Aylward, K.J. v Westpac Banking Corporation

[1989] FCA 410

IN THE FEDERAL COURT OF AUSTRALIA	)
QUEENSLAND DISTRICT REGISTRY	) QLD G207 of 1987
GENERAL DIVISION	)

BETWEEN:  KENNETH JAMES AYLWARD

First Applicant

AND :  STAR HOLDINGS (QLD) PTY LTD

Second Applicant

AND :  WESTPAC BANKING CORPORATION

Respondent

AND :  WESTPAC BANKING CORPORATION

Cross-Claimant

AND :  KENNETH JAMES AYLWARD

First Cross-Respondent

AND :  STAR HOLDINGS (QLD) PTY LTD

Second Cross-Respondent

AND :  JOHN SIMON PTY LTD

Third Cross-Respondent

AND :  JOHN SIMON PTY LTD

Further Cross-Claimant

AND:  WESTPAC BANKING CORPORATION

better particulars filed on 4 May 1989, be struck

Further Cross-Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:  PINCUS J.

2 AUGR89

DATE OF ORDER:	19 JULY 1989 , :	.	.
WHERE MADE:	BR1 SBANE
THE COURT ORDERS THAT:

1.   paragraph 4 of document 38, being further and

out; the applicant is given leave to replace it by a new paragraph 4 to be notified to the respondent's solicitors on or before 26 July 1989;

2.    the amended particulars of illegality filed herein on 24 May 1989 be struck out;

3.    the costs of the notice of motion filed on 14 June

1989 be costs in the proceedings.

NOTE :  Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY	QLD G207 of 1987
GENERAL DIVISfON

BETWEEN:  KENNETH JAMES AYLWARD

First Applicant

AND :  STAR HOLDINGS (QLD) PTY LTD

Second Applicant

AND :  WESTPAC BANKING CORPORATION

Respondent

AND :  WESTPAC BANKING CORPORATION

Cross-Claimant

AND :  KENNETH JAMES AYLWARD

First Cross-Respondent

AND :  STAR HOLDINGS (QLD) PTY LTD

Second Cross-Respondent

AND :  JOHN SIMON PTY LTD

Third Cross-Respondent

AND:  JOHN SIMON PTY LTD

Further Cross-Claimant

AND :  WESTPAC BANKING CORPORATION

Further Cross-Respondent

PINCUS J. 19 JULY 1989

EX TEMPORE REASONS FOR JUDGMENT

There are two notices of motion before me which have
been heard separately. I will give judgment now on the first of

them, which is a notice of motion of the respondent bank filed on 14 June 1989. Paragraph 1 of the notice of motion asks that certain particulars be struck out due to a mistake on the part of the applicants' solicitors. According to what I have been told, those particulars were not withdrawn, and they will have to be struck out. Paragraph 1 will be acceded to.

Paragraphs 3 and 4 do not require any particular mention, except to say that there is some ground for complaint about para.4, but not, I think, sufficient to warrant any order.

Paragraph 2 is pressed and is the substantial point of
the notice of motion; that is, para.2 says: "that the

cross-respondents provide further and better particulars of

paragraphs 16 and 17 of the statement of claim ..." Paragraphs 16

and 17 of the statement of claim say that the respondent provided "services of management and/or trading on the First Applicant's behalf in foreign currencies by entering into numerous contracts

..." Paragraph 17 says that they were wagering contracts.

The complaint which has been made is principally that two documents, being documents numbered 38 and 41 on the Court	file, do not provide an adequate explanation of what the case
sought to be made on illegality is. Document 38 is admittedly defective in one respect, in that para.4 does not make sense; I will order that para.4 of document 38, being the further and better particulars filed on 4 May, be struck out; I give the applicant leave to replace it by a paragraph to be notified to the respondent's solicitors on or before 26 July 1989.
The other complaints which are made about document 38 (read with document 41) seem to me to be principally as follows. First of all, it is said that the applicants' case is unclear in that, reading these documents in the light of the statement of claim, one is not sure whether it is intended to say that there were contracts entered into on behalf of the applicants under a management agreement, or that there were not. Mr Sheahan (for the respondent bank) points to para.15 of the statement of claim as an example of its difficulty. On the other hand, Mr Harrison P.C. (for the applicants) is able to point to indications to the contrary, such as the reference in para.l6(d)(i) to contracts purporting to cover transactions. I agree with the criticism made by Mr Sheahan that the pleadings are in this respect confused. However, the practical course seems to me not to require another attempt to clear up this point. The reason is that it is obvious, in a general way, what is being said, namely that, if there were contracts, then they are illegal, and if there were not, then they cannot be charged for the loss.
But their basic difficulty (and from what Mr Sheahan says, it is likely to be a serious difficulty, because of the
cannot know at this stage exactly what the bank did. If I require change in the bank's systems) is that it seems that the applicant
the pleadings to be tidied up in the respect complained of now, it is, in a sense, going to be futile and a waste of time and money. I am not going to do it. I will, however, invite the respondent to make a further application to raise the point after discovery, if, by that stage, the applicants have not, with the advantage of discovery, got their pleadings in order.
I agree with Hr Sheahan that the bank is entitled to go to trial knowing precisely what the case is: whether it is said there were contracts or there were not. At present, that is left obscure. I will not make any order in favour of the bank on that aspect now.
The second substantial complaint which is made on behalf of the bank, is that the pleading vaguely says, in its present form, that there was to be an allocation of the results of the bank's trading to the first applicant. In particular, para.l2(c) of the defence (document no. 39) refers to an allocation. The same point is implicit in the particulars, document 38 , referring to the payment of differences; that is, it is unclear whether or not the first applicant is saying that contracts were entered into on its behalf, or whether it is simply saying that the bank entered into contracts in gross and asserted that the result of it trading was to be apportioned.
Again, the same answer should be given; that is, that point must be clarified, but it is premature to clarify it now. I think that although the matter might have been handled more elegantly, the first applicant is entitled to say, "I know what the bill was". (It was a quarter of a million dollars.) "I know
it was supposed to have been incurred in consequence of the management agreement, but I do not know in detail what the bank did." I decline to force the applicant to attempt to rectify this particular obscurity in its pleading at this stage.
A third objection which is taken by Mr Sheahan is that the representations set out in para.2(c) to (d), and the other pleadings in para.2 of document 38 do not marry well with the rest of the pleading.
It is unclear, he says, exactly what is being alleged. For example, how can it be that a representation made by the letter of 27 August leads to the outcome asserted? That outcome is that the true agreement was not that which was set out in the writing. I have looked at the writing and the passages in the parts of it which Mr Sheahan refers to, and it is not as clear to me as he says it should be that the agreement does require actual delivery. Apart from that, I cannot really see anything wrong with or embarrassing about the particulars in para.2 of document
38.
What the pleading asserts, as a matter of fact, is that things happened, either as a matter of evidence or otherwise, which support the applicant's case that the real intention was that differences only should be paid, whatever the agreement says.
I cannot see that there is anything wrong with the particulars in
that respect. Mr Sheahan argued that it had to be shown that there was a mutual intention to deal in differences, otherwise
there was no illegality. The law as to illegal contracts is not sufficiently clear to enable one to assert that. It is conceivable that, if dealing in differences were unlawful and the bank always intended to engage in it, but did not tell the first applicant, it could not recover the money, whatever the mutual intention might have been.
The second leg of the notice of motion is the defence to which I have already alluded, document 39. Mr Sheahan again takes his inconsistency point which I have discussed previously, and he also asserts that sub-paras.(i) and (ii) of the paragraph lettered (C) (which is apparently intended to be letter (e)) on p.9, are irrelevant. I think that para.(c) could have been better pleaded by saying, for example, that the first cross-respondent's case is that he terminated the agreement under the clause, or that it was rescinded by mutual consent on 6 March, and that on 16 April he revoked the agreement, or that the agreement was varied. There is something in Mr Sheahan's criticism, in that although the facts are set out, their connection with the case is not; it seems to me that they could conveniently have been. Nevertheless, I cannot see that there is any particular disadvantage to the bank in the present form of the pleading. The legal consequences of what is alleged in (i) and (ii) can no doubt be debated at the hearing.
I have pointed out during the course of the hearing that the Federal Court rules contemplate the possibility of raising a point of law; that is in 0.11 r.9. Pleading law, which can also be done, in a slightly different form, in the Queensland Supreme
more orthodox, even if it be a matter of law, to say in (c) what Court Rules is sometimes useful. Certainly it would have been
the legal consequences of these allegations of fact were, but I do not see that there is any necessity to do anything about it.
In summary, the notice of motion succeeds as to para.1 by concession and it succeeds as to the terms of para.4 of the first set of particulars, that is, the particulars filed on 4 May, being document 38.
I have intimated that in my opinion, the pleadings should be tidied up, to make it clear whether it is the case that the first applicant is going to rest on the allegation that contracts were made on his behalf, or whether he says that either that happened or the bank made a contract on its own behalf and then did something else which had the result, or may have had the result, of his having to pay differences. I think that should be done, however, at a later stage, and I have said that if it is not done, then I would invite the bank to apply again. I would add that I do not really think that the form of the pleading in that respect causes any serious embarrassment to the bank.
A question arises as to the costs of this notice of motion. My view, subject to what counsel may have to say, is that although the bank has had some success, it should not get any costs of the notice of motion. I think that the honours of the day are even. Some of the criticisms which were made had substance and some did not. What I would be inclined to do, subject to what counsel may have to say, is to make the costs of the notice of motion just dealt with costs in the proceedings.

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