PRACTICE AND PROCEDURE – pleadings – application for leave to amend statement of claim – application to strike out, set aside or vary statement of claim – application to dismiss proceedings or claim – whether cause of action is tenable or arguable – whether the statement of claim should be struck out – whether the applicant should be granted leave to amend or re‑plead.
Federal Court Rules: O 11 r 16, O 13, O 20 r 2
Corporations Act 1989 (Vic): ss 205, 615, 737, 1324, 1325A(1) Corporations Act 2001 (Cth): ss 1324, 1401 Commonwealth Constitution: ss 75, 76
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Porter v OAMPS Ltd [2005] FCA 232
Case
[2005] FCA 232
Decision Date
CaseChat Overview and Summary
In the matter of Porter v OAMPS Ltd, the applicant sought a declaration that the conduct of Mr Lamont and Belgate Pty Ltd gave rise to a secret commission. The court was presented with a complex situation where Belgate Pty Ltd was not a party to the proceedings, and the applicant's standing to seek such a declaration was not adequately pleaded. The primary legal issue for the court was to determine whether the current pleadings were sufficient or if they should be struck out entirely.
The court found the current pleadings to be inadequate and struck them out. It was unable to determine whether a cause of action could be re-pleaded due to the inadequacy of the existing pleadings. The court also found several claims untenable and unable to be cured by re-pleading, including claims for a declaration of no breach of s 205 of the Corporations Law, malicious prosecution, conspiracy, damages for contravention of s 615 of the Corporations Law, and a breach of statutory duty against ASIC. These claims were dismissed pursuant to O 20 r 2 of the Federal Court Rules. The court concluded that it was not its function to assist in redrafting a defective Statement of Claim and that where a pleading was defective, the court had the power to strike it out in its entirety.
The court decided to strike out the relevant parts of the draft Statement of Claim as per O 11 r 16 of the Federal Court Rules. It noted that it was not the function of the Court to assist in the redrafting of a defective Statement of Claim. The court agreed with the respondents that the defects in the draft Statement of Claim were so pervasive that it should be struck out entirely. The court considered granting the applicant leave to re-plead, noting the seriousness of the allegations and the importance of ensuring they were properly pleaded with appropriate particularity.
In summary, the court struck out the current pleadings and dismissed several untenable claims. It granted the applicant leave to re-plead, recognising the importance of ensuring the allegations were properly pleaded with appropriate particularity.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
GOLDBERG J
The applicant seeks a declaration that the conduct of Mr Lamont and Belgate Pty Ltd gave rise to a secret commission. Belgate Pty Ltd is not a party to the proceeding. The applicant’s standing to seek such a declaration is not pleaded. The current pleading must be struck out. I am unable to reach any view as to whether a cause of action could be re‑pleaded, given the inadequacy of the current pleadings. SUMMARY AND CONCLUSIONS ON PLEADING ISSUES There are other objections made to some other aspects of the pleading, such as the claim for exemplary damages. Given the conclusions that I have reached in considering the various objections it is unnecessary to consider those other objections at this stage. For the reasons given above I consider that the following claims are untenable and cannot be cured by re‑pleading:·The claim for a declaration that the applicant did not breach s 205 of the Corporations Law.·The claim for malicious prosecution against the ninth respondent.·The claim for conspiracy against the ninth respondent.·The claim for damages against the second and third respondents based on contravention of s 615 of the Corporations Law.·The claim against ASIC for breach of statutory duty.These claims should be dismissed pursuant to O 20 r 2 of the Federal Court Rules. The draft Statement of Claim does not otherwise disclose any reasonable cause of action. As discussed, the appropriate course is to strike out the relevant parts of the draft Statement of Claim: see O 11 r 16 of the Federal Court Rules. It is well established that it is not the function of the Court to assist in the redrafting of a defective Statement of Claim and that where a pleading is defective a Court has the power to strike it out in its entirety: Turner v Bulletin Newspaper Company Pty Ltd (1974) 131 CLR 69 at 97; McKellar v Container Terminal Management Services Ltd (supra) at 466. The respondents submitted that the defects in the draft Statement of Claim are so pervasive that it should be struck out entirely: see East West Airlines (Operations) Ltd v Commonwealth (1983) 49 ALR 323 at 327 and McKellar v Container Terminal Management Services Ltd (supra) at 466. I agree. That is the appropriate course in this case. The current Statement of Claim is so inadequate that attempting to amend it paragraph by paragraph is probably futile, but, in any event, is unlikely to result in the clarity that starting afresh may (hopefully) provide. The decision that the Statement of Claim should be struck out then leads to the question whether the applicant should be given leave to re‑plead. In East West Airlines (Operations) Ltd v Commonwealth (supra) Dawson J struck out most of the Statement of Claim, but gave the plaintiff leave to re-plead. I have come to the same conclusion in this case. Notwithstanding the inadequacy of the attempts made to date to plead an appropriate case, I consider that the applicant should be permitted another opportunity to do so. In this regard I note that the allegations that he makes are very serious. Assuming that those allegations are properly pleaded with appropriate particularity then it is for the Court to consider them.
Ratio Decidendi
Legal Principle Established
Established by:
GOLDBERG J
The nature of the notices of motion before the Court fall broadly into two categories: first, the issue of the sufficiency or appropriateness of the applicant’s pleading; and secondly, whether this Court is the appropriate jurisdiction in which to hear the claim. THE PLEADING – GENERAL CONSIDERATIONS Not all the respondents made all the same complaints about the pleading. In particular, the second to seventh respondents have not applied to strike out the applicant’s amended Statement of Claim. Rather, they opposed the granting of leave to the applicant to file the draft Statement of Claim. In the event that leave to amend is refused, the applicant would be left with his amended Statement of Claim as filed. In that event the second to seventh respondents seek to stay the application on the basis that the amended Statement of Claim was filed without the requisite leave. Interesting as these procedural imbroglios may be, the submissions made by the second to seventh respondents in relation to the inadequacy of the pleadings (including the draft Statement of Claim) were broadly the same as those of the other respondents. The sensible and appropriate course is to treat them in the same way. Consequently I propose to consider whether the proceeding (or any part of it) based upon the draft Statement of Claim, assuming it had been filed, should be dismissed under O 20 r 2 of the Federal Court Rules. If the answer to that question is “no” I will then consider whether the draft Statement of Claim or any parts of it should be struck out under O 11 r 16 of the Federal Court Rules and whether the applicant should be granted leave to amend or re‑plead the Statement of Claim under O 13 of the Federal Court Rules. What further orders should then be made can then be considered. There are two complaints made against the draft Statement of Claim. The first is that it does not disclose a reasonable cause of action and, indeed, cannot be re‑drafted in order to do so. If so, then the appropriate course is to dismiss the proceeding generally or to dismiss a particular claim: see O 20 r 2 of the Federal Court Rules. Before the proceeding or a claim contained therein can be dismissed on this basis the Court must be satisfied that the causes of action are unarguable, or are so untenable that they cannot possible succeed or are manifestly groundless in the sense explained by the High Court in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 at 129. Recently, in Spotwire Pty Ltd v Visa International Services Inc (2003) ATPR 41‑949, Bennett J summarised the manner in which the test in General Steel has been applied (at 47,410):“Such an order would only be made where it is clear that there is no real question to be tried (SmithKlein Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674; Douglas v Tickner (1994) 49 FCR 507) or that it is hopeless and bound to fail (Orchard v Comrie (1998) 80 IR 76) or clearly untenable (Faessler v Neale (1994) 29 IPR 1) or hopeless to the extent that it should not be permitted to go to trial (Bray v F Hoffman‑La Roche (2003) ATPR 41-946; [2003] FCAFC 153 per Carr J). It must be plain and obvious that the impugned portions of a statement of claim are unarguable (Murex Diagnostics Australia Pty Ltd v Chiron Corp (1995) 55 FCR 194) or it must be very clear that there is no issue deserving of a hearing (Anderson v Commonwealth Bank of Australia [1995] FCA 787). However, proceedings will not be dismissed summarily merely on the ground that it appears, at the hearing of the motion, that the claim may fail (Australia Building Industries Pty Ltd v Stramit Corp Ltd [1997] FCA 1318).”