Amalgamated Scottish Oil Ltd v Premier (Perth Basin) Ltd
[2000] WASC 53
•3 MARCH 2000
AMALGAMATED SCOTTISH OIL LTD -v- PREMIER (PERTH BASIN) LTD & ANOR [2000] WASC 53
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 53 | |
| Case No: | CIV:2392/1998 | 28 FEBRUARY 2000 | |
| Coram: | MASTER BREDMEYER | 3/03/00 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed in part | ||
| PDF Version |
| Parties: | AMALGAMATED SCOTTISH OIL LTD PREMIER (PERTH BASIN) LTD PREMIER OIL AUSTRALIA PTY LTD |
Catchwords: | Pleading Application to strike out |
Legislation: | Nil |
Case References: | Commonwealth v Verwayen (1990) 170 CLR 394 Walton Stores v Maher (1988) 164 CLR 387 Bruce v Odhams Press Ltd [1936] 1 KB 697 Charlie Carter Pty Ltd v SDAE of WA (1987) 13 FCR 413 Francis v Francis [1952] VLR 321 Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32 Sabemo Pty Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880 Sinclair v James [1894] 3 Ch 564 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PREMIER (PERTH BASIN) LTD
First Defendant
PREMIER OIL AUSTRALIA PTY LTD
Second Defendant
Catchwords:
Pleading - Application to strike out
Legislation:
Nil
Result:
Application allowed in part
(Page 2)
Representation:
Counsel:
Plaintiff : Mr P G Clifford
First Defendant : Mr K R Jagger
Second Defendant : Mr K R Jagger
Solicitors:
Plaintiff : Haydn Robinson
First Defendant : Freehill Hollingdale & Page
Second Defendant : Freehill Hollingdale & Page
Case(s) referred to in judgment(s):
Commonwealth v Verwayen (1990) 170 CLR 394
Walton Stores v Maher (1988) 164 CLR 387
Case(s) also cited:
Bruce v Odhams Press Ltd [1936] 1 KB 697
Charlie Carter Pty Ltd v SDAE of WA (1987) 13 FCR 413
Francis v Francis [1952] VLR 321
Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32
Sabemo Pty Ltd v North Sydney Municipal Council [1977] 2 NSWLR 880
Sinclair v James [1894] 3 Ch 564
(Page 3)
1 MASTER BREDMEYER: This is an application by the defendants to strike out the plaintiff's statement of claim. An earlier application succeeded and the plaintiff has prepared a new minute of substituted statement of claim of 13 January 2000 ("the minute"). The current attack is on that minute.
2 The minute pleads two agreements for sale in each case to the plaintiff and breach of those agreements and also pleads a cause of misleading and deceptive conduct. The Barrack Agreement is pleaded in par 4 and the Mt Horner Agreement pleaded in par 5. Paragraph 6 pleads the alternative cause of misleading and deceptive conduct.
3 Paragraph 4.1 reads:
"By a written agreement dated 26 June 1998 ('the Barrack Agreement') the Second Defendant agreed to sell to the Plaintiff the company Barrack Hydrocarbons Pty Ltd for the total sum of $100.00 upon completion of either:
(a) the First Defendant selling the Asset to the Plaintiff as proposed in a written offer from the Plaintiff dated 25 June 1998 ('Asset Offer') referred to in paragraph 5.1 below; or
(b) the First Defendant offering the Asset for sale to Phoenix under the pre-emptive rights included in the JOA and Phoenix agreeing to purchase the Asset upon the same terms as the Asset Offer.
The Plaintiff will at trial refer to the Barrack Agreement for its complete terms and effect."
4 This paragraph needs a small amendment in line 2 as partially proposed by counsel for the plaintiff in the course of argument. The reference to second defendant should be "the second defendant in its own right and as agent for the first defendant". This amendment is necessary because par 2.2 states that at all material times the second defendant was the agent for the first defendant, whereas the Barrack Agreement was an agreement to sell a company, Barrack Hydrocarbons Pty Ltd, by the second defendant but the agreement itself also referred to the selling of the Mt Horner asset (referred to as "the Asset") by the first defendant. In so doing, it is the plaintiff's case that the second defendant was acting as agent for the first defendant.
(Page 4)
5 It will be noted that par 4.1 makes the sale of Barrack Hydrocarbons Pty Ltd to the plaintiff conditional on the sale of the Asset to the plaintiff as pleaded in subpar (a), or the sale of the Asset to Phoenix, as pleaded in subpar (b). The defendant says that neither event has occurred, so that there can be no breach of the Barrack Agreement. The defendant says the plaintiff has failed to plead the material facts of the breach of the Barrack Agreement. The plea of breach in later paragraphs is to the effect that at all material times the plaintiff has been ready, willing and able to perform its obligations under the Barrack and Mt Horner Agreements; that Phoenix was not willing and did not propose to exercise its right of pre-emption under the JOA; and that the defendants have failed and refused to perform their respective obligations under the two agreements.
6 I consider that the plea of the breach of the Barrack Agreement can stand. I do not consider it is embarrassing to the defendants because, although not pleaded in words, it is clear enough that the plaintiff can only get specific performance of the Barrack Agreement if it gets specific performance of the Mt Horner Agreement, because then the condition precedent for the Barrack sale would be fulfilled.
7 Paragraph 5.1, par 5.2 and par 5.3 pleads:
"5.1 By agreement made on 26 June 1998 the First Defendant agreed to sell the Asset to the Plaintiff for $320,000.00.
PARTICULARS
The written agreement comprises a written offer dated 25 June 1998 in which the Plaintiff offered to pay $320,000.00 to the First Defendant for the Asset (being the Asset Offer referred to in paragraph 4.1 above) and the Barrack Agreement pleaded in paragraph 4.1 above.
5.2 Further and in the alternative by agreement made on 3 July 1998 the First Defendant agreed to sell the Asset to the Plaintiff for $320,000.00.
PARTICULARS
The agreement comprises the Asset Offer and the oral acceptance of that offer by Beggs in a telephone discussion with Fearnley in which Fearnley asked if the Asset Offer had been accepted, to which Begg responded 'Let me assure you on that point Kevan, we have accepted
(Page 5)
- your offer and will be putting the offer to Phoenix on Monday' (being 6 July 1998).
- 5.3 The agreements pleaded in paragraphs 5.1 and 5.2 above are hereinafter both referred to as 'the Mt Horner Agreement'."
8 The defendants criticise par 5.1. They say that the latter words "… and the Barrack Agreement pleaded in paragraph 4.1 above", do not, and cannot, amount to an acceptance of the plaintiff's written offer. I consider that it is not the Barrack Agreement in its entirety which could amount to the acceptance. It is that part of the Barrack Agreement which refers to the first defendant selling the Asset to the plaintiff as proposed in the written offer dated 25 June 1998. The plea of the acceptance would be clearer if it was in the form "and the reference in the Barrack Agreement pleaded in paragraph 4.1(a) above to the first defendant selling the Asset to the plaintiff". With that amendment I consider the plea is arguable. It is not a particularly strong plea. It is rather elliptical but nevertheless I consider, on balance, that it is arguable and that is all I need to consider for the purposes of this application. In any event, this cause of action does not depend wholly on that plea of acceptance in par 5.1 because another plea of acceptance, an oral acceptance, is pleaded in par 5.2. Further acts of acceptance are pleaded in par 5.5(a) and par 5.5(b). Counsel for the plaintiff foreshadowed that he might amend par 5.5 to make those pleas of acceptance further alternatives to par 5.2 and I think that would be a good thing for the better expression of the plaintiff's case.
9 The defendants have argued that the plaintiff has not pleaded with particularity the breach of the Mt Horner Agreement. I consider the plea of breach is adequate and needs no more particulars. The plaintiff has pleaded that it is ready, willing and able to perform its obligations under that agreement and has pleaded that Phoenix was not willing and did not exercise its right of pre-emption to purchase the Asset under the Joint Operating Agreement with the first defendant. The plaintiff has pleaded that the first defendant has failed and refused to perform its obligations under the agreement, although requested to do so.
10 The defendants say that this cause is defective as against the first defendant because it is pleaded in par 5.10 that the second defendant denied the Mt Horner Agreement and the Mt Horner Agreement is with the first defendant. I do not think that is a fair criticism. Because of the plea in par 2.2 that the second defendant was at all material times the agent of the first defendant, the reference in par 5.10 to the second
(Page 6)
- defendant means the second defendant as agent for the first defendant. It is not necessary to add those words in par 5.10. The plaintiff is entitled to rely on its definition clause in par 2.2. Likewise, the reference in par 5.9 to a letter from the plaintiff's solicitor to the second defendant requesting that the defendants to comply with the Mt Horner Agreement should be understood as a letter to the second defendant as agent for the first defendant. I do not consider any further material facts are necessary to show the breach. The agreement is for the sale of an asset to the plaintiff. The plaintiff says it is ready, willing and able to perform the contract, it has called on the defendant to perform the contract. The contract has been denied by letter and it has not been performed. The first defendant remains the owner of the Asset.
11 The defendants attack the plea of estoppel in par 5.5. That plea is that the first defendant is estopped from denying the Mt Horner agreement and three particulars of that are given. They say that this is a plea in anticipation of a defence and is not material at this stage. It is a matter which should be left to the reply and hence should be struck out as embarrassing. Counsel for the plaintiff says he is pleading estoppel here as a sword and not a shield, and, in so doing, is following the law as set out in Walton Stores v Maher (1988) 164 CLR 387 and the Commonwealth v Verwayen (1990) 170 CLR 394. I realise that estoppel can be pleaded as a sword, ie as a cause of action, and not merely as a defence. However, I consider that the plaintiff has not pleaded fully the cause of action of estoppel. Brennan J in Walton Stores at 428 - 429 sets out six elements of the plea. I consider that par 5.5 only pleads three of them. It does not plead what the plaintiff did, or abstained from doing, in reliance on the assumption. It does not plead that the defendant knew or intended it to do so. It does not plead the detriment the plaintiff will suffer if the assumption or expectation is not fulfilled. I propose to strike out par 5.5.
12 An attack is made on the plea of misleading and deceptive conduct. I quote par 6.2:
"The Defendants represented to the Plaintiff that:
(a) the rights of Phoenix under the JOA were relevantly limited to pre-emptive rights to purchase the Asset on the same terms and conditions as an offer made by the Plaintiff; and
(Page 7)
- (b) if the Plaintiff made an offer to purchase the Asset the First Defendant would offer to sell the Asset to Phoenix on the same terms and if Phoenix did not exercise its pre-emptive rights under the JOA then the First Defendant would sell the Asset to the Plaintiff on those terms.
PARTICULARS
(a) On or about 28 January 1998, Fearnley, Begg and Saitta met at the offices of the Defendants at 31 Ventnor Avenue, West Perth at which Begg told Fearnley the Asset was co-owned with Phoenix and there was no pre-emption agreement with Phoenix but there was a gentlemen's agreement to offer to sell the Asset to Phoenix at an agreed price and if Phoenix refused then they were free to sell the Asset to anyone.
(b) Between 12 February 1998 and 27 February 1998 in a telephone discussion between Begg and Fearnley, Begg told Fearnley if Phoenix turned down the price offered by the Plaintiff for the Asset then the Defendants would be free to negotiate with the Plaintiff.
(c) By letter dated 27 February 1998 from the Second Defendant to the Plaintiff, the Second Defendant stated there was a pre-emptive agreement between the First Defendant and Phoenix in the form of an obligation to offer the Asset to Phoenix for a price yet to be determined."
13 I consider that particulars (a), (b) and (c) do not support the representations in par 6.2(a) and par 6.2(b) and should be struck out. The representations in the first part of par 6.2 are very precise: that Phoenix had the right under the Joint Operating Agreement to purchase the Asset on the same terms and conditions as an offer made by the plaintiff, and, that if the plaintiff made an offer to purchase, that offer would be put to Phoenix, and if it did not exercise its pre-emptive rights to purchase on those terms, then the first defendant would sell the Asset to the plaintiff on those terms. None of the three particulars support those representations. The plea of the two representations needs to be altered to agree with the particulars, or the particulars need to be struck out as not capable of supporting the precise plea of the representations. I have opted
(Page 8)
- to strike out the particulars. I note that the two representations pleaded agree with what is said to be the common assumption of the parties pleaded in par 4.3. That is, as I understand it, the plaintiff's case. As I have said, the particulars do not support it and for the plaintiff to lead evidence on those particulars at trial would not serve the issues pleaded. It would be leading evidence on extraneous matters.
14 Paragraph 6.5 pleads:
"The representations were false in that:
(a) the Defendants did not disclose the fact that the pre-emptive rights in the JOA were not limited to Phoenix being entitled to purchase the Asset in the same terms as the Asset Offer but included a right for Phoenix to withhold its consent to the sale of the Asset; and
(b) the First Defendant did not put the Asset Offer to Phoenix in its terms because it imposed additional conditions upon Phoenix requiring that Phoenix agree to spend $850,000.00 on other tenements in which the Defendants had an interest ('the Additional Conditions'). The Plaintiff will provide further particulars about the Additional Conditions after discovery of documents by the Defendants and answers to interrogatories by the Defendants."
15 I consider par 6.5(a) is a falsification of the representation in par 6.2(a). I also consider that particular (b) is a falsification of part of the representation in par 6.2(b), namely that the first defendant would offer to sell the Asset to Phoenix on the same terms as the offer from the plaintiff. But I ask, did the falsity of these two matters lead to the plaintiff's loss which was that it carried out due diligence inquiries at a cost of $166,000, which was wasted? I ask where is the causal connection between the falsified representations and the plaintiff's loss? I consider the causal connection is not pleaded. Granted that the Joint Operating Agreement gave Phoenix a right to veto the sale to anyone, it is not pleaded that Phoenix exercised that right. The plaintiff says it does not known if this veto was exercised or not. Its exercise may have been the reason why the sale to the plaintiff did not proceed. The plaintiff will find out by discovery and interrogatories. If so, it should not be pleaded now. It is a "fishing" pleading. If the plaintiff finds out through discovery etc that the
(Page 9)
- sale to it fell over because Phoenix exercised its veto on a sale, an amendment to the pleading can be made.
16 Granted that the first defendant did not put the plaintiff's offer in the same terms to Phoenix but put a more onerous offer to sell to Phoenix, how can it be said that that caused the plaintiff's stated loss, because, whether the offer was put in the same terms to Phoenix or not, the relevant fact is that Phoenix declined to purchase the Asset. That should have led to a purchase by the plaintiff. The essence of the plaintiff's case on its present instructions is the representation that if Phoenix did not buy the Asset, the first defendant would sell the Asset to the plaintiff for $320,000 as per its offer. I consider that the falsification of that representation is all that needs to be pleaded in par 6.5. The representation was false in that an offer to sell the Asset was put to Phoenix, Phoenix did not exercise its pre-emptive rights to purchase the Asset, yet the first defendant failed to sell the Asset to the plaintiff for $320,000. I propose to strike out par 6.5 in its present form.
17 I do not consider the defendants' other more minor objections are good ones.
18 I will hear the parties on the orders to be made and costs.
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