Lamson Engineering Australia Pty Ltd v Honeywell Ltd
[1997] FCA 314
•2 MAY 1997
CATCHWORDS
PRACTICE AND PROCEDURE - application to strike out statement of claim - whether pleaded representations could arise from documents relied upon by the applicant - whether statements by the respondent constituted representation that the respondent had complied with the requirements of a request for tender - request for tender and statements of the respondent ambiguous - statement of claim struck out with leave to amend.
General Steel Industries Inc v Commissioner for Railways (NSW)
112 CLR 125, applied
LAMSON ENGINEERING AUSTRALIA PTY LTD - v -
HONEYWELL LIMITED
No NG 004 of 1996
Tamberlin J
Sydney
2 May 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 004 of 1996
GENERAL DIVISION )
BETWEEN: LAMSON ENGINEERING
AUSTRALIA PTY LIMITED
ACN 008 430 359
Applicant
AND HONEYWELL LIMITED
ACN 000 646 882
Respondent
CORAM: TAMBERLIN J
PLACE: SYDNEY
DATED: 2 MAY 1997
MINUTE OF ORDERS
THE COURT ORDERS THAT:
Paragraphs 11, 13 and 14 of the Statement of Claim be struck out.
The applicant be given leave to amend the Statement of Claim on the condition that detailed particulars are supplied as to the precise terms of each allegation and representation which is asserted and the precise respects in which each allegation is said to be false or misleading.
The applicant pay the respondent's costs of the application to strike out.
NOTE: Settlement and entry of orders is dealt with in accordance with Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 004 of 1996 GENERAL DIVISION )
BETWEEN: LAMSON ENGINEERING
AUSTRALIA PTY LIMITED
ACN 008 430 359
Applicant
AND HONEYWELL LIMITED
ACN 000 646 882
Respondent
CORAM: TAMBERLIN J
PLACE: SYDNEY
DATED: 2 MAY 1997
REASONS FOR JUDGMENT
TAMBERLIN J:
This is a strike-out application brought by the respondent ("Honeywell") in relation to the Statement of Claim filed by the applicant ("Lamson").
Although Lamson had previously been invited, and granted leave, to amend its Statement of Claim it had decided not to do so.
The application turns on allegations made in par 11 of the Statement of Claim which assert that:
"11. In submitting its tender to the Department, the respondent: -
(a)represented expressly or by necessary implication to the Department that its tender conformed to the terms of clause 14.2 of the RFT;
(b)further or alternatively represented that the respondent was entitled to the benefit of current agreements with the manufacturer of the equipment or with the manufacturer's Australian agent;
(c)further or alternatively failed to disclose to the Department that it did not have any current agreements with either the manufacturer of the equipment or the manufacturer's Australian agent."
The requirements of cl 14.2 of the Request For Tender ("RFT") circulated by the Commonwealth of Australia are as follows:
"14 ABILITY TO EXECUTE WORK
14.1 ....
14.2 Tenderers shall submit with their tenders certified copies of current agreements which they have with the manufacturer of the equipment or the manufacturers Australian agent, preferably direct with the manufacturer, demonstrating:
(a)Their standing in respect to accreditation with the manufacturer as a service agent;
(b)Their standing in respect to direct supply of spare parts together with evidence of the level of spares inventory held."
The alleged false statements made to the Commonwealth by Lamson in the tender, read as follows:
"Clause 14.2 (a)
Honeywell have requested in writing to the manufacturer (Lampson) (sic) in a letter dated 14 February 1994 and subsequent phone conversations as to their willingness to provide accreditation to Honeywell as a service agent of their equipment. To date no reply has been forthcoming.
Clause 14.2 (b)
Lampson's (sic) have provided Honeywell with a detailed costing of the spare parts required in the contract and we believe that this is evidence of their support to supply spare parts as required."
The importance of cl 14.2 is that any tender which does not comply with the RFT or is in any way incomplete may not be considered.
The respondent submits that the pleaded representations cannot arise from the documents which are relied upon as giving rise to the representations.
The principles relating to striking out are well-settled and were summarised by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) 112 CLR 125 at 129:
"At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance ...'"
At 130 his Honour cautioned that although:
"... the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim."
Lamson's case is that Honeywell's statement in relation to cl 14.2(a) implicitly and falsely represents that Lamson were willing to provide some accreditation to Honeywell although in terms it did not say so. The suggestion is that, contrary to the fact, there is no real problem and that accreditation is just a phone call away. In relation to the cl 14.2(b) statement it is said that Honeywell failed to disclose unambiguously and frankly to the Department that they did not have any current agreements of the kind the tender contemplates. Lamson alleges that these representations constitute deceptive and misleading conduct in breach of s 52 of the Trade Practices Act 1974.
In my view, the statement in relation to cl 14.2(a) cannot reasonably be construed as a representation that there are current agreements, demonstrating accreditation or standing, or certified copies of them, in existence or that they have been furnished. The Honeywell statement, on its face, simply explains that it has made a request of the manufacturer to provide accreditation but that despite follow-up conversations none has yet been provided. An assertion cannot be extracted from these statements that cl 14.2 has been complied with.
However, on one view, the statement is open to a possible construction that the manufacturer is willing to provide an accreditation but that despite the request and follow-up action a reply has not yet been received. I express no view as to whether this is the correct or preferred interpretation but it seems to me that it is one which is open and it may provide a cause of action, if false.
Nonetheless, I do not think that the representations can be construed as assertions that Honeywell was entitled to the benefit of current agreements with the manufacturer or its agent. The representation as to subpar (a) indicates that no reply has been received and that in relation to subpar (b) refers to a belief that the costings are "evidence" of support. A reasonable inference from these statements is that there are no current agreements, but that an accreditation is in the course of being provided from the manufacturer and that the manufacturer has given some evidence of support in the form of costing. It cannot therefore be said that there has been a failure to disclose the lack of current agreements. The suggestion of "evidence" of support is indicative of an absence of a current agreement on this matter. Otherwise, presumably, a copy would have been proffered.
At the hearing of the strike-out application, Counsel for Lamson asserted that Honeywell's claim that it had been provided with a detailed costing of the spare parts required was false. Counsel also asserted that there were no reasonable grounds on which Honeywell could state that there was evidence of the support of the manufacturer to supply spare parts as required. These assertions are not those pleaded.
The conclusion I have reached is that pars 11, 13 and 14 of the Statement of Claim as presently framed should be struck out, but leave should be granted to re-plead having regard to the foregoing conclusions as to the possible differing constructions of cl 14.2 and the statements made by Honeywell. Clause 14.2 is by no means free from uncertainty as to its meaning or effect and on one possible reading of pars (a) and (b) of that clause it seems to me that Lamson has an arguable cause of action.
For the above reasons the orders of the Court are that pars 11, 13 and 14, as presently pleaded, be struck out but that Lamson should have leave to amend on condition that detailed particulars are supplied as to the precise terms of each allegation and representation which is asserted and the precise respects in which each allegation is said to be false or misleading.
The applicant should pay the respondent's costs of this application to strike out.
I certify that this and
the preceding six (6)
pages are a true copy of the
Reasons for Judgment herein of
his Honour Justice Tamberlin.
Associate:
Date: 2 May 1997
Counsel for Applicant: Mr B Coles QC
Solicitor for Applicant: Sommerville & Co
Counsel for Respondent: Mr J Nicholas
Solicitor for Respondent: Allen Allen & Hemsley
Date of Hearing: 28 April 1997
Date Judgment Delivered: 2 May 1997
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