GILBERT THOMAS BURNS AND OTHERS v. PETER JOHNSTON AND OTHERS AND SIMMONDS CAIN
PTY LTD
No. SG18 of 1993
FED No. 672/94
Number of pages - 3
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
BRANSON J
CATCHWORDS
Practice and procedure - pleadings - application to strike out - whether pleadings disclose a reasonable cause of action - pleading that a director and secretary of a society is performing duties in his/her capacity as an employee - vicarious liability - pleading that an employer owes the members of a society a duty of care to ensure that its employee will perform his/her duties as director and secretary with all due care, skill and diligence - further and better particulars
Federal Court Rules O11 r16
Beach Petroleum NL v. Johnson (1991) 105 ALR 456
Re Co-operative Travel Society and Ors (1978) ACLC 40-396 at 29,831
General Steel Industries Inc v. Commissioner for Railways (1964) 112 CLR 125
Kondes v. State Transport Authority (1984) 154 CLR 672 at 679
Bruce v. Odhams Press Ltd (1936) 1 KB 697
HEARING
ADELAIDE, 27 July 1994
#DATE 16:9:1994
Applicants: No appearance
First Respondent Peter Johnston: No appearance
Counsel for the Second Respondent: Mr D Trim with
and Cross-Claimant (Bain and Mr M Bevilacqua
Company Limited)
Solicitors for the Second Respondent: Mouldens
Third Respondent Bennett Johnston: No appearance
Consultants Pty Ltd
Counsel for the Fourth Respondent: Mr D Trim with
and Cross-Claimant (Bain and Mr M Bevilacqua
Company Investor Services Limited)
Solicitors for the Fourth Respondent: Mouldens
Counsel for the Cross-Respondent: Mr G Coppola
and Cross-Claimant (Horwath and
Horwath)
Solicitors for the Cross-Respondent: Kelly and Co.
Counsel for the Cross-Respondent: Mr M Evans
(Simmonds Cain Pty Ltd)
Solicitors for the Cross-Respondent: Fountain and Bonig
ORDER
THE COURT ORDERS THAT:
1. The Amended Cross-Claim of Bain and Company Limited and Bain and Company Investor Services Limited
(a) Paragraphs 6.1 and 7.1 will be struck out.
(b) The Cross-Claimants will have leave to make consequential amendments.
2. The Amended Cross-Claim of Horwath and Horwath (in respect of the Cross-Claim against Horwath and Horwath by Bain and Company Limited and Bain and Company Investor Services Limited)
(a) Paragraphs 8.1, 12 and 15.1 will be struck out.
(b) The Cross-Claimant will have leave to make consequential amendments.
3. The time within which the Cross-Respondent Simmonds Cain Pty Ltd is to file its defence is extended until the next directions hearing in this matter.
NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
BRANSON J By Notice of Motion dated 12 July 1994 the Cross-Respondent Simmonds Cain Pty Ltd seeks orders that certain paragraphs of the Amended Cross-Claims filed against it be struck out on the grounds that they disclose no reasonable cause of action and/or have a tendency to cause prejudice or embarrassment and/or constitute an abuse of the process of the Court. Certain other orders are also sought.
The issues raised by the Notice of Motion are virtually identical to those raised by a Notice of Motion dated 12 July 1994 in Action No. SG 57 of 1992 in which Simmonds Cain Pty Ltd is also a Cross-Respondent. My reasons for decision on that Notice of Motion are applicable here. I shall not repeat them.
I order as follows:-
1. The Amended Cross-Claim of Bain and Company Limited and Bain and Company Investor Services Limited
(a) Paragraphs 6.1 and 7.1 will be struck out.
(b) The Cross-Claimants will have leave to make consequential amendments.
2. The Amended Cross-Claim of Horwath and Horwath (in respect of the Cross-Claim against Horwath and Horwath by Bain and Company Limited and Bain and Company Investor Services Limited)
(a) Paragraphs 8.1, 12 and 15.1 will be struck out.
(b) The Cross-Claimant will have leave to make consequential amendments.
3. The time within which the Cross-Respondent Simmonds Cain Pty Ltd is to file its defence is extended until the next directions hearing in this matter.
I will hear counsel as to the costs of the Notice of Motion.
- AGLC
- Burns, G.T. & Ors v. Johnston, P. & Ors [1994] FCA 672
- Case
- [1994] FCA 672
- Decision Date
CaseChat Overview and Summary
The primary legal issues the court needed to address were whether the pleadings sufficiently disclosed a reasonable cause of action and if the allegations of vicarious liability were adequately supported. Specifically, the court had to determine whether the plaintiffs' claims that Johnston was acting as an employee, thereby making Simmonds Cain Pty Ltd vicariously liable, were sufficiently pleaded. The court also needed to consider if the plaintiffs' claims that Simmonds Cain Pty Ltd owed a duty of care to ensure Johnston's competent performance as director and secretary were substantiated.
In assessing the pleadings, the court found that certain paragraphs did not adequately disclose a reasonable cause of action. Paragraphs 6.1 and 7.1 of the Amended Cross-Claim of Bain and Company Limited and Bain and Company Investor Services Limited, as well as paragraphs 8.1, 12, and 15.1 of the Amended Cross-Claim of Horwath, were deemed insufficient. The court ruled that these paragraphs did not sufficiently establish the elements of professional negligence or breach of fiduciary duty. Consequently, these paragraphs were struck out, and the cross-claimants were granted leave to make consequential amendments. The court also extended the time for Simmonds Cain Pty Ltd to file its defence to the next directions hearing.
The court's orders reflect the need for more precise and detailed pleadings to substantiate the claims of professional negligence and breach of fiduciary duty. The plaintiffs were required to amend their pleadings to more clearly articulate the basis for their claims, particularly regarding the vicarious liability of Simmonds Cain Pty Ltd. The extension of the defence filing deadline provides Simmonds Cain Pty Ltd with the opportunity to respond adequately to the amended pleadings.
Orders
Orders of the court
THE COURT ORDERS THAT:
1. The Amended Cross-Claim of Bain and Company Limited and Bain and Company Investor Services Limited
(a) Paragraphs 6.1 and 7.1 will be struck out.
(b) The Cross-Claimants will have leave to make consequential amendments.
2. The Amended Cross-Claim of Horwath and Horwath (in respect of the Cross-Claim against Horwath and Horwath by Bain and Company Limited and Bain and Company Investor Services Limited)
(a) Paragraphs 8.1, 12 and 15.1 will be struck out.
(b) The Cross-Claimant will have leave to make consequential amendments.
3. The time within which the Cross-Respondent Simmonds Cain Pty Ltd is to file its defence is extended until the next directions hearing in this matter.
NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.