Green v Wilden Pty Ltd - [2001] WASC 311

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: GREEN & ORS -v- WILDEN PTY LTD & ORS [2001] WASC 311

CORAM: STEYTLER J

HEARD: 31 OCTOBER 2001

DELIVERED : 20 NOVEMBER 2001

FILE NO/S: CIV 3049 of 1991
CIV 3050 of 1991
CIV 2965 of 1990
CIV 2966 of 1990
Consolidated by order dated 5 August 1998

BETWEEN: GRAEME WILLIAM GREEN
First Plaintiff
W J GREEN & CO (1984) PTY LTD (ACN 008 851 867)
Second Plaintiff
SHARYN LEE GREEN
GRAEME WILLIAM GREEN
JULIE ANNE GREEN
WILLIAM JOSEPH GREEN
NORMA GLENYCE GREEN
Third Plaintiffs
AND
WILDEN PTY LTD (ACN 009 143 033)
First Defendant
MAGENTA NOMINEES PTY LTD (ACN 009 340 158)
Second Defendant
TACE PTY LTD (ACN 009 204 915)
Third Defendant
SYDNEY JAMES CHESSON
Fourth Defendant
BERT LEONARD DENBOER
Fifth Defendant
CALLAO PTY LTD (ACN 008 867 552)
Sixth Defendant
BENRONE PTY LTD (ACN 008 931 084)
Seventh Defendant
DELTABROOK PTY LTD (ACN 009 462 695)
Eighth Defendant
JOHN MARTIN KELLY
Ninth Defendant

Catchwords:

Practice and procedure - Pleadings - Plaintiffs given leave to amend pleadings - Application by defendants to strike out amendments - Turns on own facts

Legislation:

Nil

Result:

Strike-out application dismissed

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr M L Bennett
Second Plaintiff            :     Mr M L Bennett
Third Plaintiffs             :     Mr M L Bennett
First Defendant             :     Mr R H B Pringle QC & Mr T Galic
Second Defendant         :     Mr R H B Pringle QC & Mr T Galic
Third Defendant           :     Mr R H B Pringle QC & Mr T Galic
Fourth Defendant          :     In person
Fifth Defendant            :     Mr R H B Pringle QC & Mr T Galic
Sixth Defendant            :     Mr R H B Pringle QC & Mr T Galic
Seventh Defendant        :     Mr R H B Pringle QC & Mr T Galic
Eighth Defendant          :     Mr R H B Pringle QC & Mr T Galic
Ninth Defendant           :     Mr R H B Pringle QC & Mr T Galic

Solicitors:

First Plaintiff                :     Bennett & Co
Second Plaintiff            :     Bennett & Co
Third Plaintiffs             :     Bennett & Co
First Defendant             :     Galic & Co
Second Defendant         :     Galic & Co
Third Defendant           :     Galic & Co
Fourth Defendant          :     In person
Fifth Defendant            :     Galic & Co
Sixth Defendant            :     Galic & Co
Seventh Defendant        :     Galic & Co
Eighth Defendant          :     Galic & Co
Ninth Defendant           :     Galic & Co

Case(s) referred to in judgment(s):

Green v Wilden Pty Ltd [2001] WASC 145

Case(s) also cited:

Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Glandon Pty Ltd v Strata Consolidated Pty Ltd (1993) 11 ACLC 895
ASC v AS Nominees Ltd (1995) 13 ACLC 1822
Birkett v James [1978] AC 297
Carter v Standen, unreported; FCt of WA; Library No 970271; 28 May 1997

STEYTLER J: This is an application, brought by all defendants in these proceedings other than the fourth defendant, Mr Sydney Chesson, to strike out various paragraphs of the plaintiffs' amended consolidated substituted statement of claim ("the statement of claim") and of its amended consolidated reply and defence to the first, second, third and fifth to ninth defendants' counterclaim ("the reply"). Mr Chesson, who is unrepresented, chose not to bring a similar application, albeit he professed to support the application. However, he contended that I should enter a judgment in favour of the defendants, dismissing the plaintiffs' claims for failure to comply with a springing order which I made against them on 4 October 2001.
Before dealing with these matters I should say something about the background to them.
I have, in a previous judgment (Green v Wilden Pty Ltd [2001] WASC 145), set out the drawn out and tortuous history of the proceedings. I also set out the interrelationship between the parties and various of the causes of action raised by the plaintiffs against the defendants. I will not repeat what I there said. It is enough to say, for present purposes, that that judgment was given in respect, inter alia, of an application to strike out the plaintiffs' action (to which I shall refer as "the earlier application"). In the course of that application (which was unsuccessful) the defendants made a number of complaints about the plaintiffs' pleadings, including complaints about a lack of particularisation. In my reasons for judgment I mentioned other aspects of the plaintiffs' pleadings which seemed to me to be unsatisfactory.
After receipt of the reasons for judgment in the earlier application, the plaintiffs applied for, and were given, leave to amend their pleadings. They failed to do so within the time appointed for that purpose and the defendants applied for a springing order. Their application was acceded to. On 4 October 2001 the plaintiffs were ordered to file and serve their amended pleadings by 4 pm on 12 October 2001, failing which their claims would be struck out. On this occasion they did file their amended pleadings by the appointed time. However, those of the defendants who have brought the strike‑out application assert that the amended pleadings are deficient and that various parts of them should be struck out. Mr Chesson, for his part, says that, part of the purpose of the amendments having been to better particularise the pleadings, and that not having adequately been done, the order made on 4 October 2001 has not been complied with and the plaintiffs' claims should be struck out in their entirety.
Mr Chesson's contentions can be dealt with shortly. I will consequently deal with them first.
The orders which I made on 4 October 2001 did not require the plaintiffs adequately to particularise their claim, on pain of judgment, and nor could orders to that effect sensibly have been made, at least on the papers as they then stood. The plaintiffs had said that they proposed to provide additional particulars of their claim in such a way as to answer any outstanding requests, save where those requests were objected to as being improper. What I did was to require them, to the extent that any outstanding requests for particulars were not answered by the amended pleadings or otherwise, to lodge a minute saying upon what grounds the plaintiffs objected to providing answers to those requests. The plaintiffs filed, together with their amended pleadings, answers to the outstanding requests which incorporated a minute of objections, to the extent that objections were made. There is consequently no basis for any entry of judgment upon the grounds of noncompliance with my order. I should add that the other defendants did not contend that any of the orders made by me had not been complied with.
While it is strictly unnecessary for me to do so, I will, in any event, address the matters raised by Mr Chesson.
The first of these relates to par 7.6 of the statement of claim. That paragraph alleges that Mr Chesson is, and was at all material times, pursuant to a duty owed to each of the first and second plaintiffs, required to act honestly in the exercise of his powers and the discharge of his duties as a director of the first defendant. The amended pleading provides particulars of that allegation. Mr Chesson complains about each of particulars (iv) to (vii). These read as follows:
"(iv)Green & Green & Co (as the case may be) were unit holders in a Trust conducted by the relevant corporation, and were also shareholders in that corporation;
(v)given that the corporation in question was controlled by Chesson and was conducting a trust, for the benefit of the relevant Plaintiffs who, being unit holders had (in distinction to discretionary beneficiaries) distinct beneficial interests;
(vi)the breaches of duty alleged in the Plaintiffs' Statement of Claim are of the nature which directly affect Green & Green & Co (as the case may be) in addition to affecting Trust assets generally; and
(vii)it being implicit in the Plaintiffs' plea that Chesson is in effect [sic] control of the relevant trustee corporations, Chesson is not and will not cause the relevant trustee company to take action against Chesson himself."
Mr Chesson complains that particular (iv) is not a particular at all, but an assertion. As I read the pleading, it picks up what has been alleged in pars 1.1, 1.3, 2.3 and 2.5 of the statement of claim as matters supporting the proposition that the pleaded duty was owed. There is nothing improper in an "assertion" of that kind.
As to par (v), Mr Chesson contends that this is not a particular at all but merely the expression of an assumption. There is no new factual allegation in that paragraph (all of it being drawn from what has been pleaded in earlier paragraphs of the statement of claim) and the intent of the pleader appears to be merely that of repeating (perhaps inelegantly) those matters as supporting the existence of the pleaded duty. I am not persuaded that there is any impropriety in so doing.
Next, Mr Chesson says that neither of pars (vi) and (vii) provide proper particulars. I am not convinced, at least in the absence of further argument, that these two particulars add much, by way of support, to what is pleaded in par 7.6. However, in circumstances in which they raise no new factual allegation, at least of any substance, and the only argument against them is one, essentially, of form, I would not have been prepared to strike them out even if this was what had been sought by Mr Chesson.
Mr Chesson made similar complaints about the particulars to par 8.7, which makes a precisely similar allegation in respect of the fifth defendant. For similar reasons I would not have been prepared to strike out any of the particulars complained of.
Mr Chesson also makes similar complaints about pars 8.8, 8.9, 8.11, 8.12 and 8.13, each of which repeats the particulars in par 8.7. It follows, from what I have said, that I am not prepared to accede to any of these complaints.
Mr Chesson complains, too, about the particulars to par 12.3. These complaints are similar to those in respect of par 7.6 and, for similar reasons, I am not persuaded that there is any substance to them. He also complains about the particulars to pars 12.4 and 12.5 insofar as they repeat the particulars to par 12.3. It follows, from what I have said, that I do not consider that there is any substance to these complaints.
Next, Mr Chesson complains about the particulars to pars 62 and 63. In par 62 of the statement of claim the plaintiffs plead that, in breach of duty, Mr Chesson failed to act honestly in the exercise of his powers or the discharge of his duties as a director of the first defendant by causing it, in breach of its duties as a trustee, to confer a benefit on one Simon Chesson in the form of a gift to him of a trip to Italy. The amended pleading provides further particulars of the alleged failure to act honestly. Particular (a) repeats the matters described in par 63. Mr Chesson submits that it is unusual to repeat something which has not yet been said. That may be so, but nothing turns on the fact that what is "repeated" first appears in a later paragraph. Mr Chesson also pointed out that par 63.3, by way of its amended particulars, repeats the particulars to par 62(c). This, he suggested, makes the pleading circular. It may do, in this small respect. However, there is considerably more pleaded in par 63 than in the particulars to subparagraph 63.3 thereof. That being so, there is utility in the "repetition" of par 63 in par 62(a), albeit the latter paragraph should have excluded the particulars to par 63.3 from its ambit. The fact that it did not leads to no difficulty.
Next, Mr Chesson complains that the new particulars to par 65 refer to the "Capital Trust" when no such trust has previously been referred to. That is a typing error and the reference to "Capital" Trust should be a reference to the "Balga" Trust. It is consequently a simple matter to correct that error.
Mr Chesson also complained that the particulars to par 65 "are not particulars". I assume, by that, he means that they are material facts. It may very well be the case that it would have been preferable to plead the matters now pleaded by way of particulars as material facts, thereby enabling the defendants to plead specifically to them so as to clarify the issues for trial. However, I doubt that this gives rise to any real prejudice on the part of Mr Chesson (albeit it might cause the plaintiffs some prejudice), and nor did he suggest that it did give rise to any prejudice. In those circumstances I am not persuaded that there is sufficient substance to Mr Chesson's complaint.
Next, Mr Chesson complains about the particulars of failing to act honestly in par 67 of the amended pleading. He complained, firstly, about the failure to provide any particulars of an "unspecified 'Co-Op' fee" said to have been paid to Mr Chesson, and to which he is said to have had no entitlement. However, those particulars have been provided in par 27 of the plaintiffs' minute of objections (and answers) to the defendants' request for particulars of the consolidated substituted statement of claim, filed on 12 October 2001.
Next, Mr Chesson complains of particular (iv) in par 67. That is a particular to the effect that Mr Chesson did not honestly believe, and could not have honestly believed, that the payment to him of certain management fees therein referred to, and the "Co-Op" fee, was in the best interests of the Balga Trust and the other unit holders in that trust, and knew or should be taken to have known or appreciated that those payments were not in the best interests of the Trust or the other unit holders, but were in fact to the particular advantage of Mr Chesson, in that payment of these fees "represented .. [the first defendant] as trustee breaching its … [fiduciary] duty to the unitholders of the Trust". Mr Chesson submitted that this is an "allegation" and not a particular. It is not apparent to me, in the absence of further argument, that this paragraph adds much to the plea, as it seems to me to be somewhat circular in its operation. If, on the other hand, it is not circular, then it seems to me to lack any adequate particularisation. However, there being no application to strike it out (and I would not countenance any such application in the absence of prejudice), nothing more need be said of it.
Next, Mr Chesson complains that there are no particulars of the management fee referred to in par 68.1 of the pleading. However, the only particulars which have been sought in respect of that paragraph are particulars of the agreement pursuant to which it was alleged that the management fee was payable. Those particulars have been supplied in par 28 of the plaintiffs' minute, above referred to.
Mr Chesson also complained that, while additional particulars have been promised in par 76.10, these have yet to be provided. However, insofar as additional particulars have been sought, they have been provided in answer 34 of the minute above referred to.
Finally, Mr Chesson made a similar complaint about par 78. My own review of the documents discloses no further request, or answer, in respect of that paragraph and it may now be appropriate that those particulars should be supplied (the plaintiffs having said that they would provide them after discovery, answers to interrogatories and exchange of expert reports). However, the failure to provide them, to date, does not provide any basis for striking out the whole of the plaintiffs' action.
That brings me to the complaints made on behalf of the other defendants.
They, too, complain about the particulars to pars 7.6, 8.7 and 12.3 (which are repeated in a number of other paragraphs). However, their complaint is that these particulars were not requested. The fact that additional particulars have been supplied by way of amendment, and in the absence of any request, provides no basis for striking them out, least of all in circumstances in which they raise no new factual allegations and in which, by consent, leave to amend generally was given. There was, in any event, some debate, at the time of the hearing of the earlier application, as to the sufficiency of the plea in respect of the alleged duty and these particulars were, as I understand the position, provided as a consequence of complaints made by the defendants during the course of that debate. I am consequently not persuaded that any basis has been shown for striking them out. While there was also some suggestion that the delay in providing these particulars should be explained on affidavit, I am not persuaded that that is necessary in the circumstances to which I have referred.
Next, the defendants complain about the provision of further particulars to par 33A of the statement of claim. That paragraph raises a plea of knowledge and the further particulars which have been provided, by way of the amendments, are particulars of the alleged knowledge. The defendants contend that these come far too late (the principal allegation having been in the statement of claim since 1994) and that the plaintiffs should not now be allowed to insert new particulars. Similar complaints are made about pars 92A and 119A. However, each of these paragraphs was the subject of complaint in the earlier application. The defendants then complained that the pleas of knowledge in those very paragraphs were inadequately particularised (see Green v Wilden, above, par 55). That being so, it is somewhat surprising that they should now complain that further particulars of knowledge have now been provided. In those circumstances, I am not prepared to strike out the particulars which have been provided, whether on the grounds of delay or otherwise.
I should add that senior counsel for the defendants contended that the particulars, to some extent, raise a new case in that the first of the two subparagraphs numbered (g) suggests that the valuer who was to value the assets of the Balga Unit Trust was invited to make an uncritical acceptance of the auditor's report there referred to.
It may be that this particular does, to some extent, raise new material, although it has always been pleaded that, in breach of the terms of the Balga Trust Deed, the valuer adopted, without making any independent inquiry or determination, the value attributed to the assets of the Trust (other than the real estate) and the amounts attributed to its liabilities and disposal costs in the auditor's report (see pars 29 and 30), and the paragraph complained of is merely a particular of Wilden's alleged knowledge that the valuer's determination was not made in accordance with the terms of the Trust Deed. However, to the extent that this paragraph does add to what has previously been pleaded, it does so by relying upon material which appeared in affidavits filed by the defendants in support of the earlier application and the new factual issues which are raised are of very limited compass.
Counsel for the defendants also suggested that what is pleaded in this paragraph misconstrues the affidavit evidence on which the plaintiffs rely. However, that, in my opinion, is a matter for trial.
Finally, in this respect, counsel for the defendants contended that the plea of knowledge on the part of the first defendant has no utility, as it is irrelevant to the "enforceability", or otherwise, of the valuation. However, that plea precedes the amendment and no objection has previously been taken to it. It is, in any event, pleaded in support of an allegation that the first defendant's reliance on the determination made by the valuer was in breach of the provisions of the Balga Trust Deed and of the first defendant's duty as trustee (and the plaintiffs claim both equitable damages against the first defendant and also an order that it be removed as trustee of the Balga Unit Trust). I am consequently not persuaded that any basis has been shown for striking out the particulars.

Similar complaints are, once again, made in respect of the particulars to pars 92A and 119A and, for similar reasons, I am not prepared to strike them out.
The defendants also contended that, insofar as the amendments raise a new case, there is an injustice in that the defendants will be exposed to a new or additional risk of liability for interest over a protracted period. They refer, in this respect, to the fact that the plaintiffs claim damages by way of compound interest. They also say that the amendments will cause delay, while interest continues to run (if the plaintiffs should prove to be successful in their claims). I have already said, in this respect, that the additional particulars were provided as a consequence of complaints made by the defendants and that, to the limited extent that they introduce new factual matter, this arises from affidavits filed on behalf of the defendants and is of narrow compass. In those circumstances I am not persuaded that they will be productive of delay of any significance or that there is otherwise any real prejudice arising out of the amendments referred to.
Next, the defendants contend that the amendments involve the withdrawal of, or derogation from, admissions which have been made in pars 29.1, 89.1 and 111.1. Each of these admissions is to the effect that the valuer referred to made "an independent discretionary judgment of the value of the Trust Real Estate". None of pars 29.1, 89.1 and 111.1 has been amended and I am not persuaded that any of the amendments which have been made to other paragraphs in any way withdraws, or otherwise derogates from, those limited admissions. Counsel for the plaintiffs has confirmed that no departure from those admissions was intended and that the defendants are consequently still able to rely upon them.
Finally, so far as the statement of claim is concerned, the defendants complain that subpar (b)(iii) of each of pars 132, 135 and 138 should be struck out on the ground that they raise new allegations of fact. In each case that subparagraph provides further particulars of what is said to have been a purpose which amounted to a fraud in equity. The pleas, as they originally stood in pars 132, 135 and 138, were, in the course of the earlier application, said to lack adequate particularity. The amendments have been prepared in response to that complaint.
The plea, in par 132, is that Mr Chesson, in breach of duty, failed to act honestly in the exercise of his powers or the discharge of his duties as a director of the third defendant by causing it, in breach of its duties as trustee, to engage in conduct with the purpose of causing financial disadvantage to each of the first and second plaintiffs and advancing the financial interests of himself and the sixth defendant, "which in the circumstances constituted a fraud in equity". Particular (b)(iii) is to the effect that Mr Chesson knew that the exercise of his powers "was not honestly in the best interests" of the Summerfield Unit Trust or the unit holders of that trust, alternatively that he "had no honest belief" that his conduct was in the best interests of the trust or the unit holders in the trust in that:
"(iii)Chesson knew that the withholding of financial information regarding the Summerfield Trust Deed from Green and Green & Co [the first and second plaintiffs] was not in the interests of the Trust or the unit holders of the Trust in that:
(A)such refusal to provide information was calculated to frustrate Green and Green & Co and restrict their ability to monitor the conduct of the Trust by Chesson and Tace [the third defendant];
(B)the withholding of such information was calculated to conceal conduct of the Trust [sic] in breach of Trust as pleaded herein;
(C)the withholding of such information was calculated to frustrate and interfere with Green and Green & Co's right to conduct litigation to vindicate their rights in respect to the Trust, given that Green and Green & Co had become involved in contested litigation between Green and Green & Co and interests associated with Green and Green & Co and interests associated with Chesson, such as Wilden."
While the particular referred to does raise a new allegation, it is, once again, one of very limited compass and I am not persuaded that any prejudice occasioned by it is such as should see the amendment disallowed. The same is true of subparagraphs 135(b)(iii) and 138(b)(iii).
Counsel for the defendants also contended that these particulars go somewhat wider than the allegations in support of which they are pleaded. While I accept that the manner in which the particulars are formulated makes this proposition arguable, it seems to me, in the end, that the particular, in each case, sufficiently relates to what has been pleaded in the paragraph which it supports.
As to the reply, the plaintiffs object only to the amendment so far as it adds further particulars to par 15.3 of that document. The additional particulars are particulars of alleged breaches of trust on the part of the second defendant.
These particulars repeat par 92A of the statement of claim and, the defendants contend, if that paragraph is deficient then so, too, must be the particulars. I have already reached the conclusion that par 92A should not be struck out and this objection consequently falls away.
There are also objections to the lateness of the additional particulars upon the basis that they raise new matters which, the defendants contend, should, if they were to be raised at all, have been raised long ago.
Once again, these particulars are a product of complaints made by the defendants in the course of the earlier application. I mentioned, in par 58 of my judgment given in that application, that the particulars to par 15.3 could undoubtedly be improved upon. The plaintiffs, by this amendment, have sought to improve upon them. In those circumstances, and having regard for the fact that, to the extent that new facts are introduced at all, they are of very limited compass, I am not persuaded that the lateness of the new particulars should result in their being struck out.
It follows that the applications by each of the defendants should be dismissed.