Kilpatrick Green Pty Ltd v Kockums Industries Pty Ltd and Kockums Cancar Pty Ltd No. SCGRG 91/1465 Judgment No. 6132 Number of Pages 12 Procedure

[1997] SASC 6132

IN THE SUPREME COURT OF SOUTH AUSTRALIA

LANDER, J

Procedure - Supreme Court procedure South Australia - practice under rules of court - summary judgment - two applications for summary judgment in favour of defendant - jurisdiction to be exercised sparingly and not to be invoked where the Court must decide complex questions of law or fact which cannot be readily disposed of on the affidavits - contractual and tortious causes of action - whether it is inappropriate to determine on a summary judgment application whether a duty of care arises and whether there have been breaches of that duty of care in the circumstances of the case - applications dismissed. Supreme Court Rules 1987 r25.04, 46.04, 83.01(a); Trade PracticesAct 1974 s71; Sale of Goods Act 1895s14, referred to. Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572, applied.

ADELAIDE, 19 December 1996 (hearing), 29 April 1997 (decision).

#DATE 29:4:1997

#ADD 5:5:1997

Plaintiff Kilpatrick Green Pty Ltd:

Counsel: Mr J E Lunn With Mr S B Williams

Solicitors: Minter Ellison Baker O'Loughlin

Defendants Kockums Industries Pty Ltd and Kockums Cancar Pty Ltd:

Counsel: Mr J M Wilkinson With Mr C J Townsend

Solicitors: Cowell Clarke

Order: application dismissed.

LANDER J

1. On 7 September 1995 the first defendant Kockums Industries (Australia) Pty Ltd (hereafter referred to as KI) applied for the following orders: "1. That summary judgment be entered in favour of the first defendant, Kockums Industries (Australia) Pty Ltd ('KI'), against the plaintiff Kilpatrick Green Pty Ltd ('KG') in respect of the cause of action of breach of contract pleaded herein on the basis:-

1.1 That the sub-contract entered into between KI and KG on 30 September 1988 ('the Sub-contract') was novated on or about 9 January 1989 such that thereafter the parties to the sub-contract were KG and the second defendant Kockums Cancar Pty Ltd ('KC') to the exclusion of KI.

1.2 In the alternative that KG is estopped from denying that the sub-contract was novated as alleged in paragraph 1.1 hereof.

1.3 In the further alternative, that the sub-contract was abandoned by KG and KI in or about the month of January 1989."

2. The application was brought pursuant to Supreme Court Rules 25.04 and 27.04 and 75.01. More particularly KI relied upon R25.04 for the relief sought in paragraph 1 of the Application. R25.04 reads: (1) Where a defendant wishes to obtain summary judgment in an action or for any part thereof he shall: (a) file his defence or affidavit in answer to the plaintiff's affidavit; (b) make an application for summary judgment in the action; (c) file an affidavit showing why the plaintiff's claim cannot succeed or cannot succeed in this Court as the case may be on any possible view of the facts or the law.

(2) On the hearing of the application the Court may if it is satisfied that the defendant's contentions are correct enter judgment for the defendant, stay the application or make any other order which the justice of the case may require or treat the application as an application for directions ."

3. This application was for summary judgment only in respect of the cause of action for breach of contract. In the alternative the defendant, KI, sought that the trial of the issues raised in paragraph 1 of the application be heard prior to the trial of any other issues in the action. [Document 108]

4. In due course the application was supported by affidavits. The principal affidavits relied upon were those of Bengt Ake Ackerfeldt sworn on 23 November 1995, and the affidavit of Peter Herbert Carr sworn on 30 November 1995. The defendant also relied upon an affidavit of Mr Christopher John Townsend, a consultant with the firm of solicitors acting for the applicant.

5. The matter was first listed before me on 31 May 1996 and at that time there were no answering affidavits.

6. During the hearing on that day Mr Lunn, who appeared for the plaintiff objected to the admissibility of some of the evidence relied upon by KI for their application under r25.04, upon the basis that the matters raised in the affidavits supporting the r25.04 application had not been specifically pleaded in the defence.

7. When that objection was taken I raised with Mr Lunn whether his objection could not be accommodated by allowing KI leave to amend its defence to include those matters the subject of the application. I pointed out to Mr Lunn that he had had six months notice of those matters and in those circumstances it could not be said that he was taken by surprise. During that exchange Mr Lunn indicated that his client would wish to bring evidence into Court in opposition to the application made in September 1995.

8. In respect of that I inquired of Mr Lunn why it was that affidavits adducing the plaintiff's evidence had not previously been filed. His response was that the assessment made by the plaintiff was that the application could be defeated upon more technical grounds and that there was no need to resort to evidence in opposition to the application.

9. I allowed a short adjournment and upon resumption was advised that the parties had agreed upon a manner of disposal of the application without the need for Mr Lunn to bring any further evidence into Court. It was agreed that I could treat some of the assertions made in the affidavit of Mr Carr as if they were a part of the defendant's defence. That was permissible, the parties agreed, because six months earlier Mr Wilkinson had advised the Court and Mr Lunn that if the matter was to go to Court then it would be necessary to make amendments to the defence in line with the assertions made in Mr Carr's affidavit.

10. The submissions proceeded over the whole of that day, but at the end of the day Mr Lunn reserved his position in relation to calling further evidence. There was also a question of discovery raised in relation to this application. It was alleged by the plaintiff that incomplete discovery had been made by the applicant KI.

11. The matter was therefore adjourned until 16 July 1996 but before that hearing the plaintiff filed an affidavit of Christopher Allan Goddard sworn on 8 July 1996, which it relied upon for the further hearing. When the hearing resumed again the argument did not conclude due to Mr Lunn's indication during the argument that he wished to amend the statement of claim. He indicated that his client sought to amend the statement of claim to allege a further cause of action in tort other than the tortious cause of action then pleaded in the statement of claim. His argument was, notwithstanding this was an application only dealing with the contractual aspects of the statement of claim, it would be inappropriate to give the defendant the relief that it had sought because the tortious causes of action had to be considered in any event and that similar or the same evidence would be directed to those other causes of action. He recognised during the argument on that day that the tortious cause of action pleaded was quite narrow and might not support the argument which he was then putting forward. He therefore sought an adjournment to amend his statement of claim. The matter was adjourned to 20 August.

12. On 14 August 1996 the plaintiff filed an application seeking leave to amend the Further More Explicit Statement of Claim. That application was supported by an affidavit of a solicitor in the firm of solicitors acting for the plaintiff. That solicitor relied upon the affidavit of Mr Goddard, previously filed, for the purpose of arguing, in that affidavit, that the amendment ought to be allowed.

13. The application to amend the statement of claim was considered on 20 August 1996 but after argument that application was itself adjourned because it was put by KI that the amendment ought not to be allowed because it failed to conform with the rules, and in particular r46.04(f) in that it failed to contain sufficient particulars of the claim. It was put that the pleader had failed to identify the facts and circumstances giving rise to the claimed duty of care in the proposed pleading.

14. Mr Lunn sought an adjournment of the plaintiff's application to enable the plaintiff to bring in a fresh pleading to accommodate the criticisms of the proposed pleading as indicated by Mr Wilkinson.

15. An adjournment posed some difficulties. First, of course, the plaintiff had by then delayed KI's application for summary judgment for two reasons. It had previously obtained an adjournment to file an affidavit in answer to the application. It had obtained a second adjournment for the purpose of seeking to amend its statement of claim so as to allow it to argue that the application for summary judgment ought to fail. In those circumstances it had delayed by more than one year the application for summary judgment. Secondly, but in the circumstances of this case more importantly, it was asserted by the defendant that any cause of action against the defendant would expire on 24 September 1996. The defendant therefore argued that to allow an adjournment to a date close to 24 September 1996 might give the plaintiff the tactical advantage of having the amendment allowed, because not to allow the amendment would lead to the cause of action being defeated by operation of the Limitations of Actions Act. The matter was adjourned until 10 September 1996.

16. On 3 September 1996 a further affidavit was filed by a solicitor employed by the firm acting for the plaintiff exhibiting the new proposed amendment to the Further More Explicit Statement of Claim.

17. On 9 September 1996 Mr Christopher Townsend, a consultant with the solicitors acting for KI, swore an affidavit in opposition to the application for the amendment to the statement of claim, and in that affidavit exhibited a number of documents including a further affidavit from Mr Bengt Ackerfeldt. Mr Townsend's affidavit was served on the evening of 9 September 1996. When the matter came on for hearing Mr Lunn opposed my having regard to Mr Townsend's affidavit upon the basis that it had not been filed and delivered to the plaintiff two clear days before the occasion for using it arose as required by r83.01(a).

18. I indicated to him that I thought, having regard to the fact that it was the plaintiff who was seeking its third indulgence in this matter, it was not up to the plaintiff to complain about an affidavit filed five or six days after KI had been served with the plaintiff's affidavit, particularly so when KI was obliged to take its instructions from overseas.

19. I advised Mr Lunn that his remedy would appear to be in a further adjournment if he was taken by surprise by Mr Townsend's affidavit or the contents of it. He declined to seek an adjournment and advised me that it would not be possible for him to obtain instructions in relation to the matters contained in Mr Townsend's affidavit in the short time available to him before 24 September 1996.

20. He argued that the plaintiff ought to have leave to amend its statement of claim to include the further tortious plea, which would have the effect, so he said, of defeating KI's application for judgment under r25.04. He recognised that it would be a term of the leave to amend that his client would have to meet KI's costs in relation to the r25.04 application.

21. The amendment was opposed by Mr Wilkinson, counsel for KI, upon the basis that the pleading again was defective, particularly in relation to its lack of particulars. He argued that it was therefore inappropriate to allow the amendment. In response to that submission and by way of reply the plaintiff conceded that some further particulars needed to be given.

22. I therefore directed that the plaintiff file its final proposed amendment to the statement of claim by 12 September and adjourned the application for leave to amend to 17 September.

23. It was recognised during the argument that if the amendment was to be allowed and if KI wished to pursue its application for a judgment under r25.04 then the r.25.04 application would need consequential amendments. In those circumstances I allowed KI to make any further application by 3 October.

24. When the matter resumed on 17 September 1996 I gave the plaintiff leave to amend the Further More Explicit Statement of Claim in accordance with the proposed amendments. I ordered that the plaintiff pay KI's costs of its application under r.25.04 thrown away. I further ordered that the plaintiff pay KI's costs of the application by the plaintiff to amend its statement of claim.

25. I made consequential orders in relation to third party proceedings.

26. On 19 September 1996 KI made a further application for summary judgment and I set out the terms of that application. "1. That summary judgment be entered in favour of the (sic) Kockums Industries against the Plaintiff ("Kilpatrick Green") in respect of the causes of action pleaded in paragraphs 54B.5 to 54B.29 on the following grounds: The paragraph 54B.21 Duty of Care

1.1 On the facts Kockums Industries does not owe Kilpatrick Green the duty of care alleged or any duty of care because nothing occurred which required Kockums Industries to give Kilpatrick Green any advice on which Kilpatrick Green intended to rely and the necessary "special relationship" or "proximity" did not exist.

1.2 Alternatively, on the law Kockums Industries does not owe Kilpatrick Green the duty of care alleged or any duty of care because the claim depends for the nature and scope of the alleged duty of care on the manner in which Kockums Industries' obligations or duty has been expressly and specifically defined in paragraph 8.1.1 (b) and (c) and Schedules 5A and 5B of the Sub-contract.

1.3 Alternatively if the duty of care was owed (which is denied) there was no reliance by Kilpatrick Green.

1.4 Alternatively if the duty of care was owed (which is denied) then Kilpatrick Green suffered economic loss when it entered into the Head Contract on 30 August 1988 and its claim is statute barred by virtue of Section 35 of the Limitations of Actions Act.

1.5 Alternatively if the duty of care was owed (which is denied) then Kilpatrick Green suffered economic loss when it was delayed in the construction of the Head Works on 7 July 1989 as alleged in paragraph 24 of the Claim and its claim is statute barred by virtue of Section 35 of the Limitations of Actions Act.

The Paragraph 54B.24 Duty of Care

1.6 On the facts Kockums Industries does not owe Kilpatrick Green the duty of care alleged or any duty of care because the design was completed in March 1988 by Kockums Engineering Pty Ltd ("Kockums Engineering") and Kockums Industries was asked to assume that design and to quote to complete the "for construction drawings" and supply and commission.

1.7 Alternatively, on the law Kockums Industries does not owe Kilpatrick Green the duty of care alleged or any duty of care because the claim depends for the nature and scope of the alleged duty of care on the manner in which Kockums Industries' obligations or duty has been expressly and specifically defined in paragraph 8.1.1 (b) and (c) and Schedules 5A and 5B of the Sub-contract.

1.8 Alternatively if the duty of care was owed (which is denied) then Kilpatrick Green suffered economic loss when it was delayed in the construction of the Head Works on 7 July 1989 as alleged in paragraph 24 of the Claim and its claim is statute barred by virtue of Section 35 of the Limitations of Actions Act.

The Paragraph 54B.26 Duty of Care 1.9 This duty of care is alleged to have arisen as a result of the combined effect of the facts alleged to give rise the duties of care alleged in paragraphs 54B.21 and 54B.24 and does not improve by being alleged cumulatively and fails for the same reason.

2. In the alternative, that the trial of the issues raised in paragraph 1 hereof be heard prior to the trial of any other issues in this action.

27. For reasons that are unimportant the matter did not come to be further considered until 19 December 1996. At that time KI pursued all aspects of the two applications for summary judgment, that is to say they sought summary judgment in respect of the cause of action in breach of contract and summary judgment in relation to the causes of action in tort which had been added to the statement of claim as paragraphs 54B.5 to 54B.29 pursuant to the leave given to amend.

28. Before I discuss the principles applicable to applications of this kind it is useful to identify, in general terms, the plaintiff's claim against the two defendants.

29. In early 1988 the Department of Woods and Forests and the State Supply Board of South Australia sought tenders for the design, supply, delivery, installation and commissioning of Roundwood Merchandising Plant at Mount Gambier. It is alleged that both the plaintiff and KI tendered for the project and the plaintiff was successful. The plaintiff, in turn, sub-contracted with KI whereby, it is alleged, KI agreed to provide services to the plaintiff including design, supply and commissioning services in connection with the plaintiff's contract for the supply of its services to the Department of Woods and Forests and the State Supply Board.

30. It is alleged that the sub-contract, which is in writing incorporated the terms of the head contract and it is further alleged that clause 22 of the sub-contract provided as follows: "Assignment

Neither party may assign or otherwise transfer this agreement or any part without the prior written consent of the other."

31. The plaintiff asserts that in a letter dated 9 January 1989, KI advised as follows: "Change of Business - Kockums Sawmill Systems.

As from January 3rd 1989, the sawmill business of Kockums Industries has been taken over by Hawker Siddeley Canada Inc which is the parent company of our largest supplier of sawmill machinery, Kockums CanCar of Vancouver BC.

A company, Simester Pty Ltd has been established by Hawker Siddeley. This company will change names to Kockums CanCar Pty Ltd as soon as all registrations have been completed.

...

As a result of the sale of this business, any orders for machinery and parts that were outstanding at January 3rd 1989 will now be supplied by the new company under the same terms and conditions as for your order with us..."

32. The plaintiff then alleges that by letter dated 10 January 1989 from the second defendant (which was then called Simester Pty Ltd) to the plaintiff, the second defendant requested that the plaintiff give its consent to the sub-contract being "transferred" from KI to KC.The plaintiff asserts that on 13 February 1989 by letter from the plaintiff to KI, the plaintiff wrote: "Re: ASSIGNMENT OF CONTRACT WOODROOM

We are in agreement to transfer the contract to Simester Pty Ltd the new company formed pursuant to the purchase by Kockums CanCar Pty Ltd of Kockums Industries Australia Pty Ltd subject to execution of a Deed of Novation."

33. It is asserted that no deed of novation was ever executed, but that from March 1989 the second defendant (KC) purported to perform the obligations of KI to supply the equipment and provide the services and to receive the benefits due under the sub-contract.

34. The plaintiff claims that the purported assignment in or about January or March of 1989 by KI of its contractual interest in the sub-contract to KC was ineffective, and KI in those circumstances remained bound to perform the sub-contract.

35. The plaintiff then puts its case in alternatives. First it alleges that there was an incomplete assignment of the interest in the contract from KI to KC, and as a result KI remained liable but KC also became liable to the plaintiff. In the further alternative the plaintiff pleads that there was an assignment of the sub-contract by KI to KC and in the result KC is liable to the plaintiff on the sub-contract.

36. The plaintiff's case in contract therefore is put this way. First there was not a novation or assignment to KC and KI remains liable to the plaintiff for any breach of contract; secondly, if there was an incomplete assignment, both KI and KC are liable to the plaintiff; and thirdly, if there was a complete assignment of the sub-contract, KC is liable to the plaintiff in respect of any breaches of contract in relation to the sub-contract.

37. The breaches of the sub-contract are then identified in the pleading at length, but for the purpose of the arguments presented it is not necessary to detail those matters.

38. The plaintiff asserts that on 26 November 1990 it wrote to KC pursuant to clause 16 of the sub-contract calling upon KC to rectify specified contractual failures within the time specified. It claims that neither defendant rectified the specified contractual failures within the time specified, and on 4 December 1990 the plaintiff terminated the sub-contract and took over the contract works to be performed pursuant to the sub-contract.

39. The plaintiff identifies works that it was obliged to carry out and then pleads the damage which it has suffered by reason of the failure of one or both of the defendants to meet the defendants' obligations under that sub-contract.

40. Apart from the claim in breach of contract and an associated claim for breach of warranty, which does not need to be separately addressed, the plaintiff claims that both defendants were in breach of provisions of the Trade Practices Act, in particular, in supplying goods which were not fit for the purpose for which they were intended and were not of merchantable quality, contrary to s71 of the Trade Practices Act. Further the plaintiff claims against the defendants for breaches of s14 of the Sale of Goods Act.

41. An alternative claim is brought against KI and KC in that the plaintiff alleges that, independent of the sub-contract which was initially entered into between itself and KI, KI and KC agreed with the plaintiff that the plaintiff would carry out certain minor works which, it is alleged, were carried out, but for which it is further alleged KI and KC have failed to pay, it being agreed that it would be paid a reasonable remuneration. An alternative claim is raised against KC in relation to that minor works agreement. Neither of those claims for minor works needs to be further addressed in a consideration of these applications.

42. Next the plaintiff raises claims in tort and I will refer to each of the tortious claims which the plaintiff pleads.

43. The first claim in tort is identified "Claim in Tort against Kockums CamCar" but is in fact a claim in tort against both defendants and is said to arise out of the letter of 9 January 1989 from KI. It is alleged that in the circumstances of the receipt of that letter, it was reasonable for the plaintiff to rely upon KC to perform the duties and obligations of KI under the sub-contract. It is then asserted that KC owed a duty of care to the plaintiff to perform the services under the sub-contract because it is said KC owed a duty of care to the plaintiff to supply the equipment and to perform the services, with due care. It is claimed that the plaintiff relied upon KC which was negligent in the supply of the equipment and in the performance of the services and in those circumstances it is claimed that KC has been guilty of negligence and is liable to the plaintiff for loss and damage flowing from that negligence. Notwithstanding that the pleading opened that it was a claim in damages in tort against both KI and KC, relief is only sought in relation to a claim in negligence against KC. That pleading therefore is irrelevant in a consideration of this argument.

44. The second plea in tort is headed "Claims in Tort Against Kockums Industries" and those claims are contained in paragraph 54B as amended pursuant to the leave given on 17 September 1996.

45. There are three separate claims and I will attempt to identify them with some precision although, with respect, it is not easy.

46. The first claim is that by reason of KI writing the letter of 9 January 1989 it was reasonable for the plaintiff to rely upon KI's representation that KC was capable of performing, and that KI had satisfied itself on reasonable and adequate grounds that KC was capable of performing and would perform, the duties and obligations under the sub-contract. It is alleged, because it was reasonable for the plaintiff to rely upon those representations, that KI owed a duty of care to the plaintiff.

47. The duty of care is said to be: (1) not to misrepresent the capability of KC to perform, and b) to satisfy itself on reasonable and adequate grounds that KC was capable of performing and would perform the duties and obligations under the sub-contract assigned by it to KC.

48. It is asserted that the plaintiff relied upon those representations and that KI was negligent in making those representations.

49. It seems from the pleading that the alleged duty of care arises simply out of the letter of 9 January 1989 and possibly the letter of 10 January 1989 seeking the consent to the transfer of the sub-contract from KI to KC, and possibly the reply by the plaintiff to KI of 13 February 1989.

50. It is asserted that because of those matters it was reasonable for the plaintiff to rely upon the representations to which I have referred. There are of course no such representations of the kind pleaded in the letter of KI of 9 January 1989. It is not easy to understand how those representations arise, unless it is said that they are implicit in that letter but that is, of course, not the pleading. No particulars are given of the breaches of the duty of care.

51. I understand that claim in tort to be limited to those circumstances.

52. That was the only claim in tort directly made against KI prior to the amendment which was allowed on 17 September 1996. The narrow compass of that duty of care really did not allow Mr Lunn to argue that, because there had to be an inquiry into the tortious causes of action, it would be inappropriate to allow KI to have summary judgment in relation to the causes of action in contract. It can be seen from the duty of care as pleaded that the tortious duty of care involved no further inquiry than the correspondence to which I have referred, and in those circumstances would not have led to the introduction of any viva voce evidence to determine the scope of the duty of care. It may be necessary to lead evidence of the breaches, but it is not possible on the pleading as constituted, absent particulars, to determine what evidence might be required on those matters.

53. In any event it was in those circumstances that the plaintiff sought to raise the further causes of action in tort.

54. In paragraph 54B.21 the plaintiff asserts that KI owed a duty of care to the plaintiff to advise the plaintiff as to whether the wood processing system designed by KI would achieve the production rates, which were to be prescribed in the head contract, and in particular to advise the plaintiff whether the wood processing system could not or might not achieve such production rates.

55. That duty of care is said to have partly arisen prior to the contract entered into between the plaintiff and the Department of Woods and Forests, and the State Supply Board on 30 August 1988. Moreover the duty of care is said to entirely pre-date the sub-contract between the plaintiff and KI, which was entered into on 30 September 1988.

56. To that extent the duty of care, which is said to arise for the reasons given in paragraph 54B.5 to 54B.18, involves a consideration of facts outside of those matters relating to the contractual arrangements between the plaintiff and KI.

57. The next cause of action in tort, in paragraph 54B.24, is said to arise out of a duty of care owed by KI to the plaintiff, which itself is said to arise out of KI's design of the components of the equipment and the drawings in relation to such a design, which were completed between March 1988 and November 1988, and which were supplied to the plaintiff subsequent to November 1988. The duty of care is said to be concurrent with the contractual obligations of KI to the plaintiff under the sub contract and the duty of care, in part, arises by reason of the contractual obligations between those parties.

58. Whilst the duty of care is said to be concurrent with the contractual duty and in part arises out of the contract between the parties, the breach of that duty of care would require an examination of facts other than those facts to be determined in relation to the contractual arrangements between the parties whether or not that contract had been novated or assigned.

59. The third and final duty of care pleaded in paragraph 54B.26 is said to be "an independent and overriding duty of care arising from all of the circumstances surrounding the relationship of the plaintiff and KI" and is said to arise out of all of the matters previously pleaded in relation to tort.

60. It is very difficult to understand exactly what that duty of care is because the precise duty of care is not pleaded. I do not understand what an independent and overriding duty of care is and in particular I do not understand whether it is a duty of care different to the more precise duties of care previously pleaded.

61. However the precise duties of care pleaded in paragraphs 54B.21 and 54B.24 will require an examination of the pre-contractual relationship between the parties at least in so far as they are pleaded, and a determination of whether or not that relationship gives rise to a duty of care owed by KI and, if it does, whether or not there has been a breach of those specific duties of care to which I have referred.

62. Necessarily an investigation of those facts requires a consideration of matters outside the particular events which occurred in January to March of 1989 when it is alleged by the plaintiff that KI purported to novate the contract between the plaintiff and itself and/or to assign the benefits of the contract to KC.

63. In those circumstances, even if KI was to be successful on this application in relation to the contractual matters, there will be still be, necessarily, a trial of the other matters.

64. I cannot say that the claims in tort are unarguable although it would be fair to say I have at least a suspicion that the last mentioned claim in paragraph 54B.26 does not add to anything else already pleaded, because it purports to encompass all of the other tortious actions. Unless it identifies a duty of care separate and distinct to the other duties of care previously identified, I think it would be difficult to say that such a duty of care exists. However that apart I cannot say that the specific duties of care, which are otherwise pleaded in paragraphs 54B.21 and 54B.24, are unarguable.

65. I should first deal with the application by KI for judgment in relation to the tortious actions because of course, if they were entitled to summary judgment in relation to those matters, then that would have a direct bearing upon the application for summary judgment in relation to the contractual issues. So also if they are not entitled to summary judgment in relation to the tortious actions then that will, in a negative sense, have a bearing upon their applications for summary judgment in relation to the contractual issues.

66. The jurisdiction under r25.04 is not often exercised. In Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 I said (Cox and Prior JJ agreeing) at 588: "The principles which apply to applications pursuant to r25.04 are similar to, but not identical with the principles on applications by a plaintiff for immediate relief under r25.02. The jurisdiction will only be exercised sparingly and where there is no serious question to be tried. The jurisdiction must be exercised with great care and only used while it is clear that the action is devoid of merit; Harrison v STA
(1988) 4 BCL 338. I agree with Olsson J that in an application under r25.04 the defendant must show that the plaintiff's claim cannot succeed on any possible view of the facts or law, that is, there is no real question to be tried; Royal Australia Finance Limited v Xenophone Corporation Pty Ltd (Unreported, Olsson J, Number S3526, 22 July 1992)."

67. Not only is the jurisdiction to be exercised sparingly, but it is not to be invoked in circumstances where the Court is called upon to decide complex questions of law or fact, which cannot be readily disposed of on the affidavits. The second application which KI has brought assumes, in relation to the duties of care pleaded in paragraphs 54B.21 and 54B.24, that it would be appropriate to reach a decision on the facts as to whether or not a duty of care arises.

68. In my opinion it is not appropriate in a case such as this to determine on a summary judgment application whether or not a duty of care arises. A duty of care will arise in any number of circumstances and consideration must be given to all of the surrounding circumstances which could establish the necessary degree of proximity required for the erection of the duty of care. I do not believe that this procedure is appropriate in the circumstances of this case to determine whether or not the circumstances surrounding the relationship of these parties gives rise to the erection of a duty of care. A fortiori, I do not believe it is appropriate in the circumstances of this case to determine, on an application of this kind, whether there have been breaches of that duty of care.

69. I have already mentioned that I have strong suspicions that the plea in paragraph 54B.26 does not give rise to a separate duty of care than the duties of care otherwise pleaded. However the appropriate procedure in relation to that plea, if KI wishes to make further challenge, would be to make an application for further and better particulars of the duty of care which is said to exist between the plaintiff and KI, the facts and circumstances giving rise to the erection of the duty of care, the precise duty of care, and the breaches of that duty of care. If in fact the particulars cannot be given in response to such an application then it might be appropriate to strike out the plea.

70. However r25.04 is not an appropriate procedure, although I do not mention this by way of criticism of KI because these amendments were made during the currency of these procedures, to seek to enter judgment in relation to a plea relying upon the lack of particularity in the plea in the statement of claim.

71. I therefore dismiss paragraph one of the application of 19 September 1996.

72. That leaves for consideration the original application which has been the catalyst for all of the interlocutory activity which has followed. The plaintiff, in resisting the original application for summary judgment, has relied upon two matters. It has relied upon the fact that the jurisdiction under r25.04 is rarely exercised and only exercised in the circumstances to which I have already referred. Moreover it has claimed that the jurisdiction would not be exercised in circumstances where there will have to be an inquiry in relation to the circumstances surrounding the contract to determine the tortious causes of action. During the hearing, for the reasons I have already mentioned, the plaintiff recognised that it could not mount those defences without bringing into Court evidence, which it did, and then further recognised that the second argument was not available to it unless it was able to point to a pleading which showed the necessity of that further inquiry.

73. It has now brought into Court a pleading which, if allowed to stand, notwithstanding its lack of particularity, will require an inquiry into those other matters. In those circumstances the plaintiff is entitled to say that there will have to be an inquiry into all matters in any event. Particularly there would have to be an inquiry in relation to the circumstances surrounding the letter of 9 January 1989 and the events of January to March of that year. That inquiry will be necessary to determine whether or not a duty of care has arisen and the precise terms of that duty of care.

74. In those circumstances there must be a reluctance to give relief in relation to a precise cause of action when that cause of action depends upon the same facts and circumstances as another cause of action into which there will still have to be an inquiry.

75. In my opinion it would be inappropriate, in the circumstances of this case, to give relief in relation to the contractual cause of action and then inquire into the same facts to determine whether or not there is a tortious cause of action.

76. Whilst having every sympathy with KI in its endeavours to bring this matter to a conclusion as soon as possible, and to have those matters determined which are not really in dispute, it seems to me that the plaintiff has been able to point to the necessity for an inquiry in relation to all of the facts and circumstances in any event.

77. In those circumstances I am not prepared to exercise the jurisdiction under r25.04 to give KI partial relief in relation to the proceedings brought against it. In relation therefore to the first application I dismiss paragraph one of that application.

78. I will hear the parties as to relief sought in paragraph two of both applications. I will also hear the parties as to costs.