Browne, P.F. v Hall, J.C.

[1994] FCA 1003

/003 99

JUDGMENT No. ........ ........ . J ,...,.

PRACTICE AND PROCEDURE - application to strike out - whether

statement of claim discloses cause of action against

respondent - allegation that "financial interest" amounted to

agency

Corporations Law ss 66(2), 170(6), 588M(3), 588R(1) and

1018(1)

P F Browne & Or6 v J C Hall & Ors

(No. VG 295 of 1994)

Judge :	Heerey J
Date :	8 December 1994

Place: Melbourne

IN THE FEDERAL COURT OF AUSTRALIA	) )
VICTORIA DISTRICT REGISTRY	) No. VG 295 of 1994
)
GENERAL DIVISION	)
B E T W E E N :

PAUL FRANCIS BROWNE

First Applicant

- and -

PAUL WILLIAM HOLYOAK

Second Applicant - -

- and -

JOHN W-TON ELDRIDGE

Third A~~licant - -

- and -

JAMES CHARLES HALL

First Respondent

- and -

LINDSAY FREDERICK OLDAKER

Second Respondent

- and -

HOWARD JOHN FRANCIS TRELOAR

Third Respondent

- and -

F F AUSTRALIA PTY LTD

(In Liquidation) (formerly known

as Filter Fresh Australia Pty Ltd)

(ACN 058 110 259)

Fourth Respondent

JUDGE :	Heerey J
m:	8 December 1994
PLACE :	Melbourne

MINUTE OF ORDERS

1. Paragraphs 24 to 29 inclusive of the statement of claim be struck out, as against the third respondent.

2. Grant liberty to the applicants to re-plead.

3. Costs of the third respondent's application be costs in the cause.

NOTE :

Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA	)
)
VICTORIA DISTRICT REGISTRY	) No. VG 295 of 1994
)
GENERAL DIVISION	)
B E T W E E N :

PAUL FRANCIS BROWNE

First Applicant

- and -

PAUL WILLIAM HOLYOAK

Second Applicant - -

- and -

JOHN WALTON ELDRIDGE

Thlrd Applicant

- and -

JAMBS CHARLES HALL

First Respondent

- and -

LINDSAY FREDERICK OLDAKER

Second Respondent

- and -

HOWARD JOHN PRANCIS TRELOAR

Third Respondent

- and -

F F AUSTRALIA PTY LTD

(In Liquidation) (formerly known

as Filter Fresh Australia Pty Ltd)

(ACN 058 110 259)

Fourth Respondent

JUDGE :	Heerey J
DATE :	8 December 1994
PLACE :	Melbourne

EX TEWORE REASONS FOR JUDGMENT

I have found this a difficult application. I am concerned

that a pleading summons should not degenerate into an exercise

in pedantry; but on the other hand, if it is seen that there

is some fundamental defect in the case as pleaded, it is in

everybody's interest that that should be exposed as early as

there was jurisdiction in this Court to review the deportation order in question under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) .

In the course of discussion at the outset of the hearing counsel for both parties agreed that the question was to be decided on administrative law grounds, and on such of the grounds in s 5 of the AD(JR) Act as were referred to in the application for review. Many of such grounds assume that an administrative decision may be legally valid even if it discloses factual error or want of loglc: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356. However, in the course of written submissions filed after the conclusion of the hearing, counsel for the respondent referred to Minister for Immigration and Ethnic Affairs v Naumovska (1983) 88 ALR 589, a case concerning threatened deportation as a result of a false statement on an incoming passenger card. In answer to a submission on behalf of the Minister that the Act as it then stood made the determination of the falsity of the information in the card a matter for the immigration officer who decides to grant an entry permit Lockhart

J said (at 601):

"It is for the courts to say whether inforrnatlon in a passenger card produced to an ~migratlon offlcer by a person for the purpose of securlng entry into Australia is false or misleading ln a material particular. It 1s not for immigration officers to determine these matters.

Before the Mlnrster may deport a prohlbited immigrant he must, of couree, conclude on the materral before h ~ m that the person is a prohlbited immigrant, but that is not to say that the determination of the person's status as a prohibrted immigrant rests on the Munster's opinion. This status rests on the

establishment of objective facts whose existence may be revlewed

by the courts."

PARTICULARS

(a)	Hall had a financial Lnterest in the company, further particulars of which the applicants at
present are unable to supply unt~l after d~scovery

and inspection herein.

(b) Upon the occasion of the first meet~ng referred to

in the particulars under paragraph 9 herein, Hall

informed the appl~cants that if they wished to

Lnvest in the company's busrness he would speak to and arrange a further meeting with the persons concerned In its management.

(C)	The second meeting was arranged by Hall as referred to in the part~culars under paragraph 9 herern, and at that meeting Messrs McPherson and oldaker
attended.
(d)	By reason of the foregoing matters, Hall made the representations wlth the express or actual implied authority or alternatively the ostensible author~ty of the company."

particulars, does not make out a case that Mr Hall in making

the representations was the agent of the company. All the

facts alleged in the particulars are equally consistent with

In my opinion para 17 read as a whole, including the company in his capacity as an accountant in private practice. The allegation in particular that he had "a financial interest in the company further particulars of which are to be supplied", does not carry the matter any further. It is trite to say that the mere fact that a person has a "financial interest in a company" does not make that person an agent of the company.

Looked at another way, the particulars serve the function of setting out the material facts on which the applicants rely in support of their allegation. If all those material facts are admitted, they still do not lead to a conclusion that the agency existed.

I do not think it is any answer to this to say that the

applicants could request more particulars. The particulars allegations against W Treloar, they have to be considexed from the starting point that the allegations as pleaded of Mr Hall's conduct do not make out a case that the company is vicariously liable for what Mr Hall did.

are pleaded as being complete in themselves and, for the

reasons I mentioned, I do not think they make out a case.

Further, there is the problem in relation to para 24 that the allegation that investment was "procured by the company" necessarily involves the proposition that the company, through the agency of some person, procured the investment. That person, on the face of the statement of claim, can only be Mr Hall and therefore the problems about the agency of Mr Hall to my mind render that paragraph defective. It cannot stand alone as a separate cause of action.

In any case, the allegations of a contravention of the requirements of Part 7.12 of the Corporations Law and, in particular, S 1018(1) raise the problem that, by virtue of S 1017(a), Part 7.12 does not apply in relatlon to "an excluded issue of securities". That expression in turn is defined by s 66(2). On its face, the applicants' claim would appear to be excluded under S 66(2)(d), but it is in any case a matter for the applicants to plead the particular facts which bring Part 7.2 into operation in relation to the investment

complained of.

The same considerations apply to para 25(a) of the statement of claim. There is the further problem that it would seem implicit in the pleading that S 170(6) is relied on but the matters said to make M r Treloar "a party to the arrangement" have not been pleaded. The same may be said of para 26. Paragraph 27 again turns on the question of Hall's agency.

Paragraph 28 raises a fraudulent trading cause of action under rlght of recovery for creditors, subject to the obtainment of

the liquidator's consent under s 588R(1).	The obtainment of
this consent has not been pleaded.

For those reasons, I accede to the application on behalf of Mr against Mr Treloar, but I will grant liberty to re-plead.

I think Mr Treloar has succeeded and I agree this application has been a worthwhile exercise. On the other hand, and this is certainly no criticism of counsel appearing today, the long-standing ethic of the Bar that a pleadlng point should be notified to an opponent who then has the opportunity to see if there is merit in it and amend the pleading with minimum cost, ought to be supported and encouraged. I think the best solution is that I make the costs of this application Mr Treloar's costs in the cause so that on a final resolution, if

he is successful, he will get the costs of today.

I certify that this and the

preceding 5 (five) pages

are a true copy of the

reasons for judgment of his

Honour M r Justice Heerey.

ADDearanceS

Counsel for the applicants:	P H Clarke
Solicitor for the applicants:	Nevett Ford
Counsel for the third respondent:	D Wyles

Solicitor for the third respondent: Hall & Wilcox

Date of hearing: 8 December 1994