Australian Retirement Communities Pty Ltd v Port Phillip Pty Ltd
[2000] VSC 30
•15 February 2000
SUPREME COURT OF VICTORIA
COMMERCIAL LIST Do not Send for Reporting Not Restricted
No. 2052 of 1997
F.4792
B E T W E E N:
| AUSTRALIAN RETIREMENT COMMUNITIES PTY LTD and | Plaintiff |
| PORT PHILLIP PTY LTD | Defendant |
| A N D B E T W E E N | |
| PORT PHILLIP PTY LTD (ACN 057 988 351) | Plaintiff by Counterclaim |
| and | |
| AUSTRALIAN RETIREMENT COMMUNITIES PTY LTD | Firstnamed Defendant by Counterclaim |
| and | |
| CHRISTOPHER JOHN DALY | Secondnamed Defendant by Counterclaim |
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JUDGE: | Warren J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 4 February 2000 | |
DATE OF JUDGMENT: | 15 February 2000 | |
CASE MAY BE CITED AS: | Australian Retirement Communities Pty Ltd v Port Phillip | |
MEDIA NEUTRAL CITATION: | [2000] VSC 30 | First revision 15 February 2000 |
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Supreme Court Rules, Ch. I, Order 23.01, 23.02, 23.03 – Summary dismissal – Striking out pleading - Trade Practices Act 1974, ss.47(6), 75B and 82 – Exclusive dealing – Whether condition required to be imposed on contracting party or corporation connected to contracting party – Whether necessary for a condition to be imposed in order to constitute a breach under s.47(6) – Questions of fact and law to be determined at trial
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff by counterclaim/respondent | Mr T. Di Lallo | Russell Kennedy |
| For the Second Named Defendant by counterclaim/applicant | Mr P. Nugent | Minter Ellison |
TABLE OF CONTENTS
Background to Proceeding.............................................................................................................................................. 1
The Application.................................................................................................................................................................... 5
Submission that alleged conduct would not amount to a breach of s.47(6)................................ 6
Submission that the requisite condition was not imposed for the purposes of s.47(6).............. 8
Submission that Daly lacked the requisite knowledge under ss.47(6) and 75B(1)(a)................ 11
Submission that there was never a nomination for the purposes of clause 5.1 of the
management agreement....................................................................................................................................... 12
HER HONOUR:
Background to Proceeding
The principal proceeding was brought by Australian Retirement Communities Pty Ltd ("ARC") against the defendant Port Phillip Pty Ltd ("Port Phillip") by writ filed as long ago as 28 July 1997. The proceedings were commenced following the purported termination by Port Phillip by way of notice given on 2 May 1997 of a management agreement between ARC and Port Phillip. In the principal proceedings ARC claimed that the termination was invalid and constituted a repudiation which was accepted and whereby ARC became entitled to damages for breach of the management agreement. Port Phillip denied that the Notice of Termination was invalid and counterclaimed for damages for breach of the management agreement.
The background to the matter was that in 1992 Port Phillip purchased from a mortgagee the Port Phillip Retirement Village at Altona. The property consisted of residential facilities for elderly persons. At the time of the purchase by Port Phillip the property was partially developed and consisted of 22 villa units. Planning permission existed for the ultimate extension of the development to comprise 145 units. ARC represented itself as being "in the business of development and management of retirement villages and the procurement of personnel for the marketing of retirement villages". Under the management agreement dated 6 May 1993 ARC undertook that for the term of the agreement it would provide expertise of the type represented to Port Phillip. In addition to the management agreement, ARC and Port Phillip entered into a project agreement and a construction agreement both dated 6 May 1993. At the time the three agreements were entered into the parties envisaged that the retirement village at Altona would be completed in stages over a staggered period of three or four years and that ultimately it would consist of approximately 160 units. By way of general background, ARC forms part of a conglomerate known as "the Knowles Group".
The management agreement provided that it was to operate for a term of 10 years commencing on 7 May 1993 but pursuant to the agreement (clause 7) Port Phillip was entitled to bring the management agreement to earlier termination in the event of certain circumstances. The management agreement, in particular, provided that if the expenses and costs of marketing exceeded the cost of those items as set out in a document referred to as the "project budget" and which was annexed to the management agreement Port Phillip was entitled to give ARC written notice of termination and the management agreement would be terminated three months after the date of that notice. In its defence Port Phillip contended that when the notice of termination was given there was an excess of expenses and costs over budget within the meaning of the management agreement whereas ARC denied that such was the position. In essence, the dispute between ARC as plaintiff and Port Phillip as defendant turned on whether or not the Notice of Termination purportedly served by Port Phillip on ARC was valid or not. The determination of that matter in turn turned upon the proper construction of a particular clause in the management agreement – clause 7.
The parties sought a determination of a preliminary question with respect to the construction of the management agreement and an issue of estoppel. Judgment was delivered by Chernov J on 9 December 1996 sitting as a judge at that time in the Commercial List. The learned judge found in favour of Port Phillip in that he found a construction of the relevant provisions of the management agreement in accordance with the submissions made by Port Phillip. ARC appealed and such appeal was dismissed by the Court of Appeal on 11 August 1999.
In its amended statement of claim ARC alleged that it had suffered loss and damage. Included in the particulars of loss and damage was a claim relating to legal fees of approximately $94,000 for the period 1998-2003. The legal fees appeared to relate to fees charged by the second defendant by counterclaim, one Christopher Daly ("Daly"). Port Phillip joined Daly as second defendant by counterclaim. In its defence Port Phillip alleged that insofar as ARC claimed damages with respect to the provision of services by Daly it denied such claim. Port Phillip alleged, further, that if it, that is Port Phillip, knew that Daly was acting as solicitor for ARC it did not know of any special retainer between ARC or the connected entity known as "the Knowles Group" and Daly at the time that the main agreement was entered into. Furthermore, Port Phillip alleged that there was no evidence that there was an agreement between ARC and Daly and, also, that ARC did not have an obligation to pay Daly any amounts on an annual basis but only for the value of services provided by him to ARC. Port Phillip alleged, further, that Daly had failed to provide a bill of costs with respect to the services he alleged to have provided. In addition, Port Phillip alleged that Daly provided legal services for "the entire Knowles Group of companies" of which ARC was a small part and that the claims for loss and damage by ARC against Port Phillip should be assessed and reduced accordingly.
Clause 5 of the management agreement between ARC and Port Phillip provided:
"LEGAL SERVICES AND PROPRIETARY RIGHTS
5.1The Proprietor covenants and agrees with the Consultant to appoint to act for it in the development of the Village (except where matters concerning dealings between the parties are in issue) and the contracts and conveyancing of the Units (including the Service Agreement) a Solicitor or firm of Solicitors as shall be nominated from time to time by the Consultant and approved by the Proprietor whose approval shall not be unreasonably withheld and will not be withheld in the event that the Solicitor nominated (or any firm with which he may from time to time be associated is Mr. C.J. Daly.
5.2The Proprietor acknowledges that the documentation for the sale and repurchase of Units is subject to copyright and that the Proprietor is only licensed to use that documentation for the Village and, except as provided in clauses 7.5(c) and 10.2(c), only while this agreement is current and on foot.
5.3For the purposes of clarification, the documentation for the sale and purchase of Units is as contained in the agreement to purchase, agreement to repurchase and the Service Agreement, copies of which are annexed hereto and marked 'C' 'D' and 'B' respectively or such varied agreements as are from time to time agreed to between the parties hereto.
5.4The Consultant covenants with the Proprietor that if at any time the Consultant alters the form of any of its documentation for the sale and purchase of units at any of its other retirement villages then it will notify the Proprietor of those alterations and the Proprietor may then at its option require those alterations to be made to the future documentation for the sale and repurchase of Units at the Village."
For the purposes of the management agreement "the Proprietor" as referred to in clause 5.1 of the agreement was ARC and "the consultant" was Port Phillip. The reference to "the Village" was to the retirement village at Altona and which I shall refer to as "the property". Clause 5 of the management agreement appeared on its face to provide that ARC agreed with Port Phillip to appoint a solicitor nominated by Port Phillip but approved by ARC to act for the development of the property and the contracts and conveyancing related to units within the property. ARC claimed that Daly was the solicitor appointed under clause 5.1 of the management agreement. In its defence Port Phillip alleged that the obligation under clause 5.1 of the management agreement that Port Phillip use the services of Daly contravened the exclusive dealing provisions of s.47(6) of the Trade Practices Act 1974. It was alleged that as a consequence, clause 5.1 was illegal and void, alternatively, unenforceable. Port Phillip alleged that as a result of the illegal or unenforceable appointment of Daly as solicitor for the purposes of clause 5.1 of the management agreement it had suffered loss and damage or alternatively might lead to a finding that Port Phillip repudiated the management agreement.
By counterclaim Port Phillip alleged against Daly that he was the solicitor who acted for ARC in the negotiation of the terms of the management agreement, drafted that agreement, in particular clause 5.1, and thereby was a person who "aided, abetted, counselled or procured ARC to contravene s.47(6) of the Trade Practices Act. Port Phillip alleged that as a consequence it was entitled to relief against Daly by virtue of s.75B of the Trade Practices Act and has suffered loss and damage under s.82 of that Act. In addition, Port Phillip alleged in its counterclaim against Daly that moneys paid by Port Phillip to Daly were moneys paid under a void or illegal contract, alternatively, were paid under mistake and are thereby recoverable by Port Phillip against Daly. In his defence to the counterclaim Daly broadly denied the allegations of Port Phillip.
The Application
By summons dated 15 December 1999 Daly sought dismissal of the counterclaim proceeding against him brought by Port Phillip pursuant to Order 23.01 or 23.03, alternatively, that the defence and counterclaim be struck out pursuant to Order 23.02. The summons was adjourned by Byrne J to the directions day of the Commercial List on 4 February 2000 and, accordingly, the matter comes before me. At the outset I would make the observation that whilst counsel for both parties, that is Port Phillip and Daly, in the interlocutory hearing have provided written submissions with respect to legal argument the court was not assisted by any summary of facts and pleadings. The court file consists of six volumes and the relevant pleadings are interleaved across those files. The court would have been much assisted by a summary of facts and pleadings for the purposes of the present application. Nevertheless, I have endeavoured (bearing in mind that the application is an interlocutory hearing listed on a directions day) to summarise the salient facts and allegations.
On the return of the summons on Directions day in the Commercial List Mr P. Nugent of counsel appeared for Daly, the applicant, and Mr T. Di Lallo of counsel appeared for Port Phillip, the respondent. At the outset Mr Nugent conceded that the onus upon him was a very high burden on the basis of the principles expressed by Dixon J in Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 92, also, Webster v Lampard (1993) 177 CLR 598, 603 and, more recently, by the Court of Appeal in Coles Myer Limited v Bowman (1996) 1 VR 446. With respect, the statement of the relevant principles set out by Charles JA (with whom Brooking and Callaway JJA concurred) in Coles Myer (at 549) conveniently states the law:
"In my view, the decision of the primary judge to dismiss the appeal was plainly correct. One does not need to cite authority for the propositions that: (a) an application to strike out a statement of claim on the grounds that it does not disclose a cause of action is to be refused unless the claim which is attacked is so clearly untenable that it cannot possibly succeed; and (b) the plaintiff's right to state his own case as he will, and to plead the facts which he contends will ground his claim, is not to be restricted unless it appears on the face of the pleading that the connection contended for between the facts alleged and the claims which are made is bound to fail."
The application for dismissal was brought on four separate bases. Firstly, that on the proper construction of s.47(6) of the Trade Practices Act the conduct alleged against Daly, even if proven, would not amount to a breach. Secondly, there was never a condition imposed by the terms by the of the management agreement such as to find a breach of s.47(6) of the Trade Practices Act. Thirdly, even if ARC breached s.47(6) of the Trade Practices Act, Daly lacked the required knowledge to have aided, abetted or counselled or procured that breach of the Act. Fourthly, if clause 5.1 of the management agreement properly construed amounted to a breach if acted upon there was no nomination pursuant to the management agreement and, therefore, there could never have been a breach of s.47(6) of the Trade Practices Act.
1. Submission that alleged conduct would not amount to a breach of s.47(6)
Section 47 of the Trade Practices Act proscribes the practice of "exclusive dealing". Section 47(6) forms part of the Trade Practices Act concerned with preventing "third line forcing" (see J.D. Heydon, Trade Practices Law Ch. 6; also F.H. Callaway, "third line forcing" (1979) 53 ALJ 125). In essence, third line forcing arises when seller one says to A: "If you want good X from me, you must buy good Y from seller two" (F.H. Callaway, op cit, p.125). Specifically, s.47(6) proscribes the supplying of goods or services on condition that the purchaser acquires other goods or services from a third party. "Services" is defined in s.4(1) of the Trade Practices Act to include rights granted under a contract. Section 47(6) provides:
"(6) A corporation also engages in the practice of exclusive dealing if the corporation ‑
(a) supplies, or offers to supply, goods or services;
(b)supplies, or offers to supply, goods or services at a particular price;
or(c)gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation, on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person."
With respect to his first submission, Mr Nugent argued that s.47(6) of the Trade Practices Act did not prohibit ARC from compelling Port Phillip to acquire services from Daly rather prohibited ARC from compelling a corporation ("related to" Port Phillip) to acquire services from Daly as a condition of supply to Port Phillip. Mr Nugent submitted for Daly that s.47(6) of the Act required ARC to make the offer of supply to Port Phillip conditional upon a body corporate related to Port Phillip acquiring goods or services of a particular kind. Such a construction involves treating the words in sub‑s.(6) as requiring a condition to have been imposed on Port Phillip that it acquire services from a body corporate related to ARC. As Daly was not a "body corporate" or related to ARC, ARC and thereby Daly were not caught by the statute. In my view the submission cannot succeed on a proper construction of s.47(6) of the Act. The authorities and writers in the field have not construed the provision in the manner submitted on behalf of Daly. The circumstances whereby exclusive dealing might arise was conveniently described by Deane J in Re Ku-ring-gai Co-operative Building Society (No. 12) Limited (1978) 35 FLR 134):
"The practice of exclusive dealing does not necessarily involve the imposition of any condition. It involves supply upon a condition. The condition may well have been imposed by the recipient of supplies. It may have been imposed by some third party. It may arise, by implication, from all the circumstances in which the goods or services were supplied. … The section does not look to the origin of the condition upon which there is a supply of services. The section looks to the supply of services upon that condition."
The courts have taken the approach of examining all the circumstances of supply. In my view the circumstances of clause 5.1 of the management agreement may be open to a number of constructions. It is not appropriate, therefore, to dismiss the defence and counterclaim as sought by Daly. To put the matter simply, at this point the "untenable" principle stated in Dey and Coles Myer cannot be made out.
2.Submission that the requisite condition was not imposed for the purposes of s.47(6)
Generally the authorities that have considered s.47(6) of the Act have been concerned with circumstances, for example, where a supplier has refused to supply goods or services on the condition that the person to whom the goods or services are to be supplied will acquire goods or services from another person. A typical example is where a car dealer might offer a larger trade‑in to a buyer if the buyer obtained finance through the car dealer's preferred credit provider (see Trade Practices Commission v Tepeda Pty Ltd (1994) ATR 41-319).
On its face clause 5.1 of the management agreement provided for the appointment of a solicitor by ARC, such solicitor to be nominated by Port Phillip and approved by ARC. Clause 5.1 provided, further, that approval of the solicitor nominated by Port Phillip would not be unreasonably withheld by ARC in the event that the solicitor so nominated was associated with Daly. It is arguable that in applying s.47(6) of the Act to clause 5.1 of the management agreement it is not immediately apparent that clause 5.1 imposed a condition upon Port Phillip with respect to the retainer of Daly. However, the fact that a position is arguable is insufficient. The proper test for summary dismissal is that the position must be untenable.
In SWB Family Credit Union Limited v Parramatta Tourist Services Pty Ltd (1980) 48 SLR 445 a credit union reached agreement with a travel agent pursuant to which the travel agent paid the credit union a commission for travel booked by its members with the agent. The credit union credited the amount received to the accounts of the members to whom the travel payments related. Another travel agent failed in an application for an injunction for breach of s.47(6) of the Trade Practices Act because the services of crediting the rebates was not provided by the credit union "on condition" in the requisite sense. The Full Court of the Federal Court held that the imposition or performance of a condition was pivotal to the construction of s.47(6) of the Trade Practices Act. Northrop J (at 464-5) observed:
"The Act relates to trade practices and Pt IV is headed 'Restrictive Trade Practice'. Section 47, which is within Pt IV, prescribes the practice of exclusive dealing. The purpose of the section is to proscribe conduct which creates a restrictive trade practice which may affect adversely persons competing with the favoured person. This is illustrated by Re Kur‑ring‑gai Co‑operative Building Society (No. 12) Ltd. (7) and Trade Practices Commission v. Legion Cabs (Trading) Co‑operative Society Ltd. In the former case the building society required members to whom it lent moneys on the security of an interest in real estate to insure that interest with a person nominated or approved by the society. In the second case, the operative society required members who received the benefit of radio services provided by it in purchase petrol and oil from designated service stations. In each case the requirement by the societies imposed an obligation upon the persons to whom they supplied a service to acquire goods or services from other persons designated or approved by the society and to the exclusion of persons carrying on similar businesses to those designated or approved by the society. In each case the arrangement was in the form 'If the society does this (supplies the service or offers to supply the service) then you will (must) do that (acquire services from a nominated insurer or acquire goods from nominated service stations)'. In each case the requirement can be said to be a condition which has attributes of compulsion and futurity. In each case persons competing with the nominated insurer or the nominated service station were affected adversely since the person upon whom the obligation was imposed was not free to acquire services or goods from them.
In the present case, the alleged condition or obligation has neither of the attributes of compulsion or futurity. Persons competing with Alliance are not affected adversely in the requisite sense. A member of the credit union desirous of acquiring travel services is free to deal with any person engaging in the travel agency business. He is not required to perform a series of acts over an extended period. He is not required by a condition or obligation to acquire the services of Alliance and Alliance only. If he does acquire the services of Alliance he need not disclose his membership of the credit union. If he does acquire the services of Alliance and discloses that he is a member of the credit union, then upon him paying the full costs of the travel services, and upon him entering on his travels, Alliance is required under its arrangement with the credit union to make a commission rebate to the credit union and the credit union then supplies its services to the member. This arrangement is in the form: 'If you do that we will (must) do this.' No condition in the nature of an obligation is imposed upon the person dealing with the corporation. At no time is that person under any obligation to perform or observe the alleged condition. Any obligation that may arise is imposed upon the corporation. This conduct does not come within the conduct described by s. 47(6) of the Act. It is not to be analysed in the same form as in the society cases."
I adopt the analysis of Northrop J. It follows, therefore, that in order for Port Phillip to succeed against Daly it must be able to establish that ARC offered services to Port Phillip on the condition that Daly be retained as solicitor. In its further amended defence and counterclaim filed on 6 October 1999 Port Phillip purports to allege that there was such an obligation under clause 5.1 of the management agreement (see paragraphs 24G-24J). The pleading makes references to "the obligation" contained in clause 5.1 of the management agreement that Port Phillip use the services of Daly. The "obligation" is not described or particularised. It is arguable that on a proper reading of clause 5.1 of the management agreement there was not any obligation or, for that matter, a condition such as to satisfy the test laid down by the Full Court of the Federal Court in SWB Family Credit Union Limited v Parramatta Tourist Services Pty Ltd, supra. However, the determination of this issue would involve a proper consideration at trial of the construction of clause 5. Furthermore, it would appear from an affidavit sworn by one Eduard Sent on 28 January 2000 on behalf of Port Phillip that there will be circumstances alleged at trial surrounding the negotiation, drafting and execution of clause 5 of the management agreement that arguably may affect the interpretation of any obligation under clause 5.1. As the pleading stands the matters adverted to by Mr Sent in his affidavit are not pleaded or the subject of particulars. In my view the mere assertion in the pleadings of an obligation arising under clause 5.1 of the agreement is insufficient. The pleading should allege all facts relied upon to support the allegation of the relevant obligation.
Further, in its counterclaim Port Phillip alleges that Daly by virtue of acting for ARC in the negotiation of the terms of the agreement and by virtue of writing all or part of that agreement aided, abetted, counselled or procured ARC to contravene s.47(6) of the Trade Practices Act and by reason thereof Port Phillip is entitled to relief against Daly pursuant to s.75B of the Act and that, therefore, Daly is liable to Port Phillip pursuant to s.82 of the Trade Practices Act. Section 82 of the Act permits a person who has suffered loss or damage as a result of the conduct of another person done in contravention of a provision of Part IV or V to recover loss or damage against that other person or, significantly for present purposes, against any person involved in the contravention. Section 75B of the Act provides that a person is involved in a contravention of a provision of Part IV, IVA or V who, among other matters, has aided, abetted, counselled or procured the contravention (s.75B(1)(a)). In order for Port Phillip to make out its claim that Daly aided, abetted, counselled or procured a breach by ARC of s.47(6) of the Act it would be necessary for Port Phillip to be able to prove that ARC itself breached s.47(6) (see Stationers Supply Pty Ltd v the Victorian Authorised Newsagents Association Limited & Ors (1993) 44 FCR 35, 36). For the reasons already expressed it may be arguable that ARC could not have breached s.47(6) of the Trade Practices Act as no requisite condition was imposed in clause 5.1 of the management agreement. If it was held that there was no such condition it would follow that a breach of s.47(6) could not have occurred, Daly could not have aided and abetted a contravention of the section and be liable to Port Phillip pursuant to ss.75B and 82 of the Trade Practices Act if it was found as a fact that a contravention by ARC had not occurred. Again the ultimate determination of this matter turns upon a full consideration of the construction of clause 5.1 of the management agreement and the surrounding circumstances. It appears, further, that from the matters deposed to by Mr Sent in his affidavit that there are other matters that Port Phillip will wish to allege against Daly at the trial. It follows the second submission relied on to support dismissal of the defence and counterclaim is not made out.
3.Submission that Daly lacked the requisite knowledge under ss.47(6) and 75B(1)(a)
The third submission is not a matter that can be determined on a summons brought under Order 23 for summary dismissal. It was submitted by Mr Nugent on behalf of Daly that as Daly had deposed on affidavit in support of his summons that he did not have knowledge of the matters alleged against ARC with respect to the asserted breach under s.47(6) of the Trade Practices Act and as such statement by Daly was not rebutted by Port Phillip it was open to find the allegations or facts alleged by Daly as made out. Such approach would involve shifting the burden from the applicant, Daly to the respondent, Port Phillip. In my view such an approach does not accord with the principles expressed in Dey v Victorian Railways Commissioners and Coles Myer Limited v Bowman. It follows that the third submission for Daly fails.
4.Submission that there was never a nomination for the purposes of clause 5.1 of the management agreement
The remaining submission was that there was never a nomination pursuant to the management agreement of Mr Daly as the solicitor for the purposes of clause 5.1 of that agreement and that, therefore, there could not have been a breach of s.47(6) in any event.
There was a clear dispute on the facts before me as to whether or not there had been a nomination pursuant to the management agreement. Daly in an affidavit deposed that there had not been such a nomination. The allegation by Daly was not rebutted in any way by or on behalf of Port Phillip. Mr Nugent for Daly submitted that as there was no rebuttal of the facts by Port Phillip I was entitled to accept the statement by Daly in his affidavit with respect to nomination as a correct fact. I was also urged by Mr Nugent to draw an adverse inference from the fact that Port Phillip had not filed any affidavit to rebut the assertions by Daly and, furthermore, had not sought to cross‑examine Daly on this matter. In my view the submission entirely misconceives the obligations upon an applicant for summary dismissal under Order 23.01 or 23.03. If I adopted the approach urged by Mr Nugent it would involve shifting the burden from the applicant Daly to the respondent Port Phillip. For the reason of the obvious principles expressed in Dey v Victorian Railways Commissioners and Coles Myer Limited v Bowman it would be an entirely inappropriate course to embark upon. Ultimately, the issue of whether or not there was a nomination for the purposes of clause 5.1 of the management agreement is a matter that will be determined on evidence at trial. It is not a matter appropriate for determination on an application under Order 23.01 or 23.03.
The summons filed on behalf of Daly seeks relief by way of dismissal of the counterclaim pursuant to Rule 23.03 or pursuant to the discretion under Order 23.01. Further relief is sought by way of the striking out of the further amended defence and counterclaim dated 27 September 1999 pursuant to Order 23.02. This proceeding has a long history and is quite complex. So much is borne out by the pleadings and the schedules thereto together with the various affidavits filed in support of and in opposition to the summons before me. It may be that upon having the benefit of reading these reasons the second defendant by counterclaim, Daly, may wish to re‑visit the pleadings. I observe that there are a number of allegations contained in the further amended defence by Port Phillip against Daly. Those allegations are repeated in the counterclaim but do not appear to be relied upon for the purposes of seeking relief by way of loss or damage by Port Phillip against Daly. As matters presently stand I consider it would be appropriate to give Port Phillip the opportunity to reconsider its pleading against Daly. Accordingly, for the reasons stated I have reservations as to paragraphs 24I, 24J, 24K and 24L of the further amended defence and paragraphs 56, 57, 58 and 59 of the counterclaim. I make the additional observation that insofar as paragraph 24L of the further amended defence and paragraphs 56 and 59 of the counterclaim relate to allegations outside the claim made under s.47(6) of the Trade Practices Act such paragraphs should be reconsidered in any event.
The appropriate course in this matter is for Port Phillip to be given the opportunity to re‑plead its amended defence and counterclaim insofar as it relates to Daly. I indicate that in the absence of amendments being made, in particular, in response to these reasons and so as to allege the relevant facts deposed to in the affidavit of Mr Sent Port Phillip will be at risk of orders pursuant to Order 23.02.
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