| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : SKILFUL HOLDINGS PTY LTD -v- RAPINESE & ANOR [2005] WADC 52 CORAM : DEPUTY REGISTRAR HARMAN HEARD : 14 FEBRUARY 2005 DELIVERED : 23 MARCH 2005 FILE NO/S : CIV 1025 of 2002 BETWEEN : SKILFUL HOLDINGS PTY LTD (ACN 056 594 051) Plaintiff
AND
NICOLA RAPINESE
First Defendant
SHIRLEY RAPINESE
Second Defendant
VAN DER MEER & ASSOCIATES PTY LTD (ACN 009 351 400)
Third Party
Catchwords: Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application of third party to strike out defendants' statement of claim in the third party proceedings
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Legislation:
Nil
Result: Application successful in relation to claims for breach of contract, breach of duty of care, contribution and indemnity Representation:
Counsel:
Plaintiff : No appearance
First Defendant : Mr T H Offer
Second Defendant : Mr T H Offer
Third Party : Mr J D Finlay
Solicitors:
Plaintiff : Andrew Lynn & Associates
First Defendant : Clayton Utz
Second Defendant : Clayton Utz
Third Party : JD Finlay & Co
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Burke v LFOT Pty Ltd (2002) 209 CLR 282
Chan Cuong Su t/as Ausviet Travel v Direct Flights International Pty Ltd & Ors [1998] 1286 FCA
Commercial Developments Pty Ltd v Mercantile Mutual Insurance (Workers Compensation) Ltd (1991) 5 WAR 208
Dare v Pulham (1982) 148 CLR 658
Jones v Moylan (2000) 23 WAR 65
McKellar v Container Terminal Management Services Ltd [1999] FCA 1101
Turquand v Fearon (1879) 48 LJQB 703
Wynne v Tempest [1897] 1 Ch 110
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1 DEPUTY REGISTRAR HARMAN: At the trial of the action the defendants' statement of claim in the third party proceedings had stood for 9 months. Upon handing up a Minute of Proposed Substituted Third Party Statement of Claim the defendants were given leave to file a substituted statement of claim and the third party was ordered to file any application to strike it out. That application is before me for determination.
2 Although the pleading contemplated by the trial judge was in the form of a substituted pleading, as I understand the position of the parties they accept that the document to which the application relates was that filed on 23 December 2004 entitled "Further Minute of Proposed Amended Third Party Statement of Claim". It follows that the third party accepts that the order extends to that minute. 3 In the context that I have outlined the difference between the process of amendment and substitution is significant. In the absence of a grant of leave to apply to strike it out, an allegation that remains constant despite the course of amendment would be immune from attack. That would not necessarily be the result where in the context of substitution an allegation remained constant. As to whether such leave would be granted in this case a significant consideration is that the third party proceedings having reached the point of trial it would be undesirable to countenance disputation relating to the issues put and/or the manner in which they have been articulated. It is appropriate to record that despite the context in which the order was made there is nothing to displace the application of the general proposition that the onus is on the applicant. 4 The plaintiff's claim against the defendant is to recover the costs associated with subdivision works undertaken on their adjoining properties on the basis of contract, enrichment, representation and statutory right. As against the third party the defendants contend that they are entitled to an indemnity or contribution alternatively to damages. 5 The first aspect of the pleading the subject of significant amendment is at par 2 where the defendants express a new claim for damages for breach of contract. The contract is identified at par 7 as the retainer to act on the defendants' behalf in relation to the subdivision of the defendants' land. The effect of the introduction of par 7(a) and (b) is to confine the scope of the pleaded retainer to contract administration and project management. By par 7A, the defendants plead that the third party thereby undertook the obligation to provide advice in relation to contract administration and project management.
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6 On my reading of the pleaded retainer it was for the provision of advice by the third party to the defendants. The only contrary indication is at par 7A(c). It commences with the word "negotiating" (with other parties). In my opinion it is outside the scope of the fundamental allegation of material fact at par 7A, which speaks of the obligation of the third party to provide advice. But for par 7A(c) the balance of the allegations are consistent with that allegation and the use of the link "inter alia". I would suggest that to be consistent with the allegation of material fact, if it is to be retained (c) is appropriately read as "negotiations".
7 As to the balance of the contractual claim, despite the limitations that I have canvassed, in an allegation that has been maintained at par 8(a) the defendants have used the broader expression "in respect of the subdivision". The significance of the amendment expressed at pars 7(a), 7(b) and 7A is to focus upon particular features of the process of subdivision and the third party's involvement in that process. It follows that if par 8(a) is to be maintained, those words should conform to the scope of the amended pleading. 8 At par 8(b) the defendants refer to the third party performing services for the defendants under the retainer. For similar reasons, the defendants having pleaded a retainer pursuant to which specified services would be provided it is appropriate that par 8(b) relates to the particular services and not to any case that may be open under any broader scope by which the retainer may be expressed. 9 The points that I have made in relation to pars 8(a) and (b) do not simply highlight loose language. The conduct of which the defendants complain at par 18 by which they contend that the third party breached the term of the retainer are pleaded at par 11 as having arisen in the context of an introduction of the defendants to the plaintiff as having been "pursuant to the retainer". If the retainer extended beyond giving advice and the defendants seek to bring a claim then the scope of the pleading of the retainer should be extended. For present purposes the process of amendment that has limited the scope of the retainer such that as it is now pleaded it does not support the allegation at par 11. 10 At par 18 the defendants allege breach of the terms of the retainer which expresses the standard to which the services to be provided under the retainer would accord. That standard is expressed at par 8(b) as the performance of services with due care skill and diligence and in accordance with the standard of performance considered acceptable by members of the consulting engineering profession in Australia.
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11 The particulars of breach at par 18(a) are given by reference to particulars of breach of duty expressed at par 17. It refers to the conduct described at pars 11 and 12. Stripped of the allegation that the relevant context in which the conduct was evident arose "pursuant to the retainer", par 11 speaks of the third party's introduction of individuals to the defendants as the representatives of the owners of the adjoining lot. The representation alleged at par 12 is that the plaintiff was a separate and independent entity to the third party. The three particulars of breach articulated at par 18(a) are that the third party acted dishonestly in representing that the plaintiff was a separate and independent entity when that was not the case, that the third party could not act in the interests of the defendant because it was in effect the plaintiff and that a named individual "of the third party" was also a beneficial owner of the plaintiff's lot. In my opinion none of those particulars engage with the term that the third party would perform services for the defendants with due care, skill and diligence and in accordance with the industry standard. Furthermore none of the particulars appear to be supported by any allegation of material fact.
12 I make the last observation in relation to each of the sub-paragraphs to par 18 (b). In my opinion it is appropriate for the defendants to give the third party the opportunity to respond to that material by way of a pleading. I would add that at sub-clause (iv), at the point that reference is made to the failure of the third party to negotiate with the plaintiff, the defendants contend for breach beyond the terms of the retainer. 13 I also make the last observation in relation to sub—par 18(b)(v). It obviously relates to par 7A(e) yet there is nothing in the pleading that would suggest that the third party had the expertise to develop the proposal described at par 7(e) to the point where the retainer pleaded would take effect. Equally I could observe that par 7A is limited by reference to par 7. For the purposes of the claim, the retainer is limited to contract administration and project management. What is described at par 7A(e) is beyond that scope. On yet another analysis there is nothing to suggest that the retainer would embrace what may have been discussed between the parties prior to the retainer. 14 At par 18 (c) the defendants particularise further breach of the term in the event that they are bound by the agreement with the plaintiff. At sub-par 18(c)(i) reference is made to a failure to warn the defendants that that they were or might be incurring liability. I know nothing of the circumstances whereby the defendants would find themselves so bound. In the absence of any pleading I consider that it is appropriate to infer that
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the only circumstances whereby the defendants would be bound is if they signed an agreement. I accept that if the third party knew that the defendants were likely to so commit themselves or if due diligence would have brought them to such an appreciation, obligations to advise in relation to that prospect may arise. There is no useful pleading to that end. 15 Paragraph 18(c)(ii) possibly contains the essence of the claim however the particular of breach of the term that the agreement entered into had a particular adverse consequence is not supported by any allegation of material fact. 16 As to par 18(c)(iii), it suggests the prospect of a failure to advise in a context where the third party was unaware of the defendants' intentions. 17 At this point I have reached the conclusion that further consideration of the application in relation to the contractual claim would be to no useful end and it should be struck. What remains would fail to present a case. 18 The next case of the defendant for consideration is that for breach of duty of care expressed par 2. It has stood for 13 months. Although not the subject of amendment, a concession was made during the course of the submissions along the lines that the breach of duty expressed at par 17 was intended to refer to breach of the third party's contractual obligation. The effect of the concession is that but for the reference at par 2 there is no pleaded case for the claimed breach of duty of care. It seemed to me that the concession carried with it the commitment to that end. Regardless of that consideration, the concession renders the claim for damages for breach of duty of care as being unsupported by any pleading. In my opinion, the context in which the respondent made the concession together with its effect combine to justify consideration being given to an exercise of discretion to strike out the reference to the claim for breach of duty of care regardless of considerations that otherwise would render that case immune from the scope of the application. 19 Otherwise at par 2 the defendants express a claim on the basis of an entitlement to an indemnity or alternatively contribution. The only other reference to those cases is in the prayer for relief. There is no pleading of any material fact that would support either case. 20 As to whether it is appropriate to now deal with those parts of the pleading, the first observation that I would make is that it is conceivable that the failure of the defendants to support the claims may arise from the
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fact that by the process of amendment pars 18 to 32 of the pleading have been deleted. I was informed that the deleted material was difficult to digest and accordingly I have persuaded myself that I would avoid the exercise. It is conceivable that it related to the claimed entitlement to indemnity and contribution. 21 As much as I had no interest in evaluating the material deleted from the pleading, I could have no reason to embark on an evaluation of the circumstances that may have pertained at trial. It may have been the case that the claims were never supported and went to trial without presenting any difficulty for the third party. 22 In my opinion the want of any pleading is a more significant observation to make in relation to a case than what may be characterised as a mere difficulty with the expression of a pleading. On balance I am attracted to the proposition that it is preferable that a party pleads a case that it puts to trial. In my opinion there is good reason to grant leave to strike out the references to those claims. 23 The third party sought to deal with par 6. It refers to the communication of a feasibility study/fee proposal being provided by the third party to the defendants in a letter dated 25 June 1998. It precedes the pleading of the retainer of the third party to provide the particular services that I have described. The only further reference to the letter is in the form of particulars of par 8 by which the defendants seek to imply a term of the retainer that the third party would act honestly and in the interests of the defendants "in respect of the subdivision". 24 The applicant submitted that if the letter was significant then its content should be the subject of allegations of material fact to that effect. I accept that it would be useful to understand whether the letter had any greater significance than that I have portrayed. Paragraph 6 has stood the test of amendment and been in place over a period of some 13 months. It is presently admitted. I apprehend that if the pleading had been put in place by substitution rather than amendment I may have been inclined to require the defendants to put their case in relation to the letter. In the circumstances I am not persuaded that it is appropriate to strike out par 6. 25 As to pars 12 and 15 of the pleading the applicant has raised a contest on points that I consider have some validity. Be that as it may I am not persuaded that it is appropriate to allow for leave to strike out in light of the consideration that the pleading has been taken to trial.
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26 As to par 17, it is the allegation to which the concession to which I have referred applies. Consistent with the concession it should be struck out.
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