AIR LINK PTY LIMITED v Malcolm Ian PATERSON (NO 2)

MASON P : This is one of those cases where the correct answer depends largely on asking the correct question. This said, the issue can be stated as whether a statutory cause of action arising under a federal Act (which declares it to be “extinguished” if “action is not brought” within two years) can be added by amendment to a statement of claim filed more than two years ago which did not plead that cause of action in its original form. The amendment purports to be authorised under a rule of the District Court which, according to the respondent, was validly made and has been picked up and applied to the proceedings by s79 of the Judiciary Act 1903 (Cth) .

On 25 September 1998 the respondent travelled from Cobar to Dubbo on the appellant’s aircraft. He was allegedly injured while disembarking at Dubbo. On 22 September 2000 he commenced proceedings for damages in the District Court. In his statement of claim he pleaded the intra-State flight between Cobar and Dubbo and framed his causes of action in contract and tort.

The statement of claim was served on the appellant on 4 October 2000. In its Notice of Grounds of Defence filed 8 March 2001 the appellant pleaded inter alia that the statement of claim was liable to be dismissed (par 14) on the ground that the only liability of the appellant in the circumstances lay under Pt IV of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (the Act). In support of this contention, the appellant pleaded that the flight from Cobar to Dubbo was a leg in an interstate journey originating in Queensland pursuant to a contract of carriage evidenced by a single ticket issued to the respondent. It was also pleaded that the appellant held an air operator’s certificate (cf s27 of the Act).

These two factual matters raised in the Defence are no longer in dispute between the parties. The respondent has sought to amend his statement of claim, by removing the causes of action in contract and tort, and asserting a cause of action arising exclusively under Pt IV of the Act. His right to do so for the first time after the lapse of the two year limitation period stipulated in s34 of the Act is the matter in issue in this appeal. The Warsaw Convention as amended at the hague and its translation into Australian Municipal Law

The original Warsaw Convention of 1929 governs the liability of international air carriers to passengers in respect of death or injury and loss of baggage. Australia has been a party since 1935.

The Hague Protocol to amend the Warsaw Convention was adopted in 1955 by 44 States including Australia. The Warsaw Convention as amended at The Hague (the Convention) has legal force in Australia in relation to any carriage by air to which the Convention applies, subject to the provisions of Pt II of the Act (see s11). The Convention is set out in Schedule 2 of the Act. Subject to s14 of the Act, the liability of a carrier under the Convention in respect of personal injury suffered by a passenger is in substitution for any civil liability of the carrier under any other law in respect of the injury (s13). The Convention thus enacted into Australian law applies according to its terms, subject to the limited modifications effected in Pt II of the Act. But the Convention applies only to international carriage of persons, baggage or cargo.

Chapter III of the Convention (Articles 17-30) deals with the carrier’s liability. Article 17 imposes liability (without proof of fault) for damage sustained in the event of bodily injury suffered by a passenger. Article 24 provides that in the cases covered by Article 17, any action for damages, however founded, can only be brought subject to the conditions and limits set out in the Convention. The quantum of recoverable damages is capped by Article 22.

Articles 28 and 29 are tangentially relevant to issues arising in this appeal and should therefore be set out: Article 28 1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the Court having jurisdiction where the carrier is ordinarily resident, or has his principal place of business, or has an establishment by which the contract has been made or before the court having jurisdiction at the place of destination. 2. Questions of procedure shall be governed by the law of the Court seised of the case. Article 29 1. The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. 2. The method of calculating the period of limitation shall be determined by the law of the Court seised of the case.

Because international carriage by air is not involved the present case does not engage the Convention or Pt II of the Act. Australian domestic air carriage

Part IV of the Act (ss26-41) applies rules similar to those found in the Convention to Australian domestic airline operators except when they are engaged in purely intra-State carriage (see s27). (A parallel scheme operates as regards intra-State carriage by force of legislation passed in the various States. This State’s provision is the Civil Aviation (Carriers’ Liability) Act 1967 . )

Unlike Part II of the Act, Pt IV does not apply the Convention according to its terms. Rather, it enacts its own detailed legislative regime which parallels the general scheme of the Convention to domestic air carriage, subject to certain modifications.

It is Pt IV that is the basis of the appellant’s putative liability to the respondent, subject to the all important limitation provision found in s34.

So far as presently relevant, s27 applies Pt IV to the carriage of a passenger where the passenger in an aircraft operated by the holder of an airline licence or a charter licence in the course of commercial transport operations under a contract for the carriage of the passenger between a place in a State and a place in another State. Section 28 imposes liability for damage arising from a passenger’s personal injury as a result of an accident which took place in the course of disembarking. That liability is, however expressly “Subject to this Part” . Section 31 imposes a monetary cap on the damages recoverable.

Section 34 provides: Limitation of actions 34. The right of a person to damages under this Part is extinguished if an action is not brought by him or for his benefit within two years after the date of arrival of the aircraft at the destination, or, where the aircraft did not arrive at the destination; (a) the date on which the aircraft ought to have arrived at the destination; or (b) the date on which the carriage stopped; whichever is the later.

In this appeal the appellant submits that s34 of the Act should be interpreted conformably with the interpretation of Article 29 of the Convention. The appellant relies upon textual and contextual similarities as well as statements by the Minister in his second reading speech upon introduction of the Act concerning the desirability of uniformity as regards international, national and intra-State air carriage (see Parliament of Australia, Hansard , House of Representatives, 7 April 1959, pp903-908). The appellant cites authorities referable to Article 29 which (in the main, though not exclusively) indicate that extinguishment by lapse of time cannot be trumped by resort to a power to amend proceedings that were brought within time but which do not originally plead a cause of action under the Convention.

The respondent contends that s34 of the Act is to be interpreted according to the norms for interpreting domestic legislation and well established principles about the relation back of amendments to pleadings permitted under rules of court. The respondent also resists automatic transposition of the local and international law relating to the Convention into a situation governed by Pt IV of the Act. The deficiencies of the original Statement of Claim

On 7 May 2001 the plaintiff filed a notice of motion in the District Court seeking orders that: (i) par 14 of the Defence be struck out; or (ii) the plaintiff has leave to amend his statement of claim to substitute a claim pursuant to Pt IV of the Act for the claims in contract and tort.

On 17 May 2001 the defendant countered with a notice of motion seeking summary dismissal of the proceedings, as foreshadowed in par 14 of its Defence.

On 18 May 2001 Black DCJ dismissed the defendant’s notice of motion and made orders in accordance with par (i) of the plaintiff’s notice of motion, ie striking out par 14 of the Defence. His Honour did not proceed to par (ii), apparently because the defendant signalled that it wished to challenge on appeal the order striking out par 14 of the Defence.

In Air Link Pty Limited v Paterson [2002] NSWCA 85 ( Air Link (No 1) ) this Court set aside the orders made by Judge Black. The Court’s reasons were given by Sheller JA, with whom Beazley JA and I agreed. The Court held that the original statement of claim pleaded only causes of action in contract and tort. It did not plead an action under Pt IV of the Act in that the pleading contained no reference to the Act and omitted allegations of material facts necessary to ground an action under Pt IV of the Act (namely that the appellant held an airline licence and that the contract was for interstate carriage) (see esp pars [7], [22] and [32] of Sheller JA’s reasons). In the penultimate paragraph of his judgment Sheller JA said: Section 34 of the Act provides that the right under Pt IV is extinguished “if an action is not brought by him or for his benefit within two years”. This must be read as an action under Pt IV. Neither party directed any argument to para 2 of the plaintiff’s notice of motion in the District Court. I deliberately refrain from expressing any view about the merits of that part of the plaintiff’s application to the District Court which may now be renewed in that court. Further proceedings in the District Court

The respondent returned to the District Court. He filed a notice of motion seeking “leave pursuant to Pt 17 r1 and/or r4(1) and/or r4(5)” of the District Court Rules to amend the statement of claim. The proposed amendment was in substitution for the earlier statement of claim (which was still on the record) and it pleaded a single cause of action under Pt IV of the Act. The new pleading alleged material facts that give rise to a cause of action under Pt IV, based upon injury suffered in an accident in the course of disembarking from an aircraft as a passenger under an interstate contract for carriage. Unlike the original statement of claim, the proposed amendment also pleaded that the appellant held a current air operator’s certificate and that the respondent travelled pursuant to a ticket covering a series of journeys constituting interstate carriage (cf ss26 and 27 of the Act).

The difficulty for the respondent was that, on one view of the matter, he was unable to satisfy s34 of the Act which stated in effect that his only cause of action was already “extinguished”.

The respondent has never suggested that he could have commenced proceedings in 2002 by a statement of claim in the form of the proposed amendment. Nevertheless, he contended in the District Court that (subject to the grant of leave) he could amend the original statement of claim by substituting the new cause of action under Pt IV in circumstances which would enable him to satisfy s34 of the Act by treating the date when he first sued in relation to the accident (22 September 2000) as the bringing of his action under Pt IV within time.

The respondent invoked the power of the District Court to permit the amendment of his original statement of claim. Specifically he relied upon the following rules in Pt 17 – Amendment of the District Court Rules : General 1. (1) The Court may, at any stage of any proceedings, on application by any party or of its own motion, order, that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit. (2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings. … (3A) An order may be made, or leave may be granted, under subrule (1) notwithstanding that the effect of the amendment is, or would be, to add or substitute a cause of action arising after the commencement of the proceedings, but in such a case the date of commencement of the proceedings, so far as concerns that cause of action, shall, subject to rule 4, be the date on which the amendment is made. … Statutes of limitation 4. (1) Where any relevant period of limitation expires after the date of filing of a statement of claim and after that expiry an application is made under rule 1 for leave to amend the statement of claim by making the amendment mentioned in any of subrules (3), (4) and (5), the Court may in the circumstances mentioned in that subrule make an order giving leave accordingly, notwithstanding that that period has expired. … (3) Where there has been a mistake in the name of a party and the Court is satisfied that the mistake was not misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, the Court may make an order for leave to make an amendment to correct the mistake, whether or not the effect of the amendment is to substitute a new party. (4) Where, on or after the date of filing a statement of claim, the plaintiff is or becomes entitled to sue in any capacity, the Court may order that the plaintiff have leave to make an amendment having the effect that he sues in that capacity. (5) Where a plaintiff, in his statement of claim, makes a claim for relief on a cause of action arising out of any facts, the Court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action. (5A) An amendment made pursuant to an order made under this rule shall, unless the Court otherwise orders, relate back to the date of filing of the statement of claim. (6) This rule does not limit the powers of the Court under rule 1.

The corresponding rules in the Supreme Court are identical in their stated effect ( Supreme Court Rules , Pt 20 rr1,4).

The application was granted by Judge Graham who held that he had power under Pt 17 to add a claim under Pt IV of the Act and that it was appropriate in the circumstances to grant the leave sought. This order, not yet acted upon, is challenged in this appeal.

Since no special order was made under r4(5A), the effect of the amendment permitted by his Honour will (according to that subrule) be that it relates back to the date of filing of the original statement of claim. As will appear below, this was the position at common law. The subrule was probably added to confirm this and to ensure that there could be no doubt as to the court’s power to order otherwise.

Judge Graham’s reasons contain a most helpful review of the issues and refer to most of the cases to which we were taken in the appeal. His Honour held that the power under Pt 17 was not removed because of any inconsistency between the Rules and s34 of the Act. Judge Graham was not asked to address a general claim that Pt 17 r4(5) was ultra vires the rule-making powers of the judges of the District Court.

Judge Graham was satisfied that the proposed amended statement of claim was for relief on a new cause of action arising out of the same or substantially the same facts as those originally pleaded (cf r4(5)) and that it was appropriate to exercise the discretion in favour of the respondent in light of the appellant’s inability to point to any prejudice stemming from the delay in seeking the amendment (see Reasons at pp5-7). The due exercise of his Honour’s discretion is not in issue in the appeal.

What is in issue is the power of the District Court to resort to Pt 17 of its Rules in the present circumstances. Judiciary Act 1903, s79

At least by the time of the application before Judge Graham, the District Court was exercising federal jurisdiction in light of the respondent’s invocation of a right stemming from a Commonwealth Act. Section 79 of the Judiciary Act 1903 (Cth) provides that, in those circumstances: The laws of [New South Wales], including the laws relating to procedure… shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on [the District Court] in all cases to which they are applicable.

It is well established that s79 picks up as surrogate federal law State laws rendered applicable to proceedings in a court exercising federal jurisdiction ( Solomons v District Court of New South Wales [2002] HCA 47, 76 ALJR 1601, 192 ALR 217 at [21]-[23]). But s79 picks up those laws according to the terms and subject to the qualifications stated in s79 itself. It does not do so if the situation is “otherwise provided by the Constitution” and it only does so in cases “to which [the State laws] are applicable” .

In Northern Territory of Australia v GPAO (1999) 196 CLR 553 Gleeson CJ and Gummow J said (at 588): The objective of s79 is to facilitate the particular exercise of federal jurisdiction by the application of a coherent body of law, elements in which may comprise the laws of the State or Territory in which the jurisdiction is being exercised, together with the laws of the Commonwealth, but subject always to the overriding effect of the Constitution itself. Seen in that light, the notion of “inconsistency” involved in the phrase “otherwise provided” in s79 is akin to that first identified by Mason J in … University of Wollongong v Metwally [(1984) 158 CLR 447 at 463]…. This is the need to resolve the problem that arises by conflict between conflicting statutes having the same source. The law of a State or Territory which is to operate as a surrogate law of the Commonwealth is to be measured beside other laws of the Commonwealth.

Section 79 extends to substantive state laws ( Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136, Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559). As the Court put it in Commissioner of Stamp Duties (NSW) v Owens (No 2) (1953) 88 CLR 168 at 170 (emphasis added): The purpose of [s79] is to adopt the law of the State where federal jurisdiction is exercised as the law by which, except as the Constitution or federal law may otherwise provide, the rights of the parties to the lis are to be ascertained and matters of procedure are to be regulated.

It follows that it would be no answer to the respondent’s case to demonstrate that (contrary to my view) Pt 17 r4 was substantive and not procedural, at least so long as r4 is valid as a matter of State law in the constitutional (s 109) sense and not inconsistent with a federal enactment. Section 79 can pick up State laws relating to limitations even if they are substantive in effect (cf John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 532 [58], 543 [98]). This is not to say that such laws will always be picked up, only that s79 may do so in particular circumstances (see John Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1973) 129 CLR 65) ( John Robertson ). In Kruger v The Commonwealth of Australia (1997) 190 CLR 1 at 139-141 Gaudron J held that s79 could pick up a law of the Australian Capital Territory which had substantive effect in relation to the choice of law touching limitations matters. Toohey J agreed (at 97). The other justices found it unnecessary to address this issue. Outline of issues

The appellant submits that s79 of the Judiciary Act did not engage Pt 17 of the Rules in the present case because: (1) Part 17 r4(5) did not purportedly or validly apply to a federally-enacted limitation provision expressed in the terms of s34 of the Act; and (2) On its true construction, s34 applied directly to the situation confronting the District Court, with the consequence that the amended proceedings were doomed to fail because the action which the respondent was seeking to prosecute was already extinguished.

The propositions overlap and represent my distillation of the appellant’s detailed submissions, to which I shall return.

The respondent’s case, supported by the Attorney General for New South Wales intervening, is that: (1) Rule 4 is a valid exercise of the rule-making power of the District Court judges which is picked up by s79 of the Judiciary Act ; (2) Rule 4 does not enter the field covered by s34 of the Act and accordingly is not inconsistent with s34 (in terms of s109 of the Constitution ) nor does it (when made surrogate federal law by s79 of the Judiciary Act ) provide “otherwise” than s34. Section 34 of Civil Aviation (Carriers’ Liability) Act 1959

There is a well-recognised distinction between statutory time limitations barring the remedy for an existing cause of action and those imposing a condition which is of the essence of a new statutory right ( Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 at 488-9; John Pfeiffer Pty Ltd at 543; Rudolphy v Lightfoot (1999) 197 CLR 500 at 508).

Section 34 is clearly of the latter kind, according to its plain terms. (I find it unnecessary to reinforce this conclusion by reference to the caselaw interpreting Article 29 of the Convention.) It follows that proceedings for the cause of action conferred by Pt IV commenced on or after the two year period enacted by s34 would be doomed to fail and accordingly liable to be summarily dismissed. This general proposition is not in issue.

What is at issue is whether the general proposition applies in relation to the present proceedings, which were commenced within two years of the accident, but sought for the first time to be amended to plead a cause of action under Pt IV after the lapse of more than two years. The appellant contends that the application to amend, which was first made on 7 May 2001, was the step that represents the commencement of the relevant action; and since the relevant cause of action had already been extinguished by force of s34, the general proposition applied and the amendment came too late. The respondent contends that federal law ( Judiciary Act , s79) engaged Pt 17 of the District Court Rules , with the result that an amendment to the original action permitted pursuant to Pt 17 r4(5) meant that the action under Pt IV was deemed to have commenced when the original statement of claim was filed (see esp r17(5A)) and therefore not extinguished by s34.

A similar issue was addressed by Rogers J in Australia & New Zealand Banking Group Ltd v Larcos (1987) 13 NSWLR 286 ( Larcos ) and by the Victorian Court of Appeal in Agtrack (NT) Pty Ltd v Hatfield [2003] VSCA 6. There are however points of distinction between those cases and the present. The reasoning in Larcos is also unsatisfactory in its focus upon s109 of the Constitution as distinct from s79 of the Judiciary Act , although nothing turns on this. The appellant also submits that, if the cases are not distinguishable, they were wrongly decided and ought not to be followed.

It will be necessary to look more closely at those decisions. For the moment, it is sufficient to observe the manner in which Rogers J reasoned in Larcos to a conclusion which supports the respondent’s position in the present appeal. Speaking of Pt 20 r4 of the Supreme Court Rules (the counterpart of Pt 17 r4 of the District Court Rules ) Rogers J said (at 295): The subject matter of the rule was the exercise of discretion in granting amendments. It did not seek to, as indeed it could not, alter Commonwealth legislation providing for limitation of actions…. The rule accepts fully the dictate of the Commonwealth legislation that proceedings should be commenced within three years from the accrual of the cause of action. The rule deals merely with a procedural matter which, as a matter of law, then has an impact on what is to be taken as the date of commencement of proceedings. The two regulatory provisions operate in different fields and are therefore not inconsistent. Amendment of pleadings and the relation back principle

Part 17 r1(2) states the guiding principle in relation to applications to amend pleadings: All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in any proceedings, or of avoiding multiplicity of proceedings.

The court has a broad discretion whether to permit an amendment, but the surrounding principles are well established. In State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 the High Court endorsed a well-known passage in the judgment of Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710-711 where his Lordship said: … I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace…. as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.

Part 17 r4(5A) re-enacts the common law principle that an amendment duly made shall, unless the court otherwise orders, relate back to the date of the filing of the Statement of Claim. This was the position at common law, as I seek to demonstrate below. But the significance of its express reiteration in r4 is to put it beyond doubt that the relation back principle can apply in a limitation context, so long as the court gives leave to amend in accordance with rr1 and 4.

When a party amends, the general rule is that the amendment takes effect as if it had always been in the relevant pleading. This in a sense is the very nature of an amendment and it has nothing to do with whether or not limitations issues are in play.

The relation back principle has long been firmly established in the law. It is not confined to the interface between statutes of limitation and pleading rules ( Liff v Peasley [1980] 1 WLR 781 at 791). It can operate with substantive effect to rescue retrospectively a plaintiff who by an original pleading alleged a cause of action beyond the court’s jurisdiction ( Sneade v Wotherton Barytes and Lead Mining Co Ltd [1904] 1 KB 295) or who as a tenant exposed himself to a forfeiture stemming from denial of his landlord’s title ( Warner v Sampson [1959] 1 QB 297). See also Warner v Sampson [1959] 1 QB 297; Baldry v Jackson [1976] 2 NSWLR 415 at 419; Anglo Irish Beef Processors International v Federated Stevedores Geelong [1997] 2 VR 676 at 680-1; Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 236.

The principle also serves practical functions. For example, an existing Defence can be allowed to stand as responsive to the later-filed amended statement of claim if the defendant is content to do so; and an amendment to originating process may be allowed by an appellate court without triggering the absurdity of the appellant having to file a fresh notice of appeal.

The judgment of Priestley JA in Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 at 182 demonstrates the antiquity of this relation back rule, which his Honour describes as a power to permit amendments having that effect. His Honour also points out (at 182E) that the decision in Weldon v Neal (1887) 19 QBD 394 (discussed below) confirms rather than denies the existence of such a power (see also McGee v Yeomans [1977] 1 NSWLR 273 at 277 per Glass JA).

Even before subrule 4(5A) was inserted, it had been established that a court permitting an amendment had power to displace the application of the relation back principle by ordering that the amendment be dated from a date other than the commencement of the proceedings ( Middleton v O’Neill (1943) 43 SR(NSW) 178 at 186; Brook v The Flinders University of South Australia (1988) 47 SASR 119 at 126). This might be especially appropriate if the amendment added a new party.

Part 17 r4(5A) now confirms this general power and its application in the limitation context. No order displacing the relation back principle was made in the present case. If validly made, the amendment will therefore take effect as if the allegation was part of the original statement of claim ( Baldry v Jackson [1976] 2 NSWLR 415 at 419, Adam v Shiavon [1985] 1 Qd R 1 at 10).

In the 1980s, doubts were raised about the correctness of the assumption that the relation back principle continued to apply, unless displaced by contrary order, where an amendment (now permitted under rule modifications) added a new party or a new cause of action in a limitation context (see Liff v Peasley [1980] 1 WLR 781 at 802-804; Ketteman v Hansel Properties Ltd [1987] AC 189 at 200; Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 731-733). How the doubts were resolved in this State in Proctor will be addressed below, after I examine the rule in Weldon v Neal which was the springboard for those doubts. The rule in Weldon v Neal

Bowen LJ’s dictum in Cropper qualified the generality of the right to amend by stating that it cannot be exercised where it would do injustice to the other party. Weldon v Neal gave its name to a “settled rule of practice” precluding leave to amend if the proposed amendment would prejudice the rights of the opposite party existing at the date of the amendment. The rule was not confined to amendments sought by plaintiffs (see Horton v Jones (No 2) (1939) 39 SR(NSW) 305 at 314). However, it was usually invoked to explain refusal to permit an amendment of a statement of claim that would introduce a new statute-barred cause of action which would not be statute-barred if treated as being covered ex post facto by the initiating process under the relation back doctrine.

In McGee, Glass JA said (at 277): Since Weldon v Neal it has been a settled rule of practice that, except in ‘very peculiar circumstances’, an amendment will not be allowed which sets up a cause of action which, at the time of the amendment, is barred by a statute of limitation. The plaintiff is treated as having already commenced his action in respect of the claims made, and he is not permitted to introduce new claims by amendment for this would be regarded as being in substance, though not in form, the bringing of a new action for claims which are already barred by statute: O’Grady v Botany Wools (Australia) (1964) 64 SR(NSW) 359 at 367. The doctrine does not suggest that the Court lacks power to allow the amendment, but that, in the absence of ‘very peculiar circumstances’, the judge is bound, in the proper exercise of his discretion, to refuse the application….

Relevant to the issues in this appeal is the fact that this analysis of the Weldon v Neal rule shows that it was always viewed as a “rule of practice” that informed and controlled the general power to permit amendment to pleadings having retrospective effect under the relation back principle. Weldon v Neal was quintessentially a matter of practice and procedure as to the exercise of the power to permit amendments under rules of court conferred in general terms. By characterising the rule as one of “practice”, the Court in Weldon was taking pains not to deny the power to permit an amendment to relate back even though the amended cause of action was otherwise statute-barred (see Proctor at 182). It must, however be acknowledged that these comments in Weldon and other nineteenth century cases were made in the context of limitation provisions that barred the remedy as distinct from those where the time limit was a condition of the right. But Proctor was not such a case (see below).

To characterise the rule in Weldon v Neal as one of practice is not inconsistent with authoritative statements about the way in which a court endeavours to distinguish between amendments establishing a new cause of action for the first time and those which merely recast an existing pleading. In Jordan CJ’s words in Horton (at 315): … the matter is one of substance, not of form. It is regarded as unjust to a defendant to allow the power to amend to be used to allow a plaintiff to present for the first time a new matter of controversy at a time when it is already barred by statute. To similar effect were the following remarks of Herron J in Penrith Municipal Council v Australian Blue Metal Ltd (1960) 60 SR(NSW) 608 at 615: The rule is not a mere rule of pleading. It is not designed to give effect to a technical rule of pleading, nor is it designed to penalize a party, whether plaintiff or defendant, merely because he has already limited himself to certain allegations from amending his statement of claim or defence to correct such allegations. The rule is one directed to the substance of the claim and seeks to prevent fresh claims being litigated in respect of causes of action as to which, since the writ, the defendant has acquired a valid defence of a statute of limitation. What is prohibited is the bringing forward of a new claim, one essentially different from that which hitherto had been alleged. It is to prevent injustice to a defendant in respect of a cause of action as to which he has already a vested right of immunity. The cases turn upon the introduction of a claim new and different in substance and one which seeks to impose on the defendant for the first time a basis of liability not previously alleged.

The focus of the rule was the legal character of the new case on which the plaintiff wished to rely. An amendment might be allowed if it introduced no more than further and better particulars of material facts already pleaded (eg Juric v Dixon Supply Co Pty Ltd [1976] VR 701 (amendment of particulars of negligence to plead non-compliance with statutory duty); Golski v Kirk (1987) 14 FCR 143 (amendment of particulars of negligent surgical treatment to plead failure to advise of the risks involved)), or if it was sufficiently related to what was already alleged that it would not be unfair to allow it as another way of putting the same claim (eg Harris v Raggatt [1965] VR 779 at 786). But if the facts sought to be added represented a new cause of action or a different legal theory of liability, the amendment would be disallowed ( Patterson v Richards [1963] VR 179 at 187, Harris at 785).

On these principles, the amendment sought by the respondent would have been disallowed in the proper exercise of a discretion informed by the unmodified rule in Weldon v Neal . Modification of the rule in Weldon v Neal

The “finespun distinctions” engendered by the rule in Weldon v Neal (per Glass JA in McGee at 280) prompted its modification by rules of court in many jurisdictions, not always in identical terms.

In 1965 the English Rules of Court conferred a power to amend that arguably qualified the rule in Weldon v Neal (RSC 1965 O 20 r5). English courts disagreed as to its effect (see McGee at 278-9). When the New South Wales Law Reform Commission drafted the rules which were enacted as a schedule to the Supreme Court Act 1970, Pt 20 rr1 and 4 were framed in slightly different terms to the English model. In McGee , this Court held that the rule in Weldon v Neal had thereby been “totally destroyed” (per Glass JA at 280). So long as the amendment substituting a new cause of action arose out of the same or substantially the same facts, it was open to the court to permit it notwithstanding the earlier expiry of a relevant period of limitation. When Hunt J and Cross J later raised doubts about the matter (in Chapple v Laming [1981] 2 NSWLR 765 and Proctor v Jetway Aviation Pty Ltd [1982] 2 NSWLR 264) they were overruled and reversed by this Court in Proctor , with a stern lecture as to their duties of obedience to higher authority. See also Minister Administering the Environmental Planning & Assessment Act 1979 v San Sebastian Pty Ltd [1983] 2 NSWLR 268 at 314-5 (Glass JA). In Proctor , McGee was affirmed, explained and applied to a limitation provision that expressly extinguished a cause of action.

In Adam v Shiavon [1985] 1 Qd R 1 esp at 7-8 the Full Court of the Supreme Court of Queensland followed McGee and applied it to the Queensland rule abrogating Weldon v Neal .

Implicit in McGee and explicit in Proctor (at 174-5, 181, 183-5) was the adoption of the relation back principle in a situation covered by r4. In Proctor , Priestley JA described the interaction between Pt 20 r4 and the relation back principle in the following terms (at 183, emphasis added): The decision [in McGee ] was one which read the rules of court in the ordinary meaning of their words and thus held that the rules required the courts, at some cost of certainty, to follow a practice designed to achieve in particular cases what in the court’s view would be more meritorious results than under the practice before the introduction of the new rules. It brought about a change of practice in the exercise of a power the court had always had . What would happen more frequently under the new practice would be that leave would be granted to include time expired causes of action in statements of claim and then the rule necessarily implied in cases such as those in the Exchequer Court above referred to and recognized by this Court in Baldry v Jackson [1976] 2 NSWLR 415 at 419, would operate. That rule is that an amendment duly made takes effect from the date of the original document which it amends. Thus a statement of claim permitted to be amended by allowing the insertion of a time expired cause of action is to be regarded as having been in its amended form from the date of first filing, and consequently as having pleaded the cause of action before it was barred (using pre 1969 language) or extinguished . The law simply ignores any logical difficulties created by the doctrines of relation back or retroactivity it uses in various fields….

This passage, in a judgment concurred in by Glass JA, is important because (1) it confirms that courts always had the power to permit an amendment in a manner that would attract the relation back principle; and (2) it recognises (by the words “or extinguished” ) that the new rule of court applied to both types of limitation provisions that were well-established by that time.

The dual categories of limitation statutes had long been recognised (see [39] above). It was therefore unlikely that those who drafted r4 intended to confine it to “procedural” limitation statutes. Proctor held that the rule is not thus confined. See also Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212 (where r4 was applied to a contractual time bar); Rodgers v Commissioner of Taxation (1998) 88 FCR 61 ( Rodgers ). This expansive interpretation of r4 accords with statements about the remedial nature of r4 and its counterparts, and the consequential need to construe them liberally and beneficially (see eg Bridge Shipping at 260-1 per McHugh J, with whom Brennan and Deane JJ agreed).

Despite these developments, doubts surfaced in the 1980s as to the correctness of continuing to apply the relation back principle to all amendments permitted under rules of court that modified Weldon v Neal . The correctness of doing so was first doubted in 1980 by the English Court of Appeal (Stephenson and Brandon LJJ) in Liff , a case involving the addition of a new party. In 1987 Lord Brandon, as he had become, repeated these doubts in Ketteman . In 1989, Clarke JA referred to these doubts in Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 732-3. He added (at 733) his opinion that the English cases were distinguishable from Baldry in that they entailed the addition of a new party, whereas Baldry entailed the addition of a new cause of action against an existing party. The distinction is important (see also Stumann v Spansteel Engineering Pty Ltd [1986] 2 Qd R 471). The authority of Proctor therefore stands undiminished in this context.

In any event, these doubts were laid to rest by the new subrule (5A) added to Pt 20 r4 in the Supreme Court Rules in 1989 and to Pt 17 r4 in the District Court Rules in 1996. I suspect that the main impetus for the subrule was to confirm the power of the court to displace the relation back principle by ordering otherwise, thereby allowing the court to permit an amendment but preserve the defendant’s rights to plead the statute of limitations in a proper case.

There is an express modification of the relation back principle where a new party is added (see Supreme Court Rules , Pt 8 r11(3), District Court Rules , Pt 7 r11(3)). What Proctor decided

McGee and Proctor have stood unchallenged for many years and there is in any event no reason to doubt their correctness. They represent the settled law in this State as to the scope of the power conferred by r4.

In McGee and Proctor this Court confirmed that the Supreme Court Rules conferred power to allow a statute-barred cause of action to be added by amendment. The rule in Weldon v Neal was displaced and replaced by a discretion to allow an amendment to be made if the rule’s requirements were met and the justice of the case required it (see McGee at 280, Proctor at 173-4). Proctor confirmed that Pt 20 r4 of the Supreme Court Rules applied according to its terms in relation to the addition of new causes of action, without the qualifications suggested by the dicta in Liff and Ketteman .

Proctor also represents a considered ruling that Pt 20 r4 of the Supreme Court Rules is valid, notwithstanding its impact upon a substantive limitation provision in a State enactment.

The plaintiff in Proctor had claimed damages arising out of the death of her husband who was a passenger on a charter flight from Sydney to Dubbo. The case bore similarities to the present one in that the original pleading omitted an essential allegation as to the intra-State nature of the carriage and contained only an irrelevant allegation of negligence. Being an intra-State flight, the carrier’s liability in Proctor was created by the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) , this State’s counterpart of Pt IV of the Civil Aviation (Carriers’ Liability Act 1959 (Cth) engaged in this appeal.

The 1967 Act relevantly provided (s5) that the provisions of Part IV of the Commonwealth Act (with presently immaterial exceptions and qualifications) applied to and in relation to intra-State air carriage to which the State Act applied (cf s4) “as if those provisions were incorporated in this Act” . Part IV of the Commonwealth Act, including s34, was thus made part of the statute law in New South Wales.

More than two years after the accident, the plaintiff in Proctor sought leave to amend her statement of claim so that it pleaded the statutory cause of action. Leave was refused by Cross J at first instance who held that s34 (as incorporated into State law) had operated to extinguish (rather than bar recovery upon) the relevant cause of action. Cross J held that Pt 20 r4 of the Supreme Court Rules had no effective application to a cause of action that had been extinguished, notwithstanding the ruling in McGee , whose correctness he doubted, which had held otherwise in relation to s63 of the Limitation Act 1969 (also an extinguishing limitation provision).

This Court reversed Cross J and held that r4 validly empowered the Supreme Court to grant an amendment to the statement of claim effectively to include a cause of action which had otherwise already expired or been extinguished according to statute law. As indicated already, this Court explained McGee and justified its decision by reference to the width and purpose of r4 and the continued power to apply the relation back principle. Cross J’s attempt to explain or distinguish McGee was firmly rebuffed. Rule 4 was construed as plainly including both types of traditional limitation statutes within its scope.

This interpretation was underpinned by reference to the fact that r4 was part of the rules as originally enacted in a Schedule to the Supreme Court Act 1970 . (It then omitted subrule (5A), but nothing turns on this in the present context.) This statutory backing of the original rule meant that no problem could arise from the fact that the substantive limitation provision in question stemmed from a specific State enactment, being the Civil Aviation (Carriers’ Liability) Act 1967 . McGee was confirmed and r4 was applied in the context of a limitation provision of substantive or extinguishing nature found in a statute other than the Limitation Act 1969 (see esp per Moffitt P at 176, per Glass JA at 181, per Priestley JA at 186).

Proctor put to rest in this State any questions about the validity of r4 in the Supreme Court Rules or its capacity to extend to a cause of action expressed to be subject to the limitation condition found in s34 of the 1959 Commonwealth Act (at least as adopted by a State Act).

The appellant seeks to distinguish McGee and Proctor on various grounds. It is submitted that they cannot be applied to a limitation provision in a federal enactment, especially one framed in the manner of s34 of the Act. It is also submitted that the District Court rule that modified the rule in Weldon v Neal (ie Pt 17 r4) was beyond the rule-making power conferred by the District Court Act . The corresponding provision in the Supreme Court Rules had statutory backing, whereas the District Court Rule did not. The validity of the District Court rule abrogating Weldon v Neal

The appellant submits that r4 is invalid, especially in light of the way the High Court characterised all limitation provisions in John Pfeiffer (at 543-4), albeit in the context of choice of law rules.

The District Court Rules were not enacted as a Schedule to the District Court Act (contrast ss6 and 122 of the Supreme Court Act 1970 ).

The District Court Rules closely followed the form of the Supreme Court Rules at their inception and they have been amended from time to time so as to keep them in similar form to the Supreme Court Rules . In these circumstances, an authoritative interpretation of the corresponding rule in the Supreme Court will apply in the District court absent peculiar circumstances.

In 1973 the rule making power was vested in the Chief Judge and any four other judges of the District Court. For civil proceedings that power was conferred by ss68 and 161 of the District Court Act 1973 .

In its original form, s161(1) relevantly conferred power to make rules for or with respect to - (a) the procedure (including the method of pleading) and the practice to be followed in the Court in any proceedings … and any matters incidental to, or relating to, any such procedure or practice, including the manner and time of making any application … which under this or any other Act or Commonwealth Act is to be made to the Court… … (r) the amendment … of any document filed by a party. Unlike the position for the Supreme Court, the rules were subject to disallowance by either House of Parliament (s162(2)).

When the District Court Rules were first made in 1973, Pt 17 rr1 and 4 were substantially in their present form (although r1(1) was slightly differently expressed and r4 did not yet contain subrules (5A) and (6)). Nothing turns on these minor differences. The side note to each rule contained a cross reference to the counterpart in the Supreme Court Rules.

Section 161 was repealed and re-enacted in different form in 1984. Validly made rules that were extant earlier were continued in force ( District Court (Procedure) Amendment Act 1984 , Schedule 3(63), Schedule 9 cl 2).

In 1994 s161 was again recast in a manner designed to ensure that it applied even if jurisdiction was conferred by an Act other than the District Court Act 1973 ( Statute Law (Miscellaneous Provisions) Act (No 2) 1994 , Schedule 1). But the new s161 also made it clear that the rules were not to be concerned with any matter other than the Court’s exercise of its jurisdiction. The opening portion of s161 now provided: (1) The Rule Committee may make rules, not inconsistent with this Act, for or with respect to any matter: • that by this Act, or by any other Act or law, is required or permitted to be prescribed by rules; or • that is necessary or convenient to be prescribed by rules, for the purposes of, or in connection with, the exercise by the Court of its civil jurisdiction under provisions of this Act, or of any other Act or law, or for carrying any such provisions into effect, and in particular for or with respect to: A validation provision stated that: Any rule of court made (or purporting to be made) under section 161 of the District Court Act 1973 that could have been made under that section as amended by this Act is taken to be made under that section as so amended.

Part 17 rr1 and 4 had been made or at least purportedly made under the earlier form of s161. They had not been disallowed. The validation provision deemed them to have been made under the new form of s161 so long as they could have been made under it.

In the upshot, any question about the validity of rr1 and 4 as State law is removed if: 1) the rules were for or with respect to either the procedure and practice of the Court, or the amendment of documents filed by a party to civil proceedings (original s161(1)(a) and (r)); or 2) the rules were for or with respect to any matter necessary or convenient to be prescribed by rules for the purposes of, or in connection with the exercise by the Court of its civil jurisdiction under any Act or law, or for carrying any such provisions into effect (s161(1) as enacted in 1994).

In my view, r4 passes muster on both accounts.

In Mitchell v Harris Engineering Co Ltd [1967] 2 QB 703 the English Court of Appeal held RSC (Rev 1965) Ord 20 r5 was intra vires a “practice and procedure” rule-making power. The English rule differed slightly from r4, but not in any manner affecting its characterisation. Mitchell is cited with apparent approval by the High Court in Bridge Shipping .

Further support for this procedural characterisation of r4 is found in the discussion in Proctor (discussed above) and Agtrack (discussed below) about the nature of the rule as a modification of an otherwise general power to amend. Rule 4 does not contradict the command of a statutory limitation period (procedural or substantive) because the amendment rule functions in a different sphere of operation. This conclusion also represents the essential reasoning process in Larcos , Harris v Western Australian Exim Corporation (1994) 56 FCR 1, Rodgers and PSL Industries Ltd v Simplot Australia Pty Ltd [2003] VSCA 7. The latter two decisions are recent decisions of intermediate appellate courts in this country.

As I have sought to demonstrate, the rule in Weldon v Neal and the rules of court abrogating it must be seen as functioning in the context of amendments to proceedings pending in the court. The need for the rule of court is manifested by the sorry history of the case law struggling with Weldon v Neal . Rule 4 requires the amended pleading to arise out of the same or substantially the same facts. This is a legitimate and appropriate modification of Weldon v Neal . It still bears the hallmarks of Weldon v Neal in its concern for the justice to the defendant. The new rule is nevertheless concerned with procedure and matters incidental thereto. In John Pfeiffer the joint judgment of Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ referred with approval to a formulation put forward by Mason CJ in McKain v R W Miller & Co (SA) Pty Ltd (1991) 174 CLR 1 at 26-7 that “rules which are directed to governing or regulating the mode or conduct of court proceedings” are procedural. On this test, rr1 and 4 are procedural, even in their impact on a provision such as s34 of the Act. ( John Pfeiffer’s willingness to characterise all types of limitation provisions as substantive, at least in the choice of law context, takes the matter no further. Nor does s78(2) of the Limitations Act 1969 which is arguably not confined to the choice of law context. Section 34 has always been a “substantive” limitation provision.)

Alternatively, the opening words of s161 as introduced in 1994 were broad enough to render the rules valid to their full operative extent, a fortiori since McGee and Proctor had by then put their interpretative stamp on the identical Supreme Court Rules .

The present case does not raise the issue of a general rule-making power being invoked to override a fundamental principle such as legal professional privilege or directly challenging the command of an applicable statute (cf Taylor v Guttilla (1992) 59 SASR 361, Harrington v Lowe (1996) 190 CLR 311, General Mediterranean Holdings SA v Patel [2000] 1 WLR 272). Merely because a rule intrudes into an area of substantive law does not per se rob it of its procedural character. It is only if the rule, ex facie procedural, could not reasonably have been adopted for the purpose of regulating pleading, practice or procedure that it goes beyond the power conferred by the standard, generally expressed statutory provisions (see generally Taylor at 366-7 per King CJ, Harrington at 341-3 per Kirby J).

Originally the rule-making power of the Federal Court was expressed in general terms relating to “practice and procedure” and incidental matters ( Federal Court of Australia Act 1976 , s59(1)). Until 1994, Order 13 r2(1) and (2) of the Federal Court Rules was similar in effect to r1(1) and (2) of Pt 17 of the District Court Rules and there was no counterpart of r4. In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Toohey J (at 559-562) expressed doubts as to the capacity of Order 13 r2 to displace Weldon v Neal , particularly given the absence at that stage of any express power to allow an amendment to a statement of claim that introduced a cause of action which otherwise would be statute barred (at 560). Deane J (at 545) expressed his general agreement with these remarks. These comments were obiter but naturally command the highest respect.

As I read these remarks, they address the scope of the original Order 13 r2 as distinct from the power of the Judges of the Federal Court to introduce the equivalent of r4 under the power then conferred by s59 of the Federal Court Act . Perhaps however there were hints of a wider concern, because Toohey J spoke of s82(2) of the Trade Practices Act (which enacts a substantive limitation bar that is part of the statutory cause of action) as presenting “a statutory barrier to any new cause of action; to this barrier, reference to express, implied or incidental powers [of the Federal Court] provides no answer” (at 562).

Section 59 of the Federal Court of Australia Act was subsequently amended to give express power to make rules for the amendment of documents in a proceeding even if the effect would be to allow a person to seek an otherwise statute-barred remedy. The Explanatory Memorandum explained that the amendment was to overcome doubts raised by Toohey J’s remarks (see Rodgers at 65). The Federal Court Rules were subsequently amended to take up this power, broadly along the lines of r4 in the Supreme Court Rules and District Court Rules in this State.

The similarity between the original form of s59 of the Federal Court of Australia Act and the original form of s161 of the District Court Act means that Toohey J’s remarks caution against finding that r4 can rest on the first alternative basis that I have identified. Nevertheless, I conclude that it can. The issue is at most indirectly alluded to by his Honour. In light of the statements in Proctor , Agtrack and other cases that demonstrate why rule 4 is procedural both in its operation and historical context, I adhere to my stated position as to the validity of the rule. Alternatively, I rest validity upon the form of s161 as amended in 1994.

In view of the scope of s79 of the Judiciary Act (see above) it is unnecessary to place any reliance upon those parts of the rules which purport to apply to federal enactments. Section 79 does that work, in circumstances that do not attract questions about the extent of State legislative power in that regard. The references to federal enactments nevertheless make it plain that the rules (as State law) were not intended by their makers to be used only in State jurisdiction. Agtrack

The facts in Agtrack were very similar to the present case. The respondent’s husband was killed in an air crash in the Northern Territory while on a flight within the scope of Pt IV of the Act. The original statement of claim in the Supreme Court of Victoria relied upon contract and negligence and omitted reference to some allegations necessary to engage Pt IV (see at [10]-[19]). After the two year limitation period stipulated in s34 had passed, the respondent sought leave to amend to substitute a pleading that asserted liability under Pt IV and remedied the other deficiencies. The Victorian rule (O 36.01(6) of the Victorian Supreme Court (General Civil Procedure) Rules 1996 ) provides: The Court may, notwithstanding the expiry of any relevant limitation period after the day a proceeding is commenced, make an order under paragraph (1) where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of his claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.

Leave to amend was granted by Ashley J in the Victorian Supreme Court ( Hatfield v Agtrack (NT) Pty Ltd (t/as Spring Air) (2001) 162 FLR 97). In the appeal to the Victorian Court of Appeal, this order was upheld although not all of Ashley J’s reasoning was endorsed.

Ormiston JA, who wrote the leading judgment in the Court of Appeal thought the deficiencies in the original pleading to be minute and technical and not such as to have caused the defendant any misapprehension (see at [12]-[20]). He characterised the newly pleaded facts as “essentially jurisdictional” (at [9]). With much hesitation and reluctance, he concluded that the original statement of claim failed adequately to set out all the necessary allegations supporting a claim under Pt IV and therefore required amendment (see at [22]-[23]. See also at [33].). In reaching this conclusion, his Honour acknowledged the persuasive influence of this Court’s decision in Air Link (No 1) .

I would firmly reject the tentative submission of senior counsel for the appellant that Ormiston JA’s reasons can be construed as turning upon an ultimate conclusion about the status of the original statement of claim. This is the very opposite of what his Honour stated at [22]-[23] of his reasons and which I have just summarised. This submission was bold, stopping just shy of being impertinent. Eventually Ormiston JA screwed his resolve to the sticking-place on this issue and it is not open to counsel to suggest otherwise in exegeting the reasons for judgment. Chernov JA agreed with the reasons of Ormiston JA as did O’Bryan AJA “generally”, albeit with “a degree of hesitancy about holding that the original statement of claim was inadequate because it did not include a reference to the Act supporting the claim” (at [87]).

Ormiston JA then proceeded to analyse the history of the rule in Weldon v Neal , particularly as it was understood in the Victorian caselaw. After citation of many authorities he said (at [32]): The end result seems to have been that, although some discretion was left to a court where an amendment sought to add new facts but without changing the basis of the plaintiff’s claim, there was in effect no discretion to allow an amendment where it was sought to add a new cause of action, however little the factual foundation of that cause of action varied from one set out in the original statement of claim. The only exception appears to have been “peculiar circumstances”, an expression which has, to my knowledge, never been examined for this purpose.

Ormiston JA demonstrated that dissatisfaction with the rule and difficulties with its application led to proposals for its abrogation in Victoria by a “discretionary rule such as existed in England or New South Wales” (see at [26], [34]-[36]).

His Honour then discussed the relation back principle which is the assumption upon which the rule in Weldon v Neal and its abrogating rules of court proceed (see at [37]-[44]). Ormiston JA described relation back as “not a matter of high principle, but one of practice, depending on a practical analysis of what is sought to be achieved” (at [41]). (I am not sure that I entirely agree with this characterisation, if it is intended to state more than that relation back could be displaced at the discretion of the court. Nothing, however turns on this reservation.)

The Victorian rule of court abrogating the rule in Weldon v Neal (O.36.01(6)) is expressed in broader terms than its English and New South Wales predecessor. Ormiston JA nevertheless held (at [49]) that the rule was intended to be procedural in effect and did no more than alter the nature of the discretion to be applied to a much broader discretion when considering amendments which might otherwise appear to defeat limits laid down in limitations legislation (see at [49]-[50]). He said at [50]): My prima facie conclusion therefore is that O.36.01(6) was intended only to have a procedural effect designed to ensure the proper and fair consideration of applications to amend pleadings where, if the amending claim had been brought independently and out of time, that claim would have been automatically rejected as statute-barred pursuant to existing authority. The Court now in the exercise of its discretion may look at the totality of the circumstances to resolve whether it is in fact fair to permit that claim to be introduced by way of amendment. It would never have been proper for the rules to have attempted more ….

Nevertheless, Ormiston JA held (at [50]) that Order 36.01(6) was capable of going further, as a matter of Victorian law, because it had been given statutory underpinning (in the detailed manner set out at [46]). This had been considered desirable, his Honour pointed out (at [50]) because: …. the concern was that the “rule in Weldon v Neal ” had been given so rigid an interpretation, especially in this State in Cutrona v Harnischfeger of Australia Pty Ltd [1977] VR 306] , that it might be perceived that, if amendment were effected solely by changes to rules of court, then a defendant’s immunity or other rights pursuant to a limitations statute would be invalidly defeated by the abrogation of that “rule”, at least in certain circumstances. I would not, however, interpret a rule of court, such as the new Order 36, as permitting an amendment which clearly and directly took away rights given under a limitations act, with one, not unimportant, exception. For better or for worse, instead of merely ratifying and sanctioning the rules of court so that they might, as rules of practice have statutory force, Parliament went further in relation to the Victorian Limitations of Actions Act and, so it would seem, did that of the Northern Territory by its Limitation Act . To that extent the new rule should be treated as having a greater ambit, consistent with those Acts, namely that, in relation to limitation periods laid down by each Act and probably, though it is unnecessary for the present appeal to so decide, those otherwise laid down by the relevant legislature, a wider power has been given. That wider power does require the consideration of potential prejudice, although the new provisions appear to concentrate on the conduct of the trial rather than any inherent unfairness in allowing stale claims to be litigated, but again it is not necessary to resolve that for the purpose of this appeal.

Ormiston JA then turned to the question whether the rule of court could apply to a case involving federal jurisdiction (at [53]-[84]).

In the contexts of s109 of the Constitution and s79 of the Judiciary Act Ormiston JA rejected the appellant’s submission that s34 of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) rendered invalid or inapplicable the Victorian rule of court. He held in effect that the vesting of federal jurisdiction in State courts meant that s79 picked up and applied the complex body of practice and procedure dealing with the commencement of actions, pleading and amendment. Section 34 was characterised as stating a two-year limitation period but in such a manner as to engage rather than repel this corpus of procedural law. Ormiston JA said (emphasis added, footnotes deleted): 60. For the present I shall not return to the issue whether and how an "action" should be treated as commenced for the purposes of s.34 . It is sufficient to say that, although limitation periods have been held to be substantive, rather than procedural, in legal effect since John Pfeiffer , they are inextricably bound up with the manner by which proceedings are brought . One has only to think of the power given to a plaintiff to have a writ issued (i.e. by causing it to be filed) but not to serve it for up to one year (with a power of extension) according to the Victorian Rules of Court, yet allowing the plaintiff to treat the action as effectively commenced on the date of issue. It is common for specific legislation to prescribe limitation periods, whether they are directed to the mere bringing of proceedings or to the extinguishing of the right. It is far less common to find limitation provisions set out with all the qualifications commonly found in a modern limitation statute such as the Victorian or Northern Territory Limitation Acts; and for good reason, that it is assumed that those matters would have been dealt with in a general act of that kind. Doubtless that is why there is no general Commonwealth limitation statute with any like provisions set out applicable generally to proceedings brought in federal courts or when federal jurisdiction is being exercised. Indeed the only general example we were taken to was s.59(2B) of the Federal Court Act 1976 (Cth), but that does so only by giving explicit power (carried into effect by O.13 of the Federal Court rules) to make rules allowing amendments which have the effect of allowing a party to seek a remedy for a claim "that would have been barred" at the time of application. The explanation may be simple: at a time when federal jurisdiction had not been developed to the extent that it has today a court applying a Commonwealth Act such as the present, especially in circumstances where there were other common law claims, would simply treat the law of the state as applying to the proceeding to the action subject only to the specific requirements of that Commonwealth Act which of necessity and to the extent of any inconsistency would be given priority. That might involve a consideration of the covering the field doctrine where a particular subject matter was comprehensively dealt with, but otherwise there would be no doubt that the rules of procedure and evidence and the law concerning other general concepts such as contribution would be that applied by the particular state court in which the proceeding was brought, subject to the particular requirements of choice of law rules. The position is, in effect, little different today, but the exercise of applying s.79 of the Judiciary Act is more frequent, essentially because more proceedings seem to attract federal jurisdiction. That section has always been seen, however, as seeking to achieve the same end, namely to allow the proceedings to be decided in the same way (subject to specific Commonwealth laws) as if they had been brought in a local court untrammelled by concepts of federal jurisdiction . The section goes back a long way, to the very passing of the Act in the year the High Court was founded, and has only been amended once, only so as to give it proper effect in the territories. 61. It is perhaps unnecessary to resolve whether s.109 of the Constitution should first be applied so as to examine the inconsistency of s.34 of the Act with state and territory limitation laws, for in my opinion the answer here will be the same if one applies the irreconcilability test as to whether it is "otherwise provided" for the purpose of litigation akin to the present proceedings. It would seem hard to see how the question could arise in a matter involving the exercise of state jurisdiction alone. If the Act is being enforced or is otherwise relevant to rights being enforced in a state court, then federal jurisdiction is invoked and s.79 applies. But that, however, is an oversimplification for s.79 is concerned only to define rights in litigation to which the Judiciary Act applies. Every substantive statute has to be considered and applied on a day-to-day basis when no litigation is contemplated. The rights given by the Act may never be the subject of a proceeding in the courts but they must have an understood meaning and application. If Part IV and s.34, in particular, of the Act "cover the field" or are otherwise inconsistent with State or Territory legislation, that ought to be known by those given rights or subjected to liabilities under the Act. The answer must be capable of being given without the need to resort to litigation and before s.79 can have any operation. 62. The question must therefore be answered both at the Constitutional level, by applying s.109, and, at the practical level, in this litigation now that s.79 is known to apply to the dispute and the present action. But whether the issue is one of inconsistency or one of irreconcilability, the answer is the same. The answer must be asked whether the Act is intended to control all rights and duties relating to the limitation period for the bringing of actions under Part IV or whether it is intended to cover a narrower field. In my opinion, s.34 (with which must be read all other related sections) is intended to lay down only the relevant limitation period, leaving questions of its application to particular parties, extension, power to amend proceedings, the manner in which actions are commenced and the like to the law which must be applied by the court in which the action is brought. …. 64. … Doubtless [Part IV] sets up a "regime" and many matters are dealt with in terms which would deny the operation of specific common law rules and relevant statutory provisions of the states and territories. It is quite another thing to say that the regime was of a kind which was intended to cover all related fields so as to make inapplicable laws of the states and territories relating to evidence, procedure and the like which were not explicitly dealt with in Part IV. 65. … it is interesting to note that the Convention's limitation article, Article 29, specifically provides (in Para.2) that "the method of calculating the period of limitation shall be determined by the law of the court seised of the case". More importantly, in Article 28 of the Warsaw Convention (and of each of the other relevant conventions) which vests jurisdiction in the courts either of the carrier's principal place of business or of the country of destination (in effect), Paragraph 2 explicitly provides: "Questions of procedure shall be governed by the law of the court seised of the case." 66. That points clearly to the conclusion that matters of procedure are not intended to be referable to the Convention and, subject to what appears below, I would draw a similar conclusion in relation to the rather less explicit provisions of Part IV, conceding nevertheless that there was an intention to copy the substance of those provisions so far as practical in an interstate and intra-territory context. I would have little doubt that Part IV was intended to cover the field as to liability for accidents of this kind, in the sense that it is intended to define the nature of the liability and its extent and, furthermore, to deal with those other specific matters which are addressed in the provisions of the Part. Even when it deals with specific subjects such as liability for the acts of servants and agents of the carrier (as in s.33), it leaves it to the general law, presumably in most jurisdictions the common law, to define what in fact is a servant or agent. But I would not assume that these provisions of the Part, even the specific provision of s.34, were intended to deal comprehensively with the manner in which those provisions, such as the limitation provision, should be applied. If it was, that would mean the complex matters which are now the subject of most limitation acts would have to be replicated in every Act of the Commonwealth Parliament which imposes a limitation period. I would find it hard to believe that Parliament intended to deal with such matters by impliedly excluding them: rather it intended to fix the primary limit, albeit in terms of extinguishment. It certainly did not say how one ascertained when "an action is ... brought by him or for his benefit", nor would one expect it to …. Of course, what matters of procedure and what matters of substance were intended to be covered by the provisions of Part IV must be further examined. 67. The argument based on general considerations relied on by the appellant asserted that the respondent's cause of action had been "extinguished" by the time the application to amend was brought, so that the claim was incapable of being revived by amendment or otherwise. There can be no doubt that the terms of s.34 directly state that the "right" for a person to claim damages under Part IV is "extinguished" if action is not brought within two years after the flight. So it was said that no claim could be resurrected after 14 August 1999, whether by new writ or by amendment. Emphatic metaphors have been used over the years to describe the fate of an extinguished claim but the essence is that extinguishment does not merely bar the remedy but it also puts an end to the right itself, in this case the right to recover damages. 68. I should immediately make clear that, if a state or territory statute or rule purported directly to resuscitate an extinguished claim such as one subject to s.34, then it would be clearly ineffective, whether or not one called in aid s.109 of the Constitution (or the parallel inconsistency rule relating to territorial legislation) or whether one asked, on applying s.79 of the Judiciary Act , whether the local limitation regime as set out in statute or rule, was irreconcilable with the terms of the Act as a Commonwealth law. Thus if there was a general state law providing for the extension of all limitation periods, that could not stand with s.34 of the Act . Moreover, although it is not necessary here to decide it, a state or territory provision which purported to excuse non-compliance with s.34 so as to permit the revival of an extinguished claim under Part IV would likewise seem to be inconsistent. 69. One must be careful, however, about characterising something which is said to be "extinguished". Colourful words have been used for the concept, e.g., "dead and gone forever", but on other occasions caution as to its real meaning has been expressed judicially, for example by Tadgell, J. in Australian Shipping Commission v. Kooragang Cement Pty. Ltd , In some cases it has been said that, if it has been introduced as part of a limitation regime, the use of the word "extinguished" does not necessarily exclude the application of the ordinary ameliorative provisions of the same statute, for example the use of the term in s.63 of the Limitation Act 1969 (NSW ), as discussed in Proctor . On the other hand very strict effect has been given to the word in cases arising under the Warsaw and other carriage Conventions, which doubtless explains the decision in Timeny . … 73. So long as one can characterise that power to amend as essentially procedural, I see no difficulty in that power being exercised pursuant to state or territorial laws "picked up" by virtue of s.79 of the Judiciary Act. In that respect I see no basis for an argument either in terms of inconsistency or irreconcilability. I concede that other powers of extension or qualification of limitation periods must now be treated as substantive, not procedural. Whatever may have been thought before the year 2000, a majority of the High Court consisting of Gleeson, C.J., Gaudron, McHugh, Gummow and Hayne, JJ., have held in John Pfeiffer that "the application of any limitation period, whether barring the remedy or extinguishing the right, would be taken to be a question of substance not procedure ...". This the majority justify in the following terms: "[M]atters that affect the existence, extent and enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason, C.J. in McKain , `rules which are directed to governing or regulating the mode or conduct of court proceedings' are procedural and all other provisions or rules are to be classified as substantive." 74. Consequently, whatever may be said about the substantive provisions of limitation statutes of the states or territories, those relating to procedure, such as the commencement and amendment of proceedings, are prima facie not to be assumed to be covered by the provisions of the Commonwealth statute dealing with limitations or the like, unless that statute purports to embark upon the prescribing of procedural rules. In the present case there is nothing to suggest that Part IV of the Act was intended to cover the field in relation to the procedure to be adopted in relation to the commencement or amendment of proceedings. The assumption would ordinarily be to the contrary and there is nothing in this statute to deny that consequence. In the result there is no reason to believe that there is a provision in Part IV which contradicts either the Victorian or Northern Territory statutes or rules relating to amendment, or that the Commonwealth intended to "cover the field" so as to deny the states and territories the right to make relevant provisions relating to procedural aspects concerning limitation periods. Furthermore, there is nothing in the relevant amendment regime of State or Territory which can be said to be irreconcilable with Part IV of the Act inasmuch as it cannot be said to have been "otherwise provided" by Part IV of the Act as a Commonwealth Act that the relevant rules as to procedure concerning amendment should not apply. I should mention only that a vast number of other authorities were cited in relation to these various issues which I do not propose to discuss, except to observe that I have read them and taken them into account in reaching the conclusions stated herein. 75. I should here mention an argument put on behalf of the appellant as to the construction of s.34 of the Victorian Limitation Act (and its equivalent in the N.T.), which presumably was also directed to the operation of O.36. It suggested that both provisions were intended to apply only to limitation provisions prescribed by the Victorian (or N.T.) Limitation Act . For this it cited the tentative opinion of Batt, J. in Keller v. Bayside City Council , which was noted and not disapproved in Anglo Irish Beef Processors International v. Federated Stevedores Geelong . I confess I am not attracted by the argument, or by the dicta which support this. The statutory provision in s.34 was very much a fail-safe, devised after the rule was drafted and in fact passed. The terms of O.36.01(6) are general in their operation and were intended to be so. The "rule in Weldon v. Neal" was likewise general and not confined to any particular statute; nor should the provision which abrogated that practice. …

Ormiston JA’s statement (at [73]) that there was no difficulty with the amendment power picking up the Victorian rule “so long as one can characterise that power to amend as essentially procedural” implies a limitation in s79 that is, I think, at variance with recent statements of the High Court about s79 picking up substantive as well as procedural laws (see 39 above). (See also PSL Industries at [16].) Nevertheless, his Honour’s procedural characterisation of the power under the rule is relevant to the issues in this appeal, because the District Court Rules lack the express statutory backing enjoyed by the Victorian Rules and because, on one alternative argument as to s161 of the District Court Act it is necessary to characterise r4 as a matter of practice or procedure. When I dealt with the question of the validity of r4 I indicated my reliance upon Agtrack .

It is not possible, in my view, to distinguish Agtrack . Ormiston JA was at pains to point out that his reasoning did not turn upon s34 of the Limitation of Actions Act 1958 (Vic), which arguably reinforced the substantive effect of the Victorian rule, but which was “very much a fail-safe devised after the rule was drafted and in fact passed” (at [75]. See also >). His Honour also recognised and distinguished arguments that a different result might apply as regards claims relating to international flights brought under Pt II of the Act. I address similar arguments from the appellant below.

Subject to the minor qualifications I have already stated, I respectfully agree with the reasoning in Agtrack . This Court should in any event follow Agtrack , because it represents a recent, considered and persuasive decision of an intermediate appellate court in Australia touching the interpretation and application of federal law ( Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485).

The recent decision of the Full Court of the Supreme Court of Western Australia in Morgan v Banning (1999) 20 WAR 474, upon which the appellant placed considerable reliance, does not require a different result, or cause me to qualify what I have just written.

In Morgan the Full Court (Ipp, Owen and Wheeler JJ) were dealing with a case involving a claim for which the Limitation Act 1935 (WA) fixed a 6 year limitation period. It was in the traditional procedural form of a limitation provision, but there was no relevant statutory provision enabling time to be extended. The Rules of the Supreme Court of Western Australia require that “actions” be commenced by writ, while allowing service to take place within the ensuing 12 months (or longer if the writ was renewed). A writ must contain an indorsement of the plaintiff’s claim, but such indorsement is not a pleading and even a defective indorsement does not make the writ a nullity. Within limits, the indorsement may by leave be amended to “clarify or particularise or ‘cure’” the terms of the original indorsement (per Wheeler J at 483).

In Morgan the indorsement was amended before service of the writ. But that amendment occurred after the expiry of the relevant limitation period. After the writ had been served the defendant moved to strike out the amended indorsement, effectively invoking the rule in Weldon v Neal . There was no rule of court abrogating Weldon v Neal .

The Master had struck out the amended indorsement and granted leave to amend it because the proposed amendment arose substantially out of the same facts as those alluded to in the original indorsement. However, the Master also ordered that the amendment was to take effect from the date of that order. He did this to enable the defendant, who had only been served with the writ after the expiry of the limitation period, to plead the statute of limitations.

The Full Court upheld the plaintiff’s appeal against the order as to the date on which the amendment would take effect. The court held that limitation provisions are generally concerned with the date of issue of the writ, rather than any subsequent proceeding. A defective indorsement did not usually nullify a writ and the indorsement could be amended even outside the relevant limitation period if the terms of the writ were wide enough to encompass the proposed amendments. If the indorsement on the writ was not wide enough, then its amendment would be controlled by the application of the rule in Weldon v Neal .

The leading judgment was given by Wheeler J (with whose reasons Ipp and Owen JJ agreed, Owen J adding some additional comments). Her Honour discussed the rule in Weldon v Neal and adverted to its adoption in other jurisdictions by rules of court backed up by statutory authority (at 483). As indicated, Western Australia has not even abrogated the rule, let alone by a statutorily-backed rule of court. This shows why her Honour’s remarks about Wardley and Proctor and about the relationship between limitation statutes and rules of court based on the relation back principle are obiter dicta . The same cannot be said about the general discussion about the rule in Weldon v Neal . In that context, she said (at 486) that the “ inability to permit the raising of a new cause of action (rather than a new description or new form of action) is a result of lack of power to do that which the statute of limitations prohibits ”. Accordingly, the rule in Weldon v Neal itself could not be abrogated without statutory authority (ibid).

I do not think that this represents the approach to Weldon v Neal adopted in Proctor or Agtrack , where a less categorical approach to the relation back doctrine and a broader view of the scope of the power to permit amendments appear. In any event, we have Pt 17 r4 in the present case and it is in my view valid, even in its application to substantive limitation periods.

Morgan is interesting in that it arose in a jurisdiction involving the writ system. Under this system a good writ stops time running, at least in relation to a cause of action within the notification in the indorsement on the writ. Such an indorsement does not have to rise to the level of a pleading that avers all material facts. Indeed it may be wide enough to cover several causes of action and, until a statement of claim omits to rely upon one of them all are treated as brought for the purposes of stopping time running ( Renowden v McMullin (1970) 123 CLR 584 at 595-6, 609). A defective or omitted indorsement does not make the writ a nullity in some jurisdictions or circumstances even in a context where the limitation of actions is involved (see, eg Common Law Procedure Act 1899 (NSW) s20, Pontin v Wood [1962] 1 QB 594, Elsum v Jameson [1974] VR 529, Renowden at 596).

This traditional method of initiating proceedings is clearly a method whereby action may be “brought”, to use the language of s34 of the Act. So too is a summons that merely claims damages. The vesting of federal jurisdiction in all State and Territory courts of general jurisdiction was obviously intended to take these variants “on board”. Section 79 of the Judiciary Act removes any doubts on that score.

If, however, a defectively indorsed writ or a bald summons is good enough to stop time running in some circumstances at least, what is the categorical difference between a statement of claim which is defective but was nevertheless close enough to the amended pleading to enable the latter to be described as “arising out of the same or substantially the same facts” (cf r4(5))?

One answer to my hypothetical question is that the writ still gave some notice of the intended claim. But a defective or even omitted indorsement did not invariably nullify the proceedings. The running of time stopped in some situations even though the indorsement was not a pleading. But s34 does not speak in terms of filing a document that discloses a properly pleaded statutory cause of action, according to the rules of pleading. Rather, it speaks of time ceasing to run if action is “brought” within two years. Section 34 leaves it to the corpus of the rules of practice, procedure and pleading to indicate what is involved in the bringing of a timely action. In the District Court of New South Wales those rules include the provision for commencing action by a statement of claim and the rules conferring generous but not unlimited powers of amendment in a context where a duly authorised amendment will relate back. The Appellant’s submissions considered

The appellant submitted that the respondent’s only right to claim damages for the accident was extinguished by operation of s34 of the Act.

The first step in this argument is the characterisation of s34 as stipulating a time condition that is of the essence of the statutory right to damages conferred by Part IV. This submission is reinforced by reference to the interpretation of Article 29 of the Convention (set out at par 8 above) in Timeny v British Airways Plc (1991) 56 SASR 287, 102 ALR 565 and many overseas cases dealing with Article 29.

I accept the appellant’s first step. In doing so I content myself with reiterating that s34 is too clearly expressed to find otherwise. It is not necessary to go to the caselaw on Article 29, although I shall return to Timeny .

Section 34 is a substantive provision in which the time limit is an integral part of the statutory right to claim damages under Part IV.

The second step in the appellant’s submissions were a cluster of arguments to the effect that r4 was not engaged according to its terms. It was submitted that: • s34 was a condition precedent to liability and not a “relevant period of limitation” within r4(1) • no cause of action was disclosed in the original statement of claim (cf r4(5)) • r4(5) does not denote by “new cause of action” a cause of action that no longer exists • r4 applies only to a period of limitation fixed by an Act of the Parliament of New South Wales.

These submissions should be rejected. They ignore the interpretation and application of r4 in Proctor ; they fail to recognise the function of r4 in light of its history and its Weldon v Neal pre-history, and they overlook the compelling force of Agtrack . In the present case, the invocation of s34 by the appellant meant that it became a relevant period of limitation.

There is no distinction between the deficiencies of the original pleadings considered in Proctor, Agtrack and the present case. In each, the original statement of claim failed to plead all of the facts material to the only cause of action available in the circumstances. But in each, what was originally pleaded was sufficiently close to what was required to engage r4 or its counterpart, subject to the favourable exercise of the judicial discretion.

The submission that r4, standing alone, does not purport to apply to a federally-enacted limitation provision is debatably correct but definitely irrelevant.

It is debatably correct, because the rule-making judges of the District Court may have intended to keep entirely out of the deep waters revealed by this appeal. On the other hand, adopting the approach of the framers of r4 in the Supreme Court Rules, they may (correctly) have thought that it was open to them to prescribe generally-applicable rules for litigation, aware that many federally-based claims are litigated in the District Court and that federal law is (as here) often silent about the scope of the field it enters.

But the enquiry is totally irrelevant, because (subject to arguments yet to be addressed) it is federal law (s79 of the Judiciary Act ) that chooses to pick up r4 in its endeavour to assimilate federal jurisdiction with the jurisdiction of State and Territory courts invested with jurisdiction to hear federal claims, subject only to the Constitution and to federal law otherwise providing. In other words, it totally inverts the role of s79 to treat it as incapable of picking up substantive or procedural laws enacted in a State Parliament with only State matters in mind (see John Robertson at 88, 95).

Third, the appellant submits that Part 17 r4 is ultra vires the rule-making power of the District Court. It is submitted that s161 of the District Court Act 1973 is directed essentially to matters of practice and procedure. It is not broad enough to validate r4 even in relation to State limitation provisions of substantive effect.

I have already rejected this argument.

Fourth, the appellant submits that, if the rules purport to confer the power exercised, there is an inconsistency between the rules and s34 which s109 of the Constitution resolves in favour of s34. Section 34 confers an immunity from action upon a carrier against whom no action is brought within two years of the accident. Alternatively, s34 sets out a field in which Commonwealth law is intended to operate exhaustively (see generally Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 76). Alternatively, Part IV and s34 of the Act have “otherwise provided” within the meaning of s79 of the Judiciary Act , with the result that r4 cannot be picked up in the present case: rule 4 cannot derogate from the operation of s34 and still become surrogate federal law ( Macleod v Australian Securities and Investments Commission (2002) 191 ALR 543 at 548-9 [22]).

It is this last submission that poses the most substantial issue in this appeal. I shall return to it after dealing with some specific submissions addressed by the appellant towards Proctor , Larcos and Agtrack . The authority of Proctor, Larcos and Agtrack

The appellant points out that this Court is not bound to follow the first instance decisions of Rogers J in Larcos or Ashley J in Agtrack . This is obviously correct, although the lines of binding precedent blur somewhat when it is noted that Ashley J also decided a case dealing with s82(2) of the Trade Practices Act (the section addressed in Larcos ) and that Ashley J was upheld by the Victorian Court of Appeal in PSL Industries .

As indicated already, Larcos is unsatisfactory in that it contains no reference to s79 of the Judiciary Act . It appears that Rogers J was given insufficient assistance by counsel who appeared before him, including the Solicitor General for NSW representing the Attorney General as intervener. Be that as it may, the approach adopted by Rogers J, where he characterised the federal limitation provision and the State amendment rule as operating in different, complementary fields is pertinent to the present appeal and assists the respondent.

As to Proctor , the appellant submits that it is distinguishable because it involved intra-State air carriage and because there is no provision in the District Court Act similar to s6 of the Supreme Court Act .

The particular deficiency of the original pleading in Proctor is neither here nor there when considering the principles for which the case stands. I have already discussed this. Nor can Proctor be sidelined by reference to the cause of action invoked, because the Civil Aviation (Carriers’ Liability) Act 1967 (NSW) incorporated the terms of s34 of the Act into the intra-State scheme that was definitely intended to parallel Part IV of the Commonwealth Act, except for specific and presently irrelevant points of departure.

Proctor could be distinguished because it dealt with the Supreme Court Rules , but this is a distinction without a difference if the corresponding rules of the District Court are intra vires , albeit for different reasons to those affecting the Supreme Court Rules .

Proctor could also be distinguished because it addressed the interplay between a State limitation provision and r4. Again, this is a distinction without a difference if s79 of the Judiciary Act picks up and applies r4 to the federally-enacted s34 in a context such as the present.

The appellant seeks leave to reargue the correctness of Proctor . I would refuse that leave. Proctor has long stood as authority in this State and its central reasoning has been followed by appellate courts in Queensland (in Adam ) and Victoria (in Agtrack ).

The appellant seeks to persuade this Court not to follow Agtrack because: (a) the statement of claim in that case was not deficient to the extent that the statement of claim in the present case was held to be deficient in Air Link (No 1) ; (b) Agtrack was wrongly decided on various grounds; (c) Agtrack is inconsistent with Timeny and the international case law relating to rights directly arising under the Convention.

I have already rejected propositions (a) and (b).

As to (c), senior counsel for the appellant in his learned submissions, took the Court to a body of overseas caselaw which (with the exception of the Court de Cassation in France) has adopted an interpretation of Article 29 of the Convention that precludes resort to any local enactment or rule of court that would permit the Convention’s two year limitation to be “tolled” for infancy or disability or treated as procedural as distinct from stating a condition precedent to liability (see generally Shawcross and Beaumont, Air Law 4th ed, 2002 VII (485)). Leading United States cases are Kahn v Trans World Airlines Inc 443 NYS 2d 79 (1981) and Fishman v Delta Air Lines Inc 132 F 3d 138 (1998). These cases are not directly in point for at least two reasons: (1) they concern the Convention, an instrument which well-established canons of interpretation indicate should so far as possible be construed and applied consistently by all nation States that are parties; and (2) the cases involve plaintiffs who invoked clearly substantive municipal laws governing the “tolling” or extension of limitation provisions, as distinct from a procedural provision directed at the circumstances in which an action brought within time may be amended.

There is one exception to the latter proposition. In Motorola Inc v MSAS Cargo International Inc 42 F Supp 2d 952 (1998) a United States District Judge granted summary judgment to a defendant that was added to proceedings after the two year limitation period in Article 29 had expired. The plaintiff invoked a rule of court (Fed R Civ P 15(c)) which provided for the relation back of amendments. The Court held that Rule 15(c) could not be applied to the Warsaw Convention’s limitation period under Article 29(1). Cases such as Kahn were applied, the judge stating: The decisions cited herein involve tolling provisions, while Rule 15(c) ‘extends’ rather than ‘tolls’ the limitations period. The rationale that forbids local forums from tolling the limitations period, applies with equal force, however, to local statutes that would extend the limitations period, such as Rule 15(c). Local laws that lengthen the two-year period, whether through tolling or relation back, frustrate the Convention’s objectives of uniformity and certainty.

Motorola Inc is a decision at first instance involving the addition of a defendant after two years as distinct from an amendment to a statement of claim against a defendant served within two years but in circumstances that would otherwise have attracted the rule in Weldon v Neal . The decision also involves the Convention and not municipal law enacting a parallel regime for national air carriage. I do not propose to apply Motorola Inc to r4.

Arguably pointing in the same direction as Motorola Inc is the recent decision of the English Court of Appeal in Western Digital Corporation v British Airways plc [2001] QB 733. It involved a cargo damage claim under Article 18 of the Convention, as applied by the Guadalajara Convention . The original statement of claim sued British Airways plc as the actual carrier that had contracted with the plaintiff through identified agents. After the lapse of the two year limitation period stipulated in Article 29(1) of the Convention, the plaintiff amended to plead an alternative basis which led to the same conclusion (ie that British Airways was the actual carrier) but by a different set of intervening contractual arrangements. The amendment was struck out at first instance.

The Court of appeal upheld this order. Mance LJ, who gave the leading judgment, said (at 741-2): Mr Crane’s submission is that an action was brought within two years against British Airways as actual carrier, and that all that is now wished is to redefine the basis upon which British Airways were actual carriers. This has some attraction in the light of the wording of article 29(1). But I have come to the conclusion that it paints with too broad a brush. Article 29(1) extinguishes any right to damages if an action is not brought to enforce it within two years. The right to damages here depends upon there being a specific agreement with a specific carrier from whom the actual carrier receives his authority. If an action is brought against a carrier on the basis that it was an actual carrier with reference to a different agreement, contracting carrier and authority, that involves a different right to damages (or in English terms a different cause of action), even though it relates to the same cargo and the same physical carriage. The first right to damages is not the subject of any action and is extinguished because action was not brought upon it within two years. Although the introduction by amendment of paragraph 3A would not deprive the defendants of the benefit of any defence to this new claim under article 29(1) (see Payabi v Armstel Shipping Corpn [1992] QB 907), it would still be wrong to permit the introduction of a claim which was clearly extinguished by lapse of time. On this basis, the judge was in my judgment right to disallow the amended case sought to be introduced in paragraph 3A.

The amended pleading was characterised as pleading a different cause of action and this was treated by the Court as sufficient to run foul of Article 29(1)’s time limitations. The reasoning makes no reference to the English rule abrogating Weldon v Neal (RSC, Order 20 r 5). However, the reference to Payabi enables one to infer that the nub of the reasoning in Western Digital is that, in the light of Ketteman , the English rule has been read down so that it is confined to procedural limitations provisions and the relation back principles excluded from English procedural law in all but presently irrelevant circumstances (see [1992] QB 907 at 932).

Proctor took a different interpretation of the differently worded r4. Accordingly, I am unprepared to depart from the position already assumed in this judgment by reference to this English decision in a claim directly arising under the Convention.

Here we are dealing with an Australian statute which operates as domestic law and (in Part IV) in a field into which the Convention does not reach. Granted the Ministerial intention to introduce a similar scheme as that provided for under the Convention, it remains the case that the issues are to be determined according to the canons of Australian constitutional and statute law. Section 79 of the Judiciary Act indicates a primary intent to treat litigants the same, whether or not involved in federal jurisdiction. This more than outweighs the force of the more general international comity arguments that the appellant seeks to invoke in carrying across what is possibly the situation under Part II of the Act into the regime under Part IV.

The appellant placed considerable weight on Timeny , a decision which the appellant submitted was at variance with Agtrack and should be preferred to Agtrack . Ormiston JA rejected such a submission in Agtrack (at [70]-[72]) and, on this, I agree generally with his reasons, especially those distinguishing claims under Parts II and IV in the present context. I say “generally”, because Ormiston JA expressed some reservations about aspects of Proctor and because he gives s 79 of the Judiciary Act a narrower scope than I do. These qualifications only strengthen the force of the general reasoning of Ormiston JA in distinguishing Timeny . See also PSL Industries at [21].

Timeny involved an accident in the context of international air carriage, ie one arising under Part II of the Act which, with minor exceptions, provides that the Convention has the direct force of law in Australia. The original statement of claim was defective because it pleaded a case in negligence and made no reference to essential elements of the Convention cause of action. After the two year limitation period stipulated in Article 29 the plaintiff sought leave to amend her pleadings. The amendment which she sought was to invoke the power conferred by s48 of the Limitation of Actions Act 1936 (SA) which provided: (1) Subject to this section, where an Act, regulation, rule or by-law prescribes or limits the time for - (a) instituting an action; (b) doing any act, or taking any step in an action; or (c) doing any act or taking any step with a view to instituting an action, a court may extend the time so prescribed or limited to such an extent, and upon such terms (if any) as the justice of the case may require.

Timeny did not involve a statement of claim which was filed within time and which was sought to be amended under a rule similar to r4. Rather, there was an attempt to extend the time for filing initiating process to bring a Part II claim that was clearly out of time at that stage. One issue was whether s48 of the Limitations of Actions Act 1936 (SA) applied on its true construction to the federally-derived action under the Convention. This meant that the South Australian Parliament could not displace the limitation period stipulated in the Convention. King CJ considered whether s79 of the Judiciary Act could uplift s48 for present purposes. He held (at 289) that it could not, because (according to its terms) s48 still applied only to State Acts. This does not assist the present appellant because r4 is not similarly confined and because r4 is obviously intended to be available in the District Court whether or not engaged for any reason in federal jurisdiction.

Bollen J held that Article 29 of the Convention operated to extinguish the Part II cause of action if action was not brought within two years. In other words, it was a substantive as distinct from a procedural limitation bar. He held (at 301) that unless action is brought within time, the cause of action is “extinguished, dead and gone forever” . The Chief Justice and Cox J spoke in similar terms (at 289-90). None of this really advances the present appellant’s case. I have already indicated that s34 of the Act is similar to Article 29 in its substantive barring of actions “brought” out of time. But that is not the issue in the present case, which is concerned with r4. Nothing in Timeny addresses the interplay between a federally-based substantive limitation period and the application of a rule such as r4. Bollen J adverted (at 295) expressly to the absence in South Australia of the rule considered in Proctor . This was a passing remark, but it underscores the fact that Timeny did not address the present issue. Compatibility of rule 4 and section 34

The appellant’s submission that s34 is inconsistent with (cf Constitution , s109) or provides otherwise than ( Judiciary Act, s79 ) r4 can at last be addressed.

The prevailing tests for determining these federal compatibility issues are summarised by Chernov JA in PSL Industries at [12]-[13]. It is sufficient to observe that the s109 inconsistency issues are usually addressed by considering “direct inconsistency” and “cover the field” inconsistency. The s79 inquiry is conceptually different, but not greatly different in practice. In Austral Pacific the joint judgment of Gleeson CJ, Gummow and Hayne JJ said that the operation of one federal Act would “otherwise provide” if its operation would so reduce the ambit of the State or Territory Act putatively picked up to the point where the provisions of the original federal Act were irreconcilable with the other law.

On this approach the primary provision is s34 and the inquiry is whether the picking up of r4 via s79 of the Judiciary Act would “otherwise provide” in the sense of being irreconcilable or incompatible with s34. The related constitutional inquiry is whether there is direct inconsistency between the federal section and the State rule or whether s34 covers the relevant field in the sense discussed in the s109 caselaw.

On either basis, there is no inconsistency or incompatibility in my view.

Section 34 states categorically that the statutory cause of action is extinguished unless “action is brought” within two years. Under New South Wales law action is brought by the commencement of proceedings, inter alia by the filing of a statement of claim. Federal jurisdiction to hear and determine matters arising under Part IV of the Act is vested in the District Court by s39(2) of the Judiciary Act . Section 79 of the Judiciary Act picks up and applies State laws, procedural or otherwise, as the rules for determination of the matter, subject to the two limits stated in s79 itself (see above).

Section 34 implicitly contemplates that it will be necessary to determine how action is “brought” so as to engage the limitation condition. This alone invites in the body of common law and enacted law (including rules) governing this matter, along with rules of procedure, evidence etc to flesh out the “rules of engagement”. Section 79 adds its general incorporation of State law unless repelled by the proviso to s79 itself. Section 34 did not confer an implied immunity from Pt 17 of the District Court Rules (cf Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47).

Cases like Larcos , Proctor , Agtrack , Rodgers and PSL all treat r4 and its analogues as operating in a different, though complementary field to that addressed by s34 of the Act (or any other limitation provision unaccompanied by its own express code spelling out its application). Section 34 states the time limit and its substantive consequences (extinguishment) but does no more than condition its command upon action not “brought” within time.

The power to amend pleadings and the relation back principle have long been integral parts of litigation law. They serve purposes beyond rescuing dilatory plaintiffs from time bars. Weldon v Neal was always a “rule of practice” that guided the exercise of the broad power to permit amendments according to the otherwise indulgent principles of Cropper v Smith . Rule 4 removed some of the problems and (from a defendant’s point of view) protections stemming from Weldon v Neal and its “finespun distinctions”. But the rule continued to deserve its characterisation as one of practice or procedure and as something relating to pleadings and their amendment. As Rogers J put it in Larcos (at 295): The rule accepts fully the dictate of the Commonwealth legislation that proceedings should be commenced within three years from the accrual of the cause of action. The rule deals merely with a procedural matter which as a matter of law then has an impact on what is to be taken as the date of commencement of proceedings.

It is not to be forgotten that s39(2) of the Judiciary Act is the enacted source of the District Court’s jurisdiction in the present case. Jurisdiction and power should not be conflated, but the investing of federal jurisdiction in the District Court of New South Wales with respect inter alia to Pt IV of the Act is an important background to the whole matter presently in issue. That investing of jurisdiction is not relevantly qualified.

Much of the beneficial operation of rr1 and 4 will obviously serve the proper purposes of litigants as well as “the interests of justice” in federal matters, including matters involving Pt IV of the Act. Why carve out those raising a substantive limitation problem? Is s34 so categorical in its command as to preserve intact (via s79) the common law rule in Weldon v Neal (applied to r1) yet repulse a reasonable modification of it which retains the safeguards found in r4?

My responses to these rhetorical questions will be readily perceived.

Lying behind the rhetorical questions are the principles expounded by the Victorian Court of Appeal in its two recent decisions. I have already set out substantial portions of Ormiston JA’s judgment in Agtrack .

The companion case ( PSL Industries ) covered the same field as Larcos , ie the compatibility of s82(2) of the Trade Practices Act and a State court rule of court amending Weldon v Neal . Section 82(2) of the Trade Practices Act was construed by the Court in PSL to be a procedural rather than a substantive limitation provision. This distinguishes that case from this one, but I would still respectfully agree with and apply the following remarks in the leading judgment of Chernov JA (at [16], footnotes omitted): … given the operation of s82(2) of the Act which I describe below, the two sets of laws operate in different “fields”, or, put another way, they deal with different matters: s82(2) fixes the limitation period for a claim that is brought under s82(1), whereas the Victorian provisions deal with a materially different matter, namely, the removal of what was previously considered to be an inhibition on the discretion of the court to allow amendment to a pleading (which would ordinarily date back to the date of the document) and which may have the effect of allowing a new cause of action to be prosecuted in the context of an existing proceeding, notwithstanding the expiration of the relevant limitation period. As Ormiston JA has explained in Hatfield , the Victorian provisions are permissive only and rule 36.01(6) for example, was intended to have only a procedural effect designed to ensure the proper and fair consideration of applications to amend pleadings where, if the amending claim had been independently brought out of time, it would have been rejected as statute barred. In order to secure an exercise of discretion in favour of the amendment under the Victorian provisions, said his Honour, the new claim must arise out of the same or substantially similar facts already pleaded. Importantly, as Ormiston JA pointed out, the power to amend given by the Victorian provisions is procedural and thus, is “picked up” by s79 of the Judiciary Act (although as his Honour recognised, the other powers or qualifications of limitation periods must now be treated as substantive and therefore not procedural in accordance with John Pfeiffer Pty Ltd v Rogerson ). Thus, said his Honour, State provisions relating to procedure , such as amendment of proceedings, are prima facie not to be assumed to be covered by the provisions of the Commonwealth Statute dealing with limitations. Consequently, since the two sets of laws operate in different areas, both can be obeyed and, therefore, there is no inconsistency between them.

I adopt those reasons even though I do not share Chernov JA’s apparent views that the procedural characterisation of the rule was vital to its capacity to be picked up by s79.

In Jobbins v Capel Court Corp Ltd (1989) 25 FCR 226 the Full Court of the Federal Court said (at 228): Section 82(2), by being expressed to turn on “the date on which the cause of action accrued”, echoes familiar concepts of the law in respect of the limitation of actions. See Halsbury’s Laws of England (4th ed, 1979), Vol 28, par 622 and see Hawkins v Clayton (1988) 164 CLR 539 at 561-562, 587-588, 599. There is every reason to understand this language in the sense in which it has come to be understood in statutes of limitations. For the purposes of those statutes, a number of principles have been worked out. In the first place, where the incurring of damage is an essential element of a cause of action, the suffering of some damage (the other elements of the cause of action having already occurred) will, in general, start time running even although the damage continues to grow. The running of time is not suspended until all the damage which will be suffered has ceased to flow, nor does further damage constitute a fresh cause of action.

This passage illustrates why the bald language of s34 of the Act requires a substantial corpus of substantive and procedural law to flesh out its content and application. Section 79 ensures that this will occur, not just as an implication from s34 itself, but by independent force of a federal law (s79) that seeks, in the words of the High Court in Commissioner of Stamp Duties (NSW) v Owens (No 2) at 170: … to adopt the law of the State where federal jurisdiction is exercised as the law by which, except as the Constitution or federal law may otherwise provide, the rights of the parties to the lis are to be ascertained and matters of procedure are to be regulated. Cf also R v Gee [2003] HCA 12, 196 ALR 282 at [7] per Gleeson J.

The appeal should be dismissed with costs.

BEAZLEY JA: I agree with Mason P.

IPP JA: The issues in this appeal

I have had the real benefit of reading the learned and lucid reasons of Mason P. I do not propose to repeat the relevant facts and circumstances relevant to this appeal. They are set out in his Honour’s judgment.

The appellant submits that there is a conflict between s 34 of the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (the “Commonwealth Civil Aviation Act”) and Pt 17 r 4 of the District Court Rules (which is the equivalent of Pt 20 r 4 of the Supreme Court Rules ).

Section 34 of the Commonwealth Civil Aviation Act provides: “The right of a person to damages under this Part is extinguished if an action is not brought by him or for his benefit within two years after the date of arrival of the aircraft at the destination, or, where the aircraft did not arrive at the destination: (a) the date on which the aircraft ought to have arrived at the destination; or (b) the date on which the carriage stopped, whichever is the later.”

Part 17 r 4 of the District Court Rules provides: “Statutes of limitation 4.(1) Where any relevant period of limitation expires after the date of filing of a statement of claim and after that expiry an application is made under rule 1 for leave to amend the statement of claim by making the amendment mentioned in any of subrules (3), (4) and (5), the Court may in the circumstances mentioned in that subrule make an order giving leave accordingly, notwithstanding that that period has expired. … (5) Where a plaintiff, in his statement of claim, makes a claim for relief on a cause of action arising out of any facts, the Court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action. (5A) An amendment made pursuant to an order made under this rule shall, unless the Court otherwise orders, relate back to the date of filing of the statement of claim. …”.

The respondent’s statement of claim was filed in the District Court on 22 September 2000, two days before expiry of the two-year limitation period under the Commonwealth Civil Aviation Act. As this Court held in Air Link Pty Limited v Paterson [2002] NSWCA 85, that statement of claim, and the action so brought, did not contain and was not based on a cause of action founded on that Act.

By notice of motion, returnable on 6 May 2002, the respondent renewed his application in the District Court for leave to amend the statement of claim so as to rely on a cause of action based on the Commonwealth Civil Aviation Act. Graham DCJ heard the motion on 16 May 2002 and his Honour granted leave to amend. The respondent undertook not to act on that order pending determination of the application for leave to appeal and has not acted on it since leave to appeal was granted.

The appellant contends that, by reason of what it submits is a material inconsistency between Pt 17 r 4 and s 34 of the Commonwealth Civil Aviation Act, Graham DCJ had no power to grant the amendment. The appellant submits that District Court rules, entitling judges to grant amendments resulting in the extension of limitation periods under Commonwealth legislation, are ultra vires the District Court Act 1973. The appellant also submits that Pt 17 r 4, to the extent that it is inconsistent with s 34 of the Commonwealth Civil Aviation Act, is invalid pursuant to s 109 of The Constitution . The rule in Weldon v Neal

Part 17 r 4 was introduced to ameliorate the rule in Weldon v Neal (1887) 19 QBD 394. The rule in Weldon v Neal was based on fairness. Lord Esher MR in that case said at 395: “If an amendment were allowed setting up a cause of action, which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion, improper and unjust”. Injustice to a defendant also lay at the root of the judgments of Lindley LJ and Lopes LJ.

These sentiments were echoed in Horton v Jones (No 2) (1939) 39 SR (NSW) 305 where Jordan CJ said at 315: “[T]he matter is one of substance, not of form. It is regarded as unjust to a defendant to allow the power to amend to be used to allow a plaintiff to present for the first time a new matter of controversy at a time when it is already barred by statute”. Similar views were expressed in Penrith Municipal Council v Australia Blue Metal Limited (1960) 60 SR (NSW) 608 at 615.

Part 17 r 4 does not give carte blanche to amendments that add or substitute a new cause of action after the expiry of a limitation period. The rule limits the judge’s discretion to circumstances where the cause of action arises “out of the same or substantially the same facts” as previously pleaded. It was apparently thought that this limitation would meet the objections of injustice referred to in Weldon v Neal . As Ormiston JA noted in Agtrack (NT) Pty Limited v Hatfield [2003] VSCA 6: “It was one thing to object to a cause of action being brought out of time dependent on new facts, but quite another to object to a change in form or characterisation of an action otherwise commenced in time, where the fresh claim was directly related to its original subject matter. Prejudice might be obvious in the first case but not in the second”.

The present case, however, shows the reach of the rule. The amendments that the respondent seeks would not involve merely a new characterisation of facts already pleaded, or the labelling of the cause of action by reference to the statute concerned. The amendment pleads essential new facts, namely the fact of intra-state travel and the fact that the appellant held an air operator’s certificate.

In Agtrack , Ormiston JA categorised facts of this kind as “jurisdictional facts”. I understand his Honour to mean, by this phrase, facts that would not be in dispute, but which were necessary elements of the new cause of action, and which had been omitted in the earlier pleading. The omission to make allegations of this kind means that the appellant was not put on notice that a claim was to be made against it under the Commonwealth Civil Aviation Act. The significance of Proctor

Proctor v Jetway Aviation Pty Limited [1984] 1 NSWLR 166 affirmed McGee v Yeomans (1977) 1 NSWLR 273. Mason P observes in relation to both cases: “ McGee and Proctor have stood unchallenged for many years and there is in any event no reason to doubt their correctness. They represent the settled law in this State as to the scope of the power conferred by [Pt 20 r 4 of the Supreme Court Rules ]”.

Proctor relevantly held the following: (a) Part 20 r 4 of the Supreme Court Rules displaces the rule in Weldon v Neal and substitutes a general discretion, whenever justice so requires, to allow an amendment, notwithstanding that it raises a barred remedy or extinguished cause of action. (b) An amendment, duly made, of a statement of claim takes effect, not from the date when the amendment is made, but from the date when the statement of claim is filed. (c) Pursuant to Pt 20 r 4, even after the apparent extinguishment of a cause of action by a statutory limitation in force immediately before the commencement of the Supreme Court Act 1970 the Court may allow a statement of claim to be amended by the introduction of that cause of action. (d) The new cause of action is then regarded as having been first pleaded when the statement of claim was first filed. (e) Section 6 of the Supreme Court Act 1970, to the extent stated therein, gives statutory backing to Pt 20 r 4;

Section 6 of the Supreme Court Act was crucial to the decision in Proctor . It provided: “Any Act in force immediately before the commencement of this Act which is inconsistent with the rules shall be superseded to the extent of such inconsistency and while such inconsistency continues to exist.”

The appellant sought leave to reargue the correctness of Proctor . Mason P observes that Proctor “has long stood as authority in this State”. Moreover, McGee has been followed by the Full Court of the Supreme Court of Queensland in Adam v Shiavon [1985] 1 Qld R 1, and Proctor has been followed by the Victorian Court of Appeal in Agtrack . And in Rodgers v Commissioner of Taxation (1988) 88 FCR 61, the Full Court of the Federal Court, in effect, adopted the reasoning in both Proctor and McGee .

Mason P is of the opinion that Proctor is correct and should be followed. He would refuse to allow it to be reargued. Having regard to the length of time that Proctor has stood unchallenged, its acceptance in other jurisdictions and its acceptance by Mason P, I think it inappropriate for this Court, constituted as it is, to depart from what is laid down therein. In my view, only the High Court, or a five-judge bench of this Court, should determine, authoritatively, that Proctor was wrongly decided. The application to reargue the correctness of Proctor was made midway through the argument on appeal and no application was made for the Court to be reconstituted with five members.

Moreover, there are two features of Proctor that make it distinguishable from the facts of this case. Firstly, Proctor concerned Pt 20 r 4 of the Supreme Court Rules and it had the statutory backing provided by s 6 of the Supreme Court Act . Secondly, it concerned a State and not a Federal statute. The present case, on the other hand, concerns Pt 17 r 4 of the District Court Rules , which has no statutory backing of the kind provided by s 6 of the Supreme Court Act , and the conflict said to arise is with a Federal statute, namely, the Commonwealth Civil Aviation Act. For these reasons I do not think that Proctor governs this case. There is no need for it to be reargued.

Accordingly, I would refuse leave to reargue Proctor . In saying this I do not intend to convey any view as to whether Proctor is correct. The reasoning in Larcos

In ANZ Banking Group Limited v Larcos (1987) 13 NSWLR 286, Rogers J extended the reasoning in Proctor . An application had been made to make a late amendment to a cross-claim introducing a cause of action based on s 52 of the Trade Practices Act (1972) (Cth). Section 82 of the Trade Practices Act laid down a limitation period of three years. The three-year period had expired at the time the amendment application was made. The Bank submitted that Pt 20 r 4 of the Supreme Court Rules was invalid as being inconsistent with the limitation in s 82(2).

Rogers J (at 295) held that Pt 20 r 4 “did not seek to, as indeed it could not, alter Commonwealth legislation providing for limitation of actions”. His Honour said that to find the true solution “the cross-claim if amended is to be treated as having been in that form all along. If so treated the proceedings have been commenced in time”. In dealing with the Bank’s contention that Pt 20 r 4 was invalid by reason of being in conflict with s82(2) his Honour said (also at 295): “This result would have been demanded by The Constitution, s 109, had there truly been an inconsistency. In my view, on the correct characterisation of the rule, there is no inconsistency. The rule accepts fully the dictate of the Commonwealth legislation that proceedings should be commenced within three years from accrual of the cause of action. The rule deals merely with a procedural matter which, as a matter of law, then has an impact on what is to be taken as the date of commencement of proceedings. The two regulatory provisions operate in different fields and are therefore not inconsistent”.

The proposition that underpins Larcos , and which is the cornerstone of the respondent’s argument in the present case, is that, once the relevant pleading (be it a cross-claim or statement of claim) is amended by the introduction of a new cause of action, the pleading is to be regarded as having been in the amended form from the date it was first filed. The newly introduced cause of action is treated as relating back to the date on which the relevant pleading was first filed. This occurs despite the fact that, unlike the situation in Proctor , in Larcos there was no statutory backing for the relevant Rule of Court.

The reasoning I have described enabled the amendment in Larcos to be treated as a matter of procedure, and any conflict between the Rule of Court and the Trade Practices Act was held to be removed because the Rule pursuant to which the amendment was made was said to function in a different sphere of operation. As Mason P points out, this represents the essential reasoning process in cases such as Rodgers v Commissioner of Taxation , PSL Industries Limited v Simplot Australia Pty Limited [2003] VSCA 7 and Agtrack . See also Trustee of the Property of Mahony v McElroy [2003] QCA 208. The fiction in the Larcos approach

In Proctor , Priestley JA at 183 referred to the “logical difficulties created by the doctrines of relation back or retroactivity”. These logical difficulties are illustrated by the remarks of Brennan J in Stage Club Limited v Millers Hotels Pty Limited (1981) 150 CLR 535 where his Honour, in considering the effect of s 63 of the Limitation Act 1969, said at 570: “Under the Act, there can be no new assumpsit, no implied promise to discharge a liability, after the expiry of the limitation period. The liability is gone, the right of the creditor extinguished. Although an acknowledgment prior to the expiry of the limitation period, if made in conformity with s 54, extends the limitation period, no revival of the cause of action is possible after the period expires”.

The Larcos line of cases seeks to overcome the logical difficulties caused by the extinguishment of the cause of action, and the fact that the new cause of action, in reality, never formed part of the original statement of claim, by the proposition that the relation back effect has nothing to do with the limitation period, as a period. The received doctrine is that the relation back effect does not alter the duration of the limitation period. All that happens, it is said, is that by the amendment the commencement date for the limitation period is determined by relating it back to the statement of claim. Thus, the relation back power is used only to determine the commencement date of the limitation period, and not its duration.

According to this argument, the exercise of this power relates only to procedural matters or, if it extends into the substantive field, it does so only in a way that is ancillary to the determination of the commencement date of the limitation period. In my view, however, the foundation of this doctrine is a fiction.

Take, for example, the facts of the present case. Assuming that Graham DCJ was entitled to grant leave to amend, the cause of action based on the Commonwealth Civil Aviation Act became part of the respondent’s statement of claim not less than nearly two years after the expiry of the limitation period laid down by the Act. Even if one assumes that the bringing of the new cause of action was on 6 May 2002, when the notice of motion by which the amendment was sought was returnable, the respondent has been given almost four years (and not two years, as laid down by the Act) to bring his action.

Thus, Mr Hislop QC, senior counsel for the respondent, was required to submit (quite correctly, I would add) that, when an amended statement of claim is filed, the new cause of action is deemed to have been in the statement of claim from its inception. The relation back doctrine recognises that the new cause of action was not initially in the statement of claim, but holds that it should be regarded as having been there all the time. This is the fiction.

The reality of allowing the respondent to plead and proceed with his new cause of action is that the limitation period is extended substantially beyond its expiry date. This consequence of the relation back doctrine is perfectly consistent with the intent and purpose of Pt 17 r 4.

The purpose of Pt 17 r 4 of the District Court Rules (and Pt 20 r 4 of the Supreme Court Rules ) is to empower the Court, in its discretion, to alleviate the rigour of limitation statutes. This is the inference to be drawn from the plain and ordinary meaning of the words used. By sub-rules 4(1), 4(5) and 4(5A), the Court is given the express power to override limitation statutes by allowing an amendment introducing a new cause of action to be made, on the basis that the amendment will relate back to the date of the filing of the statement of claim, even where “any relevant period of limitation” has expired. The purpose of the Rule, in my view, could not even arguably be aimed at providing a regime for determining the commencement date of a cause of action. Its purpose is to provide for the resuscitation of expired remedies and causes of action, and this it achieves by the fiction of deeming the commencement date of the new cause of action to be the date of filing of the statement of claim.

While that approach may be acceptable where there is appropriate statutory backing for the Rule that empowers this life-giving process (as in Proctor and Rodgers ), the position, in my view, is different in those instances when such backing is absent. The power of rules of court to override limitation statutes

The importance of limitation statutes was underlined In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 where McHugh J said at 553: “A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated with the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated”.

In Morgan v Banning (1999) 20 WAR 474, Wheeler J (with whom Owen J and I agreed), when dealing with the Rules of Court of the Supreme Court of Western Australia, said: “Whatever the rules of Court may provide, an action which is in fact instituted out of time is able to be defeated by reliance upon the Limitation Act , which the Court has no power to override, whether by a procedural rule of ‘relation back’ or otherwise. The clearest observations on this point are those of Toohey J, with whom Deane J agreed, in Wardley Australia Limited v The State of Western Australia (1992) 175 CLR 514 at 559-562, where his Honour rejected the view that Weldon v Neal was no more than a ‘rule of practice’, and expressed the opinion that where an amendment seeks to introduce an ‘admittedly new cause of action’ a court has no power to ignore any statutory limitation period governing the bringing of that cause of action. Although these remarks were strictly obiter, they appear to me to stem from well understood principles governing the relationship between statutes and rules of court, and I would respectfully adopt them.”

The Western Australian Rules considered in Morgan v Banning permitted the making of an amendment, justified by the justice of the case, to add or substitute a new cause of action even though the limitation period had expired. There was no statutory backing for any rule that purported in effect to allow the Court, by the relation back doctrine, to extend statutory limitation periods. Morgan v Banning constitutes a decision by an intermediate appellate court that holds that, in the absence of appropriate statutory backing, rules of court that provide for relation back powers cannot be used to resuscitate remedies or causes of action which have been time barred or extinguished by limitation statutes.

Morgan v Banning is consistent with the views expressed by the High Court in Harrington v Lowe (1996) 190 CLR 311 at 324. It is also consistent with the position in England. Mason P states in this regard: “[i]n the light of Ketteman v Hansel Properties Limited [1987] 1 AC 189 the English rule [relating to the relating back power] has been read down so that it is confined to procedural limitation provisions and the relation back principles excluded from English procedural law in all but presently irrelevant circumstances (see (1992) QB 907 at 932)”.

The reluctance of English courts to accept that amendments introducing new causes of action should have retrospective effect so as to defeat limitation statutes is expressed in a number of cases.

In Liff v Peasley (1980) 1 WLR 781, Brandon LJ, in dealing with the proposition that an amendment should relate back to the document amended said at 803: “This seems to me to be an entirely sensible proposition so long as the amendment concerned does not involve the addition of a new party, either as plaintiff or defendant, or the raising of a new cause of action , but involves only the modification, by addition, deletion or substitution, of pleas or averments made between existing parties in respect of a cause or causes of action already raised”. [emphasis added] See also Ketteman , Payabi v Armstel Shipping Corporation [1992] 1 QB 907 and Western Digital Corporation v British Airways Plc [2001] QB 733. The absence of statutory backing for Pt 17 r 4

The only statutory backing given to Pt 17 r 4 of the District Court Rules is s 161(1) of the District Court Act . Mason P points out that, under s 161(1), any question about the validity of sub-rule (4) (and sub-rule (1)) as State law is removed if: “(1) the rules were for or with respect to the procedure and practice of the Court, or the amendment of documents filed by a party to civil proceedings (original s 161(1)(a) and (r)); or (2) the rules were for or with respect to any matter necessary or convenient to be prescribed by rules for the purposes of, or in connection with the exercise by the Court of its civil jurisdiction under any Act or law, or for carrying any such provisions into effect (s 161(1) as enacted in 1994)”.

In my opinion, Pt 17 r 4 is only valid if it is confined to procedural limitation provisions that do not permit the introduction of new causes of action extinguished by lapse of time. It is only on that basis that it can be characterised as a rule “with respect to the procedure and practice of the Court, or the amendment of documents filed by a party to civil proceedings” or “for the purposes of, or in connection with the exercise by the Court of its civil jurisdiction”.

This is not substantially dissimilar to the way in which, as Mason P points out, the equivalent English Rule has been read down. Thus, Mitchell v Harris Engineering Company Limited [1967] 2 QB 703, which held that RSC (Rev 1965) Ord 20 r 5 was intra vires a “practice and procedure” rule-making power, rested on the Court construing the English Rule as being of application only in regard to procedural matters.

In Agtrack , Ormiston JA held that the Victorian equivalent of Pt 17 r 4 was procedural. His Honour said: “In my opinion, s 34 (with which must be read all other related sections) is intended to lay down only the relevant limitation period, leaving questions of its application to particular parties, extension, power to amend proceedings, the manner in which actions are commenced and the like to the law which must be applied by the court in which the action is brought”.

In PSL Chernov JA agreed with Ormiston JA in Agtrack and also held that the power to amend given by the Victorian Supreme Court Rules equivalent of Pt 17 r 4 was procedural. His Honour said: “As Ormiston JA has explained in [ Agtrack ], the Victorian provisions are permissive only and rule 36.01(6) for example, was intended to have only a procedural effect designed to ensure the proper and fair consideration of applications to amend pleadings where, if the amending claim had been independently brought out of time, it would have been rejected as statute barred”.

Mason P, in his reasons in the present case, relies on the proposition that the power exercisable under Pt 17, r 4 concerns only the date of the commencement of the limitation period under the Commonwealth Civil Aviation Act. On that basis, his Honour is of the view that: “Rule 4 does not contradict the command of a statutory limitation period (procedural or substantive) because the amendment rule functions in a different sphere of operation”.

With respect to their Honours, I have come to a different conclusion.

Limitation statutes, as a rule, say nothing about when an action is to be regarded as having been commenced. They only prescribe the period of limitation, usually by reference to some formula such as a stipulated number of years from the commencement of an action or the bringing of an action. It is left to the courts to prescribe rules that determine when an action is regarded as having been commenced or brought. These rules differ from jurisdiction to jurisdiction. Depending on the jurisdiction and the nature of the claim, actions may be commenced by the issuing of a writ, or the filing of a summons or statement of claim. Rules of service and substituted service differ from jurisdiction to jurisdiction. Such rules are essentially procedural although they may have substantive effect. Section 79 of the Judiciary Act plays an essential role in regulating the uniform application of Federal limitation statutes in circumstances where different States and Territories have different rules, of the kind mentioned, for the commencement of actions.

In my view, however, rules of court such as Pt 17 r 4 that purport, by way of relation back mechanisms, to confer power on courts to extend limitation periods are a very different kettle of fish. I reiterate that the clearly stated purpose of Pt 17 r 4 is to empower the Court, in its discretion, to defeat statutory limitation periods. That involves a direct alteration of substantive law: John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503.

The High Court said in Harrington v Lowe at 324-325: “The power conferred by s 123 [of the Family Law Act 1975 (Cth)] makes provision for or in relation to practice and procedure, and matters and things incidental to such practice and procedure or necessary or convenient to be prescribed for the conduct of court business. These are broad but limited terms. The power does not authorise the making of regulations which (i) vary or depart from, and thus are inconsistent with, the positive provisions of the Act …, or (ii) go beyond the field of operations marked out by the Act, in particular beyond the exercise of federal jurisdiction by courts doing so in respect of matters arising under the Act”.

In my opinion, Pt 17 r 4 offends against these principles and is ultra vires s 161 of the District Court Act . I would uphold the appeal on this ground. Section 79 of the Judiciary Act

The appellant also argued that Pt 17 r 4 was inconsistent with a law of the Commonwealth, namely, s 34 of the Commonwealth Civil Aviation Act, and, by s 109 of the Constitution , is, to the extent of the inconsistency, invalid.

Cases such as Larcos , PSL and Agtrack have held that no inconsistency exists, as the relevant Rule of Court operates in a different field to the Federal legislation concerned. The following remarks of Ormiston JA in Agtrack (at [73]) are typical of the approach in these cases: “So long as one can characterise that power to amend as essentially procedural, I see no difficulty in that power being exercised pursuant to state or territorial laws ‘picked up’ by virtue of s 79 of the Judiciary Act. In that respect I see no basis for an argument either in terms of inconsistency or irreconcilability. I concede that other powers of extension or qualification of limitation periods must now be treated as substantive, not procedural”. Thus, on the basis that the power to amend was regarded as “essentially procedural”, these cases held that s 79 of the Judiciary Act picked up the statutory provision (whether it be a Rule of Court or a State Act of Parliament) that conferred the power.

Mason P, however, in his reasons in this case, goes further and points out: “Section 79 extends to substantive state laws ( Austral Pacific Group Limited (in Liq) v Airservices Australia (2000) 203 CLR 136, Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2000) 203 CLR 559)”. His Honour concludes: “Section 79 can pick up State laws relating to limitations even if they are substantive in effect (cf John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503 at 532 [58], 543, [98])”.

Mason P recognises that State laws will not always be picked up, but this may occur in certain circumstances. In Agtrack , Ormiston JA explains when s 79 would not have that effect. His Honour says: “I should immediately make clear that, if a state or territory statute or rule purported directly to resuscitate an extinguished claim such as one subject to s 34, then it would be clearly ineffective, whether or not one called in aid s 109 of the Constitution (or the parallel inconsistency rule relating to territorial legislation) or whether one asked, on applying s 79 of the Judiciary Act , whether the local limitation regime as set out in statute or rule, was irreconcilable with the terms of the Act as a Commonwealth law. Thus if there was a general state law providing for the extension of all limitation periods, that could not stand with s 34 of the Act. Moreover, although it is not necessary here to decide it, a state or territory provision which purported to excuse non-compliance with s 34 so as to permit the revival of an extinguished claim under Pt IV would likewise seem to be inconsistent”. There is nothing in the views of Mason P that is at odds with these remarks.

I understand from the observations of Ormiston JA that, if the relevant Rule of Court provided, expressly, that the Court had power in its discretion to override all limitation periods in all statutes, “it would be clearly ineffective”. But, in my opinion (subject to the new cause of action arising out of the same or substantially the same facts as were pleaded in the original statement of claim), that is precisely what Pt 17 r 4 purports and is intended to do.

In Timeny v British Airways PLC (1991) 56 SASR 287, the Full Court of the Supreme Court of South Australia was concerned with what was submitted to be a conflict between s 48 of the Limitation of Actions Act 1936 (SA) (which empowered a court to extend the time limit for the institution of proceedings) and Article 17 of the Warsaw Convention as to International Carriage by Air 1929 (which is in terms not dissimilar to s 34 of the Commonwealth Civil Aviation Act). In upholding the submission, King CJ said at 288: “It is beyond the constitutional power of the State Parliament to make s 48 apply to time limits imposed by Commonwealth Acts. A State law purporting in terms to do so would be pro tanto ineffective of its own force to achieve that result. It could do so only if picked up by s 79 of the Judiciary Act ”. King CJ went on to say at 289: “I have reached the conclusion that s 48 does not, according to its true meaning, refer to Commonwealth Acts. It follows that, although the combined operation of s 79 of the Judiciary Act and s 48 of the Limitation of Actions Act authorises courts exercising federal jurisdiction in South Australia to extend the time limits which are imposed by State law and which apply to actions under federal law by virtue of s 79, there is no power to extend time limits imposed directly by federal law. The status of the time limit imposed by Art 29 of the Convention, in the domestic law of Australia, is that of a time limit imposed by federal statute and I would hold that, even if the time limit in Art 29 could be regarded merely as a procedural provision limiting the time for instituting proceedings, there is no power to extend it”. And concluded at 290: “If a State law were to purport to revive a right which had been validly extinguished by federal law, it would be inconsistent with federal law and invalid pro tanto by virtue of s 109 of the Constitution (Cth). It would not be picked up by s 79 which picks up State laws only ‘except as otherwise provided by the Constitution or the laws of the Commonwealth’. In my opinion, therefore, even if s 48 of the Limitation of Actions Act could be construed as applying in terms to time limits imposed by Commonwealth Acts, an extension of time within which to institute the action would not operate to revive the appellant’s right to recover damages under the Convention and would therefore be futile”.

Bollen J (with whom Cox J agreed) expressed similar views. He said at 301: “The right given by the Convention must be exercised within the time contemplated by Art 29. If not it is extinguished, dead and gone forever”.

I accept that there are differences in the facts and in the legislation between Timeny on the one hand, and PSL , Agtrack and the present case on the other. In my view, however, on the fundamental issues as to whether State legislation, which empowers a court to extend time limits for the institution of proceedings, is to be regarded as procedural, and as to whether s 79 of the Judiciary Act picks up State laws of that kind, I see no basis for distinguishing Timeny .

I am particularly conscious of the admonition expressed in Australian Securities Commission v Marlborough Gold Mines Limited (1993) 177 CLR 485. In my view, however, there are serious conflicts between Morgan v Banning and Timeny on the one hand, and PSL and Agtrack on the other. Accordingly, I do not think that a consistent view has been expressed by intermediate appellate courts in the different jurisdictions and I am not required to follow PSL and Agtrack . For the reasons I have explained I consider Proctor to be distinguishable. I would add that cases such as Rodgers (which were concerned with the Federal Court Rules ) do not come into this debate as there was, in those cases, Commonwealth statutory backing for the rules that conferred the relation back powers.

As I consider, firstly, that Pt 17 r 4 purports to confer power sufficiently broad to extend the limitation period laid down by s 34 of the Commonwealth Civil Aviation Act and, secondly, that Pt 17 r 4 is a substantive and not a procedural provision, I conclude that it does not function in a different sphere of operation to the relevant limitation period laid down in the Commonwealth Civil Aviation Act and it would not be picked up by s 79 of the Judiciary Act .

I would uphold the appeal on this ground as well. Conclusion

I propose the following orders: (a) The appeal is upheld; (b) The order made by Graham DCJ on 16 May 2002 granting leave to the respondent to amend the statement of claim is set aside; (c) The statement of claim is struck out; (d) The respondent pay the costs of the appeal and the proceedings before Graham DCJ.