Australia NZ Migration Publications v Business and Property Sales Pty Ltd
[2010] FMCA 820
•27 October 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| AUSTRALIA NZ MIGRATION PUBLICATIONS & ANOR v BUSINESS AND PROPERTY SALES PTY LTD & ORS | [2010] FMCA 820 |
| TRADE PRACTICES – Defence and cross-claim – embarrassing and prejudicial – strike out – application to dismiss. |
| Anisminic Ltd v Foreign Compensation Commission [1968] 2 QB 862 Declaratory Orders, 2nd Ed, PW Young QC, Butterworths 1984 |
| First Applicant: | AUSTRALIA NEW ZEALAND MIGRATION PUBLICATIONS |
| Second Applicant: | CHASE MANHATTAN BUSINESS BROKERS PTY LTD |
| First Respondent: | BUSINESS AND PROPERTY SALES PTY LTD |
| Second Respondent: | PNP PUBLICATIONS PTY LTD |
| Third Respondent: | NALA ANNE PERKINS |
| Fourth Respondent: | GLOBAL BUSINESS BROKERS PTY LTD |
| File Number: | BRG 628 of 2010 |
| Judgment of: | Burnett FM |
| Hearing date: | 3 September 2010 |
| Date of Last Submission: | BRG 628 of 2010 |
| Delivered at: | Brisbane |
| Delivered on: | 27 October 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr C. Johnstone |
| Solicitors for the Applicant: | Bennett & Philp Lawyers |
| Counsel for the Respondent: | Mr J. Cremin |
| Solicitors for the Respondent: | Davellin Lawyers |
ORDERS
The cross-claim filed 19 July 2010 be struck out.
The Respondents be granted leave to file an amended cross-claim on or before 10 November 2010.
The defence filed 19 July 2010 be struck out.
The respondents be granted leave to file an amended defence on or before 10 November 2010.
The applicants’ application for summary judgment in the original application in terms of orders sought in paragraph 1 of the applicants’ application filed 28 June 2010 be adjourned.
The Respondents by the original action pay the costs of the Applicants by the original action and those of the fifth to tenth Cross-Respondents by cross-claim being the costs of and incidental to the application in a case including reserved costs to be assessed on a standard basis.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 628 of 2010
| AUSTRALIA NEW ZEALAND MIGRATION PUBLICATIONS PTY LTD |
First Applicant
| CHASE MANHATTAN BUSINESS BROKERS PTY LTD |
Second Applicant
And
| BUSINESS AND PROPERTY SALES PTY LTD |
First Respondent
| PNP PUBLICATIONS PTY LTD |
Second Respondent
| NALA ANNE PERKINS |
Third Respondent
| GLOBAL BUSINESS BROKERS PTY LTD |
Fourth Respondent
REASONS FOR JUDGMENT
The applicants in the original application (the Publishers) and the respondents to the cross-claim (the Officers) have brought an application in a case seeking orders for summary dismissal of the response, the defence and the cross-claim of the first to fourth respondents inclusive (the Brokers) filed 19 July 2010. They also seek that judgment be entered in favour of the Publishers in the original action in terms of orders sought in paragraph 1 of their application filed 28 June 2010 and further consequential orders.
The Publishers seek to strike out the Broker’s cross-claim pleading against the Officers and claim for judgment in the original action on the basis that the material does not disclose any defence or basis for cross-claim.
The Brokers also made a similar application in respect of the Publisher’s principal application. So much was apparent from the contentions contained in paragraph 21 of their submissions, exhibit 6. However at the hearing the Brokers, by their counsel, advised they were no longer pursuing that application.
Given the issues in contention I consider the appropriate approach to be as follows:
a)Consider whether the cross-claim maintained by the Brokers against the Officers ought be struck out;
b)If I determine that the cross-claim ought be struck out consider whether the Officers have summary judgment on the cross-claim in their favour or whether they be given leave to replead;
c)Consider whether the defence of the Brokers ought be struck out;
d)If I determine that the defence of the Brokers ought be struck out, consider whether it is appropriate to proceed to determine the matter summarily against them or whether they ought be given leave to replead.
The cross-claim[1] by the Brokers against the Officers
[1] The pleading is entitled counterclaim. It is variously described as a cross-claim or counterclaim. I have adopted the term cross-claim that being the term employed in both the Federal Magistrate Court Rules and Federal Court Rules. By definition the term cross-claim includes counter-claim – FCR O1 r 4.
The Brokers have joined six cross-respondents being the Officers. The Brokers have not pleaded any substantial allegations of fact against the Officers on which they rely in respect of any relief claimed against any of those cross respondents. Moreover, with respect to the second to sixth cross respondents the Brokers seek no relief against them at all other than that relief detailed in para 10 being an unparticularised claim for damages and costs. The counterclaim otherwise seeks declarations in paragraphs 1 to 5 based upon allegations contained in para 9 that each of the first to fifth respondents by cross-claim were officers of the Publishers and were in control of them and responsible for the Publisher’s conduct. The offending conduct supporting the purported cause of action appears to be alleged at para 8. The allegation is they “have had their good name brought before this honourable court by a party or parties that have the intent of besmirching the good name and business reputation of the third respondent and her companies (namely the first, second and fourth respondents to the principal application) without proper or good cause and by allegations of wrongdoing and breach of the Trade Practices Act without foundation.”
In essence it appears that the Brokers assert a claim against the Officers on the basis that they are persons associated with the Publishers and as the directing minds of the Publishers they have caused the Publishers to engage in nuisance and/or intentional interference with economic relations or other economic torts. None of these matters are particularised.
The Publishers and Officers contend that the relief sought in paragraphs 7, 8 and 9 of the cross-claim pleads relief which is unknown to the law. In broad terms the Publisher’s contention is well founded. However despite the inadequacy of the pleading, which I accept is evident in this case, the nature of the respondents’ complaints are opaquely addressed in their counsel’s submissions filed in response to this application in a case. See exhibits 5 and 6.
Without descending into a detailed examination of the facts in issue in this case it is apparent from the material, a large part of which is strictly inadmissible, there is a long and turgid history between the individuals standing behind the corporations on each side of the record. Where the truth lies in respect of the allegations and counter allegations is a matter for resolution at trial.
Notwithstanding those issues I accept that the Publishers and Officers’ complaint that the relief sought particularly in paragraphs 1 to 5 of the cross-claim is not apposite. The matters in respect of which declarations are sought, in the context of this dispute, are more properly factual matters the proof of which may support a private claim of right. They are matters which properly ought to be the subject of findings at trial. For instance claims for declarations that William Mumford is “the controlling person of the applicant companies” in reality is a claim that he is an officer of the Publisher and that he is a person knowingly concerned in any conduct of the Publisher. As to whether that matter is material depends upon the claim pleaded. Likewise the claim for declarations at paragraph 2 that Mumford is the beneficial owner of shares in the applicant and the allegation at paragraph 3 that Mumford is also “Terry Williams” appears to be directed to Mumford’s being knowingly concerned with the Publisher’s conduct. Those matters are relevant to the imperfectly pleaded allegation pleaded in paragraph 4 as a claim for declaration.
The declaration pleaded at paragraph 5 that Bennett and Philp Solicitors have a conflict does not concern the Officers and clearly in that respect the Brokers have no locus standi.
Generally these allegations are not in themselves proceedings involving a “right” in the sense explained by Lord Diplock in Anisminic Ltd v Foreign Compensation Commission [1968] 2 QB 862 at 910 that “The jurisdiction … to give declaratory judgment is limited to declaring the existence of legally enforceable rights or liabilities”. These matters are further explored in Declaratory Orders, 2nd Ed PW Young QC, Butterworths 1984 at [205]. In fact as the pleading presently stands the declarations seek resolution of discrete matters. They only achieve form when collected together and made the subject of proper compendious allegations. The pleading does not do this. If it were done correctly, as I suspect it could be, there would be no need for any declarations because as allegations of fact those matters would be demonstrated as part of the factual matrix necessary to prove the claim.
The principles concerning the strikeout of pleadings are well settled. Where a pleading discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading or has a tendency to cause prejudice, embarrassment or delay in the proceeding or is otherwise an abuse of process of the court, the court may order the whole or part of the pleading to be struck out; FCR O 11 r 56. A pleading will disclose no reasonable cause if it is “so clearly untenable that it cannot succeed” – General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. The determination of whether the pleading discloses no reasonable cause of action will be made on the assumption that the facts alleged are true; Empire Shipping Co Inc v Owners of the Ship “Shin Kobe Maru” (1991) 32 FCR 78. In determining the application of those principles it is not enough that the pleaded case is weak or has a low prospect of success; Coe v Commonwealth of Australia (1979) 53 ALJR 403. However an application to strike out which involves prolonged and serious argument should only be entertained by a court if it not only harbours doubt about the soundness of the pleading but it is also satisfied that the striking out will avoid the need for trial or substantially reduce the burden of its preparation; Sun Earth Homes Pty Ltd v Australian Broadcasting Corporation (1993) 15 ATPR 46 – 112[2]. A court should only determine a point summarily where a court is satisfied that this can be done appropriately avoiding the necessary expense of going to trial.[3]
[2] This paragraph is sourced from the respondent’s counsel’s submission. It is clearly not his work and the source is not attributed. It does however accurately summarise the relevant principles.
[3] Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] ATPR 41-794 at para 50.
It is a trite proposition that “in order to disclose a reasonable cause of action the statement of claim must contain statements of material facts which support the claims made”; H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242 per Northrop J at 246.
In this case the cross-claim simply fails to plead a reasonable cause of action by its omission to include statements of material fact which support the claims made. While there may be opaque references to facts which are essential to support such a claim it is unfair to the respondents to the cross-claim to expect them to respond to such opaque allegations. In addition its form is embarrassing. Furthermore the absence of a proper pleading denies the applicants an opportunity to make appropriate requests for particulars of the various facts alleged in support of the cross-claim. The difficulties occasioned by these circumstances was discussed by French J (as he then was) in The Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 223.
In the circumstances I consider the cross-claim should be struck out in its entirety.
Dismissal of cross-claim
The Publishers and Officers also seek to have the cross-claim dismissed. In assessing whether the court should deal with a matter summarily Driver FM in Vivid Entertainment LLC & Ors v Digital Sinema Australia Pty Ltd & Ors [2007] FMCA 157 at 30 detailed the principles that ought be applied. Those principles are:
a)The court must be cautious not to do an injustice by granting summary dismissal;
b)There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary dismissal is sought to succeed at the final hearing;
c)Evidence of an ambivalent character will usually be sufficient;
d)Unless only one conclusion can be said to be reasonable the court’s jurisdiction cannot be enlivened;
e)The court should have regard to the possibility to an amendment in considering whether one conclusion is possible.
In this case for reasons that I have earlier noted there is some material which, if accepted, could found the basis for an action in one of the economic torts. While it has not been appropriately pleaded at this time it is a matter which I consider the respondents ought be afforded an opportunity to address. In the circumstances summary dismissal of the cross-claim would in this case be unjust and in my view such an order presently would be inappropriate. I will not order summary dismissal of the cross-claim at this time.
Amended cross-claim for which leave is sought
The Brokers seek leave to deliver an amended cross-claim which it is expected will replace in its entirety the original cross-claim. That proposed pleading is also prejudicial and embarrassing for the same reasons addressed in respect of the original cross-claim. Furthermore insofar as it seeks to introduce accessorial liability by reference to the matters alleged in paragraph 3C those allegations are deficient. In addition it is complained that the loss asserted in paragraph 6 of the pleading it fails to plead a causal link between the conduct complained of and such loss. The cross-claim is deficient and embarrassing on this point alone. Such an allegation is fundamental to the cause of action. See Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (supra) at 222. Its omission is fatal to the pleading for in its absence it does not plead a sustainable cause of action.
In the circumstances and in particular given my earlier views concerning the deficiencies evident in the original cross-claim it is inappropriate to give the respondent leave to file the proposed amended cross-claim. The deficiencies in that document can be addressed in any further pleading which may be delivered consequent upon orders made following this application.
Strike out of defence
In their submissions the Publishers complain that the defence itself suffers numerous deficiencies. For instance it is contended that the defence whilst divided into paragraphs is not consecutively numbered and does not contain a discrete allegation of fact in each separate paragraph. While the Publishers accept that this is a relatively minor complaint the effect of the deficiency is to add to the difficulty that the Publishers have in understanding the defence which might be run at trial. This is evidenced from paragraph 1 of the defence. For instance, its expression gives rise to some confusion as to which respondent is admitting which paragraphs. Paragraph 2 of the defence compounds that problem.
Furthermore it is complained that the pleading is generally illogical and fails to respond to the facts as pleaded against the Brokers in such a manner as to allow the Publishers to sensibly understand the basis on which the case will be defended. For instance paragraph 4 of the defence appears to be the Broker’s response to paragraph 8 of the statement of claim. However it is unresponsive to the pleaded allegations, is discursive and is largely incomprehensible. I consider that the criticisms made by the Publishers of the Broker’s defence are well founded.
The Publisher also complains that the defence offends FCR O 11 r 13 which requires a party pleading a defence to specifically traverse each matter which it does not intend to admit. FCR O 11 r 13(2) requires a traverse must be either a specific denial or a specific non-admission. Every paragraph of the defence from the second paragraph (i) and following offends that rule as not one of those paragraphs pleads a specific traverse.
In addition the Publishers complain that the defence is so poorly particularised that any request for particulars would result in particulars being more extensive than the pleading itself. Specifically it complains of the absence of adequate particulars in respect of allegations contained in the second paragraph (i), the second paragraph (1)(a)(ii), second paragraph (2) and second paragraph (4)(a), (b), (c), (d) and paragraph (5). I accept that complaint as reasonable in this case.
For those reasons the Publishers contend that the Brokers should not be permitted to defend the proceedings but that their defence should be struck out.
Given the patent difficulties with the defence the only appropriate course is to strike it out entirely and require the Brokers to re-plead in a manner consistent with law.
Summary dismissal of defence and judgment for the Publishers
The Publishers dismissal application needs to be considered against the background of its general attitude to the relief presently claimed. In an affidavit filed in support of this particular application the Publisher’s solicitor Mr Kenneth Philp deposed that for the purposes of the hearing of this particular application, that is for a strike out and dismissal of the current defence, and in order to bring the action to a speedy conclusion, the Publishers instructed him they did not seek final orders on the application for damages, interest or corrective advertising. The Publishers would waive those claims if the court was prepared to summarily dismiss the defence and grant the relief sought by the Publishers to the original application, that is final injunctive relief.
Considered alone and in circumstances where the Publisher does not press for damages or other relief beyond the granting of permanent injunctions there is arguably a basis to consider summary relief on the limited basis contended for by the Publisher. To do so would require the court to consider the Broker’s case at its highest in respect of relevant matters. That would include accepting the Broker’s contention that the reference to 10 on the magazine spine after the word Volume was indeed a reference to the year 2010 and that the migration services representation alleged in paragraph 10 of the Publisher’s statement of claim ought be considered against the Broker’s contentions at paragraph 6 of the defence. At page 141 the magazine states that the Broker “works in association with migrant agents within Australia and overseas.”
Although for the Publisher it may be desirable to determine that part of the application summarily at this time, given my earlier ruling that the Brokers ought be afforded one opportunity to replead their cross-claim, it may not be appropriate at this time to split the case as will occur if I make orders as suggested by the Publishers. This is particularly given that the Publisher in making its suggestion did so on the basis that it would forgo other remedies such as any potential damages claim it would have against the Brokers. Undoubtedly if the Brokers seek to pursue any claim against the Officers the Officers may wish to answer any such cross-claim by a claim for indemnity from the Publishers in respect of any damages to which they may have a liability.
It follows that it may well be premature to proceed to summarily dismiss the defence. The defence is patently inadequate and ought be struck out. However the Brokers should be afforded an opportunity to deliver a proper pleading.
In the circumstances I do not consider it would be just and fair to all parties to permit the matter to be resolved summarily at this time. In the event the Brokers fail to properly plead or prosecute a cause of action then the Publishers should renew this application.
Summary
In summary the Publishers and Officers complain that the Brokers cross-claim and proposed cross-claim are prejudicial and/or embarrassing and ought be struck out and summarily dismissed. I accept their complaints that the pleadings are prejudicial and embarrassing. There does however appear to be a possible claim, albeit one to be tested at trial, and accordingly the Brokers ought be permitted an opportunity to properly plead its case. The Brokers will be allowed that opportunity. In any event the Broker’s defence is defective and ought be struck out.
In the ordinary course given concessions by the Publishers concerning final remedies sought consideration would be given to summarily disposing of the Publishers’ limited claim for final injunctions. However given the present uncertainty as to the Broker’s cross-claim it is not appropriate to make any final orders at this time.
Costs
The Publishers have sought the costs of this application. The prospect of an application for summary disposal of the Brokers’ pleadings was addressed on 21 July 2010 at a directions hearing before me. The matter has been alive between the parties since at least that time. Following my review of the filed defence and cross-claim and a consideration of the proposed amended defence and cross-claim it is plain that the Brokers’ pleadings are clearly deficient. This ought to have been plain to them from the time of filing their original defence and cross-claim on 19 July 2010. The Brokers have failed to sustain their pleading on the return of the application and it follows that they have been largely unsuccessful. Although the Brokers may contend that the Publishers have not been successful in their strike out application, that application has not proceeded so as to permit the Brokers an opportunity to properly plead any case that they may seek to plead. While no dismissal orders have been made that is not to say that dismissal orders will not be made if the Brokers cannot address the current deficiencies. The Publishers have been largely successful to date and in my view costs to date ought follow the event.
Orders
The cross-claim filed 19 July 2010 be struck out.
The Respondents be granted leave to file an amended cross-claim on or before 10 November 2010.
The defence filed 19 July 2010 be struck out.
The respondents be granted leave to file an amended defence on or before 10 November 2010.
The applicants’ application for summary judgment in the original application in terms of orders sought in paragraph 1 of the applicants’ application filed 28 June 2010 be adjourned.
The Respondents by the original action pay the costs of the Applicants by the original action and those of the fifth to tenth Cross-Respondents by cross-claim being the costs of and incidental to the application in a case including reserved costs to be assessed on a standard basis.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Burnett FM
Date: 26 October 2010
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