Elitegold P/L v BPTC Ltd

[1992] FCA 960

JUDGMENT No. .%.OJ ez&

IN THE FEDERAL COURT OF AUSTRALIA )

LIMITED DISTRIBUTION

NEW SOUTH WALES DISTRICT REGISTRY )

) No NG 55 of 1992

GENERAL DIVISION j

BETWEEN:	ELITEGOLD PTY LIMITED
Applicant
BPTC LIMITED formerly BURNS PHILP TRUSTEE COMPANY (In Liquidation)
First Respondent
AUSTRALIA FAIR SHOPPING CENTRES PTY LIMITED
Second Respondent
PROPERTIES (OLD) PTY LIMITED
Third Respondent
CM HOLDINGS PTY LIMITED
Fourth Respondent
CM DEVELOPMENTS (OLD) PTY LIMITED
Fifth Respondent

CORAM: HILL J PLACE: SYDNEY DATED: 24 NOVEMBER 1992

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.    The statement of claim be struck out as against the third respondent.

2.    Leave to the applicant to replead its case against the third respondent by filing and serving a further amended statement of claim on or before 9 December.

3.   Applicant to pay the respondent's costs of the motion with leave to tax.

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY )	No NG 55 of 1992

)

GENERAL DIVISION )

BETWEEN:  ELITEGOLD PTY LIMITED
Applicant

W :	BPTC LIMITED formerly BURNS PHILP TRUSTEE COMPANY (In Liquidation)
First Respondent
W :	AUSTRALIA FAIR SHOPPING CENTRES PTY LIMITED
Second Respondent
W :	PROPERTIES (OLD) PTY LIMITED Third Respondent
W :	CM HOLDINGS PTY LIMITED Fourth Respondent
W :	CM DEVELOPMENTS (OLD  ) PTY
LIMITED Fifth Respondent

 ORAM AM:  *:- . HILL J

PLACE : ' SYDNEY

DATED! 24 NOVEMBER 1992

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.\	:	EX TEMPORE REASONS FOR JUDGMENT
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The third respondent, Properties (Qld) Pty Limlted, moves the court pursuant to Order 20 Rule 2 of the Federal Court R* that the proceedings brought against it by Elitegold Pty Limited, the applicant, be dismissed generally or alternatively stayed, as against the third respondent. Alternatively an order is sought pursuant to Order 11 Rule 16 that the pleadings against the third respondent be struck out.
The amended statement of claim alleges that the applicant was the "victim" of misleading and deceptive conduct In that representations were made to it prlor to its entry lnto a lease of a shopping site in the Australia Fair Centre.
The statement of claim particularises the alleged misleading and deceptive conduct as being representations made by a Mr Duncalf and a Mr Farrell to Mr Nizic of the applicant company relating to a fruit shop in the Sundale shopping centre which was said to be going to close when, in fact, it is alleged, there was no reasonable basis for believing that to be the case. It is also alleged that there were representations that the business in the Australia Falr Centre would be profitable and would turn over $60,000 per week and that the rent for the shop could falrly be calculated on the basis of an anticipated return of $60,000 per week.
The pleadings do not allege any basis for connecting Mr Duncalf and Mr Farrel.1 cr. the one h ~ n d with the third
respondent on the other so as to found a cause of action against the third respondent. This failure comes about, it may be assumed, because the applicant is not aware of the relationship between Mr Duncalf and Mr Farrell on the one hand and the third respondent and, indeed, other respondents referred to in the statement of claim. Thus paragraph 6 of the statement of claim says:

During the course of the negotiations one or more of the second, thlrd, fourth and fifth respondents engaged in misleading and deceptive conduct contrary to section 52 of the Trade Practices Act.

Paragraph 3 contains a contention that the relevant representations were made on behalf of one or more of the second, third, fourth and fifth respondents and notes that, as the applicant is unable to assert with knowledge which of those corporations is liable to it, it has accordingly loined them all to the proceedings.

Evidence was led on the notice of motion that the third respondent had an indirect interest in the Australia Fair Shopping Centres Pty Limlted, the second respondent, but that in 1986 it had sold its business and goodwill to another company. Mr Cunnlngton also gave evldence on affidavit that Mr Duncalf and Mr Farrell were not servants, agents or employees of the third respondent. One might have questioned his abllity to give that evidence since, in part, it lnvolves a concliision of law, but no objection was taken to it,

Mr Cunnlngton was also cross-examined and maintained the position that the third respondent had nothlng to do with the events in question. Mr Cunnington himself was chief executive of the second respondent, which company was a subsidiary of CM Holdings Pty Llmited, the fourth respondent, at the relevant time. He said that a family company of his, Josiah Pty Limited, made his services available to the second respondent and the fourth respondent. Josiah Pty Limited is not, at least at this stage, a party to the proceedings.

The third respondents submitted in these circumstances that the pleading should be struck out. This was because it alleged no facts upon which a cause of action was shown against the third respondent. Further, it was said, if leave were given to replead there could be no more in the repleading than a bare allegation of a connection between the representors and the third respondent, and that representation was incapable of proof: cf W A d v Bannerman (1980) 30 ALR 559 at 569 per Brennan J.

I agree that the pleading, as it presently stands, is defective and should be struck out as against the third respondent. However, I do not thlnk it is appropriate at this stage to determine that the application be struck out altogether as agalnst the third respondent and the applicant

be not allowed to replead the case. I say this because, as	General Steel Industries Inc v Commissioner for Railways (NSW)
(1964) 112 CLR 125 points out, it is inappropriate to use the
court's power to strlke out in a case where an issue of fact arises. The present case is distinguishable from that involved in W-v Bannerman where Brennan J took the view that the allegation in the statement of claim could not in the future be substantiated.

All that has happened here is that evidence has been given by one person, Mr Cunnington. If that evidence were given in the trial and no further evidence were glven against it, it is quite clear that the applicant would have no case against the third respondent.

However, in a trial one would expect evidence to be called by the applicant which might take the form of evidence of those persons making the alleged representations or which mlght take the form of other documentary material, eg salary records and the like, bearing upon the question of whether the persons who allegedly made the representations were agents for the third respondent so as to create a liability in the third respondent to the applicant.

In my view it is not appropriate at this stage to
preclude the applicant from repleading a case against the

third respondent where, after considering the evidence given

by Mr Cunnington. the applics~t might form the view that such

a case can ultimately be made out. I would, however, indicate

that should the applicant replead its case against the thlrd respondent and it later turn out that there is no connection between the third respondent and those persons making the representations, the applicant will be liable to have an order against it not merely for costs against the third respondent but costs on an indemnity basis.

However, for the reasons I have indicated, I do not propose to preclude the applicant from repleadlng its case nor do I consider it appropriate to stay the proceedings. I would accordingly make orders as follows:

1.	That the statement of claim be struck out as agalnst the third respondent.
2.	That the applicant have leave to replead its case agalnst the third respondent by flling and servlng a further amended statement of claim on or before 9 December.

I would further order the applicant to pay the respondent's costs of the motion, in respect of whlch I give leave to tax.

I certify that this and the
preceding flve (5) pages
are a true copy of the Reasons
for Judgment herein of his Honour
Mr Justice Hill.

Associate: pLA!tw

Date: 24 November 1992

Counsel and Solicitors	S. Motbey lnstructed by
for Applicant:	Vaughan Barnes

Counsel and Solicitors for 

Second, Fourth & Fifth	A.H. Bowne lnstructed by
Respondents:	Mallesons Stephen Jaques
Counsel and Solicitors	D. Williams instructed by
for Thlrd Respondent:	Flower & Hart
Dates of Hearlng:	24 November 1992
Date Judgment Delivered:	24 November 1992