Potts, L.N. v Dennis Jones & Co P/L

[1993] FCA 323

JUDGES' CHAMBERS

FEDERAL COURT OF AUSTRALIA
450 LITTLE BOURKE STREET

MELBOURNE. 3000

19 May 1993

Elizabeth Harrison
Principal Registry

Federal Court of Australia

Law Courts Building

Queens Square

SYDNEY NSW 2000

Dear Madam,

Trade Practices Commission v Santos Limited

No. VG 377 of 1992

Find enclosed a copy of his Honour's judgment delivered in the above matter on 12

May 1993.

This judgment is not for general distribution.	5327-1 \cl?%
Yours faithfully,
David Brennan
Associate to Heerey J
IN THE FEDERAL COURT OF AUSTRALIA	1
)
NEW SOUTH WALES DISTRICT REGISTRY	) No NG 882 of 1992
GENERAL DIVISION	1

BETWEEN LESTER NEIL POTTS

Applicant

AND DENNIS JONES & CO PTY LIMITED

First Respondent

DENNIS JONES

Second Respondent

RAY SMITH

Third Respondent

NATIONAL MUTUAL PROPERTY

SERVICES [AUSTRALIA) PTY LIMITED

Fourth Respondent

CITIBANK SAVINGS LIMITED

Fifth Respondent

FEDERAL COURT OF

AUSTRALIA PERMANENT TRUSTEE COMPANY
LIMITED

Sixth Respondent

Morling J. 22 February 1993

REASONS FOR JUDGMENT
(EX TEMPORE)

This is an application by the fifth respondent that the whole of the amended statement of claim be struck out.

Although that is the form of the application I will treat it

as being an application that the statement can be struck out

as against the fifth respondent. The substantial ground upon which the application is based is that there are no facts alleged in the statement of claim as against the fifth respondent which are capable of making out the allegations made against it.

The statement of claim contains allegations as
against the first, second and third respondents which, if made
out, might well establish causes of action against those

respondents. The fifth respondent is sued because, so it is alleged, the first, second and third respondents acted as its agents. The basis of the allegation of agency is set out in para 11A(a) of the statement of claim. In that paragraph it is alleged that the first respondent, by itself, its servants and agents (which included the second and third respondents) was acting on behalf of, inter alia, the fifth respondent for the purpose of arranging the introduction to the fifth and sixth respondents of borrowers of money. As against the fifth respondent there are three subparagraphs in which the allegation of agency is particularised.

It is said in para 11A(a) that the authority of the

first respondent to act on behalf of the fifth respondent was
implied from:

"The distribution by the fifth respondent to the first respondent of the fifth respondent's loan application forms and promotional pamphlets and materials for the purposes of making such documents available in turn to prospective borrowers including

the Applicant. "

Standing on their own I do not think the allegations in this subparagraph afford any basis upon which a claim of agency could be made out. It seems to me that the mere fact that

possession of its own application forms and promotional	the fifth respondent permitted the first respondent to have
material and pamphlets would not go any way to showing the first respondent had the authority of, or was the agent of, the fifth respondent for the purpose of making representations of the kind referred to earlier in the statement of claim.
The same can be said of the allegation in para 11A(b) of the statement of claim. In that paragraph it is alleged that the agency of the first respondent appears from the fact that the fifth respondent permitted or allowed
persons in the position of the first, second and third respondents to explain, fill out and complete on its behalf loan application forms provided by the fifth respondent. One such form has been tendered. It is a fairly conventional form of application for a loan on the security of real estate. I cannot see that allowing other persons to have possession of those forms and to fill them out would carry with it any agency to make the representations alleged earlier in the statement of claim.
However, para. 11A(c) is in quite different terms. In that subparagraph it is alleged that the fifth respondent allowed the first, second and third respondents:

"To a c t i n t h e conduct and management o f t h e f i f t h

respondent's b u s i n e s s . "

If that allegation is made out then the applicant may well be able to succeed against the fifth respondent.

What has troubled me has been the extreme generality of para 11A(c). In my opinion if the facts referred to in paras 11A(a) and (b) are the only facts which are relied upon at the trial to make good the allegation in para 11A(c), the application will fail for the reasons I have given. But I

cannot say at this stage that that will be the case.

The

be struck out because of the generality of para 11A(c) or

question, therefore, is whether the statement of claim should

whether I should permit the allegation therein made to be the
subject of a further request for particulars.

My mind has hesitated on the matter but I have come to the conclusion that I should not strike out the statement of claim. In its present form para 11A(c) is, I think, sufficient to make good the claim against the fifth respondent. However, that respondent is entitled to further and better particulars of the allegations made in para 11A(c).

I think the preferable course is to allow the pleading to

stand, at least for the moment, pending any application which
may be made for further particulars of para 11A(c).

Should the application be made and the applicant be only able to assert facts which cannot make out a claim against the fifth respondent, it would always be competent for the fifth respondent to apply to the Court to obtain appropriate relief. That application may either take the form of a fresh application to strike out the statement of claim, or possibly an application to have the allegation of agency tried as a separate issue, without the expense of the fifth respondent being a party to a trial at which all the issues as against all the respondents will be determined.

On the question of costs, I would normally order

that the applicant's costs be its costs in the cause.
However, I think on the facts of this case the better order is
that the costs of this application should be costs in the
cause. My reason for holding that opinion is that
para 11A(c) is so general as almost to invite an application
of the present kind. Under the circumstances I think justice
will be done if the costs of the application are made costs in
the cause.

I make orders as follows:

1. Notice of motion dismissed.

2.   Costs of the application to be costs in the cause.

The applicant and the fifth respondent are to give preliminary discovery of all documents relevent to the issue of the authority of the first, second and third respondents to act as agents of the fifth respondent by 5 March 1993.

I stand over the notice to produce to 5 March 1993.