Pacific Industrial Co (WA) Pty Ltd v Outotec Pty Ltd

[2008] WASC 308

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PACIFIC INDUSTRIAL CO (WA) PTY LTD -v- OUTOTEC PTY LTD [2008] WASC 308

CORAM:   TEMPLEMAN J

HEARD:   ON THE PAPERS

DELIVERED          :   23 DECEMBER 2008

FILE NO/S:   CIV 2044 of 2007

BETWEEN:   PACIFIC INDUSTRIAL CO (WA) PTY LTD (ACN 008 895 154)

Plaintiff

AND

OUTOTEC PTY LTD (formerly OUTOKUMPU TECHNOLOGY PTY LTD) (ABN 7400 3491 165)
Defendant

Catchwords:

Practice and procedure - Application to strike out portions of statement of claim - Application unsuccessful, but partially resolved by conferral and exchange of submissions - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 20 r 19

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff:     No appearance

Defendant:     No appearance

Solicitors:

Plaintiff:     Tottle Partners

Defendant:     DLA Phillips Fox

Case(s) referred to in judgment(s):

MacMahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271

1. TEMPLEMAN J:  This is an application by the defendant to an action in the Commercial and Managed Cases List (CMC List) to strike out portions of the plaintiff's statement of claim.  Following Practice Direction No 4 of 2006, I have dealt with the application on the papers, having regard to the parties' detailed submissions.

2. It is now well established that the policy of the court is to actively discourage applications of this kind.  The approach to pleadings is summarised in MacMahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271, and the authorities there cited.

3. In the present case, the defendant says its application is necessary because 'essentially, it cannot understand what precise case is put against it' in respect of certain aspects of the claim.  This is a somewhat surprising assertion, given that the defendant has pleaded extensively in its amended substituted defence and counterclaim (the defence) to the fifth further re‑amended statement of claim of the plaintiff (the statement of claim).

4. Some of the issues arising in the chamber summons have fallen away as a result of the exchange of submissions: and the plaintiff has undertaken to provide certain particulars and expert evidence which will clarify its position.

5. Having considered the pleadings in the light of these developments, I consider the present statement of the plaintiff's case to be sufficiently clear.

6. The application is brought in part under O 20 r 19(1)(a) of the Rules of the Supreme Court 1971 (WA) (the pleading does not disclose a reasonable cause of action) and in part under O 20 r 19(1)(c) (the pleading may prejudice, embarrass or delay the fair trial of the action).

7. Rule 19(2) provides that no evidence shall be admissible on an application under par 1(a).

8. The defendant has filed a substantial amount of affidavit evidence in support of its application, insofar as it is brought under par (1)(c).  The evidence consists mainly of contractual documents, the plaintiff's August 2007 claim and inter‑solicitor correspondence relating to the pleadings.

9. I do not consider it appropriate to attempt to analyse the contractual documents or the August claim for the purposes of this application.  Because it will be necessary to do so at trial, when evidence relating to the entirety of the dispute will be before the court, it would be inefficient, and result in the expenditure of a disproportionate amount of effort to embark upon that exercise now.

Background

1. It is common ground that in 2004, the plaintiff, as subcontractor, entered into three contracts with the defendant for steel fabrication and installation for the Ravensthorpe Nickel Joint Venture.

2. Subsequently, in order to settle disputes which had arisen between them in relation to these subcontracts, the parties entered into an agreement contained in a letter dated 16 June 2006, and a schedule to that letter (the Settlement Agreement): statement of claim, par 17, defence, par 50.

3. The plaintiff pleads that the Settlement Agreement contained express and implied terms: statement of claim, par 19 and par 20.  The defendant denies that it does so: defence, par 53.

4. The terms on which the plaintiff relies are said to include an obligation to carry out works in accordance with 'Revised Programmes'.

5. The plaintiff pleads in par 22 of the statement of claim that in breach of the Settlement Agreement, the defendant prevented it from completing the works in accordance with the Revised Programmes.  The factual basis for the allegation is set out, albeit the claim is said to be 'not limited to' those facts.

6. The plaintiff pleads in par 23 of the statement of claim that it completed the works on the later dates specified: and in par 24, that it suffered loss and damage as particularised.

7. The defendant denies par 22 of the statement of claim: defence, par 61.  It denies that the plaintiff has completed the works: defence, par 62.  The defendant accordingly denies par 24 of the statement of claim.

8. These are not bald denials.  The defendant sets out in considerable detail what it contends to be the true construction of the Settlement Agreement and the factual matters on which it relies for its defence.

9. In par 26 of the statement of claim, the plaintiff pleads that the Settlement Agreement required that the final value of certain variations be determined: and in par 27, that the parties have been unable to agree on the value of those claims.

10. The defendant denies par 26 and par 27: defence, par 78 and par 79.  It relies on a construction of the Settlement Agreement set out in par 55.2.  The defendant relies also on an agreement said to have been reached at a meeting on 15 September 2006 between representatives of the parties: defence, par 56.2.

11. Paragraph 28 of the statement of claim contains an allegation that under the Settlement Agreement the determination of the final value was to be referred to arbitration, but the parties have elected to have the amount determined in these proceedings.  This is denied in par 80 of the defence.

The strike out application

1. I deal with the application by reference to the paragraph numbers of the chamber summons.

Paragraph 1

1. The defendant seeks to strike out pars 26 to 28 of the statement of claim, on the basis that they fail to plead the necessary material facts relating to the work the subject of the variations and the methodology and manner by which the value of the variations has been calculated.

2. The plaintiff says in the particulars of par 27 of the statement of claim that it has claimed the amount of $5,415,434 (excluding GST).  I assume this includes the August claim in the sum of $4,017,695.  It is not clear how the balance is said to arise, but the plaintiff does not object on that basis.  I therefore assume further that the details have been provided to the defendant.  In essence, therefore, the dispute is about the calculation method, having regard to the construction of the Settlement Agreement.  The defendant pleads its construction compendiously in the defence.

3. The dispute about methodology will no doubt require expert evidence.  Once this evidence has been exchanged and the experts have conferred, the position should become sufficiently clear.

Paragraph 2

1. The defendant seeks to strike out pars 22 to 24 of the statement of claim on the basis that they disclose no reasonable cause of action.

2. The essence of the complaint is that the facts relied on as constituting a breach of the Settlement Agreement (par 22) are not clear.

3. The plaintiff has now agreed to remove the words 'not limited to' from par 22.

4. The plaintiff appears to accept that it is required to provide further particulars and has undertaken to do so 'after the Defendant provides discovery and with expert evidence'.

5. In my view, this is a sufficient response.

Paragraph 3

1. Alternatively to par 2, the defendant seeks to strike out par 22 of the statement of claim on the ground that it may prejudice, embarrass or delay the fair trial of the action.

2. In my view, this contention adds nothing to par 1 above and requires no further comment.

Paragraph 4

1. The defendant seeks to strike out pars 18 to 21 of the statement of claim and pars 16(e), 20(g), 23(b), 25, 40(b), 40(c), 43(c), 43(d), 44(b) and 48 of the substituted reply and defence to counterclaim dated 1 July 2008.  This is on the basis that these paragraphs may prejudice, embarrass or delay the fair trial of the action.

2. It will be recalled that pars 18 to 21 of the statement of claim set out the plaintiff's contentions as to the true construction of the Settlement Agreement.

3. In the paragraphs of the reply and defence to counterclaim referred to above, the plaintiff responds to the defendant's contentions as to the true construction of that agreement.

4. For the reasons given above, I consider that it would be inappropriate now to attempt to construe the Settlement Agreement out of the context in which it was made and thereby, in effect, to try that as a preliminary issue.

5. The defendant raises an additional point.  In par 25(f) of the pleading, the plaintiff contends that the parties have each elected not to rely on item 10 of the Settlement Agreement.  The factual basis for the alleged election has not been pleaded.  The plaintiff should now do so.

Paragraph 5

1. Further and alternatively, the defendant seeks to strike out par 24 of the statement of claim and pars 9.1, 9.5, 10.1, 11.1, 12.1, 13, 14, 15, 16 and 17 of the plaintiff's answers to the defendant's request for further and better particulars of the statement of claim dated 18 December 2007, on the grounds that they may prejudice, embarrass or delay the fair trial of the action.

2. It will be recalled that par 24 of the statement of claim pleads the loss and damage the plaintiff claims to have suffered as a result of the alleged breaches of the Settlement Agreement.

3. The essence of the complaint is that the particulars referred to above do not themselves provide details of the claim, but incorporate by reference, a claim submitted by the plaintiff to the defendant under cover of a letter dated 28 August 2007.  That is the August claim, referred to above.

4. The defendant submits that:

   A pleading which purports to incorporate by reference the content of another document is of itself embarrassing:  see for example Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 4) [2004] VSC 522 at [5].

5. In my view, that case is distinguishable.  There, the plaintiff sought to give particulars of a claim pleaded in nuisance, negligence and for compensation under the Environmental Protection Act 1970 (Vic) 'by reference to the content of a lengthy witness statement and … certain other documents'.

6. Byrne J, who dealt with the application, said he had not examined the documents, but that he agreed in principle that the pleading should itself set out the substance of the matters relied on.

7. By contrast, the August claim is a substantial document which sets out the basis for the claim in considerable detail.  Further, the plaintiff has now agreed to particularise the various contents of the August claim on which it now relies, rather than simply referring compendiously to that claim.

8. Whether or not the claim is well‑founded, is a matter to be determined at trial.

9. The defendant goes on to say that it has a more fundamental objection to the plaintiff's claim.  By par 1A of the defence and counterclaim, the defendant alleges that the plaintiff did not carry on its business on its own account, but as trustee for the Steelfab Unit Trust.  However, the plaintiff has sought to particularise allegations of breach and consequential loss and damage in its own right.

10. The plaintiff contends that it has never denied that it contracted with the defendant as trustee.  That allegation was said to have been first raised against the plaintiff in the amended defence and counterclaim filed on 12 November 2008, two (clear working) days before the defendant's strike out application was filed.  The defendant disputes this: it points to inter‑solicitor correspondence in which the defendant's solicitors raised the issue, having, in the course of discovery, cited documents on the plaintiff's letterhead which suggested that it carried on business as a trustee.  In response, the plaintiff's solicitors noted that the plaintiff had commenced proceedings in its own right, not as trustee, and that the defendant's counterclaim had been brought against the plaintiff in its own right.

11. The plaintiff proposes to amend the writ to identify the plaintiff as trustee of the Steelfab Unit Trust, suing in that capacity.

Paragraph 6

1. The defendant seeks the production or discovery of documents specified in attachment A to the chamber summons, under O 26 r 10 of the Rules of the Supreme Court and, or in the alternative, in the court's inherent jurisdiction.

2. These documents include the trust deed for the Steelfab Unit Trust, certain financial documents for the trust and for the plaintiff.

3. This request has fallen away.  The parties have agreed to confer further about the implications of the plaintiff's present position.

Conclusion

1. The defendant's application has been largely unsuccessful.  Such success as it has achieved has resulted from the exchange of submissions: in substance, a continuation of the conferral process.  I therefore consider that the appropriate course is to dismiss the application.

2. The parties should now confer further for the purpose of agreeing a minute of order which gives effect to these reasons and a pre‑trial programme.  I will list the matter in January for a directions hearing when I will deal also with the costs of this application.  The solicitors should contact my associate to make the necessary arrangements.