Cherubino v Britten
[2011] FMCA 117
•4 March 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHERUBINO v BRITTEN | [2011] FMCA 117 |
| PRACTICE AND PROCEDURE – Application to strike out Amended Statement of Claim on the grounds that it has a tendency to cause prejudice, embarrassment or delay – Court’s approach to striking out of pleadings – whether permissible to plead inconsistent facts – further and better particulars sought of Amended Statement of Claim – Court’s approach to applications for particulars – application for summary dismissal. |
| Bankruptcy Act 1966 (Cth), s.120 Business Names Act 1962 (WA), s.5(1)(b) Fair Trading Act 1987 (WA), ss.9, 10 Federal Court Rules (Cth), O.11, r.16, O.12, rr.1(1) and 4(1) Partnership Act 1895 (WA), ss.7(1), 8(3) Trade Practices Act 1974 (Cth), ss.51A, 52 |
| Allianz Australia Insurance Ltd v Newcastle Formwork Constructions Pty Ltd [2007] NSWCA 144 Issitch v Worrell & Ors (2000) 172 ALR 586; [2000] FCA 477 Woodroffe & Anor v National Crime Authority & Ors (1999) 168 ALR 585; [1999] FCA 1689 |
| K.L. Fletcher, The Law of Partnership in Australia (Ninth Edn) (Pyrmont: Law Book Company, 2007) R.C. I’Anson Banks (ed), Lindley & Banks on Partnership (Eighteenth Edn) (London: Sweet & Maxwell, 2002) |
| Applicant: | MARGARET CHERUBINO |
| Respondent: | WENDY BRITTEN |
| File Number: | PEG 31 of 2010 |
| Judgment of: | Lucev FM |
| Hearing date: | 27 July 2010 |
| Date of Last Submission: | 27 July 2010 |
| Delivered at: | Perth |
| Delivered on: | 4 March 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Rumsley |
| Solicitors for the Applicant: | Alan Rumsley |
| Counsel for the Respondent: | Mr S Davies |
| Solicitors for the Respondent: | Taylor Smart |
ORDERS
(a) Paragraphs 3, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and 3.7 of the Amended Statement of Claim be struck out;
(b)Paragraph 11 of the Amended Statement of Claim be amended by deleting “Applicant” where it first appears, and substituting therefor “Respondent”;
(c)Otherwise the respondent’s application in a case be dismissed.
That the applicant have leave to file and serve a Further Amended Statement of Claim.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 31 of 2010
| MARGARET CHERUBINO |
Applicant
And
| WENDY BRITTEN |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a case in which the applicant, Margaret Cherubino, alleges:
a)misleading and deceptive conduct under ss.52 and 51A of the Trade Practices Act 1974 (Cth);[1]
b)misleading and deceptive conduct for the purposes of ss.9 and 10 of the Fair Trading Act 1987 (WA);[2] and
c)breach of a partnership agreement entered into under s.7(1) of the Partnership Act 1895 (WA),[3]
by the respondent, Wendy Britten, and further alleges that loss and damage was suffered as a consequence thereof.
[1] “TP Act”.
[2] “FT Act”.
[3] “Partnership Act”.
The business or partnership allegedly concerned was a psychology practice.
Application in a case
Ms Britten has made an application in a case which seeks:
a)to strike out all of Ms Cherubino’s Amended Statement of Claim, or, alternatively, a significant number of critical paragraphs of the Amended Statement of Claim, and to have the claim dismissed and judgment entered for Ms Britten; or
b)the provision of extensive further and better particulars in relation to the Amended Statement of Claim.
Approach to strike out application
This Court’s approach to strike-out applications was discussed in O’Brien v Michel’s Patisserie (WA) Pty Ltd[4] as follows:
7. Order 11 rule 16 of the Federal Court Rules relevantly provides that:
16 Embarrassment etc
Where a pleading:
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
(b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or
(c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out.
[4] [2010] FMCA 7 (“O’Brien”).
8. In Guglielman v Trescowthick the Federal Court said:
“Whether a pleading should be struck out depends upon whether, in the particular circumstances, it is necessary to do so in the interests of justice. If the object of pleadings is sufficiently met, the striking out of the pleading will be unnecessary.”
9. The modern approach to litigation is to discourage interlocutory applications of the type made here because they are extremely time consuming and costly.
10. A proper pleading must put a respondent on notice of the case to be met and should sufficiently define the issues for decision so that the preparation of the case and hearing can be controlled.
11. The statement of claim must plead the necessary facts for the purpose of formulating a complete cause of action. While it is not permissible to merely state a conclusion drawn from facts not set out in the statement of claim, consideration should be given to whether the conclusionary pleading still achieves the objective of pleadings. A pleading should be allowed to stand if it would be open to the applicant upon the pleadings to prove facts at the trial which would constitute a cause of action.
12. Embarrassment in the context of O.11 r.16 of the Federal Court Rules carries the connotation of a pleading:
a) which is susceptible to various meanings; or
b) which contains inconsistent allegations; or
c) in which alternatives are confusingly intermixed; or
d) in which irrelevant allegations are made tending to increase expense.
13. The Court may protect its processes from abuse by summarily disposing of an action as frivolous or vexatious, but only if it is so obviously untenable that it cannot possibly succeed.
14. The general rules concerning pleadings need to be considered in the context of the FM Act which provides that the objects of the Court are:
a) to enable the Federal Magistrates Court to operate as informally as possible in the exercise of judicial power; and
b) to enable the Federal Magistrates Court to use streamlined procedures.[5]
[5] O’Brien at paras.7-14 per Lucev FM (footnotes omitted).
In Buckingham v KSN Engineering Pty Ltd[6] this Court discussed the approach it takes in relation to strike out applications, as follows:
[6] (2008) 177 IR 427; [2008] FMCA 546 (“KSN Engineering”).
15. In considering the approach to be adopted to the strike out application it is necessary to deal with the relevant procedural rules.
16. In considering the relevant procedural rules it is appropriate to note that this Court was not originally a court of pleadings. In Rana v University of South Australia the Federal Court observed that:
a) the Federal Magistrates Court Rules 2001 (Cth) do not require pleadings;
b) parties are not obliged to tender all their evidence when the Application and Response is filed; and
c) the Court should be cautious about summarily dismissing a proceeding.
17. In some respects, the role of this Court has changed since the judgment in Rana. The FMC Rules were amended in 2007 to provide that applications might be commenced by the filing of a Statement of Claim or Points of Claim to which a Defence or Points of Defence might be filed in response, and in neither case was there a requirement for the filing of an affidavit ...
18. Because the FMC Rules are silent in respect of striking out pleadings the Federal Court Rules (Cth) can apply so far as is necessary, because of the insufficiency of the FMC Rules.
19. … However, a pleading which discloses no reasonable cause of action or which has a tendency to cause prejudice, embarrassment or delay, may be struck out at any stage of the proceedings, either in whole or in part.
20. The Court recognises that in determining to strike out all or part of a pleading it must exercise a discretion, and that that discretion is one to be exercised with caution having regard to the objects of the Federal Magistrates Act 1999 (Cth) and FMC Rules, and modern case management techniques.[7]
[7] KSN Engineering IR at 432-433 per Lucev FM; FMCA at paras.15-20 per Lucev FM (footnotes omitted).
In Shelton v National Roads and Motorists’ Association Ltd,[8] the Federal Court defined “embarrassment” in the context of O.11 r.16(b) as follows:
18. …“Embarrassment” in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense. This is not an exhaustive list of situations in which a pleading may be embarrassing: see Bartlett v Swan Television & Radio Broadcasters Pty Ltd (1995) ATPR 41-434. An example of an embarrassing pleading is where the pleading simply pleads a conclusion…[9]
[8] (2004) 51 ACSR 278; [2004] FCA 1393 (“Shelton”).
[9] Shelton ACSR at 283-284 per Tamberlin J; FCA at para.18 per Tamberlin J.
It has also been said that a pleading will be embarrassing:
34. …where it is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him: Gunns Ltd v Marr [2005] VSC 251 at paras 14–15.[10]
[10] Priest v New South Wales [2006] NSWSC 12 at para.34 per Johnson J.
Ms Britten asserts that it is an abuse of process to set up two inconsistent sets of facts in the alternative when a party must know that one or the other is a lie.[11]
[11] Citing Brailsford v Tobie (1888) 10 ALT 194 (“Brailsford”).
The position is, however, that as a general rule, parties may plead inconsistent sets of facts, in the alternative.[12] However, if a party knows that one of the alternative sets of facts is false, the pleading is embarrassing and is liable to be struck out.[13]
[12] Issitch v Worrell & Ors (2000) 172 ALR 586 at 594 per Drummond J; [2000] FCA 477 at para.32 per Drummond J (“Issitch”).
[13] Brailsford at 195-196 per Holroyd J; Issitch ALR at 594 per Drummond J; FCA at para.32 per Drummond J; CGU Insurance v Lawless [2008] VSCA 38 at para.27 per Redlich JA (“Lawless”), with whom Neave JA agreed generally at para.9 and Maxwell P agreed on this point at para.1.
In Brailsford the defendant pleaded mistake or fraud in response to a claim in contract for the balance of the purchase price of a property. The court there held that the alternative pleas could not be allowed because:
“…The actual facts must be within her own knowledge, and that being so she has set out two sets of facts inconsistent with one another. If this were to be allowed it would be permitting a party knowing the facts to deliberately place on the record statements, one or other of which must be known to be a lie…”[14]
[14] Brailsford at 194-195 per Holroyd J.
The critical point in Brailsford was that one of the pleas “must be known to be a lie” because “the actual facts must be within … [the party’s] own knowledge”.[15] Put shortly, the party asserting the facts must know the actual facts within their own knowledge before an inconsistent plea will be struck out.
[15] Brailsford at 194-195 per Holroyd J.
Issitch involved an appeal against orders of the Federal Court (at first instance):
a)refusing to annul a bankruptcy; and
b)in favour of the trustee against the appellant.
In Issitch the trustee pleaded that monies withdrawn from the bankrupt’s account by the appellant (the bankrupt’s wife), including a sum of $90,167 which the trustee alleged the appellant had spent on the construction of a new house, constituted a settlement under s.120 of the Bankruptcy Act 1966 (Cth), and that the withdrawal was void against the trustee.[16] The appellant asserted that she used the funds for purposes other than the construction of the new house: it was “a case factually inconsistent in a radical way” with the money having been spent on the new house.[17]
[16] Issitch ALR at 594 per Drummond J; FCA at para.29 per Drummond J.
[17] Issitch ALR at 594 per Drummond J; FCA at para.31 per Drummond J.
On appeal the appellant asserted that had the trustee pleaded the case differently at first instance by asserting a want of consideration for the money spent on the house, the appellant would then have pleaded that she did not receive most of the money, nor did she spend it on the construction of the house, but spent a large part on the bankrupt himself, and alternatively if she did receive the money and did apply it to the construction of the new house, she gave particular benefits to the bankrupt that constituted good consideration.[18]
[18] Issitch ALR at 594 per Drummond J; FCA at para.31 per Drummond J.
The Federal Court held that the appellant was not entitled to set up the alternative inconsistent answer “where one of these sets [of facts] must be known to the party to be false.”[19]
[19] Issitch ALR at 594 per Drummond J; FCA at para.32 per Drummond J.
In Lawless a third party, CGU Insurance, appealed against a personal injuries damages judgment in favour of the plaintiff. The plaintiff was the grandson of the respondent, Mr Lawless. The then 10 year old grandson had been injured when his left hand became caught between a post driver and a fence post, crushing that hand. The post driver was being operated by Lawless (the grandfather) on a farming property that Lawless leased to a fourth party, who had taken out a public risk policy indemnifying Lawless against public liability. At first instance the Victorian Supreme Court gave judgment for the grandson, and CGU Insurance was ordered to indemnify Lawless. CGU Insurance appealed on the basis that the trial judge should have found that Lawless was in breach of a special condition of the policy requiring Lawless to take all reasonable precautions to prevent personal injury, and therefore CGU Insurance was entitled not to indemnify him.[20]
[20] Lawless at paras.10, 11 and 18 per Redlich JA.
At first instance Lawless had contended that he did not know his grandson was holding the fence post, a contention which the trial judge rejected.[21] The trial judge found that Lawless had, in any event, not failed to take reasonable precaution, because on all the available evidence:
a)Lawless did not recognise the relevant danger or at least the extent of it;
b)the grandson’s injury was not due to a lack of desire on the part of Lawless to prevent bodily injury to his grandson by taking reasonable precaution; and
c)there was no deliberate decision to endanger the grandson by Lawless.[22]
[21] Lawless at paras.21 and 26 per Redlich JA.
[22] Lawless at paras.24-25 per Redlich JA.
Thus, Lawless was not precluded from relying on the alternative case to that which he had positively and expressly disclaimed, to support an argument that he had taken reasonable precaution.[23] In so doing the Victorian Court of Appeal found that:
a)the trial judge had been confronted with the divergent cases of the grandson as plaintiff and his grandfather Lawless as respondent from the outset; and
b)CGU Insurance had put in issue the question of compliance with the reasonable precaution special condition in the public risk policy, which gave rise to the indemnity.[24]
[23] Lawless at paras.26-34 per Redlich JA.
[24] Lawless at paras.30-34 per Redlich JA.
In Lawless the Victorian Court of Appeal said:
“…it would be an abuse of the Court’s processes to permit facts to be pleaded which deliberately place on the record positive statements of fact, one or other of which must be known by the pleading party to be untruthful…”[25]
[25] Lawless at para.27 per Redlich JA.
The Victorian Court of Appeal thus had regard to the pleading principle identified in Brailsford and Issitch. The common element in the rationale behind the pleading principle is that the pleading party must know one of the versions of the facts to be untruthful. It is not enough that one of the versions of the facts is, or must be, or will be found to be, untruthful.
The Court will approach the strike out application with the above considerations in mind.
The whole of the Amended Statement of Claim sought to be struck out
Ms Britten seeks to have the whole of the Amended Statement of Claim struck out on the grounds that it has a tendency to cause prejudice, embarrassment or delay in the proceedings.[26]
[26] Pursuant to O.11 r.16(b) of the Federal Court Rules (“FC Rules”).
The paragraphs of the Amended Statement of Claim that are attacked
In support of the claim that the whole of the Amended Statement of Claim ought to be struck out on the grounds cited above, Ms Britten attacks specific paragraphs of the Amended Statement of Claim, each of which is considered below.
Paragraphs 2 and 2A
In relation to paragraph 2 Ms Britten says that:
The Applicant has pleaded that “the Respondent represented to the Applicant that the Respondent would establish and carry on a psychology practice from premises at 150 Walcott Street, Mount Lawley with the Applicant (the “Representation”)”. In Paragraph 2.1 what seem to be particulars of the Representation are pleaded using the words “operate our business from there”.[27]
[27] Ms Britten’s Contentions of Fact and Law, para.10.
Ms Britten also says that:
The Applicant has pleaded that the Applicant understood the Representation to be that the Applicant and Respondent would carry on a joint business together from premises in Mount Lawley.
The Respondent contends that the phrase “carry on a joint business together” is vague and embarrassing, and as such paragraphs 2 and 2A should be struck out. The Respondent is entitled to know exactly the case which is being made against it by the Applicant and the phrase joint business could have a variety of meanings. Which of those meanings is to be attributed to that phrase in this case is unclear from the pleadings.[28]
[28] Ms Britten’s Contentions of Fact and Law, paras.11 and 12.
In order to properly understand the pleading it is necessary to set out paragraph 2.1 in its totality, which is as follows:
The Respondent said words to the effect of “we can set up a family practice in Mount Lawley together. We can both lease the premises and register the name of Mount Lawley Family Psychology Centre and operate our business from there providing psychological services”.
When read in context with the whole of paragraphs 2 and 2.1, Ms Cherubino’s plea of a representation being made by Ms Britten that they would carry on a “joint business” together puts Ms Britten sufficiently on notice as to the nature of the claim against her, especially in a case where an alternative plea of the parties being in a partnership has been made, and the nature of the business, “providing psychological services” has been made clear. It will ultimately be a matter for the Court to determine the working arrangement between the parties having regard to the evidence, which will be on affidavit, and which will therefore set out the facts relied upon to establish that there was a joint business, and, if so, what kind of joint business.
The Court will not therefore strike out paragraphs 2 and 2A.
Paragraph 3
Ms Britten contends that:
Paragraph 3 refers to “further representations consistent to the Representation in telephone conversations, email messages and conversations with the Applicant”. The particulars provided in paragraphs 3.1 to 3.7 do not refer to any telephone conversations, email messages and conversations with the Applicant and as such the paragraph should be struck out as it is embarrassing, or alternatively further better and particulars of the telephone conversations, email messages and conversations should be provided.
The Particulars of Representations from paragraph 3.1-3.7 do not provide adequate information as to how the Respondent made the alleged statements contained within those paragraphs. The paragraphs should be struck out for want of particularity, or alternatively, further and better particulars of these statements ought to be provided.
The “further representations” referred to in Paragraph 3 are not referred to at any other point in the Amended Statement of Claim. It is not pleaded that the Applicant has relied on these further representations, and as such the paragraph should be struck out as it is not relevant to the Applicant’s pleaded claim.[29]
[29] Ms Britten’s Contentions of Fact and Law, paras.13-15.
The further representations said to have been made by Ms Britten in telephone conversations, emails and conversations with Ms Cherubino are not set out in the particulars provided in paragraphs 3.1 to 3.7, none of which refer to further representations made in “telephone conversations, emails and conversations with” Ms Cherubino. Rather, those further representations in paragraphs 3.1 to 3.7 are representations said to be made to third parties. The representations made in paragraphs 3.1 to 3.7 appear to be broadly consistent with an allegation of partnership, and are related to conduct by Ms Cherubino said to be in reliance upon the Representation, that is, that Ms Britten would establish and carry on a psychology practice from the Mount Lawley premises. However, in circumstances where:
a)there are no pleaded further representations by way of telephone conversations, email messages and conversations with Ms Cherubino as pleaded in paragraph 3; and
b)the particulars of further representations in paragraphs 3.1 to 3.7 are not otherwise specifically relied upon to found any cause of action, plea for relief or reliance,
paragraph 3 and the particulars in paragraphs 3.1 to 3.7 ought to be struck out as embarrassing.
The Court notes that it is fairly obvious that, assuming that there were further representations made as pleaded in paragraph 3, that plea could stand if sufficiently particularised, and that the present particulars of further representations in paragraphs 3.1 to 3.7 could be related to a cause of action, and in particular, the further and alternative plea that Ms Cherubino and Ms Britten entered into a partnership.[30] Thus, whilst the Court will order that paragraph 3, and sub-paragraphs 3.1 to 3.7 be struck out, Ms Cherubino will have leave to file a Further Amended Statement of Claim.
[30] See R.C. I’Anson Banks (ed), Lindley & Banks on Partnership (Eighteenth Edn) (London: Sweet & Maxwell, 2002) (“Lindley & Banks”), page 117 where it is said that “…the existence of …a partnership [in the absence of direct documentary evidence of an agreement for partnership] will have to be proved by reference to the parties’ conduct and, in particular, to the way in which they have dealt with each other and with third parties. However, dealings of the latter type will only be of real evidential value if they were known to and, thus, conducted with the express or implied authority of the other alleged partner(s). Such knowledge may, inter alia, be proved by reference to books of account, letters, admissions and the oral evidence of employees, agents and other persons.”
Paragraph 4.5
Ms Britten contends that:
Paragraph 4.5 should be struck out as the phrase “carried on business” lacks sufficient particularity for the Respondent to adequately be informed of the case being put against it. If the Claimant alleges that it entered into a partnership with the Respondent then that should be pleaded. Alternatively if “carried on business” had some alternative meaning then that should be pleaded.[31]
[31] Ms Britten’s Contentions of Fact and Law, para.16
The same considerations apply to the contention concerning paragraph 4.5 as applied to paragraphs 2 and 2A above. The Court will not therefore strike out paragraph 4.5.
Paragraph 11
Ms Britten contends that:
Paragraph 11 is embarrassing as it states that “the Applicant engaged in conduct…without the prior knowledge or consent of the Applicant.” Clearly the Applicant cannot act without its own knowledge.[32]
[32] Ms Britten’s Contentions of Fact and Law, para.17.
Paragraph 11 of the Amended Statement of Claim is clearly a mistake, and the Court will grant leave to the Applicant to replace the first ‘Applicant’ with ‘Respondent’. In a modern litigation case management context the parties ought to have agreed to such an amendment, and not troubled the Court with such a matter, except by their consent to the amendment.
Paragraphs 2, 2A, 4.5, 7, 12 and 19 to 24
Ms Britten contends that:
Paragraph 7 pleads that the Representation (pleaded at paragraph 2) was false in that, on or about 9 June 2009, the Respondent informed the Applicant that they were not and had not been carrying on a business together. This is the only basis relied on by the applicant to show that the Representation was false.
Paragraphs 19 to 24 however plead that from in or about November 2006 the Applicant and Respondent entered into a partnership for the purposes of section 7(1) of the Partnership Act 1895 by carrying on business of psychologists together with a view to making a profit.
Paragraph 4.5 also pleads that the “Applicant carried on business from the Premises with the Respondent from in or about November 2006.” Further, paragraph 12 states that the Applicant ceased carrying on business with the Respondent in or about July 2009.
The pleadings at paragraphs 2, 2A, 4.5, 7 and 19 are contradictory. The Applicant has pleaded two sets of facts in the alternative. In the first instance the Applicant has pleaded that the Representation (that the Respondent would establish and carry on a psychology practice from premises at 150 Walcott Street, Mount Lawley with the Applicant) was false. The Applicant has pleaded that her understanding of the Representation is that the parties would carry on a joint business together from the premises.
Yet the Applicant clearly pleads in the Amended Statement of Claim that the Applicant carried on business with the Respondent, and further that a Partnership was entered into. If the facts pleaded in paragraphs 4.5, 12 and paragraphs 19 to 24 are correct (which is not admitted) then the Representation cannot be false. Alternatively, if the representation was false then it stands that the parties could not have entered into a partnership or ‘joint business’. The Respondent submits that the pleading is embarrassing and the Amended Statement of Claim in its entirety ought to be struck out. Alternatively paragraphs 2, 2A, 4.5, 7, 12 and 19 to 24 ought to be struck out.
The fact that the Respondent later allegedly made a statement that was contradictory to the alleged Representation does not in itself make the Representation false. It is clear from the pleadings that the Applicant believes that a partnership or ‘joint business’ was entered into. If that is the Applicant’s belief then to maintain this inconsistent pleading is an abuse of process.[33]
[33] Ms Britten’s Contentions of Fact and Law, paras.18-23.
Ms Britten also argued that there are no material facts pleaded by Ms Cherubino in relation to the partnership plea at paragraphs 19 to 21 of the Amended Statement of Claim, and that the plea is conclusory.
There are material facts pleaded in support of the partnership plea in paragraph 19. Paragraph 19 of the Amended Statement of Claim pleads that the parties carried on business together with a view to making a profit. If, as a matter of fact, parties carry on business in common with a view of profit, then that is a partnership.[34] There are matters pleaded that support a claim that Ms Cherubino and Ms Britten carried on a business in common with a view to profit, including paragraphs 2 and 2A discussed above. Because the partnership relationship is contractual, the determination of its existence requires an assessment of what the parties intended, which may be evidenced by their conduct towards one another during the course of carrying on the business.[35] Thus, further matters pleaded by Ms Cherubino in paragraph 4 as conduct by her in reliance upon the Representation, namely:
a)leasing premises jointly with Ms Britten;
b)registering a business name jointly with Ms Britten;
c)opening a joint bank account with Ms Britten in the business name;
d)registering for GST jointly with Ms Britten; and
e)carrying on business from the leased premises with Ms Britten,
would, if that conduct were proven to have occurred “with Ms Britten”, be evidence which might support a claim of a partnership.[36] So too would paragraph 20 which pleads that the partnership commenced trading under the business name. Registering and trading under a business name may evidence a partnership, as a business name is registered in relation to a person, and each other person, who carries on the business.[37]
[34] Partnership Act 1895 (WA), s.7(1); Connell & Anor v Bond Corporation Pty Ltd & Ors (1992) 8 WAR 352 at 363 per Malcolm CJ (“Connell”).
[35] K.L. Fletcher, The Law of Partnership in Australia (Ninth Edn) (Pyrmont: Law Book Company, 2007), page 42 (“The Law of Partnership”). See also Lindley & Banks, page 74 where it is said “[if] the agreement is not in writing the intention of the parties must naturally be ascertained from their words and conduct.”
[36] The usual evidence of a partnership includes joint bank accounts and the use of property jointly: Lindley & Banks, pages 121-122.
[37] Business Names Act 1962 (WA), s.5(1)(b).
Ms Britten is sufficiently on notice as to the alternative plea of entry into a partnership and can plead to it. Ultimately, it is a mixed question of fact and law to be made out, or not, on the evidence at hearing.[38]
[38] Keith Spicer Ltd v Mansell [1970] 1 All ER 462, especially at 463 per Harman LJ. See also The Law of Partnership, page 64; and Lindley & Banks, page 115.
Ms Cherubino submits that a party may plead two or more inconsistent sets of material facts, may claim relief in the alternative, and may rely upon several different rights alternatively. A party may do this if they do so separately and distinctly.
Ms Cherubino has pleaded the existence of a partnership and a termination of the partnership as a result of Ms Britten’s conduct, causing Ms Cherubino to suffer loss and damage, as a distinct alternative to the TP Act misleading and deceptive conduct claim. Therefore, the alternative claim is not precluded unless it is the case that one of the claims is known to be false to the party pleading it, in this case Ms Cherubino.
In this case the Representation pleaded is claimed to be false. Ms Cherubino, as the pleading party, does not actually know whether the Representation is false. In the event that the Representation is not false, Ms Cherubino therefore pleads, in the alternative, a specific kind of business arrangement, namely a partnership. If the Representation is true it cannot be said to be something that Ms Cherubino knew to be false, and it cannot be said that she knew the plea of falsity of the Representation was false. It may be, in the event that the Representation is true, that the business concerned is, in any event, a partnership. Indeed, irrespective of the truth or falsity of the plea concerning the Representation, there may be a partnership. In Connell the Western Australian Supreme Court found, notwithstanding that the parties to a formal and detailed joint venture agreement had eschewed the partnership as a relationship under the joint venture agreement, there was nevertheless a partnership as a matter of law under the terms of ss.7(1) and 8(3) of the Partnership Act, because the parties became joint venturers carrying on a business in common with a view to profit, and it was intended that the profits were to be shared in proportion to the joint venturers’ respective interests.[39]
[39] Connell at 363 per Malcolm CJ.
In the above circumstances, it cannot be said that Ms Cherubino has knowingly pleaded a falsity with respect to the Representation (or for that matter, the alleged partnership), and, in any event, the relevant facts form the basis for an arguable case that there was a partnership between Ms Cherubino and Ms Britten.
Ms Cherubino further submits that the conduct pleaded in support of the misleading and deceptive conduct claim is relied upon to plead the alternative claim that a partnership existed between the parties. The Court notes that this is not specifically how the issue is pleaded in the Amended Statement of Claim in support of the claim that a partnership existed. Nevertheless, it is the Court’s view that the nature of the pleading is such that it is clear what claims are made, and what relief is sought, and that the claims and relief sought are sufficiently supported by pleaded material facts, which the Court expects will be further supplemented by affidavit evidence in due course.
In the Court’s view, Ms Britten has not made out a case to strike out paragraphs 2, 2A, 4.5, 7, 12 and 19 to 24 of the Amended Statement of Claim on the bases claimed.
Paragraph 22
The Court notes that paragraph 22 of the Amended Statement of Claim as presently pleaded is unintelligible. It may be that it should read: “In partnership with the Respondent, the Applicant: …” but, unlike paragraph 11, is not so obviously a mistake that the Court can rectify it. It suffices to observe that it is a matter which can be rectified in any Further Amended Statement of Claim to be filed.
Particulars
Provision of particulars
Under the FC Rules:
a)a party pleading shall state in the pleading or in a document filed and served with it the necessary particulars of any claim, defence or other matter pleaded;[40] and
b)where a party pleading claims damages, including monies paid or liable to be paid, particulars are required of those monies.[41]
[40] FC Rules, O.12 r.1(1).
[41] FC Rules, O.12 r.4(1).
With respect to the granting of particulars in this Court, this Court observed in Olsen v Wellard Feeds Pty Ltd:
7. Determining the necessity for particulars by having regard to the totality of the pleadings and the evidence that has already been filed, is a proper course to adopt. It is not inconsistent with modern principles of case management.
8. There is provision in the rules for particulars, as there is, for example, for discovery and interrogatories. Unlike the latter two, particulars orders do not require the Court to make a declaration that it is in the interest of the administration of justice to do so. Nevertheless, particulars are very rarely ordered and probably more rarely than discovery and interrogatories which require the declaration. It is fair to say that generally it is only in the most complex cases before this Court that particulars are ordered.[42]
[42] [2007] FMCA 1885 at paras.7-8 per Lucev FM (“Wellard Feeds”) (footnotes omitted). See also Verge & Anor v Devere Holdings Pty Ltd & Ors [2008] FMCA 591 at paras.15-16 per Lucev FM; Doukidis v Williamson (2008) 6 ABC(NS) 717 at 725 per Lucev FM; [2008] FCA 1352 at paras.33-34 per Lucev FM.
In Bailey & Ors v Beagle Management Pty Ltd & Ors[43] the Full Court of the Federal Court observed that:
…modern techniques of case management suggest a more pragmatic and flexible approach than the structured, rule-laden regime proposed by the applicants.[44]
[43] (2001) 182 ALR 264; [2001] FCA 60 (“Beagle Management”); see also Woodroffe & Anor v National Crime Authority & Ors (1999) 168 ALR 585 at 590-591 per Drummond, Sundberg and Marshall JJ; [1999] FCA 1689 at para.23 per Drummond, Sundberg and Marshall JJ.
[44] Beagle Management ALR at 272 per Heerey, Branson and Merkel JJ; FCA at para.34 per Heerey, Branson and Merkel JJ.
In Police & Nurses Credit Society Ltd v Burgess Rawson (WA) Pty Ltd[45] it was said:
What are “necessary” particulars of any claim, defence or other matter pleaded is a matter of judgment. The underlying principle is that the case of each of the parties is adequately exposed to the other. It is important to maintain a sense of balance in the detail of particulars sought and ordered. The provision of particulars should not be allowed unduly to increase the cost and delay associated with litigation. In contemporary commercial litigation where, frequently, the court will direct the filing of witness statements or affidavits on either side subject to the right to cross-examination, the necessity for elaborate particulars and lengthy debates about them is even more questionable.[46]
[45] [2006] FCA 1395 (“Burgess Rawson”).
[46] Burgess Rawson at para.17 per French J.
In Keshi Pty Ltd v Firefly Press (Australia) Pty Ltd[47] the Federal Court, citing Burgess Rawson, observed that:
… it is important to maintain a sense of balance in the details of particulars sought or ordered.[48]
[47] (2008) 246 ALR 166; [2008] FCA 440 (“Keshi”).
[48] Keshi ALR at 169 per McKerracher J; FCA at para.23 per McKerracher J.
In Chapman v Australian and New Zealand Banking Group Ltd[49] the Federal Court, again citing Burgess Rawson, observed that:
It has been suggested that in contemporary commercial litigation, where there will inevitably be a direction for the filing and service of affidavits or witness statements, the necessity for lengthy particulars may be viewed with disfavour.[50]
[49] [2008] FCA 86 (“Chapman”).
[50] Chapman at para.78 per Lindgren J.
In Allianz Australia Insurance Ltd v Newcastle Formwork Constructions Pty Ltd[51] one member of the New South Wales Court of Appeal observed that:
… parties have a duty to assist the court to further the just, quick and cheap resolution of the real issues in proceedings … It is to be hoped that the present case’s unfortunate combination of an excessive request for particulars and an intransigent response is an aberration.[52]
[51] [2007] NSWCA 144 (“Allianz Australia Insurance”).
[52] Allianz Australia Insurance at para.29 per Giles JA.
The application for particulars will be considered having regard to the principles established in the above cases.
Paragraphs 14, 18 and 24
Ms Britten contends that:
Paragraph 14 ought to be struck out for want of particularity, or alternatively, particulars of the expenses incurred by the Applicant in establishing alternate premises ought to be provided. Similar objections are raised with respect to paragraphs 18 and 24.[53]
[53] Ms Britten’s Contentions of Fact and Law, para.24.
The amount of $21,629 claimed in paragraph 14 of the Amended Statement of Claim is particularised in paragraphs 15.1-15.3. Likewise the particulars of loss and damage in paragraphs 18 and 24 are set out in paragraphs 18.1 - 18.3 and 24.1 - 24.3 respectively. The Court accepts that further particulars of loss may also be provided in the evidence put before it prior to hearing. These paragraphs will not be struck-out and particulars will not be ordered.
Summary dismissal of application
Given the conclusions reached by the Court concerning striking out paragraphs of the Amended Statement of Claim and the provision of particulars, it is clear that, on the relevant principles applied in this Court as to summary dismissal of an application, Ms Britten’s application in a case for summary dismissal cannot succeed.[54]
[54] See, for example, Balding v Ten Talents Pty Ltd (2007) 162 IR 17 at 24 per Lucev FM; [2007] FMCA 145 at paras.15-18 per Lucev FM.
Conclusions
The Court has concluded that:
a)paragraphs 3 and 3.1 to 3.7 of the Amended Statement of Claim are to be struck out;
b)paragraph 11 of the Amended Statement of Claim is to be amended by deleting “Applicant” where it first appears, and substituting therefor “Respondent”;
c)otherwise, the application in a case be dismissed; and
d)there will be general leave to file a Further Amended Statement of Claim.
The Court will hear the parties as to costs and directions for the future programming of the application.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 4 March 2011
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