Supreme Court New South Wales Medium Neutral Citation: Trust Co. Fiduciary Services Ltd v Hassarati (No. 3) [2012] NSWSC 979 Hearing dates: 31 May 2012 Decision date: 24 October 2012 Jurisdiction: Common Law Before: Davies J Decision: On the Plaintiffs' application to amend: (1) Leave to the Plaintiffs to file a Fourth Amended Statement of Claim in the form annexed to the Affidavit of Eliza Joan Birkett with any formal amendments necessary by reason of the filing by the First Defendant of a Fifth Amended First Cross-Claim. The amendment joining Konstan Lawyers will take effect from the date of their joinder; (2) The Fourth Amended Statement of Claim is to filed within 14 days; (3) Any defences to the Fourth Amended Statement of Claim are to be filed within 14 days of service of that Claim; (4) Except as between the Plaintiffs and Konstan Lawyers the Plaintiffs should pay the costs of the remaining parties thrown away by reason of the amendment. (5) As between the Plaintiffs and Konstan Lawyers there should be no order as to costs with the intent that each party should bear its own costs of the application. On the application by George and Jospehine Hassarati: (6) The Motion by the Applicants filed 2 May 2012 is dismissed. (7) The Applicants are to pay the Plaintiffs' costs. (8) As between the Applicants and the other parties there should be no order as to costs to the intent that each party should pay its own costs. Catchwords: PROCEDURE - amendment - leave to amend Statement of Claim to add parties - delay - lack of explanation for delay - whether fatal - proposed defendants already cross-defendants - effect of joinder on limitation period. PROCEDURE - possession proceedings - application by occupiers to be joined - life tenant and remaindermen not registered on title - whether interests prevail over registered mortgagee - effect on limitation period of joinder on potential cross-defendants - s 74 Limitation Act. REAL PROPERTY - Torrens system - indefeasibility - Administrator mortgages estate property -rights of life tenant and remaindermen - rights in personam - constructive notice of interests -unconscionability. LIMITATION OF ACTIONS - when action accrues - loan of funds - claim by lender -whether no-transaction case - nature of interest infringed. PROFESSIONS AND TRADES - lawyers - solicitors - non-contentious business- whether solicitor owes duty of care to other party - representations by solicitor. CONTRACTS - unjust contracts - rights of third parties - third parties not having benefit of contract. Legislation Cited: ACT Supreme Court Rules 2006 Australian Securities And Investments Commission Act 2001 (Cth) Civil Procedure Act 2005 Contracts Review Act 1980 Fair Trading Act 1987 Limitation Act 1969 Real Property Act 1900 Uniform Civil Procedure Rules Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 Argy v Blunts and Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 Australia and New Zealand Banking Group Ltd v P A Wright & Sons Pty Ltd (unreported, Supreme Court of NSW, Giles CJ Comm D - 3 July 1997; BC 9702853) Bahr v Nicolay (No 2) [1988] HCA 16; 164 CLR 604 Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319 Bebonis v Angelos [2003] NSWCA 13; 56 NSWLR 127 Brueckner v The Satellite Group (Ultimo) Pty Ltd & Ors [2002] NSWSC 378 Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd [1971] HCA 9; 124 CLR 73 Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 Eade v Vogiazopoulos [1999] 3 VR 889 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 81 ALJR 1107 Gibbs v Messer [1891] AC 248 Hammond v JP Morgan Trust Australia Ltd [2012] NSWCA 295 Hemmes Hermitage Pty Ltd v Abdurahman (1991) 22 NSWLR 343 Hill v Van Erp (1988) 188 CLR 159 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 53; 217 CLR 640 Kenny & Good Pty Ltd v MGICA [1999] HCA 25; 199 CLR 413 Liff v Peasley [1980] 1 WLR 781 Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 482 McGrath v Campbell [2006] NSWCA 180; 68 NSWLR 229 Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37 Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (in liq) [1999] FCA 1820; 169 ALR 419 Murphy v Overton Investments Pty Ltd [2001] FCA 1725 National Australia Bank Limited v Leon Nikolaidis [2011] NSWSC 506 Nelson v Wyong Shire Council (1989) 68 LGRA 164 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liquidation) [2011] NSWCA 367 Ross v Cook [2009] NSWSC 671 Spina v Conran Associates Pty Ltd; Spina v M & V Endurance Pty Ltd [2008] NSWSC 326; (2008) 13 BPR 25,435 Sullivan v Moody (2001) 207 CLR 562 Trust Co. Fiduciary Services Ltd v Hassarati [2011] NSWSC 577 Winnote Pty Ltd v Page [[2006] NSWCA 287; 68 NSWLR 531 Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505 Wardley Australia Ltd v Western Australia (1992) 172 CLR 514 Westfield Management Ltd v Perpetual Trustee Company Ltd [2007] HCA 45; 233 CLR 528 Texts Cited: Woodman & Nettle, The Torrens System in New South Wales (LBC, 2003) Category: Procedural and other rulings Parties: Trust Company Fiduciary Services Ltd (formerly known as Permanent Trustee Company Ltd) (First Plaintiff) Australia and New Zealand Banking Group Ltd (Second Plaintiff) Alvera Hassarati (First Defendant) Lily Hassarati (Second Defendant) Royal Guardian Mortgage Corporation Pty Ltd (Third Defendant) Anthony Tomazin (Fourth Defendant) CKM (Mortgages) Ltd (Fifth Defendant) John Maait (Cross-Defendant) Joseph Capogreco (Cross-Defendant) Joseph Kotowicz (Cross-Defendant) Simon Konstantinidis (Cross-Defendant) National Australia Bank Ltd (Cross-Defendant) George and Josephine Hassarati (Applicants) Representation: A A Henskens SC & T Fishburn (Plaintiffs) P Cutler (Alvera Hassarati) In person (Lily Hassarati) G Fletcher (Royal Guardian Mortgage Corporation Pty Ltd and Anthony Tomazin) P Barham (CKM (Mortgages) Ltd) P Braham SC & A Munro (Joseph Kotowicz and Simon Konstantinidis) B Connery (Joseph Capogreco) I Griscti (John Maait) P Reynolds (National Australia Bank) B Zipser (George and Josephine Hassarati) Gadens Lawyers (Plaintiffs) Garry Pickering (Alvera Hassarati) In person (Lily Hassarati) Bransgroves Lawyers (Royal Guardian Mortgage Corporation Pty Ltd and Anthony Tomazin) Gibson Howlin Lawyers (CKM (Mortgages) Ltd) HML Ebsworth Lawyers (Joseph Kotowicz and Simon Konstantinidis) Connery Partners (Joseph Capogreco) Middletons (John Maait) Tricia Andres (National Australia Bank) Pericaud Zraika (George and Josephine Hassarati) File Number(s): 2009/295712 Judgment 1This judgment concerns two Notices of Motion. The first is a Motion by the Plaintiffs who seek leave to file a Fourth Amended Statement of Claim. The second Motion is by two persons who are not currently parties to the proceedings, George and Josephine Hassarati. By their Motion they seek to be joined as parties to the proceedings. They seek leave to file a defence to the current form of the Plaintiff's claim being the Further Amended Statement of Claim filed 15 February 2011. They also seek leave to file a cross-claim against Alvera Hassarati. Factual background 2I set out the factual background in my judgment of 20 June 2011 (Trust Co. Fiduciary Services Ltd v Hassarati [2011] NSWSC 577) but, for completeness, I will set out that background again and supplement it with other relevant material. In setting out this background I am not making factual findings. Rather, I am endeavouring to put together what is contained in these pleadings. In that way, the following facts are assumed to be correct if only for the purposes of determining the present applications. 3A man called Said (Sid) Hassarati was the owner of a property at 191 Pennant Hills Road, Thornleigh. He had four children, Tony, George, Joesphine and Raymond. The First Defendant, Alvera Hassarati, was married to Tony. The Second Defendant, Lily Hassarati, was a child of Tony and Alvera. Without intending any disrespect I shall refer to the various members of the Hassarati family by their first names. 4Sid died on 27 December 1976. He appointed Tony to be the executor of his will. He gave to Tony and Josephine a life interest in the Thornleigh land. Upon the expiry or relinquishment of the life interest the land was to be held by Tony (50%), Josephine (25%), and by each of his other two sons George and Raymond (12.5% each). 5Josephine lived at the Thornleigh property. Her life interest was never noted on the title to the land. 6On 15 October 1998 Tony died intestate. On 14 December 2001 Alvera obtained Letters of Administration of Tony's intestate estate. Alvera became registered as the owner of the land on 20 December 2001. John Maait was the solicitor who acted for Alvera in the application for Letters of Administration and in respect of the Transmission Application. 7Sometime in 1998, whether before or after Tony's death is not made clear, George built another house on the land at Thornleigh. He and his wife continue to live in that house. Josephine and Alvera live in the other house on the land. 8 In about February 2002 Lily borrowed approximately $240,000 from the National Australia Bank. The loan was secured by a first registered mortgage over the Thornleigh property. 9In about November 2002 Lily borrowed a further $626,000 from the NAB to purchase a property in Petersham. It seems that the second loan was made collateral to the first loan from the NAB with the result that the second loan was also secured over the Thornleigh property in addition to being secured over the Petersham property being purchased. Both of the NAB loans were guaranteed by Alvera. 10In about November 2003 Lily refinanced both of the NAB loans by borrowing approximately $1,588,000 from CKM (Mortgages) Ltd, the Fifth Defendant. The CKM loan was also used to purchase a shop in Leichhardt. Alvera was the guarantor for this loan from CKM, and the Thornleigh property was again used as part security for it. 11A solicitor called Joseph Capogreco was retained in about November 2003 by Lily to provide independent legal advice to Alvera in order to comply with Solicitors' Rule 45 of the Revised Professional Conduct and Practice Rules 1995. 12In about April or May of 2004 there was a default under the CKM loan. In January 2005 CKM served a s 57(2)(b) notice which does not appear to have been complied with. 13It was in those circumstances that a loan came to be obtained in about July 2005 from the First Plaintiff, Trust Company Fiduciary Services Ltd, then known as Permanent Trustee Company Ltd. The Second Plaintiff was the funder of the mortgage. The monies borrowed from the Plaintiffs were used to pay out the CKM loan with additional funds also being provided. Once again the Thornleigh property was mortgaged as security for the loan from the Plaintiffs. Alvera consulted a solicitor Joseph Kotowicz for some advice in respect of this loan. 14Apparently also in July 2005, a 12.5% share as tenant in common of the land was transferred from Alvera to Lily. It does not seem that Alvera had any beneficial interest in the land. Her beneficial interest would only arise when Josephine dies. At that point the life estate would come to an end and Tony's estate would receive the 50% left to him by Sid. Since Tony died intestate Alvera would share in that estate. The transfer of this 12.5% portion of the land was registered simultaneously with the loan obtained from the Plaintiffs, the subject of the present proceedings. 15On 26 September 2008 caveats were lodged by George and Josephine. George's caveat claimed an interest as a beneficiary of a 1/8 share after the life tenancy terminated in the estate of Sid Hassarati. Josephine's caveat claimed an interest as a life tenant and as a beneficiary of a 1/4 share in Sid's estate. 16In about October 2008 there was default in respect of the loan from the Plaintiffs. There was a failure to comply with a s 57(2)(b) notice served in January 2009, and on 31 July 2009 the Plaintiffs commenced the present proceedings. 17On 6 December 2011 George applied for legal aid to assist him in his application to be joined to the present proceedings. As part of his application he said: The Supreme Court of NSW granted to me on 22 September 2011 Administrator of the Un-administered Estate of Said Hassarati, a copy of the grant is annexed hereto. A copy of the Grant was not in evidence before me. Pleadings and procedural history 18The current form of the Plaintiffs' claim is the Further Amended Statement of Claim filed 15 February 2011. The named Defendants are Alvera Hassarati, Lily Hassarati, Royal Guardian Mortgage Corporation Pty Ltd, Anthony Tomazin and CKM. 19The claim against Alvera and Lily Hassarati is a claim for possession of the land formerly mortgaged to secure the loan and a claim in debt for $1,743,081.45. In the alternative, if the loan agreement and mortgage are held to be void and unenforceable the Plaintiffs claim against Alvera on the basis that by a legal advice certificate she signed on 23 June 2005 she represented that she had obtained legal advice from Joseph Kotowicz, that she understood the obligations she was agreeing to and that she signed the loan agreement and mortgage freely and voluntarily. 20The claim against Royal Guardian is made pursuant to what is called a Mortgage Origination and Management Deed (MOMD) entered into between the Second Plaintiff and Royal Guardian. The claim is dependent upon the Cross-Claim brought by Alvera where she alleges that (inter alia) she had limited ability to communicate orally in English and that certain other events occurred or did not occur at the time the loan facility was entered into. The Plaintiffs in effect say that if those allegations are correct then Royal Guardian breached the terms of MOMD. 21The claim against Mr Tomazin is simply that he guaranteed to the Second Plaintiff the proper performance by Royal Guardian of its obligations under the MOMD. 22The claim against CKM is that the funds advanced by the Plaintiffs were used to pay out the loan from, and discharge the mortgage to, CKM. It is asserted that the Plaintiffs are entitled to be subrogated to the rights of CKM under CKM's mortgage or that if subrogation is not available, that the money advanced by the First Plaintiff to CKM was had and received by CKM for the First Plaintiff's use. 23Alvera has cross-claimed against a number of parties. First she claims against the First Plaintiff in reliance on the Contracts Review Act 1980, of those parts of the Australian Securities And Investments Commission Act 2001 (Cth) concerned with unconscionability and on the basis that the loan to her was unconscionable under the general law. 24Secondly, she claims against Lily on the basis of Lily's acquiring the 12.5% in the interest in the land from Alvera in about 2000. Alvera says that Lily represented to Alvera that Alvera was obliged to transfer the 12.5% share to Lily. Alvera pleads that Lily was not, however, entitled to obtain this interest because the life estates had not come to an end. She then makes reference to the loans obtained by Lily of which she, Alvera, was the guarantor although she received no benefit from them. The claim is a little hard to understand. It appears to be based on the assertion that Lily represented to Alvera that she was entitled to obtain the loans because of the interest she held in the land. 25Thirdly, Alvera claims against John Maait in relation to the way he acted at the time of Tony's death which resulted in Alvera becoming the registered proprietor of the land. Alvera asserts that her title to the land was subject to the life tenancy arising under Sid's will and the interests of other beneficiaries. The claim against Mr Maait seems to be based on the assumption that Alvera was entitled to an interest in the land although subject to the life tenancies. It would appear (as mentioned earlier) that she would have an entitlement in Tony's intestate estate when Josephine died, but that entitlement would be less than an interest in the whole of the land. 26Fourthly, she claims against Joseph Kotowicz who was a solicitor retained by Lily in about July 2005 in relation to the obtaining of the CKM loan. 27Fifthly, she claims against Simon Konstantinidis from Konstan Lawyers who employed Joseph Kotowicz. 28John Maait has brought a cross-claim against a number of parties. First he claims against Lily for failing to inform prospective lenders, when she was endeavouring to borrow money, that Alvera held the property as trustee for the beneficiaries of the estates of Said and Tony Hassarati. (If that is so, Sid's estate must have been completely administered. That, as will be seen, is a significant issue on the application by George and Josephine to be joined to the proceedings.) Mr Maait alleges further that as a result of Lily's failing to inform prospective lenders Alvera entered into the various loan facilities with NAB, CKM and finally the Plaintiff. In that way Lily is said to be a joint tortfeasor. 29Secondly, Mr Maait claims against Joseph Capogreco who acted on behalf of Alvera with respect to the CKM loan. It is alleged that Mr Capogreco did not act in accordance with the Professional Conduct and Practice Rules because of the conflict of interest which existed between Lily and Alvera. 30Finally, Mr Maait claims contribution from Joseph Kotowicz and Simon Konstantinidis in relation to their acting for Alvera in relation to the loan from the Plaintiff. 31By a third cross-claim CKM claims against NAB by reason of having advanced the funds borrowed by Lily to pay out the NAB loan. 32The fourth cross-claim is brought by Mr Capogreco seeking contribution from John Maait, Lily, Joseph Kotowicz and Simon Konstantinidis for the various matters earlier identified. 33In the fifth cross-claim brought by Joseph Kotowicz and Simon Konstantinidis, they seek contribution from Lily, John Maait and Joseph Capogreco for the matters earlier identified. Plaintiff's application 34The Plaintiffs wish to amend their Statement of Claim in two substantive ways. First, the Second Plaintiff wants to amend the existing claim against Royal Guardian and Anthony Tomazin to rely on Lending Guidelines which it says ought to have been followed pursuant to the terms of the MOMD. It wants to allege some further breaches of the MOMD and to assert misleading and deceptive conduct by Royal Guardian in representing that requirements of the Guidelines and the MOMD had been complied with when they had not. 35There is no opposition to this amendment and there is no reason it should not be allowed. 36Secondly, the First Plaintiff wants to join Joseph Kotowicz and Simon Konstantinidis as Sixth and Seventh Defendants respectively. I shall refer to them together as Konstan Lawyers or the "firm". The First Plaintiff wishes to allege a breach of the Fair Trading Act 1987 based upon an Advice Certificate provided by Konstan Lawyers to the First Plaintiff's solicitors before the making of the loan. The Advice Certificate was said to contain representations concerning the giving of independent legal advice and concerning Alvera's understanding of the risks and obligations of signing the mortgage. It is further alleged against the firm that they owed a duty of care to Alvera to provide independent and competent legal advice to her. 37The only party who actively opposed the filing of the Fourth Amended Statement of Claim by the Plaintiffs was Konstan Lawyers. Lily Hassarati was unrepresented and said merely that she was not familiar with it. The proposed pleading does not affect Lily in any way which differs from the previous form of the Statement of Claim. 38Konstan Lawyers oppose the filing of the Fourth Amended Statement of Claim as it affects them on three bases. First, it is said that no explanation has been given for the delay in making the application. In that regard attention is drawn to the fact that the allegations made by Alvera about not being given appropriate advice at the time of the obtaining of the Plaintiffs' loan had been articulated for the first time in Alvera's Cross-Claim of 23 October 2009 when she claimed against Mr Kotowicz (paragraphs 54-65 of her Cross-Claim). 39Secondly, the proposed claim in paragraphs 81 to 83 is said to be problematic in that Konstan Lawyers could not be said to have owed a duty of care to the First Plaintiff. 40Thirdly, it is opposed on the basis that the limitation period is alleged to have expired in July 2011 (six years after the loan was obtained from the Plaintiffs). Konstan Lawyers say that the amendment in that regard cannot be brought within s 65(2) Civil Procedure Act 2005. (1)Delay 41The power to permit amendment is to be found in s 64 Civil Procedure Act. In particular, sub-s 2 provides: Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. 42The affidavit in support of the application to amend contains no explanation about why the application is made at this time nor offers any reasons why it was not brought at an earlier time and particularly not within a short time after Mr Kotowicz was joined to the proceedings in Alvera's cross-claim. 43In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 the joint judgment said this: [102]The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment. [103]The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case. 44Rule 21 of the ACT Supreme Court Rules 2006 referred to in those paragraphs is relevantly the same as s 56 Civil Procedure Act. 45Senior Counsel for the Plaintiff, when asked about the issue of delay and the failure to explain it, pointed only to the procedural history of the matter including the fact that the parties were said to be awaiting the decision from the Court in Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319, and to the various interlocutory applications that were made by other parties in the matter. 46In my view that is no explanation at all. Those matters in no way prevented the Plaintiffs making an appropriate application to amend the Statement of Claim to join Konstan Lawyers once Alvera identified her complaints against that firm. At that time the issue now sought to be claimed against Konstan Lawyers was clearly identified. Alvera alleged that the advice Mr Kotowicz provided that led her to sign the loan and mortgage documents was inadequate for reasons that she particularised in the Cross-Claim. It is precisely that matter about which the Plaintiffs now wish to claim against Konstan Lawyers. 47The proposal to join Konstan Lawyers had nothing to do with the issues in Bank of Western Australia Ltd v Tannous nor any principle that emerged from that case. The issue argued in that case concerned only Alvera and whether she had a right to claim against NAB and CKM. The proposal to join Konstan Lawyers had nothing to do with the other applications regarding joinder and strike out between other parties in the proceedings. 48Nevertheless, and subject to a consideration of the remaining issues concerning pleading and the limitation period I do not consider that leave to amend to join Konstan Lawyers should be refused by reason of the delay or the absence of an explanation for it. It seems to me from the way the proceedings have developed involving solicitors who acted for Lily and/or Alvera in relation to the three successive loans that the claims now sought to be made by the Plaintiffs against Konstan Lawyers concern real questions in issue in the proceedings. The prejudice to Konstan Lawyers is minimal because they have been parties to the proceedings since they were joined by Alvera in 2009. 49The causes of action sought to be raised (about which I shall say something further), except in one small respect, involve legal argument arising out of the same facts raised by Alvera in her Cross-Claim against the firm. The one additional matter is that evidence would need to be given by someone on behalf of the First Plaintiff of reliance upon the Advice Certificate and Legal Advice Representations. I do not consider that the proceedings will be prolonged in any real sense as a result of the proposed amendments. 50I have had particular regard to ss 56 and 58 CPA (the latter being a requirement by virtue of s 64(2)) and I have noted what was said in the joint judgment in Aon, that an explanation will generally speaking be called for by the party seeking the discretion in its favour. What is said in Aon at [103] is not a hard and fast rule. Although in one sense it can be said in the present case that there is a disadvantage to Konstan Lawyers by their being joined as Defendants in the Statement of Claim, the disadvantage is minimal in the circumstances I have described earlier. Whether or not the Plaintiffs suffered a loss by reliance upon what that firm did or failed to do, that issue clearly arises from the matters already raised in the proceedings. It is a real question in the terms of s 64(2) CPA. 51Factually, the present case is somewhat removed from the situation in Aon because the present proceedings have not even been given a hearing date. Nor, by reason of the further application of George and Josephine Hassarati to be joined, have they even reached the stage where it can be said that the pleadings are otherwise closed. 52In my opinion, despite the absence of an explanation for the delay, I would not by reason of the delay and the failure to account for it refuse leave to the Plaintiffs to join Konstan Lawyers as defendants in the Statement of Claim. (2)Duty of care 53Subject to arguments about the limitation period, the cause of action based on the breach of the Fair Trading Act was not said to be a cause of action that could not be brought. There is sufficient authority that where a solicitor makes a representation to another party a cause of action may result: Argy v Blunts and Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112; Eade v Vogiazopoulos [1999] 3 VR 889; Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liquidation) [2011] NSWCA 367. 54The position in relation to whether a solicitor acting for one party owes a duty of care to another is not so clear. In Bebonis v Angelos (2003) 56 NSWLR 127 Handley JA (with whom Beazley and Heydon JJA agreed) said at [42] that a solicitor acting for one party does not ordinarily owe a duty of care to another but exceptionally may do so if a responsibility to that party has been assumed. I acknowledge that Smith J held in Eade v Vogiazopoulos that a duty of care was owed when the solicitor for the mortgagor represented that he acted for both the husband and wife and documents were duly executed. I acknowledge also that the approach of Macfarlan JA (with which Campbell and Young JJA agreed) in Milanex suggested that he accepted a duty of care was owed because of his references to the standard of care of the reasonable man at [103]-[104]. In addition, Young JA certainly seemed to accept that this was what Macfarlan JA's analysis produced - see at [136]. Unfortunately, Bebonis v Angelos was not cited to the court in Milanex. 55Some further support for the existence of such a duty comes from the decision of Young CJ in Eq (as his Honour then was) in Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505; (2008) 13 BPR 25,343 at [601]-[613]. 56It seems to me that the matter of whether Konstan Lawyers owed a duty of care to the Plaintiffs should not be decided on this application. That is particularly so when there is likely to be an issue of whether Konstan Lawyers assumed a responsibility to the Plaintiffs in acting in the way they did (Bebonis at [42]). In any event, there can be no prejudice in allowing the cause of action set out in paragraphs 81-83 to go ahead when the cause of action based on a breach of the Fair Trading Act is undoubtedly a valid cause of action for the Plaintiff to bring. When that cause of action is available, in one sense the assertion that a duty of care is owed is (subject to what was said in Sullivan v Moody (2001) 207 CLR 562 at [60] about conflicting duties being a relevant consideration to determine if a duty exists in a novel situation) only another way in law of characterising the responsibility of the firm. (3)The limitation issue 57Konstan Lawyers argued that the proposed claims against it were doomed to fail because they are statute barred. They asserted that the way the proposed claim is pleaded and particulary paragraph 80, which provides that if the First Plaintiff had been aware of the alleged breaches by the firm the loan would not have been advanced, demonstrates that it is a no- transaction case with the result that loss was first suffered when the funds were advanced in July 2005. Reliance was placed on Winnote Pty Ltd v Page [2006] NSWCA 287; (2006) 68 NSWLR 531. 58The Plaintiffs argued, however, that the loss is contingent on the Court declaring that the loan agreement and/or mortgage are unenforceable. They said that the loss comes from the inability to be able to realise the security to recover the funds advanced. The Plaintiffs also pointed to the warning given in Wardley Australia Ltd v Western Australia (1992) 172 CLR 514 at 533 concerning the undesirability of limitation questions of the present kind being decided in interlocutory proceedings in advance of the hearing of the action except in the clearest of cases. 59Whilst I think there is considerable force in the arguments of Konstan Lawyers that the present is a no-transaction case and is pleaded as such, I must have regard to what was said in Kenny & Good Pty Ltd v MGICA (1999) 199 CLR 413 by Gaudron J at [13]-[17] and Gummow J at [82]-[89]. There is an arguable case that any loss to the Plaintiffs will only be established if recruitment becomes impossible. That may never be so because the mortgage and loan agreement may not be set aside or declared unenforceable. 60What is clear from Kenny & Good and Wardley is that one must look to see what is the interest infringed. In Kenny & Good it was the interest of a mortgage lender whose interest was said by Gaudron J at [16] to be such that it should be able to recoup the amount owing under the mortgage. There must be an argument available that the interest of a mortgagee is in a similar category. Nothing said by the High Court in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] 217 CLR 640 is inconsistent with that. I discussed the consistency of the decisions in Kenny & Good and HTW Valuers as well as other similar authorities in Ross v Cook [2009] NSWSC 671. 61I do not consider this to be the clearest of cases. Where both positions are arguable it is inappropriate for this matter to be decided on an application to amend. 62However, Konstan Lawyers should have the opportunity to argue the limitation issue at the final hearing. The amendment will, therefore, take effect not from the date on which the proceedings commenced but from the date of the application to amend: Liff v Peasley [1980] 1 WLR 781 at 791, 796, 799 and 804. 63Accordingly, leave will be given to the Plaintiffs to amend the Statement of Claim in the form annexed to the affidavit of Eliza Jane Birkett sworn 10 May 2012. Application by George and Josephine Hassarati 64George and Josephine Hassarati (hereafter "the Applicants") apply to be joined as parties to the proceedings and to file a defence to the Plaintiff's Further Amended Statement of Claim filed 15 February 2011 and to cross-claim against Alvera. 65The Court has power to add a person as a party where that joinder "is necessary to the determination of all matters in dispute in any proceedings": r 6.24 UCPR. Sub-rule (2) goes on to provide: Without limiting subrule (1), in proceedings for the possession of land, the court may order that a person (not being a party to the proceedings) who is in possession of the whole or any part of the land (whether in person or by a tenant) be added as a defendant. 66Regard should also be had to r 6.8 UCPR which provides: 6.8 Originating process for recovery of land to be served on occupier (1)If, when proceedings for possession of land are commenced, a person (the occupier) not joined as a defendant is in occupation of the whole or any part of the land, the plaintiff: (a)must state in the originating process that the plaintiff does not seek to disturb the occupier's occupation of the land, or (b)must serve the originating process on the occupier together with a notice to the effect that: (i)the occupier may apply to the court for an order that the occupier be added as a defendant, and (ii)if the occupier does not so apply within 10 days after service, the occupier may be evicted under a judgment entered in the occupier's absence. (2)For the purposes of subrule (1), documents may be served on the occupier personally or by leaving the documents on the land concerned addressed to the occupier by name or addressed simply "to the occupier". (3)If originating process is amended by the addition of a claim for possession of land, the time at which proceedings for possession of that land are commenced is taken, for the purposes of subrule (1), to be the time at which the amendment is made. 67Giles CJ Comm D (as his Honour then was) dealt with the earlier equivalent of this rule in Australia and New Zealand Banking Group Ltd v P A Wright & Sons Pty Ltd (unreported, Supreme Court of NSW, Giles CJ Comm D - 3 July 1997; BC 9702853) where he said (at BC 6): The provisions of the Rules to which I have referred ... are protective of the occupier of land of which a plaintiff claims possession from a defendant. The occupier may have rights good against the plaintiff which the defendant is not concerned to uphold, and if the plaintiff seeks to disturb his occupation is given the opportunity to assert his rights. A case such as Minet v Johnson (1890) 63 LT (NS) 507 illustrates the mischief addressed: although the note to Pt 7 r 8 in Ritchies' Supreme Court Procedure states that the purpose of the rule is "to prevent collusive ejectment actions", the occupier is protected even in the absence of collusion between the plaintiff and the defendant. 68In National Australia Bank Limited v Leon Nikolaidis [2011] NSWSC 506 McCallum J made reference to Wright and said at [12]: ... the purpose of the rule is to protect occupiers by affording them an opportunity to uphold any rights they may have against the plaintiff mortgagee. 69It is necessary, therefore, to examine what rights George and Josephine Hassarati have in relation to the land and whether any such rights would prevail against the registered mortgage of the First Plaintiff. 70The Applicants put forward a number of bases upon which they say they have rights to protect. First, they say that they have proprietary interests - Josephine as a life tenant, and both Applicants as remaindermen with a vested interest in the land. They say that those interests prevail over the interest of the First Plaintiff as registered mortgagee by reason of Alvera's being registered as the proprietor of the land by the means of the Transmission Application. The Applicants argue that because of the reference alongside Alvera's name on the first schedule of the title search to "TA8224507" the Plaintiffs were put on notice that Alvera obtained the title by a transmission application and that by virtue of what it was said in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 93 and Hemmes Hermitage Pty Ltd v Abdurahman (1991) 22 NSWLR 343 at 355-356 the further information about the circumstances of Alvera's registration is "recorded in the folio" or is "an incident" of the interest Alvera had as recorded in the register. In this way it was said the Plaintiffs were, or ought to have been, aware that Alvera was a trustee and could only deal with the property in accordance with her duties as administrator of the estate. They say that the estate was impressed with a trust in favour of the Applicants. 71Secondly, the Applicants submitted that the unconscionability said to have been engaged in by the Plaintiffs resulted in the Applicants' rights being able to be enforced notwithstanding the registered interest obtained by the First Plaintiff. These rights were said to be in the nature of personal equities or rights in personam which are an exception to indefeasibility. Reference was made to Mercantile Mutual Life Insurance Co Ltd v Gosper (1991) 25 NSWLR 32 and McGrath v Campbell (2006) 68 NSWLR 229. 72Thirdly, the Applicants assert that they have standing under the Contracts Review Act to challenge the contractual arrangements between the Plaintiffs and Alvera notwithstanding that they were not parties to the contract. 73The Plaintiffs oppose the application on a number of bases. First, they say that George and Josephine have no interest in the property, or have only an equitable interest which does not prevail against the Bank's registered interest as mortgagee. In the first place they say that Tony's estate was unadministered in 2005 with the result that the Applicants had no interest in the land: Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694. They further rely on the indefeasibility provisions in the Real Property Act 1900. 74Secondly, they say that no adequate explanation has been given for the delay in seeking joinder when George and Josephine first became aware of the subject matter of the proceedings in 2009. I cannot help noting the irony of this submission in the light of the failure of the Plaintiffs to provide any explanation at all of their delay in applying to amend the Statement of Claim when they also became aware of the relevant information in 2009 in relation to that application. 75Thirdly, the Plaintiffs say that their claim for possession of the property is being defended by Alvera who claimed her interest in the property as the legal representative of Sid's estate. They say further that George and Josephine have no standing to defend the proceedings on the basis of the Contracts Review Act or unconscionability as they assert. 76The Plaintiffs say that the fact that George may have an equitable interest in the land arising from his building a house on the land in 1998 could not give rise to a personal equity against the Plaintiffs such as to defeat its mortgage. No caveat was lodged in respect of that interest. (1)Delay 77The Applicants explain why they have not moved to be joined prior to the present time. In general terms their evidence was that they spoke with other members of the family and had meetings with Garry Pickering, the solicitor for Alvera. They were reassured by Mr Pickering about their position and told not to worry. In 2010 Mr Pickering is supposed to have said that he would organise a separate solicitor for the Applicants. It was only after the Applicants' present solicitor commenced to act in 2012 that the present application was made. 78I note again what was said in Aon (set out in paragraph 43 above). An explanation has been provided. Although it is not an entirely satisfactory one in circumstances where a new party is sought to be added with issues not entirely co-extensive with existing issues in the proceedings, I bear in mind the background of the Applicants including their limited ability with English and the reassurances they received from Mr Pickering. I would not, by reason of the delay alone, refuse to accede to their joinder application. (2)Do the Applicants have rights to protect? 79In my opinion the scheme of the Real Property Act 1900 stands in the way of the Applicants having any interest in the land as against the Plaintiffs which they can protect. Sections 42 and 43 relevantly provide: 42(1)Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded... The exceptions are not relevant to the present matter. 43(1)Except in the case of fraud no person contracting or dealing with or taking or proposing to take a transfer from the registered proprietor of any registered estate or interest shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which such registered owner or any previous registered owner of the estate or interest in question is or was registered, or to see to the application of the purchase money or any part thereof, or shall be affected by notice direct or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding; and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud. 80The position with regard to a trustee as registered proprietor is dealt with specifically in s 96 which provides: A fiduciary registered as proprietor pursuant to section 93 shall hold the estate or interest in respect of which the fiduciary is so registered in trust for the persons for whom and purposes for which that estate or interest is applicable by law, but for the purposes of any dealing therewith the fiduciary shall be deemed to be absolute proprietor thereof. 81The learned authors of Woodman & Nettle, The Torrens System in New South Wales (LBC, 2003) say in relation to this section at [96.20]: The object of this section is to draw a curtain between the obligations which a fiduciary owner owes to the beneficiaries and the relation he or she bears towards the outside world. The right of purchasers to regard a registered proprietor as an absolute owner is not to be prejudiced by that owner's duties towards persons claiming under unregistered interests. It is, in effect, a restatement of s 43. 82The decisions in Bursill and Hemmes, relied on by the Applicants, were concerned with easements and rights of way which are subsisting interests. Woodman and Nettle say at [42.400]: ...the preferable view is that Bursill's case requires only that a person taking an interest in land investigate subsisting registered dealings. Dealings whose functions are exhausted on registration (such as transmissions, or transfers not incorporating an easement or covenant) and dealings which, even though when originally registered evidenced an intention to create a continuing contractual relationship, no longer relate to a subsisting interest (such as mortgage since discharged, or an expired lease) may be disregarded. 83That statement is entirely consistent with what the Privy Council said in Gibbs v Messer [1891] AC 248 at 254, namely that the Torrens system was: to save persons dealing with registered proprietors from the trouble and expense of going behind the register, in order to investigate the history of the author's title, and to satisfy themselves of its validity. That end is accomplished by providing that every one who purchases, in bona fide and for value, from a registered proprietor, and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title. That position has been affirmed frequently since that decision - see, for example, Bahr v Nicolay [No 2] (1988) 164 CLR 604 at 652 and Westfield Management Ltd v Perpetual Trustee Company Ltd (2007) 233 CLR 528 at [39]. 84The Applicants rely on s 40(1B) RPA to suggest that the estate of Alvera in the computer folio certificate was subject to the provision of an instrument being the Transmission Application. The short answer to this contention is that the certificate was not expressed to be subject to the provision of an instrument merely by referring to the instrument as it has. Ordinarily, the matters to which the registered title is subject are to be found in the Second Schedule on the title. Nothing of relevance appeared in the Second Schedule on the title to the Thornleigh land when the First Plaintiff registered its mortgage. 85The Applicants say further that registration by transmission is "a unique form of transfer" and the requirement that they suggest, that a search should be made of the instrument by which Alvera came to be registered, would not be a considerable incursion into the Torrens system. However, they do not point to the basis for suggesting that such a search should be made. Nor is the submission consistent with Gibbs v Messer and the authorities which have followed it. 86The Applicants' submissions and proposed defence appear to assume that the only way there could have been a transmission application whereby Alvera became registered was because she was the legal personal representative of a deceased person. However, she may have become registered as the proprietor by a transmission application in one of the circumstances envisaged in the definition of "transmission" in s 3(1). In particular, she might have become registered that way as a result of being a joint tenant with the deceased person. In such circumstances the land would not necessarily have been held on trust for any other person. 87There must be doubt, in any event, that Alvera held the land on trust for the Applicants or any other person. If Sid's estate remained un-administered, as the evidence seems to suggest, there would be no trust fund of the residuary estate in which the Applicants could be said to have a beneficial interest: Livingston at 708; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 312. Nevertheless, I do not base my decision on this point. Although such matters as the absence of the Applicants from the title and the need for George to obtain Letters of Administration in respect of the un-administered estate of Sid suggest that administration was not complete these are factual matters which it is not possible to decide on an application such as the present one. 88Even if Alvera held the property on the trust for the Applicants ss 43 and 96 RPA mean that the First Plaintiff was not bound to concern itself with that arrangement. This highlights the submission made by the Plaintiffs that any rights which the Applicants have are rights against Alvera by reason of the way she has dealt with the land. Those rights concern vastly different issues from those in dispute in the present case. 89The Applicants' submissions concerning constructive knowledge on the part of the Plaintiffs of the Applicants' alleged interests in the land are inconsistent with the provisions of the Real Property Act to which I have referred. To the extent that they rely on personal equities or rights in personam to avoid the operation of s 42 the authorities are against them. It should be noted that the Applicants do not allege fraud on the part of the Plaintiffs. 90In Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 81 ALJR 1107 the High Court agreed with Tadgell JA in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133 at 156-157 that it "is not possible, consistently with the received principle of indefeasibility ..., to treat the holder of a registered mortgage over property that is subject to a trust, registration having been honestly obtained [by the mortgagee], as having received trust property". 91Campbell J (as his Honour then was) said in Brueckner v The Satellite Group (Ultimo) Pty Ltd & Ors [2002] NSWSC 378 at [70]: The most that Westpac could possibly have had, at the time it took its mortgage, is constructive notice of the existence of Mr Brueckner's rights in relation to the two apartments. That is not enough to give Mr Brueckner, against Westpac, any right in personam. In Bahr v Nicolay [No.2] (1988) 164 CLR 604, at 652 Brennan J said, of the Western Australian analogue of section 43 of the Real Property Act 1900: "These provisions are designed to achieve the main object of the Torrens system of registration of interests in land which the Privy Council in Gibbs v Messer [1891] AC 248, at 254 perceives to be: "To save persons dealing with registered proprietors from the trouble and expense from going behind the register, in order to investigate the history of their author's title, and to satisfy themselves of its validity. That end is accomplished by providing that everyone who purchases, in bona fide and for value, from a registered proprietor, and enters his deed of transfer or mortgage on the register, shall thereby acquire an indefeasible right, notwithstanding the infirmity of his author's title." The consequence is that, whereas equity would subject the interest of a purchaser of land to an antecedent unregistered interest of which the purchaser has notice, a purchaser who takes with notice of an antecedent interest but who becomes registered under the Act without fraud takes free of that interest: Ortel v Hordern (1902) 2 SR (NSW) (Eq) 37; Munro v Stuart; Friedman v Barrett; ex parte Friedman [1962] Qd R 498 at 511-512." 92Even assuming, therefore, that Alvera held the land on trust for the Applicants and that the First Plaintiff was on constructive notice of that trust (as the Applicants allege without specifying the basis for it) the Applicants' interest would still not be sufficient to defeat the interest of the First Plaintiff as registered mortgagee of the land. 93In relation to any rights George claims by reason of building a house on the land I note that he has never lodged a caveat claiming such an interest. It was not put as an alternative in the caveat he lodged in 2008. It is not and cannot be alleged, therefore, that the First Plaintiff was on notice of an interest arising in that way, let alone that such interest over-rode the First Plaintiff's registered mortgage. Any rights he may have in that regard are against Alvera and do not impact on the position of the Plaintiffs. 94A similar situation arose in Hammond v JP Morgan Trust Australia Ltd [2012] NSWCA 295. In that case Mrs Hammond was the registered proprietor of the land but her husband claimed that she held the property for the two of them beneficially as joint tenants on the basis that he provided some or all of the funds for its purchase. A loan was obtained from JP Morgan Trust to purchase the property. Default followed and the mortgagee sought possession of the property. Mr Hammond sought to be joined as a necessary party to the proceedings. Mr Hammond had sought to be joined as a party to the appeal from a judgment of Johnson J who had ordered possession in favour of the mortgagee. Beazley JA dismissed Mr Hammond's application to be joined as a party to the appeal. 95In the appeal from that decision Meagher JA with whom Basten JA and Bergin CJ in Eq agreed said: [69]For Mr Hammond to have been a necessary party to the possession proceedings, the judgment for possession sought by the respondent against the appellant as registered proprietor must have "directly" affected his rights or liabilities: John Alexander's Clubs Pty Ltd at [131]-[132]. [70]In John Alexander's Clubs Pty Ltd, Walker Corporation's unregistered interest as mortgagee of the Option Land was liable to be displaced if the relief sought by White City Tennis Club - a constructive trust over and transfer of that land to the Club - was granted and that transfer registered so as to make the Club's interest indefeasible. For that reason the orders sought directly affected its right as unregistered mortgagee. In News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 the rights and liabilities of the players and coaches under their Super League employment contracts were directly affected by the restraining orders sought: esp at 525, 527. For that reason they should have been joined as necessary parties. [71]The right which Mr Hammond asserts in relation to the Faulconbridge property is as a joint beneficial owner with the appellant. He does not assert that he has any personal equity or other right as against the respondent or in respect of the property, other than by reason that the appellant holds her registered interest beneficially for them jointly. Any such beneficial interest is subject to the statutory and contractual rights which the respondent has as registered mortgagee. [72]The effect of any judgment for possession on Mr Hammond is only indirect and consequential on the fact that it is given against the appellant as registered proprietor. For that reason, Beazley JA was correct to conclude at [19]: "JP Morgan is not concerned with the interests of those who stand further down the ladder of claimable interests. It has a first registered mortgage which takes priority over any other interest and it has not, in seeking to enforce its interest, engaged in any conduct that affects any interest of an equitable nature claimed by Mr Hammond. Rather, Mr Hammond is seeking, as against his wife, as registered proprietor, an interest in property." 96Any rights arising out of unconscionability on the Plaintiffs' part would have to be shown to give rights in personam or personal equities to the Applicants to overcome the indefeasibility provisions of the RPA. The Applicants relay on Spina v Conran Associates Pty Ltd; Spina v M & V Endurance Pty Ltd [2008] NSWSC 326; (2008) 13 BPR 25,435 at [98] to submit that where a mortgagee behaves unconscionably a Plaintiff may have rights in personam to have the mortgage removed from the register. However, in that case the mortgagee knew or was taken to know the limitations on the power of attorney pursuant to which the mortgage was entered into - see at [27] and [44]. Further, knowledge by the mortgagee of the position concerning the disadvantaged person was shown - see at [110]. 97The pleading in the present case does not demonstrate any knowledge on the part of the First Plaintiff of the existence of the Applicants let alone their financial or other position. The thrust of the complaints concern the position of Alvera and Lily - see paragraphs 52 (c) and (d) and 53 (d) of the proposed defence. To reach the point of unconscionability the Applicants rely on the assertion of constructive knowledge of the alleged trust by which Alvera was said to hold the land for the Applicants. For reasons given earlier constructive knowledge of the existence of rights on the part of the Applicants has not been demonstrated. 98The Applicants submitted that they have standing under the Contracts Review Act as beneficiaries under Sid's Will. In addition George claims standing by reason, now, of being the Legal Person Representative of Sid's estate. In this regard they point to s 12 of that Act which provides: (1) Where in proceedings for relief under this Act in relation to a contract it appears to the Court that a person who is not a party to the contract has shared in, or is entitled to share in, benefits derived or to be derived from the contract, it may make such orders against or in favour of that person as may be just in the circumstances. (2) The Court shall not exercise its powers under this Act in relation to a contract unless it is satisfied: (a)that the exercise of those powers would not prejudice the rights of a person who is not a party to the contract, or (b)that, if any such rights would be so prejudiced, it would not be unjust in all the circumstances to exercise those powers, but this subsection does not apply in relation to such a person if the Court has given the person an opportunity to appear and be heard in the proceedings. 99The Applicants point particularly to subs (2) to argue that the Court may not exercise powers under the Act which may prejudice rights of the Applicants without giving them the opportunity to be heard. This submission mistakes the protection that s 12 provides. Its operation can clearly be seen from the situation in Murphy v Overton Investments Pty Ltd [2001] FCA 1725 at [109] -[113]. The party against whom relief was being sought, who had the benefit of the contract, had assigned its rights to a third party which was not before the court. The order would have prejudiced the third party's rights and was, accordingly, not made. 100That is the type of third party to which s 12 is directed. As s 12(1) makes clear orders may be made against a non-party who "has shared in, or is entitled to share in, benefits derived or to be derived from the contract". That is not the position the Applicants are in. They did not obtain, and would not obtain, any benefits under the contract - those benefits went to Lily or, possibly, Alvera. If the Court exercises its powers under the Act that exercise would not prejudice the rights of the Applicants - the exercise of these powers could only benefit their position by ameliorating the effect of the loan agreement and mortgage on any interests they have in the land. Section 12 is not concerned with third parties who have already been detrimentally affected by the entry into the contract to which they were not a party. 101It may be thought doubtful that s 7 of the Act enables a third party to make application under the CRA - the considerations in s 9(2) are all, expressly or impliedly, concerned with matters touching the parties to the contract. However, it is not necessary to decide that point. I can see no basis on which it would be appropriate to join the Applicants as Defendants to the present claim. Considerations such as those discussed in Morlea Professional Services Pty Ltd v Richard Walter Pty Ltd (in liq) [1999] FCA 1820; (1999) 169 ALR 419 at [53]-[55] and Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37 at [79] concerning cases where a trustee does not take the action it should or does not defend a claim do not apply here. Alvera has vigorously defended the proceedings and has brought cross-claims against relevant parties. In that regard her interests and those of the Applicants are identical. 102For these reasons I consider that any rights which the Applicants have in respect of the land are subject to the rights of the Plaintiffs. The Applicants cannot defeat the Plaintiffs' rights. In those circumstances there is no utility to joining the Applicants to the proceedings. Any rights they have against Alvera and/or Lily should be brought in separate proceedings. (3)Mr Maait's opposition 103It is not strictly necessary, therefore, to consider John Maait's opposition to the application but out of deference for the submission put, and lest I am in error in relation to my earlier conclusion, I will consider Mr Maait's position. 104Mr Maait opposes the application and points to the relevance of a number of matters raised by the Plaintiffs including the delay and the fact that it is said the Plaintiffs seek no order against the Applicants. The latter is not entirely correct because an order for possession would take effect, to some extent, as an order in rem that would, from a practical point of view, affect the Applicants. 105However, Mr Maait's particular opposition to their being joined is the potential effect that such joinder may have if a cross-claim of some sort is brought by the Applicants against him. He points to the fact that the solicitors for the Applicants said in a letter of 3 April 2012 that they were still considering whether the Applicants might bring a claim against Mr Maait. Mr Maait says that if the Applicants are joined to the proceedings that would give them a substantial advantage in relation to any limitation defence that Mr Maait would otherwise have. It is to be recalled that Mr Maait acted for Alvera in November/December 2001. If the Applicants were now to sue Mr Maait in separate proceedings their action would be statute barred. However, by virtue of s 74 Limitation Act 1969 time would not commence to run until the date on which the Applicants became joined as a party to the principal action. 106 Section 74 provides: (1)Where, in an action (in this section called the principal action), a claim is made by way of set off, counterclaim or cross action, the claim, for the purposes of this Act: (a)is a separate action, and (b)is, as against a person against whom the claim is made, brought on the only or earlier of such of the following dates as are applicable: (i)the date on which the person becomes a party to the principal action, and (ii)the date on which the person becomes a party to the claim. (2)This section extends to a claim by way of set off made by a defendant under the Civil Procedure Act 2005, even if one or more of the debts giving rise to the set off became due and payable after the date on which the defendant became a party to the principal action, so long as at least one of those debts became due and payable on or before that date. 107The effect, therefore, of joining the Applicants as Defendants would be to overcome the time bar of which Mr Maait has the benefit. Giles J discussed the operation of s 74 in Nelson v Wyong Shire Council (1989) 68 LGRA 164. He considered (at 169-170) that the benefit the potential cross-claimant would obtain was a relevant consideration on an application for that party to bring a cross-claim beyond the time allowed by the Rules. In Maronis Holdings Ltd v Nippon Credit Australia Ltd [2000] NSWSC 482 at [6] Bryson J thought such a matter was a significant discretionary consideration. In my opinion it is, similarly, both a relevant and a significant consideration on an application such as the present. 108It is disingenuous for the Applicants to say that they have no present intention to cross-claim against Mr Maait and that the appropriate time to consider the matter is when they make any such application. In a letter from the Applicants' solicitors to Mr Maait's solicitors of 3 April 2012 the solicitors said: We are still considering whether George and Jospehine have a claim against John Maait. We are seeking to obtain a report from an expert witness concerning what steps a solicitor exercising reasonable care and skill in the position of Mr Maait in 2001 would have taken... The opinion of an expert witness of proper practice in 2001 is relevant to our consideration of whether George and Josephine have a claim against John Maait. If George and Josephine seek leave to proceed with a claim against Mr Maait, we will prepare and serve an affidavit which explains the delay in proceeding with the claim. 109The Plaintiffs are being given leave to file a further amended Statement of Claim. If the Applicants are joined as Defendants they will need to be named as Defendants in that claim. That would then give them 28 days to file any Defence and Cross-Claim they wished to bring without the need for further leave. The result, in such a case, would be that the mere joinder of them to the proceedings would deprive Mr Maait of the benefit of the limitation period by virtue of the operation of s 74. 110One matter which weighed heavily with Bryson J in Maronis at [21] was that the right which the cross-claimant wished to assert was a fundamental common law right - to recover an alleged debt payable under a deed. Against that his Honour thought that an immunity brought about by a limitation statute was not a fundamental common law right. I would similarly regard a person's right to sue a solicitor for damages as a fundamental common law right. I accept here that Mr Maait did not purport to act for the Applicants but that will not mean he may not owe duties to them: Hill v Van Erp (1988) 188 CLR 159. 111I bear in mind also that Mr Maait is already a cross-defendant to a number of cross-claims arising out of his acting for Alvera in 2001. The prejudice he suffers by reason that a further claim may be made against him arising out of those events is small. It would not be sufficient to justify a refusal to permit the Applicants to be joined to the proceedings if they were otherwise entitled. Costs 112On the application by the Plaintiffs, they sought an indulgence of the Court. They did so without providing any explanation for their delay. It was not unreasonable for Konstan Lawyers to have opposed the application. Nevertheless, the Plaintiffs were successful. In the circumstances, as between the Plaintiffs and Konstan Lawyers each party should pay its own costs. 113As between the Plaintiffs and the other parties, the Plaintiffs should pay the costs thrown away by reason of the amendment. 114On the application by George and Josephine the Applicants were unsuccessful. They should pay the Plaintiffs' costs. As between the Applicants and Mr Maait I would not have rejected the application by reason of Mr Maait's opposition alone. Nevertheless, the Applicant's sought an indulgence. As between the Applicants and Mr Maait each party should pay his and her own costs. Conclusion 115In my opinion the following orders should be made: On the Plaintiffs' application to amend: (1)Leave to the Plaintiffs to file a Fourth Amended Statement of Claim in the form annexed to the Affidavit of Eliza Joan Birkett with any formal amendments necessary by reason of the filing by the First Defendant of a Fifth Amended First Cross-Claim. The amendment joining Konstan Lawyers will take effect from the date of their joinder; (2)The Fourth Amended Statement of Claim is to filed within 14 days; (3)Any defences to the Fourth Amended Statement of Claim are to be filed within 14 days of service of that Claim; (4)Except as between the Plaintiffs and Konstan Lawyers the Plaintiffs should pay the costs of the remaining parties thrown away by reason of the amendment. (5)As between the Plaintiffs and Konstan Lawyers there should be no order as to costs with the intent that each party should bear its own costs of the application. On the application by George and Jospehine Hassarati: (6)The Motion by the Applicants filed 2 May 2012 is dismissed. (7)The Applicants are to pay the Plaintiffs' costs. (8)As between the Applicants and the other parties there should be no order as to costs to the intent that each party should pay its own costs. ********** 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. Decision last updated: 24 October 2012