Case: Stroud v Lawson [1898] 2 QB 44
Outcome: followed
That said, it is now necessary to consider the construction and application of O 6 r 2. It provides two bases, each again discretionary ( John Cooke &amp; Co Pty Ltd v The Commonwealth [1922] HCA 60 ; (1922) 31 CLR 394 at 411), for joinder. The second basis, in r 2(b), is emphatic of this discretion which falls to be considered having regard to the subject matter, scope and purpose of O 6 as whole and as part of the Federal Court Rules : The Queen v Australian Broadcasting Tribunal: Ex Parte 2HD Pty Ltd [1979] HCA 62 ; (1979) 144 CLR 45 at 49. The first basis, in r 2(a) involves considerations which have been the subject of over a century of judicial decisions. It requires not just the existence of a common question of fact or law in each proceeding which might be brought separately against two or more persons, but also that ' all rights to relief claimed' are in respect of or arise out of the same transaction or series of transactions (cf: Stroud v Lawson [1898] 2 QB 44 at 52). 46 Here the rights to relief claimed by the Bank against Ms Nader are legally and factually independent of the claims by the Bank against the guarantors other than Marie and Josephine Saklaoui for the purposes of O 6 r 2(a) because none of the other guarantors participated in the transactions between each of Marie and Josephine Saklaoui, Ms Nader and the Bank. As Mason J said in Payne v Young [1979] HCA 39 ; (1980) 145 CLR 609 at 618 (see too per Barwick CJ at 614-615, Stephen J at 615 and Aickin J, whose decision at first instance was affirmed, at 611) of the amendment to the English rules in 1898: 'The object of the amendment was to allow several plaintiffs to join separate causes of action where under the old rule as interpreted by judicial decision they could not do so. Subject to the two limitations expressed in pars. (a) and (b) of the rule, it permits the joinder of separate causes of action which have accrued to different plaintiffs. The effect of the rule was, in my opinion, correctly stated by Vaughan Williams L.J. in Stroud v Lawson when he said ([1898] 2 QB at pp 54-55): "I do not think that the rule means that the whole of a transaction must be involved in each of the causes of action joined. I think that, if there was a transaction or series of transactions in respect of which one plaintiff was interested up to a certain point, and other plaintiffs were interested, not only up to that point, but in respect of the entire transaction or series of transactions from beginning to end, under this rule they might joint their separate causes of action in one action, because there would be one transaction or series of transactions in respect of which the various plaintiffs all claimed a right to relief. Their remedies or damages might be different, but they would be claiming relief in respect of the same transaction or series of transactions." To these observations I would add the comment that the rule may well authorize the joinder of separate causes of action accruing to various plaintiffs against different defendants, so long as the causes of action arise out of the same transaction or series of transactions. The consequence is that under par. (a) of the rule joinder of separate causes of action accruing to different plaintiffs is authorized when the relief claimed is in respect of, or arises out of, the same or a particular series of transactions. Joinder is not authorized when the relief claimed is in respect of, or arises out of, two or more different series of transactions, when the participation of each individual plaintiff is limited to participation in one series of transactions, the other plaintiffs not participating in that series.' 47 In Stroud v Lawson [1898] 2 QB 44, the plaintiff sued four defendants, three individuals and a company. Two causes of action were pleaded; first that the three individuals had by deceit induced the plaintiff to become a member of the company. Secondly, the plaintiff sued all four defendants, not in his personal capacity but on behalf of himself and all other shareholders in the company, seeking to have the payment of a dividend declared ultra vires as being paid out of capital, not profits, and claiming that the individual defendants should pay the money back to the company. Chitty LJ observed that in substance there were two plaintiffs claiming on two separate and distinct causes of action ([1898] 2 QB at 51, 52) even though the payment of the impugned dividend was one of the fraudulent devices which were said to have induced the plaintiff to become a shareholder. The distinctness of capacities is now addressed by O 6 r 1 but the reasoning is still relevant for present purposes. 48 As AL Smith LJ said ([1898] 2 QB at 50-51), according to the terms of the analogical predecessor of O 6 r 2 the plaintiff could not join the two causes of action which he put in different capacities unless they both arose out of the same transaction. His Lordship continued: 'The right to relief which he claims in a representative capacity in the second part of the statement of claim is quite independent of any fraud on the part of the defendants. The two causes of action and the nature of the relief claimed are wholly distinct and separate.' 49 For present purposes, the reasoning of Chitty LJ is also helpful. He said ([1898] 2 QB at 52 and Vaughan Williams LJ took the same approach at 55): 'The mere circumstance that he makes the declaration and payment of a dividend out of capital an element in the fraud alleged as the basis of the first-mentioned cause of action does not in my opinion shew that the two causes of action arise out of the same transaction. It seems to me that they arise out of different transactions, though they have that one feature in common.'