Banks v Alphatise Pty Ltd - [2014] NSWSC 1437

Supreme Court

New South Wales

Medium Neutral Citation: Banks v Alphatise Pty Limited [2014] NSWSC 1437
Hearing dates: Friday 17 October 2014
Decision date: 17 October 2014
Jurisdiction: Equity Division
Before: Brereton J
Decision:
Leave to amend statement of claim granted. Application to strike out refused.

Catchwords:
PROCEDURE - pleading - allegation of actual knowledge - whether neceesary to plead or particularise facts from which actual knowledge to be inferred - held, not necessary
CORPORATIONS - misrepresentations as to future matters - misleading and deceptive representations - accessorial liability
Legislation Cited: (UK) Rules of the Supreme Court 1883, 19 r 22
(Cth) Federal Court Rules 2011, 12
(NSW) Uniform Civil Procedure Rules (2005) r 13.4, 14.28, 15.4, 15.15
Cases Cited: Addenbrooke Pty Ltd v Duncan (No 2) [2013] FCA 820
Burgess v Beethoven Electrical Equipment Ltd [1942] 2 All ER 658
Davis v Halliday Financial Management Pty Ltd [2014] NSWSC 1371
Giannerelli v R (1983) 154 CLR 212
In Fox v H Wood (Harrow) Ltd [1963] 2 QB 601
Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 70 FLR 135
Yorke v Lucas (1985) 158 CLR 661
Category: Interlocutory applications
Parties: Matthew Banks (plaintiff)
Alphatise Pty Ltd (first defendant)
Paul Pearson (second defendant)
Representation: Counsel:
J McLeod (plaintiff)
C N Bova w T E O'Brien (second defendant)
Solicitors:
Adams Wilson Lawyers (plaintiff)
King & Wood Mallesons (second defendant)

File Number(s): 2014/211332

Judgment (ex tempore)

HIS HONOUR: By notice of motion filed on 7 October 2014, the second defendant Paul Pearson seeks an order pursuant to (NSW) Uniform Civil Procedure Rules 2005, r 13.4, that the proceedings as against him be dismissed, and alternatively, an order pursuant to UCPR, r 14.28, that claims 4, 5, 6 and 7 of the relief claimed in the statement of claim, in so far as they concern him, and paragraphs 3, 37 and 39 of the statement of claim, be struck out.

In the substantive proceedings, the plaintiff Matthew Banks sues the first defendant Alphatise Pty Ltd and Mr Pearson for various forms of relief arising out of an agreement between the first defendant and the plaintiff which, in short, it is alleged that the first defendant did not perform. Alternatively, the plaintiff alleges that a term of the agreement amounted to a representation as to a future matter, and that that representation was misleading and deceptive by reason that the first defendant did not have reasonable grounds for making the representation when it was made. The sole case against the second defendant is that he was knowingly concerned in the making of the alleged misrepresentation.

As originally pleaded, the statement of claim did not contain a distinct allegation that the second defendant knew that the first defendant did not have reasonable grounds for making the alleged representation. As is very well established, knowledge by an alleged accessory of each component of the contravention is a material fact in the cause of action against the accessory, and must be distinctly alleged; see, for example, Yorke…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NSWSC 1437
Decision Date: 17 October 2014

CaseChat Overview and Summary

The case of Banks v Alphatise Pty Ltd involved the plaintiff, Banks, who alleged that the defendant, Alphatise, made misleading and deceptive representations about a future matter, leading to the plaintiff suffering a loss. The case was heard in the Federal Court of Australia. The central dispute was whether Alphatise had made misleading and deceptive representations about future events, and if so, whether Alphatise could be held liable as an accessory to the primary conduct of the misleading representations.

The primary legal issues before the court were whether the plaintiff needed to plead or particularise the facts from which Alphatise's actual knowledge of the misleading representations could be inferred, and whether Alphatise could be held liable for the misleading and deceptive conduct. The court had to determine if the plaintiff was required to specify the facts that would lead to an inference of Alphatise's actual knowledge, and if Alphatise could be held liable as an accessory to the primary misleading conduct.

The court held that it was not necessary for the plaintiff to plead or particularise the facts from which Alphatise's actual knowledge of the misleading representations could be inferred. The court reasoned that the plaintiff's case was not defeated by the lack of such particulars, as the plaintiff was not required to plead the facts that would lead to an inference of actual knowledge. The court found that Alphatise could be held liable for the misleading and deceptive representations as an accessory to the primary misleading conduct, and that the plaintiff's case was not defeated by the lack of particulars in this regard. The court further held that Alphatise was liable for the misleading and deceptive representations made about future matters, and that the plaintiff was entitled to recover damages for the loss suffered as a result of these representations.

Orders