| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : BUNBURY CITATION : SHAL NOMINEES PTY LTD -v- PALMER & ORS [2002] WADC 72 CORAM : REGISTRAR KINGSLEY HEARD : 14 DECEMBER 2001 DELIVERED : 16 APRIL 2002 FILE NO/S : CIV 40 of 2001 BETWEEN : SHAL NOMINEES PTY LTD (ACN 008 862 851) Plaintiff
AND
STEPHEN PALMER
First Defendant
KIRI INVESTMENTS PTY LTD (ACN 055 649 020)
Second Defendant
GREENVALE ENTERPRISES PTY LTD (ACN 054 505 510)
Third Defendant
Catchwords: Practice - Application to strike out statement of claim - Turns on own facts
Legislation: Fair Trading Act 1987
Trade Practices Act
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Result: Statement of claim struck out Representation:
Counsel:
Plaintiff : Mrs R Park
First Defendant : Mr R Lonnie
Second Defendant : Mr R Lonnie
Third Defendant : Mr R Lonnie
Solicitors:
Plaintiff : Edward John Myers
First Defendant : Slee Anderson & Pidgeon
Second Defendant : Slee Anderson & Pidgeon
Third Defendant : Slee Anderson & Pidgeon
Case(s) referred to in judgment(s):
Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556
Case(s) also cited:
Argy v Blunt & Lane Cove Real Estate Pty Ltd (1990) 94 ALR 719
Brown v Jam Factory Pty Ltd (1981) 35 ALR 79
Dow Corning Australia Pty Ltd v Girys [2001] WASCA 361
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225
Morton v Black (1988) 83 ALR 182
Parker v Barnett (1890) 16 VLR 214
San Sebastian Pty Ltd v Minister Administering Environmental Planning Act (1986) 162 CLR 340
Shardlow v Cotterell (1881) 20 Ch D 90
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1 REGISTRAR KINGSLEY: The defendants have brought an application seeking an order that the whole of the plaintiff's statement of claim be struck out. Alternatively the defendants seek that certain paragraphs of the statement of claim be struck out on the basis they:
2 The cause of action revolves around the sale of a vineyard to the plaintiff. Prior to executing the sale agreement the plaintiff and the defendants had entered into a Deed of Lease dated 9 June 1999. The Deed provided that the third defendant would carry out certain vineyard establishment works. The establishment works are specified in par 8 of the statement of claim. 3 At par 13 of the statement of claim the plaintiffs plead that in early May 1999, and again in early June 1999, Palmer, the first defendant, made certain representations about the capacity of the dam on the land. At par 13.2 of the statement of claim the plaintiffs allege Palmer represented the capacity of the dam was 50,000 cubic metres. Further the plaintiffs plead Palmer represented that only Merlot variety vines had been planted on blocks A1 and A2 of the property. 4 The plaintiffs plead the defendants knew or ought to have know the plaintiffs would rely on the representations and having relied on the representations executed the 9 June 1999 Deed. At par 17 the plaintiffs plead the capacity of the dam as being 15,517 cubic metres, and that blocks A1 and A2 were planted with rogue variety of vines. 5 Thus the plaintiffs plead the representations were false (par 18) or alternatively were negligent (par 19) and there was false, misleading and deceptive conduct contrary to the Trade Practices Act and Fair Trading Act (par 20), all of which has caused loss and damage, particularised in par 21. 6 At par 22 and par 23 of the statement of claim the plaintiffs seek to establish a collateral contract, the breach of which has been causative of the loss and damage as particularised in par 21. 7 The principles to be applied in applications to strike out a statement of claim are clear. Every pleading must contain a summary of the material facts on which the party relies for their claim or defence. Material facts only must be pleaded, not evidence nor subordinate facts.
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Material facts are those facts which a plaintiff must prove in order to establish a cause of action. A cause of action is a fact, or combination of facts, which give rise to the right to sue.
False pre-contractual representations 8 The defendants counsel argues that the representations made prior to the parties entering into the Deed of 9 June pleaded in par 13, and the pleading of the entry into the Deed and consequent loss do not constitute a cause known to the law. 9 The plaintiff's response refers to the Fair Trading Act as providing a statutory remedy for misrepresentation constituted by misleading and deceptive conduct. This response, in my opinion misses the point of the defendants objection. The issue is whether there are material facts sufficient to ground an action for false pre-contractual representation. The particular of the representations pleaded in par 18 is headed "Particulars of Falsity, Misleading and Deceptiveness". In my opinion the words "Misleading and Deceptiveness" add nothing. 10 The pleading in par 13, and following, relating to the representation do not found a cause at law. The contract has been affirmed by the plaintiff. The statements purportedly made by Palmer were, in my opinion, promissory: they relate to a fact and description that the dam was of a particular capacity. 11 The contract having been affirmed the plaintiff’s rights lie in the contract only. The pleas in so far as they relate to the plea of false pre contractual representations are struck out as disclosing no cause of action.
Deceptive and misleading conduct 12 The plea of misleading and deceptive conduct in par 20 presumably seeks to draw in the Trade Practices Act and the Fair Trading Act. There is no plea that the second and third defendants were carrying on any trade or commerce. The plaintiff counsel's response is that the second and third defendants are corporations and that the sale of a farm on which primary production is carried on may be a trade and commerce. That being the case there is no need to plead more. 13 In my opinion the fact that the second and third defendants are corporations engaged in trade and commerce is a material fact to found a cause of action under the Trade Practices Act and the Fair Trading Act
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and must pleaded. Accordingly, the pleas in so far as they relate to the plea of misleading and deceptive conduct are struck out as disclosing no cause of action. 14 The defendant's counsel also contends that the particulars of damage under this plea are on a contractual basis and thus not relevant to an action for misleading and deceptive conduct. Whilst the tortuous measure of damages is, prima facie, the correct measure, it is open for a court to apply the contractual measure.
Negligence 15 The defendants' counsel contends that the claim in negligence is based on pure economic loss and there is no plea that the parties were in any special relationship or proximity. 16 The issue of special relationship was considered by Barwick CJ in Mutual Life & Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 556. At p 571 Barwick CJ comments that to establish a special relationship the circumstances must be such to have caused the speaker, or caused a reasonable person in the position of the speaker, to realise he is being trusted by the recipient to give information which the recipient believes the speaker to possess. 17 The pleading adequately establishes the relationship of the parties such that it is open, in my opinion, for a Judge to draw a conclusion that the parties were in a special relationship. Accordingly I see no merit in an attack on pleading on this ground.
Particulars 18 The defendants' counsel submits that the particulars of damage are confusing. Paragraph 17.2 pleads that 612 vines of Shiraz and 1868 Cabernet Franc (the rogue variety) were planted on blocks A1 and A2. 19 Paragraph 21, under the heading "Details of Loss and Damage" categorises four vine varieties and then goes on to list three categories of original rogue vines at purchase, rogue vines planted by the third defendant after purchase, and rogue vines total. 20 In my opinion the particulars referred to in par 21 are not supported by the pleading in par 17.2, nor any pleading. There is no basis in any cause for the particulars referred to in par 21 and is therefore struck out.
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21 Paragraph 21 also rolls up the various causes into one paragraph and then particularises the loss and damage as a whole. There is no identification which cause is productive of which loss. In that regard par 21 also is embarrassing.
Collateral contract 22 Paragraph 22 and par 23 seek to set up a collateral contract. Paragraph 22 refers to the statement by Palmer that the land contains a dam of 50,000 cubic metres and par 23 refers to the planting of Chardonnay vines in block D7, and blocks A1 and A2 being planted with Merlot variety vines. In both paragraphs the plaintiff pleads that in consideration of the statements made the plaintiff entered into the 9 June Deed. 23 Paragraph 24 then goes on to plead the breach of the agreement referred to in par 22. Paragraph 25 refers to the breach in par 23 and says the second and third defendants planted 4974 rogue varieties of vine. The reference to the planting of 4974 rogue varieties of vine springs from nowhere. There is no basis for the plea in par 25 arising from the collateral contract. That being the case there is no apparent cause of action based on the plea in par 23 and the breach pleaded in par 25.
Breach of contract 24 Paragraph 31 of the statement of claim pleads that the third defendant would carry out vineyard establishment work in a good and workmanlike manner in accordance with a term of the Deed as pleaded in par 7.5 of the statement of claim. 25 Paragraph 32 then pleads a breach of the term in that the third defendant planted 4974 vines of a rogue variety. 26 There is again no connexion between the vineyard establishment work and the planting of rogue varieties. That pleading has no basis in any material fact and therefore raises no cause of action against the defendants.
Conclusion 27 The defendants have made out a case to show that a majority of paragraphs of the statement of claim disclose no cause of action in the way they have been pleaded. In addition there are paragraphs which, in
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the manner they are pleaded, are embarrassing to the defendants. As the plaintiff has pleaded the action in such a way that there is an interweaving of such material facts as there are, in my opinion the best course is to strike the statement of claim and allow the plaintiff to bring in a fresh statement of claim. 28 I give leave to the plaintiff to bring a fresh Minute of Proposed Amended Statement of Claim within 21 days. The application is adjourned to the next sitting of the Bunbury Chambers to hear argument as to whether the Minute ought be allowed in. 29 As for costs the defendants have been substantially successful and therefore ought have the costs on the application including costs reserved.
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