Brown, David Arthur v Forest Hill Shopping Centre Pty Ltd

[1996] FCA 537

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION  No VG 99 of 1994

BETWEEN :

DAVID ARTHUR BROWN, ELIZABETH JOAN BROWN

STEVEN BRIAN MURPHY and ANNE FRASER MURPHY
  Applicants
  and

FOREST HILL SHOPPING CENTRE PTY LTD,
  L C STEVENSON ESTATES PTY LTD,

HUGH McMASTER and DIANE McMASTER               Respondents
AND BETWEEN:
  FOREST HILL SHOPPING CENTRE PTY LTD  Claimant
  and

DAVID ARTHUR BROWN, ELIZABETH JOAN BROWN,
  STEVEN BRIAN MURPHY, ANNE FRASER MURPHY,
  L C STEVENSON ESTATES PTY LTD,
  HUGH McMASTER, DIANE McMASTER,
  LINDSAY CHARLES STEVENSON and
  ISOBEL ELSIE STEVENSON                  Cross-Respondents

COURT:         NORTHROP J
DATE: 3 JUNE 1996
PLACE:         MELBOURNE

REASONS FOR JUDGMENT

The history of this application is most unfortunate.  It shows how an application which, on the face of it should not be that difficult, has meandered along at great expense to all parties over a long period.  It has involved a number of amendments to the statement of claim, at least one appeal to a Full Court and now a motion for leave to amend a further time, leave to amend what is described as a fourth amended statement of claim.  The fact that initially the action would have been for a relatively small amount as far as this Court is concerned has resulted in the amount being claimed now to be much larger, to the detriment of all parties and particularly to the applicant who, to some extent, has not been able to frame causes of action in a form complying with the requirements of the Federal Court Rules as to pleadings.

Normally the duty of the Court is to ensure that the parties to the litigation have the opportunity to have their dispute heard and determined by the Court in a dispassionate manner.  This depends greatly on the skill and the ability of the legal advisers to prepare pleadings which identify the issues to be determined, and in a way by which evidence can then be tested as being relevant to any issue between the parties or not.  It is only in extreme cases, and at the end of one's tolerance, that there will be a refusal to give leave to amend to enable an applicant to raise what in truth are the real issues between it and the respondents.  This case has almost reached that barrier.

During the course of the hearing of the motion for leave to amend the application and the statement of claim, the Court made a number of comments about the statement of claim as presently framed, as well as comments about the amendments sought to be made.  The view the Court formed is that the statement of claim before being amended pursuant to leave being sought, is in a form which is embarrassing and should be struck out.

However having regard to what has been said as to the nature of the claims the applicants are seeking to establish, the Court has formed the view that it is only fair to the applicants, and in the circumstances fair to the respondents, to give one last chance to the applicants to amend their application and statement of claim to a form which does disclose the real case they are making and the pleading to be in conformity with the rules.

From the great mass of the words set out in the existing statement of claim as well as the proposed amendments, it has become apparent that there are in reality two, maybe three, causes of actions which should be raised.  The first arises from the contract for the sale of the business between the second, third and fourth respondents and the applicants, and matters related to that.  The cause of action could arise from breach of contract, possibly also under section 52 of the Trade Practices Act and possibly also rectification as a first step in the claim for breach of contract.  It is quite obvious that in the present pleading the allegations of the dates of the agreements and the dates of the contract of sale are in such a form as to be completely embarrassing to the respondents.

In so far as claims are made against the first respondent, the lessor, it appears that there may well be a claim based upon breach of the lease, even though it is based on the existing clause 19 of the lease.  This is an issue which has been raised, as I understand it, by the pleadings.  But in addition the applicants now desire to seek rectification of that lease by substituting for clause 19 a clause which, it is said, was to give effect to the true intent of the parties relating to use of other premises at the shopping centre, as distinct from granting a lease of a certain type with respect to those premises.

In addition to that there are claims based upon section 52 of the Trade Practices Act in relation to conduct engaged in by the first respondent, and possibly by the other three respondents relating to the lease, the assignment of lease and also conduct entered into between the respondents among themselves affecting the lease which were not disclosed to the applicants.  It is also contended that there should be a further cause of action based upon pre contractual assurances, and reference was made to what was said by Higgins J in the Supreme Court of the Australian Capital Territory in Liangis Investments Proprietary Limited v Daplyn Proprietary Limited 1994 117 FLR 28. The facts of that case, even though a pleading summons, were so different from what is alleged in the present case that I can see no basis at the moment for a claim being based upon it. In truth, the claim for rectification of the lease gives rise to the same issues, and if the applicants succeed on that claim they will be in a position to claim damages for breach of lease, which are of the same nature as would arise under the other cause of action which, in my opinion, would only give rise to further confusion and embarrassment.

In the circumstances, the applicants should be granted leave to amend their application and to file and serve a new statement of claim supporting the claims made in the amended application.  This is to be done on the basis that the existing statement of claim be struck out, and in substance the applicants commence again the formal parts as to the claim and the statement of claim.  This application and the pleadings should not try to develop new areas of law except as a very last resort.  The parties already have paid too much in legal expenses in this regard.  What must be done is to bring the case back to reality to enable the real issues to be determined and the action heard.

The submissions made on behalf of the respondents is that the present motion by the applicant should be adjourned to enable the applicants to reframe their application and their statement of claim, brought back for hearing and if, at that stage, the statement of claim discloses no cause of action or is embarrassing, leave should be refused and the application dismissed.  Alternatively the other course is to give leave to amend the application and file a new statement of claim by a specified time, to leave it to the respondents then to move the Court to have the statement of claim, if need be, struck out and the application dismissed pursuant to the powers conferred by the Federal Court Rules.

Unfortunately, the former course would be appropriate if the matter could come back before me in the near future, but with my commitments I cannot see that happening for many months.  In the circumstances, I think the best course to adopt is the second one, to enable the matter to proceed in a more timely fashion.  If issues do arise they should be dealt with in the normal way before the appropriate duty Judge.  There will then be completely new documents before the Court.  Strictly speaking they should be the only documents that the Court should need to look at in determining whether the statement of claim should be struck out or not.

What I am saying is that there should be a complete break with the past and a new start.  In saying that, I do not express any view as to the application or otherwise of any question of statutes of limitation.  Accordingly, the Court makes the following orders and directions:

(1)       the fourth amended statement of claim be struck out;

(2)the applicants have leave to file and serve within 21 days an amended application and statement of claim.

This is not part of the order.  I will not limit the areas in which the claim can come, but all I can say is that by experience if you have too many claims the more likely the statement of claim will be struck out.

(3)I order that the applicant pay the costs of the two motions before the Court today and the costs thrown away by the orders giving leave to amend the application and the statement of claim.  I also direct that the directions hearing be adjourned to Tuesday, 9 July 1996.

I should indicate that the order for costs covers the three motions before the Court today and also costs thrown away by leave to amend.  I am conscious of the fact that the second, third and fourth respondents have no motion before the Court but the Court has power to look at the whole matter and make such orders as it thinks appropriate in these matters.  In these circumstances the orders which have been made, to my mind, are the only ones to get this matter back on a proper course.  The question has arisen whether the Court should make orders under Order 62 rule 3 sub-rule 3, I think it is, in relation to whether the costs ordered today should be taxed and paid forthwith rather than at the end of the whole proceeding.

In my opinion it is appropriate that that be done for the reason that in reality the action is starting again, as it were, without the formalities needed to go through the issuing of an application.  It is unfortunate that the applicants are required to bear these costs in any
event and possibly even more so to be paid before the action is determined, but in my view this is one of the consequences which have arisen and it is only fair to the respondents in my view that they should get their costs which are being rendered abortive by what is occurred.  It is most unfortunate again that these matters have not been raised at a much earlier stage.

Accordingly, an order is made under Order 62 rule 3(3) that the costs ordered to be paid today be taxed and paid forthwith.

I certify that this and the preceding six (6) pages
are a true copy of the Reasons for Judgment of
The Honourable Justice R.M. Northrop.

Associate:

Date:

ATTACHMENT

Counsel for the Applicants:  Mr A. Roberts

Solicitors for the Applicants:  G.W.P. Aarons & Co.

Counsel for the 1st Respondents:                  Mr T. North

Solicitors for the 1st Respondents:                Pryles & Defteros

Counsel for the 2nd, 3rd, 4th
Respondents:  Mr R. Greenberger

Solicitors for the 2nd, 3rd, 4th
Respondents:  Rowson Eddey

Date of Hearing:  3 June 1996