Atkins v Interprac Financial Planning Pty Ltd & Crole (No 2) [2008] VSC 99 – joinder issues

April 13, 2008 |

Stop the presses! A judge admits his earlier ex tempore (off the cuff to the occasional lay observer) comments to an application is wrong. Actually that is harsh. Judges and the occasional Magistrate with the wisdom that only quiet reflection can bring do change their minds. And why not. Pleadings and discovery fights can be every bit as complex as a hearing. How his Honour did it is a linguistic work of art:

11 I heard the application for leave to join PIR on 12 March 2008. On that day, I refused leave to the defendants to join PIR and gave brief ex tempore reasons for doing so. In the course of revising those ex tempore reasons, I had cause to doubt the correctness of my decision. Accordingly, as the orders which I pronounced refusing leave to join PIR had not been authenticated, I informed the parties that the orders which I pronounced would be withdrawn whilst I reconsidered my decision. The power of the Court to reconsider a decision when the order or judgment pronounced as a result of the decision has not been authenticated is not in doubt.[4] It is unfortunate for the parties that this situation has arisen, but the justice of the case must be the paramount consideration. Where a judge thinks that he or she is or may be in error in a decision reached or the reasons given for reaching it, either in whole or in part, it is appropriate that the judge reconsider the decision or reasons whilst that opportunity remains prior to authentication of the resulting judgment or order. Of course, the power to reconsider should be exercised sparingly. However, in circumstances where the orders which I pronounced would have had the effect of shutting out the defendants from raising the pleaded claims against PIR in this proceeding, and from relying upon the status of PIR as a concurrent wrongdoer to reduce the amount of any liability they may have to the plaintiff, it is appropriate that this power be exercised.

This judgment is useful in providing a thumbnail outline of the principles associated with joinder and that the bar to allow for a claim against a joined party is not high. It is that there is an arguable case.

2 The defendants have applied to the Court for leave to join additional parties to the proceeding, in order that the defendants may take advantage of the proportionate liability regime established by Part IVAA of the Wrongs Act 1958 (Vic) (“the Act”). 3 Section 24AL(1) of the Act provides:

24AL Joining non-party concurrent wrongdoer in the action

(1) Subject to subsection (2), the court may give leave for any one or more persons who are concurrent wrongdoers in relation to an apportionable claim to be joined as defendants in a proceeding in relation to that claim.

4 Section 24AL(1) requires two things to be shown before the Court may give leave to join additional parties. First, that the proceeding is, in whole or part, “in relation to an apportionable claim”. For the purpose of this application, the plaintiff accepts that the proceeding relates to an apportionable claim. Second, that the proposed additional party is a “concurrent wrongdoer”.

5 Section 24AH defines a “concurrent wrongdoer” in the following terms:

24AH Who is a concurrent wrongdoer?

(1) A concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions caused, independently of each other or jointly, the loss or damage that is the subject of the claim.

(2) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up, has ceased to exist or has died.

6 The parties agree that, in order for the defendants to obtain leave to add a party for the purposes of contending that the added party is a concurrent wrongdoer, they must put forward a pleading which raises an arguable case that the party is a concurrent wrongdoer. It is common ground that, in order to enliven the Court’s jurisdiction to allow joinder of an alleged concurrent wrongdoer, the defendants need only plead a case which is “not hopeless”. [1]

12 Having reconsidered the matter, I am now of the view that the proposed pleadings by the defendants against PIR do not raise a case which is so hopeless that it does not admit of argument. Issues such as whether a duty of care is owed, the class of persons to whom a duty of care is owed and whether an arguably misleading statement was the cause of loss to persons relying upon it are all questions to be resolved on the basis of the evidence presented at trial. On an application such as this, the defendants need only establish that the proposed pleadings contain factual allegations which, if established at trial, could arguably found one or more of the causes of action alleged. If the Court is satisfied that such an arguable case has been put forward, joinder should be allowed.


39 As I have said, my task is not to determine whether the proposed causes of action alleged against PIR are likely to succeed. I must only determine whether the proposed causes of action are arguable, in the sense that they might succeed once all of the evidence has been led at trial. In all the circumstances, it is in my view arguable that, in preparing the PIR report, PIR owed a duty of care to financial advisers who, in recommending that their clients invest in promissory notes pursuant to the second information memorandum, act on the faith of statements in the PIR report which have application to both the first information memorandum and the second information memorandum. Further, in my view it is arguable that a duty of care was owed to investors such as the plaintiff. Although an express disclaimer may negative the existence of a duty of care, this is a matter of interpreting the disclaimer in the full content of the surrounding circumstances.[7]

40 It is arguable that the representations were inaccurate, incomplete or otherwise misleading. No argument was put to the contrary. It is also arguable that the representations were made negligently or without reasonable grounds. Again, no argument was put to the contrary.

41 Of course, the statutory causes of action based upon misleading or deceptive conduct do not depend upon the existence of a duty of care. It is enough if it is established that the misleading or deceptive conduct is the cause of loss or damage.

43 In my view, all questions of reliance and causation are issues for determination after all the evidence has been adduced at trial. It cannot be said that they are unarguable. However, having regard to the way in which the causation arguments were presented in oral submissions, further particulars of the alleged reliance by the defendants should be given. I will so order.

[1] See, eg, Boral Resources (Vic) Pty Ltd v Robak Engineering and Construction Pty Ltd [1999] VSCA 66; [1999] 2 VR 507, [13].

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