Park Fast (Aust) Pty Ltd v Vivlios & Anor No. DCCIV-02-346

Park Fast (Aust) Pty Ltd v Vivlios & Anor
[2003] SADC 156
Judge Herriman
Civil

This is an appeal against the order of a Master of this Court, made on 12 September 2003 and dismissing an application by the appellant filed on 2 July 2003 and seeking that paragraphs 14 and 15 of the Amended Defence to Further Amended Counterclaim be struck out.
For the purposes of clarity, it should be understood that the appellant is the defendant in the action.
I will not attempt a detailed history of the matter because it is well covered in the reasons of the Master. Shortly, however, it is as follows:
(1)By their Summons, the respondents pleaded the existence of a contract with the appellant whereby they licensed the appellant to exploit particular premises as a car‑park, the termination of that contract and a claim for recovery of arrears of licensing fees due to them.
(2)By its Further Amended Defence and Counterclaim, the appellant denied liability, alleging that the respondents had wrongfully terminated the contract and seeking, by way of counterclaim, damages resulting therefrom. In support of its assertion there was wrongful termination, the appellant pleaded that the relevant contract had contained certain express or, alternatively, implied terms for defined periods of occupancy, that these had been breached or, alternatively, that the licence had been governed by the provisions of the Retail and Commercial Leases Act 1995 and the respondents were in breach of that Act.
(3)In response to those allegations, the respondents had filed the impugned document, an Amended Defence to Further Amended Counterclaim which, amongst other things, contended that if the contract contained the terms pleaded by the appellant (which was disputed), then they relied on pre‑contractual representations or, alternatively, as I read the pleading, a collateral agreement, as constituting an answer to the Defence and Counterclaim. They further said that by reason of those alleged matters, the appellant was estopped from refusing to accept their termination of the contract and, further, that if the written agreement was to be interpreted in the manner contended for by the appellant, then it was not in its form complete and (as I read the pleading) should be rectified. Further, the respondents contended (in the paragraphs 14 and 15 under challenge) that if the written agreement was to be read in the terms contended for by the appellant, then, in that case, it had been procured by the appellant’s misleading and deceptive conduct (within the meaning of s.52 of the Trade Practices Act) and/or unconscionable conduct (aided and abetted by its servant or agent, Mr Damien Leicester) within the meaning of s.51AA of that Act.
The appellant having unsuccessfully sought to have paragraphs 14 and 15 of the final document struck out, has appealed against that refusal upon the following grounds:
“1.The learned Master erred in finding that the matters pleaded in paragraphs 14 and 15 and the relief claimed in the amended Defence to further amended Counter Claim were not embarrassing.
2.The learned Master erred in finding that the matters pleaded in paragraphs 14 and 15 and the relief claimed in the amended Defence to further amended Counter Claim were pleaded solely in response to the further amended Counter Claim.
3.The learned Master erred in finding that the matters pleaded in paragraphs 14 and 15 of the amended Defence to further amended Counter Claim could plead inconsistent facts or law if pleaded solely in response to the further amended Counter Claim.
4.The learned Master erred in finding that the matters pleaded in paragraphs 14 and 15 of the amended Defence to further amended Counter Claim were proper or sufficient pleas of unconscionable conduct or misleading or deceptive conduct.
5.The learned Master erred in failing to strike-out paragraphs 14 and 15 and the relief claimed in the amended Defence to further amended Counter Claim as embarrassing and/or inconsistent with the Claim and/or purported to set up additional grounds for the Claim and/or contrary to the rules of pleading.”
Before me, the focus of the appeal was on grounds 1 and 4, but I was also addressed with respect to grounds 2 and 3 and I will deal with those latter grounds first. Ground 5 simply complains of the Master’s failure to make consequential orders of the type which might have been made had he not, as it is contended, erred in the manner pleaded on appeal.
As to the general issue of inconsistency raised in grounds 2 and 3, I respectfully agree with and adopt the analysis of the law set out by the Master in pages 7 and 8 of his reasons.
There is no doubt that, here, the respondents raised, by the impugned pleading, matters which had not been adverted to in their Summons and which conflicted with their primary allegation in that Summons. They argued, however, that paragraphs 14 and 15 had been pleaded by way of alternative and for the sole purpose of meeting a defence raised by the appellant on its own pleadings, a defence which they had not reasonably anticipated.
In principle, on the basis of the Master’s reasoning and the cited authorities, which I respectfully adopt, there is no reason why the respondents cannot set up a new plea, albeit conflicting with their Statement of Claim, as a response by way of alternative to a matter first raised in the defence. I refer to Duke Group v Arthur Young No. 13 (unrep., SCSA Judgment No. 2946, 26/6/91), Renton, Gibbs & Co. Ltd v Neville & Co [1900] 2 QB 181 and Hall v Eve (1876) 4 Ch D 341. The test for the acceptance of such a plea appears to be based on the footing that it must be set up solely in answer to a defence and not as an alternative or new claim. If that test is satisfied, then, to the extent that new matters are raised by the plea, the opposing party will remain at liberty to respond to them by way of reply or rejoinder. Further, I am not persuaded that any evidentiary or procedural issues from a pleading sequence such as that, cannot be adequately dealt with by a trial judge.
As I apprehend the Notice of Appeal, it does not seek to challenge that principle, but rather its application in the context of the pleadings in paragraphs 14 and 15.
That contention obliges me to focus upon those paragraphs and, in doing so, I must necessarily consider the objections taken to their form in Grounds of Appeal 1 and 4. In doing that, I must consider (as, indeed, both parties contended) the paragraphs which preceded them, being those numbered 9 to 13 inclusive.
The appellant’s counsel addressed each one specifically. I will not repeat his submissions in full, but amongst other things, he observed:
(1)The plea in paragraph 10 that there was an oral agreement or a warranty, is curious in the sense that the timing of that agreement or warranty predates the contract sued upon.
As to that observation, it does seem to me that if the contents of that discussion are relied upon as an independent oral agreement, then I would have expected the respondents to seek to plead a collateral contract – they have not done so, at least explicitly. Alternatively, if they are said to amount to a warranty, then I would have expected the respondents to say whether they rely upon it as a pre‑contractual representation or as relevant pre‑contractual conduct and, if so, for what precise purposes – they have not done this.
(2)The plea in paragraph 11 appears to relate back to the matters raised in paragraph 10. If that is so, unless a plea of a contract collateral to the written arrangement is being made, then it makes no sense to say that “in consideration of” the licensing agreement, an earlier oral agreement was entered into.
As I read it, the paragraph is at best unclear and at worst nonsensical.
(3)The estoppel plea in paragraph 12 throws up the same allegation about an earlier oral agreement, but then says it induced the formation of the agreement sued upon. It appears to foreshadow not a defence, but a claim based on promissory estoppel.
It appears to me that the manner in which the respondents seek to rely upon the matters pleaded in that paragraph is simply not identified either there or in the prayer for relief.
(4)As to paragraph 13, it is alleged, by way of alternative, that if the written agreement between the parties is to be interpreted in the manner pleaded by the appellant, then it does not reflect the intention of the parties. The paragraph itself does not go on to say this, but the clear implication is that it should, accordingly, be rectified. That is not without significance as a plea because part of the relief sought in that document is for any “necessary rectification of the written agreement”.
There is indeed force in this contention. The paragraph can really only be read in the context of the prayer for rectification.
In a sense, those observations as to paragraphs 10 to 13 are peripheral because they do not deal with the impugned paragraphs 14 and 15, but they become central by reason of the respondents’ contentions as to paragraphs 14 and 15. The respondents say that those paragraphs have to be read and interpreted in the context of the pleadings immediately preceding them, that is to say, that the “conduct” upon which the paragraph 14 and 15 pleas rely is that outlined in paragraphs 9 to 13 inclusive. Once seen in that light, says the respondents’ counsel, the plain meaning of paragraphs 14 and 15 is revealed and they stand as proper and sufficient pleas under those sections of the Trade Practices Act upon which they rely and as proper matters of defence to the counterclaim.
I cannot agree with that contention. I am not persuaded that either paragraph is properly or sufficiently pleaded and, indeed, each is embarrassing. I say so for these reasons:
1.As I apprehend it, the use of the provisions of s.52 of the Trade Practices Act by way of a bare defence to a claim is not well established and, indeed, no authority was advanced in support of it. I am not prepared to hold that the pleading and proof of conduct proscribed by the section affords a defence to a civil claim. Offending conduct in that part of the Act has both civil and criminal consequences, but the civil consequences are quite specifically provided for in sections 82 and 87 of the Act. Neither of those sections infers that proof of such conduct may of itself constitute an answer to a civil claim and each contemplates the institution of proceedings and the seeking of particular types of relief against offending parties. It appears to me that the only available use of s.52 as a defensive ploy, is by way of a counterclaim relying upon s.82 or s.87.
Here, it may be that the respondents, by paragraph (b) of their prayer for relief seeking rectification, have sought to rely upon s.87(2)(b) of that Act, but if they have done so, they have not properly identified that reliance. That prayer is equally capable of being interpreted as relief sought consequential upon what is alleged in paragraph 13.
2.Likewise, proof of unconscionable conduct, within s.51AA of the Trade Practices Act, does not under the Act appear to constitute a defence of itself and, again, it would appear that that section could only be relied upon to found some form of action by way of counterclaim, brought under s.87 of the Act.
3.The appellant complains that neither of paragraphs 14 or 15 sufficiently or properly identifies the “conduct” relied upon. The respondents reply that these paragraphs are to be read and can be understood in the context of those paragraphs which precede them. I am not persuaded by that reply.
There can be no doubt that within paragraphs 9 to 13 of the document, particular allegations are made which might be capable of amounting to conduct of the kind proscribed by s.51AA and s.52, but I am not persuaded that the respondents can discharge their obligation to plead with reasonable particularity by simply advising the court that those paragraphs constitute the bases for their paragraph 14 and 15 pleas:
3.1In the first place, as I have noted, there appears to be an issue raised by the respondents on their own pleadings as to whether the conversations which preceded the written contract led to an agreement (and, if so, whether it is contended to be a collateral agreement) or whether they constituted representations (or conduct) on which the respondents relied. If the respondents rely upon them as conduct within the meaning of s.52, then they should clearly say so.
The appellant should not be expected to guess at the respondents’ intentions with respect to this matter.
3.2Paragraph 11 is either ambiguous or nonsensical, for the reasons I have mentioned. If it is to be used to plead conduct upon which paragraphs 14 and 15 rely, then it is not clear what is being said.
3.3Paragraph 12 of the pleading raises estoppel as a defence. Is it also to be translated into a plea of conduct offending s.51AA and s.52? Does it foreshadow a claim based on promissory estoppel? Certain of the allegations infer it. Just what purpose it is intended to serve is not clear. It appears to refer to the conduct mentioned in paragraph 10 and about which I have already spoken.
3.4Paragraph 13 is the paragraph which appears to foreshadow the claim for rectification. Of itself, it does not assert conduct which, prima facie, would found a claim under s.51AA or s.52. If it is intended otherwise, that is not apparent.
4.In its own terms, paragraph 14 neither identifies the conduct relied upon nor, for the reasons I have discussed, can it easily be read as picking up all or some particular aspects of the conduct pleaded in the paragraphs which precede it. Some of what is pleaded there may be capable of amounting to relevant conduct, but those paragraphs are confusing, at times conflicting, and it cannot be said that each allegation they contain is capable of constituting relevant s.52 conduct.
Had the respondents sought to set out the conduct relied upon either by way of repetition of specific matters or by incorporating references to matters pleaded elsewhere, it might have been sufficient, subject, of course, to what was then sought by way of relief. As it stands, I am satisfied the pleading is embarrassing and improper. Again, the appellant, in filing a reply, should not be called upon to guess at the conduct relied upon.
5.The same observation can be made about paragraph 15.
The appellant’s counsel urged more than that and referred me to the discussion about s.51AA in Australian Competition and Consumer Commission v Berbatis Holdings Pty Ltd & Ors (2003) 197 ALR 153. He contended that the weight of authority favoured the view that the party seeking relief under that section must establish a position of “special disadvantage”. Here, said the appellant’s counsel, no special disadvantage was identified or pleaded.
I am less attracted to that argument, as I am not persuaded that the weight of opinion in that case went as far as he contended. Their Honours Gummow and Hayne JJ appear to me to be quite reluctant to limit the ambit or reach of s.51AA. In those circumstances, the respondents should not be forced to do any more than specify the basis for the asserted “unconscionability”. Having said that, however, I note that they have not even attempted to do that. It appears to me they should be obliged to do so.
6.Having said all that, I am not persuaded that, even were paragraphs 14 and 15 properly particularised, they could stand with the existing prayers for relief. For reasons already discussed, it appears to me that if the respondents wish to rely upon those sections of the Trade Practices Act, they should identify with precision the relief they are seeking under sections 82 or 87 of the Act.
7.The appellant also raised the failure of the respondents to plead the primary bases for relief under either s.51AA or s.52, namely, that the appellant was at relevant times a corporation acting in trade or commerce. In response, the respondents suggested those matters were self‑evident on the pleadings. Perhaps they are, but as I am calling upon the respondents, inter alia, to properly particularise paragraphs 14 and 15, it appears to me that those precursor allegations should also now be made.
I return then to the appeal grounds 2 and 3.
It appears to me that if paragraphs 14 and 15 are properly pleaded and consequential relief properly sought, and provided in particular that relief does no more than “answer” or “match” the quantum of the appellant’s counterclaim, then the respondents can reasonably argue that those pleadings are raised “solely” by way of response to a matter raised in the Defence and Counterclaim. That conclusion perhaps extends the meaning of what constitutes a “defence”, but it does accord with what I perceive to be the true purpose of pleadings, namely, to define the issues in the action.
If, however, the respondents seek to go further than simply meeting the counterclaim, it seems to me that that will offend principle and they will then be obliged to seek to reformulate their original Statement of Claim.
In the course of these reasons, I have made reference to what appear to me to be inadequacies in paragraphs 9 to 13 inclusive. They are not the subject of challenge before me now, but I have expressed my reservations about their adequacy. It must remain a matter for the respondents to consider whether any amendment to them is appropriate.
Otherwise, for the above reasons, the appeal is allowed. Paragraphs 14 and 15 of the respondents’ Reply to Further Amended Defence and Counterclaim are struck out and I will hear from the parties as to consequential orders.

[2003] SADC 156

25 November 2003