Kimberley NZI Finance Ltd v Torero Pty Ltd

[1986] FCA 336

, -- . - _.

! I 3-36 i

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT )

OF AUSTRALIA

)

WESTERN AUSTRALIA

) No. WA G99 of 1985

DISTRICT REGISTRY

)

GENERAL DIVISION

)

B E T W E E N :

KIMBERLEY NZ1 FINANCE LIMITED

Applicant

and

TORERO PTY. LTD.

First Respondent

and	I
t ,
STEVEN ALICK MASEL

Second Respondent

and

TORESO FTY. LTD.

Cross Claimant

and

TRAYDA PTY. LTD.

Cross Respondent

CORAM: MUIRHEAD J.

1 August 1986

REASONS FOR DECISION

In this action the applicant seeks damages pursuant o

the Trade Practices Act, the cause of action arising out of

proposals for the financing by the applicant of a proposed

development plan and the construction of units. The facts are

i

L .

complex and proceedings are pending in another ~urisdiction in

which the first respondent seeks a declaration as to the validity

of certain contracts entered into with the cross-respondent in

this action, Trayda Pty. Ltd. Basically the applicant asserts

that certain representations made to it by the respondents were

false and formed part of a scheme arrangement or understanding

designed, and successfully designed. to mislead and deceive the

L -

applicant which thereby suffered damage. ' ,-

I have before me a Notice of Motion seeking first an

order that the applicant "do answer paragraphs 5,7, 9 and 9 of the

respondent's Request for Particulars of the Applicant's Statement

of Claim and give further and better particulars of paragraph 3 of

the respondents said request consequent upon discovery and

inspection in another action in this Court".

Circumstances require that I should give my decision

briefly but I have the benefit of full argument by counsel. 0 12

r.5 of the Federal Court Rules deals generally with orders for

particulars. In this case the respondents' application is made

after the filing of the defence. In this situation the objectives

i

of particulars are generally regarded as having three prime j - I

objects, the first to inform the other side of the nature of the

case to be met as distinguished from the mode in which the case is

to be proved, secondly to limit the generality of the pleadings,

to limit and define the issues to be tried (and as to which

discovery may be required and evidence given) and thirdly to

i

enable a respondent to sufficiently comprehend the applicant's

t : .

case to enable exercise of the right to pay into court (where I

. I

I '

3 .

applicable) or to file an offer of consent to ludgment. See

Wilson v. Dun's Gazette Ltd. C19127 V.L.R. 342 and the authorities

referred to in Williams Supreme Court Practice 2nd Edn.	(Vol.1) at
p.1307 et seq.

"The function of particulars is to carry into operation the overriding principle that the litigation between the parties, and particularly the trlal, should be conducted fairly, openly and

without surprises and incidentally to save costs.'' Astrovlanis

Compania Naviera v. Linard (1972) 2QB 611 at 620.

See also Bullen and Leake and Jacobs Precedents of

Pleadinqs (12th Ed.) pp.112-113. See also Australian Hiqh

Court and Federal Court Practice 60.751 et seq., and the

authorities there referred to.

The many pri..ciples enunciated do not always easily

stand together, and on Motions such as this some selectivity is

unavoidable. The Court in the case of conflicting argument before

evidence is given, can only take an objective view upon the

material before it, particularly upon the pleadings filed. Here I

must say that the Statement of Claim appears to be a carefully

drawn document and indeed the defence itself illustrates the same

qualities.

The applicant has already given particulars and I am

I

informed by its counsel that in fact at the present time the

I

I	applicant	has	given	all	such	particulars	which	are	presently
I

I within its power to supply. The fact that a party is unable to

i 4.

i:

give particulars is of course a cogent factor to consider; in some

cases that may illustrate some weaknesses in the claim, in others

it means little bearing in mind the inferential processes of fact

finding .

I

? '

Paragraph 5 of the request seeks further and better

particulars of the allegations in para.15 of the Statement of

Claim which pleads that the second respondent was aware or should

have been aware of the applicant's reliance on the fact that units not consider that para.(g) of the answer which refers to the

in question had been resold pursuant to enforceable contracts.

,-.

applicant's inability to give further particulars until discovery

I

in another action in this Court (No.94 of 1985) justifies an

order. Should such discovery enable the provision of further

relevant particulars they should be provided to the respondents.

If they do not do so the matter may rest.

Paragraph 7 of the request refers to para.36 of the

Statement of Claim which after referring to false representations

previously pleaded allege that they formed part of a scheme

arrangement or understanding on the part of the first respondent 1 .

which deceived the applicant. Particulars are pleaded in six

subsequent sub paragraphs. There is some reiteration in the

::

. . ,

drafting of those particulars and some appear to me to be somewhat

inept as particulars. (See H. 1976 Nominees Pty. Ltd. v. Galli

and Apex Quarries (1979) 40 F.L.R. 242 at 246; Trade Practices

Commission v. David Jones (Australia) Ptv. Ltd. and Others (1985)

7 F.C.R. 109 at 112 et seq.)

r

* ,

5 .

Particulars when supplied should not assume the role f

pleadings. Such a practice tends to complicate the issues and

delay finallsation. It must always be remembered that an

appllcant in presentation of his case is bound by his pleadings.

If he has no evidence or factual material to support essential

allegations of fact, the applicant will fail. In the past it has

frequently appeared to me that unnecessary use of interrogatories

by a defendant tends to work in the long run in favour of a

.	plaintiff. The same may be said of unnecessary use of requests
for particulars, although they may on occasions preface an
application to strike out. I do appreciate that actions under
s.52 which are often based on a totality of conduct of different
types, and sometimes silence, and which cover situations between

innocent misrepresentation and fraud raise difficult problems.

Absolute precision cannot always be expected of an applicant who

enters into contractual arrangements and then finds the outcome so

at odds with his expectations that logic requires an inference or

conclusion that he has been misled or deceived. In such cases

particularity in pleading, before the processes of discovery may

be difficult .

The request is in effect for further and better

particulars of the particulars, and particulars are not pleadings.

. ,

However, I order that the respondent supply the further and better i

particulars sought in paras.(c) and (d) of request No.7, which as

I have said refers to para.36 of the Statement of Claim.

6 .

Request No.8 seeks particulars of loss and damage

referred to in paras.37 and 43 of the Statement of Claim. The

applicant relterates, what the Statement of Claim originally

asserted "that full particulars of loss and damage will be

provided prior to trial". Order 12 r.4(1) provides that "Where a

party pleading claim damages which include moneys which he has paid or is liable to pay, he shall give particulars of those

moneys". This is not broad enough to cover loss or damage of a

nature which may lead to an assessment akin to general damages.

The history of assessments under Part IV and V of the Trade

Practices Act 1974 is now sufficient to indicate that damages may	I '.
#~
.-

fall for assessment under many heads. Here I assume the applicant

will seek damages assessed on the basis of any residual loss

(including possibly loss of profit) after it has exercised its

powers as mortgagee over the land, as until this has been done

loss cannot be calculated. Be that as it may. I consider the

respondents are entitled to know the heads under which damages are

to be claimed and I order that the applicant should provide

particulars of monetary loss as soon as it can be assessed, i.e.

after it has realised its securities and further that within six

weeks of this date it provide the respondent with particulars of

the heads of loss, including loss of interest, under which damages

will be claimed.

Request No.9 refers to para.41 of the Statement of Claim.

which in the alternative pleads that the respondents, at a time

when the first respondent was possessed "with special skill and knowledge" concerning certain representations, or was in a special

i

7 .

relatlonship with the applicant negligently failed to ensure the

accuracy of the representatlon. Particulars are sought as to all

I

"specific facts, documents	or overt acts" upon which the applicant
intends to rely.

i

The plea has for its essential foundation proof of the !

relationship between the parties and the respondents' knowledge at

the relevant times. The applicant in answer to this request

refers to particulars previously given.	I	am not persuaded that
further particulars should be ordered.

Save where expressly otherwise provided I direct that

the few further particulars required be supplied within	28 days of
this date.

F

r

By the same motion the second respondent seeks an order I

in its capacity as cross-claimant against Trayda Pty. Ltd. the

cross-respondent. The cross-respondent has not entered an

appearance to the cross-claim which solely seeks a declaration

"that the Trayda contracts have been discharged by reason of the

cross-respondent's repudiation thereof".

0.5 r.13 provides

"Where a respondent to a cross-claim does not enter an

appearance or file a defence, if and as required by

these Rules, or does not file a defence in accordance

with an order to do so. a judgment (including a

judgment by default or by consent) or decision

(including a decision by consent) on any claim,

question or issue in the proceeding on the originating process or on any other cross-claim in the proceeding shall, unless the Court otherwise orders, be binding as

I between the cross-claimant and the respondent to the

cross-claim so far as the judgment or decision is

8.

relevant to any claim, questlon or issue in the

proceeding on thc cross-claim."

The applicant, assuming he has status so to do, asks

that I should not make such a declaration in default of the 5

cross-respondent's appearance. It seems to be common ground that I '.

Trayda Pty. Ltd. is now without assets and whilst it appears to

have figured prominently in the matters the subject of this

litigation, it indicates no further interest in the proceedings.

The applicant's counsel has drawn my attention t paras.25, 33 and

34 of the Statement of Claim which allege that the first

c

I '

respondent "wrongfully refused to complete the purchase of the

units" (para.28), that it "failed to complete the purchase of the I .

Trayda contracts" (para.33) and that it "has continued to

wrongfully refuse to complete the Trayda contracts (para.34)".

, -

The power of this Court to enter judgment in default of I.'

compliance with directions as to the filing of pleadings is then ~oined. For that reason Order 5 is required to deal with

contained in 0.10 r.7. Directions were made in this matter in

cross-claims. 0.5 r.13 does not bind the applicant and respondent

to default orders which may be entered in such cross proceedings.

The rule has another purpose, namely to bind a cross-respondent ! L '

,. '

who does not appear or file a defence to the cross-claim to a

judgment in the proceedings relevant to issues raised on the

I

cross-claim. But assuming I have power to make the declaration

I >

sought merely upon default of appearance and without any evidence I

going to the merits of the declaration (which I very much doubt).

I decline to do so. Determination of this issue as to the Trayda

i

I	.	S
!

I	9 .
l

i contracts may be vital. It would be singularly Inappropriate and

embarrassing to have on record In the proceedings a declaration by

this Court, which goes to prlmary issues, entered without

consideration of the merits and without indeed full understanding

I	of the relationship (if	any) of Trayda Pty. Ltd. to the other
i
I

I partles, a declaration which may prove to be at odds with the

I L

I	considered conclusion of the Court on the issue. There is much
I	authority for the proposition that the power to make a declaration
i	is discretionary and it is a discretion which ought to be
exercised with care (W v. Warke (1949) 86 CLR 271 AT 279,280)
I
and "with great care and jealousy" and "with great caution"
(London Passenqer Transport Board v. Moscrop (1942) A.C. 332 at
344). See also Bacon v. Rose and another (1972) 2 NSW LR 793 at
796.

The issue considered by the House of Lords in

Brunswick Railway Company and British and French Trust Corporation

Limited (1939) A.C. 1 related to estoppel and the construction of

documents. But Lord Maugham's remarks (at p.22) are relevant. "I

think it right to observe that it is in my view undesirable that

judges should make declarations as to the true construction of

documents on motions for judgment in default of defence..... As

far as possible the Court should make such declarations only when

i

the matter has been argued by counsel on each side, and is then

the subject of adjudication by the judge".

The motion for the declaration must be refused.

The orders are as follow:-

10.

(1) The Motion that the applicant do provide further

particulars of paras. 15 and 41 of the Statement	of Claim
is refused.

rz) The applicant shall within 28 days provide further and

better particulars of para.36 of the Statement of Claim

limited to the particulars sought in paras	(c) and (d) of
request N0.7.

(3)(a) The applicant shall provide particulars of its alleged

loss and damage as soon as it is practicable to estimate

such loss and damage.

(b) The applicant shall within 6 weeks of this date supply the

respondents with particulars of the heads of damages and

loss claimed.

4. Paragraph 2 of the Motion, in which the declaration is

sought is refused.

I have considered the question f costs and have decided

i

the appropriate order is that costs of and incidental to the

motion be costs in the cause.

I certlfy that this and the nlne

precedlng pages are a true copy

of the Reasons for Declslon herein

of h l s Honour Mr. Justlce Mulrhead

"Assoclate

Dated: 1 August 1986

i

i