Islington Nominees Pty Ltd v N.C.R Australia Pty ltd

[1983] FCA 372

Trade Practices - consumer protection - sale of computer

hardware and software - whether misleading and deceptive

conduct - alternatively whether representations made

fraudulently or negligently

Practlce and Procedure - application to strike out parts of

statement of clam - whether reasonable cause of action

disclosed - meaning attached to statements pleaded a matter

for trial Judge to determine - whether representations

pleaded are statements as to future conduct - tendency to

cause prejudice or embarrassment - whether lack of clarity

may be cured by further and better particulars

Trade Practices Act 1974 Part V s s . 5 2 , 53(c)

ISLINGTON NOMINEES PTY.

LTD. v. N.C.R. AUSTRALIA PTY. LIMITED

No. WA G17 of 1983

Toohey J.

Perth

15 December 1983

IN THE FEDERAL	C0ITP.T	)
OF AUSTRALIA	)

WESTERN AUSTRALIA	)	No. WA G17 of 1983
DISTRICT REGISTRY	)
GENERAL DIVISION	1

B E T W E E N :

ISLINGTON NOMINEES PTY. LTD.

Applicant

and

N.C.R. AUSTRALIA PTY. LIMITED

Respondent

O R D E R

JUDGE MAKING ORDER	Toohey J.
DATE OF ORDER	15 December 1983
WHERE MADE	Perth
THE COURT ORDERS THAT:

1.    The respondent's motion filed on 2 November

1983 be dismissed.

2.   The respondent pay the applicant's costs of the motion in any event.

Q

. .

IN THE FEDERAL COURT ~~~~~~~ ~ ~ ~~

OF AUSTRALIA )

WESTERN AUSTRALIA ) No. WA G17 of 1983

DISTRICT REGISTRY 1

GENERAL	DIVISION	)
B E T F I E E N :

ISLINGTON NOMINEES PTY. LTD.

Applicant

and

N. C. R. AUSTRALIA PTY. LIMITED

Respondent

CORAM: TOOHEY J.

15 December 1983

REASONS FOR JUDGMENT

This is a motion to strike out large segments of a

statement of claim.

The substantive application seeks rescission of a number

of contracts made between the applicant and the respondent and

further, or in the alternative, damages under the Trade Practices

Act 1974 and at common law.

The motlon primarily relies upon the contention that the

paragraphs of the statement of claim under attack disclose no

reasonable cause of action. Some of those paragraphs are said to

have a tendency to cause pre~udice or embarrassment to the

, respondent. In so far as the motion asserts that paragraphs of

the statement of claim disclose no reasonable cause of action,

2 .

"the question 1s whether It would be open to the Capplicantl upon

the pleadings to prove facts at the trial which would constitute a

cause of action" (Mutual Llfe and Citizens Assurance Co. Ltd. v.

(1970) 122 CLR 628 at p.631).

The applicant is a motor vehicle dealer and the

respondent is a suppller of computer hardware and software

products. Following negotiations between the parties, the

applicant entered into several contracts for the purchase of

hardware and software. It pleads that it did so in reliance upon

representations made by the respondent regarding the quality of

its products atid the services It was able to offer. The applicant

alleges that a number of representations were false and it relies

upon those representatlons and their falsity as constituting

misleading or deceptive conduct within s.52 and s.53(c) of the

Trade Practices alt rnatively Act, constituting as

misrepresentations made fraudulently negligently. or The

applicant pleads further causes of action based upon sections of

Part V of the Trade Practices Act.

In my view the motlon should be dismissed. In giving my

reasons for reaching that conclusion it is unnecessary to refer to

each paragraph of the statement of claim under attack or to refer

in any detail to the arguments of counsel. For the most part the

matter can be dealt with by reference to considerations	of	a
general nature.

The statement of claim pleads that in the course of

negotiations the applicant made known to the respondent its

3

particular needs In processing its business transactions. It

dlleges that the respondent made a number of representatlons as to

the quality of Its computer system ("the NCR system"), its

superioricy over the syscem then being used by the applicant and

the advantages to the applicant of the NCR system in terms of

availabillty of parts and of trained staff to service the system.

In many respects the respondent's real complaint is lack

of preclsion in the pleading of the statement of claim. I do not

say that the complaint is justified but, to the extent that it is,

the remedy is in the respondent's hands. It may seek further and

better particulars.

The representations pleaded by the applicant include

statements that "each component of the computer hardware and

software system offered for sale to the applicant by the

respondent ('the NCR system') would do everything that the

applicant's present computer system could do but better and

quicker" (para. 5(b)) and that "the NCR system was perfect for a

motor vehicle franchise such as that conducted by the applicant

... ' I (para. 5(c)). The respondent submits that these statements

are self evidently no more than exaggerations or mere puffing and

that the first of them is pleaded in ambiguous language.

As to ambiguity, the statement of claim purports to

plead the representation that was made. If the statement is

ambiguous, that is not the fault of the pleader; it is matter for

the trial judge to determine the meaning (if any) to attach to it.

4.

Nor do I regard the statements as self evldently no more

than exaggerations or mere puffing, partlcularly when taken In

context. Again the meaning to be attached to them is for the

trial judge but they are certamly capable of bemg understood as

representations that the NCR system was more efflcient than that

owned by the applicant and that the respondent‘s system was

admirably suited to the appllcant’s busmess.

The respondent submitted that representations pleaded by

the applicant relatlnq to the provision of parts and of services

for the NCR system were statements of future conduct. I do not

accept this. As pleaded, they may fairly be taken to be

assertions of the respondent’s capacity to provide all that the

appllcant might require to operate the NCR system.

The r spondent a tacked the pleading that the

representations were false, on the ground that it did not allege

that the falsity was known to the respondent or that the

representation was made recklessly.

Paragraph 9 of the statement of claim pleads that

“Subsequent to the installation of the computer hardware and some

of the software It became apparent to the applicant that the

representations were false in that ... ‘I. The pleading is perhaps

ambiguous since it does not expressly assert that the

representations were false when made or whether they were false to

the knowledge of the respondent.

!

5.

In so far as a cause of action based upon 5.52 of the Trade Practices Act is concerned, llabilitg depends upon conduct that misleads gr deceives or is likely to mislead or deceive and does not demand knowledge or other relevant state of m m d on the part of the respondent. Parkdale Custom Built Furniture Pty. Ltd.

v. Puxu Pty. Ltd. (1982) 42 ALR l per Gibbs C.J. at p.5. Where representations are made as to future conduct, the position may

well be different. See the discussion by Fitzgerald J. in Stack

v. Coast Securities No. 9 Ptv. Ltd. (1983) ATPR 40-342 at p.44,119

and by Lockhart J. in Bill Acceptance Corporation Ltd. v GWA Ltd.

(1983) ATPR 40-408 at p.44.759.

But these questions do not arise for determination at

this stage of the proceeding. As I have said already, the

representations pleaded by the applicant are representations as to

present facts including the capacity of the respondent to provide

future parts and services to maintain the NCR system in efficient

working order. In so far as the state of mind of the respondent

becomes relevant, there is a pleading in para. 12 of the statement of claim that the representations were made fraudulently or with reckless indifference to their truth or without belief in their truth.

As to the pleading in para. 9 that "it became apparent

to the applicant that the representations were false", I take that

to mean that it became apparent that the representations were

false when made. However that can be put beyond doubt by	a simple
amendment to the paragraph.

An attack 1 s made upon paras 20 and il of the statement

of clam whlch art concerned with alleged breaches of mplied

condiclcns and warrantles. It 1 s s a d that the pleading does not

Identify the partlcular “purpose” for whlch the goods were

required. These paragraphs are expressed to be read together wlth

paras 3 , 5 and 3 from whlch It merges clearly enough that the

applicant asserts the qoods to have been requlred for the

partlcular purposes of its business as a motor vehicle dealer. In

any event, if the respondent requires clarlfication it can request

further and better partlculars.

I reject the argument that certaln segments of the

statement of claim have a tendency to cause prejudice or

embarrassment to the respondent in pleading thereto. At worst,

from the respondent’s point of new, there may be some lack of

clarity but that 1s readily capable of being cured by particulars.

The respondent has falled to demonstrate that any of the

statement of clalm should be struck out as disclosing no

reasnnable t:aluse of at:tion ot- a5 having a tendency t n cause

prejudice or embarrassment. The motion	will be dismissed with
costs.

I certify that this and the five

preceding pages are a true copy

of the Reasons for Judgment hereln

of hls Honour Mr. Justice Toohey

A-- Associate

Dated: 15 December 1983