Joinder of Plaintiffs - Joining Claimants

By S. Perkovic, Principal, Northfields Lawyers, on 8 October 2016

This topic has a very interesting history in Common Law where Rules of English Court from the end of 19th Century are still implemented to a degree.

Rules of English Court at the End of 19th Century

In the 1890’s in England, bales of cotton were shipped by several shippers upon a general ship for carriage to Liverpool the bills of lading being similar. The number of bales landed went missing and some of the bales landed could not be identified. Sixteen holders of bills of lading joined in one action against the shipowners claiming damages for non-delivery of the number of bales in the case Smurtwaite and Others v Hannay and Others. In the 1893 Matthew J. made an order at chambers refusing and application to stay the action, but on appeal from that refusal in the same year, the Court of Queen’s Bench made an order that all further proceedings should be stayed on the ground that the plaintiffs should have brought separate actions in respect of their respective claims. The Court of Appeal of ([1893] 2 Q.B. 412 reversed and the decision of the Queen’s Bench Division restored. On Appeal, the House of Lord ([1894] H.L. (E.) 494 ruled that although one negligent act was the source of all the claims, there was not one transaction but a series of different transactions.

This case led to modification of the rule of joinder of the English Court by Order xvi.,r.1, introduced in the year 1896, was to allow plaintiffs in similar situations at in Smurthwaite v. Hannay, to be possibly joined. The original rule at the time of the above decision stated: “All persons may be joined as defendants against whom the right to any relief is alleged to exists”. The rule after was modified in 1896 to replace the words “the right to any relief” to “”any right to relief” in respect of or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally or in the alternative, where if such persons brought separate actions any common question of law or fact would arise.  The new rule was commented by the Court of Appeal in the year 1898 in the case of Stroud v Lawson [1898] 2 Q.B. 44, 51. where it was said that the modification was intended merely to effect to allow a limited liberty of joining plaintiffs with separate causes of action (Universities of Oxford and Cambridge v George Gill & Sons [1898] Chancery Diivision 1 Ch 55.  Per Stirling J at 60). Application of the Rule was subject to two limitations: that the right to relief must arise from the same transaction or series of transaction and that there must be a common question of law and fact.  

High Court of Australia

This above rule from the Court of England was introduced in the Rules of the High Court of Australia, and was considered in the case Payne v Young (1980) 145 CLR 609. The majority held that claims made by seven abattoir operators for the recovery of inspection fees paid to eight defendants could not be joined as the relief claimed was not in respect of, or arose out of, two or more different series of transactions. A discretion of the Court to grant leave to join plaintiffs was not present in the High Court rules as it now exist in New South Wales.

New South Wales, Australia

Uniform Civil Procedure Rules (2005) NSW (“UCPR”) in addition to the rule as taken from the English Court (UCPR 6.19 (1)), there is the residual discretion for the Court to give leave for the plaintiffs to be joined: UCPR 6.19. (1) “…or if the court gives leave for them to be joined.”

Arguably, if defendants take step in the proceedings, they waive the objection in relation to any part of UCPR 6.189 (Lloyd v Great Western Dairies [1907] 2 KB 727 at 731, 732 and 734).

Rules like UCPR 6.19 should be construed in a liberal sense so as to permit joinder of parties wherever reasonably practicable (Payne v. British Time Recorder Co. [1921] 2 K.B. 1.) if that course seems to be most conductive to a just resolution of the dispute between the parties.

Relevant factors may be the desirability of limiting the costs and delay of the litigation (Bishop v Bridgelands Securities Ltd (1990) 25 FCR 311 at 314.) , disadvantages (if any) for the defendants weighted against identified advantages to the plaintiffs and in terms of the efficient use of the Court’s resources having regard to the commonality of the issues raised and the court’s ability to case manage so as to minimise the disadvantages (Dean-Willcocks v Air Transport International Pty Ltd (2002) 55 NSWLR 64 at [34].  Austin J stated in ASIC v Somerville  [2008] NSWSC 788 (where leave was granted under UCPR 6.19) at [45] “These considerations may be an application of the overarching requirement of the Civil Procedure Act that the court should facilitate the just, quick and cheap resolution of the real issues in the proceedings.”

In Bishop v Bridgelands Securities Ltd  (1990) 25 FCR 311 at 315-316. dependence on documentary evidence was an important factor to granting leave.  

A fear that evidence admitted in favour of one plaintiff wold stand for other plaintiffs (in a non-jury trial) was forcefully rejected in in ASIC v Sydney Investment House Equities Pty Ltd [2007] NSWSC 434 by Barrett J (as his Honour then was) in ASIC v Sydney Investment House Equities Pty Ltd [2007] NSWSC 434 at [20]-[21] which was upheld in Australian Securities and Investments Commission v Somerville [2008] NSWSC 788 where at [57] Austin J in rejecting a somewhat similar argument against granting leave under UCPR 6.19(1) said:

“ … Sydney Investment House Equities case demonstrates that the court is able to address the risk of unfair prejudice by appropriate means, while achieving efficiencies in other respect….It seems to me that the concept of ensuring that findings in relation to each defendant are based solely on the evidence relevant to the case against that defendant is not a difficult one to grasp, and its implementation ought to be achievable in a practical sense, given that separate transactions are identified in respect of the alleged contraventions of each of the eight director defendants.”

Morling J in Miliss Pty Ltd & Anor v Kerin & Ors (22 June 1988), Federal Court, unreported, was prepared to make an order granting leave for the joinder because ``the claims that the applicants make are so interrelated and involve so many common questions of fact and law that it is highly desirable that they should be determined at the same time and in the same proceeding''.

The comments of Morling J  were quoted with approval by Rogers CJ Comm Div in Springfield Nominees Pty Limited & Ors v Bridgleands Securities Limited & ANOR (1991) ATPR ¶41-078 where six plaintiffs were successfully joined in an action against their investment adviser company and its director. The impugned representations were said to be contained in a letter sent to all of the plaintiffs at the time when funds of the plaintiffs moved to the investment company.

In Australian Securities and Investment Commission v Somerville [2008] NSWSC 788 Austin J gave detailed consideration to how to approach an application for leave under UCPR 6.19(1) and the plaintiffs rely on his Honour’s reasoning.  The defendant solicitor there provided separate but similar verbal advices to eight of the companies which were in financial distress, which he confirmed in most of the cases by a letter of advice to the same effect. ASIC applied to join all of the receivers of the advice as co-defendants with the adviser.  Austin J, found that the case neither involved the same transaction or series of transaction nor that separate proceedings would rise common questions of law and fact. Nevertheless, his Honour concluded that there were many similarities in the facts of each case, arising out of the involvement of the adviser, the use of similar documentation and similarities in implementation and that there was a pattern in transferring assets to a new company in return for shares entitling the vendor.  Moreover, the same statutory provisions would be invoked against the defendants although the issues of their applications may vary.

Austin J, allowed the joinder, stating, at [42]: “Indeed it seems to me that these similarities are a more weighty consideration than the somewhat technical point that the transactions do not form a series.”.

Examples of the cases where joined was disapproved are cases  Cheque One Pty Ltd v Cheque Exchange (Australia) Pty Ltd (in liq) [2002] FCA 593, Payne  v Young (1980) 145 CLR 609 and Marino v Esanda Ltd [1986] VicRp 73; [1986] VR 735. However, it is notable in these cases commonality connection was not strong. In Cheque One, there were different agreements which were the subject of different misrepresentations which were only similar but overlapped. In Marino v Esanda there was no commonality except that transactions allegedly infringed the Credit Act 1984.

Conclusion

The threshold for joinder of plaintiffs became very much relaxed in comparison to the first cases about this matter such as  Smurtwaite v Hannay. 

Disclaimer:

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources