Aldebaran Contracting Pty Ltd v Tiwi Islands Regional Council

[2021] NTSC 89

CITATION:Aldebaran Contracting Pty Ltd v Tiwi Islands Regional Council [2021] NTSC 89

PARTIES:ALDEBARAN CONTRACTING PTY LTD

v

TIWI ISLANDS REGIONAL COUNCIL

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  SUPREME COURT exercising Territory jurisdiction

FILE NO:2021-00288-SC

DELIVERED:  10 November 2021

HEARING DATE:  11 October 2021

JUDGMENT OF:  Luppino AsJ

CATCHWORDS:

Practice and Procedure – Strike out of pleadings which are embarrassing – When a pleading is embarrassing – Discretionary nature of a strike out order – Factors relevant to the exercise of the discretion – Alternatives to strike out orders to address pleading defects.

Supreme Court Rules rr 1.09, 13.02, 13.09, 13.10, 23.02, 23.04.

Practice Direction 6 of 2009 – Trial Civil Procedure Reforms paras 17.3, 17.5, 17.7.
Australian Consumer Law ss 18, 236.

LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor [2020] NTSC 45.
Barnes v Commonwealth of Australia & Anor [2021] NTSC 30.
Dare v Pulham (1982) 148 CLR 658.
Benfield v Farebrother [2011] NTSC 65.
Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69.
Phillis v J Anderson Constructions Pty Ltd & Anor [2020] NTSC 70.
Australian Consumer and Competition Commission v Pauls Ltd [1999] FCA 1750.
Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191.
Wickham Point Pty Ltd v Commonwealth of Australia [2018] NTSC 7.
Beach Petroleum NL v Johnson (1991) 105 ALR 456.
BWK Elders Australia Pty Ltd v Westgate Wool Company Pty Ltd & Ors (No 2) [2002] FCA 87.
Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499.
Fluor Australia Pty Ltd v Sherritt International Corporation & Anor [2002] VSC 203.
Barclay Mowlem Construction Limited v Dampier Port Authority & Anor [2006] WASC 281.
RTA Pty Ltd & Orsv Brinko Pty Ltd & Ors [2012] NTSC 3.
Southern Cross Exploration NL vFire & All Risks Insurance Co Ltd [1985] 2 NSWLR 340.
Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568.
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.
Agricultural And Rural Finance Pty Ltd v Gardiner & Anor (2008) 238 CLR 570.
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226.
Northern Territory of Australia v John Holland Pty Ltd & Ors [2008] NTSC 4.
Williams v Cadillac Transport Repairs Pty Ltd [2004] NTSC 51.

Williams, Civil Procedure Victoria, LexisNexus Butterworths.

REPRESENTATION:

Counsel:

Plaintiff:J Roper

Defendant:T Moses

Solicitors:

Plaintiff:Bowden McCormack Lawyers

Defendant:Minter Ellison

Judgment category classification:  B

Judgment ID Number:                   Lup2103

Number of pages:  29

IN THE SUPREME COURT

OF THE NORTHERN TERRITORY

OF AUSTRALIA

AT DARWIN

Aldebaran Contracting Pty Ltd v Tiwi Islands Regional Council [2021] NTSC 89

2021-00288-SC

BETWEEN:

ALDEBARAN CONTRACTING PTY LTD

Plaintiff

AND:

TIWI ISLANDS REGIONAL COUNCIL

Defendant

CORAM:        Luppino AsJ

REASONS

(Delivered 10 November 2021)

[1]The Defendant has applied for the strike out of the whole of the Plaintiff's Amended Statement of Claim (SOC) pursuant to rule 23.02 of the Supreme Court Rules (SCR). That rule sets out four bases for such an order but the Defendant elected to base the current application only on the basis in rule 23.02(c) of the SCR specifically, that the paragraphs complained of are embarrassing.

[2]Provisions of the SCR relevant to these reasons include:-

13.02Content of pleading

(1)A pleading shall:

(a)contain in a summary form a statement of all the material facts on which the party relies but not the evidence by which those facts are to be proved;

(b)where a claim, defence or answer of the party arises by or under an Act identify the specific provision relied on; and

(c)state specifically the relief or remedy, if any, claimed.

13.09Inconsistent pleading

(1)A party may in a pleading make inconsistent allegations of fact if the pleading makes it clear that the allegations are pleaded in the alternative.

13.10Particulars of pleading

(1)A pleading shall contain the necessary particulars of a fact or matter pleaded.

(2)Without limiting subrule (1), particulars shall be given if they are necessary to enable the opposite party to plead or to define the questions for trial or to avoid surprise at the trial.

23.02Striking out pleading

Where an endorsement of claim on a writ or originating motion or a pleading or a part of an endorsement of claim or pleading:

(a)does not disclose a cause of action or defence;

(b)is scandalous, frivolous or vexatious;

(c)may prejudice, embarrass or delay the fair trial of the proceeding; or

(d)is otherwise an abuse of the process of the Court,

the Court may order that the whole or part of the endorsement or pleading be struck out or amended.

23.04Affidavit evidence

(1)On an application under rule 23.01 evidence shall be admissible for a party by affidavit or, if the Court thinks fit, orally.

(2)On an application under rule 23.02 no evidence shall be admissible on the question whether an endorsement of claim or pleading offends against that rule.

(3)Rule 22.07 applies to an affidavit under subrule (1).

[3]The term ‘embarrassing’ in this context forms part of the phrase “may prejudice, embarrass or delay the fair trial of the proceeding” in rule 23.02(c) of the SCR. As I said in LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor[1] and in Barnes v Commonwealth of Australia & Anor,[2] notwithstanding the multiple alternatives in that phrase, it is a single concept and, distilled down to the essentials, means that the pleading does not sufficiently inform the opposite party of the case which has to be met. Examples of embarrassing pleadings were there set out and, relevantly to the current case, included:-

·A pleading which fails to comply with the pleading rules;

·A pleading which does not allege all the material facts which a party relies on;

·A pleading which pleads conclusions;

·A pleading which pleads irrelevancies;

·A pleading which is too vague and general;

·A pleading which pleads inconsistent allegations;

[4]I will deal firstly with a matter raised by Mr Roper, counsel for the Plaintiff, after the Defendant closed its case. He argued that, as the Defendant’s Summons only seeks an order for strike out of the whole of the Plaintiff’s pleading and not a part strike out in the alternative, unless the Defendant established that the entirety of the pleading was defective, the Defendant must necessarily fail on its summons.

[5]Although there are strict rules in respect of initiating processes to the effect that a party is not entitled to relief which is not claimed,[3] I am not convinced that strictly applies in respect of orders sought on an interlocutory application.

[6]Before he closed his case, and before Mr Roper made the subject submission, Mr Moses for the Defendant pointed out that the application to strike out the whole of the SOC was sought primarily to avoid piecemeal amendments which might unnecessarily complicate the amendment process. I agree that often is the case.[4] In reply, Mr Moses submitted that the general catchall order included on the Defendant’s Summons[5] enabled a partial strike out and therefore sufficiently negated the Plaintiff's argument. I agree. As a supplementary order to a specific order, as opposed to a general standalone alternative order, the catchall alternative is I think a valid mechanism to claim orders ancillary to the primary relief sought. In any case, I think the better basis for rejecting the Plaintiff’s argument is that the Court is empowered, by rule 23.02, to strike out the whole or part of a pleading.  That is especially apt in conjunction with the line of authority to the effect that it is often preferable to strike out the entire pleading to avoid complications resulting from piecemeal amendments.[6]

[7]I also take the opportunity to make some comments which generally apply to all strike out applications.

[8]A number of the Defendant's complaints are in respect of relatively minor or technical defects in the pleading. As I said in Phillis v J Anderson Constructions Pty Ltd & Anor,[7] following a number of other cases,[8] an order for strike out of a pleading is in the discretion of the Court. If the Defendant's application had been only in respect of technical defects then, assuming the application was otherwise established, an order for strike out would likely be refused on discretionary grounds. Mr Moses accepted that but said that the technical defects were raised only in conjunction with the more substantial complaints so that, in the event that a strike out was ordered and leave to re-plead was given, all defects had been identified so that the opportunity could be taken for all defects, technical or otherwise, to be corrected by amendment. I consider that to be an appropriate approach. The fact that a pleading defect is otherwise sufficiently minor so as not to warrant a strike out on discretionary grounds does not mean that those defects should not be addressed if a strike out and re-pleading is otherwise ordered.

[9]Secondly, as I observed in Wickham Point Pty Ltd v Commonwealth of Australia[9] and the cases there discussed,[10] the discretionary nature of a strike out order allows the Court to take a flexible approach to pleadings in appropriate cases. That is an extension of the approach which may be taken in respect of amendments to pleadings and such an approach can also be taken in respect of strike out applications. In the context of strike out applications that approach means that strike out of pleadings should only occur where it is necessary and where no suitable alternative means are available to resolve the issues.

[10]An order for strike out is most justified where a pleading does not plead sufficient material facts to establish a cause of action or where the party required to respond to a pleading can rightly establish that it is unable to understand the case that has to be met. When I say “rightly” in this context I am endorse and adopt the comments made by Byrne J in Fluor Australia Pty Ltd v Sherritt International Corporation & Anor.[11] In that case, and albeit in the context of a complex building dispute, his Honour said:-

The plaint is often heard from counsel, as in this case, that the pleadings do not disclose the case which their client must address. Very often the party knows very well what the case is. A feature of building cases arising out of major projects is that they are usually commenced after extensive negotiation involving exchanges of position between the parties. Furthermore, in so far as the claims concern technical matters, the litigants are usually well resourced in terms of technical input. Moreover, by the time the case comes for trial, mediation will have been conducted and expert and other witness statements will have been delivered. All of this has the consequence that the particulars provided early in the litigation process often cease to play a very significant role. This is not to say that particulars should be put to one side; …It means only that arguments about their sufficiency must be approached in a practical and pragmatic way.[12]

[11]Alternatives to a strike out application, and which can occur at different stages of the litigation process, are the consent amendment of pleadings, the provision of further and better particulars, the provision of documents by the pre-action protocols and disclosure process in Practice Direction 6 of 2009 – Trial Civil Procedure Reforms (PD6), the provision of documents by discovery pursuant to the SCR, the provision of evidence both expert reports and affidavit evidence in chief and lastly, mediation.

[12]PD6 is very relevant to assessing whether a party knows the case to be met. If the pre-action process in PD6 is properly undertaken the parties ought to know much about the case of the other before proceedings are instituted. If that does not occur due to insufficient compliance with the pre-action protocols, then cost consequences can flow from that.

[13]The case management conference process in Part 3 of PD6 is a good but underutilized alternative. Paragraph 17 of PD6 sets out what the Court can do at a case management conference. In particular, subparagraph 17.3 requires the Court to scrutinize the respective pleadings to ensure that they only identify the real issues of substance in dispute between the parties. More generally, subparagraph 17.5 requires the Court to resolve outstanding procedural issues and, where that is not possible, to give directions to resolve those issues. Subparagraph 17.7 acknowledges that the Court will make such orders as are appropriate to ensure the just, prompt, proportionate and economical resolution of the proceedings by the Court. In my view, those subparagraphs enable a less formal avenue to resolve disputes concerning pleadings (and other disputes as well), in appropriate cases.

[14]In routine cases at least, where a case management conference can be conveniently held sufficiently near to the close of pleadings, arguments concerning pleadings may be best resolved in the summary way provided for in Part 3 of PD6 rather than seeking a strike out of pleadings by interlocutory summons. The latter inevitably delays the proceedings, results in otherwise avoidable costs and results in the unnecessary and extensive debate of the application of technical pleadings rules that Martin CJ was so critical of in Barclay Mowlem Construction Limited v Dampier Port Authority & Anor.[13]

[15]Dealing with pleadings issues at the case management conference could be facilitated by appropriate directions preceding the case management conference such as directions for the provision of submissions. In appropriate cases affidavit evidence could be relied on which would not routinely be permitted on a strike out application[14] and that may be an advantage. In particular, where the pre-action process of PD6 sufficiently sets out a party’s case, with appropriate safeguards, evidence of that could be led by affidavit to enable proper assessment of any complaint that a party does not know the case to be met. The possibility that pleadings issues can be resolved in this way ought to be considered before strike out applications are issued.

[16]Before leaving these general comments I should add that there is one qualification to the alternative of a request for further and better particulars. This is relevant in the context of the current case as one of Mr Roper’s arguments was that essentially the Defendant’s complaints more concerned particulars than material facts and that therefore the pleadings issues could be resolved by the provision of particulars. Although I disagree with his characterization of the Defendant’s complaints, in any case particulars can only go so far. It is readily accepted that, except in limited circumstances, particulars cannot be used to fill gaps in pleadings resulting from the failure to plead necessary material facts.[15] Further, material facts cannot be provided in the guise of particulars.[16] In the latter instance that would likely result in the pleading of a mode of proof contrary to rule 13.02(1)(a) of the SCR.

[17]I now deal with the Defendant’s specific complaints. The following extracts of the SOC are set out for reference and to better put these reasons into context.

6.        The Contract included terms, inter alia, to the following effect:

(a)The Defendant would supply all material suitable for the subbase and basecourse

(b)The Defendant would be responsible for the quality and quantity of the subbase and basecourse material

(c)The Defendant would ensure that the subbase and basecourse material would accord with the Contract specifications or otherwise meet with the Northern Territory Government Department of Infrastructure, Planning and Logistics’s approval in writing

(d)That any liability consequent upon the Defendant’s failure in relation to provision of material for the subbase and basecourse would be borne by the Defendant

Particulars of paragraph 6 (a) – (d)

i)     Clause 3.3(a) of the Contract.

(e)Further and in the alternative, it was an implied term of the  contract that, in fulfillment of clause 3.3(a) of the Contract, the  Defendant would be responsible for nominating a suitable gravel pit and pushing up suitable gravel from the pit for carting by the  Plaintiff to use in the subbase and basecourse;

Particulars

i)     This term is implied for business efficacy

ii)   This term is implied by a course of conduct between the parties

iii)     Email from Bruce Mann of the Defendant to inter alia, Luke Halton of the Plaintiff dated 27 October 2017 at 6.23pm.

iv)     Email from Rory Hinton of the Defendant to Luke Halton and Kenneth Skewes of the Plaintiff dated 10 November 2017 at 2.10pm.

(f) The Plaintiff and Defendant would allow in the tender for demobilisation being the removal and transportation from site of all temporary and construction facilities and equipment.

Particulars

i)     Clause 7.5.1 of the Contract.

(g) The Plaintiff would assume responsibility for the safe conduct of traffic through, past or around the Words (sic), 24 hours a day, from the possession of the site to completion of all works and handover.

Particulars

i)     Clause 8 of the Contract.

(h)The date for practical completion of the Works was to be 21 November 2017;

Particulars

i)     Item 21, Annexure to Conditions of Contract,  Contract Document Melville Island – Pickertaramoor Road Upgrade Part 2: CH3250 to CH6100

ii)   Clause 70.2, Conditions of Contract

(i)The Defendant could at any time and from time to time and for any reason it thought sufficient, by notice addressed to the  Plaintiff, extend the time for practical completion of the Works  by nominating a date specified in the notice as the date for practical completion of the Works and the date so specified in the notice would, for the purpose of the contract, be deemed to be the date for Practical Completion of the Works;

Particulars

i)     Clause 70.4, Conditions of Contract

(j)The unilateral power vested in the Defendant by clause 70.4 of the Contract was required to be exercised reasonably to maintain the benefit of the Contract for the Plaintiff;

(k)The Plaintiff would submit progress claims to the Defendant and the Defendant would issue a Progress Claim and make payments within thirty days of receipt of claims.

Particulars

i)     Clause 77.1 of the Contract.

(l)     The Plaintiff was entitled to make claims for variations to the Works carried out in accordance with the Defendant’s directions or otherwise as necessary for the carrying out of the Works.

Particulars

i)    To the extent that this term is express, it is contained in clause 75 of the Contract.

ii)To the extent that this term is implied, it is to be implied from the course of conduct between the parties.

(m) The Plaintiff was entitled to be reimbursed for costs that it incurred in maintaining its plant, equipment and personnel on sites in periods of “stand down” where the Plaintiff could not carry out works because of the actions or omissions of the Defendant.

Particulars

i)     This term is implied for business efficacy

ii)   This term is implied by a course of conduct between the parties.

iii)     Email from Rory Hinton of the Defendant to, inter alia, Kenneth Skewes of the Plaintiff dated 26 October 2017 at 8.41am.

iv)     Email from Kenneth Skewes of the Defendant to, inter alia, Rory Hinton of the Plaintiff dated 26 October 2017 at 10.14am.

25.On 21 December 2017, the Northern Territory Government issued a Notice of Suspension of Works to the Defendant suspending the Works from 20 December 2017 until such time as the Defendant was directed to recommence.

Particulars

i)     Suspension of Works executed by Arthur Busato of the Northern Territory Government dated 21 December 2017.

26.At no time prior to pre-litigation discovery in these proceedings did the Defendant notify the Plaintiff that the Northern Territory Government had issued a Notice of Suspension of Works on 21 December 2017.

27.From 21 December 2017 onwards, the Defendant engaged in conduct towards the Plaintiff that at all material times from 21 December 2017 until 18 January 2018, which conveyed that the Defendant continued to be authorised by the Northern Territory Government to continue the Works (“the Conduct”).

52. The Plaintiff repeats it pleadings above in paragraphs 25 to 27.

53. The Conduct pleaded in paragraph 27 was misleading or deceptive or likely to mislead or deceive the Plaintiff that the Defendant continued to be required to undertake the works.

54. The Conduct was conduct in relation to trade or commerce within the meaning of section 18 of the Australian Consumer Law forming part of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the ACL).

55. The Conduct carried within it the implication that:

(a)The Defendant was authorised to continue the Works beyond 21 December 2017;

(b)The Defendant would have access to funding from the Northern Territory Government for the purposes of paying the Plaintiff to continue the Works beyond 21 December 2017.

56. The Conduct was not qualified by a statement in circumstances where the Conduct needed to be qualified in order not to be liable to mislead.

57. The Defendant did not have reasonable grounds to engage in the Conduct.

58. By reason of the matters set out in paragraphs 52 to 57, the Conduct contravened section 18 of the ACL.

61. Further or in the alternative, by reason of the contravention pleaded in paragraph 58, the Plaintiff has suffered loss and damage.

Particulars

i)   Losses incurred from carrying out the Works and standing down its plant and personnel from time to time between 21 December 2017 and 18 January 2018 until the Plaintiff’s demobilisation.

ii)    Loss of opportunity to use its plant, equipment and personnel elsewhere whilst the Plaintiff remained on Melville Island.

66. Further or in the alternative, the Plaintiff has suffered loss and damage as pleaded above in paragraph 58.

Particulars

i)     Particulars of loss will be provided closer to the hearing.

[18]The background facts, derived from the SOC, are that the Defendant contracted with the Northern Territory to re-construct a road on Melville Island. In turn, the Defendant sub-contracted those works to the Plaintiff. One of the terms of that subcontract was that the Defendant was to supply base material of suitable quality and conforming to the head contract specifications, and in sufficient quantity for the works.[17]

[19]That base material was to be extracted from a pit by the Defendant and the Plaintiff was to then cart the material to the work site. The Plaintiff alleges that because the base material initially extracted by the Defendant from the nominated pit was insufficient for the works, an agreement was then reached that the Plaintiff would extract further base material from that pit and prepare it so that it was suitable for use in the works.

[20]The Plaintiff alleges that this agreement resulted in stand down costs being incurred. The Defendant then directed the Plaintiff to use alternative base material which also necessitated the Plaintiff performing additional work on that material to make it suitable for use in the works.

[21]The Plaintiff alleges that when the material from the pit initially nominated ran out, the Defendant directed the Plaintiff to use material from an alternative pit. The Plaintiff claims that it could not access that alternative pit due to road conditions such that the Plaintiff was first required to perform remedial roadworks to gain access to that pit. The Plaintiff further alleges that the material from that alternative pit was also unsuitable and again required the Plaintiff to undertake additional work to prepare that material for use in the works.

[22]The delays occasioned by the foregoing resulted in an extension of the practical completion date. Intervening weather factors rendered the access road impassable such that the Plaintiff could not cart the material from the pit to the site.

[23]The Northern Territory then apparently suspended the head contract but the reasons for that, or how that affected the subcontract was not pleaded. What is alleged is that the Defendant did not notify the Plaintiff of that suspension. Nothing is pleaded to show any obligation on the Defendant to do so. What turns on that suspension is not clear from the pleading. However, the SOC alleges, in paragraph 27, that the conduct of failing to notify of that suspension led the Plaintiff to believe that the Defendant continued to be authorized by the Northern Territory to undertake the works. The precise conduct complained of is not pleaded.[18] A claim for misleading and deceptive conduct allegedly in contravention of section 18 of the Australian Consumer Law in respect of that unspecified conduct is then pleaded.

[24]Apparently the works resumed sometime thereafter and the Plaintiff alleges that the alternative base material from the second pit was both insufficient in quantity and not of the required quality for use in the works. The Plaintiff alleges that as a result, it requested a further extension of the completion date and gave notice to the Defendant of a claim for costs in respect of stand down of plant, equipment and personnel pursuant to the term of the subcontract pleaded in paragraph 6(m) of the SOC. The Plaintiff alleges that the Defendant then directed the Plaintiff to demobilize until the end of the wet season.

[25]Subsequently the Defendant issued a show cause notice to the Plaintiff alleging a breach of the Plaintiff's traffic management obligations as set out in paragraph 6(g) of the SOC. The Plaintiff disputed that the notice but treated the issue of that notice as a repudiation of the contract leading to the current proceedings.

[26]The first defect complained of has its origin in the particulars to paragraph 5 of the SOC where it is alleged that the subcontract was “wholly in writing”. The various documents alleged to evidence the contract are particularized. However, subparagraphs 6(e), (l) and (m) of the SOC plead a number of implied terms. The Defendant argued that this was inconsistent with the allegation that the contract was wholly in writing and therefore in breach of rule 13.09(1). I am not convinced that is correct. As Mr Roper pointed out, a term can be implied into a contract that is wholly in writing in line with Codelfa Construction Pty Ltd v State Rail Authority of New South Wales.[19] That case also confirms that the implication of the term into a contract is a matter of the construction of the contract.[20] In any case, I think that is a defect which is minor enough to be ignored on discretionary considerations.

[27]The pleading in subparagraph 6(e) and the particulars contain the words "in the alternative". That phrase is almost universally accepted as sufficient to satisfy rule 13.09(1) of the SCR.[21] However, due to the setting out of the pleading, it is not entirely clear which paragraph or subparagraph of the SOC that subparagraph 6(e) is intended to be in the alternative to. Presumably it is the allegation in the particulars to paragraph 5 that the contract was “wholly in writing”.

[28]Although more significant, that would still be a minor or technical breach of rule 13.09(1) of the SCR such that it would not warrant a strike out order on discretionary grounds.

[29]What is the greater concern is in respect of the particulars to each of the subparagraphs alleging the existence of implied terms. Particulars are also liable to strike out pursuant to rule 23.02 by reason of the definition of "pleading" in rule 1.09 of the SCR notwithstanding that particulars are not technically pleadings.

[30]I think the pleading of the basis of implication in particular (i) of subparagraph 6(e), and also in subparagraph 6(m) namely, to give business efficacy, is sufficient and that was not challenged by the Defendant. However the pleading of the basis of implication in particular (ii) namely, by a course of conduct between the parties, is insufficient in my view as it does not clearly articulate what that course of conduct is. Particulars (iii) and (iv) are references to emails sent after the commencement of the contract. It is not clear if the matters referred to in the emails are intended to be the course of conduct relied on as the setting out of the particulars to subparagraph 6(e) belies that. If that is what was intended then that should be addressed by more appropriate setting out. If they are not then those paragraphs are a pleading of mode of proof in breach of rule 13.02(1)(a) of the SCR. More significantly, in the latter case, that means that the course of conduct relied on is not particularized at all.

[31]Another issue arises in respect of the emails referred to in those particulars as they post-date the formation of the contract. It is doubtful that they can provide a basis for the implication of a term into the contract on the basis alleged. That likely offends against the parol evidence rule.[22]  In general terms, and subject to an exception in respect of ambiguity, the rule prohibits extrinsic evidence, including of antecedent negotiations, to be led to contradict the written terms of a contract.

[32]Communications after the formation of a contract usually can only be relevant in respect of a pleading relating to either a variation of the contract or of the formation of a collateral contract. If that is intended then that needs to be clearly pleaded. Ordinarily, and logically, only pre-contract conduct between the parties can found an implication based on a course of conduct. If that is what is intended, then particulars of the precise conduct and the dates of that conduct, are critical.

[33]What is intended by the subject pleading is not entirely clear given that Mr Roper argued that the matters pleaded in subparagraphs 6(l) and 6(m) are subject to implication by way of a course of conduct within the meaning of Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd.[23]  That case dealt with the basis of implication according to custom or trade usage. That is not directly on point with cases of implication based on a course of conduct between the parties. Moreover, that specific basis of implication has not been pleaded and if that is intended then more elaborate pleading is required as the bare reference to a course of conduct is insufficient to inform as to what the Plaintiff’s case is in this respect.

[34]There are related issues with the two other subparagraphs which plead implied terms. Subparagraph 6(m)(ii) is structured in the same way as subparagraph 6(e) and the above comments therefore directly apply. The other is subparagraph 6(l)(ii). That contains a bare statement that the term is implied from a course of conduct. There are no references to emails and there is nothing else pleaded to indicate what the course of conduct relied on is. The particulars therefore are insufficient to enable the Defendant to know what the Plaintiff alleges is the case that has to be met. On the face of the pleading at least, the Defendant can rightly say that it does not know the case it has to meet.

[35]The second of the significant complaints of the Defendant relates to the claim for misleading and deceptive conduct pursuant to section 18 of the Australian Consumer Law. The relevant paragraphs of the pleading are 25-27 and 52-58 of the SOC.

[36]The first concern with these paragraphs is that, as Mr Moses pointed out, and correctly in my view, a contravention of section 18 of the Australian Consumer Law is not a cause of action in its own right. That section only prohibits misleading and deceptive conduct in set circumstances. Alone, that does not give rise to the entitlement to the damages pleaded in paragraph 61 of the SOC. Apparently the Plaintiff intends to claim damages for that contravention pursuant to section 236 of the Australian Consumer Law. That is evident from the reference to that section in the prayer for relief.

[37]I am not convinced that the reference to that section in the prayer for relief in lieu of in the pleading is sufficient as the recognized principle is that the relief claimed is limited to that set out in the pleading.[24] Still, if that was the only defect I could see a case for declining an order for strike out on discretionary grounds in reliance on the prayer for relief. Partly the issue is that section 236 of the Australian Consumer Law is not the only provision or basis pursuant to which a contravention of section 18 of the Australian Consumer Law can be enforced. The Plaintiff needs to clearly spell out the basis relied on, both because it is imperative that the pleadings sets out the relief sought but also by reason of the specific requirements of rule 13.02(1)(b) of the SCR. Having said that, this defect can be easily rectified by a simple amendment and that should occur if a strike out and leave to re-plead is ordered.

[38]The more significant concern with this aspect of the pleading is that an action based on section 18 of the Australian Consumer Law is founded on conduct which is misleading and deceptive. It is critical that the particular conduct alleged to constitute that conduct is pleaded as a necessary material fact. However, there is no pleading of any conduct on which that part of the claim could be based. The pleading contains, in paragraph 27, a bare statement that there was a course of conduct which conveyed a certain implication. That only pleads the effect of the conduct, not the conduct itself, and that is inadequate. In its current form, it is an obvious conclusion and not permitted on authority of Northern Territory of Australia v John Holland Pty Ltd & Ors.[25]

[39]Mr Roper conceded the need for the conduct to be specified but submitted that this defect could be addressed by particulars. I disagree as the conduct relied on is a material fact and as I repeat what I say in paragraph 16 above namely, a failure to plead material facts cannot be cured by the provision of particulars.[26]

[40]There is another significant defect with this part of the SOC. Although paragraph 61 of the SOC contains a plea that loss and damage resulted from the contravention of section 18 of the Australian Consumer Law, no causal connection is pleaded between the conduct and the loss and damage.

[41]That is because no facts are pleaded to allege how the suspension of the head contract on which the claims for misleading and deceptive conduct is based affected the subcontract. Nothing is pleaded to indicate why the alleged conduct in conjunction with the suspension of the head contract resulted in the claimed loss. I think this would need pleading of facts to show why the suspension of the head contract was material, specifically why the subcontract could not proceed independently of the head contract. It is trite to say that the two contracts, although involving the same subject matter, are legally independent.

[42]Paragraph 55(b) of the SOC gives some clue as to what might be intended in that one of the implications pleaded to flow from the conduct is that the Defendant would otherwise have had the availability of funds from the Northern Territory. If that is the basis of causation, the existing pleading is insufficient. All relevant circumstances would need to be pleaded including why it was material that the head contract remained operative and particularly how the Defendant’s funding arrangement with the Northern Territory is relevant to the subcontract or was material. Whatever the position, the requirement for proper pleading of causation requires the pleading of all relevant material facts to connect the conduct relied on and the loss or damage said to result. The current pleading is insufficient.

[43]Another issue is the apparent inconsistency in the pleading of loss and damage. The loss and damage alleged to result from the contravention of section 18 of the Australian Consumer Law is pleaded in paragraphs 61 and 66 of the SOC. There is some attempt in paragraph 61 to particularize the loss and damage. Essentially the loss is particularized as stand down costs and demobilization costs. I would expect that if particulars of loss could be given for the purposes of paragraph 61 of the SOC, then that would also be so in respect of paragraph 66. Indeed, I expect that the particulars of loss would be the same in both instances. However, paragraph 66 simply states that particulars of loss will be provided. The inconsistency suggests that the damages in each paragraph is different. It is difficult to envisage how that could be the case as both paragraphs relate to the alleged contravention of section 18 of the Australian Consumer Law. That anomaly needs to be rectified.

[44]Overall, the pleading in respect of misleading and deceptive conduct is embarrassing because the pleadings fail to plead all the material facts necessary to establish the cause of action and due to the intrinsic inconsistency in respect of loss and damage. That defect is not minor and warrants a strike out.

[45]The last of the Defendant’s significant complaints is in respect of paragraph 67 of the SOC which pleads a claim in quantum meruit. I agree with the submission of Mr Moses, unchallenged by Mr Roper, that the pleadings are insufficient for failure to plead the necessary material facts. It may have sufficed had the pleading referred back to material facts in other parts of the pleading. However, absent that, and absent any separate pleading of material facts to establish the Plaintiff's entitlement to an award in quantum meruit, this part of the pleading is purely a conclusion. Although this is a major defect, it is a defect which can be easily rectified.

[46]The Defendant raised a number of other complaints concerning the adequacy of the pleadings. The first was with respect to paragraph 10 of the SOC. The Defendant complained that it was not clear if this pleaded a variation and/or a collateral contract. Implicit in that submission is that the cause of action must be categorized or labelled in that way. The categorization of a cause of action in the pleading is not binding and the Court can grant relief for any cause of action supported by the material facts pleaded.[27] What is important is that all of the material facts to support the cause of action relied on are set out in the pleading. That is a matter for the Plaintiff for now and if any necessary material facts are lacking, they must be pleaded.

[47]Secondly, the Defendant submitted that the pleading of breach in paragraphs 49 and 50 of the SOC does not properly correlate to the provisions of the contract pleaded in paragraphs 6(a)-(d). The Defendant submits that the subparagraphs of paragraph 6 referred to ought to plead facts to the effect that the Defendant was required to supply "adequate amounts" of material and of a specified standard and that a temporal timeframe for that supply must be pleaded. I disagree. Nothing was put to convince me that the pleading needs to be that specific. The material facts as pleaded sufficiently and properly set out the case to be met in my view. If it is truly the case that the Defendant does not know the case to be met, as this is a relatively minor instance, I think it is appropriate that the issue be left until interlocutory procedural steps occur as I expect that the service of expert reports and affidavit evidence will sufficiently rectify that.

[48]Thirdly, Mr Moses argued that the reference to “agreed” in paragraph 59 of the SOC was unclear as to whether or not this referred to a variation or a collateral contract. I do not agree. On my reading, I think that paragraph sufficiently shows, by the reference in that paragraph to clause 3.3(a) of the subcontract, that the agreement referred to is the primary agreement described in subparagraph 6(d) of the SOC. If the Plaintiff intends otherwise then an amendment will be required.

[49]Lastly, Mr Moses claimed that the setting out of the claims for debt and damages in paragraphs 46, 60 and 66 made the precise basis of those claims unclear. Although arguable, I am not convinced that is correct. At best this would be a minor defect falling within the class of defects which should be corrected only if a strike out and re-plead was otherwise ordered. However, I expect that might unnecessarily complicate the amendments and I prefer to avoid that. I think the preferable approach is to allow the pleading to stand at least until evidence is served, particularly expert evidence on quantum, as I expect that will sufficiently clarify the position.

[50]For the foregoing reasons, I think that critical parts of the SOC ought to be struck out. It is appropriate that the whole of the pleading be struck out as I think that it will not be efficient to rectify the deficiencies with piecemeal amendments. It is appropriate that when re-pleading the Plaintiff takes the opportunity to correct the more minor defects which have been identified, notwithstanding that they would not otherwise have warranted a strike out order. Those defective parts are summarized as follows:-

1.Subparagraphs 6(a)-(d) should individually identify which of the specific documents described in paragraph 5 that each of those subparagraphs relate to;

2.Similarly, which of the contract documents described in paragraph 5 are referred to in paragraphs 47-50 should be properly identified;

3.There are two obvious typographical errors namely, the incorrect year of the Corporations Act in paragraph 2 and the word “Words” in subparagraph in 6(g). Additionally I think the word “was” has been omitted from the chapeau to paragraph 48;

4. The pleading in paragraph 18 does not appear to be of a material fact. There is nothing elsewhere in the pleading to indicate the relevance of the Plaintiff having to conduct remedial works on the access road. I suspect that may be an unintended omission and if so that should be rectified. It may be a particular of loss and damage and if so it should be pleaded as such and repositioned as appropriate. Otherwise, it is mode of proof;

5. There are instances of inconsistent terminology used in different paragraphs of the pleading. Although referring to different times, paragraph 16 of the SOC refers to the access road as being "not trafficable", paragraph 17 refers to the road being “inaccessible” and paragraph 22 describes it as being "impassable". As different terminology is used it is not entirely clear whether a different meaning is intended, but that does not appear to be the case. The terms appear to be used interchangeably and that should be clarified;

6.Similarly, paragraph 60 refers to an indemnity. It is pleaded as relating to subparagraph 6(d) but the latter does not refer to an indemnity. I suspect that the latter should also plead an obligation to indemnify but either way the inconsistent terminology needs to be resolved;

7. A related instance is the vague terminology in paragraph 50 namely, the reference to "the required standard". Without more, the Defendant cannot know what that standard is. Presumably it is the standard described in subparagraphs 6(a)-(c) of the SOC. A reference to those subparagraphs in lieu of that offending phrase would rectify that. Although that also might be rectified after all interlocutory procedural steps are completed, I think this is so obvious that the opportunity should be taken to rectify that now;

8.Paragraphs 37 and 38, although both relate to the demobilization provided for in subparagraph 6(f) of the subcontract, appears to be only mode of proof. I query whether a pleading that the Defendant directed the Plaintiff to demobilize may have been intended. If so, and if that is corrected by amendment, the pleadings in the current paragraphs 37 and 38 might become particulars of that allegation.

[51]For the aforesaid reasons I will strike out the SOC in its entirety and will give the Plaintiff leave to file and serve a Second Amended Statement of Claim. I will hear the parties as to the time that should be allowed for that and as to any consequential orders.

[1][2020] NTSC 45.

[2][2021] NTSC 30.

[3]Dare v Pulham (1982) 148 CLR 658; Benfield v Farebrother [2011] NTSC] 65.

[4]LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor [2020] NTSC 45; Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69.

[5]Order 2 sought "Such further or other orders as this Court deems fit".

[6]LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor [2020] NTSC 45; Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69.

[7][2020] NTSC 70.

[8]Australian Consumer and Competition Commission v Pauls Ltd [1999] FCA 1750; Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191; see also the cases discussed at Williams, Civil Procedure Victoria, LexisNexus Butterworths, at para 23.02.20.

[9][2018] NTSC 7.

[10]Beach Petroleum NL v Johnson (1991) 105 ALR 456; BWK Elders Australia Pty Ltd v Westgate Wool Company Pty Ltd & Ors (No 2) [2002] FCA 87; Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499; Fluor Australia Pty Ltd v Sherritt International Corporation & Anor [2002] VSC 203; Barclay Mowlem Construction Limited v Dampier Port Authority & Anor [2006] WASC 281.

[11][2002] VSC 203.

[12][2002] VSC 203 at para 40.

[13][2006] WASC 281 at 84.

[14]See rule 23.04(2) of the SCR.

[15]RTA Pty Ltd & Orsv Brinko Pty Ltd & Ors [2012] NTSC 3; Southern Cross Exploration NL vFire & All Risks Insurance Co Ltd [1985] 2 NSWLR 340; Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568.

[16]Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568.

[17]See SOC subparagraphs 6(a)-(c).

[18]This is discussed in more detail in paragraph 38 below.

[19](1982) 149 CLR 337.

[20](1982) 149 CLR 337 at 345.

[21]LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor [2020] NTSC 45 at para 16.

[22]Agricultural And Rural Finance Pty Ltd v Gardiner & Anor (2008) 238 CLR 570.

[23](1986) 160 CLR 226.

[24]Dare v Pulham (1982) 148 CLR 658; Benfield v Farebrother [2001] NTSC] 65.

[25][2008] NTSC 4.

[26]RTA Pty Ltd & Orsv Brinko Pty Ltd & Ors [2012] NTSC 3; Southern Cross Exploration NL vFire & All Risks Insurance Co Ltd [1985] 2 NSWLR 340; Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568.

[27]Williams v Cadillac Transport Repairs Pty Ltd [2004] NTSC 51.