Burnett v 3 Property Group 10 Pty Ltd (No 3)

[2024] ACTSC 57

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Burnett v 3 Property Group 10 Pty Ltd (No 3)
Citation:	[2024] ACTSC 57
Hearing Date:	1 March 2024
Decision Date:	1 March 2024
Before:	Mossop J
Decision:	See [19]
Catchwords:	PROCEDURE – MISCELLANEOUS PROCEDURAL MATTERS – Amendments to pleadings to join additional defendants and
plaintiffs – plaintiffs seek to amend pleadings to join current and
past directors of the defendant as additional defendants and to
join additional plaintiffs – pleadings seek to run claim similar to
class action in circumstances where legislation and rules do not
clearly permit that to occur – plaintiffs propose to run proceedings with “sample plaintiffs” and “group plaintiffs” – pleadings deficient,
contain drafting inconsistencies and inadequacies – question of
joinder should be determined in the context of adequate pleadings
– application dismissed
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – Parties – plaintiffs assert claim in contract against defendant –
plaintiffs seek to join up to 27 additional parties as further plaintiffs
to proceedings – not all additional parties had contractual
relationship with defendant
Legislation Cited:	Court Procedures Rules 2006 (ACT), rr 211, 266
Parties:	Sheridan Burnett (First Plaintiff)
John Griffiths (Second Plaintiff) 3 Property Group 10 Pty Ltd (Defendant)
Representation:	Counsel
R Markham (Plaintiffs) D Robens (Defendant)
Solicitors
Adero Law (Plaintiffs)
Harrington Hall (Defendant)
File Number:	SC 223 of 2023
MOSSOP J:
1․	This interlocutory application had a number of components:

(a) amendment of an Amended Originating Claim, so as to add approximately 27

new plaintiffs;

(b)	filing of a Further Amended Statement of Claim;
(c)	joinder of additional plaintiffs consistent with the proposed Further Amended

Originating Claim and proposed Further Amended Statement of Claim;

(d)	joinder of two past directors of the defendant as parties to the proceedings;
(e)	joinder of two current directors of the defendant to the proceedings; and
(f)	an injunction restraining the defendant from dealing with certain property

relating to the claims made by the proposed plaintiffs.

2․	The joinder of the current directors and the injunctive relief was not pressed.
3․	Written submissions were filed by the defendant and the past directors. They opposed
the orders sought. The submissions pointed out a variety of problems with the proposed
pleadings. Those problems were of two general types. The first related to the unusual
structure of the pleadings. The second related to particular drafting inconsistencies and
inadequacies.
4․	So far as the first is concerned, the pleadings were unusual in that they sought to run
something similar to a class action in circumstances where legislation and the Court
Procedures Rules 2006 (ACT) did not clearly permit that to occur. They contemplated
that the proceedings would be run by “sample plaintiffs” but then would bind “group
plaintiffs” whose proceedings were not run, or not completely run. Questions of damage
and relief relating to the group plaintiffs would be postponed. Although r 266 was relied
upon, the structure of proceedings was not something which could readily fit within the
existing rules. The submissions of the defendant identified some of the problems arising
from this structure of the pleadings.
5․	So far as the second category of problems is concerned, the pleadings also contained
within them drafting inconsistencies and inadequacies quite apart from the complexity
that arose from the split between “sample plaintiffs” and “group plaintiffs”. One of those
was the failure to address the position of plaintiffs whose contractual relationship was
with a now deregistered company which was not named as a defendant, Chajam Pty Ltd.
Those plaintiffs were joined, but the basis of liability of the defendant was not articulated in the pleadings so as to address the obvious lack of privity between the plaintiffs and
the present defendant.
6․	The intention behind the pleaded claim is to allow a significant number of plaintiffs to
proceed with claims in a single set of proceedings. There was debate at the hearing as
to whether or not the relationship between the claims was such as to fit within the scope
of r 211 so as to allow the claims to be brought together. Although there were conflicting
submissions as to whether or not there were common issues of law or fact, or whether
the rights to relief arose out of the same series of transactions or events, it must be borne
in mind that it is not essential to resolve those questions in circumstances where the
alternative power in r 211(1)(b) is available, namely, that the court orders that the parties
be included.
7․	It is not necessary for present purposes to make a ruling on the merits of each of the
criticisms of the pleadings made by counsel for the defendant. To do so would only
unnecessarily delay the making of orders and giving of reasons for decision, and it is not
essential to make a ruling on each of the contentions.
8․	The reason for that is that, by the conclusion of the submissions, counsel for the plaintiffs
appeared to accept that re-pleading was necessary and indicated that the matter would
be pleaded in a way that did not involve the complexity of representative plaintiffs and
other plaintiffs who did not participate to the full extent in the proceedings.
Notwithstanding that, the submission was made that the order relating to joinder should
still be made and the issue of pleadings dealt with subsequently. Counsel for the
defendant submitted that this was not an appropriate course and that the question of
joinder should be considered in light of whatever was attempted to be pleaded by the
new plaintiffs against the defendant and proposed defendants.
9․	These proceedings have been on foot since May 2023. Prior to the present hearing, they
have been before judges of the court on six occasions and before registrars on five
occasions. They have not progressed beyond a Statement of Claim. Whether they
involve one plaintiff or 29 plaintiffs, it is very clear that they must progress with a greater
degree of expedition than they have to date.
10․	Notwithstanding the need to make some progress in this case, I consider that the issue
of joinder should be postponed until there is a pleading available which explains the
causes of action relied upon. That is particularly so in relation to the new plaintiffs who
had no direct contractual relationship with the defendant, but instead had a contractual
relationship with the now deregistered Chajam Pty Ltd. Although it appears to be
reasonably possible for competent junior counsel to plead a claim involving each of the plaintiffs, I do not consider it appropriate to commit to having such a significant multi-party
proceeding by making an order under r 211 that would, on any view, regularise such a
proceeding, without being clear that the lawyers acting for the plaintiffs have the ability
to plead a claim in a manner that is likely to efficiently dispose of the claim rather than
embarrass its progress. If it is not possible to effectively draft a consolidated Originating
Claim and pleading, then the various cases can be separately pleaded in the ordinary
course and then managed together.
11․	I will decline to permit the filing of a Further Amended Originating Claim as a result of the
fact that I will not permit the filing of the Further Amended Statement of Claim to which it
is tied, or the joinder of the additional parties which it contemplates.
12․	I will not permit the filing of the Further Amended Statement of Claim because it has too
many pleading deficiencies and the filing of it was not ultimately pressed.
13․	I will decline to join the additional parties sought to be joined because I consider that the
question of joinder should be dealt with in the context of an assessment of the proposed
pleading which identifies the claims against them.
14․	I decline to join either of the former directors as defendants because, although it is likely
that such an order will ultimately be made, joinder should be determined in the context
of an adequate pleading.
15․	I decline to order the joinder of the current directors, as those orders were not pressed.
16․	The order for an injunction was not pressed.
17․	I consider that it is appropriate to dismiss the present application rather than adjourn it
so as to allow some further attempt at pleading, because the burden must be on the
plaintiff and proposed plaintiffs to get their pleading house in order and directions can be
made so as to ensure that whatever momentum there is to make progress with the case
is maintained.
18․	So far as costs are concerned, I consider that the appropriate order is that the plaintiffs
pay the costs of the defendant and proposed defendants of the application in proceeding.
This is a case in which the plaintiffs were seeking an indulgence through the amendment
of their pleadings. They have been unsuccessful on the application as a consequence of
pleading defects which were pointed out in written submissions prior to the hearing. In
those circumstances, in my view, costs should follow the event.
19․	The orders of the Court are:

1.       The application in proceeding dated 27 November 2023 is dismissed with costs.

2.       The plaintiffs are to file and serve any application to file a Further Amended

Originating Claim and Further Amended Statement of Claim and any claim for

injunctive relief by no later than 15 March 2024.

3.       Any such application is to be made returnable before Mossop J on

28 March 2024 at 9:30am.

4.       If the application is opposed, the respondents to the application are to file and

serve written submissions no later than 22 March 2024 and the applicants on

the application are to file and serve any written submissions by 26 March 2024.

5.       The listing before the Registrar on Monday, 4 March 2024 is vacated.

I certify that the preceding nineteen [19] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 14 March 2024