Case: Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34
Outcome: discussed
At the hearing the principles upon which I was asked to exercise my discretion in granting leave to join Ms Nader to the Bank's proceedings, were set out in written submissions by the Bank which were accepted by Ms Nader's counsel. They are: ' Principles on Joinder 11. Order 6 rr.2 and 8 of the Federal Court Rules , permit the addition of parties. It is submitted with regard to the proposed causes of action against Ms Nader that there are clearly common questions of fact and law under O.6 r.2 which will arise in the proceedings and also relate to the proposed case against her. Under O.6 r.8 joinder is permitted where it is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon. 12. Order 6 r.8 should be liberally construed so that all parties to disputes relating to the one subject matter may be dealt with at the one time: Montgomery v Foy, Morgan &amp; Co. [1895] 2 QB 321 at 324; John Cooke &amp; Co. Ltd v Commonwealth [1922] HCA 60 ; (1922) 31 CLR 394 at 411. In order to obtain a joinder order under the rule, a party must only show an arguable case against the proposed respondent at least to the standard of being able to resist an application for summary judgment by the proposed respondent to have the proposed party being sued in separate proceedings: Review Australia Pty Ltd v Redberry Enterprise Pty Ltd [2003] FCA 1009. The phrase "all matters in dispute in the proceedings" should not be construed as limited to matters arising on the existing pleadings: it may also properly include those disputed issues of fact which are subjacent to the existing pleadings: Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34. Disputed issues of fact which underlie proceedings are subjacent to the pleadings: Fried v National Australian Bank Ltd [1999] FCA 737. As the joinder of Ms Nader is based upon affidavit evidence served in support of the existing pleadings, the case against Ms Nader is a matter currently in dispute in the proceedings.' 27 Unfortunately, these principles do not address the considerations relevant for the exercise of the discretion to join Ms Nader in the factual context of this application. It is necessary to understand the purpose of and interrelation between the various relevant rules in Order 6. This has been explained in some detail by the High Court in Richardson v Trautwein [1942] HCA 5 ; (1942) 65 CLR 585 at 590, 593-594, 598, 601-602, and Mahoney JA in Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34 at 44C-56D in considering analogues, not wholly identical, of Order 6 in Judicature system court rules. More recently Branson J, in Warner Music Australia Limited v Swiftel Communications Pty Limited [2005] FCA 1127 at [14] - [18] followed Sheppard J in Trade Practices Commission v Westco Motors (Distributors) Pty Ltd (1981) 58 FLR 384 at 388. Her Honour observed that the extent to which causes of action against different persons legitimately may be prosecuted is governed by O 6 r 2 of the Federal Court Rules . The parties did not make submissions on this question or refer to Branson J's judgment or the authorities on which it was based at the hearing. When I found her Honour's judgment after judgment was reserved, accordingly, I asked for further submissions which the Bank, the first to fifth respondents in the Bank proceedings and Ms Nader provided on 19 April 2006. 28 The Bank relied on what Glass JA with the agreement of Samuels JA had said in Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34 at 37G-38B, 43D-E. Glass JA noted that the analogue of s 22 was also directed to avoid multiplicity of proceedings. He said that the fact that the constitution of the proceedings prior to the joinder of the new party by a plaintiff (or applicant) could not yield an order which directly affected that new party was no answer to the application. This was because r 2(a) and the analogue of s 22 sanctioned and encouraged the addition of a further defendant (or respondent) to avoid multiplicity of proceedings. He continued by construing r 2(a) as not being limited, on a plaintiff's (or applicant's) motion to join a new party, to the matters arising on the existing pleadings ([1981] 2 NSWLR at 38C-E) but he did not decide the case under r 2 ([1981] 2 NSWLR at 39A, E). 29 In the case before the Court of Appeal there was an issue on the existing pleadings as to whose default had caused a building to be unstable. Glass JA there said that where a plaintiff (or applicant) asserted on tenable grounds that such a matter of dispute could not be determined without the joinder of the builder as a party, the power to join that person as a party under r 8 was enlivened ([1981] 2 NSWLR at 38D-E). In Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34, the nomination of the builder as the person whose alleged default occasioned the building's instability, was to be seen as a joint or several tortfeasor along with the current defendants who were the architects and engineers. A claim in contract was also made ([1981] 2 NSWLR at 36A-G). 30 The Bank contended that this showed that Branson J's approach to O 6 r 8 was wrong and, moreover, it submitted that the approach of Glass and Samuels JJA had been approved by the Full Court in News Ltd v Australian Rugby Football League (1996) 64 FCR 410 at 523G-524B. But there, the Full Court referred simply to the decision in Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34 in the context of considering a different situation; viz , one in which the trial judge had made orders that affected the substantive rights of persons who had not been joined to the proceedings (see 64 FCR at 524E-F). Lockhart, von Doussa and Sackville JJ did say (64 FCR at 524A-B) immediately after their reference in the above context to the decision of the Court of Appeal and FCR O 6 r 8(1)(b): 'The post-Judicature Act rules of court also included provisions of the kind now found in FCR O 6, rr 1 and 2 for the joinder of multiple claims and multiple parties, either plaintiffs or defendants, where the subject matter of the proceedings is in respect of, or arises out of, the same transaction or series of transactions, involving some common question of law or fact. These provisions reflect an intention, which now receives more emphasis than in the past, to avoid where reasonably practicable a multiplicity of proceedings: Montgomery v Foy, Morgan &amp; Co [1895] 2 QB 321; but see Amon v Raphael Tuck &amp; Sons Ltd [1956] 1 QB 357 at 378 per Devlin J.' 37 I am of opinion that O 6 r 8, on its proper construction, does not authorize the joinder of Ms Nader as sought. Her joinder would require, as is sought, substantive amendment of the Bank's statement of claim. Save for the assertion of her liability if the Bank's remedies against the guarantors in contract, pursuant to its interest in land the subject of its mortgages and its tortuous and statutory claims fail, Ms Nader has no interest in the subject matter of the Bank proceedings or the ASS proceedings. She is a discrete third party quite unlike the wool growers, for example, in John Cooke &amp; Co Pty Ltd v The Commonwealth [1922] HCA 60 ; (1922) 31 CLR 394 or the builder in Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34.