Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (No 2)

Paper Products Pty Ltd sought to sue Tomlinsons (Rochdale) Ltd in a dispute concerning the validity of a loan. The case was heard by the Federal Court of Australia, which was required to determine whether the statement of claim disclosed a reasonable cause of action. The primary issues involved the enforceability of a book-entry credit loan and the reliance on Magna Carta and the Bible to support the plaintiff's claims against the bank and its officers.

The court considered that the plaintiff's allegations regarding the unenforceable loan created by book-entry credit were not substantiated by assets in currency or real wealth. The court found that substantial sections of the statement of claim were not supported by any reasonable cause of action. As a result, the court ordered the striking out of paragraphs 7 to 16 and 19 to 22 of the amended statement of claim filed on 26 October 1992. The plaintiff was granted liberty to file and serve a further amended statement of claim in terms consistent with the court's reasons. The court also ordered that the plaintiff pay the respondents' costs of and incidental to the order.

The court's decision highlights the importance of ensuring that a statement of claim discloses a reasonable cause of action, and that unsupported allegations can lead to the striking out of significant portions of the pleadings. The plaintiff was granted an opportunity to amend their statement of claim to address the deficiencies identified by the court.