IGA Distribution Pty Ltd v King and Taylor Pty Ltd

[2002] VSC 390

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 2068 of 2001

IGA DISTRIBUTION PTY LTD	Plaintiff
v
KING & TAYLOR PTY LTD	First Defendant
DELAHEY PROPERTIES PTY LTD	Second Defendant

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RULING NO. 1

JUDGE:	Nettle J
WHERE HELD:	Melbourne
DATES OF HEARING:	3, 4, 5 September 2002
DATE OF RULING:	5 September 2002
CASE MAY BE CITED AS:	IGA Distribution Pty Ltd v King & Taylor Pty Ltd and anor
MEDIUM NEUTRAL CITATION:	[2002] VSC 390

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R.M. Garratt QC with Mr M.K. Moshinsky	Cornwall Stodart
For the First Defendant	Mr J.D. Hammond QC with Ms J.E. Richards	Richard Szental
For the Second Defendant	Mr P.J. Hayes with Ms L. Hannon	Efron & Associates

HIS HONOUR:

1. By paragraph 13 of its statement of claim, the plaintiff pleads that prior to entering into a contract of sale to purchase land from King & Taylor, Delahey had notice that King & Taylor and IGA had entered into an agreement for lease and that IGA had an interest in the land as lessee subsequently described in Caveat X617446A lodged by IGA and registered on the title on 23 July 2001.

1. Under paragraph 13 of the statement of claim, the particulars given are:  that on 27 July 2001, Jonathan Carlisle of IGA spoke by telephone to Sam Herszberg of Delahey who said he was aware of IGA's interest in the land;  that notice is also to be inferred from the fact that King & Taylor purported to terminate the agreement for lease on 6 July 2001 and the contract of sale was executed on 6 July 2001;  and that further particulars will be provided after discovery.

1. No further particulars were provided before the trial began, but during the course of his opening on the first day of the trial Mr Garrett, of Queen's Counsel, who appears with Mr Mark Moshinsky for the plaintiff, foreshadowed that it was the intention of the plaintiff to apply for leave to amend the particulars. 

1. At the beginning of the second day, Mr Garrett brought in proposed further amended particulars and applied ore tenus for leave to rely upon them.  However, because the defendants' counsel had not then had an opportunity to consider the document, I stood over the application for leave until this morning.  Now, after time has been allowed for instructions to be taken, I have received detailed submissions from the defendants' counsel in opposition to the leave which is sought.

1. In short substance, four grounds of opposition are advanced.  First, by Mr Hammond of Queen's Counsel who appears with Ms Richards for the first defendant, it is submitted that what is being alleged in the new particulars in effect is that the contract of sale into which the second defendant entered with the first defendant was a sham, and that sham should not be allowed to be alleged by the indirect or back-door route of particulars. 

1. Secondly, by Mr Hammond and also Mr Hayes, who appears with Ms Hannan for the second defendant, it is submitted that there is not sufficient specificity as to the time at which the various acts referred to in the new particulars are alleged to have occurred.

1. Thirdly, by Mr Hammond and also by Mr Hayes, it is submitted that there is not sufficient specificity, particularly in paragraphs (i), (E) and (F), as to the acts which are alleged to have constituted the "negotiations" and "actions" on behalf of the second defendant that are referred to in those paragraphs.

1. Finally, Mr Hayes on behalf of the second defendant opposes paragraph (iii), in which it is alleged that knowledge is to be imputed to his client because of a lack of particularity as to the enquiries which it is alleged could have been made, or at least ought reasonably to have been made.

1. I accept Mr Hayes' criticism of paragraph (iii) and until and unless further specificity is provided I will not allow the particulars to be amended by inclusion of that paragraph. 

1. That said, however, I reject Mr Hammond's argument that what is sought to be done through the proposed new particulars is to allege a sham.  For a number of reasons it is plain that that is not what is intended or achieved. 

1. First, the particulars offered are of the allegation contained in paragraph 13 of the statement of claim, which is not an allegation of sham.  Secondly, in the course of his opening, Mr Garrett made clear that it is not his case that the agreement which was entered into between the second defendant and the first defendant was a sham, but rather that it was part of a broader arrangement, the full colour and context of which needs to be understood in order to show that the second defendant had notice of the plaintiff's interest.

1. I also reject Mr Hammond's and Mr Hayes' arguments that the proposed paragraphs (i)(A) to (F) are not sufficiently specific as to the time at which the acts alleged are said to have occurred.  Given the difficulties with which the plaintiff is faced in a case of this kind, where the knowledge sought to be established is within the minds of the first and second defendants, there is a limit to what can be provided.  It is the sort of case where less specificity is demanded than might ordinarily be the case.

1. Moreover and perhaps more importantly, when one looks at what is alleged in these paragraphs, the allegations relate to acts which, in the most part, are cross-referenced to documents in the court book of evidence.  And they make plain enough, in my view, the time of the acts which are in issue.

1. For very much the same reasons, I reject the argument of Mr Hammond and of Mr Hayes that insufficient specificity is provided in the description of the acts complained about.  It is true that, in the ordinary case, one might demand more of an allegation that someone entered into negotiations;  at least to the extent of requiring a specification of what those negotiations were said to be comprised of.  But in a case of this kind, where it is apparent that there has been no discovery concerning the negotiations and no information otherwise readily available about them, I think that what has been done is the best that the plaintiff can be expected to do until something better emerges.

1. Accordingly, I propose to allow the plaintiff leave to amend its particulars under paragraph 13 of the statement of claim by adding paragraphs (i) and (ii) in the document dated 4 September 2002 which was submitted by Mr Garrett;  but I disallow the plaintiff's application to amend its particulars under paragraph 13 of the statement of claim by adding the paragraph numbered (iii).  I will, however, entertain an application for leave further to amend to include an allegation along the lines contained in paragraph (iii), provided the application is made expeditiously and provided that it complies with the sorts of requirements to which both Mr Hayes and Mr Hammond have referred.

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