATCHWORDS : PRACTICE AND PROCEDURE - service outside of Australia - application to set aside service under Pt 10 r 6A - cross-claim for contribution in tort claim - breach of duty of company officer - discretion to set aside - appearance filed by cross-defendant - circumstances affecting capacity of cross-defendant to defend claims - PRACTICE AND PROCEDURE - notice of appearance filed by cross-defendant served outside Australia - whether submitting defendant - whether right to apply to set aside service waived - PRACTICE AND PROCEDURE - whether joinder of cross-defendant afforded double protection to cross-claimant - PRIVATE INTERNATIONAL LAW - jurisdictional nexus - acts and omissions of company officer in New Zealand - transactions entered into by company in Australia - LIMITATION OF ACTIONS - whether joinder of party as cross-defendant in tort claim statute barred - accrual of cause action in negligence where contingent liability under mortgage - TORT - effect of release on co-sureties - co-ordinate liability - construction of document of general release Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5 LEGISLATION CITED : Limitation Act 1969 (NSW) ss 14, 26, 74 Supreme Court Rules 1970 (NSW) Pt 7 r 5, Pt 10 rr 1A, 6A, Pt 11 r 8, Form 13A Trade Practices Act 1974 (Cth) ss 52, 82 Allison v. KPMG Peat Marwick [2000] 1 NZLR 560 Astley v. Austrust Ltd (1999) 73 ALJR 403 Brooks . New Zealand Garden Trust [1994] 2 NZLR 134 Christopoulos v. Angelos (1996) 41 NSWLR 700Daniels v. Anderson (1995) 37 NSWLR 438 Esanda Finance Corp Ltd v. Wordplex Information Systems Ltd (1990) 19 NSWLR 146 Forster v. Outred & Co [1982] 1 WLR 86 Gye v. Davies (1995) 37 NSWLR 421 Hyde v. Agar (1998) 45 NSWLR 487 CASES CITED : Kenny & Good Pty Ltd v. MGICA (1992) Ltd (1999) 73 ALJR 901 McKain v. R W Miller & Co (South Australia) Pty Ltd (1991) 174 CLR 1 News Corporation Ltd v. Lenfest Communications Inc (1996) 40 NSWLR 250 Official Trustee in Bankruptcy v. Citibank Savings Ltd (1995) 38 NSWLR 116 Registrar General v. Cleaver (1996) 41 NSWLR 713 Tanna v. Deutsche Bank (Asia AG) (unreported, SC(NSW), Hodgson J, 5 September 1996) Thompson v. Australian Capital Television Pty Ltd (1996) 186 CLR 574 Voth v. Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 Wardley Australia Ltd v. Western Australia (1992) 175 CLR 514 Wood v. Wood (1997) 149 ALR 301 DECISION : Service of cross-claims set aside. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRYSON J. FRIDAY 9 JUNE 2000 1946/94 MARONIS HOLDINGS LIMITED & ANOR v. NIPPON CREDIT AUSTRALIA LIMITED & ORS JUDGMENT 1 HIS HONOUR: By Notice of Motion of 5 May 2000 Mr John Spencer Boscawen sought orders under Pt 10 r 6A of the Supreme Court Rules setting aside the Third, Fourth and Fifth Cross-claims. Other claims in the Notice of Motion were not pursued. In the Third Cross-claim the seventh defendants, partners of the law firm Clayton Utz, made claims against Messrs Duncan, Ambler, Petersen, Boscawen and Nippon Credit Australia Ltd, alleging that Clayton Utz are entitled in Equity or under s 5 of the Law Reform Miscellaneous Provisions Act 1946 (NSW) to contribution from them, and claimed contribution amounting to a complete indemnity against any liability of Clayton Utz to the plaintiffs. The allegations against the cross-defendants other than Mr Boscawen are largely based on allegations made earlier in the pleadings against the same persons as defendants. 2 I made an order on 1 March 2000 which gave each of these cross-claimants leave to file a cross-claim, and directed that Mr Boscawen be given notice in accordance with Pt 10 r 2A and Form 13A. These orders did not give leave to serve the cross-claims outside Australia; under the Rules and in the circumstances, such leave was not required, and the direction to give notice in accordance with Pt 10 r 2A did no more than repeat the requirements of that Rule. 3 Clayton Utz alleged against Mr Boscawen that at the material times he was a director of the plaintiff Maronis and secretary of the plaintiff Girvan Corporation (New Zealand) Ltd, and that he was the chief financial officer of GNZ and the executive responsible for the day to day running of the affairs of the New Zealand companies in the Girvan Group including the plaintiff. It is alleged that Mr Boscawen owed duties of care to the plaintiffs, in negligence and otherwise, and that he was in breach of those duties by his conduct and omissions relating to entry into the loan, the Facility Agreement, the Cross Roads mortgage and the Joint Guarantee. Extensive particulars of breaches are given. Claims in the Third Cross-claim for contribution towards liability in tort are based on alleged concurrent torts, and not on joint torts committed by Mr Boscawen jointly with the members of Clayton Utz. The allegations relate to conduct and omissions which occurred while Mr Boscawen was in New Zealand engaged in conduct of the affairs of the plaintiffs principally in their Auckland office. The claims of the plaintiffs relate to transactions which were entered into in Sydney and to land owned by Maronis situated in New South Wales. 4 In the Amended Fourth Cross-claim Mr Ambler and in the Fifth Cross-claim Mr Duncan also claim indemnity or contribution against Mr Boscawen. Mr Ambler and Mr Duncan were officers of companies in the Girvan Group. 5 Part 10 r 1A of the Supreme Court Rules authorises originating process to be served outside Australia in a number of cases which are there stated, including "(f) where the proceedings are for contribution or indemnity in respect of a liability enforceable by proceedings in the court". These cross-claims clearly fall within case (f). Part 10 r 6A makes provision for setting aside service outside Australia in these terms: 6A(1) The Court may make an order of a kind referred to in Part 11 rule 8 (which relates to setting aside etc originating process) on application by a person on whom an originating process is served outside Australia. (2) Without limiting subrule (1), the Court may make an order under this rule on the ground - (a) that the service of the originating process is not authorised by these rules; or (b) that this Court is an inappropriate forum for the trial of the proceedings. 6 It will be seen that the grounds on which the Court may act under r 6A are not limited to the two grounds mentioned in subr (2). 7 Part 11 r 8 is in these terms: 8(1) The Court may, on application made by a defendant to any originating process on notice of motion filed within the time fixed by subrule (2), by order - (a) set aside the originating process; (b) set aside the service of the originating process on the defendant; (c) declare that the originating process has not been duly served on the defendant; (d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State; (e) discharge any order extending the validity for service of the originating process; (f) protect or release - (i) property seized, or threatened with seizure, in the proceedings; or (ii) property subject to an order restraining its disposition or disposal or in relating to which such an order is sought. (g) declare that the Court has no jurisdiction over the defendant in respect of the subject matter of the proceedings; (h) decline in its discretion to exercise its jurisdiction in the proceedings; (j) grant such other relief as it thinks appropriate. (2) Notice of a motion under subrule (1) - (a) may be filed without entering an appearance; (b) shall bear a note "The defendant's address for service is" and state the address; (c) shall be filed within the time limited for entering an appearance. (3) The making of an application under subrule (1) shall not be treated as a voluntary submission to the jurisdiction of the Court. 8 Part 10 r 6A refers to Pt 11 r 8 for the purpose only of identifying kinds of orders which may be made. Provisions of Pt 11 r 8 requiring the application to be made within a limited time and enabling a conditional appearance to be entered are not adopted for an application under Pt 10 r 6A to set aside service outside Australia. Counsel for Clayton Utz contended that it was significant that the application was not made within 28 days after service and referred to the time limited by Pt 7 r 5(1)(b)(iii) applicable under Pt 11 r 8(1)(c). However, this has no application to Pt 10 r 6A. In any event it is plain that the prescription of time for application is directory, and that an application under Pt 11 r 8 will not necessarily fail if it is made out of time. 9 Before Mr Boscawen's Notice of Motion was filed an appearance was entered on his behalf, on or about 4 April 2000, in each cross-claim. It was contended against him that by entering these appearances he had voluntary submitted to the jurisdiction of this Court; and for that reason he is precluded from making an application under Pt 10 r 6A to set aside service outside Australia. As Mr Boscawen has entered appearances he has submitted to the jurisdiction of this Court for the purpose of recognition of the effectiveness of any judgment by the courts of another place which has private international law like ours. If he had applied under Pt 11 r 8 that rule gave him the opportunity so to apply without entering an appearance; the effect of so doing as a voluntary submission to the jurisdiction of this court is a question for the law of whatever other place may ever be asked to recognise any judgment. 10 Part 11 r 8 does not oblige a person applying under that rule to proceed without entering an appearance under subr 8(2), and the procedure under that rule is not applicable to this application. In my opinion the fact that a person applying under Pt 10 r 6A has submitted to the jurisdiction of the court by filing an appearance is a relevant factor within the ambit of discretion under the rule, but is not conclusive and does not exclude the discretionary power. Submission to the jurisdiction of the Court is not conclusive because no provision of Pt 10 r 6A or elsewhere in Pt 10 makes it conclusive. The fact that it is not conclusive is illustrated by the terms of para (h) in Pt 11 r 8(1), which is incorporated in Pt 10 r 6A, and shows that the Court may have jurisdiction and decline in its discretion to exercise it. The fact that Mr Boscawen has filed an appearance and in that way submitted to the jurisdiction cannot in principle prevent him from asking the Court to exercise its jurisdiction, including its jurisdiction to set aside service of the originating process. There is no inconsistency between accepting that the Court has jurisdiction and asking the Court to set aside service of the process, and there cannot be any question of waiving the second by electing the first. In a previous state of the law setting aside service was a recognition that there was no jurisdiction. The discretionary element in the present rule is an indication of a far-reaching shift in the law, as there could be no discretion about giving effect to a proved lack of jurisdiction. Mr Boscawen has shown readiness to participate in the proceedings if he has to, but his readiness appears to me to be of very little weight for a decision whether the Court will set aside its own process. 11 Counsel for Clayton Utz referred me to much case law which exemplified the Supreme Court practice at other times and other regimes of court rules and attempted to make good the position which it was necessary for him to show, that to set aside originating process under Pt 10 r 6A is not an exercise of jurisdiction. Counsel contended that once a foreign defendant submits to the jurisdiction of the Court that is the end of jurisdictional issues. Reference was made to the judgment of Giles CJ (Comm Div) in News Corporation Ltd v. Lenfest Communications Inc (1996) 40 NSWLR 250 at 254, particularly the passage "A plaintiff need not obtain prior leave before serving originating process on a defendant outside Australia. If the defendant files a notice of appearance, he waives any objection to the jurisdiction of the Court and any irregularities in the manner of the commencement of the proceedings or the service of the originating process." 12 Counsel submitted that the present application to set aside service is a challenge to jurisdiction. I do not accept this submission. Mr Boscawen has not invoked Pt 11 r 8 and has not contested the Court's jurisdiction; he has acknowledged jurisdiction and sought its exercise. His application under Pt 10 r 6A does not depend on conformity with Pt 11 r 8 or on making good a challenge to jurisdiction, and relates to a different subject, that of setting aside the Cross-claims and their service. He does not seek to do any of the things which Giles CJ said that a submitting foreign defendant waives; he does not object to the jurisdiction, he does not raise any irregularities in the manner of the commencement of the proceedings and he does not raise any irregularities in the service of the originating process. He seeks a quite different decision, a discretionary decision whether or not the Court will set aside its process. 13 It is part of the scheme of extending jurisdiction in Pt 10 that the Court retains discretionary control over the cases in which it is to exercise its powers; the authorisation of service in Pt 10 r 1A is not the whole of what the rules prescribe on that subject, and that rule and the particular cases set out in it must be understood with the power to set aside service under r 6A. The discretionary control of the Court is just as much a part of the circumstances in which foreign service is authorised as are the cases designated in r 1A. The argument is an argument to bar the Court's powers to control its own process, it needs a clear basis, and in my opinion it has no basis. 14 The Third Cross-claim when served was endorsed with a notice conforming to Form 13A which informed the cross-defendant that the Court may on application set aside service of a cross-claim and "alternatively you may submit to the jurisdiction of the Court by following the prescribed form of unconditional notice of appearance." The notice does not state the full terms or effect of Pt 10 r 6A. In so far as it posits applying to set aside service and submitting to the jurisdiction as alternatives it is not a complete or accurate statement of what the Rules prescribe. When the Rules and the Form are read together the Form is obviously no more than an attempt to give a brief summary of what the cross-defendant may do. The Form and the notice were not intended to qualify or colour the meaning of the rule. 15 No criteria are specified in Pt 10 r 6A(1) so that all the circumstances of the case must be taken into account: see Esanda Finance Corp Ltd v. Wordplex Information Systems Ltd (1990) 19 NSWLR 146 at 154 (Giles J). The discretion is not confined by the words of the Rules, and the merits of the claim are not the only matters relevant: see Hyde v. Agar (1998) 45 NSWLR 487 at 504. The approach which should be taken was recently examined detail in the unanimous judgment of the Court of Appeal in Hyde v. Agar, and I address the exercise of the jurisdiction with that judgment as a guide. 16 In Hyde v. Agar, the Court of Appeal did not decide the significance of filing an appearance. I do not regard the Court as having referred to the "non-submitting defendant" with the intention to state exhaustively a limit for the operation of Pt 10 r 6A in the following passage at 506: Where a plaintiff establishes jurisdiction under r 1A to the requisite standard, there remains a discretion whether leave should be given or, alternatively, service set aside. As stated above, the discretionary phase is separate and distinct: [ Seaconsar Far East Ltd v. Bank Markazi Jonhouri Islami Iran [1994] 1 AC 438]. The question is whether, the plaintiff having passed through the nexus gateway, it is appropriate to grant leave to proceed to trial against the non-resident, non-submitting defendant. 17 The Court of Appeal's reference to the non-submitting defendant can be contrasted with a passage at 501E where the language used is capable of the reading that an application to set aside service is an alternative to a case where the defendant does not enter an appearance. It would be wrong to attribute to either passage an intention of expressing exhaustively a conclusion about the effect of entering an appearance, which was not under debate. By applying to set aside service Mr Boscawen has shown that for the purpose addressed by the Court of Appeal he is a non-submitting defendant. 18 It is relevant to consider whether the cross-claimants have a good arguable case, and to appraise that case: see Hyde v. Agar, at 507F. Mr Boscawen's counsel made submissions on a number of matters which relate to whether there is a good arguable case. I will appraise these matters, while bearing in mind that the merits of the case do not have much role to play in the exercise of the court's discretion if a good arguable case is shown. 19 The appropriateness or inappropriateness of the local forum for hearing the cross-claim may be a basis for the exercise of the discretion, but the principles of forum non conveniens stated in Voth v. Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 should not be undermined by the use of this discretion: see Hyde v. Agar, at 510D-G. The present application was not based on a contention that this Court is an inappropriate forum to try the contribution claim. The test established by Voth requires that this Court should be a clearly inappropriate forum for the determination of the dispute, and could not have been satisfied in this case. 20 In relation to location, I have regard to the propositions relating to location of a tort which the Court of Appeal derived from Voth and stated at 514: The principles are set out in Voth (at 566-568). From that passage we derive the propositions that: (a) the search is for the place where in substance the cause of action arose, by determining in a commonsense way the place of the act on the part of the defendant which gives the plaintiff the cause of complaint (at 567); (b) in relation to omissions, the inquiry is to determine the place of the act or acts of the defendant in the context of which the omission assumes significance (at 567); (c) the focus of attention is some act of the defendant, and not its consequences (at 567); (d) if the place of the happening of damage might have been quite fortuitous it is unlikely to be a pointer to the place of the tort (at 567-568). 21 In the application of these propositions, particularly (b) and (c), I am of the view that the location of the tort alleged against Mr Boscawen was at Auckland, New Zealand. The same conclusion should be reached for the location of any other breach of duty. 22 Mr Boscawen's counsel contended as a discretionary consideration that there is at least a strongly arguable case that the claim by Clayton Utz for contribution to damages in tort is statute barred. The claim for contribution was pleaded under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). To my mind it is for consideration whether a claim would lie under that legislation on the assumption that there were concurrent torts one of which was in New South Wales and the other in New Zealand. I see at least three dimensions of consideration. One is the meaning and effect of the New South Wales legislation and the question whether, on its true construction, it was intended to extend to torts outside New South Wales concurrent with torts within the State. The second is the constitutional reach of New South Wales legislative power. The third is the application of private international law as considered in McKain v. R W Miller & Co (South Australia) Pty Ltd (1991) 174 CLR 1, which would require the cross-defendant did not have a defence or exemption from liability under the law of New Zealand. 23 The Limitation Act 1969 (NSW) s 26(1)(b), read with s 14(1)(b), gives an effective limitation period of ten years from the accrual of the plaintiffs' cause of action against the cross-claimants. See too subs 26(3). The analysis presented by Mr Boscawen's counsel was to the effect that if Clayton Utz are liable to the plaintiffs in tort, damage occurred when the plaintiffs joined in giving a guarantee and Maronis gave a mortgage over its property to support borrowings by the principal borrower Girvan Australia. The documents were given and the loan was drawn down on 1 June 1989. It was contended that each plaintiff incurred damage, the gist of the action of negligence, on the happening of those events and that it was open to the plaintiffs had they wished to do so to bring an action forthwith, on the following day or at any time thereafter. It was contended that this is no less so because, as time passed, the loss increased. It was contended that there was loss to the plaintiffs to some extent from first incurring obligations under the guarantee and mortgage, illustrated by the need to bring contingent liability into account in annual accounts and the implication of doing so on each company's financial position, and to Maronis by diminution in value of its land with registration of the mortgage. Counsel pointed to expressions in records of the plaintiffs which suggest that officers perceived the mortgage and guarantee as disadvantageous from a very early time after they were executed. They were referred to in the note to the accounts for the financial year 1988/89, and were the subject of inquiry by a secured creditor in December 1989. Counsel further pointed out that a demand (Ex AB) was made against the plaintiffs on 14 February 1990 after the appointment on 31 January 1990 by the secured creditor of a receiver of the principal debtor. These events occurred more than 10 years before the commencement of the first of these cross-claims on 4 March 2000. 24 In response counsel for Clayton Utz referred to the treatment of the time of accrual of a cause of action in the judgment of Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Ltd v. Western Australia (1992) 175 CLR 514 at 533ff. The decision in Wardley related to accrual of a cause of action under provisions of the Trade Practices Act 1974 (Cth), not to the tort of negligence. It is a question of statutory construction what facts and events constitute the cause of action and with what facts and events the cause of action accrues, and this requires scrutiny of the provisions of the statute with respect to remedy. 25 Counsel for Clayton Utz contended that damage in respect of the contingent liability incurred by entering into the securities did not first accrue until the contingency was fulfilled. This proposition was based upon the holding in Wardley at 533. In that case the plaintiffs sued under s 82(1) of the Trade Practices Act for loss or damage suffered by misleading and deceptive conduct in contravention of s 52(1). Section 82 confers a right to recover the amount of loss or damage in terms which do not create a time bar but make authorisation to commence an action within the stated time part of the terms on which that right in conferred. In this respect it operates differently to the law of negligence and the Limitation Act. 26 In the leading judgment the passage relied on is as follows: The conclusion which we have reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or liability accords with the comment of Gaudron J in Hawkins v. Clayton (1988) 164 CLR at p 601: [I]f the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible. Gaudron J went on to point out ibid, at p 602: It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability. The conclusion which we have reached is reinforced by the general consideration to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate consequences which would follow from an adoption of the view for which the appellants contend outweigh the strength of the argument that the principle applicable to the cases in which the plaintiff acquires property (or a chose in action) should be extended to cases where an agreement subjects the plaintiff to a contingent loss. In such cases, it is fair and sensible to say that the plaintiff does not incur loss until the contingency is fulfilled. 27 This passage follows discussion under the heading "The concept of loss or damage in the context of misrepresentation", at 527-33, and should be understood within this context. In relation to the claims of the plaintiffs I am of the view that notwithstanding the authority with which their Honours spoke, the effect of relying on the Limitation Act as contended for is not established in concept or in detail by their Honours' conclusions. In my reading their Honours did not express disapproval of the remarks of Dunn LJ in Forster v. Outred & Co [1982] 1 WLR 86 at 89 which their Honours cited at 529. They made this observation regarding the basis on which that decision was explicable, and the observation is not inconsistent with approval: "The decision in Forster v. Outred & Co is explicable by reference to the immediate effect of the execution of the mortgage on the value of the plaintiffs' equity of redemption, an aspect of the case to which Dunn LJ attached particular importance." Lord Justices Dunn, at 100, and Stephenson, at 98, regarded executing the mortgage as reducing the value of the mortgagor's interest in the property. It may be that the significance of these elements depends on an actual showing of reduction in value flowing from registration of a mortgage to secure a contingent liability where the contingency has not yet happened. Their Honours' observations, at 175 CLR 533, on the practical consequence of the alternate views of the accrual date where an agreement subjects plaintiff to a contingent loss may have been intended to refer generally to tort claims, but they were directed to the meaning and effect of s 82(1) of the Trade Practices Act. 28 In Kenny & Good Pty Ltd v. MGICA (1992) Ltd (1999) 73 ALJR 901 at 918, [85]-[86], Gummow J made an observation which appears to indicate openness to review of accrual dates in relation to the facts of particular cases. Of the observation in Wardley at 527 that "[t]he kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected", his Honour said "[t]hese propositions apply with equal force to the tort of negligence and to this case". Justice Gummow's observation favours close examination of particular facts rather than generalisation. 29 It is also necessary to consider views expressed by the Court of Appeal in another statutory context in Christopolous v. Angelos (1996) 41 NSWLR 700 and Registrar General v. Cleaver (1996) 41 NSWLR 713 and the decisions at first instance of Wood v. Wood (1997) 149 ALR 301 (Tamberlin J) and Tanna v. Deutsche Bank (Asia AG) (unreported, SC(NSW), Hodgson J, 5 September 1996). In Tanna, at 40, Hodgson J distinguished Forster v. Outred. As the relevant mortgage in Tanna replaced previously existing mortgages I would think that it could not have had any adverse impact on value. 30 Counsel on both sides of these proceedings put forward a number of possible events which might satisfy the test in Wardley; Mr Boscawen's counsel referred to registration of the mortgage, its impact on value, obtaining legal advice about it (which would have to be paid for), the impact of the contingent liability on the accounts of the plaintiffs and consequent possible adverse impacts on their affairs including their capacity to borrow, and events in January 1990 when there was a default by Girvan Australia, a Receiver was appointed and the plaintiffs were notified of this. Notice of the appointment of the Receiver was given by correspondence dated 14 February 1990 (Ex AB). There were later notices expressly calling in money dated 18 April 1990. Correspondence in Ex AC shows that possible adverse outcomes of the guarantees were the subject of concern, consideration and legal advice on the part of the plaintiffs before 4 March 1990. Clayton Utz's counsel pointed to later events at which he said the contingency of loss was fulfilled, the latest being the sale of the security property in 1998. There was a further contention which I understood to be to the effect that no loss had accrued to Maronis if, as it claims, the mortgage was in fact held on trust for it. 31 The outcome of the prospective limitation question cannot be seen in a sufficiently clear way to justify its being treated as a discretionary element in favour of setting aside service of the cross-claim. 32 If Mr Boscawen established a defence under s 26(1)(b) of the Limitation Act he would not thereby defeat all the grounds upon which cross-claimants' claims are prima facie supportable. There are claims on equitable principles that the cross-claimants and cross-defendant have come under a common liability as a result of breaches of fiduciary duties arising from their various relationships with the plaintiffs; there does not appear to be any statutory limitation period for those claims and in an attempt to apply the Limitation Act by analogy the time at which potential liability could be taken to have come home to a claimant by enforcement would be worthy of consideration as the accrual date. 33 Mr Boscawen's counsel also put forward as a discretionary consideration that the cross-claimants when applying ex parte for leave to file cross-claims did not make full disclosure appropriate to such applications. The basis of this was that at the time of the application the potential limitation problems were not referred to. In my opinion the applicants were doing no more than seeking to overcome provisions in the Rules of Court which limit the time to file cross-claims and came under no obligation to review fully for my information what potential defences there were, whether Limitation Act defences or otherwise. The applications related only to leave to file cross-claims out of time, and if I had adverted to the possibility of a serious limitation problem that would not have deflected me from extending time, because the cross-defendant's opportunity to rely on that defence is not affected by grant of leave: see Limitation Act s 74. 34 A further matter which was said to be relevant to the exercise of discretion is the effect of a release which Mr Boscawen alleges was given to him on 19 September 1990, and purportedly executed for GNZ by Mr Currie who then held office as its Executive Chairman. It was said that it is an arguable contention as a matter of construction that the release, according to its terms a general release by GNZ, was also a release by Maronis. That contention is not borne out in any way by its terms, or by any other evidence which might affect its construction, and on the evidence now before me I see no prospect that the release might protect Mr Boscawen from claims by Maronis. It could well afford him protection against claims by GNZ, but this depends on further evidence to be adduced on the actual or ostensible authority of Mr Currie to make such an arrangement and, I should add as the facts were not conceded, whether Mr Currie indeed did make the arrangement and whether the document is authentic. It also seems possible that some evidence of the circumstances in which the arrangement was made may lead to a restriction of the prima facie unlimited release granted by its terms. 35 Mr Boscawen's counsel built a structure of argument on this document to the effect that under the law of New Zealand liability of a tortfeasor to make contribution is extinguished if a concurrent tortfeasor obtains a release from the plaintiff. This argument depends on accepting that the document of 19 September 1990 operates as a release, which proposition has difficulties mentioned above. Counsel referred to Brooks v. NZ Garden Trust Co [1994] 2 NZLR 134 at 138, 140 and Allison v. KPMG Peat Marwick [2000] 1 NZLR 560 at 597, 599, 604. Those decisions establish for New Zealand a rule different to that established for Australia by Thompson v. Australian Capital Television Pty Ltd (1996) 186 CLR 574. In New Zealand the release of one joint tortfeasor releases all joint tortfeasors. However, the New Zealand rule relates to only joint tortfeasors, not concurrent tortfeasors. In Allison v. KPMG (at 597) Tipping J stated that it is "… long-established, settled and sound principle that a release of one concurrent tortfeasor does not release another concurrent tortfeasor …". It was also contended that an effect of the release is that Mr Boscawen no longer has a co-ordinate liability and that there is no basis to activate the equity of contribution among persons subject to a co-ordinate liability; counsel referred to Official Trustee in Bankruptcy v. Citibank Savings Ltd (1995) 38 NSWLR 116 at 119-24ff and to Gye v. Davies (1995) 37 NSWLR 421 at 427. Again this structure depends on the effect of the release, which cannot be clearly seen. 36 A further matter put forward for consideration by Mr Boscawen's counsel relates only to the Third Cross-claim. It was contended to the effect that damages recoverable in tort by the plaintiffs against the Third Cross-claimants would be reduced having regard to contributory negligence and that the conduct of Mr Boscawen as an officer of the plaintiffs should and would be treated as contributory negligence of the plaintiffs, and would operate to reduce their recovery against the Third Cross-claimant. It was then said that it is most unlikely that an award of contribution would be made against Mr Boscawen in favour of the Third Cross-claimant because any findings made against him would be attributed to the plaintiffs and would go in reduction of the primary award, so that also to allow contribution against Mr Boscawen would give double protection. It was said that this effect was contemplated by the Court of Appeal in Daniels v. Anderson (1995) 37 NSWLR 438 at 578-80. 37 A decision on what contribution is just and equitable must be based on what in detail are eventually found to be contributory negligence of plaintiffs and concurrent torts of Clayton Utz and Mr Boscawen. I do not think that the outcome for which counsel contended could be regarded as certain. In my view it is unlikely, having regard to the decision of the High Court in Astley v. Austrust Ltd (1999) 73 ALJR 403, that there would be a reduction for contributory negligence if the plaintiffs were to succeed against Clayton Utz; the likely outcome would be that Clayton Utz would be found liable both in contract and in tort, and would not be entitled to a reduction for any contributory negligence. 38 The Amended Fourth Cross-claim brought by Mr Ambler and the Fifth Cross-claim brought by Mr Duncan are not based on the same grounds as the Third Cross-claim. They have been sued for the tort of deceit, and for alleged breaches of fiduciary duty, and do not plead contributory negligence. Submissions by Clayton Utz's counsel relating to concurrent tort liability do not arise. Mr McGrath, solicitor, representing the Fourth Cross-claimant took as his primary position the contention that Mr Boscawen cannot bring the present application after filing an appearance. He also presented an argument in detail about the effect of the release document. He referred to observations of Kitto J in Albion Insurance v. Government Insurance Office (1969) 121 CLR 342 at 350 relating to the basis in natural justice of contribution where there are co-ordinate liabilities, and contended that it would not accord with natural justice to allow a generally worded release of one co-surety to defeat contribution by others. He also made observations pointing to characteristics in which the claim against Mr Boscawen is related to New South Wales. Mr Hopkins, solicitor, representing Mr Duncan did not present a separate argument. 39 Mr Boscawen did not put in issue on this application any matter of detail relating to the merits of his own conduct and involvement in the transaction. However, counsel put forward considerations relating to Mr Boscawen's personal circumstances. Mr Boscawen is now, and was at the time of the events a resident of New Zealand, and the events occurred in the course of his holding office in New Zealand companies. Counsel observed that if Pt 10 r 1A(f) is within State legislative power, it is at the tenuous end of the spectrum of power. While it was not submitted and I do not hold that r 1A(f) is beyond the legislative power of the State, I do regard its operation as, in counsel's words, at the tenuous end of the spectrum of power when it operates with an alleged liability to make contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act in relation to concurrent torts, one committed within New South Wales and the other in New Zealand. The claim of jurisdiction made to support the proceedings against Mr Boscawen does appear to me to be an extreme one, although, in the amplitude of legislative power, I have not been asked to hold that it was excessive. As counsel pointed out, Mr Boscawen is brought to litigate in New South Wales ultimately because the plaintiffs which are themselves New Zealand companies have come to New South Wales and sued persons here over events and land titles which were located in New South Wales, and Mr Boscawen is alleged to have been in breach of duties to those companies by acts and omissions in New Zealand concurrent with the events in which they sue. Counsel submitted that there is no obvious connection between the transaction in which he took place which is the subject matter of the proceedings against him, and New South Wales and its territory. In my view there is a connection but it is a tenuous connection. 40 Mr Boscawen's personal circumstances were narrated in his affidavit. He operates a shopping centre which is going through troubled times and requires his personal attendance to its management. Counsel contended, in my view obviously correctly, that an absence of some months for a trial in New South Wales would be highly prejudicial to his economic position. Mr Boscawen also has personal family obligations for the care of his elderly parents. If he is involved in the hearing of these proceedings, which can be expected to take in the order of 8 or 10 weeks, his attendance in Australia will be required for most if not all of the period of the trial and extensive period of preparation beforehand. He will not be concerned in much of what takes place at the hearing. This will bear very heavily on a person who lives in New Zealand, as he will find it difficult to attend to his personal affairs while in Australia, with a degree of difficulty much greater than would be experienced by litigants whose homes are here. The hearing will be very long and very expensive. Adding him as a party will give the hearing an additional dimension of complexity; it is already extremely complex, and management of the hearing with procedural justice will be difficult. Much time will be spent on issues which do not involve him, or do so indirectly, yet his attention and that of his legal representatives must always be maintained. The burden of prejudice upon him of involvement in the litigation and its extended hearing is severe. He is available in New Zealand to be sued for contribution there if any party wishes to pursue him there. The litigation here was on foot for well over five years before he was involved in it as a cross-defendant. 41 Mr Boscawen's joinder came after he made affidavits in support of the plaintiffs which identified him as a witness on whom the plaintiffs rely, followed after an interval of several years by other litigants joining him as a party, on bases which had been available from the first in 1994, but were not brought forward until after he was identified as a witness and when the hearing was approaching. These events to my mind wear a very unfortunate appearance; the appearance is that he was left out of the litigation for years and he appeared to be a relatively minor figure in the litigation, a company secretary and officer of subsidiary companies, but then he was joined when he was identified as a witness, and after a period of deliberation. The sources of prejudice to Clayton Utz's position associated with requiring that any contribution claim be brought against him in New Zealand referred to were: there would have to be separate proceedings in New Zealand; the parties would not be bound by findings in these proceedings and Clayton Utz would be faced with the need to prove that they were liable to the plaintiffs; and Clayton Utz would risk losing the benefit of the time at which the present cross-claim was filed for the purposes of limitation statutes. 42 The burden to be placed on Mr Boscawen as a litigant is even heavier than the heavy burden imposed on other individual litigants who reside in New South Wales, who are amenable to service within the jurisdiction as of right, and have had longer involvement. The long interval of time, over ten years, between the events and his joinder in the proceedings adds considerably to his burden of prejudice in preparing to meet and in meeting those claims. He cannot be active in two places at once or divide his attention for months at a time, and if he chooses not to be here, but to attend to his other concerns at home, he will be at a disadvantage which other litigants will not bear. None of the advantages or conveniences of deciding the case here will accrue to him. For the court to exercise over him its extended jurisdiction under Pt 10 would be quite oppressive, in my judgment, and the court should not do that. 43 The discretionary circumstances relating to the projected outcome of various issues have served to illustrate some few of the complexities of the litigation, but I would not act on them to grant this application. I act on the ground of the personal circumstances to which I have referred and will grant Mr Boscawen's application. 44 On the Notice of Motion of John Spencer Boscawen, a Cross-defendant, filed 5 May 2000 order: (1) Pursuant to Pt 10 r 6A of the Supreme Court Rules that service of the Third, Fourth and Fifth Cross-claims on John Spencer Boscawen be set aside. (2) Order that the Third, Fourth and Fifth Cross-claimants pay John Spencer Boscawen's costs of the Notice of Motion and of the Cross-claims. Last Modified: 09/26/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.