Limitation of Actions; Joinder of Claims & Parties / Lecture Hours 5 - 6

limitation of actions; joinder of claims & parties

A.Limitation of Actions Act 1974

  • For most types of legal action there are time periods known as limitation periods within which cases must be commenced.
  • Failure to commence proceedings within the limitation period will bar the action, subject to possible suspension or extension of the period, or the other side failing to take issue.
  • The existence of the statues of limitation is based on the policy that stale claims should not be bought. The policy is justified in 2 major respects:

(i)injustice - it would be an injustice to defendants to have proceedings hanging over their heads for too long, and where witness' memories have faded, etc

(ii)efficiency - litigants should be encouraged to bring their actions within a reasonable period

  • The Acts are not ordinarily applicable to courts exercising federal jurisdiction (eg. Federal Court of HC) or where a state court exercise federal jurisdiction. However, s.79 Judiciary Act (Cth) provides that laws of each state are binding on all courts exercising federal jurisdiction, except as otherwise provided by the Commonwealth, which may pick up a state limitation provision if a HC action is commenced and heard in a state (Pederson v Young).
  • The HC will not remit a case to a jurisdiction in which the case would be statute-barred (Fielding v Doran)

(i)The Purpose of limitation periods

  • The purpose of the limitation statutes is to protect defendants, and the Courts have expressed 3 reasons for supporting their existence:

(a)that plaintiffs with good causes of action pursue them with reasonable diligence

(b)that a defendant might have lost evidence to disprove a stale claim; and

(c)that long dormant claims have more cruelty than justice in them

  • There are various views as to the application of limitation periods - Morgan refers to the 'defendant's windfall' which occurs when the court upholds the statutory time bar, whereas McHugh in Brisbane Southern Regional Health Authority v Taylor urges that the policy of the law is to fix definite time limits which should generally be adhered to in order to preserve the quality of justice.
  • Statutes of limitation are intended to bring certainty to legal proceedings by preventing old and stale claims from being resurrected.

(ii)The running of time

  • Generally, the limitation period commences to run upon accrual of the cause of action and is stopped by the commencement of proceedings. If proceedings are not commenced within the limitation period, time expires and the cause of action is unenforceable.
  • However, a plaintiff may seek an extension of time to bring the action, and certain occurrences have the effect of suspending the operation of the statutes.
  • Commencement occurs when the originating process is issued by the plaintiff (ie. when it is sealed in the court registry)

Stipulated Periods

Cause of Action / Limitation Period / Section
Limitation of Actions Act 1974-91 (Qld)
Contract* / 6 / 10(1)(a)
Tort (general)* / 6 / 10(1)(a)
Tort (personal injuries)* / 3 / 11
Deceased estates / 12 / 28
Breach of trust or recovery of trust property / 6 / 27(2)
Deed or speciality / 12 / 10(3)
Recovery of land / 12 / 13
Action on a Judgement* / 12 / 10(4)
Series of conversions/wrongful detention of a chattel / 6 / 12

* Relevant to the course

Accrual of Cause of Action

  • The general rule is that the limitation period commences to run when the plaintiff's cause of action accrues or is complete.
  • A cause of action accrues when the necessary facts have occurred, and there is in existence, a competent plaintiff who can sue and a competent defendant who can be sued (Thomson v Lord Clanmorris). The requirements of the cause of action vary according t the type of case and are determined by the general law. Time runs from this point in time to the time that the originating process is filed.
  • However, the limitation period must be still be remembered in the following interlocutory procedures:

applications for leave to amend the originating process

applications to renew the originating process

applications to dismiss for want of prosecution

  • For example, in contract the cause of action is said to arise from the time of breach, whereas in tort the cause of action arises from the time that damage is sustained(Price, Higgins & Fidge v Drysdale)

Postponement

  • Limitation periods may be suspended or postponed in particular circumstances, such as fraud or mistake, or where there has been an acknowledgment or part payment by the defendant, or where the plaintiff is under a disability.

Disability

  • A plaintiff is under a disability if he/she is under 18 years of age or of unsound mind: s.5(2)
  • "Unsound mind" must be construed in context, so that where a plaintiff is incapable of managing his/her affairs then he/she is under a disability

Kirby v Leather (High Court of England, Queens Bench, 1965)
Facts:
15 May 1959: the pl. was involved in a motor vehicle accidence, when his scooter collided with a van
he suffered serious injuries including brain damages, and was unconscious for several weeks after the accident
he had no recollection of the accident
2 October 1963: a writ was issued claiming damages against the driver of the van
Held: Denning MR
The limitation period under the respective legislation was 3 years from the date the cause of action accrued
in calculating the 3 years, you exclude the day of the accident itself (15 May 1959) which is the date the action accrued. The 3 years started on midnight on May 15-16 1959, and ran up to midnight on May 15-16 1962
There is an extension of time, when a person is under a disability - if on the date when any right of action accrued, the person was under a disability, the action may be brought at any time before the expiration of 3 years from the date when the person ceased to be under a disability
A person is deemed to be under a disability "while he is an infant or of unsound mind"
The question is then, was David Kirby, at and after 15 May 1959, of unsound mind?
The words "unsound mind" are not defined in the statute, but mean a person, who by reasons of mental disorder, is incapable of managing and administering his property and affairs (in this case, in relation to the accident)
Dr Cook introduced evidence that from 1960 onwards, Kirby was badly affected mentally
Subsequently, the court found that the action is not statute-barred
  • Macrossan in King v Coupland considered Denning's judgement, and found that the matters referred were aspects of a broader concept of mental illness causing an incapacity to manage affairs in a manner that a reasonable man would achieve.
  • The effect of the plaintiff's disability is to prevent the running of the limitation period: s.29. The plaintiff need not wait until the disability ceases before suing.

(iii)The effect of expiration of the limitation period

  • Where the limitation period has expired, the general rule is that the right remains in existence, but can no longer be enforced (ie. the remedy is barred, but not the right).
  • However, in certain instances, the running of the limitation period extinguishes the right, eg. the running of the limitation period for an action to recover land extinguishes the title of the landowner (s.24)

Georgiadis v Australian and Overseas Telecommunications Corp
Facts:
a Cth employee had accrued a cause of action for damages for economic loss prior to 1 December 1988, but had not commenced proceedings prior to the commencement of s.44 Comcare Act (which purported to retrospectively abolish pre-existing injuries claims)
Mr G challenged the constitutional validity of s.44 on the basis that it effected an acquisition of property (his right to bring an action for damages) other than on just terms as required by s.51(xxxi) Cth Constitution
Held: Majority (Mason, Brennan, Deane, Gaudron)
Upheld the plaintiff's argument
a plaintiff's claim in negligence causing personal injuries is a chose in action, and the effect of s.44 was to confer a distinct financial benefit on the Cth
however, the majority expressly avoided the issue as to whether a cause of action which is statute-barred can constitute 'property' for the purposes of s.51(xxxi)
the minority (Dawson, Toohey & McHugh) found that s.44 was not invalid, as the extinguishment of rights is not an acquisition
Commonwealth v Mewett
Facts:
the case involved 3 plaintiffs, who fell under various statutes rendering their causes of action, out of time
the Cth argued that there was no vested valuable property right in the cause of action, and therefore no property to be protected under s.51(xxxi)
Spencer J (Full Federal Court) found that the claims of 2 (Rock and Brandon) of the plaintiffs (in contract and tort) were barred with the respective provision being procedural in nature (s.14 Limitation Act 1969 NSW). The other plaintiff's claim was extinguished, and the relevant provision was held to be substantive in nature (s.63 of the same Act), however it is necessary for the defendant to plead the extinguishment of the right, for the right to be extinguished.
Section 44 Comcare Act purported to retrospectively abolish causes of action for personal injuries
An appeal to the HC was dismissed, but the Justices adopted different approaches to the issue of whether a cause of action can constitute property for the purposes of s.51(xxxi)
Held: HC on Appeal
Dawson J:
The cause of action is not extinguished under s.63, because there is no expiration of a limitation period fixed under the NSW Act - such a limitation period remains to be determined by way of an application for extension of time.
The cause of action remains sufficiently proprietary in nature to be counted among the "innominate and anomalous interest" (Bank of NSW v Cth) to which s.51(xxxi) has been held to extend its protection.
Where an extension of time is refused, s.63 will be engaged, but until time or circumstances otherwise preclude an application for extension of time, s.63 does not take effect
Rock and Brandon's causes of action are not extinguished under s.63, as their applications for extension of time have yet to be determined
Section 44 Comcare Act, in seeking to extinguish them, fails to provide just terms and is invalid

Gummow and Kirby JJ:

A cause of action, upon which there has operated a bar of the kind imposed by the statute of limitations, still has sufficient substance to answer the constitutional description of "property" in s.51(xxxi)
This follows from 2 considerations:
  1. a statutory bar does not go the jurisdiction of the court to entertain the claim, but to the remedy and defences available. The cause of action has not been extinguished. Absent an appropriate plea, the matter of the statutory bar does not arise for consideration by the court (Cth v Verwayen).
  2. In circumstances the defendant may be estopped from pleading the statutory bar or otherwise be deemed to have waived the right to do so (Cth v Verwayen)
The constitution guarantee under s.51(xxxi) operates in respect of a species of valuable right and interest
Despite the existence of the statutory bar, the subsistence of the cause of action, particularly one for a liquidated sum, means that it still may be turned by the plaintiff, into a valuable account (eg. possessory lien may still be exercised, etc)
It is this subsistence which suffices to engage the constitutional guarantee
Brennan CJ & McHugh J:
did not express a view on this issue

(iv)Extension of the Limitation Period [general knowledge required only for this course]

  • Part III of the Limitation of Actions Act 1974 (Qld) allows the limitation period to be extended in certain cases. It is intended to assist persons who, for genuine reasons, have not taken action and whose case would otherwise be statute barred or will shortly be statute barred.
  • The courts have taken the view that the legislation is not designed to assist plaintiff's who have been careless, tardy or slothful, or whose legal advisers have shared these attributes.

(v)Forum Shopping

  • Refers to the situation in which the plaintiff seeks out the jurisdiction most favourable to his/her cause of action, and hence boosts their prospects for success.
  • The issue arises in relation to limitation periods because the legislation is state-based.
  • The court exercising jurisdiction generally applies the law in force in that jurisdiction. Therefore, an action can be maintained if it has been bought within time under the law of the forum, even if according to the limitation statute of the law governing the dispute it is statute barred. (ie. distinction between 'procedural' law = law of jurisdiction in which proceedings commenced v. substantive law = law of jurisdiction in which dispute arose)
  • Statute (eg. Choice of Law (Limitation Periods)Act 1996 Qld) now essentially removes the procedural/substantive distinction, and regards limitation periods as part of the substantive law to be applied accordingly (cf. McKain v R W Miller & Co)

(vi)"Out of Time" as a Defence

  • The allegation that an action is out of time must be raised as a legal defence in the pleadings and must be specifically pleaded: r150(1)(c)
  • There is no discretion in the Court to refuse to accept such a plea, however the court will not raise the defence itself. The party with the benefit of the defence must raise it.

(vii)Contracting Out

  • It is possible for parties to agree not to plead the limitation period.
  • Correspondence from a defendant that stated "liability is not an issue" has been held to amount to contract between the parties precluding the defendant from putting forward any defence which would impeach that liability including a defence that the claim is statute barred: Newton, Bellamy & Wolfe v SGIO

(viii)Example: Personal Injury Actions

  • 'Personal injury' is defined as any disease and any impairment of a person's physical or mental condition: 5(1) Limitation of Actions Act

Accrual of the cause of action

  • The general rule is the limitation period begins to run upon accrual of the cause of action - ie. the time when the injury first occurred

Latent Injuries

  • In this instance, the plaintiff has no way of knowing of the injury, however the limitation period has begun to run, eg. employees who develop pneumoconiosis from inhaling particles of silica some 30 years earlier.
  • The court is given a discretion to extend the limitation period in cases where the plaintiff was unaware that the injury had been suffered

(ix)Law Reform

  • "The principle that the limitation period commences on the date when the cause of action accrues should be replaced."

Problems Identified

  • Difficulties determining when the cause of action accrues
  • Different causes of action accrue at different times
  • Unfairness

Proposed Changes

  • A limitation period of general application for common law claims, being the lesser of:

(a) 3 years after the date on which the plaintiff first knew, or, in the circumstances ought to have known:

> that the injury had occurred

> that the injury was attributable to the conduct of the defendant

> that the injury, assuming liability on the part of the defendant, warranted bringing proceedings

OR

(b) 10 years after the date on which the conduct, act or omission giving rise to the claim occurred

  • 'Injury' is defined as:

personal injury

property damage

economic loss

non-performance of obligations

  • A judicial discretion to extend the limitation period, including considerations

plaintiff's reasons

prejudice to defendant

nature of the plaintiff's injury

could the defendant have been expected to be aware of claims?

defendant's conduct leading to injury

defendant's conduct following injury

duration of plaintiff's disability

did plaintiff act properly and reasonably?

steps taken by plaintiff to obtain medical, legal or other expert advice

B.Joinder of Claims and Parties

(i)Introduction

  • General principle: each person whose presence is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in a proceeding must be included as a party to the proceeding: r62(1)
  • The legislation is designed to avoid multiplicity of proceedings and inconsistency of result.
  • The provisions should be liberally construed: Roberts v Gippsland Agricultural and Earth Moving Contracting Pty Ltd

(ii)Res Judicata and Issue Estoppel

  • Res judicata and issue estoppel apply where a court has given judgment in relation to matters the subject of litigation. A party is unable to reopen such matters.
  • These are relevant considerations in the context of joinder, as the failure to join a claim in a proceeding may preclude the pursuit of such a claim in a later proceeding. Furthermore, the failure to join a person as a party will normally mean that a decision made in the proceeding will not be binding upon that person.

Res Judicata

  • The classic formulation is from Henderson v Henderson:

"Where a given matter becomes the subject matter of litigation in and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The please of res judicata applies…to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."
  • The main authority in the area is Port of Melbourne Authority v Anshun Pty Ltd (No 2):

Port of Melbourne Authority v Anshun Pty Ltd (No 2)[HC, 1981]
Facts:
a worker was injured by a load of girders handled by a crane hire by Anshun Pty Ltd form the Port of Melbourne Authority.
In an earlier action brought by the injured worker against Anshun and the Authority, the defendants sought contribution from each other, and subsequently Anshun was to recover 90% of the damages awarded to the plaintiff from the Authority, and the authority should recover 10% of the damages from Anshun.
The authority then brought proceedings against Anshun claiming an entitlement to an indemnity pursuant to the crane hire agreement.
Held:
At first instance, it was held that the rule from Henderson v Henderson applied, and the indemnity should have been pursued in the original proceedings.
This decision was upheld by the Full Court of the Supreme Court.
The HC also upheld the decision. However, Gibbs, Mason and Aicken, and Brennan noted that a claim to an indemnity may be litigated as between a defendant and a third party (or between defendants) even though the right to indemnity arises only on payment of the liability to which it relates, that is, payment to the plaintiff who seeks damages. The fact that liability to the plaintiff has not be established or discharged is no bar to the third party claim.

Issue Estoppel