Johnstone v HIH Insurance Limited - [2004] FCA 1414

FEDERAL COURT OF AUSTRALIA
Johnstone v HIH Insurance Limited [2004] FCA 1414
PRACTICE AND PROCEDURE – Pleadings - Strike out applications with respect to Amended Application and Statement of Claim – Sufficiency of pleadings – Representative proceedings – Procedural requirements - Definition of group members – Inherently confusing formulation of pleading – Failure to specify conduct – Inability to ascertain group membership with certainty – Application of Philip Morris principles – Insufficient particularisation – Inconsistency in allegations – Purpose of pleadings – Application and Statement of Claim struck out in entirety – Leave to re-plead granted – Federal Court of Australia Ac t 1976 (Cth) s 33C
Federal Court of Australia Act 1976 (Cth) s 33C(1)(a)
Trade Practices Act 1974 (Cth)
Corporations Law ss 995 and s 999
Johnstone v HIH Limited [2004] FCA 190 cited
Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 referred to
BRIAN ALEXANDER JOHNSTONE v HIH INSURANCE LIMITED
(ACN 008 636 575) (IN LIQUIDATION) AND ORS
N317 of 2002
TAMBERLIN J
SYDNEY
2 NOVEMBER 2004

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N317 OF 2002

BETWEEN:

BRIAN ALEXANDER JOHNSTONE
APPLICANT

AND:

HIH INSURANCE LIMITED (ACN 008 636 575)
(IN LIQUIDATION)
FIRST RESPONDENT
~~GEOFFREY ARTHUR COHEN~~
SECOND RESPONDENT
~~JUSTIN HERBERT GARDENER~~
THIRD RESPONDENT
~~CHARLES PERCY ABBOTT~~
FOURTH RESPONDENT
~~ROBERT REGINALD STITT~~
FIFTH RESPONDENT
~~RODNEY STEPHEN ADLER~~
SIXTH RESPONDENT
RAYMOND REGINALD WILLIAMS
SEVENTH RESPONDENT
TERENCE KEVIN CASSIDY
EIGHTH RESPONDENT
DOMINIC FODERA
NINTH RESPONDENT
ARTHUR ANDERSEN
TENTH RESPONDENT
HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
ELEVENTH RESPONDENT
HANNOVER REINSURANCE (IRELAND) LIMITED
TWELFTH RESPONDENT
E & S REINSURANCE (IRELAND) LIMITED
THIRTEENTH RESPONDENT
~~SWISS RE AUSTRALIA LIMITED (ACN 004 360 909)~~
FOURTEENTH RESPONDENT

JUDGE:

TAMBERLIN J

DATE OF ORDER:

2 NOVEMBER 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The Second Amended Application and the Third Amended Statement of Claim be struck out.
2.The applicant be granted leave to re-plead.

3. The applicant pay the respondents’ costs in respect of the applications.
4.Leave be granted on a party-party basis to the respondents to tax and collect those costs forthwith.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N317 OF 2002

BETWEEN:

BRIAN ALEXANDER JOHNSTONE
APPLICANT

AND:

HIH INSURANCE LIMITED (ACN 008 636 575)
(IN LIQUIDATION)
FIRST RESPONDENT
~~GEOFFREY ARTHUR COHEN~~
SECOND RESPONDENT
~~JUSTIN HERBERT GARDENER~~
THIRD RESPONDENT
~~CHARLES PERCY ABBOTT~~
FOURTH RESPONDENT
~~ROBERT REGINALD STITT~~
FIFTH RESPONDENT
~~RODNEY STEPHEN ADLER~~
SIXTH RESPONDENT
RAYMOND REGINALD WILLIAMS
SEVENTH RESPONDENT
TERENCE KEVIN CASSIDY
EIGHTH RESPONDENT
DOMINIC FODERA
NINTH RESPONDENT
ARTHUR ANDERSEN
TENTH RESPONDENT
HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
ELEVENTH RESPONDENT
HANNOVER REINSURANCE (IRELAND) LIMITED
TWELFTH RESPONDENT
E & S REINSURANCE (IRELAND) LIMITED
THIRTEENTH RESPONDENT
~~SWISS RE AUSTRALIA LIMITED (ACN 004 360 909)~~
FOURTEENTH RESPONDENT

JUDGE:

TAMBERLIN J

DATE:

2 NOVEMBER 2004

PLACE:

SYDNEY

REASONS FOR JUDGMENT

These reasons concern applications brought by the seventh respondent (“Mr Williams”), the tenth respondent (“Arthur Andersen”) and the eleventh, twelfth and thirteenth respondents (collectively “the Reinsurers”) to strike out the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] FCA 1414
Decision Date: 2 NOVEMBER 2004

CaseChat Overview and Summary

In the case of Johnstone v HIH Insurance Limited, the plaintiff, Mr Johnstone, filed a claim against HIH Insurance Limited alleging misleading and deceptive conduct. The dispute was heard in the Federal Court of Australia. The plaintiff sought damages for losses he claimed were caused by the defendant's actions. The court was tasked with determining whether the plaintiff's pleadings adequately outlined the claims, whether they sufficiently identified the causal link between the alleged conduct and the damages, and whether the pleadings complied with procedural requirements.

The central legal issues before the court were whether the plaintiff's pleadings met the necessary standards for a viable claim, specifically whether they sufficiently detailed the facts to support the allegations of misleading and deceptive conduct and its resultant damages. Additionally, the court considered whether the plaintiff's inability to properly formulate a pleading, despite multiple attempts, indicated that the case was untenable.

The court concluded that the plaintiff's pleadings were deficient in multiple respects, notably in failing to sufficiently particularise the factual basis of the claims and the causal link between the alleged conduct and the damages. The deficiencies were deemed so substantial and pervasive that the court determined the pleadings did not meet the necessary standards. While the court did not find the case entirely untenable, it was sufficient to warrant the striking out of the pleadings. The inability of experienced counsel to properly formulate the pleadings was highlighted as a significant factor. The court ultimately decided that the pleadings needed to be completely reformulated and granted leave to the plaintiff to re-plead while ordering the plaintiff to pay the defendants' costs.

The court's final orders included striking out the Second Amended Application and the Third Amended Statement of Claim, granting leave to the plaintiff to re-plead, ordering the plaintiff to pay the defendants' costs on a party-party basis, and granting the defendants leave to tax and collect those costs forthwith.

Orders

Orders of the court

1. The Second Amended Application and the Third Amended Statement of Claim be struck out.

2. The applicant be granted leave to re-plead.

3. The applicant pay the respondents’ costs in respect of the applications.

4. Leave be granted on a party-party basis to the respondents to tax and collect those costs forthwith.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

TAMBERLIN J

Finally, material facts have not been pleaded to indicate the way in which the misleading and deceptive conduct caused or resulted in the damage or loss complained of. In my view, this requires further attention and particularisation. CONCLUSION It is not for the Court to draft the pleadings for a party. It is sufficient to indicate the deficiencies in the pleading. In my view, in the present case, these deficiencies are so substantial and pervasive as to warrant the striking out of the entire Application and Statement of Claim. However, I am not presently persuaded that a sufficiently strong case has been demonstrated to the effect that the case Mr Johnstone seeks to present is so untenable that, having regard to well-known and settled principles, the proceeding should be struck out entirely. At the same time, the inability of experienced Counsel to properly formulate a proper pleading after a number of attempts is an important matter to take into account when considering whether the case sought to be formulated is untenable, either as a class action or generally. A number of other objections were made in written submissions by the respondents. However, as the pleading needs to be completely reformulated, there is no necessity to rule on each of these individual matters since they raise questions of law more appropriately dealt with when and if the substance of the case has been properly pleaded. I strike out the Application and Statement of Claim as now framed. I do not think it practicable to be selective and retain parts of the present pleadings for the purpose of amendment by supplementary material. Any reformulation of the pleadings in this matter should be drawn paying careful regard to the detailed matters raised in the submissions of the respondents. I order the Mr Johnstone to pay the respondents’ costs on a party-party basis in respect of the applications, and I grant leave to the respondents to tax and collect those costs forthwith.

Ratio Decidendi

Legal Principle Established

Established by: TAMBERLIN J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N317 OF 2002

BETWEEN:	BRIAN ALEXANDER JOHNSTONE APPLICANT
AND:	HIH INSURANCE LIMITED (ACN 008 636 575) (IN LIQUIDATION) FIRST RESPONDENT ~~GEOFFREY ARTHUR COHEN~~ SECOND RESPONDENT ~~JUSTIN HERBERT GARDENER~~ THIRD RESPONDENT ~~CHARLES PERCY ABBOTT~~ FOURTH RESPONDENT ~~ROBERT REGINALD STITT~~ FIFTH RESPONDENT ~~RODNEY STEPHEN ADLER~~ SIXTH RESPONDENT RAYMOND REGINALD WILLIAMS SEVENTH RESPONDENT TERENCE KEVIN CASSIDY EIGHTH RESPONDENT DOMINIC FODERA NINTH RESPONDENT ARTHUR ANDERSEN TENTH RESPONDENT HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT ELEVENTH RESPONDENT HANNOVER REINSURANCE (IRELAND) LIMITED TWELFTH RESPONDENT E & S REINSURANCE (IRELAND) LIMITED THIRTEENTH RESPONDENT ~~SWISS RE AUSTRALIA LIMITED (ACN 004 360 909)~~ FOURTEENTH RESPONDENT
JUDGE:	TAMBERLIN J
DATE OF ORDER:	2 NOVEMBER 2004
WHERE MADE:	SYDNEY

JUDGE:	TAMBERLIN J
DATE:	2 NOVEMBER 2004
PLACE:	SYDNEY