Authentic Systems Pty Limited v Woolworths Limited
[2003] ACTSC 110
AUTHENTIC SYSTEMS PTY LIMITED v WOOLWORTHS LIMITED
[2003] ACTSC 110 (12 December 2003)
PROCEDURE – pleadings – striking out - amendments
Trade Practices Act 1974 (Cth), s 52
Supreme Court Rules O 23 r 6; O 29 r 4; O 32 r 1; O 66 r 7
Cropper v Smith (1884) 26 Ch D 700
Tildesley v Harper (1878) 10 Ch D 393
Chadwick v Bridge (1951) 83 CLR 314
No SC 149 of 2003
Coram: Master Harper
Supreme Court of the ACT
Date: 12 December 2003
IN THE SUPREME COURT OF THE )
) No SC 149 of 2003
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:AUTHENTIC SYSTEMS PTY LIMITED
Plaintiff
AND:WOOLWORTHS LIMITED
Defendant
ORDER
Coram: Master Harper
Date: 12 December 2003
Place: Canberra
THE COURT ORDERS THAT:
The application made by notice of motion dated 13 November 2003 be dismissed.
The plaintiff have leave to further amend the amended statement of claim on or before 30 January 2004 conformably with these reasons.
The costs of the application be costs in the cause.
Until some twelve months ago, the plaintiff was the sublessor and the defendant the sublessee of a warehouse at Hume. The sublease provided for a term ending on 31 October 2002, with a provision for holding over in the following terms:
6. We mutually agree and declare:
(c) that if you occupy the premises after the expiry of the term then you do so as tenant from month to month at a rent of 1/12 of the annual rent payable during the last year of the term and on the same terms of this lease so far as they can be applied. Either of us may end that tenancy by one month’s notice in writing to the other ending on any day;
The defendant remained in occupation of the premises after the end of the term, triggering the provision.
Relevantly, the sublease also contained the following provisions:
3.You covenant with me that as to the premises you:-
…
(e)will at your cost keep (and at the expiry or other ending of the term give up) them in repair to my reasonable satisfaction fair wear and tear and damage by fire, storm , tempest, lightning, flood or earthquake excepted. This clause does not require you to effect repairs of a structural nature;
…
(s)will at the expiry or other ending of the term immediately and carefully remove all your fixtures. If you do damage in that removal you will pay to me on demand the cost of repairing it and I can recover that cost from you as liquidated damages. If you have not, within 7 days of the expiry or other ending of the term, removed your fixtures, fittings and goods in the premises, those things become my absolute property and I may dispose of them as I wish;
The plaintiff commenced these proceedings on 25 March 2003. The nature of the action was set out as follows: “Claim for loss of rent and damages incurred and to be incurred for making good the plaintiff (sic) premises arising from a breach of lease by the defendant.” The relief claimed was damages, costs and interest.
Clause 11 of the statement of claim accompanying the originating application was in the following terms:
11. The defendant subsequently gave notice pursuant to clause 6(c) of the sublease bringing that month to month tenancy to an end on the 8th January 2003.
The statement of claim then asserted that the defendant failed to deliver up possession of the premises on 8 January 2003 in good repair.
A defence was delivered on 23 June 2003 responding to paragraph 11 of the statement of claim as follows
7. Save that the defendant admits that it gave a notice of termination of the monthly tenancy pursuant to clause 6(c) of the sublease on 9 December 2002 terminating the monthly tenancy on 8 January 2003, it otherwise does not admit the allegations in paragraph 11 of the claim and says that it will rely on the true meaning and effect of the notice at hearing. This admission is without prejudice to the defendant’s assertion that the tenancy had validly terminated on 30 November 2002.
On 25 August 2003, the Registrar, apparently by consent, gave certain directions as to pleadings, particulars and discovery, including a direction that the plaintiff file an amended statement of claim if required by 15 September. It is common ground that at the time this direction was given, a draft amended statement of claim had not been prepared, and the defendant was unaware of the detail of any proposed amendments.
Following correspondence between the solicitors for the parties, an amended statement of claim was delivered on 3 October 2003. There followed further correspondence, leading up to the making of the present application. On 23 October 2003 the defendant’s solicitors wrote to the plaintiff’s solicitors setting out perceived deficiencies in the amended statement of claim in four areas. Firstly, the amendments had added a claim under s 52 of the Trade Practices Act 1974, in relation to which, it was said, the damage pleaded could not as a matter of law be made out. Secondly, the amendments added a claim for equitable damages but failed to plead the material facts necessary to establish that cause of action. Thirdly, criticism was made of a general lack of particulars in the pleading. Finally, it was said that the effect of the amendments was to withdraw an admission made in the original statement of claim without leave.
The solicitors for the plaintiff responded on 30 October, taking issue with each of the points made on behalf of the defendant. They provided some particulars and argued that to the extent that leave was required in relation to the amended statement of claim, this was implicit in the direction made by the Registrar.
The notice of motion before me was filed on 13 November. Incorporating a subsequent amendment, the relief sought in the notice of motion is as follows:
1. That pursuant to Order 29 rule 4, paragraphs 25-32 of the amended statement of claim be struck out as disclosing no cause of action.
2. Alternatively, that pursuant to either Order 29 rule 4 or Order 23 rule 28, paragraphs 25-33 be struck out as tending to prejudice, embarrass or delay the fair trial of the action.
3. That the amendment to paragraph 11 be struck out as amounting to the withdrawal of an admission without leave.
10. The rules upon which the plaintiff relies are as follows:
O. 29 r.4The court may order any pleading to be struck out on the ground that it discloses no reasonable cause of action or answer, and in any such cause (sic), or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as is just.
O. 23 r. 28The court may, at any stage of the proceedings, order to be struck out or amended any matter in any indorsement or pleading which is unnecessary or scandalous, or may tend to prejudice, embarrass, or delay the fair trial of the action, and may in any such case, if it or he or she thinks fit, order the costs of the application to be paid as between solicitor and client.
11. The onus on a defendant in an application to strike out a statement of claim as disclosing no reasonable cause of action is a high one. Pleadings which have been struck out have been described as “obviously unsustainable”, “so obviously untenable that it cannot possibly succeed”, “so manifestly faulty that it does not admit of argument”, “palpably and unmistakably bad”, “unarguable”, “manifestly groundless” – quotations from decisions cited in the annotations to Order 29 rule 4 at paragraph 8915.5, Civil Procedure Australian Capital Territory.
12. The test under Order 23 rule 28 is different: the rule exists to ensure compliance with the rules of pleading, and is focused on intelligibility (see annotations to O. 23 r. 28, Civil Procedure ACT para 8230.10).
13. The defendant’s attack on the trade practices count is in essence that the damage claimed predates the representation. In the particulars of loss or damage claimed by the plaintiff as consequential upon the representation, set out in paragraph 32 of the amended statement of claim, the first item listed is loss of rental between 9 January 2003 and 14 April 2003. The representation is pleaded at paragraph 25 as having being made prior to 4 March 2003, and it seems clear from paragraph 29 that the plaintiff’s claim is that any loss resulting from the representation commenced no earlier than 4 March 2003. Mr Pappas of counsel for the plaintiff conceded that a mistake had been made in the particulars set out in paragraph 32, and that the date 9 January 2003 should be 4 March 2003.
14. Mr Purnell of senior counsel for the plaintiff conceded that if that date were changed, his argument that the trade practices count is unsustainable could no longer be maintained. However, he submitted that the plaintiff had had plenty of time to get its pleadings and particulars right, and that the application before the Court was the defendant’s application to strike out the pleading, rather than an application by the plaintiff for leave to amend the date.
15. Order 32 rule 1 includes the following provisions:
1(1) Subject to subrules (2) to(7) (inclusive), the court may, at any stage of an action, on application by a party or on its own initiative –
(a)order that any document in the action be amended; or
(b)give leave to any party to amend any document of that party in the action;
in such manner and on such terms as the court considers just.
(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the action, of correcting any defect or error in the action or of avoiding multiplicity of actions.
16. The annotations to O. 32 include what are described as classic statements of the principles upon which amendments are allowed:
Now, I think it a well-established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights… I know of no kind or error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace… It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right: Cropper v Smith (1884) 26 Ch D 700 per Bowen LJ at 710.
My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder, he had done some injury to his opponent which could not be compensated for by costs or otherwise: Tildesley v Harper (1878) 10 Ch D 393 per Bramwell LJ at 396.
17. It seems to me that where counsel for the defendant concedes that there has been a mistake made in a date in particulars which form part of the amended statement of claim, and that with the mistake corrected, the argument that the count to which those particulars relate is unsustainable would disappear, then it is just to permit the error to be corrected and would work an injustice to the plaintiff to require the error to stand. It might be otherwise if the defendant had acted to its detriment in reliance on the truth of the assertion, but that is not the case here. In the absence of an application by the plaintiff for leave to amend, it seems to me an appropriate occasion for the exercise of the power under Order 32 rule 1 to give leave to amend on the initiative of the Court.
18. In my view a further amendment is necessary. The amended statement of claim does not include any particulars of the representation relied on as the basis for the trade practices count. The pleading is silent as to whether the representation was oral or written, and as to who made it on behalf of the defendant, where and when. If the representation is said to have been wholly or partly in writing, the writing should be identified in the pleading. Order 23 rule 6(1) specifically requires particulars of a misrepresentation to be stated in the pleading. It seems to me that this omission can readily be cured by my granting the plaintiff leave to amend so as to provide particulars in compliance with that rule.
19. The relief claimed by the plaintiff includes equitable damages; indeed, this is the first item of relief listed, immediately following paragraph 40 of the amended statement of claim.
20. The claim for equitable relief is set out at paragraph 33:
33. In consequence of the facts alleged in paragraph 25 and 26 hereof the plaintiff acted to its detriment.
Particulars
Delay in carrying out the necessary “make good work” with resultant loss of rental and/or lost opportunity to use and enjoy the premises and/or diminished opportunity to use and enjoy the premises.
21. The defendant submitted that the facts alleged in paragraph 25 and 26 were themselves insufficient to ground a claim for equitable damages, and it seems to me that this is probably correct, and that perhaps paragraphs 29 and 30 were also intended to be relied upon. The defendant also submitted that the equitable count is deficient because the ability to rent the premises, a material fact, is not pleaded; nor are any material facts to make out claims for lost enjoyment or diminished opportunity to use the premises. I am not persuaded that the latter are fatal defects. It seems to me that the particulars pleaded are adequate to put the defendant on notice of the nature of the claim it will be required to meet, and that the particulars lay an adequate grounding for the calling of evidence at trial on those issues.
22. Paragraph 11 of the amended statement of claim is as follows:
11. The defendant purported to give notice pursuant to clause 6(c) of the sublease bringing that month to month tenancy to an end on the 8th January 2003.
The original paragraph 11 is set out in paragraph 4 of these reasons. The words “purported to give” have replaced the word “gave”. It is submitted on behalf of the plaintiff that this amendment is tantamount to the withdrawal of an admission.
23. Counsel for the defendant replies that the original clause 11 was not an admission, and that a party to civil litigation is permitted to plead inconsistent allegations of fact in the alternative. Reference was made to a number of old authorities to the latter effect. The principle was accepted by the High Court in Chadwick v Bridge (1951) 83 CLR 314, a case involving inconsistent assertions of fact in a motor vehicle personal injury action against the nominal defendant on the one hand, and the registered owner of an identified vehicle on the other. I do not understand Mr Purnell to take issue with the general proposition.
24. I am not persuaded that paragraph 11 as originally pleaded can properly be characterised as an admission. It was not an allegation of fact put by those representing the defendant in respect of which they sought an admission. It was simply an assertion of fact contained in a pleading, which might or might not have been admitted by the defendant, and which the plaintiff ultimately might or might not have been able to establish by evidence. It follows that the plaintiff did not require leave to amend paragraph 11 as it has been amended, other than the general leave to amend which flowed from the direction made by the Registrar on 25 August.
25. In the result, I am not satisfied that the plaintiff has made out an entitlement to any of the substantive orders sought in the amended notice of motion. At the same time, the process has succeeded in identifying some remaining shortcomings in the amended statement of claim, which should be further amended to meet the objectives of Order 32 rule 1, of determining the real questions raised by or otherwise depending on the action, and of correcting defects and errors in the action.
26. I note in passing that the amended statement of claim is not paginated as required by Order 66 rule 7. The number of each page should appear in the lower right corner of the page.
27. I grant leave to the plaintiff to make further amendments to the statement of claim conformably with these reasons. Having regard to the time of year, it is reasonable to allow an extended period to make those amendments. They are to be made on or before 30 January 2004.
28. Neither party has been completely successful in the application, but the exercise has been a useful one in identifying and narrowing the issues. It seems to me that the appropriate order as to costs is that the costs of the application be costs in the cause.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Decision herein of Master Harper.
Associate:
Date: 12 December 2003
Counsel for the plaintiff Mr J Pappas
Solicitor for the plaintiff Vandenberg Reid
Counsel for the defendant Mr F J Purnell SC
Solicitor for the defendant Minter Ellison
Date of hearing 5 December 2003
Date of decision 12 December 2003
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