Hughes v Vernon Nominees Pty Ltd
[1999] WASC 135
HUGHES -v- VERNON NOMINEES PTY LTD & ORS [1999] WASC 135
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 135 | |
| Case No: | CIV:2076/1998 | 12 AUGUST 1999 | |
| Coram: | MASTER SANDERSON | 19/08/99 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| PDF Version |
| Parties: | MERVYN LESTER HUGHES VERNON NOMINEES PTY LTD (ACN 008 858 615) AMP LIFE LTD (ACN 179 300 379) AMP GENERAL INSURANCE LTD (ACN 008 405 632) |
Catchwords: | Practice and procedure Application for leave to amend statement of claim Turns on its own facts |
Legislation: | Nil |
Case References: | Esanda Finance Corporation v Peat Marwick Hungerfords (1995) 188 CLR 241 Jingellic Minerals NL v Abbigroup Ltd (1992) 7 WAR 566 Hospitals Contribution Fund of Australia v Hunt (1982-1983) 44 ALR 365 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
VERNON NOMINEES PTY LTD (ACN 008 858 615)
First Defendant
AMP LIFE LTD (ACN 179 300 379)
Second Defendant
AMP GENERAL INSURANCE LTD (ACN 008 405 632)
Third Defendant
Catchwords:
Practice and procedure - Application for leave to amend statement of claim - Turns on its own facts
Legislation:
Nil
(Page 2)
Result:
Application refused
Representation:
Counsel:
Plaintiff : Mr G M Jordan
First Defendant : No appearance
Second Defendant : Ms F C Davis
Third Defendant : Ms F C Davis
Solicitors:
Plaintiff : Michael Whyte & Co
First Defendant : No appearance
Second Defendant : Phillips Fox
Third Defendant : Phillips Fox
Case(s) referred to in judgment(s):
Esanda Finance Corporation v Peat Marwick Hungerfords (1995) 188 CLR 241
Jingellic Minerals NL v Abbigroup Ltd (1992) 7 WAR 566
Case(s) also cited:
Hospitals Contribution Fund of Australia v Hunt (1982-1983) 44 ALR 365
(Page 3)
1 MASTER SANDERSON: This was the return of the second and third defendants' chamber summons seeking to strike out the plaintiff's statement of claim. The application has quite a history. The chamber summons was issued on 9 March 1999. On 13 April 1999 Acting Master Chapman made orders striking out the statement of claim with leave to file a minute of amended statement of claim. On 4 May 1999 the second and third defendants filed a chamber summons for a springing order based on the plaintiff's failure to file and serve an amended statement of claim. On 6 May 1999 a further minute was filed. On 10 May 1999 the second and third defendants raised objections to that minute. On 1 July 1999 Master Bredmeyer made an order, by consent, that the plaintiff file a fresh minute of amended statement of claim within seven days. The matter was then adjourned to 12 July 1999. When the matter came on again on that date the fresh minute had not been filed. The matter was further adjourned to 26 July 1999 on the basis that the minute of amended statement of claim was to be filed forthwith. In fact, the minute was filed on 19 July 1999. At the resumed hearing on 26 July 1999 the matter was adjourned to a special appointment. In effect, then, although I was dealing with the plaintiff's strike-out application, the plaintiff was essentially seeking leave to file an amended statement of claim in the form of a minute dated 19 July 1999. That is the way the application proceeded.
2 Although the plaintiff makes two separate and distinct claims against the first defendant on the one hand, and the second and third defendants on the other, these two claims are interrelated. This application did not concern the first defendant, but to put the application in context it is necessary to say something about the plaintiff's claim against the first defendant. The plaintiff pleads that he was at all material times an insurance agent. The first defendant was an insurance agency in Northam representing the second and/or third defendants. In April 1996 the plaintiff and the first defendant agreed that the plaintiff would purchase a half interest in the first defendant's Register of Insurance Policies. This Register of Insurance Policies is defined in the statement of claim (par 4(a)) as "the Register". It is further pleaded that it was a term of the contract between the plaintiff and the first defendant that the remaining 50 per cent of the Register would be offered by the first defendant to the plaintiff on the happening of a certain specified event, but in any circumstances within 12 months of the initial purchase of 50 per cent. In other words, the agreement between the plaintiff and the first defendant is said to contain a right of first refusal with respect to the 50 per cent of the Register not then acquired by the plaintiff. It is claimed that in breach of
(Page 4)
- this agreement the first defendant sold the remaining 50 per cent of its interest in the Register to a third party without offering it to the plaintiff. It is said that, in making the sale to the third party, the first defendant was in breach of its agreement with the plaintiff and the plaintiff claims damages for breach of contract. The action then, as between the plaintiff and the first defendant, is quite straightforward.
3 From par 9 of the minute onwards, the plaintiff turns to the claim against the second and third defendants. Paragraph 9 of the minute is in the following terms:
"9. Further, in or about January 1996 the plaintiff and the second and/or third defendants entered into an agreement ('the Agency Agreement'), partly oral and partly in writing, pursuant to which the second and/or third defendants engaged the plaintiff as an insurance agent ('an AMP agent'), inter alia, to sell insurance policies issued by the second and/or third defendant for remuneration by way of commission, bonuses and other payments payable by the second and/or third defendant to the plaintiff.
PARTICULARS
(a) Insofar as the terms of the Agency Agreement were written, the plaintiff refers to the terms contained in the file entitled 'Agreements, Benefits and Conditions' provided by the second and/or third defendants to the plaintiff; and
(b) Insofar as the terms of the Agency Agreement were oral, the plaintiff refers to discussions between the second and/or third defendants through their servant or agent James Bivoltsis and the plaintiff in or about November 1995."
4 The second and third defendants raise three separate objections to this paragraph. First, they say it is vague and embarrassing as it fails to plead material terms upon which the plaintiff relies and it fails to state, in respect of each of these terms, whether they are written, oral or implied. Secondly, it is said that the plea is embarrassing because the agreement is alleged to have been made in or about January 1996 when par (b) of the particulars refers to discussions held in November 1995. Finally, it is said, that no consideration for the agreement is pleaded.
(Page 5)
5 This last point can be disposed of first. The pleading is not explicit as to consideration, but it seems apparent that the plaintiff is saying that in consideration of his selling insurance policies for and on behalf of the second or third defendants, he would be paid commission or bonuses or other benefits. In my view, the pleading is sufficiently clear on this question and I would not strike out the paragraph on that basis.
6 I am also satisfied that the nature of the agreement is sufficiently pleaded to allow the second and third defendants to know the case they have to meet. Paragraph 9 itself does not contain details of the terms and conditions of the agreement. Stylistically, it may have been better for the draftsman to have included in the one paragraph all the material terms of the agreement and to have stated whether such terms were express or implied, written or oral. However, the rest of the pleading sets out the terms which this agreement is said to contain and in my view, taken as a whole, it is clear what the plaintiff says are the terms of the agreement.
7 However, I do have difficulty with the particulars pleaded in par 9(b). It is not apparent how discussions which took place in November 1995 could be incorporated in an agreement reached in January 1996. It may be that when the agreement was reached the parties agreed that what had been discussed by them in November 1995 would form part of the agreement; it may be that, by some other mechanism, the prior discussions were imported into the agreement in January 1996. But if that is the case then the plaintiff should plead how this came about. At present there seems to be no nexus between the November 1995 discussions and the January 1996 agreement. I accept that the difficulties lie with the particulars and that, as a rule, it is not necessary to plead to particulars. But particulars of an agreement such as this are such an integral part of a pleading, based as it is upon an alleged contract, that the lack of sound particulars is a basis for refusing to allow an amendment.
8 On this basis, I would not be prepared to allow par 9 to stand in its present form.
9 Paragraph 10 of the minute reads as follows:
"10. It was an express term of the Agency Agreement that if the plaintiff acquired from the first defendant its interest in and right to the income generated by the whole of the Register, then the plaintiff would succeed the first defendant as the sole operator of the Agency at Northam.
(Page 6)
- The term was oral and the plaintiff refers to discussions between the second and/or third defendant through their servant or agent James Bivoltsis and the plaintiff in or about November 1995."
10 The second and third defendants raise a number of objections to this paragraph. Contrary to submissions made by the second and third defendants, I see nothing embarrassing about par 10 in its terms. It may have been better had par 10 been incorporated in par 9, the express term of the Agency Agreement being properly pleaded in the context of the plea of the Agency Agreement itself. But apart from that it is open to the plaintiff to allege that there was an express term of the Agency Agreement as set out in par 10. However, I do have difficulty with the particulars. Once again, it is difficult to see the nexus between the discussions in November 1995 and the agreement in January 1996. Essentially, this difficulty with par 10 is a reflection of the difficulty with par 9. In my opinion, par 10 cannot stand in its present form.
11 Paragraph 11 pleads, as an alternative cause of action against the second and third defendants, what is described as "the Collateral Agreement". Paragraph 11 is in the following terms:
"11. In the alternative to paragraph 10 hereof, in consideration of the plaintiff entering into the Agency Agreement, it was expressly agreed by the second and/or third defendants that if the plaintiff acquired from the first defendant its interest in and right to the income generated by the whole of the Register, then the plaintiff would succeed the first defendant as the sole operator of the Agency at Northam ('the Collateral Agreement').
PARTICULARS
The Collateral Agreement was oral and was made during discussions between the second and/or third defendants through their servant or agent, James Bivoltsis and the plaintiff in or about November 1995."
12 It is submitted on behalf of the second and third defendants that par 11 is embarrassing in its terms, in particular, because it does not deal with the question of consideration. Paragraph 9 pleads that the plaintiff and the second and/or defendants entered into the Agency Agreement in
(Page 7)
- January 1996. It is pleaded that the consideration for the Collateral Agreement was the plaintiff entering into the Agency Agreement. But the particulars make it plain that the Collateral Agreement was reached in November 1995. It is difficult to see how entering into an Agreement in January 1996 can be consideration for an agreement reached in November 1995. The complaints of the second and third defendants are well made. Paragraph 11 cannot stand in its present form.
13 Paragraph 12 deals with terms which are said by the plaintiff to be implied in the Agency Agreement, or, alternatively, the Collateral Agreement. That paragraph reads as follows:
"12. There were implied terms of the Agency Agreement, or alternatively the Collateral Agreement, that the second and/or third defendants would not:
(a) do anything to prevent the plaintiff from acquiring the first defendant's interest in the whole of the Register as contemplated in any agreement entered into between the plaintiff and the first defendant; and/or
(b) approve the transfer of the Register, or any part thereof, by the first defendant to any party other than the plaintiff prior to the plaintiff having the opportunity to acquire the first defendant's interest in right to the whole of the Register as contemplated in any agreement entered into between the plaintiff and the first defendant.
PARTICULARS OF IMPLIED TERMS
Such terms are reasonable and necessary to give business efficacy to the Agency Agreement, or alternatively the Collateral Agreement, and so obvious that they 'would go without saying'."
(Page 8)
- complaint is answered by reference to par 13. This paragraph is in the following terms:
"13. At all material times the agency agreement pursuant to which the second and/or third defendants engaged the first defendant as an insurance agent, inter alia, to sell insurance policies issued by the second and/or third defendants provided that the first defendant could not transfer all or any part of the Register unless the transfer was approved by the second and/or third defendants.
PARTICULARS OF AGENCY AGREEMENT
Particulars of the agency agreement existing between the first defendant and the second and/or third defendants will be provided by the plaintiff after discovery."
16 The second and third defendants also complain as to par 13. They say that the pleading is bad because material terms are not pleaded. However, the pleaded contract is between the first defendant and the second and/or third defendants. This is a matter particularly within the knowledge of the second and/or third defendants and I would not strike out par 13 for want of particularity: see Jingellic Minerals NL v Abbigroup Ltd (1992) 7 WAR 566 at 570, 575. It is also said by the second and third defendants that par 13 is inconsistent with the pleading that agreement was reached between the plaintiff and the first defendant as to the sale of 50 per cent of the Register. In my view, the two pleas are not inconsistent. It may be the case that the sale of the Register was subject to approval by the second and third defendants. If that is so, it may well be a matter which should have been pleaded when the material terms of the agreement as between the plaintiff and the first defendant were pleaded. Be that as it may, par 13 in its present form can stand. Whether it should remain in its present position or whether it needs to be moved to ground what the plaintiff attempts to plead in par 12 is a matter which requires consideration by the draftsman.
(Page 9)
17 The second and third defendants also object to par 15 of the minute. That paragraph is in the following terms:
"15. In breach of the terms of the Agency Agreement, or alternatively the Collateral Agreement, pleaded in paragraphs 9, 10, 11 and 12 hereof, the second and/or third defendants approved the transfer of the remaining 50% of the Register as pleaded in paragraph 7 hereof."
18 Two complaints are made in relation to this paragraph. First, it is said that it is not pleaded when and how the second and third defendants are alleged to have approved the sale of the Register. It is said that these are material facts and ought to be pleaded. In my view that complaint is properly made. It is not a question of particulars. It is a question of when and how the approval was granted. Once these material facts are pleaded the second and third defendants can either admit or deny the allegation. Secondly, complaint is made that there is no plea that sale of the Register was conditional upon the approval of the second and third defendants. I think this complaint is answered by the terms of par 13. Paragraph 15 could be expanded to link in the requirement of approval by the second and third defendants with the sale of the half interest in the Register to the third party. But I think, even in its present terms, par 15 is sufficiently linked to par 13 to allow the second and third defendants to understand the case that they have to meet.
19 Finally, the second and third defendants object to par 22 of the minute. That paragraph is in the following terms:
"22. By reason of the matters pleaded in all or any of paragraphs 9, 10, 11, 12, 13, 14, 15, 16 and 17 hereof, at all material times the second and/or third defendants owed the plaintiff a duty of care to refrain from doing anything to prevent the plaintiff from acquiring the first defendant's interest in and right to the whole of the Register as contemplated in the Agreement ('the duty of care')."
20 This paragraph sets up a cause of action in tort. As the claim made by the plaintiff is for purely economic loss, a duty of care as between the plaintiff and the second and third defendants depends upon the relationship of proximity, perhaps best described as a special relationship and one which will only arise in certain circumstances: see Esanda Finance Corporation v Peat Marwick Hungerfords (1995) 188 CLR
(Page 10)
- 241. As I understand the present pleading, it is par 17 through to par 21 which are said to establish the relationship of proximity from which the duty of care arises. In my view the plea is inadequate. At the very least it would be necessary for the plaintiff to plead that the second or third defendants assumed responsibility for providing information or advice in circumstances where they knew, or ought reasonably have known, that such information or advice would be acted upon and that as a consequence of any inaccuracy the plaintiff would suffer loss and damage. It may be that it is open to the plaintiff to plead a cause of action in tort. But, at present, the plea is too general and imprecise and cannot stand.
21 I would refuse leave to amend in terms of the minute. I will, however, allow the plaintiff the opportunity to file a further amended pleading. I will hear the parties as to the form of orders and in relation to costs.
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