Gregory v Huda - [2005] WASC 111

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: GREGORY -v- HUDA [2005] WASC 111

CORAM: MASTER SANDERSON

HEARD: 11 MAY 2005

DELIVERED : 2 JUNE 2005

FILE NO/S: CIV 1906 of 2004

BETWEEN: PETER CHARALAMBOS GREGORY
Plaintiff
AND
CATRIN NURUL HUDA
Defendant

Catchwords:

Practice and procedure - Application for leave to amend statement of claim - Turns on own facts

Legislation:

Trade Practices Act 1974 (Cth)

Result:

Leave granted

Category: B

Representation:

Counsel:

Plaintiff: Mr A S Stavrianou
Defendant: Mr P Mendalow

Solicitors:

Plaintiff: Arthur Metaxas & Co
Defendant: Anchor Legal

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

Permanent Trustee Australia Ltd & Anor v FAI General Insurance Co Ltd (in liq) (2003) 214 CLR 514
Village Building Co Pty Ltd v Canberra International Airport Pty Ltd (2004) 210 ALR 114

Case(s) also cited:

Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Bride v Australian Bank Ltd, unreported; FCt SCt of WA; Library No 950632; 21 November 1995

MASTER SANDERSON: By chamber summons filed 3 March 2005, the defendant in this action sought summary judgment against the plaintiff under O 16. In the alternative, the defendant sought to strike out the plaintiff's statement of claim on the grounds either that it disclosed no reasonable cause of action or would embarrass a fair trial of the action. The matter was listed for hearing on 28 April 2005. On 21 April 2005 the plaintiff filed an application for leave to amend his statement of claim in terms of a minute of proposed substituted statement of claim filed with a chamber summons. When the matter came on for hearing, counsel for the defendant indicated that he had not had the opportunity to consider the minute. The matter was therefore adjourned to a fixed date with the intent that at the resumed hearing consideration would be given to whether or not the plaintiff should have leave to amend the statement of claim in terms of the minute. Prior to the resumed hearing, the plaintiff's solicitors filed a further minute of proposed substituted statement of claim dated 10 May 2005 ("the minute"). I was advised that there had been considerable negotiations between the parties, but that no agreement had been reached with respect to the minute. The matter then proceeded as an application by the plaintiff for leave to amend his statement of claim in terms of the minute. The defendant's application for summary judgment was stood over for consideration at a later date.
This is a somewhat unusual claim. The plaintiff pleads that he and the defendant met and became acquainted at Burswood Casino, Perth, in about mid October 2001. The plaintiff says that at the time of the meeting the defendant verbally represented to the plaintiff that she and her husband were involved in the banking business and that the business involved large amounts of money. These two representations are described in the pleading as "First Representations".
The plaintiff pleads that on or about 2 January 2002 the defendant requested him to advance to the defendant by way of loan the sum of $5000. The plaintiff says the defendant advised that the money would be repaid the following week. It is said the loan of $5000 was made and has not been repaid. The plaintiff says that the money is now due and owing. The plaintiff also says that on or about 2 January 2002, at Garden City Shopping Centre, Booragoon, the defendant requested the plaintiff to pay for the purchase of certain items. It is alleged the defendant told the plaintiff she had forgotten her credit cards and that if payment was made by the plaintiff he would be reimbursed. The amount involved was $1674. As with the payment of $5000, the plaintiff says that the money has not been repaid.
Paragraph 12 of the statement of claim deals with what are defined as the "Second Representations". It is alleged that the defendant represented to the plaintiff that she was the owner of bonds which had matured or were about to mature and were worth in the order of $200,000,000. She represented that she needed some assistance with investment of the funds. She also represented that she required $4000. The plaintiff pleads that an advance of $4000 was made and that this was a loan which has not been repaid.
And so the pleading goes on. Paragraphs 20 and 21 plead the "Third Representations", par 22 the "Fourth Representations", par 23 the "Fifth Representations", par 24 the "Sixth Representations", pars 25 and 26 the "Seventh Representations", pars 27 through to 29 the "Eighth Representations", pars 30 and 31 the "Ninth Representations", and par 32 the "Tenth Representations". Some of these alleged representations appear to stand alone. For instance, par 24 which deals with the "Sixth Representations" pleads that the defendant made representations to the plaintiff and certain third parties that she was expecting to receive the money from the matured bonds in the immediate future and that she may need the assistance of the Bank of Cyprus Australia to transfer the bond money to Australia. There is no suggestion that there was some money advanced by the plaintiff to the defendant pursuant to this representation such as to give rise to a loan which has not been repaid. On the other hand, pars 30 and 31, which deal with the "Ninth Representations", plead that in reliance upon the ninth representations and all the other representations, the plaintiff paid an account at a Perth restaurant and that the payment of the account was a loan to the defendant.
By now the flavour of this action will have become apparent. The plaintiff alleges that he is the victim of a scam. He says that he was told certain things by the defendant which led him to pay certain of the defendant's expenses and meet various restaurant bills which he now characterises as loans. He says it was all, to use the vernacular, a con. He now wants his money back. What I have said about the pleading to date and my further comments should be viewed against that background.
As part of par 32 which deals with the "Tenth Representation", the plaintiff says that on or about 15 January 2002 the plaintiff advised the defendant that he was prepared to make advances to or for the defendant at his discretion, but would do so only on terms that the advances would be as and by way of loan. He says that it was further agreed that not only would the defendant repay these advances, but would pay the plaintiff any credit charges and interest the plaintiff incurred in making the advances. These arrangements are said to have been an "Agreement". The terms of this agreement are set out in pars 33, 34 and 35. It is also pleaded in par 36 that the plaintiff made the agreement "in reliance upon" the first through to tenth representations.
By par 37 it is pleaded that a series of advances were made pursuant to the agreement and "in reliance upon" the first through to tenth representations. Paragraphs 38 and 39 plead, respectively, the eleventh and twelfth representations. Paragraph 40 pleads that a third party, the plaintiff's accountant, was engaged to assist the defendant in certain matters. That is a stand alone paragraph which appears by way of background. By pars 41 and 42, the plaintiff says he paid for certain hotel accommodation for the defendant. Once again, this advance is said to be pursuant to the agreement and in reliance upon the representations. Paragraphs 43, 44, 45 and 46 plead, respectively, the thirteenth, fourteenth, fifteenth and sixteenth representations. Paragraphs 48 and 49 plead the seventeenth and eighteenth representations. Paragraph 47 pleads that an agreement was reached for the plaintiff's accountant to travel with the plaintiff and the defendant to Switzerland. Again, this paragraph seems to simply continue the narrative.
Paragraphs 50 and 51 plead certain further advances. Paragraph 52 pleads the "Nineteenth Representation". Paragraphs 53 and 54 deal with a trip to Geneva, during the course of which nothing was achieved. Paragraph 55 deals with advances made by the plaintiff to the defendant. Again, these are said to be made pursuant to the agreement and in reliance upon the first through to the eighteenth representations.
Paragraph 56 pleads the "Twentieth Representations". Paragraph 57 pleads moneys advanced pursuant to the agreement and the first through to twentieth representations. Paragraph 58 pleads the "Twentyfirst Representations". Paragraph 59 pleads certain advances made pursuant to the agreement and the first through to the twenty‑first representations. Paragraphs 60 to 62 plead the "Twentysecond Representations". Paragraph 63 pleads advances made pursuant to the agreement and the first to twenty‑second representations.
That is the way the pleading proceeds. In all, there are 26 representations pleaded and the amount involved is $864,070. By pars 77 through to 79 it is said that the representations made were in "the course of trade and commerce", and by pars 80 to 83 it is said that the representations were "misleading and deceptive". Paragraphs 95 through to 98 complete the misleading and deceptive plea. By par 100, the plaintiff pleads in the alternative to par 99 that the representations were fraudulent and if they had not been made the advances would not have been made. The plaintiff seeks repayment of all the funds he has expended.
Even from this limited analysis of the statement of claim, it is clear that the plaintiff's claim faces considerable obstacles. It is common ground between the parties that the plaintiff and the defendant were involved in a romantic relationship. Yet the plaintiff would now have it that all the advances he made to the defendant were made pursuant to a contractual arrangement. As an alternative, he says that the representations were made in the course of trade or commerce. Establishing that the relationship between the plaintiff and the defendant could be characterised as one of trade and commerce will doubtless present difficulties to the plaintiff. In the alternative, there is a claim in fraud. This is not a plea of what is sometimes called equitable fraud or breach of some fiduciary duty. What the plaintiff is saying is that the defendant knowingly told him things that were not true in order to induce him to part with funds to the benefit of the defendant. In other words, what is alleged is fraud in the most straightforward way imaginable.
The defendant makes a number of objections to a large number of paragraphs. In the main, these objections can be divided into three categories. First, there are those objections where it is said that no material facts are pleaded to support what is a conclusion. Second, it is said that a number of pleas are irrelevant and will embarrass a fair trial of the action. Third, it is said that there are a number of non sequiturs – that is, the facts pleaded do not in any way give rise to the cause of action as alleged. It will be sufficient for present purposes if I give examples of each of these objections.
By par 26 the plaintiff pleads that in reliance upon the first through to seventh representations the plaintiff paid two amounts on the defendant's behalf. These amounts paid, it is said, were "by way of loan". The defendant says that there are no material facts pleaded in relation to a loan transaction. It is to be remembers that this transaction took place before the agreement pleaded in par 33 in which it is alleged was concluded on or about 15 January 2002 was reached.
As an example of a paragraph which is irrelevant, the defendant refers to par 29. This paragraph deals with a verbal agreement allegedly reached between the plaintiff and the defendant in relation to certain business dealings. It is difficult to see how this paragraph relates to the rest of the pleading. It does not, in and of itself, give rise to a claim. It might perhaps provide some background to the other claims made by the plaintiff, but it is difficult to see how that might be the case.
Paragraph 34 of the statement of claim pleads an implied term of the agreement. The plaintiff alleges that it was an implied term of the agreement that advances made by the plaintiff to the defendant would be repaid as soon as the defendant received the bond money. It is said that the implication arises as a consequence of par 32.4. Paragraph 32.4 pleads that the defendant advised the plaintiff that she could not repay the loans made by the plaintiff until the bond moneys were received.
There are two other objections which are taken to the pleading which are of a more general nature. The first relates to the plea that the representations were made in trade and commerce. On behalf of the defendant it was submitted that the representations could not be said to be in trade or commerce as they were not conduct in the course of a trading or commercial relationship and they do not bear a trading or commercial character. Furthermore, it is said that the plaintiff is not a "consumer" in any relevant sense. Reference was made to Village Building Co Pty Ltd v Canberra International Airport Pty Ltd (2004) 210 ALR 114. I have already indicated that in my view the plaintiff will have considerable difficulty establishing that all of the representations complained of and which are said to be actionable under the Trade Practices Act 1974 (Cth) were made in trade and commerce. But that is not a pleading point. In my view, it is at least arguable and it is a matter which should be left to the trial Judge.
The second broad complaint is that the allegation of fraud is not pleaded in the clear distinct way that is required: see Permanent Trustee Australia Ltd & Anor v FAI General Insurance Co Ltd (in liq) (2003) 214 CLR 514 at 534. The defendant says that it is not possible to ascertain on what basis it is alleged that the representations were false and that the defendant knew they were false. Put another way, it is said that the plaintiff has not pleaded material facts which go to the state of mind of the defendant.
As I have already mentioned, the plea of fraud in this case is straightforward. The plaintiff says that the defendant worked a scam upon him and that he was consequently induced to part with money. Overall, I am satisfied that the plea of fraud in its present form can stand.
In the end, and not without some hesitation, I have concluded that the plaintiff should be allowed to amend his statement of claim in terms of the minute. I accept that in a number of areas, according to strict pleading practice, the statement of claim is defective. But this is one of those cases where the point of a pleading must be borne firmly in mind. What the plaintiff has to do is alert the defendant to the case she has to meet. Taken in the overall, this pleading achieves that end. In my view, it will serve no purpose whatever to require the plaintiff to redraft the statement of claim in such a way that it meets all the technical requirements of proper pleading practice. To do so will increase the costs and offer no substantial benefit to either party. In reaching this conclusion I am adopting a pragmatic approach. To do otherwise would, I think, not be in the interests of justice.
Having said all of that and having indicated that I would allow the amendment of the pleading in terms of the minute, there is reason to believe that if counsel was to give further consideration to the minute it could be improved in significant respects. Accordingly, what I would propose to do, subject to hearing from counsel, is to give the plaintiff leave to amend substantially in terms of the minute. If counsel does not take the opportunity to make minor adjustments to the pleading to clarify some matters and remove some irrelevant material, then so be it. Leave will be given to amend in terms of the minute. But if the pleading is to be revised, so long as the new pleading does not differ radically from the present minute, then the plaintiff should have leave to file a fresh pleading.
I will hear the parties as to how best to give effect to these orders and as to costs.