Amanda Jane Cecil Jones as Executor of the Will and Estate of the Late Barton Cecil Jones Snr v Jones
[2024] WASC 115
•9 APRIL 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: AMANDA JANE CECIL JONES as Executor of the Will and Estate of THE LATE BARTON CECIL JONES SNR -v- JONES [2024] WASC 115
CORAM: REGISTRAR FATHARLY
HEARD: 4 AUGUST 2023
DELIVERED : 9 APRIL 2024
PUBLISHED : 9 APRIL 2024
FILE NO/S: CIV 1565 of 2022
BETWEEN: AMANDA JANE CECIL JONES as Executor of the Will and Estate of THE LATE BARTON CECIL JONES SNR
First Plaintiff
BARTON CECIL JONES JNR as Executor of the Will and Estate of THE LATE BARTON CECIL JONES SNR
Second Plaintiff
AND
JOHN LOAD CECIL JONES
First Defendant
BURCHELL FRANCIS CECIL JONES
Second Defendant
Catchwords:
Practice and procedure - Pleadings - Striking out - Extension of time - Inconsistent pleadings - Pleading privileged documents and communications - Pleading reply to estoppel and laches defences - Pleading extensions to limitation periods - Whether matters disclose reasonable cause of action - Whether matters pleaded may prejudice, embarrass or delay fair trial of action - Whether matters pleaded scandalous, frivolous or vexatious - Whether abuse of process
Legislation:
Limitation Act 2005 (WA), s 18, s 38, s 44, s 46-48
Partnership Act 1895 (WA), s 50
Rules of the Supreme Court 1971 (WA), O 20 r 11(1), r 19; O 36 r 10
Supreme Court Act 1935 (WA), s 71
Result:
Application to strike out substantially successful
Category: B
Representation:
Counsel:
| First Plaintiff | : | P J Hannan & S Blyth |
| Second Plaintiff | : | P J Hannan & S Blyth |
| First Defendant | : | J Garas SC & B Campbell |
| Second Defendant | : | J Garas SC & B Campbell |
Solicitors:
| First Plaintiff | : | SJB Legal |
| Second Plaintiff | : | SJB Legal |
| First Defendant | : | HHG Legal Group |
| Second Defendant | : | HHG Legal Group |
Case(s) referred to in decision(s):
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 5] [2016] WASC 263
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5
Bolt v Bolt [2023] WASC 162
CMA Assets Pty Ltd formerly known as CMA Contracting Pty Ltd v John Holland Pty Ltd [No 4] [2013] WASC 77
Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14 [22]; (1986) 160 CLR 226
DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Fremantle Port Authority v Cosco Shipping Bulk (South East Asia) Pte Ltd [2023] WASC 95
Geneva Finance Ltd (Receiver and Manager Appointed) v Boys [2001] WASC 269
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1997] FSR 178
Hoefler v Tomlinson [1995] FCA 1105
Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 1625
Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986)
Kitay v Chaucer Syndicates Ltd [2021] WASC 450
Liu v Chan & Ors [2020] QCA 25
Lowe Pty Ltd v Belgravia Nominees Pty Ltd [2020] WASCA 180
Nellbar Pty Ltd v Jones Partners Pty Ltd [2018] WASC 292
Nellbar Pty Ltd v Jones Partners Pty Ltd [No 2] [2020] WASC 336
Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11
Pigozzo v Mineral Resources Ltd [2022] FCA 1166
Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33
Rundle v Salvation Army (South Australia Property Trust) [2007] NSWSC 443
Saffari v Western Australia Police [2022] WASC 200
Spedding v State of New South Wales [2022] NSWSC 503
Terravision Pty Ltd v Black Box Control Pty Ltd (No 4) [2016] WASC 378
Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398
Volaric v Livun in her personal capacity & Anor [2023] WASC 212
Waltons Stores (Interstate) v Maher [1988] HCA 7; (1988) 164 CLR 387
Woodings as liquidator of The Bell Group Ltd and the Bell Group Finance Pty Ltd v WA Glendinning & Associates Pty Ltd [2019] WASC 54
Wright v Lemon (No 2) [2021] WASC 159
REGISTRAR FATHARLY:
Summary
The defendants applied to strike out the whole or parts of the plaintiffs' amended reply filed 13 April 2023 (Reply) by letter under O 4A r 5A and O 20 r 19(3) Rules of the Supreme Court 1971 (WA) (RSC).
The whole of the Reply is comprised of nine pages containing 38 paragraphs, most with sub‑paragraphs and considerable circular cross-referencing to support other pleas.
Having heard counsel for the parties at special appointment, and considered the detailed written submissions, authorities cited and relevant documents, for the reasons set out:
(a)leave should and will be granted for the application to be brought out of time;
(b)there are many parts of the Reply which should be struck out; and
(c)subject to hearing further from counsel, it is my preliminary view that the most efficient means of addressing the pleading issues is for the Reply in its current form to be struck out with leave to replead it as a substituted Reply.
Application
The application was:
(a)supported by a memorandum of conferral, a minute of proposed orders and the first defendant's affidavit sworn 3 May 2023;[1] and
(d)the subject of written submissions from each party.
[1] Filed 5 May 2023, but not read at the hearing as to par 5 – 10.
The defendants sought orders that the Court strike out the whole of the Reply, alternatively parts of it, under:
(a)Order 20 r 19(1)(a): as disclosing no reasonable cause of action or defence;
(b)Order 20 r 19(1)(b): on the basis of being scandalous, frivolous or vexatious;
(c)Order 20 r 19(1)(c): on the basis that it may prejudice, embarrass or delay the fair trial of the action;
(d)Order 20 r 19(1)(d): on the basis of being otherwise an abuse of process of the Court; and
(e)Order 20 r 11: on the basis of departure from the requirements of consistency of facts and grounds of claim pleaded with prior pleadings.
The paragraphs of the Reply the subject of the application and bases of objection are summarised in the Schedule to these reasons.
The issues are relatively concise in nature however the parties each provided very detailed submissions referring to a number of authorities[2] going to issues of:
(a)principles of strike out applications;
(b)the rule against inconsistent pleadings (departure);
(c)without prejudice privilege;
(d)the Limitation Act and improper conduct for the purpose of s 38(2); and
(e)delay and extensions of time.
[2] Defendant: 4 July 2023; plaintiff: 24 July 2023 and as amended 26 July 2023.
Applicable principles
Extension of time for application
An application under O 20 r 19 to strike out is required to be brought within 21 days of the filing of the pleading.
The principles to be applied in determining whether to exercise the discretion to extend time were summarised by Acting Master Strk (as her Honour then was) in Saffari v Western Australia Police [2022] WASC 200.[3] Relevant stated factors were principles of positive case flow management; the interests of justice; efficient case management requiring it, for example, due to irreparable prejudice to the applicant, to resources or the trial process; and justification of the delay.
[3] Saffari v Western Australia Police [6] ‑ [7].
The unamended reply was filed 22 August 2022, the Reply 13 April 2023. The application was made by letter dated 5 May 2023.
While leave to bring this application out of time is required there had been conferral, no delay or prejudice arising, and the extension is not opposed.
It is in the interests of justice to grant leave for the application to be brought out of time:
(a)for the defendants to know the case they need to answer;
(b)for the efficiency of the trial in this matter if the dispute is not resolved;
(c)for the efficient use of the resources of the parties;
(d)to avoid unnecessary ongoing disputes as to the pleadings; and
(e)to avoid prejudice to the applicant in not knowing the case to answer and evidence required for trial.
Striking out ‑ general principles
The essential functions of a pleading are to define and limit the issues, provide the basis for determining discovery and admissibility of evidence for trial and ensure a fair trial by putting the other side on notice of, and being sufficiently to ensure they are on notice of, the case to meet.
Objects of case management are often promoted by a clear and precise statement of issues for decision.
I respectfully adopt the principles applicable to a strike out application which need not be repeated in detail. The principles were:
(a)summarised in Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60] (Smith J);
(b)adopted and endorsed by the Court of Appeal in English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [56] (Murphy, Mitchell and Vaughan JJA) and DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2022] WASCA 97 [226] (Quinlan CJ, Beech and Vaughan JJA).
It is well accepted that the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action. While the court may determine a difficult question of law on such an application, it would usually be appropriate to leave the determination of such questions for trial.[4]
[4] Fremantle Port Authority v Cosco Shipping Bulk (South East Asia) Pte Ltd [2023] WASC 95 [14] (Lundberg J) citing Vantage Holdings Group Pty Ltd v Donnelly [No 4] [60(d)] (Smith J).
As a general rule a party is entitled to have his or her case heard, to have the facts found and then to argue the questions of law as they arise at trial upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the party, that the pleading should be struck out on the ground there is no reasonable cause of action.[5]
Rule against inconsistent pleadings
[5] Fremantle Port Authority v Cosco Shipping Bulk (South East Asia) Pte Ltd at [16] citing Kimberley Downs Pty Ltd v Western Australia (Unreported, WASC, Library No 6414, 25 August 1986).
There is a general prohibition in O 20 r 11(1) on pleading inconsistent facts where one of those facts must be known to the party to be false. The prohibition was explained by Tottle J in Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 5] [2016] WASC 263.[6] Such a pleading is embarrassing and will be struck out as an abuse of process on the basis of deliberately placing on the court record positive statements of fact, one or other of which must be known by the pleading party to be untruthful.
[6] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 5] [53].
However, His Honour acknowledged that there is authority for the proposition that the rule does not prevent a party pleading in a counterclaim something inconsistent with that has been pleaded in a party's defence, such as to deny an agreement in the defence and by counterclaim allege that if there was such an agreement to seek relief in respect of it.[7]
Without prejudice privilege
[7] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 5] [54].
Principles and considerations relevant to striking out pleas relating to without prejudice and privileged communications were recently summarised by Vandongen J in Bolt v Bolt [2023] WASC 162.[8]
[8] Bolt v Bolt [29] ‑ [31].
Firstly, His Honour stated[9] that in Old Papa's Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 [91] ‑ [95], McLure J made the following observations that conveniently summarise many of the relevant principles relating to without prejudice privilege:
Statements made without prejudice in an attempt to settle a dispute or action are privileged. Without prejudice privilege is a joint privilege and thus cannot be waived without the consent of the negotiating parties. The mere fact that a document is or is not marked 'without prejudice' is not decisive. The test is whether the communication was part of a genuine attempt to settle a dispute. If so, the whole course of the negotiations is privileged. …
The authorities establish that the without prejudice rule is not absolute and resort may be had to without prejudice material for a variety of reasons when the justice of the case requires it.
Thus, without prejudice negotiations may be 'pleaded into evidence' in such a way that the privilege is no longer available, by analogy with the rule concerning legal professional privilege. The principle is not confined to the case where the party seeking to assert privilege raises a positive case.[10] (citations omitted)
[9] Bolt v Bolt [32].
[10] see also, Woodings as liquidator of The Bell Group Ltd and the Bell Group Finance Pty Ltd v WA Glendinning & Associates Pty Ltd [2019] WASC 54 [121] ‑ [122].
Relevant in that matter to whether pleas should be struck out were whether a dispute existed over which litigation might be expected, in which communications took place between the parties to the dispute, that were genuinely aimed at negotiating a settlement of that dispute or part of it, and whether or not they were expressly stated to be made 'without prejudice'.
Also relevant to the issue of whether pleadings of privileged communications could be struck out as an abuse were whether the plaintiff could lawfully call any evidence to substantiate the pleading if the only relevant evidence available to the plaintiff was inadmissible evidence of communications subject to the protection of without prejudice privilege.
His Honour stated that while there are several exceptions to the without prejudice rule, one notable exception relevant to his decision[11] was the estoppel or unconscionability exception:
if a clear and unambiguous statement is made by one party in 'without prejudice' correspondence, and the statement is acted on, and reasonably acted on, by the other party, an objection to the first party to the correspondence being put in evidence by the second party in order to justify the step taken by the second party would be plainly unconscionable and would not be upheld by the court.[12]
[11] Bolt v Bolt at [49] citing Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1997] FSR 178, 191.
[12] Hodgkinson & Corby Ltd v Wards Mobility Services Ltd, 191.
His Honour also considered that waiver of without prejudice privilege can occur by reason of an inconsistency perceived by the court between the conduct of the party claiming privilege and the maintenance of the privilege.[13]
[13] Bolt v Bolt [50] citing CMA Assets Pty Ltd formerly known as CMA Contracting Pty Ltd v John Holland Pty Ltd [No 4] [2013] WASC 77 [8] – [12].
The exception therefore permits evidence of settlement negotiations where delay is an issue, including laches, of the fact of and dates of without prejudice communications but, in general not the contents.[14]
[14] Hoefler v Tomlinson [1995] FCA 1105; Liu v Chan & Ors [2020] QCA 25, 26.
The cause of action
For the purposes of these reasons the parties' first names are used without intending disrespect as they all have the same surname.
There have been partnerships involving farming and pastoralist operations at Hampton Hill Station over many years going back to 1972.
It is not in dispute that:
(a)the first partnership the subject of a deed dated 1 October 1972 (Partnership Deed) was between Charles Jones and his sons Bart Snr, John and Burchell;
(b)when Charles died on 4 June 1999:
(i)Bart Snr and John were appointed his executors;
(ii)Bart Snr, John and Burchell exercised an option conferred under the Partnership Deed to acquire their father's partnership share;
(iii)a second partnership then carried on between Bart Snr, John and Burchell until Bart Snr died on 16 October 2006;
(c)immediately prior to Bart Snr's death the assets of the second partnership comprised the pastoral land Hampton Hill Station;
(d)probate was granted on 31 January 2007 of Bart Snr's will dated 20 February 2007 to Amanda and Bart Jnr, the executors appointed under his will, the plaintiffs in that capacity;
(e)at no time within 28 days of the grant did John and Burchell exercise the option conferred under the partnership deed to purchase Bart Snr's share in the second partnership;
(f)by reason of cl 13 and cl 14 of the Partnership Deed and the fact that John and Burchell did not exercise the option to purchase Bart Snr's interest, the second partnership was dissolved as and from 1 March 2007.[15]
[15] Amended statement of claim filed 21 February 2023 par 46; amended defence filed 9 March 2023 par 46 and 54.
Relief sought by plaintiffs
The plaintiffs, by reason of the circumstances, seek the following relief by the amended statement of claim:
(a)declarations should be made declaring the partners of the second partnership immediately prior to Bart Snr's 16 October 2006 death, and that the partnership was dissolved upon his death on 16 October 2006;[16]
(b)an order under s 50 of the Partnership Act 1895 (WA) and/or in equity winding up the business and affairs of the second partnership, including sale of Hampton Hill Station;
(c)inquiries and takings of accounts of the second partnership and its assets and liabilities as at 16 October 2006 through to the present time.
[16] Notwithstanding pleas that it was dissolved as and from 1 March 2007: amended statement of claim par 46; amended defence par 46 and 54 and admission in par 2 of Reply as to par 54 amended defence.
Defence
The amended defence contains denials that that relief is appropriate or available to the plaintiff, and raises:
(a)limitation issues, these proceedings having been commenced over 15 years after the cause of action arose, giving rise to the claim being statute barred;
(b)materially altered positions, including creation of a third partnership solely between John and Burchell upon dissolution of the second partnership and assumption of liabilities by them of the second partnership;
(c)estoppel and laches, with the plaintiffs being aware that John and Burchell were continuing to operate a business in common with a view to profit and control the property formerly of the second partnership, with reliance upon the lack of objection by the plaintiffs, it now being unconscionable and inequitable to permit the denial of the existence of the third partnership;
(d)the books of the second partnership at the date of the dissolution of the second partnership showed the interest of Bart Snr being a debt owing to the partnership, it now being in vain to provide equitable relief as the assets of the second partnership are unrecoverable.
Reply
The Reply raises numerous matters going to:
(a)the conduct of John and Burchell since the death of Bart Snr, controlling assets of the second partnership;
(b)why, regardless of whether the appropriate limitation period is 12 years[17] or otherwise, certain periods should not count in the calculation of that period, or the defendants should not be able to rely upon such limitation defence and the Court should grant an extension of time, and the defendants should be estopped from reliance upon limitation defences;
(c)the defendants' conduct pleaded in the Reply for the grant of an extension constituting 'improper conduct' within the meaning of s 38(2) of the Limitation Act.
[17] Section 18 Limitation Act 2005 for actions on a deed.
In broad terms, so far as it is contentious, the Reply pleads that the plaintiffs rely upon the following regardless of whether the relevant limitation period is 12 years as an action on a deed or less:
(a)emails sent between 28 September 2010 and 6 February 2014 being premised upon certain 'assumptions' which allegedly confirm the cause of action;[18]
[18] Par 7 ‑ 10, and 18.
(b)reference to a private Mediation Agreement[19] and one of its terms,[20] to negotiate certain matters;
(c)attempts to resolve issues under the Mediation Agreement and an Interim Agreement[21] made in writing concerning matters referred to mediation under the Mediation Agreement including agreed terms;
(d)a deed entered into on 13 July 2016;[22]
(e)the content of without prejudice correspondence sent 1 November 2016;[23]
(f)various time periods since 1 March 2007 which do not count for the purpose of reckoning the time for limitation purposes;[24]
(g)conduct in reliance upon the assumptions and intention to act on such assumptions, including no reliance upon limitation periods;[25]
(h)no notice the defendants would rely upon limitation issues;[26]
(i)detriment to the plaintiffs if the defendants are permitted to depart from the negotiation assumptions or the claim is statute barred;[27]
(j)estoppel against the defendants from pleading and relying upon limitation defences arising from the above;[28] and
(k)if, which is denied, the claim is barred by the Limitation Act, then the plaintiffs say the Court should grant an extension of time pursuant to s 38 of the Limitation Act by reason of the matters pleaded in the Reply at par 7 - 21, 24 and 25, such conduct constituting 'improper conduct' for the purpose of s 38(2).[29]
[19] Par 11 – 14.
[20] Par 12.
[21] Par 14 – 17.
[22] Par 24 – 25.
[23] Par 26.
[24] Par 28, referring to dates pleaded in par 7 ‑ 11, 14, 18, 20, 22 and 24.
[25] Par 29 – 32.
[26] Par 33.
[27] Par 34.
[28] Par 5 and 35 relying upon the matters pleaded in par 7 – 26, 29 – 34.
[29] Par 36.
Defendants' submissions in support of striking out
Primarily there were four grounds of the defendants' submissions made in support of striking out the whole of the Reply, alternatively, parts of the Reply, with leave to replead.
First ground ‑ inconsistent pleas
The plaintiffs rely upon communications from 28 September 2010 to 1 November 2016 as allegedly confirming the cause of action as they were 'premised upon' the estate of the late Bart Snr being a member of the second partnership along with the defendants[30] despite the fact that:
(a)the plaintiffs pleaded in par 46 and 47 of the amended statement of claim that the second partnership consisting of Bart Snr, John and Burchell was dissolved as and from 1 March 2007 by reason of cl 13 and cl 14 of the Partnership Deed and there having been no exercise of the option by John or Burchell within 28 days of the grant of probate of Bart Snr's will to purchase his interest, for which they sought declaratory relief;
(b)those facts pleaded by the plaintiffs were admitted by the defendants;[31] and
(c)in reply to par 54 of the amended defence asserting the dissolution on 1 March 2007, the plaintiffs admitted in the Reply[32] that the second partnership consisting of Bart Snr, John and Burchell was dissolved as and from 1 March 2007.
[30] Reply par 7 – 10, 18, 22, 26, also par 29(1)(b), 24(3), 25, 27 and 28.
[31] Amended defence par 46 and 47.
[32] Par 2.
The inconsistency is submitted to be a breach of the prohibition on departure in O 20 r 11(1).
Further it is submitted that:
(a)the communications do not confirm the cause of action but are in direct conflict with the cause of action in that they suggest the continuation and subsistence of the same partnership up to nine years after the admitted dissolution; and
(b)the issue compounds other pleading difficulties which have the consequence of failing to serve the function of fairly apprising the defendants of the case they must meet, and it is variously inconsistent, vague, unintelligible, and obscures the real questions in controversy.
Second ground ‑ without prejudice materials
The Reply discloses content of mediation agreements and without prejudice communications.[33] The relevant paragraphs also fail properly and fairly to apprise the defendants of the case they will need to meet at trial as to how those pleaded matters are an answer to limitation and laches defences.
[33] Reply par 12, 14 – 17, 26.
So far as there is reference to the Mediation Agreement and related agreements, the defendants rely upon the Mediation Agreement governing confidentiality of the mediation and its surrounding circumstances.
The first defendant's affidavit of 3 May 2023 attached a redacted form of the Mediation Agreement. The Mediation Agreement was between numerous parties and entities. It contained obligations as to privilege and confidentiality. The first defendant stated that at no time did the defendants consent to the use of or reference to the without prejudice materials and mediation materials.
Third ground ‑ estoppel against laches and limitation defences
The plaintiffs set up in the Reply an argument for estoppel against laches and limitation defences[34] based upon other defective pleas. Those pleas are said not to raise a reasonable case on estoppel, are evasive, and conceal or obscure the real questions, particularly regarding shared Negotiation Assumptions pleaded at [30] onwards in the Reply.
Fourth ground – improper conduct
[34] Reply par 29 – 35.
'Improper conduct'[35] for the purpose of s 38(2) Limitation Act 2005 (WA) is pleaded to support an extension of the limitation period without the requisite facts and particulars to support an allegation of impropriety. Broad reference to earlier pleadings to which objection is otherwise taken, with no articulation as to what and how the conduct of the defendants is alleged to be improper, is submitted to be insufficient.
Broader grounds arising from pleading
[35] Reply par 36.
The defendants broadly submit that a non‑technical, robust and non‑pedantic approach to the resolution of pleadings disputes does not remove the need for a statement of claim to disclose a reasonable cause of action and fulfil its basic function of stating the case with the sufficient clarity to allow the other party a fair opportunity to meet it.[36]
[36] Pigozzo v Mineral Resources Ltd [2022] FCA 1166 [23] Feutrill J.
Some allegations are impugned on the basis of being vague, or rolled up pleas which pick up many of the earlier allegations which are themselves impugned, lack proper pleading of matters or lack particulars sufficient to engage legislation relied upon.
Plaintiffs' submissions in opposition to application
Evidence
The plaintiffs relied upon the affidavits of Bart Jnr sworn 5 June 2018 (Bart Jnr's affidavit)[37] and of John sworn 6 June 2018 (John's Corporations Affidavit)[38] in evidence in relation to the application, having given notice pursuant to O 36 r 10 RSC of their intention, that evidence having been before Master Sanderson on 11 June 2018.
[37] Filed in Supreme Court action COR 266 of 2013 on 5 June 2018.
[38] Filed in Supreme Court action COR 265 of 2013 on 6 June 2018.
Counsel for the plaintiffs submitted that:
(a)the whole of Bart Jnr's Corporations Affidavit was tendered in evidence in that hearing without objection save for par 46, that affidavit having included unredacted copies of the Mediation Agreement and the Interim Agreement, referred to in that hearing;
(b)the whole of John's Corporations Affidavit was tendered without objection, including references to the Interim Agreement; and
(c)the defendants have waived any without prejudice privilege that might otherwise exist as to those agreements.
While the plaintiffs acknowledged cases such as Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 1625 [61] ‑ [66] and Spedding v State of New South Wales [2022] NSWSC 503 [6] ‑ [10], it was submitted that the material referred to in those affidavits is admissible for the limited purpose of establishing that the defendants have waived any without prejudice privilege.
It is relevant to note that the proceedings from which the affidavit evidence arises was in the matter of Jones Partners Pty Ltd and between four companies, not the individual parties to the current proceedings. Mediation and separation of business interests in that context related to various business interests the family had which were the subject of those documents.
First ground ‑ inconsistent pleas
The plaintiffs rely upon the decision of Belgravia Nominees Pty Ltd v Lowe [No5] [54] for the proposition that the rule against departure from earlier pleadings does not operate to prevent a party from pleading in a counterclaim something inconsistent with what has been pleaded in that party's defence.
Relevantly, however, that paragraph of the decision goes on to state that a defendant may deny an agreement in its defence and by counterclaim allege that, if there was such an agreement, seek relief in respect of it.[39]
[39] Citing Geneva Finance Ltd (Receiver and Manager Appointed) v Boys [2001] WASC 269 [28].
The plaintiffs submit that the amended statement of claim[40] and Reply[41] support pleas of acknowledgement for the purposes of s 46 ‑ s 48 Limitation Act 2005 (WA),[42] estoppel[43] and extensions of time under s 38(2) Limitation Act 2005 (WA)[44] and on that basis there is no inconsistency.
[40] At par 46 and prayers 1 and 2.
[41] At par 6 – 10 and 18 (relating to limitation period and emails premised upon Bart Senior's estate being a member of the second partnership) and par 26 (a plea relating to a letter marked 'without prejudice save as to costs').
[42] As pleaded in the Reply at par 27 – 28, justifying not counting certain time periods in reckoning the relevant limitation period.
[43] As pleaded in the Reply at par 35 as a plea that the defendants are estopped from pleading limitation defences.
[44] As pleaded in the Reply at par 36 as a plea to the effect that if, which is denied, the action is time barred, then the court should grant an extension of time on the basis of improper conduct by the defendants as defined in the Act.
As stated in the plaintiffs' submissions:
If X asserts that X is in partnership with Y as at date Z, even if the partnership is (according to Y) dissolved as at date Z, Y is entitled to rely on X's assertion as a representation for purposes such as an extension of time.
The plaintiffs further submit that the pleas alleged to be inconsistent are further supported by other pleas in the Reply, and even if there is any inconsistency, nothing is to be gained by striking out par 6 ‑ 10, 18 and 26.[45]
Second ground ‑ without prejudice materials
[45] Relying on the decision of Volaric v Livun in her personal capacity & Anor [2023] WASC 212 [103] ‑ [110] (Forrester J).
The without prejudice materials arguments fall into four categories, being pleas in the Reply relating to:
(a)the written Mediation Agreement dated 26 October 2011;[46]
(b)the Interim Agreement, including some of its terms;[47]
(c)a mediation conducted in the Supreme Court;[48] and
(d)a letter marked 'without prejudice as to costs'.[49]
[46] Reply par 11 to 13.
[47] Reply par 14 to 17.
[48] Reply par 23.
[49] Reply par 26.
The plaintiffs rely upon Bart Jnr's Corporations Affidavit and John's Corporations Affidavit as to the waiver of any without prejudice privilege that might otherwise exist, the Mediation Agreement and Interim Agreement having been annexed to Bart Jnr's Corporations Affidavit and the Interim Agreement annexed to John's Corporations Affidavit, the Interim Agreement referring to the Mediation Agreement.
The Corporations Act proceedings were the subject of the decision of Master Sanderson in Nellbar Pty Ltd v Jones Partners Pty Ltd [2018] WASC 292. There were two Corporations Act 2001 (Cth) proceedings commenced in 2013. Following a seven day trial orders were made. In Nellbar Pty Ltd v Jones Partners Pty Ltd[No 2] [2020] WASC 336, the Master refused an application for variation to the orders made. Consolidated appeals followed the subject of the decision in Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33 and related costs determinations.
The parties to those proceedings were related entities of, or were some of the parties to, this proceeding.
Refences to the two mediations were made by Master Sanderson in his first decision at [1] in which he stated:
Two mediations were held – one before the Hon Neville Owen and the other before Registrar Whitby.[50] In principle agreements were reached but came to nothing. So eventually the matters were listed for hearing.
[50] As Her Honour then was.
The plaintiffs submit that:
(a)there is nothing objectionable about the fact of mediation and agreement to mediate, and the action numbers or date and time of mediation, as opposed to the content of what is said during mediation, relevant to par 11 ‑ 13 and 14 ‑ 17 of the Reply; and
(b)as to the without prejudice letters referred to in par 26 and 29 ‑ 35 to found negotiation assumptions and the basis for estoppel and improper conduct to justify an extension to the limitation period, without prejudice privilege does not preclude the proof of communications or statements relied upon as an objective act having legal consequences;
(c)privilege attaching to without prejudice communications may be waived;
(d)nothing in par 26 of the Reply breaches s 71 of the Supreme Court Act 1935 (WA) as to the privilege attached to mediations;
(e)the Mediation Agreement does not contain any admission against interest by the defendants, and the Mediation Agreement is a binding contract;
(f)a 'premise', being the basis for the pleas regarding the sending of emails, is not, without more, an admission.
The plaintiffs submit that the references to the Mediation Agreement and Interim Agreement in John's Corporations Affidavit tendered in evidence before Master Sanderson on 12 June 2018 without objection constitute a waiver of any without prejudice privilege that might otherwise attach to the documents.
Third ground ‑ estoppel against laches and limitation defences
The plaintiffs rely upon authority for the fact that a party can be estopped from relying on limitation defences[51] and the fact that the Reply pleads estoppel by convention, not a representation of fact, founded on the conduct of relations between the parties on the basis of an agreed or assumed state of facts which both will be estopped from denying.[52] The convention must be mutually adopted, whether true or otherwise, and each party relies on its adoption.
Fourth ground ‑ improper conduct
[51] Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 considered in Rundle v Salvation Army (South Australia Property Trust) [2007] NSWSC 443 [126] ‑ [132].
[52] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14 [22]; (1986) 160 CLR 226, 244; considered further in Wright v Lemon (No 2) [2021] WASC 159 [444] ‑ [449]; Terravision Pty Ltd v Black Box Control Pty Ltd (No 4) [2016] WASC 378 [24] setting out the elements.
The plaintiffs submit that for the purpose of s 38(2) of the Limitation Act 2005 (WA), 'other improper conduct' is not limited to conscious wrongdoing, conduct akin to fraud or to conduct with an element of moral turpitude.[53]
[53] Kitay v Chaucer Syndicates Ltd [2021] WASC 450 [202.3] citing Lowe Pty Ltd v Belgravia Nominees Pty Ltd [2020] WASCA 180 [182], [187], [189] ‑ [191].
Rather, whether fraudulent or other improper conduct has been established is an evaluative judgment to be made in all the circumstances of the case. In that respect, the position is analogous to whether given conduct in a given set of circumstances amounts to unconscionable conduct.[54]
[54] Kitay v Chaucer Syndicates Ltd [188], [202.5].
Should any of paragraphs of the Reply be struck out?
Most of the Reply seeks to respond to the defence of limitation periods, creation of a new partnership after dissolution of the second partnership between John and Burchell, the assumption of liabilities of the second partnership by the partners of the third partnership and estoppel and laches pleaded by the defendants. At the heart of those issues for the plaintiffs is the limitation upon their claims.
Paragraphs 7 ‑ 10, 18, 22, 26, with 19(1)(b), 24(3) and 25
It is convenient to deal with par 7 ‑ 10, 18, 22 and 26, with par 19(1)(b), 24(3) and 25 of the Reply together.
Paragraph 7 of the Reply pleads:
An email sent on 28 September 2010 at 3.26pm from Mr John Jones (on behalf of himself and Mr Burchell Jones) to inter alia Ms Amanda Jones and Mr Bart Jones Jnr was premised upon Mr Bart Jones Snr's estate being a member of the 2nd Hampton Hill Station Partnership along with Mr John Jones and Mr Burchell Jones[55].
[55] Underlining added.
Paragraphs 8 ‑ 10 and 18 of the Reply are pleaded in the same form relating to other emails on later dates up to 6 February 2014.
Paragraph 19(1)(b) pleads a Crown lease between the Crown in the right of Western Australia as lessor and Charles Jones, Bart Snr, John and Burchell as lessees as tenants in common in the same shares pleaded in par 13 – 16 of the statement of claim.[56]
[56] As originally in the Partnership Deed.
Paragraph 22 pleads that management accounts for Hampton Hill Station as at 31 December 2015 refer to Mr Bart Jones Snr's 'estate as being a member'[57] of the 2nd Hampton Hill Station Partnership with Mr John Jones and Mr Burchell Jones.
[57] Underlining added.
Paragraph 24(3) pleads in relation to a deed that it was made between two specified companies and 'the following persons trading as Hampton Hill Station (ABN 86 124 273 845)'. That refers to Mr Bart Jones Jnr and Ms Amanda Jones as executors and trustees for the estate of Mr Bart Jones Snr … Mr Burchell Jones … and Mr John Jones.[58]
[58] Underlining added.
Paragraph 25 refers expressly to par 24(3) and rights of access and other rights granted under the deed by the named individuals to the companies.
Paragraph 26 states that a 'without prejudice except as to costs letter' dated 1 November 2016 'was premised upon Mr Bart Jones Snr's estate being a member of[59] the 2nd Hampton Hill Station Partnership along with Mr John Jones and Mr Burchell Jones'.
[59] Underlining added.
Paragraphs 7 ‑ 10, 18, 22, 26, with par 19(1)(b), 24(3) and 25 of the Reply are impugned on the basis that:
(a)breach of O 20 r 11(1) in relation to inconsistency of pleading those matters despite the claim being that the partnership was dissolved on 1 March 2007 and being inconsistent with the prayer for relief seeking orders for winding up, inquiries and accounts on the basis of the dissolution;
(b)they are not pleaded in the alternative as a continuation of the second partnership with the executors as members, alternatively the creation of a new partnership between the plaintiffs as Bart Snr's executors, John and Burchell;
(c)the plaintiffs have not abandoned allegations to make the pleas consistent and intelligible;
(d)they are embarrassing and should be struck out as an abuse;
(e)while appearing to be directed to supporting the extension by confirmation under s 47 Limitation Act in par 27 ‑ 28, they fail to state with sufficient particularity to fairly apprise the defendants of the case they are to meet, and are inconsistent, ambiguous, vague, unintelligible, evasive and conceal or obscure the real questions in controversy;
(f)this aspect of the Reply is unsustainable and therefore frivolous;
(g)the paragraphs referred to are relied upon to support other pleadings within the Reply including alleged estoppel and improper conduct warranting an extension of time. The unfair and defective nature of the allegations visits serious prejudice and unfairness on the defendants in attempting to understand the case against them, particularly egregious in relation to the assertion of improper conduct without particularisation.
The same issues are submitted by the defendants to apply to par 27 and 28, addressed separately in addition to other matters below.
The phrase 'premised upon' is vague and the subject of other objections.
So far as being 'premised upon the estate being a member of' the second partnership:
(a)each pleading reliant upon that phrase is without particulars and no attempt has been made to state precisely the words or content giving rise to the premise for each document;
(b)the dissolution of the second partnership arose, by cl 13 and cl 14 of the Partnership Deed[60] following Bart Snr's death on 16 October 2006, the grant of probate of his will on 7 January 2007 and a total of 29 days passing without the exercise of the option, the partnership being dissolved 1 March 2007;
(c)any entitlement or liability that Bart Snr had in the second partnership was an asset or liability of his estate upon his death and the dissolution of the partnership under the Partnership Deed following his death. However, it is the executors, not the estate itself, who could have been in partnership with others. Reference to the 'estate being a member of' the second partnership with the defendants is not correct and embarrassing;
(d)the plaintiff executors of Bart Snr's estate became entitled under s 50 Partnership Act to make any claim for Bart Snr's interest and such interest, if of value, would then have been an asset of his estate, alternatively there may have been a liability. However it was not possible for the executors of the deceased's estate to be in partnership under the second partnership on or after 1 March 2007, the partnership having been dissolved, or for the estate to be in partnership;
(e)it is possible that the emails or documents stated as a fact, or were somehow premised upon, matters which are incorrect as a matter of fact or law or both, although I make no finding in that respect.
[60] Amended statement of claim par 46.
In relation to par 19, 24(3) and 25, I do not strike out those pleas as they are sufficiently clear and the documents will speak for themselves.
As paragraphs 7 – 10, 18, 22 and 26 are relied upon to found the various bases to extend the limitation period pleaded in the defence, for that purpose I do not consider they should be struck out on the basis of consistency for inconsistency.
The pleaded reliance on the Limitation Act provisions in par 27 ‑ 28 and 35 is where the proper basis to those claims should be set out, addressed further below. I do not consider for that purpose that par 7 ‑ 10, 18, 19, 22, 24(3), 25 and 26 should be struck out as being unsustainable and frivolous, as the consideration of any evidence for the extension to the limitation period should be considered by a judge upon the evidence, not by me.
However, par 7 – 10, 18, 22 and 26 should be struck out and repleaded. They are ambiguous as to their proper meaning, vague, and partly unintelligible and conceal or obscure the real questions in controversy.
Paragraphs 12, 14 ‑ 17 and 26
Paragraphs 12, 14 - 17 and 26 are impugned on the basis of being scandalous, frivolous or vexatious, prejudicing, embarrassing or delaying or as an abuse of process. Complaint is made that there is disclosure of without prejudice communications and they are vague allegations.
The nature of the Mediation Agreement is for the appointment of a private mediator on certain terms to conduct a privileged and confidential mediation between parties to resolve certain disputes between them.
The fact of the Mediation Agreement entered into between certain parties for the purpose of resolving disputes described in the document on 26 October 2011, pleaded at par 11 of the Reply, and various references to attempts to resolve the disputes in par 13, are not impugned.
Paragraph 12 of the Reply is impugned on the basis that it refers to one of the issues referred to mediation as a term of the Mediation Agreement. The defendants seek for it to be struck out on the basis of O 20 r 19(1)(a), (b) and (c).
It is notable, however, that there were a number of other parties to the Mediation Agreement in addition to those pleaded and the scope of disputes go beyond that pleaded at par 12.
A relevant term of the Mediation Agreement was that the parties agreed that the Mediation shall be conducted on a without prejudice basis and that any information and/or documentation relating to or in any way connected with the Dispute (as defined) disclosed by any Party (as defined) to the other or to the Mediator specifically for the purposes of the Mediation is privileged and confidential, and such information and documentation may not be disclosed or used in any subsequent arbitration or judicial proceedings or in respect of the Dispute and in particular, certain specific aspects and documents of the process were to be kept confidential and could give rise to injunctive relief.
Paragraphs 14 to 17 refer to terms of the Interim Agreement concerning issues mediated under the Mediation Agreement and the proper construction of those terms.
The fact of private and Court mediation have been referred to in the Master's reasons.
Broader objections relating to par 26 are addressed above, with the finding that the paragraph should be struck out with leave to replead.
The Reply from par 5 onwards purports to set out the matters to be relied by the plaintiffs regardless of whether the relevant limitation period is 12 years or some lesser period. The difficulties relating to considering the privilege issue are compounded by the fact that so far as most of the paragraphs after par 5 plead facts, it is not apparent what their relevance is to the limitation periods or why they may be material until much later in the Reply when many are relied upon as particulars, notably in par 27 (relying upon par 7 – 22, 24 and 25), 28 (relying upon the matters pleaded in par 27) and 36 (relying upon the matters pleaded in par 7 – 21, 24 and 25) arising from the Limitation Act 2005 (WA), and par 29 ‑ 35 and 38 (relying upon the matters pleaded in par 7 – 22, 24 ‑ 26, 29 – 33 and 37) as a further answer to allegations in the defence.
So far as there is reference to the Mediation Agreement, related agreements and without prejudice documents and information, the defendants state that at no time did the defendants consent to the use of or reference to the without prejudice materials and mediation materials. There were numerous parties to the Mediation Agreement and Interim Agreement, and privilege cannot simply be waived between parties to this action.
On the basis of disclosure of contents of the Mediation Agreement and Interim Agreement and a without prejudice communication alone, it is not appropriate for me to strike out par 12, 14, 17 and 26 but rather to leave the issue for consideration before the trial judge where the issues can be properly argued in the context of the evidence relied upon and the purpose for which it is relied upon. While on their face, the pleas at par 12, 14 – 17 and 26 appear to be an abuse of process, amendment or particularisation may resolve the complaints.
If the without prejudice letter referred to in par 26 is relied upon in par 29 ‑ 35 to found Negotiation Assumptions, the basis for estoppel by convention and 'improper conduct' to justify an extension to the limitation period, there is the authority as cited by counsel[61] to the effect that without prejudice privilege does not preclude the proof of communications or statements relied upon as an objective act having legal consequences. It is not clear from the plea that that is the sole purpose and evidence is to be led of it only for that purpose or otherwise.
[61] Bolt v Bolt [49] being one, in which His Honour cited the estoppel or unconscionability exception referred to by Neugberger J in Hodkinson & Corby Ltd v Wards Mobility Services Ltd,191.
If, as counsel submits, par 26 is relied upon solely for those purposes, how are the defendants to know that, without amendment, to make express reference to reliance and that evidence is to be led solely for those purposes?
Similar issues arise regarding the Mediation Agreement and Interim Agreement with the further arguments about confidentiality terms of agreement, use in earlier proceedings and waiver.
If, as counsel submits, privilege has been waived, the basis of the confidentiality and privilege, including terms of agreement, could be stated, and the basis of alleged waiver stated.
Argument will be required before the trial judge as to the privilege and confidentiality of documents and information, whether it has been waived, whether it is admissible and for what purpose. Each layer has to be peeled back for each substantive defence to the limitation issues. However, the time spent in that regard may be significant if the pleadings at par 12, 14 ‑ 17 and 26 are not amended, or pleas relying upon them amended, or both.
The pleas are vague and embarrassing individually and as the basis of the Negotiation Assumptions, estoppel, improper conduct and acknowledgements addressed below. They prejudice, embarrass or will likely delay as all of the issues are unclear. Further, there is no plea of any clear and unambiguous statement made by the defendants in without prejudice documents, acted upon and reasonably acted upon by the plaintiffs to found the exception referred to in Bolt v Bolt [50]. Rather, simple reference is made to documents as matters relied upon. Paragraphs 12, 14 – 17 and 26 should be struck out and repleaded.
Paragraphs 27 and 28
Paragraph 27 of the Reply pleads:
By reason of the matters pleaded in paragraphs 7-22, 24 and 25 above, Mr John Jones and Mr Burchell Jones acknowledged in writing, for the purposes of sections 46 and 48 of the Limitation Act 2005 (WA) the right or title of Ms Amanda Jones and Mr Bart Jones Jnr, as executors of Bart Jones Snr's Will, to an interest in the 2nd Hampton Hill Station Partnership.[62]
[62] Underlining added.
The general objections to par 27 are made under O 20 r 19(1)(b), (c) and (d), that is, scandalous, frivolous or vexatious; will prejudice, embarrass or delay; or otherwise an abuse of process. There is also submitted to be a breach of the prohibition on departure in O 20 r 11(1) RSC arising from inconsistency.
Bart Snr died 16 October 2006. The plaintiffs have clearly pleaded in the amended statement of claim and the Reply, and it is also pleaded in the amended defence, that the second partnership was dissolved as and from 1 March 2007.
Section 50 of the Partnership Act 1895 provides:
Application of partnership property
On the dissolution of a partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after such payment applied in payment of what may be due to the partners respectively, after deducting what may be due from them as partners to the firm; and for that purpose any partner or his representatives may, on the termination of the partnership, apply to the court to wind up the business and affairs of the firm.
While the amended statement of claim seeks declarations that immediately prior to 16 October 2006 Bart Snr, John and Burchell were partners of the second partnership and that upon his death it was dissolved, with orders for winding up and accounting for the assets and liabilities including under s 50 Partnership Act 1895(WA), that does not mean that the estate or the executors were members of the second partnership. Rather, Bart Snr's executors have had standing upon the dissolution to apply to the Court to have partnership property applied and accounted for taking into account assets and liabilities, and for any remaining share in the dissolved partnership applied to the partners. Section 50 contemplates that.
The defendants submit that:
(a)the communications do not 'confirm' the cause of action but are in direct conflict with the cause of action in that they suggest the continuation and subsistence of the same partnership up to nine years after the admitted dissolution; and
(b)the issue compounds other pleading difficulties which have the consequence of failing to serve the function of fairly apprising the defendants of the case they must meet, and it is variously inconsistent, vague, unintelligible, and obscures the real questions in controversy.
Paragraphs 7 ‑ 22, 24 and 25 are relied upon for the plea in par 27. The communications pleaded in par 7 ‑ 10 and 18 and management accounts pleaded in par 22 being premised upon the estate of the late Bart Snr being a member of the second partnership (italics added) along with the defendants, and documents the subject of the remaining pleas including the executors, are almost all the subject of separate objections. So far, par 7 – 10, 12, 14 – 17, 18 and 22 of those relied upon have been determined appropriate to be struck out and repleaded.
Paragraph 5 of the Reply states that par 7 to 35 are in further answer to the limitation defences. The plea in par 27 does not relate to seeking conflicting relief, rather the plea is a basis for the limitation period to be extended by confirmation. It is not for me to stifle the plaintiffs' ability to argue the point and I do not strike it out for being inconsistent to the cause of action, or on the basis of being scandalous, frivolous or vexatious or as an abuse of process.
However par 27 should be struck out and repleaded on the basis that it may prejudice, embarrass or delay for the following reasons:
(a)The meaning of 'confirmation' for the purpose of s 46 Limitation Act 2005 (WA) is stated in the section. A person may confirm a cause of action in one of three ways, essentially either an acknowledgment of a right or title without payment, or a payment not inconsistent with an acknowledgment of a right or title, or a payment to a person having rights in relation to a mortgaged property. It is not clearly pleaded which basis is relied upon, or if more than one basis, which earlier pleaded communications and documents fell into each category.
(b)Section 48 then states that for the purpose of s 46(1)(a), the first category, an acknowledgment is of no effect unless it is in writing and signed by the maker. It is not pleaded which, if any of those matters pleaded in the earlier paragraphs falling into that category were in writing and signed by the maker for the purpose of s 48, merely that by reason of the matters pleaded in par 7 – 22, 24 and 25, John and Burchell acknowledged in writing for the purpose of s 46 and s 48 the relevant interest of the executors in the partnership. Some were emails, others written agreements or deeds between various parties, and it is not pleaded in relation to par 22 who prepared the management accounts as at 31 December 2015 or whether they were signed. If it is the plaintiffs' case that each was in writing, signed by the maker acknowledging the interest, that is not clearly expressly pleaded regarding each matter relied upon.
(c)While there is inconsistency between the pleaded paragraphs relied upon for par 27 referring to emails and accounts premised upon the estate being a member of the second partnership and par 27 pleading acknowledgment of the plaintiffs as executors having an interest in the partnership, those are appropriately left for the trial judge to consider the evidence and basis for that acknowledgment. Nonetheless, for the pleading to be clear, and to avoid prejudice, embarrassment or delay, the basis upon which each is said to constitute an acknowledgment of the interest, the nature of the interest acknowledged, how it arises, who made it, and the fact it was in writing signed by the maker should be clearly pleaded.
(c)Simply relying upon other pleas does not make clear how the acknowledgment supports the interest, such as the entry into the Mediation Agreement to mediate disputes[63] or attempting to resolve those disputes under the Mediation Agreement.[64]
(d)Paragraph 28 compounds the issues, where it pleads that by reason of the matters pleaded in par 27 and s 47 of the Act the time between 1 March 2007 and each of the dates in par 7 ‑ 11, 14, 18, 20, 22 and 24 does not count in reckoning the relevant limitation period. It does not state the periods which should not be counted and thereby the amount by which the limitation period should be extended. That paragraph should also be struck out and repleaded to make those periods clear.
Paragraphs 29 ‑ 35
[63] Par 11 – 12.
[64] Par 13.
Until pleas in par 29 to par 34, it is not apparent that many of the early pleadings in the Reply are relied upon to found pleadings that certain Negotiation Assumptions were adopted by the parties and that they conducted their affairs intentionally on the basis of those assumptions to their detriment with no notice to the contrary. On that basis, at par 35, it is pleaded the defendants are estopped from pleading limitation and laches defences.[65]
[65] As pleaded in par 54 - 47 and 69 - 71 defence.
Particulars relied upon for those paragraphs are similar:
(a)for par 29 and par 30: par 11 ‑ 26, 31 ‑ 33;
(b)for par 31: par 11 ‑ 26, 32 ‑ 33;
(c)for par 32: par 11 ‑ 26, 33;
(d)for par 35: the matters pleaded in par 7 ‑ 26, 29 ‑ 34.
Reliance is again placed in circular fashion to most pleas of the Reply despite the fact that the particulars of par 29, 30, 31 and 32 are almost identical.
Firstly, as the defendant submits, par 29 ‑ 35 are based upon other defective pleas, some of which are required to be struck out and which may be repleaded to resolve difficulties. I would not on that basis strike out the whole estoppel plea due to some of the earlier pleas being relied upon being struck out.
An amended or preferably substituted Reply would inform that issue. If further particulars are required, they may be provided upon request or upon orders being made without having to strike out the plea if it is otherwise sufficient.
Secondly, the defendants' submission is that those pleas do not raise a reasonable case on estoppel, are evasive, and conceal or obscure the real questions, particularly regarding shared Negotiation Assumptions at par 30 and onwards.
I accept the defendants' written submission that the estoppel plea does not state how the alleged assumptions arose, what they were based on, how they were common to or shared by the parties, how the defendants induced the plaintiffs to make the alleged assumptions or how the defendants knew or intended the plaintiffs to act on the alleged assumptions[66], but the plaintiffs' amended submission sought to clarify that the plea arises as estoppel by convention arising from agreed or assumed facts, not the Waltons Stores equitable estoppel basis. That this was not clear from the pleading highlights the issues.
[66] Waltons Stores (Interstate) v Maher [1988] HCA 7; (1988) 164 CLR 387, 413 ‑ 417, Brennan J.
In brief, the two Negotiation Assumptions are pleaded to be that no party would rely upon any period of time to form part of a limitation defence in respect of the 2nd partnership's affairs, before or during which the parties to the Mediation Agreement dated 26 October 2011 and Interim Agreement dated 10 February 2012 were negotiating in an attempt to resolve any aspect of the disputes the subject of the Mediation Agreement and any aspect of the separation of any of the business interests the subject of the Interim Agreement. The elements required to establish estoppel by convention are clearly stated in Terravision v Black Box Control (No 4) [24]. They are not clearly pleaded or supported by particulars in this case.
For example, par 29 pleads that each of the parties adopted the assumptions pleaded in par 30, and 'conducted their affairs on the basis of those assumptions'. How did the assumptions arise? Did each have knowledge of the other's acceptance expressly or by implication of the assumptions? How were their affairs conducted on the basis of those assumptions? A written Mediation Agreement was entered into to resolve disputes, but how did each of the parties adopt the assumptions if there were disputes? Was it a term of the agreement not to rely on any period of time?
Paragraph 29 also relies upon par 31 as a particular. Paragraph 31 pleads that the parties pleaded in par 29 above 'conducted their affairs on the basis of the Negotiation Assumptions'. It pleads exactly what is pleaded in part of par 29. Paragraph 31 is irrelevant, unnecessary and embarrassing and should be struck out. Reference in par 29 ‑ 31 as a particular which pleads the same is embarrassing.
The plea in par 32 is similar but it is that the parties 'intended that they would conduct their affairs on the basis of the Negotiation Assumptions'. If there is a distinction between the pleas of 'conducting their affairs on one hand and intending that they would conduct their affairs' on the other, the pleas and particulars do not make clear what that is and the same matters are relied upon as particulars. Presumably if each party adopted the Negotiation Assumptions and conducted their affairs on the basis of those assumptions, they did so consciously, thereby intending to do so. However, each of par 29, 31 and 32 plead the conduct. Either par 32 is also irrelevant, unnecessary or embarrassing or the distinct intentions and how those arose should be stated.
It is not for me to determine whether the alleged assumptions had in fact been adopted by the parties as the basis of their relationship and whether the particular state of affairs was an assumed statement of fact, as opposed, for example to the legal effect of their conduct. Those are matters for the trial judge. Rather it is for me to ensure that if such is pleaded it is sufficiently clear and meeting requirements of O 20 r 19 RSC.
Fundamentally, par 29 – par 35 fail to clearly plead or particularise the case to be met in response to the limitation issues, and mere circular reliance on numerous other pleadings confuses rather than clarifies. I accept that these paragraphs will have the potential to prejudice, embarrass and delay a fair trial and should be struck out and repleaded. However, I do not strike them out as being an abuse of process or obviously unsustainable, as appropriate repleading may resolve the issues and enable the trial judge to properly consider the pleaded position taken by the plaintiff.
Paragraph 36
Paragraph 36 of the Reply pleads that:
If (which is denied) any of the relief claimed by the Plaintiffs in this action is statute barred by the Limitation Act 2005 (WA), then the Plaintiffs say that the Court should grant an extension of time pursuant to section 38 of the Limitation Act 2005 (WA).
Particulars
A.The Plaintiffs rely on paragraphs 7‑21, 24 and 25.
B.The matters relied on constitute 'improper conduct', within the meaning of section 38(2) of the Limitation Act 2005 (WA), on the part of the Defendants.
Paragraph 36B specifically, a particular, is impugned on the basis of O 20 r 19(1)(a), (b), (c) and (d). These matters are in addition to the specific objections otherwise to the paragraphs relied upon in support of par 36 as particulars of the improper conduct.
The whole of par 36 should be struck out and leave given to replead for the following reasons.
For the purpose of s 38 Limitation Act a plaintiff may apply to a court for leave to commence an action on a cause of action even though the limitation period provided for under the Act has expired if the court is satisfied that the action was attributable to fraudulent or other improper conduct of the defendant or a person for whom the defendant is vicariously liable. Impropriety is a factor.
There has been no application to the court for leave to commence an action out of time, and the plea does not expressly seek leave, rather the plaintiffs deny they are out of time and seek to address the issue as an alternate plea in the Reply in reliance upon 'other improper conduct' for the purpose of s 38.
It is well established that an allegation of dishonesty or impropriety is a very serious matter, which should not be made unless there is a proper factual basis for it, and where such an allegation is made, it must be clearly and distinctly alleged and precise particulars of it pleaded.[67]
[67] Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [24].
Even if the matters pleaded in par 7 ‑ 21, 24 and 25 are relied upon, or capable of being relied upon,[68] the facts and particulars required to support the basis upon which those matters are said to constitute improper conduct for the purpose of the Limitation Act are absent. Those paragraphs plead emails, attempts to resolve in including mediation agreements, without prejudice correspondence, a Crown lease, a pastoral lease and the existence of a deed between certain parties including the parties to these proceedings. It is not pleaded how any of the matters relied upon are alleged to constitute improper conduct individually or in combination.
[68] Subject to other objections.
Section 38, and in particular what may constitute improper conduct, was considered and the subject of proceedings in Belgravia Nominees Pty Ltd v Lowe Pty Ltd [No 6] [2019] WASC 5[69] and on appeal in Lowe Pty Ltd v Belgravia Nominees Pty Ltd.[70] Even if there was improper conduct, the failure to commence the action must be attributable to the improper conduct.[71] There is no plea as to how the failure to commence the action within the limitation period was attributable to improper conduct, either individually in relation to each matter relied upon, or in combination. The earliest of those emails relied upon in par 7 was dated 28 September 2010. Did that constitute improper conduct? Was the failure to commence within the limitation period due to that, and on what basis?
[69]Belgravia Nominees v Lowe [No 6] [401] ‑ [416].
[70]Lowe v Belgravia Nominees [165] ‑ [209].
[71] Lowe v Belgravia Nominees [180], [187].
The most recent date relied upon is the deed.[72] Did it constitute improper conduct? Was the failure to commence the proceedings until 2022 due to the making of that deed. How was the failure attributable to the alleged improper conduct?
[72] 13 July 2016.
There are other pleas within the Reply going to matters of acknowledgment for the purpose of s 46 and s 48 Limitation Act (2005), assumptions adopted, reliance, intention of parties to conduct their affairs on the basis of the assumptions, no notice of intention to rely upon a limitation defence, detriment, and estoppel, they are not matters relied upon for the extension under s 38, although some particulars are the same.
It is also relevant that an extension application can be sought or determined at any time before or after the issue, or close of, pleadings[73] and that when deciding an extension application, in deciding whether to extend time for commencement of an action, a court is to have regard to the s 44 matters, whether the delay in commencing the proposed action would unacceptably diminish the prospects of a fair trial of the action, and whether extending time would significantly prejudice the defendants other than by reason only of the commencement of the proposed action.
[73] Section 43(5).
While the issues are raised for extension of time purposes under the Limitation Act 2005 (WA) to pursue the claimed relief pleaded otherwise, rather than a cause of action itself, it is not a paragraph which I strike out on the basis of being an abuse of process. However, the proper basis for the s 38 extension in par 36 is not pleaded clearly or fully or adequately particularised. It is a serious allegation which should be clearly and fully pleaded and particularised. Currently without such, it should be struck out on the basis of O 20 r 19(a), (b), (c) and repleaded.
Paragraph 38
Paragraphs 48 ‑ 52 of the defence are largely denials to entitlements for relief claimed. Paragraphs 54 ‑ 57 raise limitation issues regarding the partnership. Paragraphs 58 – 63 plead the creation of a new partnership and assumption by it of liabilities of the second partnership. Paragraphs 64 ‑ 68 plead estoppel and laches. Paragraphs 69 ‑ 71 plead limitation issues regarding land, and par 72 ‑ 75 discretionary factors against the plaintiffs' relief claimed.
Paragraph 38 of the Reply as amended pleads that:
In further answer to the allegations contained in paragraphs 48‑68 and 72‑75 of the Defence, the Plaintiffs rely on the matters pleaded in paragraphs 7‑22, 24‑26, 29‑33 and 37 above.
It is impugned on the basis of being a rolled up plea, too general and vague and simply picking up some or all of the earlier paragraphs otherwise which should be struck out, hence falling with them.
Firstly, the Reply commences in par 1 with a joinder of issues upon the defence save to the extent of admissions. Then at par 5 of the Reply, the matters at par 7 ‑ 35 are relied upon in answer to the limitation defences pleaded in par 54 ‑ 57 and 69 ‑ 71 of the defence.
To the extent that par 38 of the Reply is repeating par 1 or par 5, it is not a further answer to the allegations, it is unnecessary and embarrassing.
Secondly, to work out what it is intended to mean, taking into consideration the circular reference to numerous other paragraphs is too general and vague and it is time consuming.
Paragraph 38 purports to plead in one short all‑encompassing paragraph numerous facts as a global response to defence pleadings going to denials of entitlements claimed by the plaintiffs, limitation issues regarding the partnership, the creation of a new partnership and assumption by it of liabilities of the second partnership, estoppel and laches[74] and discretionary factors relating to relief.
[74] All within par 48 ‑ 68 of the defence.
In so doing, par 38 relies for particulars upon emails, the Mediation Agreement and Interim Agreement and some of their terms, a Crown lease, a pastoral lease and management accounts,[75] the HHS Deed and rights arising from it and a without prejudice letter,[76] the Negotiation Assumptions adopted and conduct by the parties of their affairs in reliance without notice to the contrary,[77] and a plea that at no time have the defendants ever provided the plaintiffs a breakdown of the alleged debt of the second partnership and deficiency.[78]
[75] Par 7 ‑ 22 Reply.
[76] Par 24 ‑ 26 Reply.
[77] Par 29 ‑ 33 Reply.
[78] Par 37 Reply, in reply to par 63 of the defence.
Thirdly, the issue has already been raised as whether confidentiality and privilege has been waived with respect to the Mediation Agreement, Interim Agreement and without prejudice correspondence, and the limited purposes to which that might be put in relation to estoppel or unconscionability. With respect to par 38, the issue again arises as to whether it is intended to plead and rely upon those same matters for broader purposes.
Finally, many of the paragraphs relied upon in par 38 have already been considered and determined to be appropriate for strike out and repleading.
In all the circumstances par 38 should be treated in the same manner, being struck out with leave to be repleaded. It suffices that it may prejudice, embarrass or delay the fair trial of the action.
Disposition
Paragraphs 7 – 10, 12, 14 – 17, 18, 22, 26, 27, 28, 29 – 35, 36 and 38 should be struck out of the Reply and repleaded, preferably in a form of substituted Reply which addresses the broader issues raised.
I do not consider it appropriate to strike out par 19(1)(b), 24(3) or 25.
Within the Reply there are paragraphs containing cross‑references to, and reliance upon, other pleadings.
To the extent of many pleadings being struck out and repleaded as a consequence, care will need to be taken to ensure they are also amended as necessary. While it is not desirable to take an overly pedantic approach, the need for the pleadings to fulfil the basic function of stating the plaintiffs' case with sufficient clarity to allow the defendants to meet it must be achieved.
SCHEDULE
No. Paragraph number O20r19 grounds 1 7-10, 18, 19(1)(b), 22, 24(3), 25, 26, 27* 1(b), 1(c), 1(d) 2 12, 14-17, 26 1(b), 1(c), 1(d) 3 28 1(b), 1(c), 1(d) 4 29-35 1(a), (b), 1(c), 1(d) 5 36B 1(a),1(b), 1(c), 1(d) 6 38 1(b), 1(c), 1(d) * also, departure contrary to O20 r11.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JM
Associate to Registrar Fatharly
9 APRIL 2024
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