Mario Guarino & Associates Pty Limited v ING Australia Limited
[2006] FCA 1737
•17 NOVEMBER 2006
FEDERAL COURT OF AUSTRALIA
Mario Guarino & Associates Pty Limited v ING Australia Limited
[2006] FCA 1737MARIO GUARINO & ASSOCIATES PTY LIMITED (ACN 003 040 293) AND MARIO GUARINO v ING AUSTRALIA LIMITED (ACN 000 000 779), ING LIFE LIMITED (ACN 009 657 176) AND JLT LIFE CONSULTANTS PTY LIMITED (ACN 004 906 996)
NSD 435 OF 2005RARES J
17 NOVEMBER 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 435 OF 2005
BETWEEN:
MARIO GUARINO & ASSOCIATES PTY LIMITED
(ACN 003 090 293)
First Applicant/First Cross-RespondentMARIO GUARINO
Second Applicant/Second Cross-RespondentAND:
ING AUSTRALIA LIMITED (ACN 000 000 779)
First RespondentING LIFE LIMITED (ACN 009 657 176)
Second RespondentJLT LIFE CONSULTANTS PTY LIMITED (ACN 004 906 996)
Third Cross-Respondent
JUDGE:
RARES J
DATE OF ORDER:
17 NOVEMBER 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The amended statement of claim be struck out.
2.Leave be granted to the applicants to re-plead by filing and serving a further amended statement of claim on or before 13 December 2006.
3.The applicants pay the costs of the motion and the costs thrown away by any such amendment.
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
NSD 435 OF 2005
BETWEEN:
MARIO GUARINO & ASSOCIATES PTY LIMITED
(ACN 003 090 293)
First Applicant/First Cross-RespondentMARIO GUARINO
Second Applicant/Second cross-RespondentAND:
ING AUSTRALIA LIMITED (ACN 000 000 779)
First RespondentING LIFE LIMITED (ACN 009 657 176)
Second RespondentJLT LIFE CONSULTANTS PTY LIMITED (ACN 004 906 996)
Third Cross-Respondent
JUDGE:
RARES J
DATE:
17 NOVEMBER 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)
ING Life Limited and ING Australia Limited commenced this motion to seek particulars, but during the course of argument it occurred to me that a more fundamental question arose as to the articulation, in the amended statement of claim, of an intelligible cause of action.
THE ALLEGATIONS IN THE AMENDED STATEMENT OF CLAIM
Mario Guarino and Associates Pty Limited was engaged in about February 2000 as an insurance agent intermediary and consultant to assist in the negotiation of a further insurance contract for a group salary continuance plan by which Woolworths Ltd would provide continuance benefits to its salaried employees.
Woolworths had in fact retained another company, JLT Life Consultants Pty Limited, known as Jardine, to re-market its insurance cover with a view to obtaining more favourable terms than offered by ING on renewal of its existing salary continuance cover. Woolworths’ existing cover with ING had commenced in 1997. That insurance was on particular terms which included a term for annual renewals of the cover with the right of ING to review rates on each renewal. Apparently a side letter was issued in 1997 in which ING guaranteed to hold the rates offered in that year for three years.
When the time for the 2000 renewal arrived, ING offered Woolworths an increased rate and only offered to hold that rate for one year and no more. Guarino was involved in those communications (see par 14 of the amended statement of claim). In March 2000 Guarino sent to ING details of its tender specification, on behalf of Woolworths, on which other insurers had been asked to tender, for the purpose of ING considering its own position and putting forward a proposal in response to the tender.
On 22 March 2000, ING sent an email to Ms Fox of Jardine offering, in response to the tender, to maintain its previously communicated rate, noting that any increase in the waiting period to six months would decrease the rate by 0.1% and making reference to the core claims experience. Significantly, the conclusion of the email said:
‘We will maintain the existing policy document, along with all its definitions and features.’
Guarino argues that the quoted words were capable of conveying a representation that the feature of a three year guarantee of a fixed rate contained in the side letter between ING and Woolworths in 1997 was being offered afresh by the 22 March email. That email is alleged to have conveyed a representation by ING to Guarino, ‘and through them to Jardine and to Woolworths’ that ING was prepared to offer the three year guarantee of fixed rate of premium (par 18). Guarino alleged that it relied on that representation and acted to its detriment. This was because it led Guarino to believe that it was ING’s intention that, if the offer in the 22 March email was accepted, the three year minimum guarantee for premium rates to be held would apply.
Guarino advised Woolworths that it was in Woolworths’ best interest to accept ING’s tender proposal and Woolworths did so. Woolworths then entered into a new insurance contract with ING which relevantly was in the offered terms except that it repeated the one year term for the premium with a right of ING to re-rate at the annual renewals.
In late February 2001, ING substantially increased its rate in its offer to renew for the subsequent year. Woolworths complained to Guarino and said that the representation of a three year guarantee for the 2000 renewal was incorrect, causing it to have incurred substantial loss. Woolworths made a claim which Guarino paid $2.9 million to settle. Critically, in par 33 of the amended statement of claim Guarino alleges, first, that Jardine had no defence to the claim made by Woolworths against it and, secondly, Guarino had no defence to the claims made by Jardine against it consequent upon Woolworths’ claim against Jardine.
ING sought particulars of par 33 on 1 May 2006. Guarino's solicitors replied on 12 May 2006 asserting that the particulars sought were, in effect, pointless and that the pleading articulated an intelligible cause of action. On 7 July 2006, ING pressed its claim for those particulars. On 18 October 2006 I made orders that those particulars be provided. On 1 November 2006, Guarino's solicitors responded and said that the pleading was adequate and the request for particulars was not proper.
CONSIDERATION
I am of opinion that the request for particulars was warranted because the pleading does not disclose an identifiable cause of action. That is because Guarino's position as the agent to negotiate the renewal is, as par 18 of the amended statement of claim pleads in terms, one in which representations by ING to Guarino were representations to Woolworths. If the 22 March email is capable of conveying the representation alleged by the use of the offer to maintain the existing ‘features’ of the policy, as meaning the three year guaranteed rate, then it seems to me that Guarino had a defence to Woolworths' claim. That was, in simple terms, that ING had made a misrepresentation to Woolworths, by its agent Guarino, or, alternatively, made a contract with Woolworths. in which the maintained feature of a three year guaranteed rate was put forward as a term of the contract or a representation of a term contained in it.
That is why it seemed to me during the course of the argument that the allegation in par 33 that there was no defence which Guarino could maintain involved a non sequitur in the way in which the preceding paragraphs of the pleading operated. The non sequitur was that if the representation were made or the term created by the 22 March email, Guarino did have a defence to the claims by Woolworths and Jardines; namely that the renewed contract had the term in it which ING breached by changing the 2001 rate or ING had made a false or misleading representation.
Of course, the fact that a party might contend that a particular result could or could not occur raises issues as to the reasonableness of settlement, which would be matter for final hearing: see Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603.
However, if there were no defence available to Guarino to any claim against it arising out of it having told Woolworths, in effect, that it should enter into the contract with ING because it would have a three year guaranteed rate, then that must be because in the way in which the current pleading is worded:
·there was no contractual term to that effect created;
·there was no representation to Guarino that would have enabled it, as the agent of Woolworths in the negotiations, to pass on to Woolworths that it would have the benefit of a three year fixed rate. That is, if ING did make a representation to Guarino and Woolworths of a three year fixed rate, Guarino, on the current pleading, could have pleaded that as a defence to the claims made by Woolworths (to whom it was also made by Guarino as Woolworths’ agent) and Jardine.
Having heard the argument of Guarino on the current motion it seems to me that there is, lurking beneath the words of the pleading, a case which could be properly pleaded. I think Guarino should have the opportunity to adequately articulate that case, having failed to persuade me that it is currently either properly pleaded or adequately particularised.
Although the motion only sought particulars I am of opinion that the way the pleading is currently framed is embarrassing and ought be struck out for the reasons that I have sought to articulate. In those circumstances, I order that the amended statement of claim be struck out and grant leave to the applicants to re-plead by filing and serving a further amended statement of claim on or before 13 December 2006. I order the applicants to pay the costs of the motion and the costs thrown away by any such amendment. I will stand the matter over for directions on 15 December 2006.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 13 December 2006
Counsel for the Applicants on the Motion/Respondents and Cross-Claimants :
Mr N Cotman SC with Mr S Duggan
Solicitor for the Applicants on the Motion/Respondents and Cross-Claimants:
McCabe Terrill Lawyers
Counsel for the Respondents to the Motion/Applicants and Third Cross Respondent:
Mr D S Weinberger
Solicitor for the Respondents to the Motion/Applicants and Third Cross Respondent: ING Australia Limited/ING Life Limited
Date of Hearing: 17 November 2006 Date of Judgment: 17 November 2006
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