Panton v Bruce Leonard Bailey t/as Saccasan Bailey Partners and 2 Ors

[2002] NSWSC 1012

CITATION:	Panton v Bruce Leonard Bailey t/as Saccasan Bailey Partners & 2 Ors [2002] NSWSC 1012
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 5534/01
HEARING DATE(S):	22 October 2002
JUDGMENT DATE:	30 October 2002
PARTIES :	Bernard John Panton - Plaintiff Bruce Leonard Bailey t/as Saccasan Bailey Partners - Defendant
JUDGMENT OF:	Acting Master Berecry

COUNSEL :	Plaintiff: David L. Williams and Ivan L. Griscti Defendants: Robert Dubler
SOLICITORS:	Plaintiff: John R Quinn & Co Defendants: Phillips Fox
CATCHWORDS:	Strike out Pt 15 r 26 - General Steel test - lack of certain material facts - curable - demonstrated arguable cause of action - Negligent misstatement - Esanda test - proximity - misstatement to a third party - causal link - Fiduciary duty - defendant acts for two clients, separate interests - possible conflict - position of trust - arguable that duty arises - S42 Fair Trading Act - misleading or deceptive conduct - damages arise where party influenced by another - acts in reliance of misrepresentation - intention to mislead not a material fact - causal connection between conduct and loss
LEGISLATION CITED:	Fair Trading Act 1987 Trade Practices Act 1974 (Cth)
CASES CITED:	Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1995-97) 188 CLR 241 ABCOS v Jones (1997) 150 ALR488 Ultramares Corporation v Touche (1931) 174 NE 441 Hedley Byrne Co Ltd v Heller and Partners Ltd [1964] AC 465 Caparo Industries Plc v Dickman [1990] 2 AC 605 Byron v Mahoney (1994-95) 182 CLR 609 Hospital Products Limited v United Surgical Corporation (1984) 156 CLR 41 Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 Kabwand Pty Limited v National Australia Bank Limited (1989) ATPR 40-950 Wadley Australia Limited & Anor v The State of Western Australia (1992) 175 CLR 514 Mackman v Stengold Pty Ltd (1991) 13 ATPR 52-627 Pappas & Anor v Soulac Pty Ltd & Anor (1983) ATPR 40-411 Hornsby Building Information Centre Pty Limited & Anor v Sydney Building Information Centre Limited (1978) ATPR 40-067 Wentworth v Rogers (No5) (1986) 6 NSWLR 534 General Steel Industries Inc v commissioner for Railways (NSW) (1964) 112 CLR 125 Republic of Peru v Peruvian Guano Company (1887) 36 Chancery Div 489 Agar v Hyde (2001) 210 CLR 552 Penthouse Publications Ltd v McWilliam (unreported NSWCA, 14 March 1991)
DECISION:	see para 49

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ACTING MASTER BERECRY

Wednesday, 30 OCTOBER 2002

Bruce Leonard Bailey – t/as Saccasan
Bailey Partners & 2 ors

JUDGMENT

1 MASTER: By notice of motion filed on 16 April 2002 the defendants seek to strike out the plaintiff’s claim pursuant to Part 15 r 26 of the Supreme Court Rules.

2 The plaintiff commenced proceedings against the defendants on 16 November 2001 by filing a statement of claim. The statement of claim seeks to recover, inter alia, damages for loss suffered as a result of alleged negligent misstatements by the defendants, breach of fiduciary duty and breach of s 42 of the Fair Trading Act 1987.

Background

3 The plaintiff and Alan Ashley Cox (Cox) entered into discussions during 1995 concerning a partnership for the purpose of growing grapes, and making and selling wine. Cox disclosed to the plaintiff that he did not have the financial capacity to enter into a partnership unless he could obtain a loan from a bank. It was Cox’s intention to have financial statements prepared, in relation to a company, Miller Blue, for the purposes of obtaining a loan. The defendants are accountants and tax agents, practising under the name of Saccasan Bailey Partners. Bruce Leonard Bailey, one of the partners of the firm, provided professional services to Cox and Miller Blue as accountant and tax agent. In May 1995 Bailey commenced providing tax advice to the plaintiff in connection with a company, Canord Pty Limited, which Panton was a director and two other commercial ventures he was contemplating. One of these ventures was the partnership with Cox.

4 It is alleged by the plaintiff that at the time of preparing the financial statement and report, in respect of Miller Blue, that Bailey was aware that Panton and Cox were contemplating a partnership. It is also alleged that Bailey prepared the financial statement and accounts knowing that it was to be used by Cox to obtain a loan from the National Australia Bank (the Bank). It is alleged that the financial statements represented that Miller Blue owed Cox $271,835.67 and that Miller Blue had an asset, being shares in other companies, acquired for $750,000.00. Subsequently the Bank provided a loan to Cox in the sum of $250,000.00.

5 As a result of securing the loan the plaintiff and Cox agreed in 1995 to enter into a partnership which would enable property at Mudgee to be purchased and for Cox to lease the Burnbrae Winery Pty Limited site at Mudgee. There were various other terms and conditions in the December 1995 agreement.

6 Subsequently in October 1996 and 1997 further agreements were entered into between the plaintiff and Cox.

7 On or about 17 November 1998 the National Australian Bank required the plaintiff to execute a guarantee and indemnify the indebtedness of Cox under the loan. The plaintiff refused to execute the guarantee and the Bank threatened to foreclose on the Cox loan. It would appear that from that period the relationship between the parties soured. On 30 June 2000 the plaintiff rescinded the various agreements with Cox. It is alleged by the plaintiff that it came to his attention that the information provided to the Bank in 1995 contained false and misleading material. It is further alleged that the Bank, by virtue of clauses 13(c) and 14 of the Loan Agreement between Cox and the Bank, was entitled to demand immediate repayment of the loan because of the false and misleading information supplied to it.

Negligent Misstatement

8 The defendant submits that the plaintiff’s statement of claim fails to disclose a cause of action. It is submitted by the defendant that the claim does not disclose material facts which would ground a claim for negligent misstatement. The defendant relies on the High Court decision in Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1995-1997) 188 CLR 241, and in particular the judgment of Brennan CJ at 252:

“In some situations, a plaintiff who has suffered pure economic loss by entering into a transaction in reliance on a statement made or advice given by a defendant may be entitled to recover without proving the plaintiff sought the information and advice. But, in every case, it is necessary for the plaintiff to allege and prove that the defendant knew or ought reasonably to have known that the information or advice would be communicated to the plaintiff, either individually or as a member of a identified class, that the information or advice would be so communicated for purpose that would be very likely to lead the plaintiff to enter into a transaction of the kind that the plaintiff does enter into and that it would be very likely that the plaintiff would enter into such a transaction in reliance on the information or advice and thereby risk the incurring of economic loss if the statement should be untrue or the advice should be unsound. If any of these elements be wanting, the plaintiff fails to establish that the defendant owed the plaintiff a duty to use reasonable care in making the statement or giving the advice.”

9 It is submitted by the defendant that whilst the plaintiff pleads some material facts in paragraph 34 of the Statement of Claim, he does not plead the material facts that have been identified by Brennan CJ in Esanda. In the absence of the plaintiff pleading that the defendant knew, or ought reasonably to have known, that the information would be communicated to the plaintiff, was likely to lead the plaintiff to enter into the transaction, and that entering into such transaction and reliance on such information thereby run the risk of incurring economic loss if the statement should be untrue, the pleading is bad as it does not disclose a cause of action.

10 In response the plaintiff submits that the pleadings establish that the plaintiff has an arguable case based on proximity. The plaintiff submits that the alleged negligence, in this instance, is not a conventional misstatement case of the nature dealt with in Esanda v Peat Marwick (supra). It is said that the plaintiff did not rely on the information supplied to the Bank, in the sense of being persuaded to proceed with the agreement/partnership but the information caused Panton to proceed because the Bank relied on the financial statement in deciding to provide finance to Cox. It is submitted that the Full Federal Court decision in ABCOS v Jones (1997) 150 ALR 488 is an example of a Court dealing with a purely economic loss claim post Esanda. What the plaintiff appears to be submitting is that the ABCOS decision creates different principles to be applied when determining whether or not a plaintiff has a good cause of action for a claim for negligent misstatement. The plaintiff appears to rely on a statement in ABCOS at 525:

“The investors did not rely on the valuation in the sense of being persuaded by it to proceed with their investment. But the valuation caused them to proceed with their investment because MANL relied on it in deciding to provide the finance necessary for the venture to proceed.”

11 However it appears to me, that contrary to the submissions made on behalf of the plaintiff, the Court in ABCOS did consider the decision of the High Court in Esanda, and in particular the judgment of Brennan CJ. The Court in ABCOS in fact applied the elements identified by Brennan CJ in Esanda to the facts in ABCOS. True it is that there is a distinction between the two cases in that some of the investors in ABCOS did not read the valuation. To that extent, the Court made the following comment at 524:

“We have hesitated over this aspect of the case but we think it falls within the nature of proximity described by Brennan CJ.”

12 Therefore, it seems to me that ABCOS applied Esanda whilst recognising that the factual situation was not the same. It is submitted by the plaintiff that the general flavour of the pleadings brings the plaintiff’s case within the scope of a claim for negligent misstatement. It is said that the proximity test is satisfied by a general reading of the pleadings. It is clear that there is not an indeterminate class of people who may be able to bring proceedings against the company.

13 The cases however limit the scope of proceedings for negligent misstatement. It clear that where the only reference is to foreseeability the authorities are not prepared to find that a plaintiff has made out a good cause of action. In Ultramares Corporation v Touche (1931) 174 NE 441 at 444 Cardozo CJ said:

“A duty of care imposed only by reference to the criterion of foreseeability would expose the maker of the representation to a liability in an indeterminate amount for an indeterminate time to an indeterminate class.”

14 This passage was quoted in ABCOS (supra) at 524.

15 In Esanda (supra) at 249 Brennan CJ said:

“In actions for negligence occasioning economic loss suffered in consequence of a statement made or advice given by a defendant, foresight or reasonable foreseeability that a member of a class including the plaintiff might rely on the statement or advice and thereby suffer loss has never been held sufficient to support recover.”

16 In Hedley Byrne & Co Ltd v Heller and Partners Ltd [1964] AC 465 at 530 Lord Morris of Borth-y-Gest stated that a duty of care to arise when:

“A sphere in which a person is so placed that other could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows this information or advice to be passed on to, another person, who, as he knows or should know, will place reliance on it, then a duty of care will arise.”

17 In Caparo Industries Plc v Dickman [1990] 2 AC 605, Lord Bridge of Harwich made the following comment:

“The salient feature of all these cases is that the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation.”

18 In Byron v Mahoney (1994-1995) 182 CLR 609 the Court said that there need not be a direct dealing between the person who is negligent and the person affected by the negligence. It was conceded by both parties that the plaintiff does not have to be the one misled by the statement but there must be a link. In the present case the information was supplied to the Bank. The Bank in part based its decision on providing the loan on the information contained in the financial statement. It is asserted by the plaintiff that the defendant knew that the purpose of providing the statement to the Bank was to enable Cox to obtain a loan of $250,000.00 so he could enter into the partnership with the plaintiff. Further it is submitted that the defendant knew that the information contained in the statement was false and misleading.

19 In my view there is nothing in ABCOS which suggests that the elements identified by Brennan CJ, and applied since Hedley Bryne are not required in all negligent misstatement cases. While the facts were different the Court still applied Brennan CJ’s decision in Esanda to the facts in ABCOS. Further it is clear that the plaintiff does not have to be the person who was misled, however, there need to be the link. It seems to me that the allegations of negligent misstatement relied on, and as pleaded in the Statement of Claim, do not plead a good cause of action in accordance with the above authorities.

20 Additionally, the plaintiff needs to plead that as a result of the advice to the bank and it subsequently approving the loan based, inter alia, on the financial statement prepared by the defendant; the plaintiff was induced into entering the various agreements made in 1995 and 1996.

21 Therefore, those paragraphs of the statement of claim alleging negligent misstatement cannot stand.

Fiduciary duty

22 The plaintiff submits that a fiduciary duty arose between the plaintiff and defendants because Bailey acted as an accountant and tax advisor for the plaintiff. It is asserted in the Statement of Claim that the defendant owed the plaintiff a fiduciary duty to ensure that the financial statements and information provided to the Bank were true and correct and a fair view of Miller Blue’s financial affairs.

23 However, it was submitted on behalf of the defendants they were under no obligation to produce a set of accounts which showed the true and fair view of Miller Blue’s financial affairs, and in fact, gave a disclaimer that the statement did not represent a true and fair view of the state of affairs of the company. Further, it is said that the defendants could not owe a higher duty the plaintiff than that which he owed to Cox or Miller Blue. One of the difficulties is the conflict that the defendants may have had in respect of the services provided for Cox and their duties to the plaintiff.

24 The plaintiff merely asserts the relationship with the defendants. It seems to me that there is a distinction between the role that Mr Done played in the ABCOS proceedings and the role the defendants played in these proceedings. In ABCOS, Mr Done was vitally involved in the scheme. However, in the present proceedings, the defendants were the accountants for both the plaintiff and Mr Cox. It is difficult to see that his obligation and duties to Mr Cox result in a breach of fiduciary duty to the plaintiff. Nevertheless, it is perhaps arguable that there has been a breach of fiduciary duty. It would seem to me that at least paragraph 5 of the Statement of Claim needs to be expanded, either by pleading further material facts or supplementing the paragraph with particulars. In my view it is arguable that there has been a breach of fiduciary duty. The plaintiff relies on observations made by Gibb CJ in Hospital Products Limited v United Surgical Corporation (1984) 156 CLR 41 at 69:

I doubt if it is fruitful to attempt to make a general statement of the circumstances in which a fiduciary relationship will be found to exist. Fiduciary relations are of different types, carrying different obligations. … and a test which might seem appropriate to determine whether a fiduciary relationship existed for one purpose might be quite inappropriate for another purpose.”

25 Although Bailey’s relationship with Cox called for professional confidentiality, it may be arguable that he was able to disclose matters arising out of the relationship with Cox to the plaintiff. It still leaves open the question of whether or not because of the client/accountant relationship he had with the plaintiff he was obliged to ensure that the information reflected a true and fair picture of the accounts of Miller Blue.

26 As the pleadings presently stand, the plaintiff has not pleaded the precise nature and scope of the relationship, between him and the defendants, which create a fiduciary obligation on the defendant.

27 Therefore, as the pleadings stand, the plaintiff has not established a cause of action based on fiduciary duty. However it seems to me, that with some amendments to the statement of claim, the plaintiff may at least be in a position to assert that he has an arguable cause of action against the defendant for breach of fiduciary duty. Finally, Equity Doctrines and Remedies 3rd ed, Meagher, Gummow and Lehane at para 554, the learned authors state:

“It must be remembered, finally, that a fiduciary relationship may co-exist with contract, and a fiduciary may owe his principal duties breach of which sounds in damages in tort or gives rise to other common law remedies: see (502). Thus, a solicitor may be liable for damages at law if he gives negligent advice, just as he may be liable to compensate his client if he induces a client to enter into a transaction in which he, or another client, is interested without proper disclosure and consent.”

28 It would seem to me that properly pleaded, the plaintiff has at the least an arguable cause of action based on breach of fiduciary duty against the defendants.

Misleading or Deceptive Conduct

29 As well as the general claim for damages and equitable compensation, the plaintiff seeks in the alternative damages pursuant to s 68 of the Fair Trading Act 1987. The defendants’ submissions broadly relate to three matters. Firstly, that there is not a causal link between the alleged misleading and deceptive conduct and the loss or damage alleged to have been suffered by the plaintiff. Secondly, that no representation was made by the defendants because the financial statements are of Miller Blue and not of the defendants. Thirdly, the defendants gave an expressed disclaimer concerning the true or falsity of the material prepared by them.

30 The plaintiff submits that causation does not have to be demonstrated by direct evidence of the part the relevant representation played. Further it is open to the Court to determine the effect to which the relevant representation is taken to have had. It is submitted that in Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526, Lockhart J concluded that in order to recover damages direct reliance on the conduct complained of was not a necessary ingredient.

31 The plaintiff also relies on the comments of Lockhart J in Kabwand Pty Limited v National Australia Bank Limited (1989) ATPR 40-950 at 50-378.

“For the present purposes it is sufficient to say that a person claiming damages must show either that he is being induced to do something or to refrain from doing something which gives rise to damage or has been influenced to do or refrain from doing something giving rise to damage by the conduct contravening s 52.”

32 Wadley Australia Limited & Anor v The State of Western Australia (1992) 175 CLR 514 at 525 Mason CJ said in relation to loss or damage because of contravention of Part IV and V which give rise to causes of action under s 82(1) of the Trade Practices Act 1974 (Cth):

“In this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connection to satisfy the concept of causation. And, if those acts result in economic loss, that is, loss other than physical injury to person or property, that economic loss will ordinarily be recoverable under s 82(1).”

33 The plaintiff further submits that the formal disclaimer, given by the defendant in relation to the financial statements, will not protect the defendant where misleading and deceptive conduct in involved. See Mackman v Stengold Pty Ltd (1991) 13 ATPR 52,627.

34 While it is not essential for anyone to have been misled or deceived for breach of s 42 to occur, it is essential for those who seek damages following such a breach to prove that they relied on the conduct, and that this caused the damages. In Pappas & Anor v Soulac Pty Ltd & Anor (1983) ATPR 40-411 at 44,785-44,786:

“The applicants will only be entitled to an award of damages under s 82 of the Act (Trade Practices Act) if they establish that they were induced by the representation … to enter into the … contract … The question in each instance is whether they acted upon the statements … in the sense of placing reliance upon this conduct in entering into the contract. There must be a causal connection between the conduct and the loss for which they seek to be compensated.”

35 The equivalent of s 82 of the Trade Practices Act is s 69 of the Fair Trading Act 1987 (NSW). Similarly, the equivalent to s 52 of the Trade Practices Act is s 42 of the Fair Trading Act 1987.

36 In establishing whether or not there has been a breach under s 42 it is not necessary for a plaintiff to prove knowledge or intent of the defendant. The test is an objective test, and it is whether or not a man in the street would be misled by the representation. In Hornsby Building Information Centre Pty Limited & Anor v Sydney Building Information Centre Limited (1978) ATPR 40-067 at 17,693 Murphy J expressed the following view:

“Conduct is deceptive or misleading if it has the capacity or tendency to mislead or deceive; intention to mislead or deceive is not required.”

37 It would seem to me therefore that it is arguable that the disclaimer notice in the financial statements may not defeat the plaintiff’s claim based on deceptive or misleading conduct under s 42 of Fair Trading Act.

38 Section 4 of the Fair Trading Act defines trade or commerce as to include any business or professional activity. In paragraph 1 of the Statement of Claim, the plaintiff asserts that the defendant carried on business as chartered accountants and tax agents. In paragraphs 2 and 5 it is asserted that the defendant provided services as accountants and tax agents to Cox and to the plaintiff. Paragraph 10 asserts the representations made by Bailey. Paragraph 11 asserts material facts which may establish that the representations were false, misleading or deceptive. Paragraph 12 concludes that representations were false, misleading or deceptive, paragraph 13 asserts that the representations were made in trade and commerce. In paragraph 15 the plaintiff asserts that he relied on the financial statements prepared by the defendants as presenting a true and fair view of the affairs of Miller Blue and thus enabling the Bank to give proper consideration to any loan application made by Cox. Paragraph 16 asserts that as a result of Cox securing and accepting the bank loan, Panton agreed with Cox to certain matters of a commercial nature. Paragraph 38 claims the plaintiff suffered loss and damage. It seems to me that this paragraph needs to be amended to include the alternative statutory damages, namely, that by reason of the misleading or deceptive conduct the plaintiff suffered loss or damage.

39 Section 68(2) of the Fair Trading Act provides that actions be commenced within three years of the date on which the cause of action accrued. Paragraph 32 of the Statement of Claim asserts that the plaintiff became aware of Cox’s conduct in 2000 and elected to rescind the agreement between him and Cox. However, the allegation of misleading or deceptive conduct, is not the conduct of Cox but the conduct of the defendants. Therefore, in my view the Statement of Claim is at best ambiguous concerning whether or not proceedings have been commenced within the three-year period. Therefore, it follows that paragraph 32 of the Statement of Claim cannot stand. The Statement of Claim would require the plaintiff to plead material facts which would establish that the proceedings are not defeated by the limitation provision in s 68. That has not happened.

40 In all other respect however I am of the view that the plaintiff’s Statement of Claim discloses a good cause of action in respect of damages sought under s 68 of the Fair Trading Act. The question is whether or not failure to plead material facts in relation to s 68(2) of the Fair Trading Act cannot be cured. In my opinion if it is open to the plaintiff to plead material facts, then the plaintiff ought to be afforded the opportunity to file an amended Statement of Claim, Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536.

Part 15 r 26

41 Part 15 r 26 provides, inter alia:

“26(1) Where a pleading -

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;

(b) …

(c) …
the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleadings be struck out.”

42 In Republic of Peru v Peruvian Guano Company (1887) 36 Chancery Div 489 at 496, Chitty J said:

“The pleading will not be struck out unless it is demurrable and worse than demurrable.”

43 Subsequently, observations were made in the Supreme Court Practice 1991 (London 1990) Vol 1 at 326, that “by worse than demurrable” meant that beyond saving by legitimate amendment.

44 Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 stated:

“It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of cause of action - if that be the ground on which the Court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.”

45 In Agar v Hyde (2001) 210 CLR 552 at 557 the following comments were made:

“the result is that frequently the conventional form of pleading in an action of negligence will not reveal the alleged duty with sufficient clarity for a court considering an application for summary termination of the proceedings to be sure that all the possible nuances of the plaintiff’s case are revealed by the pleadings. Further, and nevertheless importantly, any finding about a duty of care will often depend upon the evidence which is given at trial. Questions of reliance or knowledge of risk are two obvious examples of the kinds of questions in which evidence given at trial may take on considerable importance in determining whether the defendant owed the plaintiff a duty of care.”

46 In Penthouse Publications Ltd v McWilliam (unreported NSWCA, 14 March 1991) Priestley JA said at 5:

“a further reason for adopting this approach is the familiar feature of litigation that in a case of any complexity there is frequent amendment of the pleadings between their first filing and the eventual judgment; in the course of trial the knowledge of, and evidence capable of proving facts, available to opposing parties, both changes and grows, no matter how diligent prepleading preparation has been. To order final dismissal or summary judgment on a strict construction of pleadings is to shut out the party suffering the judgment from the possibilities inevitably inherent in the post pleading phase of litigation. This should only be permitted when it is plain to the court hearing the demurrer type application, that on no reasonable view of the attacked pleading is there any point in allowing the case to go to trial.”

47 In the present proceeding I am of the view, that the way they stand at the moment, the pleadings are deficient to the extent that they do not address, inter alia, the criteria in Esanda (supra) and ABCOS (supra). However, it seems to me that the pleadings whilst they suffer the lack of certain material facts, disclose sufficient information to satisfy, subject to amendment, that the plaintiff has as least an arguable cause of action. It also seems to me that many of the objections the defendants have to the statement of claim are, in reality, matters that go to pleading a defence to a properly pleaded statement of claim.

48 Having regard to the above authorities, I am of the view that the pleadings should not be struck out with leave to amend the pleadings. Leave should be granted to the plaintiff to amend his pleadings in relation to the claims based on negligent misstatement and fiduciary duty and the limitation issue in respect of the claim based on misleading or deceptive conduct.

49 Therefore, I make the following orders:-

(1) The following paragraphs of the statement of claim be struck out – 5, 14 (pleads NAB misled), 15 (needs to assert the Brennan CJ material facts), 32 (it is not alleged that it was Cox’s conduct that was misleading, deceptive or negligent), 34 (see 15 above) and 38.

(2) Liberty be granted to the plaintiff to file and serve an amended Statement of Claim within 28 days.

(3) The plaintiff to pay the defendants’ costs of the application.

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Last Modified: 11/07/2002