H Stanke & Sons Pty Ltd v O'Meara - [2007] SASC 246

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
H STANKE & SONS PTY LTD & ANOR v O'MEARA
[2007] SASC 246
Judgment of The Full Court
(The Honourable Justice Duggan, The Honourable Justice White and The Honourable Justice Kelly)
4 July 2007
EQUITY - GENERAL PRINCIPLES - RULES AND MAXIMS OF EQUITY
EQUITY - GENERAL PRINCIPLES - EQUITABLE DEFENCES - LACHES AND DELAY - EFFECT AND AVAILABILITY AS A DEFENCE
Plaintiffs seek declarations that they hold an equitable interest in properties held by defendants and orders that they be registered on the relevant titles as tenants-in-common of an interest in fee simple - whether relief sought by plaintiffs is equitable - plaintiffs seek to strike out second defendant's pleadings which raise the defences of unclean hands, laches and/or acquiescence - whether the nature of the plaintiffs' claim is such as to make relevant equitable defences - whether, if doctrine of "unclean hands" is applicable, the alleged conduct of the plaintiffs has an immediate and necessary relationship to the equitable relief sought.
Held: equitable nature of case for plaintiffs permits the pleading of equitable defences. Order that certain particulars pleaded in support of pleading of "unclean hands" be struck out.

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - DEFENCES AND COUNTERCLAIM
Plaintiffs appeal from rulings of a master to strike out various pleadings in the second defendant's defence - whether pleadings include statements of conclusions based on unpleaded material facts - whether pleadings insinuate the existence of affirmative case without pleading relevant material facts - whether evidence pleaded instead of material facts - prohibition with respect to pleading evidence and argument contained in Supreme Court Rule 46A.02(b) applies to defence - disputes regarding sufficiency of pleadings to be dealt with at interlocutory stage - order that second defendant provide further material facts with respect to parts of pleading - order that certain paragraphs of the second defendant's pleading be struck out as amounting to no more than a denial.
Supreme Court Act 1935 s 31; Real Property Act 1886 s 64; Judicature Act 1873 .; Rules of the Supreme Court 1883 (UK) O 25 r 5; Federal Court of Australia Act s 21; Supreme Court Civil Rules 1987 R 45A.05, r 46A, r 46A.02, r 46A.05, r 46A.06, r 46A/09, r 46A.10, r 46A.15, r 46A.16, r 46, r 46.09, r 46.12, r 46.18, r 47, r 58A.03, referred to.
Banque Commerciale SA en Liquidation v Akhil Holdings Limited (1990) 169 CLR 279; Gascoigne v Gascoigne [1918] 1 KB 223; Hecimovic v Schembri and Ors (Holland J., 28 June 1974, unreported); Lamshed v Lamshed (1963) 109 CLR 440; Marini v MLH Insurance Brokers Pty Ltd [2004] SASC 400; Multigroup Distribution Services Pty Ltd v TNT Aust Pty Ltd (1996) ATPR 41-522; Myers v Casey (1913) 17 CLR 90; Nelson v Nelson (1995) 184 CLR 538; Re Emery's Investments Trusts [1959] Ch D 410; Williams v Australian Telecommunications Commission (1988) 52 SASR 215, applied.
Black Uhlans Incorporated v New South Wales Crime Commission and Ors [2000] NSWSC 1060; Chapman v Michaelson [1909] 1 Ch 238; Dering v Earl of Winchelsea 1 Cox 318; Lodge v National Union Investment Co. [1907] 1 Ch 300; Phillips v Phillips (1878) 4 QBD 127; Rogers v Resi-Statewide Corp (No 2) (1991) 32 FCR 344; Tito v Waddell (No 2) [1977] Ch D 106, discussed.

H STANKE & SONS PTY LTD & ANOR v O'MEARA
[2007] SASC 246
Full Court: Duggan, White and Kelly JJ.

DUGGAN and WHITE JJ. This is an appeal from the rulings of a master who refused to strike out various pleadings in the defence of the second defendant in an action commenced by the plaintiff companies.
The first and second plaintiffs conduct a large family business involved in fishing and fish processing. The business is conducted from its headquarters at Carpenters Rocks in the South-East of the State. Various commercial premises and houses have been erected on land registered in the names of various descendants of three members of the family who commenced the business and the executors of the estates of those founding members.
The business was established in 1948 by three Von Stanke brothers, Fred, Jack and Bob. At first the business was conducted by the three brothers in partnership. Then, in 1965, the brothers formed a number of companies. Each of the brothers formed a company which he and his family controlled and those companies became shareholders in the two plaintiff companies which were formed to operate the business.
The three brothers have since died and their shares in the plaintiff companies have been inherited by various members of their families.
The first, fourth and fifth defendants are the executors of the estates of Fred, Bob and Jack respectively. The sixth defendant is the administrator of the estate of Jim, another brother, who died intestate. The first defendant is the son of Fred. The second defendant, Mrs O’Meara, is the daughter of Fred and a beneficiary under Fred’s will.
The defendants hold the parcels of land which are used for the purposes of the business as tenants-in-common. The plaintiffs seek declarations that they hold an equitable interest in these properties. They also seek orders that they be registered on the relevant titles as tenants-in-common of an interest in fee simple.
It is unnecessary to record the precise details of the landholdings which are the subject matter of the action. The original parcel of land which was acquired is referred to in the statement of claim as the “Base Block”. Other parcels of land which were purchased subsequently are referred to collectively as “the Further Land”.
The business is referred to in the statement of claim as “the Family Business” and the original partnership, along with the first and second plaintiffs which took over the business after incorporation, are referred to as “the Business Owners”.
According to the amended statement of claim (ASC), Fred acquired the Base Block with a view to establishing the family business at that location. He became the registered proprietor of an estate in fee simple in this parcel of land.
The ASC then outlines the commencement of the family business in 1948 and the involvement of Fred’s brothers, Bob and Jack in that business. It is stated that residences were constructed on the Base Block for the use of the three families. Other structures associated with the business were also constructed on the site.
It is pleaded that, by his actions, Fred encouraged the other members of the family involved in the business to act upon the assumption that –
31.7the land was dedicated to the use by the Business Owners indefinitely such that the Business Owners were entitled to enjoy exclusive possession, control and use of and exercise all of the rights of the holder of the fee simple in such land for the purposes of the Family Business, its continuance and long term development for an unlimited duration in time (“the Assumption”).
According to the plaintiffs’ case as pleaded, Fred’s conduct which led to reliance on the Assumption continued after the deaths of Bob and Jack. This, so it is claimed, led to the other members of the Family Business agreeing to expend funds of the business in erecting further buildings and facilities on the site and maintaining those buildings, as well as the structures previously erected. Other expenses such as rates, taxes and insurance premiums were met out of the funds of the business.
The ASC also refers to the purchase of the Further Land which is adjacent to the Base Block. The allotments which constitute the Further Land were purchased at various times, commencing in 1953. Bob and Jack, and in one instance Jim, became registered as proprietors of the land as tenants-in-common. According to the pleading, this property was purchased out of the funds of the Family Business.
It is pleaded that, in the circumstances, it would be “unconscionable and/or inequitable and/or contrary to good conscience” for the Assumption in relation to the Base Block and the Further Land to be displaced.
It is also pleaded in paragraph 92 of the ASC that the Further Land is subject to a resulting trust of which the legal title holders are trustees and in respect of which the beneficiary was the partnership comprising Fred, Bob and Jack and, since their incorporation, was and remains the plaintiffs.
The relief sought by the plaintiffs is set out in Part 2 of the ASC. The following relief is sought in relation to the Base Block:
1      A declaration that:
1.1    it would be unconscionable for Fred, by the first defendant as his legal and personal representative, or any other person claiming under him, as registered proprietor of the Base Block to assert a position contrary to the beneficial ownership of the Base Block by the first and second plaintiffs of an estate in fee simple in the Base Block; and
1.2    Fred, by the first defendant as his legal and personal representative, or any other person claiming under him, is estopped from denying that the first and second plaintiffs hold an equitable estate in fee simple in the Base Block; and
1.3    Fred, by the first defendant as his legal and personal representative, as registered proprietor holds the legal estate in fee simple in the Base Block on trust for the first and second plaintiffs beneficially.
2      In the alternative to paragraph 1 of this Part 2, a declaration that:
2.1    it would be unconscionable for Fred, by the first defendant as his legal and personal representative, or any other person claiming under him, as registered proprietor of the Base Block to assert a position contrary to the beneficial ownership of the Base Block by the first and second plaintiffs of an estate in fee simple in the Base Block for so long as the Family Business continues to be carried on, on and from the Base Block; and
2.2    Fred, by the first defendant as his legal and personal representative, or any other person claiming under him, is estopped from denying that the first and second plaintiffs hold an equitable estate in fee simple in the Base Block for so long as the Family Business continues to be carried on, on and from the Base Block and;
2.3    Fred, by the first defendant as his legal and personal representative, as registered proprietor holds the legal estate in fee simple in the Base Block on trust for the first and second plaintiffs beneficially for so long as the Family Business continues to be carried on, on and from the Base Block.
Similar relief is sought in relation to the Further Land.
Paragraph 6 of Part 2 of the ASC seeks –
An order that the plaintiffs be registered on the titles to the Base Block and the Further Land as tenants-in-common of a fee simple interest or otherwise as those companies shall direct.
In her amended defence (AD) the second defendant pleads as follows:
111In answer to the whole of the plaintiffs’ claim, Mrs O’Meara says that the plaintiffs’ are disentitled to any equitable relief because they approach the Court with unclean hands as a result of the following matters:
111.1The plaintiffs have behaved inequitably, unfairly and unreasonably towards the defendants other than the third defendant in the following ways:
111.1.1Charging the assets of the first plaintiff to support the private borrowings of the directors of the plaintiffs and their spouses and children. Schedule A annexed hereto lists recent charges;
111.1.2Providing financial assistance for the maintenance, repairs and improvements to accommodation on the land referred to in paragraph 14 above and the “Further Land” for their directors, their spouses and children at the expense of their corporators and other Von Stanke family members who are shareholders in the family companies;
111.1.3Providing crayfish licences and crayfish pot allocations to their directors and their children as well as the opportunity to acquire increased crayfish pot allocations without offering the same to other members of the Von Stanke family who are shareholders in the family companies;
111.1.4Permitting directors who have retired as active seagoing fishermen to profit by having third parties use the crayfish licences and crayfish pot allocations which have been made available to them;
111.1.5Allowing the companies not to repay monies they borrowed from Stanke Bros, Fred and his brothers or to pay any interest on sums so borrowed for over a decade;
111.1.6Their failure to, or to seek to, make profits from trading, or declare dividends or confer any benefit upon their shareholders. Rather, all benefits have been conferred upon the companies’ directors, their spouses and children at the expense of the family companies and other Von Stanke family members who are shareholders in the family companies;
111.1.7Their imposition of a charge upon Mrs O’Meara and her husband for the purpose of making financial provision for the widows of Fred, Bob and Jack whilst treating the monies provided to at least Gwen as a loan by the first plaintiff to FWV Pty Ltd which in turn treated such payments as a loan to the estate of Fred.
111.2Following Jim’s death in 1995 and with the benefit of all relevant legal advice from Ms Choate that the companies had no beneficial interest in the land registered in Jim’s name, the plaintiffs sought to mislead Jim’s executor (“the Public Trustee”) and thereby caused the Public Trustee to transfer Jim’s interest in the “Further Land” to them:
111.2.1By letter dated 15 March 2000, the first plaintiff asserted to the Public Trustee that it had paid the cost of purchasing Jim’s interest in the “Further Land”;
111.2.2The first plaintiff and its directors knew that the assertion referred to in sub-paragraph 111.2.1 above was false and that the first plaintiff was not incorporated until 20 years after the “Further Land” was purchased;
111.2.3The first plaintiff and its directors knew that the Public Trustee would not be familiar with the matters referred to in sub-paragraphs 111.2.1 and 111.2.2 above;
111.2.4The first plaintiff and its directors intended to obtain a pecuniary advantage by deception in seeking to obtain the transfer of Jim’s interest to the first plaintiff in these proceedings in the circumstances described in sub-paragraphs 111.2.1 to 111.2.3 above.
The plaintiffs have appealed against the refusal of the master to strike out pleadings in the AD which raise the doctrine of clean hands and the defences of laches and acquiescence. Further grounds of appeal complain that the master erred in failing to strike out various paragraphs of the AD on the ground that they include statements of conclusions based on unpleaded material facts; that other paragraphs insinuate the existence of an affirmative case without pleading relevant material facts; and that, in other paragraphs, the second defendant pleads evidence instead of material facts.
The pleading of unclean hands
The issue between the parties on this aspect of the matter can be stated as follows. The issue of unclean hands raised by the second defendant is of relevance only if the plaintiffs are seeking equitable relief. The plaintiffs contend that they do not seek such relief. According to their argument, they seek declarations pursuant to s 31 of the Supreme Court Act 1935 which provides as follows:
No action or proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the court shall have power to make binding declarations of right whether any consequential relief is or could be claimed or not.
It is said that this is neither legal nor equitable relief, but statutory relief.
It is also argued by the plaintiffs that the order sought by them to be registered on the titles to the Base Block and the Further Land as tenants-in-common does not involve the granting of equitable relief.
Although s 64 of the Real Property Act 1886 is not referred to in the statement of claim, the plaintiffs argue that any order that they be registered as tenants-in-common would be made under that section and would not be equitable relief. Section 64 provides:
In any proceeding in the Court respecting any land, or any transaction, contract, or application relating thereto, or any instrument, caveat, memorial, or other entry affecting any such land, it shall be lawful for the Court to direct the Registrar-General to cancel, correct, record, substitute, issue, or make any certificate, or any memorial or entry in the Register Book, notwithstanding that the relevant duplicate certificate has not been produced to him, or otherwise to do such acts and make such entries as may be necessary to give effect to any judgment, decree, or order of such Court given or made in such proceeding, and the Registrar-General shall obey every such direction.
For her part, the second defendant submits that the plaintiffs’ claim is dependent entirely on the application of principles of equity and that, as a result, the equitable defences which she calls in aid are relevant and applicable.
In support of their argument that the claims for relief are not equitable in nature, the plaintiffs rely on several authorities which deal with the nature of declaratory relief. In the United Kingdom the issue as to whether a mere declaration could be characterised as equitable relief arose after the passing of the Judicature Act 1873. The power to make declarations which had been exercised by the Court of Chancery was transferred by this Act to the High Court generally: Tito v Waddell (No. 2)[1]. Order 25 rule 5 of the Rules of the Supreme Court (UK) which was made in 1883 removed the requirement that a declaration could only be made if other relief was sought. The rule was in terms similar to s 31 of the Supreme Court Act. In Tito v Waddell (No 2) Sir Robert Megarry V-C described declaratory relief as “neither a legal nor an equitable remedy, but statutory”[2].
[1] [1977] Ch D 106 at 257.
[2] Ibid at 259.
The plaintiffs rely on Chapman v Michaelson[3] where the plaintiff sought a declaration from the court that a mortgage was illegal and void under the Money-lenders Act 1900. The court was prepared to grant the declaration, but it was argued that terms should be imposed on the relief granted in order to require the plaintiff to do equity. At first instance, the argument was rejected by Eve J[4]. It was held on appeal that the action was not one for “true equitable relief” and that the considerations which affect such an action “do not necessarily apply to an action for a mere declaration of rights”[5].
[3] [1909] 1 Ch 238.
[4] [1908] 2 Ch D 612 at 620-621. See on appeal [1909] 1 Ch D 238 at 242-243.
[5] [1909] 1 Ch D 238 per Fletcher Moulton LJ at 242.
The court distinguished the case of Lodge v National Union Investment Co.[6]. In that case the borrower sought a declaration that certain transactions were void and illegal under the Money-lenders Act, but he also sought delivery up of securities which he had parted with as a result of the legal bargain. It was held that, as delivery up was equitable relief, it was open to the court to grant that relief on terms that he give up the money which he had obtained under the transaction.
[6] [1907] 1 Ch 300.
Von Doussa J applied Chapman v Michaelson in Rogers v Resi-Statewide Corp (No 2)[7]. The facts of that case are set out in the headnote:
The applicant and the second respondent (the husband) were proprietors registered as joint tenants of Torrens land. They executed two registered mortgages of their interests in the land (the Westpac mortgages). Later, on the husband's application to the first respondent (Resi) for a loan, Resi made the loan on security of an instrument purporting to be a mortgage in registrable form signed by the applicant and the husband of the entirety of their interests in the land (the Resi mortgage). The husband furnished to Resi documents purporting to be an authority addressed to Resi to pay off the Westpac mortgages and an authority to the mortgagees of the Westpac mortgages to hand discharges of the Westpac mortgages to Resi. Each authority purported to be signed by the applicant and the husband. The applicant's signatures on the Resi mortgage and the purported authorities were forged, and she had no knowledge of the transaction. Resi paid off the Westpac mortgages. The discharges of the Westpac mortgages and the Resi mortgage were registered, and Resi became registered proprietor of an interest as first mortgagee. Resi received and held the duplicate Certificate of Title of the land.
The applicant applied for a declaration under s 21 of the Federal Court of Australia Act to the effect that the Resi mortgage was void, and an order under s 64 of the Real Property Act directing the Registrar-General to cancel the memorial or entry of the Resi mortgage on the relevant Certificate of Title.
[7] (1991) 32 FCR 344 at 351.

It was held that the applicant was entitled to a declaration under s 21 of the Federal Court of Australia Act that the mortgage was void and of no effect. Section 21 is to the same effect as s 31 of the Supreme Court Act (SA). It was also held that the making of the declaration was a sufficient ground for the court to direct, pursuant to s 64 of the Real Property Act (SA), that the Registrar-General cancel the memorial or entry of the Resi mortgage on the relevant Certificate of Title. However, von Doussa J held that the rule that a party seeking equity was required to do equity had no application because the making of the declaration was not in the exercise of the court’s equitable jurisdiction. He said at 351:
The jurisdiction invested in the Federal Court by s 21 renders the decision of Chapman v Michaelson applicable to the present case. The relief expressly claimed by the applicant is for a mere declaration, pursuant to s 21, that the Resi mortgage is a forgery, is void, and is of no effect. The facts established entitle the applicant to a declaration in those terms. If no additional relief in equity is granted, the occasion does not arise to impose terms on the applicant.
It would seem that the only justification for describing the relief sought in Chapman v Michaelson and Rogers v Resi-Statewide Corp as equitable would be if the declaration was, of its nature, equitable. The underlying basis for the declaration in each of these cases was not in the nature of equitable relief.
There are other cases, of which the present is an example, where the plaintiff’s case is founded upon equitable principles and the declaration is simply the device which gives effect to those principles.
The learned authors of Zamir & Woolf, The Declaratory Judgment, (3^rd ed) point out that:[8]
Some declarations are so closely related to equity that they may possibly be regarded as equitable. In Re Emery’s Investments Trusts [1959] Ch. 410, in which a declaration was claimed to the effect that certain property was held by the defendant in trust for the claimant, Wynn-Parry J. founded his decision on the assumption that the declaration asked for was equitable relief (see esp. at 442). Chapman v Michaelson was not referred to in that case, which suggests that when a declaration is ancillary to some other equitable relief it may also have to be treated as equitable.
[8] See footnote 54 to para 4.029.
In Re Emery’s Investments Trusts[9] the plaintiff’s money was used to purchase bonds which were placed in his wife’s name. He intended that he and his wife should each be entitled to an equal beneficial interest in the securities. It was found that the purpose of the registration of the securities in the name of the plaintiff’s wife was to enable the plaintiff to avoid payment of federal tax. The plaintiff sought a declaration that his wife held the securities as to one-half for him.
[9] [1959] Ch D 410.
It is clear that the plaintiff’s case depended upon the application of equitable principles. However, it was defeated by his conduct in attempting to evade tax. Wynn-Parry J. said:[10]
He comes to this court seeking the aid of equity, and in the state of the authorities, and on that evidence, it appears to me that it is impossible for this court to help him.
There was no suggestion that the fact that the relief sought was by way of declaration had the effect of excluding the operation of the equitable defence.
[10] Ibid at 422.
In Young, Declaratory Orders[11] the learned author expresses the view that, where someone is seeking a declaration of an equitable right, the normal equitable principles apply. The case of Hecimovic v Schembri and Ors[12] is cited as an example. If it had been appropriate on the facts of that case to do so, the trial judge would have been prepared to make a declaration that the legal owners of a property held their title in trust as to a beneficial one-half share for the plaintiff, but that, as she was seeking equitable relief which would, in effect, enforce the trust, she ought to be required to do equity.
[11] (2^nd ed) at [609].
[12] (Holland J., 28 June 1974, unreported).
If the primary relief sought is equitable, there would seem to be no reason why a declaration of trust should not be made on terms. This was the result in Nelson v Nelson[13]. The facts are set out in the headnote:
A mother paid the purchase price for a house which was transferred into the names of her adult son and daughter. The purpose of the arrangement was to enable the mother, if she wished, subsequently to purchase another house with the benefit of a subsidy under the Defence Service Homes Act 1918 (Cth). She would not have been eligible for a subsidy under that Act if she owned another house. She did later purchase another house and received a subsidised loan under the Act, falsely declaring that she did not own or have a financial interest in a house other than the one for which the loan was sought.
The first property was sold and the mother and her son sought a declaration that the balance of the proceeds of sale was held on trust for the mother and an order that the proceeds be paid to her accordingly. The daughter sought a declaration that she had a beneficial interest in the proceeds of sale.
[13] (1995) 184 CLR 538.
The order of the majority of the court was that the mother held the beneficial interest in the property subject to a requirement that she pay to the Commonwealth the benefit she had received under the Defence Service Homes Act.
Whilst it may be accepted that applications for mere declaratory relief cannot be regarded as seeking equitable relief, it is necessary to examine the pleadings in each case in order to determine the true nature of the relief sought.
In the present matter the plaintiffs’ case is grounded almost entirely on equitable principles. It is apparent from the extracts from the ASC set out above that it is based on allegations of unconscionability and equitable estoppel and the claim that a resulting trust has arisen in the circumstances which have been pleaded.
In these circumstances, the declaratory orders sought by the plaintiffs would simply express the result of the application of the relevant equitable principles. Whether or not this results in the declarations themselves being properly regarded as equitable, there is little doubt that the plaintiffs are seeking the aid of equity. Accordingly, there is no reason to exclude from the court’s consideration other equitable principles such as the requirement as to clean hands.
Similar reasoning applies to the plaintiffs’ contention that the order sought by them to be registered on the relevant titles as tenants-in-common is not an equitable remedy.
In his reasons for refusing to strike out the claim of unclean hands the learned master said:
By not pleading s 64 as required by subr (d) [R 46A.03(d)] the plaintiffs have not confined the relief sought in paragraph 6 to statutory relief under s 64. As pleaded, it is at large and could encompass a claim for equitable relief. If the plaintiffs were to amend and confine paragraph 6 to a claim under s 64, it would then be open to the 2^nd defendant to plead, if it sees fit, that s 64 is discretionary and should not be applied where equitable remedies for the same purpose would be denied because of unclean hands. Thus I do not accept the plaintiffs’ contention that their claim as pleaded is entirely for statutory relief and so the claim of unclean hands is irrelevant.
Even if the order sought in this respect is a resort to s 64, it could not be regarded as being more than an order consequential upon the application of the equitable principles to which reference has been made. The fact that the court utilises the power to direct the Registrar-General to record a particular entry in the Register does not alter the essential character of the plaintiffs’ claim which is based on the application of equitable principles.
It follows from what has been said that the essentially equitable nature of the case for the plaintiffs leaves the way open to plead relevant equitable defences.
The particulars in support of the defence of unclean hands
The plaintiffs argue that, in any event, the particulars pleaded in support of the claim of unclean hands are not of such a nature as would defeat the plaintiffs’ claim.
The learned master refused to strike out the allegations of disentitling conduct. He said at [16]:
The plaintiffs further contend that the pleas in paragraph 111 do not constitute any reasonable ground of defence in that they are merely allegations of “general depravity” of the plaintiffs and are not sufficiently directed to the actions of the plaintiffs qua the 2^nd defendant: Myers v Casey (1913) 17 CLR 90; FAI Insurance Ltd v Pioneer Concrete Ltd (1987) 15 NSWLR 522 at 557-561. The whole action involves a conglomeration of parties and legal and equitable interests so that the actions of the plaintiffs have indirect, but potentially significant, consequences for many members of the wider von Stanke family and their respective companies. I do not consider that the matters pleaded in paragraph 111 are so remote that if they are found in favour of the 2^nd defendant, they could not reasonably constitute some equitable defence of unclean hands to at least some parts of the plaintiffs’ claims.
In Myers v Casey[14] Issacs J adopted the well known observation of Lord Chief Baron Eyre in Dering v Earl of Winchelsea[15] when considering the test for disentitling conduct in this context:
It is not laying down any principle to say that his ill conduct disables him from having any relief in this Court. If this can be founded on any principle, it must be, that a man must come into a Court of equity with clean hands; but when this is said, it does not mean a general depravity; it must have an immediate and necessary relation to the equity sued for it; it must be a depravity in a legal as well as in a moral sense.
[14] (1913) 17 CLR 90 at 123.
[15] 1 Cox 318 at 313.
A comprehensive survey of cases in which disentitling conduct of this nature has been considered is to be found in the judgment of Campbell J in Black Uhlans Incorporated v New South Wales Crime Commission and Ors[16]
[16] [2000] NSWSC 1060.
The test is simply stated. There are many cases which apply it but, apart from repeating the general principle, they are of little use for comparison purposes because of the variety of circumstances in which the test must be considered. The first step in considering its application to a particular case is to identify the nature of the equity sought in that case. Reference has been made to the essential nature of the plaintiffs’ claim in the present case.
The ASC asserts that the registered proprietors of the legal estates in the Base Block and the Further Land hold the legal estate in fee simple on trust for the first and second plaintiffs beneficially. The basis for these claims is the expenditure of funds of the Family Business in improving and maintaining the land holdings. The ultimate remedies sought are, in effect, declarations of trust.
Examples of the clean hands defence applying in broadly similar circumstances are to be found in Gascoigne v Gascoigne[17] where a husband expended funds developing a lease of land in his wife’s name so as to avoid creditors and in In Re Emery’s Investments Trusts[18] where a similar scheme was created so as to avoid the payment of tax.
[17] [1918] 1 KB 223.
[18] [1959] Ch D 410.
The requirement of an “immediate and necessary relation to the equity sued for” contemplates a connection between the conduct and the beneficial interest claimed by the plaintiffs.
It is necessary to apply this test to the conduct alleged against the plaintiffs in the present case.
Paragraph 111.1.1 of the AD refers to a charging of the plaintiffs’ assets to support the private borrowings of the directors of the plaintiffs and their families. Details of recent charges are set out in Schedule A to the AD. The property charged in each case is a Rock Lobster Fishing Licence or Rock Lobster Pot Entitlements which are part of such a licence. Although these licences and entitlements may be assets of the Family Business, they are not the assets which are the subject of the claim for equitable relief.
Paragraph 111.1.2 of the AD is vague. It asserts that the plaintiffs provided financial assistance for the development and maintenance of the Base Block and the Further Land for their directors and families at the expense of their corporators and other family members who are shareholders in the company. According to this pleading the plaintiffs were providing financial assistance for improvements on the land held in their names. The source of the financial assistance is not identified and there is no suggestion that the expenditure, if it was from the funds of the Family Business, was used contrary to the wishes of any person who might be entitled to a share in such funds.
Paragraph 111.1.3 claims that there was an allocation of crayfish licences and crayfish pot allocations to interests associated with the plaintiffs without offering them to other members of the family.
Paragraph 111.1.4 also relates to the use of crayfish licences and crayfish pot allocations.
Paragraph 111.1.5 refers to concessions given to the family companies in relation to the repayment of loans. The purpose for which the monies were borrowed is not identified.
Paragraph 111.1.6 relates to the alleged failure of the plaintiffs to properly distribute profits, declare dividends or confer any benefits upon the shareholders in the family companies.
Paragraph 111.1.7 complains that the plaintiffs treated the second defendant unfairly in making financial provision for certain other members of the family.
By way of summary, paragraph 111.1.2 refers to events associated with the land which is the subject matter of the relief sought, but not in a way which could give rise to disentitling conduct. The other paragraphs are concerned with the conduct of the fishing business and the administration of the family companies. The defence does not allege a direct connection with the subject land and does not disclose any nexus between these events and the relief sought which would justify the court in refusing equitable relief to which the plaintiffs would otherwise be entitled.
It follows that the particulars pleaded in paragraph 111.1 should be struck out.
Paragraph 111.2 stands on a different footing. The ASC asserts that Jim, by the sixth defendant as his representative, holds a legal estate in fee simple in the Further Land. The AD asserts that the plaintiffs caused the sixth defendant, the personal representative of Jim, to transfer his interest in the Further Land to them. As misrepresentation by the plaintiffs is alleged, it could be argued that this conduct has a bearing on whether relief should be granted in relation to Jim’s share. This will depend on the evidence in the case and is best left to the trial judge to determine. No criticism was made as to the form of pleading in paragraph 111.2. It is appropriate to allow this pleading to remain.
Laches and acquiescence
The defendants also plead laches and acquiescence in the AD:
112In answer to the whole of the plaintiffs’ case, Mrs O’Meara says that the plaintiffs’ are disentitled to any equitable relief because of their laches and/or acquiescence in the following respect:
112.1At no time between their incorporation in 1965 and the institution of this proceeding in 2005, did the plaintiffs or any other person acting on their behalf assert that Hercules was not entitled to leave his interest in the land registered in his name to Fred, Bob, and Jack nor that Fred, as executor, was constrained from transferring Hercules’ beneficial interest in that land by reason of the equitable entitlement of the plaintiffs to that land;
Particulars
112.1.1Mrs O’Meara repeats sub-paragraphs 33.1.1, 33.2.1, 33.3.1, 33.4.1, 33.5.1, 33.6.1, and 33.7.1 above.
112.2At no time between their incorporation in 1965 and the institution of this proceeding in 2005 did the plaintiffs or any of their directors assert any entitlement of the plaintiffs to any of the land to which Fred was a registered proprietor prior to the deaths of Jack, Bob, Fred or Jim;
112.3By refraining from making any such allegations until 15 years after Jack’s death, 11 years after Bob’s death and a decade after the deaths of Fred and Jim, the plaintiffs have been guilty of unreasonable and inexcusable delay which has caused detriment to the defendants other than the third defendant in that they have been denied the opportunity to adduce the best evidence which was previously available to defeat the claim;
112.4If the plaintiffs had made the allegations contained in the within proceedings to Jack, Bob, Fred or Jim during their respective lifetimes they would have been able readily and conveniently to adduce both oral and documentary evidence to defeat such a claim. By refraining from making such allegations until a decade after Fred’s death the plaintiffs have been guilty of unreasonable and inexcusable delay which has caused detriment to Fred and Jim’s estates and to Mrs O’Meara in that they have been denied the opportunity to adduce the best evidence which was previously available to defeat the plaintiffs’ claim.
The plaintiffs argue that this plea should be struck out on the ground that the defendant pleads a risk of potential prejudice and not actual prejudice.
If laches is to avail the defendant, it must have been to the prejudice of the defendant or a third party: Lamshed v Lamshed[19]. However, it is apparent from the pleading that actual detriment is pleaded.
[19] (1963) 109 CLR 440 at 453.
As for acquiescence, the term is used in this context
… to denote a plaintiff’s behaviour in refraining from seeking redress once he knows his rights have been violated, were he ever so ignorant of their violation whilst it was in progress; and to denote his acceptance of the fact that his rights have been violated.[20]
[20] Meagher, Gummow & Lehane’s, Equity Doctrines & Remedies, 4^th ed 36-010.
Although the heading to this pleading is “Laches & Acquiescence”, read as a whole the plea is concerned more with laches than acquiescence. In our view it has not been demonstrated that laches cannot be relied upon as a defence to the allegations in the ASC.
We will return later to the objection which is raised as to the manner in which paragraph 112 is pleaded.
Pleadings generally
We have said that various objections are taken to the manner in which the second defendant’s case is pleaded.
This action is governed by the pleading rules contained in the Supreme Court Civil Rules 1987 which have applied since 3 June 2000. Rule 46A contains the relevant rules. The pleading rules contained in rr 46 and 47 continue to apply to actions commenced before 3 June 2000. We set out below the sub-rules of r 46A which are pertinent to this appeal.
46A.02     All pleadings are to:
(a)     be as brief as the nature of the case permits;
(b)     plead only the material facts relied upon and not the evidence or arguments by which they are to be proved;
(c)     be divided into discrete numbered paragraphs so that admissions and cross references may be made readily by referring to the paragraph numbers;
(d)     bear the proper action heading and an endorsement of by whom and for whom they are filed;
(e)     bear the following certificate signed by a legal practitioner except where the party has no solicitor on the record: …
…
46A.05(2)    The Defence must plead, but plead only:
(a)     what parts, if any, of the Statement of Claim are admitted;
(b)the material facts relied upon to constitute any ground of defence on which the defendant bears an evidentiary or a legal onus of proof;
(c)such further material facts as are necessary to give other parties fair notice of the defendant’s case which they will have to meet;
(d)     any defences in law; and
(e)     any statutory provisions to be relied upon by the defendant.
…
46A.09(1)     No order is to be made that any further material facts are to be pleaded other than where the material facts pleaded do not disclose facts sufficient to give the other parties fair notice of the case which they will have to meet and the party seeking them would be significantly prejudiced in the conduct of its case by not having them. (The intent of Rule 46A is that parties should include all material facts in their pleadings as initially filed so that there is no unfairness to another party by any lack of particularity and if they have not done so the trial Judge may refuse to allow that party to present a case which is outside the terms of its pleading.)
(2)No pleading is embarrassing for want of particularity unless the missing particulars would be ordered under (1).
(3)    Where an order is made under (1) the pleading is to be amended.
(4)No costs are to be allowed to the party making any amendment under (3) in respect of it unless the Court or a taxing officer for good reason allows them.
46A.10(1)     At trial a party is not without leave of the Court to cross examine witnesses (other than on credit) or to adduce evidence about matters not properly raised on the pleadings where that course would be likely to prejudice or embarrass other parties in the conduct of their cases.
(2)In determining what issues are properly raised on the pleadings the trial Judge:
(a)will act without undue technicality and with regard to the substantial merits of the case so that no party suffers any injustice thereby; and
(b)in considering whether another party is likely to suffer prejudice or to be embarrassed may have regard to the contents of any Affidavit of Loss, experts’ reports or discovered documents, but they are not to be treated as if they were pleadings.
…
46A.15(1)     Where a party unreasonably fails to admit in its pleading any part of an earlier pleading of another party it may be ordered to pay the costs incurred in proving that which should have been so admitted.
(2)A legal practitioner who improperly or without reasonable cause gives any certificate under Rule 46A.02 (e) may be ordered to pay costs personally in accordance with Rule 101.06.

Rule 46A.16 provides for certain rules contained in r 46 to apply also to actions governed by r 46A, except in so far as they are inconsistent with the express provisions of r 46A. The sub-rules which are made applicable in this way include r 46.12(4)(a) and (ab). They add to the requirements for the pleading of a defence which are contained in r 45A.05(2). Those sub-rules provide:
(4) [A defence] [s]hall specifically plead any fact or matter which:
(a) might make any claim or defence of the opposing party not maintainable;
(ab) in an action to which Section 72 of the Development Act 1993 applies would but for the operation of Section 72 make any person who is not a party to the action jointly and severally liable for the amount claimed.
Rule 46.18 is also made applicable to actions governed by r 46A. It provides:
46.18        Where a pleading:
(a)     discloses no reasonable cause of action or defence;
(b)     does not comply with the Rules as to pleadings;
(c)has a tendency to cause prejudice, embarrassment or delay in the proceedings;
(d)     is scandalous, frivolous, or vexatious or contains scandalous matter; or
(e)     is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, order that the whole or any part of the pleadings be struck out, on such terms as it thinks just or may direct that the scandalous matter be expunged.
Rule 46A – General Principles
Rule 46A effected some significant changes in the pleading regime which applied under the 1987 Rules before 3 June 2000. Nevertheless the purpose of pleadings under r 46A remains the traditional purpose of pleadings, namely, that stated by King CJ in Williams v Australian Telecommunications Commission in relation to the original pleading regime in the 1987 Rules.[21]
The new rules do not change, however, the fundamental nature, function or purpose of pleadings. The fundamental purpose of pleadings is to provide a structure or framework for the litigation designed to promote a just outcome. Pleadings achieve this purpose by performing two basic functions. The first is to define the issues between the parties thereby providing the basis for the determination of questions as to discovery before trial and admissibility of evidence at trial and of questions as to what the litigation has decided for the purpose of the Rules as to res judicata and issue estoppel. The second function is to give the parties fair notice of the case to be made against them at trial thereby minimising the risk of injustice resulting from surprise. These fundamentals remain unaltered by the new Rules.[22]
[21] (1988) 52 SASR 215.
[22] Ibid at 216. See also Marini v MLH Insurance Brokers Pty Ltd [2004] SASC 400 at [12] per Besanko J.
This two-fold purpose of pleadings was also emphasised by Mason CJ and Gaudron J in Banque Commerciale SA en Liquidation v Akhil Holdings Limited[23] in the following passage:
The function of pleadings is to state with sufficient clarity the case that must be met … In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.[24] [Citations omitted]
In our opinion, the purposes of the pleadings rules and the “fundamentals” to which reference is made in these passages are as applicable now as they were to the pleading regimes which were then being addressed. Further, in our opinion, much of the learning developed in the authorities concerning previous pleading regimes remains applicable to r 46A.
[23] (1990) 169 CLR 279.
[24] Ibid at 286.
Rule 46A contains some rules applying generally to all pleadings, and some which apply only to particular forms of pleading. The rules are to be construed so that these different kinds of rules have a harmonious operation.
Rule 46A.02 is a rule which applies to pleadings generally. The opening words (“All pleadings are to …”) make that plain. Relevant to the issues on this appeal, r 46A.02 requires a pleading to be as brief as the nature of the case permits (r 46A.02(a)), and continues the longstanding pleading rule requiring a party to plead only the material facts relied on, and not the evidence or arguments by which those facts are to be proved (r 46A.02(b)).[25] The distinction between material facts and the evidence relied upon to prove those facts is not always easy to maintain.[26] There are cases in which it is difficult to plead the material facts giving rise to a claim without, in effect, pleading the evidence by which those facts will be proved. It can, for example, be difficult to plead the material facts relied upon for the existence of a particular title or interest derived from documents without pleading the very documents which will be relied upon to establish that title or interest. Phillips v Phillips[27] provides an example. There may also be cases in which the one fact may be both a material fact, and evidence of another fact.[28] But the underlying principle is that evidence should not be pleaded.
[25] Cf Blake v Albion Life Assurance Society (1876) 45 LJ QB 663 at 667 per Brett J.
[26] See for example Bruce v Odhams Press (1936) 1 KB 697 at 711 per Scott LJ.
[27] (1878) 4 QBD 127 at 131-5.
[28] Cf Blake v Albion Life Assurance Society (1876) 45 LJ QB 663 at 667.
Rule 46A.05 is a rule which applies specifically to defences. The opening words of r 46A.05(2) indicate that its purpose is to specify both a minimum and a maximum content of a defence. A defence must incorporate the matters specified in r 46A.05(2), and it must not include any other content. Some indication of the matters which the sub-rule precludes from being incorporated into a defence can be gleaned from a comparison of it with r 46.12 of the 1987 Rules which applies to actions instituted before 3 June 2000. By r 46.12(2), a party is required to specifically admit or deny every allegation of fact, including those in particulars, contained in the pleading to which the defence relates. Any allegation not specifically denied is deemed to be admitted. Rule 46.12(3) elaborates the way in which a party might comply with r 46.12(2), namely, by permitting a plea of lack of knowledge of the fact rendering it unable to be admitted to have the effect of a denial. Rule 46A.05(2) not only omits any obligation on a defendant to address specifically each allegation of fact in a statement of claim, it positively prohibits a defendant (unless admitting the entirety of the plaintiff’s claim) from doing so. Under r 46A.05(2), the defence may contain admissions but not a denial or a non-admission. The rules provide that any fact not admitted in the defence is to be proved by the party alleging it (r 46A.08). This reverses the position which applied previously. A defendant who fails unreasonably to admit a particular fact may be ordered to pay the costs incurred by another party in proving that fact (r 46A.15). The content of a defence prepared in accordance with r 46A.05(2) is likely to be less than one prepared in accordance with r 46.12.
Rule 46A.05(2)(b) and (c) refer to the pleading of “material facts”, ie, those facts relied upon to constitute any ground of defence on which the defendant bears an evidentiary or legal onus of proof, and those necessary to give the other parties fair notice of the defendant’s case. In each case it is only the material facts which are to be pleaded. The effect of r 46A.05 (b) and (c) and of r 46A.02(b) is to prohibit the pleading of evidence or argument. At first instance, the master held that it may be necessary for a defendant to plead evidence in order to give the other parties fair notice of its case, as required by r 46A.05(2)(c). If the master was intending by this to state a matter of general principle, then we respectfully disagree. For the reasons already given, the prohibition on pleading evidence and argument contained in r 46A.02(b) applies as much to defences as it does any other pleading. In any event r 46A.05(2)(c) permits only the pleading of “material facts”. It is the material facts necessary to give fair notice which are to be pleaded, and not evidence. This is not to suggest that there may not be cases in which facts amounting to evidence may not be pleaded. As noted above, the line of distinction between material facts and evidence is not always bright and observable.
One effect of r 46A.05 is to alter the way by which issues are joined on the pleadings. There will be a joinder of issue in respect of any allegation of fact not admitted in the defence, or, when appropriate, in the plaintiff’s reply (r 46A.06). Although 46A.05, unlike r 46.12(1), does not specify expressly that no plea of joinder is to be made, that is its effect.
A purpose of r 46A is to limit interlocutory disputes about pleadings. This is evident from (amongst other things) the simplified requirements for a defence in r 46A.05(2) and from r 46.09(1) which limits the circumstances in which a party may obtain an order for a pleading of further material facts. Such an order is only to be made if the material facts pleaded do not disclose facts sufficient to give the other parties fair notice of the case which they will have to meet and if the parties seeking them would be significantly prejudiced in the conduct of their case by not having them. Rule 46A.09(2) is a further indication of an intention that interlocutory disputes about pleadings should be limited. It provides that no pleading is embarrassing for want of particularity unless the missing particulars would be ordered under r 46A.09(1). In effect, this is a qualification on the operation of r 46.18, which, as noted above, has been made applicable to the r 46A regime by r 46A.16.
The master considered that the prohibition on the pleading of a denial or non-admission is likely to reduce the number of occasions in which it may be said that the form of pleading in a defence involves an evasive denial, or the insinuation of an affirmative case. We agree with that observation. This is another way in which interlocutory disputation about the pleadings may be avoided. If defendants ignore the prohibition on pleading a denial or non-admission, then disputes about the evasiveness of a pleading, or about the insinuation of an alternative case, of the kind which have occurred in this case are likely to continue to occur.
The master did approach the plaintiffs’ application seeking the striking out of portions of the AD or, alternatively, the pleading of further material facts, from the standpoint that issues of pleading with insufficient particularity are primarily to be dealt with by the trial judge, and not on an interlocutory basis. It is apparent that the master’s reference to “issues of pleading with insufficient particularity” was intended as a reference to disputes generally about the sufficiency of a pleading, and the adequacy of the notice of a party’s case contained in the pleading. The master reached the conclusion that such issues are primarily to be dealt with by a trial judge by reference to the words in parenthesis in r 46A.09(1), r 46A.10, and by reference to the difficulties commonly experienced at interlocutory level in assessing the extent of pleadings required for fair notice of a case. The plaintiff submitted that the master was in error in this approach to the rules.
It is true that r 46A.09(1) and r 46A.10 do contemplate orders by a trial judge which may have the effect of a sanction in the event of an inadequate pleading. Further, as already noted, it is an evident purpose of r 46A to reduce the amount of interlocutory disputes about pleadings. However, we are unable to find support in r 46A for the master’s conclusion that disputes about the sufficiency of a pleading are primarily to be dealt with by the trial judge. On the contrary, in many cases, it will be important for such disputes to be dealt with at the interlocutory level. The parties’ obligations with respect to discovery provide an example. Rule 58A.03 requires parties to discover those documents in their possession, custody or power which are directly relevant to “any issue arising on the pleadings”. It is the pleadings which determine the ambit of the parties’ discovery obligations. Ordinarily, the discovery process, including any disputes about the adequacy of the discovery provided, should be completed well before the commencement of a trial. Deferring disputes about the sufficiency of a pleading to trial could have a major impact upon the discharge by the parties of their discovery obligations, and accordingly on their very preparation for trial. An insufficiency of a pleading may also serve to deny a party proper notice of the case of the other. In this respect the following passage from the judgment of Burchett J in Multigroup Distribution Services Pty Ltd v TNT Aust Pty Ltd is apposite:[29]
Before I turn to the argument, it is convenient to refer to some of the functions of a Statement of Claim. The primary function is to tell the defending party what the claim is that he has to meet. That is a matter of elementary and natural justice; the claim cannot be answered until it is known. When a sufficient defence has been filed to a sufficient statement of claim, a further function will generally have been performed – that of defining the question or questions for decision. This definition is required, of course from an early stage, or else discovery and other interlocutory procedures are likely to prove misdirected, wasteful and unproductive. In order to achieve these fundamentals, a statement of claim must set out clearly, not just the bare claim that is made, but also “the material facts on which it is based”, including facts that, if not specifically pleaded, might take the other party by surprise.[30] [Emphasis added]
Reference may also be made in this context to the passages in Williams and in Banque Commerciale quoted earlier in these reasons.
We approach the submissions on appeal in this matter with these principles in mind.
[29] (1996) ATPR 41-522 at 42,769
[30] Ibid at 42, 769.
The plaintiffs made a number of further submissions concerning the approach of the master to the application of r 46A in the circumstances of the present case. It is not necessary, in our opinion, for each of those submissions to be addressed separately.
The grounds of appeal contain distinct categories of complaint about the form of the AD. The first category of complaint is that the master erred in failing to find that in a number of instances the second defendant had failed to plead sufficient material facts to support her allegations.
Paragraph 22.7
The effect of paragraph 22 of the ASC is to identify the persons or entities which are alleged by the plaintiffs to have carried on the Family Business at different times in the period between 1948 and the present time. Paragraph 22.7 of the AD is one of 16 sub-paragraphs pleaded in response to that paragraph. It provides:
“Stanke Bros” lent large sums of money to the plaintiffs and to H Stanke & Sons (Portland) Pty Ltd.
The plaintiffs complain that the master erred in declining to strike out paragraph 22.7 on the ground that it contains a statement of conclusion without a pleading of the material facts relied upon or, alternatively, in declining to order that the second defendant plead further material facts.
The master rejected the plaintiffs’ submissions for a number of reasons. He held that paragraph 22.7 was a proper plea under r 46A.05(2)(c) (ie, a plea giving notice of the second defendant’s case). The master considered that the plaintiffs had not, in any event, shown the prejudice required for an order under r 46A.09(1) for the pleading of further material facts to be ordered. He also considered this aspect of the plaintiffs’ application to be premature given that the plaintiffs had not filed a reply, and given the second defendant’s indication that further material facts would be provided after discovery.
In our opinion, the complaint of the plaintiffs concerning paragraph 22.7 is justified. It does assert a conclusion but without pleading the material facts which support that conclusion. Neither the amounts lent, nor the dates of the lending, nor the actual recipients of the loans have been identified. However, in our opinion, the master was correct in declining to strike out paragraph 22.7 This was an occasion for the approach adopted by Besanko J in Marini v MLH Insurance Brokers Pty Ltd[31] to be applied. In Marini Besanko J held that the power contained in r 46.18(b) to strike out a pleading on the ground that it did not comply with the rules as to pleadings should ordinarily not be exercised when the real complaint is (using the language of the 1947 Rules) a failure to provide sufficient particulars. Besanko J held that in cases of that kind, the appropriate application is an application under r 46A.09 rather than an application to strike out the pleading. We respectfully agree with that view of r 46A and consider that it is the approach to be applied in relation to paragraph 22.7.
[31] [2004] SASC 400 at [12].
In determining whether further material facts should be ordered in Marini, Besanko J considered the scope of the investigation and preparation the opposing party would have to undertake if further material facts were not provided. Such an approach is apposite in this case also. It is not necessary to have resort to extrinsic evidence to see the possible prejudice to the plaintiffs. If paragraph 22.7 is left as it is, the plaintiffs could have to engage in considerable investigation. Stanke Bros is said by the second defendant to be a partnership which operated both before and after November 1965 (when the plaintiffs were incorporated). H Stanke & Sons (Portland) Pty Ltd is said to have been incorporated in 1965. The period in which the partnership of Stanke Bros may have made loans to the plaintiffs and to H Stanke & Sons (Portland) Pty Ltd is quite large. The plaintiffs can be expected to have access to their own records but not to those of H Stanke & Sons (Portland) Pty Ltd. Left unparticularised, paragraph 22.7 may cause the plaintiffs considerable inconvenience in investigating the allegations. In that circumstance it is appropriate that an order be made that the second defendant should provide further material facts. It will be for the master, or the judge managing the action, to determine whether the second defendant should be required to provide those further material facts before discovery (or, alternatively, specified discovery) in the action.[32]
[32] Cf ETSA v Union Insurance Co Ltd (Unreported, Perry J, 9 July 1997, Judgment No S6241); Phillips v Phillips (1978) 4 QBD 127 at 131 per Bramwell LJ.
Paragraph 42
By paragraph 41 of the ASC, the plaintiffs plead that Fred’s conduct in promoting the adoption and action upon the Assumption (which is the foundation of their claim for estoppel) continued after the death of each of his brothers and until his own death in 1995. Paragraph 42 of the ASC alleges two aspects of Fred’s conduct relied upon for the purposes of paragraph 41. Those aspects are his making available of the title to the Base Block on at least one occasion as security for borrowings by the Business Owners, and his failure to make a specific devise of the Base Block in his will.
By paragraph 42 of the AD, the second defendant disputes that these aspects of Fred’s conduct support the principal allegation made and then continues:
42.1Mrs O’Meara admits that Fred made the title to the land referred to in paragraph 14 above available as security for borrowings by other family members from time to time and says that such conduct is equally consistent with a desire to assist other members of the Von Stanke families;
42.2Mrs O’Meara says that the continued currency of the mortgage between the date of Fred’s death in 1995 and 23 November 2000 was due to the conduct of the executor wrongfully preferring the interests of the first plaintiff to his duties as executor of Fred’s estate to administer that estate as promptly as was practicable;
42.3In further answer to sub-paragraph 42.2, Mrs O’Meara says that Fred dealt with the land referred to in paragraph 14 above in his will in exactly the same way as he dealt with all of his other assets and in a manner inconsistent with the plaintiff’s case.

The plaintiffs complain that each of these pleadings incorporates unpleaded material facts and that the master should either have struck them out or alternatively have ordered a further pleading. It might have been said by the plaintiffs that, with the exception of the admission contained in paragraph 42.1, paragraphs 42.1-42.3 inclusive amount to a pleading of argument and not of material facts. However, that is not the complaint which is made. The master’s reasons for refusing this application are the same as those which he gave in relation to paragraph 22.7.
In our opinion, the master’s decision has not been shown to be in error. It may be that paragraph 42.1 does turn on some material facts which have not been pleaded, but these are likely to be of narrow compass. The master was correct, in our opinion, in concluding that the plaintiffs have not demonstrated a significant prejudice of the kind to which r 46A.09(1) refers. Moreover, the very general nature of the pleas in paragraph 42 of the ASC invited a response of the general kind contained in paragraph 42 of the AD.
Paragraphs 44 to 50
Paragraphs 44 to 50 inclusive of the ASC contain a series of allegations concerning activities, expenditure and control by the Business Owners in relation to the Base Block. They purport to be a pleading of certain material facts indicating reliance by the Business Owners on Fred’s conduct and on the Assumption.
By paragraphs 44 to 50 of the AD, the second defendant denies that any of the acts were done in reliance upon conduct of Fred or in reliance upon the Assumption. The second defendant goes on in a series of pleas to allege that various forms of outgoings in respect of the property were paid by various members of the Von Stanke families. No particularity is given of the members of the Von Stanke families who have paid those outgoings, nor the dates or amounts of the outgoings paid. The plaintiffs’ complaint is that the AD fails to plead sufficient material facts.
In our opinion, the master was correct in refusing to order the striking out of paragraphs 44 to 50 inclusive and correct in refusing to order the pleading of further material facts. It is true that the second defendant’s pleadings in the impugned paragraphs are quite general and unparticularised. However they are pleas responding to equally generalised and unparticularised allegations in the ASC. If the ASC gives fair notice of the plaintiffs’ claim, it is difficult to conclude that a comparable form of pleading by the second defendant does not have the same effect. The master was correct in concluding that prejudice of the kind required by s 46A.09(1) had not been demonstrated. For example, in relation to the allegation in ASC paragraph 46 that council rates due in respect of the Base Block have been paid by the business owners using funds from the family business, the second defendant pleads that council rates have, from time to time, been paid by various members of the Von Stanke families. The issue is accordingly the identity of the payer of liabilities of this kind. Both parties are aware of the issue. Further particularity is not required in order that proper discovery may be made. In our opinion, what the plaintiffs are really seeking in the case of these paragraphs, is an identification of the evidence by which the second defendant may prove her allegation.
The same point can be made in relation to each of the remaining pleas in this group.
We would dismiss the plaintiffs’ appeal in respect of paragraphs 44 to 50.
Paragraph 31
The next two categories of complaint have, to some extent, to be considered together. The plaintiffs’ complaint is that in several paragraphs of the AD, the second defendant has pleaded evidence rather than material facts. Alternatively, it is said that the second defendant has insinuated the existence of an affirmative case without pleading the material facts relating to it.
Paragraph 31 is an important pleading to the ASC. It pleads that by six identified aspects of conduct, Fred encouraged (speaking generally) the Business Owners to act upon the Assumption that the Base Block land was dedicated to use by them for the purposes of the family business for an indefinite period. This is the Assumption which is fundamental to the plaintiffs’ claims.
Paragraph 31 of the AD comprises two parts. It commences with a denial:
In answer to paragraph 31 Mrs O’Meara says that nothing which Fred did or said at any time constituted [the “encouragement” pleaded by the plaintiffs] as alleged in sub-paragraph 31.7 of the Statement of Claim.
In its second part, paragraph 31 pleads:
Mrs O’Meara says that Fred did and said many things during his lifetime which were inconsistent with the alleged assumption.
Particulars
31.1At all times prior to his death Fred held out that his beneficial interest in the land referred to in paragraph 14 above was in accordance with his legal interest as described in the relevant certificates of title;
31.2In 1967 the companies suffered a liquidity crisis and entered into a scheme of arrangement. The scheme of arrangement documents included statements on oath by Fred that the land was owned solely by him;
31.3In 1988, Fred, Bob and Jack decided to subdivide the whole of the land comprised in Certificate of Title Register Book Volume 3167 Folio 139 and identified as section 501 (“s 501”) which they held as tenants-in-common into three separate allotments [see sub-paragraph 33.7.4 below];
31.4In 1994, Fred informed the companies and their directors that he was considering a proposal to transfer portions of the land upon which houses occupied by family members had been constructed to their occupants. No objection to this proposal was raised by the companies or any of their directors, nor was it suggested by any person that the land was not Fred’s to deal with or dispose of as he saw fit;
The plaintiffs submit that the first part of paragraph 31 of the AD insinuates the existence of an affirmative case without pleading the material facts relating to it. The complaint about the second part is that it amounts to a pleading of evidence.
The master rejected both submissions. In relation to the second part of paragraph 31, the master seems to have accepted that it did amount to a pleading of evidence, but considered that such a pleading was made permissible by r 46A.05(2)(c). In this respect the master’s decision seems to have been influenced by his view that evidence, and not just material facts, may be pleaded pursuant to r 46A.05(2)(c) in order to give fair notice of a defendant’s case. We have indicated above our disagreement with that view of r 46A.
For reasons which will become apparent, we do not consider it necessary to address all of the parties’ submissions concerning paragraph 31. We are satisfied that the first part of paragraph 31 of the AD is not a proper pleading. On its face, it seems to be no more than a denial of the matters pleaded by the plaintiffs in paragraph 31. Mr O’Bryan SC, who appeared with Mr Lipman for the second defendant, submitted that the first part of paragraph 31 was a positive allegation that Fred did not say or do anything constituting the acts upon which the plaintiffs rely. It was necessary, it was submitted, for this to be pleaded in order to give the plaintiffs fair notice of the second defendant’s case. This submission pre-supposes that there is a relevant distinction, for the purposes of r 46A.05(2), between a denial of the existence or truth of an alleged fact, on the one hand, and a positive assertion that the fact alleged does not exist, or is not true, on the other. The existence of such a distinction (for the purposes of r 46A) is to be doubted, at least when it is not suggested that some material fact in the defence case is contingent upon the asserted state of affairs. If the second defendant had simply not pleaded to paragraph 31 at all, the plaintiffs would be bound to prove the facts which they have asserted. The second defendant could lead such evidence as is available to her to contradict those facts. The plea in the first part of paragraph 31 does not alter that position.
The particulars in paragraphs 31.1 to 31.4 inclusive are in the nature of a plea of the evidence which the second defendant will lead to demonstrate conduct by Fred which is said to be inconsistent with the Assumption alleged by the plaintiffs. It was not only unnecessary, but contrary to r 46A.05(2), for the second defendant to plead that evidence.
In our opinion, paragraph 31 offends the pleading rules by pleading in the first part, in the guise of a positive assertion, a denial and by pleading, in the second part, matters of evidence. We would order that the whole of paragraph 31 be struck out. It will be for the judge managing the action, or the master, to determine whether the second defendant should have permission to replead.
Paragraph 32
By paragraph 32 of the ASC the plaintiffs allege that the adoption and action upon the assumption by the “Business Owners” in relation to the Base Block commenced at least in 1948 and has continued ever since.
In answer to that plea, the second defendant pleads in paragraph 32 of the AD:
In answer to paragraph 32, Mrs O’Meara says that nobody has ever adopted or acted upon the alleged assumption as pleaded in paragraph 32 of the statement of claim. Mrs O’Meara says that contrary to the allegation in paragraph 32, the plaintiffs and other members of the Von Stanke families have said and done many things for many years which contradict the alleged assumption.
32.1Mrs O’Meara repeats sub-paragraph 31.2 above and says that the land mentioned in paragraph 14 above and paragraphs 33 and 77 to 89 below was not treated by companies as an asset of the companies which was available for their creditors;
32.2Following Hercules’ death on 26 August 1965, Fred as executor of Hercules’ Will dated 9 November 1964, probate [sic] which was granted on 28 February 1968, transferred Hercules’ beneficial interest in the land registered in Hercules’ name equally amongst himself, Bob and Jack on 30 August 1972 in accordance with Hercules’ Will;
32.3Following the incorporation of the companies, certain land which was purchased was registered in the name of H Stanke & Sons Pty Ltd but not any of the land referred to in paragraph 14 above and paragraphs 33, and 7 to 89 below;
32.4Following Jim’s death in 1995, with the benefit of all relevant legal advice from Judith Choate (“Ms Choate”), companies did not assert the alleged assumption now contended for. Instead the first plaintiff alleged it was owed a debt by Jim as a result of [the its] contribution to the purchase of the land comprised in Certificates of Title 5691 Folio 524, 5878 Folio 30 and 524 Folio 591. The first plaintiff asserted that it would forgive the debt so long as Jim’s executor transferred his interest in all of the land registered in Jim’s name to the first plaintiff.
32.5Upon Jack’s death in 1990, the executor of Jack’s estate, IOOF Australia Ltd, offered family members the opportunity to purchase Jack’s beneficial interest in real property. Despite knowing this, the companies did not assert any beneficial interest in this land;
32.6In 1997 and 1998, the companies and the executor of Fred’s estate instructed Ms Choate to advise them with respect to the existence of any beneficial entitlement to the land referred to in paragraph 14 above. Ms Choate took instructions from the directors and other relevant representatives of the companies, and on the basis of those instructions advised them that the companies had no beneficial interest in this land (see letters from Ms Choate to Mr H Bersee dated 21 April 1997 and 30 January 1998);
32.7In 1999, the directors of the companies put forward a proposal to buy out the financial interest in the companies of Peter John Von Stanke, his sister Keryn Margaret Evelyn and his mother Eileen Isobel Von Stanke. In connection with this proposal at no time did the directors assert that the companies had any beneficial entitlement in the and registered in the name of Jack, or that by selling their financial interest in the companies, the vendors would have transferred their financial interest in the land registered in the name of Jack to the purchasers;
32.8In 1999, in the context of Inheritance (Family Provision) Act 1972 (SA) proceedings against Bob’s estate, accountants were retained to value the estate, the most valuable asset of which was the estate’s financial interest in the companies. At no time in connection with this valuation or these proceedings did the companies assert any beneficial interest in land registered in the name of Fred, Bob, Jack or Jim;
32.9On 14 December 2000, Mr and Mrs O’Meara purchased allotment 3 of the land identified as “s 501” from jack’s estate for $55,000 and were named as registered proprietors on the certificate of title on 17 January 2001. Despite taking legal advice from Ms Choate, the companies have not asserted any beneficial interest in the land purchased by Mrs O’Meara and the proceeds of sale have been distributed to the beneficiaries under Jack’s Will with the knowledge and consent of the companies;
32.10The companies’ audited accounts did not identify the land referred to in paragraph 14 above and paragraphs 33, and 77 to 89 below as part of their asset base before this proceeding commenced in 2005;
32.11Certain directors of the companies have divorced their wives. For the purpose of determining matrimonial property settlements the directors caused inventories and valuations of their assets to be prepared. Included in these inventories were the directors’ financial interests in the companies. At no time did these documents assert any beneficial interest in the land referred to in paragraph 14 above and paragraphs 33, and 77 to 89 below;
32.12The directors of the companies have never received any legal advice to the effect that the companies have, or asserted, any interest in the land referred to in paragraph 14 above and paragraphs 33, and 77 to 89 below.
It can be seen that paragraph 32, like paragraph 31, consists of two parts.
The complaint of the plaintiffs is that the first sentence contains an evasive plea, or alternatively, a plea insinuating an alternative case, and that the whole of the content of the 12 paragraphs of particulars is a pleading of evidence.
The master applied to paragraph 32 the same reasoning which he had applied in relation to paragraph 31. This means that the master’s decision was influenced by the view which he took about the permissibility of pleading evidence. We take the same view of the first sentence in paragraph 32 as we have taken of the first part of paragraph 31. It should be struck out.
The effect of the second part of paragraph 32 is to assert conduct by the plaintiffs and by other members of the von Stanke families which contradicts the Assumption which is the foundation of the plaintiffs’ claims. The particulars which are provided in sub‑paragraphs 32.1 to 32.12 seem to be an amalgam of assertions of conduct inconsistent with the alleged Assumption, on the one hand, and omissions by Fred or the plaintiffs to take advantage of opportunities to assert or rely on the Assumption, on the other.
Mr O’Bryan disputed the plaintiffs’ characterisation of the particulars in paragraph 32 as a pleading of evidence. We accept that submission in relation to certain of the impugned sub-paragraphs. We also accept that it may have been difficult to plead some of the particulars without, in effect, pleading some evidence. This is so when it is a circumstance surrounding or associated with an event upon which the second defendant relies which is said to make the event pleaded material. There are difficulties in relation to paragraph 32 in distinguishing between material facts necessary to give the plaintiffs fair notice, on the one hand, and evidence on the other. However, some of the content of sub-paragraphs 32.1 to 32.12 inclusive does more clearly offend the rule against pleading evidence. We list the following as being in this category:
32.4the words “with the benefit of all relevant legal advice from Judith Choate (‘Ms Choate’)”;
32.6the entire content of this sub-paragraph;
32.9the words “Despite taking legal advice from Ms Choate”;
32.12the entire content of this sub-paragraph.
Accordingly, we would uphold the appeal with respect to the first sentence of paragraph 32 and with respect to the particular passages identified above.
Paragraph 33.7
Paragraph 33 of the ASC pleads that within the period between about March 1953 and April 1965 Fred, and certain of his brothers, became the holder of the legal title of other land in Carpenters Rocks adjacent and proximate to the Base Block with a view to such land being used in conjunction with the Base Block in the Family Business.
By paragraph 33 of the AD, the second defendant admits that Fred, his brothers and his father became the holders of the legal title to certain other land at Carpenters Rocks. In sub-paragraphs 33.1 to 33.10 inclusive, the second defendant identifies the various parcels of land, and in some cases, pleads subsequent changes in the ownership of interests in that land. The plaintiffs’ complaint concerns sub-paragraph 33.7. That plea is as follows:
33.7On 24 May 1963, Hercules, Fred, Bob and Jack purchased and became the registered proprietors of the legal estate in the whole of the land comprised in Certificate of Title Register Book Volume 3167 Folio 139 and identified as section 501 (“s 501”) as tenants-in-common;
33.7.1Following Hercules’ death on 26 August 1965, Fred as executor of Hercules’ Will dated 9 November 1964, probate [of] which was granted on 28 February 1968, transferred Hercules’ beneficial interest in the land registered in Hercules’ name equally amongst himself, Bob and Jack on 30 August 1972 in accordance with Hercules’ Will;
33.7.2In 1987 and 1988, Mrs O’Meara wished to build a house on a portion of s 501 and to be the legal and beneficial owner of her house block. Fred agreed to implement the partition of s 501 into three allotments to facilitate the fulfilment of Mrs O’Meara’s wish;
33.7.3Bob and Jack agreed with Fred’s proposal;
33.7.4On 13 January 1988, at Fred, Jack and Bob’s request, s 501 was divided into three separate parcels of land comprised in Certificate of Title Register Book Volume 5444 Folio 566 (“allotment 1”), Certificate of Title Register Book Volume 5258 Folio 561 (“allotment 2”) and Certificate of Title Register Book Volume 5444 Folio 565 (“allotment 3”).
33.7.5On 27 July 1988:
33.7.5.1allotment 1 was transferred by Fred, Bob and Jack as tenants-in-common to Bob as sole proprietor;
33.7.5.2allotment 2 was transferred by Fred, Bob and Jack as tenants-in-common to Mrs O’Meara as sole proprietor. Fred in effect gave his share of s 501, being allotment 2, to Mrs O’Meara;
33.7.5.3allotment 3 was transferred by Fred, Bob and Jack to Jack as sole proprietor.
The plaintiffs make no claim with respect to the s 501 land to which sub-paragraph 33.7 refers. Accordingly, the plaintiffs submitted that paragraph 33.7, being a plea in relation to land which was not in issue, was in the nature of a plea of evidence. We are unable to accept that submission. A plea concerning the conduct of Fred in relation to non-disputed land is capable of being a plea of a material fact giving fair notice of the second defendant’s case in relation to the disputed land. That is particularly so given the plaintiffs’ pleadings concerning the adoption of the Assumption, and the pleadings concerning the family members having acted in accordance with that Assumption. Fred’s conduct in relation to the s 501 land is capable of being very relevant to the matters in issue.

We would dismiss the appeal with respect to sub-paragraph 33.7.
Paragraph 34
Paragraph 34 of the ASC is a plea containing particulars of Fred’s conduct encouraging the adoption of the Assumption. Paragraph 34 of the ASC provides:
34.By his conduct, namely, his procurement and encouragement of and acquiescence in:
34.1the use of the Base Block and the Further and as one unified resource in the manner pleaded in paragraphs 33, 40 and 96;
34.2the making available of the Base Block and the Further Land to the Business Owners, as land for construction at the expense of the Family Business of buildings and other infrastructure for the conduct and development of the Family Business as pleaded in paragraphs 35.1 and 103;
34.3in making available of the Base Block and the Further Land to the Business Owners, as land for construction at the expense of the Family Business of accommodation for the Business Owners, their families, employees of the Family Business and their families as pleaded in paragraphs 35.2 and 104
and by reason of his influence as pleaded in paragraphs 36 – 38 inclusive Fred in relation to the Base Block:
34.4knew of and/or was aware of and/or induced and/or procured and/or encouraged and/or acquiesced in and/or assented to the adoption of the Assumption by the Business Owners; and/or
34.5held out and/or represented to the Business Owners the state of affairs pleaded in the Assumption; and/or
34.6knew of and/or was aware of and/or induced and/or procured and/or encouraged and/or acquiesced in and/or assented to the action upon such representation and/or the Assumption by the Business Owners.
By paragraph 34 of the AD, the second defendant pleads:
34.In answer to paragraph 34, Mrs O’Meara says that nothing that Fred said or did at any time constituted his procurement and/or encouragement and/or acquiescence of any of the mattes alleged in sub-paragraphs 34.1, 34.2 or 34.3 of the statement of claim, or that Fred knew of and/or was aware of and/or induced and/or procured and/or encouraged and/or acquiesced in and/or held out and/or represented any of the matters alleged in sub-paragraphs 34.4, 34.5 or 34.6 of the statement of claim.
Particulars
34.1Mrs O’Meara repeats the particulars pleaded at paragraphs 31 and 32 above.
The plaintiffs submitted that paragraph 34 of the AD insinuated the existence of an affirmative case without pleading the material facts relating to it. In the alternative, it was submitted that the master had erred in refusing to order the second defendant to plead further material facts concerning paragraph 34.
The content of paragraph 34 of the AD is similar to that of the first part of paragraph 31. For the reasons given with respect to the first part of paragraph 31, our opinion is that the whole of paragraph 34 is an inappropriate pleading. It does no more than deny the plaintiffs’ allegations. It is a form of pleading prohibited by r 46A.05(2). For this reason alone, we would allow the appeal with respect to paragraph 34. In those circumstances, it is not necessary to consider the remaining submissions concerning paragraph 34.
Paragraphs 66 to 68
Paragraphs 66 to 68 inclusive of the ASC plead further matters concerning Fred’s encouragement of the adoption by family members of the Assumption and of matters done in reliance upon that Assumption. Paragraphs 66 to 68 of the AD adopt a similar form. The second defendant pleads, in relation to each of the matters contained in paragraphs 66 to 68 of the ASC that nothing which Fred said or did at any time constituted an encouragement by him of adoption of the Assumption or of reliance by the others on that Assumption.
The master rejected the plaintiff’s strike out application with respect to paragraph 66 to 68 inclusive on the ground that they amounted a justifiable pleading of evidence. The master considered, in the alternative, that the defendants had not shown the requisite level of prejudice required by r 46A.09(1) for the pleading of further material facts. In our respectful opinion, these reasons of the master did not address the fundamental defect which exists in paragraphs 66 to 68 inclusive.
The effect of these pleas is no more than a denial of the allegations made by the plaintiffs. We refer again to what has been said above concerning the first part of paragraph 31 of the Amended Defence. For the same reasons as we have given in relation to paragraph 31, each of paragraphs 66 to 68 inclusive contains material which is prohibited by r 46A.05(2). The appeal should be allowed and an order should be made striking out those paragraphs.
Paragraphs 77 to 87
In paragraphs 77 to 87 inclusive of the ASC, the plaintiffs allege the acquisition by Fred and his brothers of 10 further blocks of land at Carpenters Rocks which are said to comprise the further land.
The second defendant’s pleas to paragraphs 77 to 87 inclusive are identical. In relation to each of the individual paragraphs, the AD provides “Mrs O’Meara repeats the particulars at paragraphs 32 and 33 above”. The plaintiffs submit that each of these paragraphs insinuates the existence of an affirmative case without pleading the material facts relating to it and, or in the alternative, is a plea of evidence.
It is not necessary, in our opinion, to consider these submissions, nor the second defendant’s answering submissions in any detail. We are satisfied that each of the pleas to paragraphs 77 to 87 inclusive is a form of plea prohibited by r 46A.05(2). They are not pleas of admission. They incorporate by reference pleas which had been made earlier. However, the pleas contained in the particulars to paragraph 32 bear no apparent relationship to the pleas made in paragraphs 77 to 87 of the ASC. It is not apparent how the pleas contained in paragraph 33 are a permissible pleading to the allegations contained in paragraphs 77 to 87 inclusive. They are not admissions, and it is difficult to construe those pleadings as containing a plea of material facts giving fair notice of the second defendant’s case in relation to the acquisition of each block of land.
We would allow the appeal with respect to paragraphs 77 to 87 inclusive of the AD.
Paragraph 112
The terms of paragraph 112 of the AD have already been cited in these reasons. It will be remembered that sub-paragraphs 112.1 to 112.4 inclusive contained allegations of the conduct of the plaintiffs relied upon for the defence of laches and/or acquiescence.
The plaintiffs submit that sub-paragraphs 112.1 and 112.2 insinuate the existence of an alternative case without pleading the material facts relating to it. In addition, it was submitted that sub-paragraph 112.1.1 is a plea of evidence. In relation to sub-paragraphs 112.3 and 112.4, it was submitted that each constituted or included a statement of conclusion based upon unpleaded material facts.
The submission that sub-paragraphs 112.1 and 112.2 insinuate the existence of an alternative case cannot be accepted. Those pleas do not insinuate an alternative case at all. They assert positively, as a material fact establishing laches and/or acquiescence, that neither the plaintiffs or others have made, in the period specified, an assertion of a relevant kind. That is an unqualified assertion. They are not, for example, pleas that the plaintiffs did not make the relevant assertion in the manner alleged in the Statement of Claim, thereby leaving open the implication that an assertion of the same kind may have been made in some other manner.
We accept however that insofar as sub-paragraph 112.1.1 contains particulars which support the plea in sub-paragraph 112.1 it appears to be a plea of evidence. The matters which are incorporated by reference by sub-paragraph 112.1.1 are, in the context of paragraph 112.1, an identification of evidence which may be led to support the second defendant’s claim. Accordingly sub-paragraph 112.1.1 should be struck out.
As we understand the pleading, paragraphs 112.3 and 112.4 of the AD should be read together. Paragraph 112.3 asserts, in effect, that delay by the plaintiffs in making the claims has denied the defendants (other than John) the opportunity to adduce the best evidence which was previously available to defend the claims. Paragraph 112.4 purports to particularise the evidence said to have been lost, namely, the oral and documentary evidence which was available to Jack, Bob, Fred or Jim during their lifetimes. A number of matters are to be noted about this pleading. First, the pleader seems to accept that material facts identifying the evidence said to have been lost should be pleaded. Secondly, paragraph 112.4 asserts positively that oral and documentary evidence was previously available to defeat the plaintiffs’ claims. Thirdly, and as already noted, these paragraphs of the AD contain an allegation of actual prejudice. It is not a plea of a mere loss of opportunity to ascertain whether evidence of a particular kind was available. Although asserting an actual prejudice by the loss of evidence alleged, the pleading does not identify the subject matter of the evidence said to be no longer available. Further, insofar as that evidence was said to be documentary, the pleading does not identify the documents which are no longer available. A plea of these matters would not be a pleading of evidence. It would be simply an identification of the evidence said by the second defendant to be no longer available. The second defendant would not be required to plead the manner by which she will prove that evidence of that kind had formerly been available, nor the means by which she proposes to prove the loss of the documentary evidence.
For these reasons, we consider that paragraphs 112.3 and 112.4 do not disclose sufficient facts to give the plaintiffs fair notice of this aspect of the second defendant’s plea of laches and/or acquiescence. We are also satisfied that the plaintiffs would be significantly prejudiced by the absence of these material facts. We respectfully disagree with the decision of the master in this respect.
We would order that the second defendant should plead further material facts to support the allegations in sub-paragraphs 112.3 and 112.4.
Summary
We summarise our views as follows:
1The appeal in relation to paragraph 111 of the AD should be allowed for the limited purpose of striking out the particulars pleaded in sub-paragraph 111.1.
2The appeal in relation to paragraph 112 of the AD should be allowed for the limited purpose of striking out sub-paragraph 112.1 and ordering that the second defendant plead further material facts to support the allegations in sub-paragraphs 112.3 and 112.4.
3In relation to the appeal against paragraph 22.7 of the AD, an order should be made that the second defendant plead further material facts to support the allegation made in that paragraph.
4The appeal in relation to paragraph 42 of the AD should be dismissed.
5The appeal in relation to paragraphs 44 to 50 inclusive of the AD should be dismissed.
6The appeal in relation to paragraph 31 of the AD should be allowed and the whole of that paragraph struck out.
7The appeal in relation to paragraph 32 of the AD should be allowed for the limited purpose of striking out the first sentence of paragraph 32, the whole of sub-paragraphs 32.6 and 32.12 and the passages in sub-paragraphs 32.4 and 32.9 identified in these reasons.
8The appeal in relation to paragraph 33.7 of the AD should be dismissed.
9The appeal in relation to paragraph 34 of the AD should be allowed and that paragraph struck out.
10The appeal in relation to paragraphs 66 to 68 inclusive of the AD should be allowed and those paragraphs struck out.
11The appeal in relation to paragraphs 77 to 87 inclusive of the AD should be allowed and those paragraphs struck out.
12Any application to amend the AD should be dealt with by the trial judge or a master.
KELLY J. I agree with the orders proposed for the reasons expressed by Duggan and White JJ.