D Trandos and Sons Pty Ltd v South Pacific Seeds Pty Ltd
[2004] WASC 29
D TRANDOS & SONS PTY LTD -v- SOUTH PACIFIC SEEDS PTY LTD [2004] WASC 29
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 29 | |
| Case No: | CIV:2889/2001 | 17 FEBRUARY 2004 | |
| Coram: | MASTER SANDERSON | 3/03/04 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Statement of claim struck out in part | ||
| B | |||
| PDF Version |
| Parties: | D TRANDOS & SONS PTY LTD (ACN 009 399 633) SOUTH PACIFIC SEEDS PTY LTD (ACN 992 887 256) FEEGATE PTY LTD (ACN 009 072 888) ALLAN GAVIN FELIX MACKINLEY PLAZA LODGE PTY LTD (ACN 054 480 634) |
Catchwords: | Practice and procedure Application to strike out amended statement of claim Turns on own facts |
Legislation: | Nil |
Case References: | Microsoft Corporation and Auschina Polaris Pty Ltd Ltd (1996) 71 FCR 231 Bentley v Wright [1977] 2 VR 175 Dare v Pulham (1982) 148 CLR 658 Jingellic Minerals NL v Abigroup Ltd [1972] WAR 566 Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986 Lennards Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 Performing Rights Society Ltd v Ciryl Theatrical Syndicate [1924] 1 KB 1 Rainham Chemical Works Ltd (In Liq) v Belvedere Fish Guano Co Ltd [1921] 2 AC 465 Rexstraw v Johnson [2003] NSWCA 287 Smith v Littlemore (1996) 15 WAR 289 Sydney Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 Williams v Natural Life Health Foods [1998] 2 All ER 577 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
SOUTH PACIFIC SEEDS PTY LTD (ACN 992 887 256)
Defendant
FEEGATE PTY LTD (ACN 009 072 888)
Third Party
- Plaintiff
AND
ALLAN GAVIN FELIX MACKINLEY
First Defendant
PLAZA LODGE PTY LTD (ACN 054 480 634)
Second Defendant
(Page 2)
Catchwords:
Practice and procedure - Application to strike out amended statement of claim - Turns on own facts
Legislation:
Nil
Result:
Statement of claim struck out in part
Category: B
Representation:
CIV 2889 of 2001
Counsel:
Plaintiff : Mr J C Giles
Defendant : Mr M D Howard
Third Party : No appearance
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Marks & Sands
Third Party : No appearance
(Page 3)
- <mpr>
CIV 1641 of 2002
Counsel:
Plaintiff : Mr J C Giles
First Defendant : Mr T O Coyle
Second Defendant : Mr T O Coyle
Solicitors:
Plaintiff : Solomon Brothers
First Defendant : Phillips Fox
Second Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Microsoft Corporation and Auschina Polaris Pty Ltd Ltd (1996) 71 FCR 231
Case(s) also cited:
Bentley v Wright [1977] 2 VR 175
Dare v Pulham (1982) 148 CLR 658
Jingellic Minerals NL v Abigroup Ltd [1972] WAR 566
Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986
Lennards Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
Performing Rights Society Ltd v Ciryl Theatrical Syndicate [1924] 1 KB 1
Rainham Chemical Works Ltd (In Liq) v Belvedere Fish Guano Co Ltd [1921] 2 AC 465
Rexstraw v Johnson [2003] NSWCA 287
Smith v Littlemore (1996) 15 WAR 289
Sydney Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157
Williams v Natural Life Health Foods [1998] 2 All ER 577
(Page 4)
1 MASTER SANDERSON: This is the return of chamber summonses in each of these matters, whereby the defendants seek to strike out the plaintiff's amended statement of claim. The plaintiff was given leave to amend its statement of claim in terms of a minute of amended statement of claim filed 29 January by order of Registrar S Boyle made on that date. The learned Registrar also reserved to each of the defendants the right to apply to strike out the amended statement of claim. The cause of action in both these cases is broadly similar. However, there are differences. Where necessary I will highlight these differences when dealing with these applications.
2 In each case the first two paragraphs of the statement of claim identifies the parties. In CIV 1641 the first defendant is identified as being at all material times a director of the second defendant. The plaintiff, it is said carries on business as a commercial market gardener primarily growing crops of broccoli. It is pleaded by par 3 that the plaintiff, in keeping with the normal practice of commercial broccoli growers in Western Australia, grows a specific variety of broccoli for the summer season and a different variety for the winter season. Each of these varieties has common features which are said to make the broccoli attractive to consumers. Particulars of the features are provided. By par 4 it is said that in February 2001 the plaintiff had agreed to supply Woolworths Ltd with broccoli and by par 5 the quantity of broccoli promised to Woolworths is set out. By par 6 the purchase price of the broccoli is specified. All of these paragraphs are common to both statements of claim and none of the material pleaded in them is controversial.
3 By par 7 in each of the statements of claim, it is pleaded that the corporate defendant approached the plaintiff in February 2001 requesting that the plaintiff conduct grow-out trials of seedlings of a new variety of broccoli to test its suitability as a summer variety. In CIV 1641 of 2002 the seed variety was described as "Viper". In CIV 2889 of 2001 the seed variety is described as "Atomic" It appears that although the seeds were differently described, they were in fact seeds of the same variety of broccoli. This was common ground between the parties. By par 7(2) it is pleaded that trials were conducted by the plaintiff and by par 8 it is pleaded that the Trial Seedlings (as that phrase is defined in the pleading) were satisfactory. Samples were supplied to Woolworths, who were also satisfied: see par 9. By par 10 and 11 the plaintiff pleads that it had, in the past, grown Banzai variety of broccoli and that the broccoli was harvested throughout summer. By par 12 it is pleaded that the plaintiff's normal practice in running its business was to instruct a firm known as
(Page 5)
- Feegate to acquire seeds of a particular variety of broccoli and germinate these seeds at their (Feegate's) nursery. The plaintiff then purchased the seedlings from Feegate and planted them on its farm. It is important to note then that there was no direct contractual relationship between the plaintiff and the defendants. Any contractual arrangements were between the plaintiff and Feegate on the one hand and Feegate and the defendants on the other. By par 13 it is pleaded that the defendants knew of the commercial practices of broccoli growers in Western Australia, knew of the relationship between Woolworths and the plaintiff, knew of the plaintiff's usual practice of growing the Banzai variety of broccoli and knew of the contractual arrangement between Feegate and the plaintiff.
4 It is at this point that the statements of claim diverge. In CIV 2889 of 2001, by par 18, 19 and 20, it is pleaded the plaintiff advised the defendant that it would switch to Atomic seeds, in July 2001 the plaintiff ordered 960,000 broccoli seedlings of the Atomic variety from Feegate and in turn, Feegate ordered Atomic seeds from the defendant.
5 Paragraphs 14 through to 18 of the statement of claim in CIV 1641 of 2002 plead a different chain of events. By par 16 it is pleaded that in or about July 2001 a representative of the second defendant, one Mullens, met with a representative of the plaintiff, one Arthur Trandos, and Trandos advised Mullens that the plaintiff intended to grow Atomic as its main summer variety of broccoli for the 2001/2002 season. Mullins advised Trandos that the second defendant was anxious to get its Viper seed variety onto the market. By par 16 it is pleaded that by urging the Viper seed variety on the plaintiff, Mullins represented to the plaintiff that Viper variety was suitable as a summer crop. Paragraph 18 is one of the paragraphs attacked by the defendants. Because of its importance I will quote it in full:
"In July 2001, the first defendant telephoned Stuart Bennett, General Manager of Feegate, and stated words to the effect that he was aware that the plaintiff had ordered Atomic variety seedlings from Feegate for use by the plaintiff as its Summer Variety broccoli crop for the 2001-2002 summer season, and that Feegate was then seeding 'seeding Atomic' ie had commenced to germinate Atomic seeds and grow Atomic seedlings, for supply to the plaintiff, that he wanted to know why Feegate was not 'seeding Viper' for the plaintiff, that he wanted the second defendant to have the opportunity to get Viper on the market at that time via sales to the plaintiff, that to that end the second defendant would lower the cost of Viper
(Page 6)
- seeds to match the price being charged by South Pacific Seeds Pty Ltd for Atomic and he wanted Stuart Bennett to speak to Arthur Trandos to ask him to also plant Viper on the farm."
6 By par 19 then, it is pleaded that statements by the first defendant to Stuart Bennett, as pleaded above, amounted to a representation that Viper was a suitable variety of broccoli to be grown for the summer season. Paragraph 20 is then in the following form:
"By reason of the matters pleaded in par 2A, 13 and 16 to 18, the second defendant assumed responsibility for:
20.1 advising the plaintiff (either directly or by its agents or contractors) as to the suitability of Viper seeds to be germinated and grown by Feegate as seedlings at Hope Valley in the months of August and September and to be transplanted on the farm in the months of September and October;
20.2 procuring a supply of broccoli seeds to Feegate with which Feegate could grow for the plaintiff at Hope Valley seedlings which would, upon being transplanted on the Farm, produce broccoli which, on maturity, if grown in accordance with normal horticultural practices for growing Summer Variety broccoli transplanted during the period of September to October 2001 in the Neerabup area, possess the Features."
7 This then is a cause of action pleaded directly against the first defendant. It is to be remembered that the first defendant was a director of the second defendant. Yet it is said against him that the representations he made were such that he assumed personal responsibility for them. In other words, leaving to one side any liability the second defendant might have for the failure to supply appropriate seeds, his statements were such as to render him personally liable. The first defendant says this plea cannot be maintained. Before dealing with this issue it is convenient to consider the rest of the pleading.
8 By par 23 in CIV 1641 of 2001 and par 21 in CIV 2889 of 2001, it is pleaded that the seeds provided were unsatisfactory. The two paragraphs are identical, save one refers to Atomic seeds and the other to Viper seeds. Both paragraphs were subject to attack by all defendants and I will quote the paragraph in full:
(Page 7)
- "Viper seeds were supplied to Feegate by the second defendant in July 2001 which:
23.1 were not suitable to be germinated and grown as seedlings by Feegate at Hope Valley in the months of August and September and/or to be transplanted on the Farm in the months of September and October;
23.2 when grown into seedlings to be transplanted on the Farm in the period September to October 2001 and then grown in accordance with normal horticultural practices for growing Summer Variety broccoli during the period September to December 2001 in the Neerabup area, were not capable of producing, alternatively could not be relied upon to produce, broccoli which at maturity would possess the Features;
23.3 were unsuitable for supply to Feegate, with which to grow at Hope Valley in the period August to October, seedlings for supply to the plaintiff to be transplanted on the Farm."
9 The defendants complain that these paragraphs are embarrassing. They say that the plea does not make clear the plaintiff's complaint. It is said that the defendants do not know whether the plaintiff says that the seeds themselves were defective or whether it was what counsel referred to as "a timing problem" - that is to say, the seeds supplied were not suitable for growing as a summer crop. On behalf of the plaintiff it is said that the position is perfectly plain. This paragraph, taken together with what has gone before and the complaints that follow, make it clear that the complaint is as to timing. The seeds provided were not suitable for growing as a summer crop. Counsel for the plaintiff specifically disavowed any intention to plead that the seeds were inherently defective.
10 I would accept that the paragraph is not perfectly plain. But I think a fair reading of the plea, taken together with the paragraphs that proceed it, make it plain that the complaint is one of timing. If the plea had been that the seeds were simply unsatisfactory for the purpose for which they were acquired, then the plea would have been structured entirely differently. But the references in earlier paragraphs to the summer crop, when it was planted and when it was harvested and the growing trials, inform what is contained in the paragraph complained of. In my view, the position is clear and there is no embarrassment. This paragraph can stand.
(Page 8)
11 By par 24 in CIV 1641 of 2002 and par 22 of CIV 2889 of 2001, the plaintiff pleads that the defendants "knew or ought to have known" what is pleaded in respectively par 23 and 21. Once again these pleas differ slightly and it is convenient to deal first with CIV 2889 of 2001. In par 22 (CIV 2889 of 2001) the particulars of actual knowledge are said to be as follows:
"The defendant had determined prior to 2001 that Atomic seedlings were not suitable for transplantation in the Neerabup area during the months of September to November."
12 The plaintiff then provides particulars of reasonable knowledge. It repeats par 1 to 3 and par 13 to 16 of the statement of claim. It is then said that a reasonable company prior to or in the course of promoting the use of Atomic seeds would have ascertained that the seeds were unsuitable for growing a summer crop."
13 By par 24 (CIV 1641 of 2002) the plaintiff, providing particulars of actual knowledge, refers to par 2, 2A, 3 and 13 of the statement of claim and then says that the defendants had determined prior to July 2001 that Viper seedlings were not suitable for transplantation prior to about the second week in October.
14 In each case the defendants say that these particulars are unhelpful. In each case it is said that to simply say that the defendants had knowledge of the unsuitability of the seeds, provides no information at all. Further, with respect to CIV 1641 of 2002, said that references to paragraphs in the statement of claim are of no assistance.
15 It is worth dealing with this last point first. Paragraphs 2 and 2A identify the first and second defendants in CIV 1641 of 2002. Paragraph 3 deals with the normal practice of commercial broccoli growers in Western Australia. Paragraph 13 sets out matters which, it is said, were known by the first and second defendant and does so by reference to par 3, 4, 10, 11 and 12. As a matter of pleading practice, reference to a paragraph which in turn refers to other paragraphs is confusing. It requires a scramble through the pleading in an attempt to work out what is said in various paragraphs and how it relates to the particulars. In this case, par 3 is mentioned in its own right and then is mentioned as a consequence of the reference to par 13. Furthermore, it is difficult to see how identification of the parties says anything about the knowledge of the defendants as to the suitability or otherwise of the Viper seeds. The only way these paragraphs could be relevant is if they led to
(Page 9)
- some inference of actual knowledge on the part of the defendants. But they don't. Although the presence of such particulars is no great mischief, it would, in my view, be preferable they be struck out.
16 The defendants complain that otherwise the plea of actual knowledge says nothing - it was submitted that the particulars were nothing more than a bald conclusion. In my view, that is not a well-founded objection. The plaintiffs say in each case the defendants knew - actually knew - the seeds were not suitable. That is either right or it is wrong. Assuming the defendants deny that they knew that the seeds were unsuitable (and no defences have yet been filed) it will be for the plaintiff to establish the defendants' actual knowledge. To do that they must lead evidence to support their proposition. What the defendants seem to be saying at the moment is that they require details of the evidence of the material fact pleaded and particularised in the statement of claim. Moreover, there is no forensic utility in requiring the plaintiffs to tell the defendants what they did or didn't actually know. The defendants are perfectly placed to deal with the plaintiff's assertions.
17 The defendants object to the particulars of reasonable knowledge given in each case. In CIV 1641 of 2002 the plaintiff, by par A, repeats par 1 - 4, 10 - 13, 16 - 19. By subpar B it is said that:
"Prior to, or in the course of, promoting the use of Viper seed a reasonable person in the position of the first defendant and a reasonable company carrying on the business of the second defendant would have ascertained those facts."
18 It is convenient to deal first with subpar B. What is said by the plaintiff is that a party in the defendant's position ought to have known the seeds were not suitable for a summer crop. That is a question of fact to be determined on the evidence. In my view, the particulars are sufficient. It is said on behalf of the defendants that the particulars are circular - they say nothing more than what is said by the plea of material fact in par 24. To some extent that is correct. But the particulars allow the defendants to know the case they have to meet. Assuming the defendants are able to establish that they did not actually know of a defect in the seeds, then they must also lead evidence to establish that persons in their position could not reasonably have known about the alleged defects. That is all they need to know to allow them to meet the plaintiff's case.
19 As to subpar A, par 1 and 2 identify the parties, par 3 refers to the cropping practices of commercial broccoli growers in Western Australia
(Page 10)
- and par 4 refers to the long-standing commercial arrangement with Woolworths. Paragraph 10 pleads the cropping period of the summer variety and par 11 deals with the same issue. Paragraph 12 pleads the plaintiff's practice of instructing Feegate to acquire the seeds and grow the seedlings. Paragraph 13 refers back to par 3, 4, 10, 11 and 12 - in other words, all the paragraphs which have already been mentioned. Paragraph 16 details conversation between Mullens and Arthur Trandos in July of 2001. Paragraph 17 pleads the effect of those representations. Paragraphs 18 and 19 plead the case against the first defendant. It is difficult to see how any one of or all of these paragraphs provide particulars of reasonable knowledge. It may be possible to infer reasonable knowledge from such pleas, but that is a different issue and it is not what is presently pleaded. In my view, the particulars of reasonable knowledge given in subpar A should be struck out.
20 Complaint is made by the defendants in CIV 1641 of 2002 as to par 29 and in CIV 2889 of 2001 as to 24. Both of these paragraphs plead that the plaintiff was vulnerable to suffer loss and damage in certain circumstances defined by reference to particular paragraphs. The defendants complain that there are no material facts pleaded which could lead to the conclusion that the plaintiff was "vulnerable". In my view, by reference to the nominated paragraphs, the defendants are aware of the material facts which the plaintiff says rendered it vulnerable to the defendants' actions. The defendants know the case they have to meet and the pleading is satisfactory.
21 Complaint is made by the defendants as to the use of the word "defective" in par 32 in CIV 1641 of 2002 and par 27 of CIV 2889 of 2001. It is said that it is not clear what is meant by the use of the word "defective" in relation to the seeds. With respect, it seems to me the plaintiff's complaints are clear. They are carefully articulated elsewhere in the pleading and neither of these two paragraphs is likely to embarrass the defendants.
22 The defendants in CIV 1641 of 2002 complain about par 34. This paragraph pleads a cause of action in misleading and deceptive conduct either under the Fair Trading Act or the Trade Practices Act. The plaintiff pleads that the omissions pleaded in par 23 were misleading and deceptive. Paragraph 23 does not in fact plead omissions. Clearly what is intended by the plaintiffs is to plead that the defendants, in failing to advise that the seeds were unsuitable, made a misrepresentation by silence. There is no reason why such a plea should not be open, but par 34 does not properly plead such a cause of action. It may also be
(Page 11)
- necessary for the plaintiff to plead material facts which would render silence a misrepresentation. Furthermore, as a point of pleading practice, it would be preferable if the representations said to found a cause of action and the omissions said to amount to representations which also form a cause of action, were pleaded separately. At the moment, par 34 is a rolled-up plea which does have the potential to embarrass the defendants. I would strike out par 34, with leave to replead.
23 In CIV 2889 of 2001 the representation by silence is more comprehensively pleaded in par 29. No complaint as to this paragraph was made by the defendant and quite properly so.
24 All the defendants complain about the pleading of a duty of care which is found in par 32 in CIV 2889 of 2001 and par 37 of CIV 1641 of 2002. In each case it is said that the duty pleaded could not possibly be owed. In CIV 2889 of 2001 it is alleged that the defendant owed a duty to exercise reasonable care to "supply" seed to Feegate. In fact the seed supplied to Feegate was the seed requested by the plaintiff. There is no doubt that on the facts the plaintiff can plead a duty owed by the defendant to the plaintiff. However, at present the formulation does not give rise to a cause of action because there was no breach of the pleaded duty. The same comments can be made about par 37 in CIV 1641 of 2002. While a plea of duty may well be open, the duty as formulated in the pleading is not consistent with other material facts pleaded. In both cases the paragraphs must be reformulated.
25 That then leaves the final question in CIV 1641 of 2002 - do the pleaded material facts give rise to a cause of action against the first defendant on the basis that he assumed personal responsibility for the representation. This issue occupied a considerable proportion of counsel's time during submissions. Detailed consideration was given to the decision of Lindgren J in Microsoft Corporation and Auschina Polaris Pty Ltd (1996) 71 FCR 231, among other cases. I do not propose to go into that and the other authorities in detail. I would make two general points. First, there is clearly some doubt over the circumstances in which personal liability will attach to an officer of a company where a representation is made by a director in the course of his employment with the company. Given that the law is in such a state of flux, it is not appropriate to make decisions on a pleading summons which determines the rights of the parties. Secondly, even if I were to strike out this cause of action against the first defendant, he would remain a party to the proceedings. Accessorial liability under the Trade Practices Act is pleaded against him. It is unlikely that striking out the plea against the
(Page 12)
- first defendant would result in any saving of time for the trial - the first defendant's liability is said to arise in a course of the transaction which will be the subject of detailed evidence on other causes of action.
26 For these two reasons I would not strike out the claim against the first defendant. However, it is apparent that both statements of claim will need to be reworked to some extent. During the course of that reworking, counsel may care to give consideration as to whether or not the cause of action in tort against the first defendant can be maintained. Even taking the most benign view of the authorities, it seems to me doubtful whether the cause of action could succeed.
27 Accordingly, in CIV 2889 of 2001 I would strike out subpar A of the Particulars of Reasonable Knowledge in par 22 and par 32. In CIV 1641 of 2002 I would strike out par A in both Particulars of Actual Knowledge and Particulars of Reasonable Knowledge in par 24 and par 34 and 37. There should be leave to replead in both actions. I will hear the parties as to costs.
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