Reiffel v ACN 075 839 226 Ltd

[2001] FCA 392

FEDERAL COURT OF AUSTRALIA

Reiffel v ACN 075 839 226 Ltd [2001] FCA 392

Trade Practices Act 1974 (Cth) s 82

Wardley Australia Ltd v Western Australia 175 CLR 514 cited
Blacker v National Australia Bank Ltd [2001] FCA 254 considered
Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 considered

MARLENE JOYCE REIFFEL v ACN 075 839 226 LIMITED, PANNEL KERR FORSTER CONSULTING AUSTRALIA PTY LIMITED, ANDREW CHARLES VERON and KENNETH JAMES GRESHAM
N 966 OF 2000

GYLES J
SYDNEY
28 MARCH 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 966 OF 2000

BETWEEN:

MARLENE JOYCE REIFFEL
APPLICANT

AND:

ACN 075 839 226 LIMITED and OTHERS
FIRST RESPONDENT

PANNEL KERR FORSTER CONSULTING AUSTRALIA PTY LIMITED
SECOND RESPONDENT

ANDREW CHARLES VERON
THIRD RESPONDENT

KENNETH JAMES GRESHAM
FOURTH RESPONDENT

JUDGE:

GYLES J

DATE OF ORDER:

28 MARCH 2001

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The motion of the third respondent that pars 27-34 (inclusive) of the Amended Statement of Claim be struck out.

2.All other motions be stood over to 18 April 2001.

3.Costs reserved.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 966 OF 2000

BETWEEN:

MARLENE JOYCE REIFFEL
APPLICANT

AND:

ACN 075 839 226 LIMITED and OTHERS
FIRST RESPONDENT

PANNEL KERR FORSTER CONSULTING AUSTRALIA PTY LIMITED
SECOND RESPONDENT

ANDREW CHARLES VERON
THIRD RESPONDENT

KENNETH JAMES GRESHAM
FOURTH RESPONDENT

JUDGE:	GYLES J
DATE:	28 MARCH 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT (EX TEMPORE)

1. There are various motions before me today.  One is a motion pursuant to O 11 r 16 of the Federal Court Rules by the third respondent to strike out pars 27 to 34 (inclusive) of the amended statement of claim on the basis that no reasonable cause of action is disclosed because the claims under the Trade Practices Act 1974 (Cth) are statute barred.

2. It is pointed out that the damage which is pleaded relates to representations which are made outside the three year period and relate to transactions entered into outside the three year period, namely, applying for units in the trust and a linked lease of premises to the trust.  Indeed it is pointed out that they were some months prior to the three year period.

3. It is then pointed out that the essence of the falsity is projections of monthly income and that the particulars which have been given of the income performance indicates that well before the three year period it was apparent that the monthly projections simply were not being achieved and not being achieved by a fair margin.  In those circumstances it is submitted that, even taking a fairly relaxed view about the proper principles to be applied, the difficulties in the applicant's path are so clear as to cause me not to hesitate to strike out in the way indicated by the High Court in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 (“Wardley”) particularly at 527. It is submitted that Wardley itself was a very special case of a contingent liability which is quite different to the current situation. 

4. It is submitted for the applicant that the issue of when damages are ascertainable in a case like the present cannot simply be answered by looking at one or even two months results, and that it is necessary to have a factual decision as to when it was that the applicant could reasonably come to a conclusion that the loss and damage was to be sustained.  It is said that in these cases an applicant should not be forced to sue before it has the material available to make that decision.

5. In my view, this is not an appropriate case for striking out, principally because of the very recent decision of the Full Court in Blacker v National Australia Bank Ltd [2001] FCA 254 (“Blacker”).  The Full Court examined most of the relevant authorities on limitations, including in particular Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 (“Karedis”) in which the Full Court in that case had sent back to the trial judge to determine as a matter of fact the time at which the loss or damage suffered by the tenants was reasonably ascertainable, that being what could be called a coffee lounge business case.

6. Both Karedis and Blacker seem to accept the proposition that mere entry into the transaction is not the time at which the loss is crystallised.  There is of course a good body of authority that would suggest that in most cases that is the crystallising factor, but these two authorities seem to me to leave open to the applicants at least an argument which is not hopeless that in a case such as the present, with a pooled hotel investment, one could not too readily ascertain what the ultimate income result is likely to be because of the vagaries of the business involved.

7. I do not mean to suggest that I think that the argument would succeed (it is too early for me to say that), nor am I by any means ruling out the possibility that at the end of the day it might be the time of entering into the transactions at which the loss is crystallised, but, having in mind these authorities, I think it is not appropriate to exercise the draconian remedy of striking out the cause of action.  Having said that, I do not doubt that there are many cases in which the kindest thing in the end is to come to grips with the issues involved in limitations and s 52 cases.  It is certainly a recurring problem, and I by no means rule out dealing with it summarily in an appropriate case.  For the reasons, however, that I have mentioned, I do not think this is such a case. 

8. I therefore dismiss this aspect of the application before me today.  I will reserve the question of costs to be viewed in the overall scheme of things.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:            12 April 2001

Counsel for the Applicant:	JS Wheelhouse
Solicitor for the Applicant:	Slater & Gordon
Counsel for the First and Third Respondent:	F Gleeson
Solicitor for the First and Third Respondent:	Clinch Neville Long
Counsel for the Second Respondent:	IM Jackman
Solicitor for the Second Respondent:	Minter Ellison
Counsel for the Fourth Respondent:	BA Connell
Solicitor for the Fourth Respondent:	J Barboutis
Date of Hearing:	28 March 2001
Date of Judgment:	28 March 2001