Introduction
The applicants in the long running equine influenza (horse flu) class action have had a procedural victory, obtaining leave to amend their claim despite a statute of limitations argument against it.
The Federal Court representative proceedings are brought on behalf of 587 group members, predominantly members of the horse racing industry, against the Commonwealth. The action arises from the horse flu epidemic which brought the Australian horse racing industry to a standstill in 2007. The applicants allege that the outbreak was caused by the Commonwealth government's negligent management of the Eastern Creek Quarantine Station in Sydney, in particular the government's failure to ensure that a visitor to the centre who had been in contact with an infected horse was appropriately disinfected before leaving the station.
The applicants' case against the Commonwealth is based on the Commonwealth's direct liability as occupier of the station, and also its vicarious liability for alleged omissions of 7 Commonwealth employees responsible for management of the station. The 7 employees are also named as respondents to the proceedings.
In August 2014 the applicants filed an interlocutory application seeking to amend the pleadings to allege that the Commonwealth was also vicariously liable for the negligence of an eighth Commonwealth employee, Graham Turner. The Commonwealth opposed the amendments primarily on the basis that the amendment would create a new cause of action which was time-barred, being in excess of the 6 year limitation period (the applicants each having suffered a loss prior to 31 December 2007).
Rule 8.21 of the Federal Court Rules relevantly provides that an applicant may apply to amend pleadings to:
".... add or substitute a new claim for relief, or a new foundation in law for a claim for relief, that arises:
- out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the applicant; or
- in whole or in part, out of facts or matters that have occurred or arisen since the start of the proceeding ...."
Rule 8.21 also specifically provides that such an application may be made after the end of any relevant limitation period.
The applicants argued that the amendments merely added a "new foundation in law" within the meaning of the rule. The Commonwealth, by contrast, argued that the amendments effectively added a new claim for relief, rather than merely a new foundation in law for an existing claim for relief. Justice Gleeson preferred the applicants' argument.
Ultimately, however, the application turned on the issue of whether the amendments arose out of "substantially the same facts" as the previous pleading. The Commonwealth argued that they did not as the amended pleading alleged new facts distinct from Mr Turner's involvement; and the claim for the Commonwealth's vicarious liability, insofar as it related to Mr Turner, depended on these facts. Justice Gleeson disagreed with this interpretation and preferred the applicants' position that "substantially the same facts" should be interpreted with a level of generality. His Honour found that the new allegations being generally related to the previously pleaded issues concerning the equine influenza outbreak and the alleged mismanagement of the quarantine station was sufficient.
Justice Gleeson also considered that discretionary considerations favoured allowance of the amendments – in particular facilitating the just resolution of the dispute by ensuring that the applicant's claim covered the negligence of all Commonwealth employees who might be vicariously liable in connection with the outbreak of equine influenza.
