JHV Stanke Properties Pty Ltd v H Stanke & Sons Pty Ltd - [2006] SASC 391

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
JHV STANKE PROPERTIES PTY LTD v H STANKE & SONS PTY LTD & ORS
[2006] SASC 391
Reasons of Judge Lunn a Master of the Supreme Court
22 December 2006
PROCEDURE
Pleading of reply - R 46A.06 - plea of "do not know and therefore cannot admit" held not allowed by R 46A.06(2) and struck out - such pleas embarrassing as improperly insinuating an affirmative case.

JHV STANKE PROPERTIES PTY LTD v H STANKE & SONS PTY LTD & ORS
[2006] SASC 391
Reasons on application to strike out part of the reply.

JUDGE LUNN: By an amended interlocutory process issued on 8 November 2006 the first, second, fifth, sixth, seventh, eighth and ninth defendants (“the defendants”) have applied to strike out paragraphs 2, 4, 6, 17, 20, 21, 58, 60, 63, 85, 98, 108, 113, 114, 116, 118, 124.3, 125 and 126 of the plaintiff’s reply and in the alternative for an order that the plaintiff provide further material facts of para 124.3 of the reply. In order to dispose of the application it is not necessary to go into all of the arguments presented by counsel.
The dispute about the adequacy of the paragraphs of the reply which are in issue, apart from 125 and 126, can be resolved by applying the requirements of R 46A.06(2), which provides:
(2) Any Reply or a Defence to Counterclaim must plead, but only plead:
(a)what parts, if any, of the Defence of any Counterclaim are admitted;
(b)the material facts necessary to constitute of (sic) any ground of reply or of defence to counterclaim;
(c)any further material facts necessary to give the other parties fair notice of the case which they will have to meet by way of reply or of defence to counterclaim; and
(d)any points of law or statutes relied upon by way of reply or defence to counterclaim.
(Similar considerations apply to R 46A.03 on statements of claim and 46A.05(2) on defences).
R 46A.06(2) confines the contents of a reply to the pleading of the following four categories of matters:
(1) Admissions.
(2) Material facts necessary to constitute any ground of reply.
6(3) Any further material facts necessary to give the other parties fair notice of the pleader’s case which they will have to meet by way of reply; and
(4) Any points of law or statutes relied upon by way of reply.
The phrase “but only plead” in the preamble to subr (2) means that nothing else can be properly pleaded in a reply. This does away with pleas by way of joinder of issues which existed before R 46A was introduced for actions commenced on and after 3 June 2000. In particular it abolishes pleas by way of denial and non-admission which were used under the former system of pleading to produce joinders of issue. (It is still common to see pleas of denials and non-admissions in pleadings under R 46A, but they are contrary to the Rules.) As a consequence the extensive and complicated old law about evasive denials, negative pregnants and the like, which flowed from improper pleading of joinder of issue, are no longer relevant under R 46A.
With the exception of paragraphs 125 and 126 all of the paragraphs of the reply objected to by the defendants are pleas which are prefaced by “that it (ie the plaintiff) does not know and therefore cannot admit”. In some instances the paragraphs then contained partial admissions which are not challenged by the defendants. Such pleas of “do not know and therefore cannot admit” are contrary to R 46A.06(2). For this reason alone they can be struck out under R 46A.16 and R 46.18(b).
Generally I accept the submissions of counsel for the defendants that these pleas in their contexts are also embarrassing in that they insinuated, but did not properly plead, that the plaintiff sought to make out some positive case on the topic. If the plaintiff wants to make out an affirmative case at trial in answer to a plea in the defence, under R 46A.06(2) it is obliged to plead expressly the necessary facts under subr (2)(b) and/or (c). If it does not do so, R 46A.10(1) would bar it at trial from cross-examining, or leading evidence, to establish an affirmative case subject to the exceptions in subr 46A.10(2).
For these reasons the paragraphs in the reply challenged, other than paragraphs 125 and 126, will be struck out except insofar as they contain admissions. Insofar as there are admissions in those paragraphs it will be necessary for the plaintiff to re-plead the paragraphs to put these admissions in a proper form. There are also a number of other paragraphs in the reply prefaced by the objectionable “that it does not know and therefore cannot admit”. The defendants have not sought to strike these out. My not striking them out should not be taken as in any way as my approving the form of pleading used.
The defendants’ application in relation to paragraphs 124.3, 125 and 126 is based on different grounds. The plaintiff indicated by letter of 15 November 2006 it wished to give particulars and/or amend these paragraphs, but at the date of the hearing it had not done so. I consider that it should be given the opportunity to do so, reserving the right to the defendants, if so advised, to attack the new versions of these paragraphs.
The crux of the defendants’ submissions was to insure that the plaintiff properly pleaded any case which it wished to make out in answer to the affirmative pleas in the defence. By the defendants’ application the plaintiff has been put on notice that it needs to plead any affirmative case which it wishes to make at trial on the issues raised by the defence in accordance with the requirements of R 46A.04(2). Insofar as it seeks to plead using terminology defined in a particular way by the defence it needs to be explicit in whether it is accepting the meaning of the terminology pleaded in the defence or whether it is using it in some different, and if so what, way.
I will deal with any application for further amendment of the reply on the adjourned hearing.
I have today made the following orders:
1Paragraphs 2, 4, 6, 17, 20, 21, 58, 60, 63, 85, 98, 108, 113, 114, 116, 118, and 123.2 of the reply be struck out, save insofar as they consist of admissions.
2Any application by the plaintiff to amend the reply to be filed by 18 January 2007.
3Costs of the application FDN 41 as agreed or taxed are to be paid by the plaintiff to the defendants.
4Fit for counsel on 5 December 2006 and the question of any certificate for senior counsel reserved.
5Directions Hearing adjourned to 24 January 2007 at 9.50 am