SAS Financial Services Pty Ltd v Trew
[2006] WASCA 252
•24 NOVEMBER 2006
SAS FINANCIAL SERVICES PTY LTD & ORS -v- TREW & ANOR [2006] WASCA 252
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASCA 252 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:85/2006 | 20 NOVEMBER 2006 | |
| Coram: | WHEELER JA BUSS JA | 24/11/06 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal granted Appeal allowed | ||
| B | |||
| PDF Version |
| Parties: | SAS FINANCIAL SERVICES PTY LTD (ACN 080 228 066) SAS GLOBAL LIMITED (ACN 088 999 857) PHILIP ANTHONY MEAGHER JEFFEREY JOHN TREW JOAN MAUREEN TREW |
Catchwords: | Practice and procedure Failure to plead material facts in relation to alleged loss and damage Failure to plead actual knowledge in relation to alleged accessories involved in alleged contraventions of s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) Whether leave to appeal should be granted Turns on own facts |
Legislation: | Australian Securities and Investments Commission Act 2001 (Cth), s 12BAB, s 12DA, s 12DB, s 12GB, s 12GD, s 12GF, s 12GM Rules of the Supreme Court 1971 (WA), O 20 r 19(1) |
Case References: | Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 Cassidy v NRMA Health Pty Ltd (2002) ATPR 41-891 Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585 Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1 Quinlivan v Australian Competition and Consumer Commission (2004) ATPR 42-010 Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 The State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40 Wilson v Metaxas [1989] WAR 285 Yorke v Lucas (1985) 158 CLR 661 Atkinson v Fitzwalter [1987] 1 WLR 201 Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (in liq) (2006) ATPR 42103 Australian Competition and Consumer Commission v Michigan Group Pty Ltd [2002] FCA 1439 Banque Commerciale S.A., en Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 Dare v Pulham (1982) 148 CLR 658 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450 Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40994 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 Fernandez v Glev Pty Ltd [2000] FCA 1859 Fico v O'Leary (2004) ATPR (Digest) 46259 General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 Henville v Walker (2001) 206 CLR 459 Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32 Mako Investments Pty Ltd v Quindo Pty Ltd, unreported; SCt of WA (Staples M); Library No 6838; 28 July 1987 NMFM Property Pty Ltd v Citibank Ltd (2000) 107 FCR 270 Pappas v Soulac Pty Ltd (1983) 50 ALR 231 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd (1993) 41 FCR 229 Rubenstein v Truth & Sportsman Ltd [1960] VR 473 Sharp v Ramage (1995) 12 WAR 325 Su v Direct Flights International Pty Ltd (2000) ATPR 41750 Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 Talbot & Olivier (a firm) v Witcombe (2006) 32 WAR 179 Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1988) 19 FCR 469 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : SAS FINANCIAL SERVICES PTY LTD & ORS -v- TREW & ANOR [2006] WASCA 252 CORAM : WHEELER JA
- BUSS JA
- First Appellant
SAS GLOBAL LIMITED (ACN 088 999 857)
Second Appellant
PHILIP ANTHONY MEAGHER
Third Appellant
AND
JEFFEREY JOHN TREW
First Respondent
JOAN MAUREEN TREW
Second Respondent
(Page 2)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
File No : CIV 1740 of 2005
Catchwords:
Practice and procedure - Failure to plead material facts in relation to alleged loss and damage - Failure to plead actual knowledge in relation to alleged accessories involved in alleged contraventions of s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) - Whether leave to appeal should be granted - Turns on own facts
Legislation:
Australian Securities and Investments Commission Act 2001 (Cth), s 12BAB, s 12DA, s 12DB, s 12GB, s 12GD, s 12GF, s 12GM
Rules of the Supreme Court 1971 (WA), O 20 r 19(1)
Result:
Leave to appeal granted
Appeal allowed
Category: B
(Page 3)
Representation:
Counsel:
First Appellant : Mr P G McGowan
Second Appellant : Mr P G McGowan
Third Appellant : Mr P G McGowan
First Respondent : Mr J C Curthoys
Second Respondent : Mr J C Curthoys
Solicitors:
First Appellant : Mendelawitz Morton
Second Appellant : Mendelawitz Morton
Third Appellant : Mendelawitz Morton
First Respondent : Staffa Lawyers
Second Respondent : Staffa Lawyers
Case(s) referred to in judgment(s):
Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215
Cassidy v NRMA Health Pty Ltd (2002) ATPR 41-891
Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585
Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1
Quinlivan v Australian Competition and Consumer Commission (2004) ATPR 42-010
Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236
The State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40
Wilson v Metaxas [1989] WAR 285
Yorke v Lucas (1985) 158 CLR 661
Case(s) also cited:
Atkinson v Fitzwalter [1987] 1 WLR 201
Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (in liq) (2006) ATPR 42103
Australian Competition and Consumer Commission v Michigan Group Pty Ltd [2002] FCA 1439
(Page 4)
Banque Commerciale S.A., en Liquidation v Akhil Holdings Limited (1990) 169 CLR 279
Brown v Jam Factory Pty Ltd (1981) 53 FLR 340
Dare v Pulham (1982) 148 CLR 658
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32
Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 4 FCR 450
Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40994
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241
Fernandez v Glev Pty Ltd [2000] FCA 1859
Fico v O'Leary (2004) ATPR (Digest) 46259
General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164
Henville v Walker (2001) 206 CLR 459
Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32
Mako Investments Pty Ltd v Quindo Pty Ltd, unreported; SCt of WA (Staples M); Library No 6838; 28 July 1987
NMFM Property Pty Ltd v Citibank Ltd (2000) 107 FCR 270
Pappas v Soulac Pty Ltd (1983) 50 ALR 231
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd (1993) 41 FCR 229
Rubenstein v Truth & Sportsman Ltd [1960] VR 473
Sharp v Ramage (1995) 12 WAR 325
Su v Direct Flights International Pty Ltd (2000) ATPR 41750
Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177
Talbot & Olivier (a firm) v Witcombe (2006) 32 WAR 179
Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1988) 19 FCR 469
(Page 5)
1 WHEELER JA: I have had the advantage of reading in draft the reasons for decision of Buss JA. I agree with those reasons and have nothing to add.
2 BUSS JA: This is an application for leave to appeal from an order made by Master Sanderson on 3 July 2006 whereby, relevantly, he ordered that the respondents have leave to file a statement of claim in terms of a minute of substituted statement of claim dated 2 May 2006. The minute was the eighth attempt by the respondents to produce an acceptable pleading.
3 The respondents allege that at all material times the appellants were engaged in the provision of "financial services", within the meaning of s 12BAB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act"). The respondents also allege, relevantly and in essence, that:
(a) the respondents made investments in reliance on certain advice given, and representations made, by or on behalf of the appellants;
(b) the relevant advice was given, and the relevant representations were made, in breach of various contractual and tortious duties owed by one or more of the appellants to the respondents;
(c) the relevant representations were made in trade or commerce, in relation to financial services, and were misleading or deceptive or likely to mislead or deceive, in contravention of s 12DA(1) of the ASIC Act;
(d) the first and second appellants are liable as principals for the conduct which contravened s 12DA(1);
(e) the third appellant, alternatively, the first and third appellants, are liable as accessories in that they were involved in the second appellant's alleged contraventions of s 12DA(1); and
(f) by reason of the breaches of the various contractual and tortious duties, and the breaches of s 12DA(1), the respondents have suffered loss and damage.
(Page 6)
4 The appellants, in their submissions before the learned Master and also in their written submissions to this Court, made numerous complaints in relation to the minute. The learned Master acknowledged the force of many of those complaints, but was satisfied, on balance, that the minute was acceptable.
5 The ground of appeal is this:
"The Master made an error of law in granting the [respondents] leave to plead in the terms of the Minute dated 2 May 2006, because the Minute:
(a) fails to disclose a reasonable cause of action, within the meaning of Order 20 Rule 19(1)(a) of the Rules of the Supreme Court ('RSC'); and
(b) is prejudicial, embarrassing and likely to delay the fair trial of the action, within the meaning of Order 20 Rule 19(1)(c) of the RSC."
6 The learned Master's order was interlocutory and leave to appeal is therefore required. In general, an applicant for leave must demonstrate that the relevant decision was wrong or at least attended with sufficient doubt to justify the grant of leave, and that substantial injustice would occur if the decision were left unreversed. See Wilson v Metaxas [1989] WAR 285 at 294. It must be emphasised, however, that these are not rigid or exhaustive requirements, and leave may be granted if, in all the circumstances, it is in the interests of justice to grant leave. See The State of Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40 at 56 - 57.
7 In my opinion, there are two categories of pleas in the respondents' minute which are significantly defective. They comprise, first, pars 102, 103 and 104 in relation to loss and damage, and, secondly, pars 39, 40, 42, 43, 50, 51, 53, 54, 60, 61, 65, 66, 68, 69, 73, 74, 76, 77, 82, 83, 85, 86, 90, 91, 96, 97, 99 and 100 in relation to accessorial liability for contravention of s 12DA(1) of the ASIC Act.
8 Paragraphs 102, 103 and 104 merely plead that "by reason of" the breaches alleged in specified paragraphs of the minute, the respondents have suffered loss and damage.
9 The paragraphs relating to accessorial liability merely plead that the relevant appellant was "a person involved in" the conduct in question.
(Page 7)
10 As to the first category of pleas, pars 102, 103 and 104 of the minute do not plead any material facts as to:
(a) the nature of the loss and damage which the respondents have allegedly suffered; or
(b) the causal relationship between the alleged breaches on the one hand and the alleged loss and damage on the other.
- See Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222 - 223. There are some allegations of loss in pars 32 - 35 of the minute, but there is no correlation between those paragraphs and pars 102, 103 and 104, and, in any event, pars 32 - 35 are, in themselves, inadequate.
11 As to the second category of pleas, the respondents do not allege:
(a) in relation to those breaches which involve representations of "existing fact", that at the material time the appellants who are said to be liable as accessories had actual knowledge that the representations were made and that they were misleading or deceptive or likely to mislead or deceive; or
(b) in relation to those breaches which involve representations as to "future matters", that at the material time the appellants who are said to be liable as accessories had actual knowledge that:
(i) the representations were made; and
(ii) the representations were misleading or deceptive or likely to mislead or deceive; alternatively, the principal contravenor did not have reasonable grounds for making them.
- See Yorke v Lucas (1985) 158 CLR 661 at 669 - 670; Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at 281 - 283 [156] - [160]; Quinlivan v Australian Competition and Consumer Commission (2004) ATPR 42-010 at 48,844 [15].
12 In Cassidy v NRMA Health Pty Ltd (2002) ATPR 41-891, Jacobson J summarised, at 45,242 [71] - [73], the statutory scheme for
(Page 8)
- accessorial liability in the ASIC Act and the Trade Practices Act 1974 (Cth), as follows:
"It seems to me that the [ASIC] Act and the TPA contain a statutory scheme which, in subdivisions D and G of the [ASIC] Act, and, in particular ss 12DA, 12DB, 12GB, 12GD, 12GF and 12GM, distinguish between principal liability and accessorial liability. The same scheme is to be found in Part V and Part V1 of the TPA and, in particular, ss 52, 53, 75B, 79, 80, 82 and 87 of the TPA.
As part of this statutory scheme, s 12DA of the [ASIC] Act and s 52 of the TPA, if contravened, may result in remedies irrespective of the principal's state of mind. By contrast, accessorial liability under s 12GD of the [ASIC] Act and under ss 75B and 80 of the TPA is imposed only upon those who are knowingly concerned in the contravention of the Act.
It has been well established since the decision of the High Court in Yorke v Lucas (1985) 158 CLR 661 at 667 - 669 that accessorial liability under s 75B requires knowledge of the falsity of a representation and intentional participation in a contravention of the provisions of s 52 of the TPA."
The judgment of Jacobson J was affirmed on appeal: Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585. Also, the observations of his Honour, which I have just cited, were approved by a Full Court of the Federal Court in Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1, per Stone J at 24 - 25 [66], with whom Moore and Mansfield JJ relevantly agreed. In Medical Benefits Fund, Stone J said, at 25 [67], that the similarity between the provisions concerning accessorial liability in the Trade Practices Act and the ASIC Act is such that "authorities dealing with the former are clearly applicable to the latter".
13 Section 12DA(1) and other relevant provisions of the ASIC Act were amended, with effect from 11 March 2002, by No 123 of 2001. Some of the conduct which the respondents allege contravened s 12DA(1) occurred before 11 March 2002, and the balance of the impugned conduct is said to have occurred after that date. The amendments made by No 123 of 2001 do not appear to be material to the outcome of this application.
14 The decision of the learned Master was, with respect, wrong in relation to the two categories of pleas that I have identified. Those pleas
(Page 9)
- do not, when read with other relevant pleas in the minute, disclose a reasonable cause of action. They may also be characterised as embarrassing. If the pleas in question are not disallowed and required to be re-pleaded, the fair trial of the action is likely to be delayed. I do not, however, consider that the other deficiencies in the minute, of which the appellants complain, are likely to delay the proceedings.
15 Leave to appeal should be granted and, for the reasons I have given, the appeal should be allowed. Although the respondents have made numerous attempts to produce an acceptable pleading, the stage has not (yet) been reached where leave to re-plead should be refused, and the action dismissed.
16 I would make orders as follows:
1. the appellants have leave to appeal;
2. the appeal be allowed;
3. pars 1 and 2 of the orders made by the learned Master on 3 July 2006 be set aside;
4. the respondents have leave to file and serve a new minute of substituted statement of claim within 21 days of the date of these orders; and
5. the action be listed before the learned Master for directions within 14 days after the respondents have filed and served a new minute of substituted statement of claim.
- Counsel should be heard in relation to the precise forms of the orders, and also as to costs.
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