State of New South Wales v McCloy Hutcherson Pty Ltd
[1993] FCA 507
•30 JULY 1993
STATE OF NEW SOUTH WALES v. McCLOY HUTCHERSON PTY. LIMITED; D.F. McCLOY
CONSTRUCTIONS PTY. LIMITED; NEVILLE JOSEPH ROMAIN; DEREK JOHN SIDEY and
OTHERS
No. NG458 of 1992
FED No. 507
Number of pages - 20
Trade Practices
(1993) ATPR 41-261
(1993) 116 ALR 363
(1993) 43 FCR 489
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beazley J(1)
CATCHWORDS
Trade Practices - interlocutory application to stay or dismiss proceedings, or strike out parts of statement of claim - arrangement amongst tenderers for successful tenderer to pay fees to unsuccessful tenderers - whether applicant released tenderers as joint tortfeasors - whether rule as to release of joint tortfeasors abolished by the Law Reform (Miscellaneous Provisions) Act - whether release or covenant not to sue - whether causes of action statute barred - whether principle of fraudulent concealment applies to limitation periods under Trade Practices Act - whether conspiracy merges in substantive tort so that no separate claim subsists - extent to which claim for money had and received must be based on recognised principles of law.
The Koursk (1924) P 140
Duck v. Mayeu (1892) 2 QB 511
Bryanston Finance Limited v. de Vries (1975) 1 QB 703
JF and BE Palmer Pty. Limited v. Blowers and Lowe Pty. Limited and Anor. 75 ALR 509
Gardiner v. Moore (1969) 1 QB 55
XL Petroleum (NSW) Pty. Ltd. v. Caltex Oil (Australia) Pty. Ltd. (1985) 155 CLR 448
Brinsmead v. Harrison (1871) LR 7 CP 547
Wardley Australia Ltd. and Anor. v. State of Western Australia (1992) 109 ALR 247
March v. Stramare (E and MH) Pty. Limited (1991) 171 CLR 506
Lee Gleeson Pty. Limited v. Sterling Estates Pty. Limited and Ors. (1991) 23 NSWLR 571
Arcadi and Anor. v. Colonial Mutual Life Assurance Society Limited and Anor. (1984) ATPR 40-743
James and Ors. v. Australia and New Zealand Banking Group Ltd. and Ors. (1986) 64 ALR 347
Hawkins v. Clayton 164 CLR 539
Briess and Ors. v. Woolley and Ors. (1954) AC 333
Hamilton v. Kaljo and Ors. (1989) 17 NSWLR 381
Bahr and Anor. v. Nicolay and Ors. (No. 2) (1988) 164 CLR 604
Latec Investments Limited v. Hotel Terrigal Pty. Limited (in Liq.) (1965) 113 CLR 265
David Securities Pty. Limited v. Commonwealth Bank of Australia (1992) 175 CLR 353
Pavey and Matthews Pty. Limited v. Paul (1987) 162 CLR 221
Trade Practices Commission v. Allied Mills Industries Pty. Limited and Ors. (1980) ATPR 40-178
Ward v. Lewis and Ors. (1955) 1 WLR 9
Crown Proceedings Act (NSW) 1988
Trade Practices Act 1976 ss.45, 45A, 52, 75B, 82
Crimes Act 1900 (NSW) s.178BA
Law Reform (Miscellaneous Provisions) Act, 1946 (NSW), s.5
Limitation Act 1969 (NSW), ss.14, 55
Federal Court Rules O.11, r.2
State of New South Wales v. McCloy Hutcherson Pty. Limited and Ors.
HEARING
SYDNEY, 23 March 1993, 7-8 April 1993
#DATE 30:7:1993
Counsel for the Applicant: B. Donovan QC with G. Mackie
Solicitors for the Applicant: State Crown Solicitors
Counsel for Respondents: J.N. West QC with J. Simpkins
Solicitors for the First to
Fifth Respondents: Paul Hines
Solicitors for the Sixth
Respondent: Colin Biggers and Paisley
Solicitors for the Seventh,
Eighth and Ninth Respondents: Mallesons Stephen Jaques
ORDER
The Court orders that:
1. The Court orders that the notice of motion be dismissed.
2. The applicant be granted leave to amend the statement of claim in respect of its claims for damages, money had and received, breach of Pt.IV of the Trade Practices Act.
3. The parties be granted liberty to apply on seven days' notice.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
BEAZLEY J This is an application by the first to fifth respondents (the respondents) to stay or dismiss part or all of the proceedings commenced by the applicant on 3 July 1992 or to strike out all or part of the statement of claim, on the grounds that the applicant has released them from liability, or that the proceedings are statute barred or disclose no cause of action. Certain particulars are also sought.
The applicant in the proceedings is the State of New South Wales, who has commenced proceedings pursuant to the provisions of the Crown Proceedings Act (NSW) 1988. McCloy Hutcherson is a joint venture company established in early 1987 to bring together the interests, employees and executives of the second respondent D.F. McCloy Constructions Pty. Limited (McCloy) and KBH Constructions Pty. Limited (in liq.). The third and fourth respondents were directors of KBH Constructions and the third and fifth respondents were directors of McCloy Hutcherson. The fifth respondent was also a director of McCloy. The sixth respondent (Hill) was an agent or officer of Citra Constructions Pty. Limited. Citra is not a respondent to the proceedings. The eighth and ninth respondents (Daniels and Hunstead) were agents and officers of White Constructions Pty. Limited, the seventh respondent.
The applicant's claim arises out of a tender let by the New South Wales Department of Public Works (the PWD), to the first respondent, McCloy Hutcherson Pty. Limited (McCloy Hutcherson) in November 1986 for the construction of the Rankin Park Hospital, Newcastle (the Rankin Park Hospital project). The letting of the tender followed a selective tender issued in August 1986 to McCloy Hutcherson, Citra Constructions Limited jointly with Doran Constructions Pty. Limited, Leighton Contractors Pty. Limited, Concrete Constructions (NSW) Pty. Limited, White Constructions Limited and John Holland Constructions Pty. Limited who each submitted tenders on about 2 September 1986.
The applicant's case is that prior to the submission of tenders on about 2 September 1986, an agreement, arrangement or understanding was entered into by, or there was collusion between each of, the tenderers, that the successful tenderer would pay an amount of $2.5 million to the five unsuccessful tenderers at the rate of $500,000 each (the unsuccessful tenderers' fee) and that each tenderer should make provision in the calculation of its tender price for the whole or part of the cost of the unsuccessful tenderers' fee (the unsuccessful tenderers' fee arrangement). The applicant alleged that it was a term of the unsuccessful tenderers' fee arrangement that these matters should not be revealed or disclosed to the PWD. It was alleged that the arrangement was arrived at, at meetings of the tenderers at the premises of the Newcastle Master Builders' Association and the Master Builders' Association of New South Wales on 24 July, 15 August and 29 August 1986.
The applicant's claim, which is for $2.5 million, less the amounts it has recovered from certain of the other tenderers, is based on breach of contract, contravention of ss.45 or 45A of the Trade Practices Act 1976, contravention of s.52 of the Trade Practices Act 1976, conspiracy, money had and received, fraud and deceit. It is convenient at this point to summarise each claim briefly.
Contract Claim
6. It is alleged firstly that there was an agreement between the State and each of the tenderers arising out of the invitation to tender and the submission of the tender (the tender contract). The applicant claims that there were express or implied terms of each tender contract that the tender would be prepared and submitted honestly, bona fide, independently and competitively, that each tender would not, in whole or part, be the result of an agreement, arrangement or understanding between some or all of the tenderers and that the composition of each tender would not comprise amounts or percentages arrived at by discussion and agreement, arrangement or understanding with the other tenderers and that each tender would not result from or be influenced by collusion with the other tenderers.
The second agreement alleged is that between the applicant and McCloy Hutcherson, entered into in November 1986 when the applicant accepted McCloy Hutcherson's tender and entered into a building contract for the project (the building contract). It is alleged that the terms and conditions of the tender contract were terms and conditions of the building contract.
The applicant says that the unsuccessful tenderers' fee arrangement constitutes a breach of each tender contract and the building contract and alleges that McCloy Hutcherson has made payments pursuant to the arrangement between the tenderers, including payments to Citra and White in the amounts of $225,000 and $205,000 respectively.
Fraud Claim
9. This claim is that the respondents severally prepared and submitted tenders fraudulently and dishonestly in that the tenderers concealed, at the time of the tender and subsequently, the fact of the unsuccessful tenderers' fee arrangement and the payment of such fees to the other tenderers. It is alleged that the unsuccessful tenderers provided false invoices to McCloy Hutcherson, which were in fact claims for unsuccessful tenderers' fees, and that claims made by McCloy Hutcherson for progress payments included amounts for such fees. This claim was introduced by the amendment to the statement of claim made on 23 February 1993 and was subsequently amended in the statement of claim filed on 1 April 1993.
Claim pursuant to Part IV of the Trade Practices Act 1974 It is alleged that the unsuccessful tenderers' fee arrangement was made for the purpose or was likely to have the effect of fixing or controlling the price for services proposed to be supplied by the tenderers in competition with each other or is deemed to have had the effect of substantially lessening competition in the market in which the tenderers supplied construction services in contravention of s.45(2) and s.45A(1) of the Trade Practices Act. It is further alleged that the individual respondents were involved in such contravention within the meaning of s.75B and s.82 of the Trade Practices Act and are thereby liable to the applicant.
Claim pursuant to Part V of the Trade Practices Act 1974
11. The applicant alleges that McCloy Hutcherson, McCloy, White and Citra (who it will be remembered is not a party to the proceedings), by making certain representations to it which were not true, severally engaged in conduct in trade or commerce that was misleading and deceptive, or likely to mislead and deceive, in contravention of the provisions of s.52(1) of the Trade Practices Act. The representations alleged are:
(1) That the tender submitted by (each) was a bona fide, honest, independent and competitive tender for the construction of the project at the proper cost.
(1A) hat such tender was a true tender without collusion.
(1B) That the said tender was in accordance with the proper practice within the industry.
(2) That such tender was duly and properly submitted on the basis of and in accordance with the letter of invitation issued by the Applicant.
(3) That the tender price submitted was a price for the execution of and completion of the project.
(4) That there was no amount included in the tender price of an unusual nature, or unrelated to that tenderer's price for the execution and completion of the project, or unacceptable to the Applicant."
It is also alleged that in further contravention of s.52(1), on the date of entering into the building contract, and at all times thereafter up to and including approximately May 1991, McCloy Hutcherson, McCloy, White and Citra concealed from the applicant or failed to disclose the fact of making the unsuccessful tenderers' fee arrangement, and the fact that each tenderer incorporated an additional $2.5 million into its tender which was not related to goods and services proposed to be supplied or performed for the benefit of the applicant in connection with the execution and completion of the project, nor to a legitimate or competitive profit margin. The individual respondents are alleged to have been knowingly concerned in the contraventions of s.52. (ss.75B and 82)
Conspiracy Claim
13. This claim is put in three alternate ways. First, it is alleged that between June and November 1986, the tenderers intentionally conspired and combined amongst themselves to cause injury to the applicant in that each would add to its tender price or make allowance for an amount of $2.5 million and thereby cause the applicant to pay that sum and act to its detriment and that the successful tenderer would then distribute the sum amongst the unsuccessful tenderers. Secondly, the applicant claims that the tenderers conspired to injure it by unlawful means by deception and dishonestly obtaining for themselves and each other money in contravention of s.178BA of the Crimes Act 1900 (NSW), by engaging in conduct in contravention of s.52 of the Trade Practices Act, or by entering into agreements or arrangements with each other in contravention of s. 45(2) of the Trade Practices Act. Thirdly, the applicant says the tenderers conspired to cheat and defraud it by obtaining from it an amount of $2.5 million to be paid to the successful tenderer and for that sum to be distributed amongst the other tenderers.
Claim for money had and received and a claim for equitable relief This claim is also made on three bases: first that McCloy Hutcherson, McCloy and White have had and received the amount of $2.5 million to the use of the applicant; secondly they have had such money and were unjustly enriched by the receipt thereof; and thirdly they have had and received and retained from the applicant those moneys in circumstances where its retention is unconscionable and unconscientious. The third basis upon which this claim is put first arose in the statement of claim filed on 23 February 1993. During the course of the hearing of the notice of motion, the applicant informed the court of a further proposed particularisation of this claim, with which I shall deal later.
Claim in deceit
15. The applicant alleges it was induced to enter into a contract, the price for which was increased by the amount or part of the amount of the unsuccessful tenderers' fees, by representations made by the tenderers which were knowingly false and untrue. The representations alleged are:
"44. ...
(i) that the tenders and each of them severally and independently were bona fide, honest, independent and/or competitive, and
(ii) That each tender was not in whole or part the result of an agreement, arrangement and/or understanding between some or all of the other tenderers, and
(iii) that the composition of the tenders did not comprise amounts or percentages arrived at by discussion and agreement with other tenderers, and
(iv) that the tender did not result from or be influenced by collusion with the other tenders." (sic)
The applicant says it first became aware of these matters in about June 1991, during the course of the Royal Commission into Productivity in the Building Industry in New South Wales. The importance of this is that this claim was first introduced into the statement of claim by the amendment made on 23 February 1993 and the respondents allege the claim is statute barred.
The claim for damages
17. The damages which are alleged to have been suffered in respect of each cause of action are particularised in the following way:
"The amount by which the tender price was inflated being $2.5 million reduced by the amounts recovered by the Applicant from four of the unsuccessful tenderers, or alternatively by the amounts paid by McCloy Hutcherson to Doran Constructions Pty Limited, John Holland Constructions Pty Limited, Leighton Contractors Pty Limited, and Concrete Constructions (NSW) Pty Limited, plus interest."
The Notice of Motion
18. The orders sought in the notice of motion are:
"1. That the proceedings, or alternatively such claims for relief made therein as the Court shall think fit, be stayed or dismissed generally.
2. Alternatively to 1, that the whole, or alternatively such parts as the Court shall think fit, of the Statement of Claim be struck out.
3. That the Applicant within 7 days provide the particulars identified in the letter from the First to Fifth Respondents' solicitors to the Applicant's solicitors dated the 22nd October, 1992 to the extent that those particulars relate to claims for relief not otherwise stayed, dismissed or struck out."
There are three bases upon which the respondents seek to make out their entitlement to orders 1 or 2. First, it is said the applicant has released the other tenderers from liability in respect of the unsuccessful tenderers' fees and that such release operates as a release of McCloy Hutcherson; secondly that the applicant's claim is statute barred; and thirdly that certain of the claims should be struck out as not revealing an action known to law.
The Release
20. The respondents allege that the tenderers, assuming that they acted wrongly, were joint tortfeasors and that its liability to the applicant has been released as a consequence of the applicant having released the other joint tortfeasors. The applicant denies that the tenderers were joint tortfeasors. It further denies that it has given a release to the other tenderers and submits that in any event the rule that a joint tortfeasor is released by the release of another joint tortfeasor has been abolished by the operation of s.5 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW)
The concept of joint liability was well described by Bankes LJ in The Koursk (1924) P 140 at p 151 where his Lordship said that persons are joint tortfeasors:
"... when their separate shares in the commission of the tort are done in furtherance of a common design".
Sargant LJ in the same case said that for persons to be liable as joint tortfeasors there must be a concurrence in the act or acts causing damage, "not merely a coincidence of separate acts which by their conjoined effect cause damage".
Glanville Williams in Joint Torts and Contributory Negligence: A Study of Concurrent Fault, 1951 identifies three categories of joint tortfeasors, the third category of persons engaged in "concerted action" being relevant here. However, it is noted that a person who commits a tort does not become a joint tortfeasor with another, merely because it is known that a similar tort is being committed by that other at the same time. Professor Fleming: Law of Torts (8th Edition) identifies as the critical element of the third category the requirement that the persons concerned:
"must have acted in furtherance of a common design. (The Koursk at p 156, 159-160) Broadly speaking, this means a conspiracy with all participants acting in furtherance of the wrong, though it is probably not necessary that they should realise they are committing a tort. All persons acting in pursuance of a common end, being thus identified with each other, are accordingly responsible for the entire result". (p 255)
In this case, if the applicant's allegations are made out, I consider that the tenderers acted in concert so as to make them joint tortfeasors. The very act of entering into the unsuccessful tenderers' fee arrangement is illustrative of that. The effect of the arrangement as alleged was that each would act in an agreed way, depending upon who was selected as the successful tenderer. Further, as counsel for the applicant concedes, the conspiracy claim is a joint tort, so that on that basis alone, the applicant cannot make good this submission.
The effect of a release of a joint tortfeasor on the liability of other joint tortfeasors was stated by the Court of Appeal in Duck v. Mayeu (1892) 2 QB 511 at p 513 as follows:
"It is, we think, clear law, that a release granted to one joint tortfeasor, or to one joint debtor, operates as a discharge of the other joint tortfeasor, or the other joint debtor, the reason being that the cause of action, which is one and indivisible, having been released, all persons otherwise liable thereto are consequently released".
See also Cutler v. McPhail (1962) 2 QB 292 per Salmon J at 296, Glanville Williams: Joint Torts and Contributory Negligence, 1951, p 44. No particular form of words is necessary to constitute a release. As the authors of Chitty on Contracts: General Principles (26th Edition) state at paragraph 1574:
"... any words which show an evident intention to renounce a claim or discharge the obligation are sufficient. ... a release in general terms is to be construed according to the particular purpose for which it was made. The court will construe a release which is general in its terms in the light of the circumstances existing at the time of its execution, and with reference to its context and recitals, in order to give effect to the intention of the party by whom it was executed".
See also Price v. Barker (1855) 4 E and B 760; Cutler v. McPhail at 297.
However, where a document upon its proper construction reserves a party's rights against other tortfeasors, it operates, not as a release, but as a covenant not to sue. As the Court of Appeal said in Duck v. Mayeu at 514:
"the intention of the parties was to be carried out, and, if it were clear that the right against a joint debtor was intended to be preserved, inasmuch as such right would not be preserved if the document were held to be a release, the proper construction, where this was sought to be done, was that it was a covenant not to sue, and not a release".
An agreement with one joint tortfeasor will not be construed as a release as opposed to a covenant not to sue "unless it is plain that the agreement was intended by the plaintiff to operate also as a release of the other joint tortfeasors from their liability": Bryanston Finance Limited v. de Vries (1975) 1 QB 703 per Diplock LJ at p 732B-C. See also JF and BE Palmer Pty. Limited v. Blowers and Lowe Pty. Limited and Anor. 75 ALR 509. It is not necessary for an agreement to constitute a covenant not to sue rather than a release that there be an express reservation of rights against other joint tortfeasors. Gardiner v. Moore (1969) 1 QB 55, at 94.
The traditional rule expounded in Duck v. Mayeu has been the subject of criticism. In Gardiner v. Moore, Thessiger J was of the view that the rule should be confined to a release by deed or a release by accord and satisfaction, although it was not necessary for him to decide the issue. Glanville Williams disputes the rationale for the rule advanced in Duck v. Mayeu stating:
"Reasons ... for this rule are technical, and even fictitious; according to the earlier cases, the reason is that a release is a "satisfaction in law," according to the later, it is that the cause of action is one and indivisible, so that when it goes for one it goes for all. It is hard to see how the latter view is reconcilable with the proposition that the liability of joint tortfeasors is joint and several, for joint and several liability is generally taken to mean a combination of joint obligation and several obligations incumbent upon each tortfeasor; and a number of separate obligations can hardly be regarded as a single cause of action."
He states however:
"The rule has been too often affirmed to admit of doubt, and nothing short of legislation can get rid of it". Joint Torts and Contributory Negligence at p 44
Counsel for the applicant argued that the rule ought not be extended beyond the traditional categories of debt and tort. It is difficult to see why this should be so, unless the rule is considered to be so anomalous that, as a matter of policy, its scope should not be extended. However, given that it is a rule which is intended to reflect the intention of the parties in reaching a particular agreement, I do not agree that the rule should be so restricted, subject only to the question whether it has, in any event, been abrogated by statute.
Effect of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW)
29. The applicant submits that the rule expounded in Duck v. Mayeu has not survived the enactment of s.5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), which provides:
"5.(1) Where damage is suffered by any person as a result of a tort (whether a crime or not)-
(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage;
(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, brother, sister, half-brother, half-sister, parent or child, of that person, against tort-feasors liable in respect of the damage (whether as joint tort-feasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action;
(c) ... "
The section reproduces s.6(1) of the Law Reform (Married Women and Tortfeasors) Act 1935 (UK), which had already been introduced into England at the time that Professor Williams made his observation that legislation was necessary to abrogate the rule. The legal commentators, on the whole, appear to support the survival of the rule, notwithstanding the enactment of s.5(1). The authors of Trindade and Cane: The Law of Torts in Australia (1985) and Winfield and Jolowicz on Tort (13th Edition) consider the rule remains, the latter referring to Duck v. Mayeu to explain its rationale. However, Professor Fleming in The Law of Torts expresses the view that the rule, having its origins in an assumed corollary of the "one cause of action" theory, may have been implicitly abrogated by s.5, because the section, "by authorising successive actions", may have completely severed the unity of the common law action against all tortfeasors.
In XL Petroleum (NSW) Pty. Ltd. v. Caltex Oil (Australia) Pty. Ltd. (1985) 155 CLR 448 the High Court held that an effect of s.5 was that exemplary damages could be awarded against one only of a number of joint tortfeasors. In holding that the rule to the contrary was abrogated by the section, Gibbs CJ stated at p 459-460:
"The reason for the rule was that there was only one cause of action against the joint tortfeasors, but that is no longer the position - the statute has abolished, "in its entirety" the old common law principle that a person who suffers damage by a joint tort has only one cause of action which merges in the first judgment recovered in respect of it. Surely the statutory provision was not intended to abolish only the doctrine of merger, for it was not primarily directed to the question of merger, and there is no reason for selecting one aspect of the principle rather than another as that which it was intended to affect; the whole principle should be held to have gone. It seems to me impossible now to hold that there is any principle that would prevent a plaintiff from recovering different sums from different joint tortfeasors if he brings separate actions against them, provided that some are liable for exemplary damages and others are not, and the same must be true if the joint tortfeasors are all sued in one action."
Brennan J's judgment was to like effect. His Honour said at p 466:
"The rules prescribed by pars. (a) and (b) of s.5(1) do not diminish the common law right of a plaintiff to sue any or all joint tortfeasors for compensatory damages and, on recovering a judgment, to enforce it against any or all of the tortfeasors against whom the judgment is given. At common law, if the judgment debtor from whom the plaintiff first sought satisfaction of the judgment was impecunious, satisfaction might be sought from other judgment debtors until the whole of the judgment debt was paid. Under the statute, the plaintiff's right to recover a judgment against and to seek satisfaction from any or all joint tortfeasors is enhanced by the statutory right to bring successive actions against each joint tortfeasor. A plaintiff may now recover a separate judgment against each joint tortfeasor and he may seek satisfaction of each judgment recovered from the judgment debtor, subject to s.5(1)(b) which precludes recovery of sums by way of damages in excess of the amount of the damages awarded by the judgment first given. As s.5(1)(a) confers on a plaintiff the right to recover judgments in successive actions against the respective tortfeasors, the unity of the common law cause of action against all joint tortfeasors is severed".
The Chief Justice had earlier referred to the theory that when two or more joint tortfeasors commit a tort there is only one cause of action, as being the foundation of the rule in Brinsmead v. Harrison (1871) LR 7 CP 547), so that a judgment obtained against one joint tortfeasor was a bar to an action against others, even if the judgment remained unsatisfied. His Honour also noted that the same principle was the foundation of the rule that a release of one joint tortfeasor released all: (Duck v. Mayeu). His Honour referred to the fact that the rule in Brinsmead v. Harrison was abolished by the provisions of s.5. Later, his Honour referred to Lord Diplock's reiteration, in Bryanston Finance Limited v. de Vries, of the rule that a release of one joint tortfeasor released the others and commented at p 459:
"It may be thought that this implies that the rule that the victim of a tort committed by joint tortfeasors has only one cause of action still applies, but the question that now falls for decision was not discussed".
In JF and BE Palmer Pty. Limited v. Blowers and Lowe Pty. Limited and Anor. it was held that the rule applied in the case of parties jointly liable for a contravention of s.52 of the Trade Practices Act, 1976, notwithstanding the provisions of s.5(1). Burchett J stated that the rule had been accepted by Gibbs CJ in XL Petroleum (NSW) Pty. Ltd. v. Caltex Oil (Australia) Pty. Ltd. In support of his view, his Honour referred to Trindade and Cane: The Law of Torts in Australia p 640 and Lord Diplock's statement in Bryanston Finance Limited v. de Vries at p 732, that the rule survived the enactment of the equivalent English legislation. It should be noted however that Lord Denning MR in the same case was of the view that the rule should be discarded, stating at p 723: "the right solution nowadays is for any sum paid by the one wrongdoer under the settlement to be taken into account when assessing damages against the other wrongdoer".
I consider that there is much force in the proposition that the rule, that a release of one joint tortfeasor operates in favour of all joint tortfeasors, did not survive the enactment of s.5(1) of the Law Reform (Miscellaneous Provisions) Act 1946. Although Gibbs CJ in XL Petroleum referred uncritically to the comments of Lord Diplock in Bryanston Finance, his Honour's observation was obiter, and the matter was not the subject of detailed consideration. It is illogical that certain aspects of a rule are abrogated by a statute because the statute does away with the foundation upon which the rule is based, while other aspects of the rule remain, however this is the result of holding that the rule as to the release of joint tortfeasors survived the enactment of s.5. Were it necessary to decide the point I would find that the rule as to release has also been abrogated by s.5. However, because of the view which I have reached as to the proper construction of the documents which it was alleged constitute the releases, it is not necessary for me to decide this issue.
The Release documents
36. The applicant has reached agreement with the tenderers, other than McCloy Hutcherson, in respect of unsuccessful tenderers' fees. The agreements which have been reached are not in identical terms and it is thus necessary to deal with each.
Agreement with White Constructions Limited: On 17 October 1991, the Deputy Director, Construction, of the PWD, forwarded a handwritten fax to White Industries Limited. White Industries is not a respondent in the proceedings, White Constructions being sued as the party which submitted a tender. The fax referred to evidence given before the Royal Commission, including "that McCloy Hutcherson paid $205,000 to White Industries". On the same date, a letter was written by the Director, Construction, to White Industries, referring to the evidence before the Royal Commission and requesting that the amounts received be remitted to the Department. The evidence reveals that White Constructions forwarded an invoice dated 5 April 1989 to McCloy Hutcherson in an amount of $180,000 for "consulting services as agreed Rankin Park Hospital Project". In a fax to White Industries, dated 21 October 1991, the PWD again alleged that the evidence before the Royal Commission showed that White Industries received $205,000.
In November, the PWD was advised that the managing director of White Constructions was overseas and would deal with the matter upon his return. On 3 January 1992, the Director, Policy, wrote to White Industries advising that due to the failure to remit the moneys received as unsuccessful tenderers' fees "on the project under reference" proceedings had been commenced under the Trade Practices Act to recover these moneys. That was not correct, although nothing seems to turn upon the erroneous assertion. The 3 January and 25 February letters were each entitled "Rankin Park Hospital, Newcastle: Unsuccessful Tender Fees". On 9 September 1992, the Director, Policy, again wrote a letter to White Industries entitled "Rankin Park Hospital, Newcastle", referring to the letter of 25 February 1992 and to discussions between White Constructions and the PWD. The letter continued:
"Public Works has considered the matters raised and is prepared to accept your offer to pay $205,000 (payable as to $100,000 on acceptance, $35,000 one month thereafter and $70,000 two months thereafter) in full and final settlement of all claims which the Public Works, or anyone on its behalf, may have, or have had, arising out of any past participation by White Industries Limited, White Constructions Limited or any of their representative subsidiaries, all of their Directors, past and present and Warwick Daniels and Michael Hunstead, in the practice of unsuccessful tenderers' fees in relation to any of the allegations made before the Royal Commission in respect of the above project. In addition, Public Works Department confirms that neither it, nor anyone on its behalf is, at the date hereof, aware of any other past participation by any of the aforementioned in relation to any other Public Works projects nor is it, or any one on its behalf, pursuing, or contemplating pursuing, any action apart from action No. G458 to recover moneys paid by way of unsuccessful tender fees. Upon receipt of this letter and the cheque for $100,000 we shall immediately lodge notice of discontinuance in action No. G458 of 1992 against White Constructions Limited, Warwick Daniels and Michael Hunstead. Each party is to bear its own costs." (emphasis added)
The reference to "action No. G458" is a reference to these proceedings. This proposal was accepted by the managing director for and on behalf of White Constructions Limited, White Industries Limited and all of their respective subsidiaries in these terms:
"Without any admission of any allegations, or of matters raised by the Public Works or the Royal Commission, or of any wrongdoing, I agree to the above terms."
Agreement with Concrete Constructions Group Pty. Limited: The settlement is contained in two letters, the first a letter dated 24 February 1992 from Concrete Constructions Group Pty. Limited to the Department and an undated letter in response. In its letter of 24 February 1992, Concrete Constructions Group Pty. Limited acknowledged that there was an agreement amongst the tenderers for the successful tenderer to pay an amount of $500,000 to each of the unsuccessful tenderers in respect of the Rankin Park Hospital Project. It acknowledged receipt of an amount of $140,000 from McCloy Hutcherson but denied that any contra arrangement had been put in place for the balance. It strenuously denied that there was any agreement that the amount to be paid to each unsuccessful tenderer was to be included in the tender figures, or that McCloy Hutcherson had in fact inflated its tender price by an amount to accommodate such payments. Notwithstanding that it denied any liability or obligation to do so, Concrete Constructions Group Pty. Limited paid the amount received from McCloy Hutcherson to the PWD, stating it had little choice if it wanted its business relationship with the PWD to resume. The Director General of the PWD responded to the letter of 24 February and the receipt of the payment in these terms: "I note what you say about the moneys received by your company in relation to Rankin Park. I also note your explanation and accept the sum of $140,000 tendered in full satisfaction of any outstanding dispute relating to this project. ...". This settlement was reached prior to the commencement of proceedings.
Agreement with Leighton Contractors Pty. Limited: On 17 October 1991, the Director, Construction, wrote to Leighton Contractors Pty. Limited (Leighton Contractors) in the same terms as the letter to White Constructions of the same date. On 24 December 1991, the Director, Policy, wrote to Leighton Contractors in respect of another project, inviting the company to pay to the PWD "all 'add-on' moneys agreed by the Tenderer in relation to ..." the project, the subject of the letter. The add-on moneys included, but were not limited to, unsuccessful tenderers' fees. On 3 January 1992, the Director, Policy, again wrote to Leighton Contractors in relation to the Rankin Park project in the same terms as the letter to White Industries of the same date. On 22 January 1992, Leighton Contractors wrote to the Director, Policy, acknowledging receipt of these letters. It disputed the PWD's contention that there had been illegality involved in the receipt of the fees and denied it had admitted that add-on fees and unsuccessful tenderers' fees were included in that company's tender and subsequent contract sums. The Director, Policy, responded, confirming the PWD's legal advice that it had a legitimate cause of action to recover the unsuccessful tenderers' fees and that legal action would continue. It again invited Leighton Contractors to remit the fees in question.
The parties met on 10 February 1992 and on 19 February 1992, Leighton Contractors wrote to the Director General of the PWD, making an offer to resolve the issue in respect of both projects which had been the subject of the foregoing correspondence. The Director General replied on 25 February 1992, asserting that evidence before the Royal Commission revealed "information concerning your company's involvement in the receipt of moneys from the successful tenderer". He made reference to the agreement that each unsuccessful tenderer would receive a fee of $500,000. The letter further alleged that the evidence before the Commission was such that an inference was open that each of the unsuccessful tenderers had been paid the full amount either in cash or some "equivalent negotiated arrangement". It appears that following the letter of 25 February 1992 there were discussions between the parties. On 28 April 1992, the Director, Policy, wrote:
"Public Works has considered the matters raised at the discussion and is prepared to accept your offer to pay $300,000 in full and final settlement of all claims which the Public Works Department of New South Wales, or anyone on its behalf, may have, or have had, arising out of any past participation by Leighton Contractors Pty. Ltd, in the practice of unsuccessful tender fees or special fees, or in relation to any of the allegations made before the Royal Commission."
Instalment terms were specified. Leighton Contractors acknowledged their agreement to the proposal on the same day.
Agreement with John Holland Constructions Pty. Limited On 17 October 1991, 3 January and 25 February 1992, there was correspondence from the PWD to John Holland Constructions Pty. Limited in the same terms as the letters of those dates to the other tenderers (other than Leighton Contractors). On 17 March 1992, the company wrote to the Director General, admitting as a general matter that the company had, in the past, selectively entered into agreements in respect of unsuccessful tenderers' fees. The company alleged that the practice was not illegal and disputed that it was part of such agreements that the tender price would be inflated by the amount of the fees in question. The letter concluded by seeking an opportunity to discuss the matter. A meeting was held on 25 March 1992 at which the company apparently made an offer of settlement. A file note of the meeting indicates that the company had been a contractor on at least one other Public Works project.
On 3 April 1992, the Director, Policy, wrote to the company accepting the company's offer of settlement. The letter is headed "Unsuccessful Tender Fees". Reference was made to the recent discussions in relation to matters raised at the Royal Commission in respect of tendering and continued:
"Public Works has considered the matters raised at the discussion and is prepared to accept your offer to pay $100,000 in full and final settlement of all claims which the Public Works Department of New South Wales, or anyone on its behalf, may have, or have had, arising out of any past participation by any of the companies in the John Holland Group of Companies, in the practice of unsuccessful tender fees or special fees, or in relation to any of the allegations made before the Royal Commission." (emphasis added)
An instalments schedule was proposed. On the same day, the company confirmed its agreement to the proposal set out in this letter.
Agreement with Doran Constructions Pty. Limited: Letters were written by the PWD to Doran Constructions Pty. Limited on 17 October 1991, 3 January 1992 and 25 February 1992 in the same terms as the letters of the same dates referred to earlier. On 17 March 1992, Doran Constructions responded to the letter of 25 February 1992, asserting that it "did not enter into a collusive arrangement with other tenderers to inflate the tender price". It requested an opportunity to discuss matters. On 14 April 1992, the Director, Policy, wrote to the company, referring to the earlier correspondence and the recent discussions. The letter, headed "Re: Rankin Park Hospital - Newcastle" was in these terms:
"Public Works has considered the matters raised at the discussions and is prepared to accept your offer to pay $150,000 in full and final settlement of all claims which the Public Works Department of New South Wales, or anyone on its behalf, may have, or have had, arising out of any past participation by any of the companies in the Doran Group of Companies, in the practice of unsuccessful tender fees or special fees, or in relation to any of the allegations made before the Royal Commission."
There was provision for payment by instalments. Doran Constructions acknowledged its agreement to the letter on the same date.
I am of the opinion that none of these letters on their proper construction constitute a release within the traditional rule in Duck v. Mayeu. In the first place, the word "release" is not used. That of course is far from conclusive, and there is the opposing factor that there is no express reservation not to sue. However, the settlements with Leighton Contractors, John Holland and Doran Constructions were not confined to the Rankin Park Hospital project. They were each in respect of any past participation in the practice of unsuccessful tenderers' fees, or special fees (of which there is no allegation in these proceedings) or any of the allegations made before the Royal Commission. It will also be remembered that in the case of Leighton Contractors, the correspondence was in respect of two projects. The terms of the settlement with each of these three contractors are such that should it turn out that any one of the three contractors had participated in such arrangements on any other PWD project, the settlement extended to that project also. If there was such an arrangement on another project, it may, of course, have involved tenderers other than those involved in the Rankin Park Hospital project. In the case of White Industries and White Constructions, the parties expressly state that they do not know of any participation in any such arrangement other than the Rankin Park Hospital project, and the settlement is restricted to that project. Agreement was also reached in respect of discontinuance of these proceedings against White Constructions. The settlement with Concrete Constructions, which was reached prior to the commencement of proceedings, was in respect of Rankin Park Hospital only.
In each case, except Leighton Contractors, settlement was reached either with companies in addition to the tenderer, or in the case of Concrete Constructions Pty. Limited, with another company, Concrete Constructions Group Pty. Limited. Presumably, in that case that agreement was reached as agent for Concrete Constructions (NSW) Pty. Limited, the tenderer, but may have also been reached on behalf of other companies in the Group. There is simply insufficient evidence to determine this. In the case of Doran Constructions, it was a joint tenderer with Citra Constructions, and there is no evidence of any agreement reached with the latter. To construe each settlement as a release in such circumstances would involve a construction that the applicant was releasing unknown joint tortfeasors in respect of unknown and unquantified wrongful acts. In my opinion, these matters tend to a construction of the settlements as covenants not to sue to the extent specified in each settlement.
The next factor, which in my opinion makes the construction of these documents as covenants not to sue compelling, if not conclusive, is that the PWD was pursuing individual settlements with each unsuccessful tenderer and only for the amount that each tenderer received. This manner of acting, in my opinion, is only consistent with an intention not to sue the individual tenderer if agreement was reached between it and the PWD. It is not consistent with an intention to release all other joint wrongdoers. Accordingly, I find that the settlement documents constitute covenants not to sue, and not releases.
Statute of Limitations
48. The respondents contend that the claims for damages under s.82(1) for breaches of Parts IV and V of the Trade Practices Act and the claim in deceit are statute barred, the former because the proceedings were commenced more than three years after the causes of action accrued and the latter because the claim was first introduced into the pleading by way of an amendment made 23 February 1993, more than six years after that cause of action accrued.
In Wardley Australia Ltd. and Anor. v. State of Western Australia (1992) 109 ALR 247 the High Court confirmed that in an action for damages under s.82(1) of the Trade Practices Act, the limitation period prescribed in s.82(2) does not commence to run until loss or damage is sustained. In determining when such loss or damage occurs the High Court held at p 253:
"... Section 82(1) should be understood as taking up the common law practical or common sense concept of causation recently discussed by this court in March v. Stramare (E and MH) Pty. Limited
(1991) 171 CLR 506, except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act."
The joint judgment recognised that a cause of action under s.82(1) may accrue upon entry into the agreement where the contract measure of damages is appropriate. (See also Elna Australia Pty. Limited v. International Computers (Australia) Pty. Limited (1987) 75 ALR 271 at p 279).
In March v. Stramare, the High Court rejected the "but for" test as the sole determinative of causation in negligence. Rather, as Deane J said at p 522
"For the purposes of the law of negligence, the question of causation arises in the context of the attribution of fault or responsibility whether an identified negligent act or omission of the defendant was so connected with the plaintiff's loss or injury that, as a matter of ordinary common sense and experience, it should be regarded as a cause of it".
The respondents say that in respect of the claims under Parts IV and V of the Trade Practices Act, the applicant's loss was sustained at the time the building contract was entered into, on 2 November 1986, as the applicant alleged that its loss was the inflation of the contract price by $2.5 million. Alternatively, the respondents submit that even if the limitation period does not commence to run until some later point of time, it can be no later than the time the damage occurred, which in this case was the commencement of payments under the building contract, the first payment being made on 28 November 1986. This submission was based upon the pleading of the damages claim which alleges a loss of $2.5 million on the basis that the entire tender price was inflated. Reliance is placed upon the decision of Brownie J in Lee Gleeson Pty. Limited v. Sterling Estates Pty. Limited and Ors. (1991) 23 NSWLR 571 where his Honour referred to the distinction between the occurrence of damage and the assessment of the extent of damage.
The applicant's first submission was that this issue should not be dealt with on an interlocutory application: (see Wardley). In any event, the applicant disputes that time began to run either at the time the building contract was entered into, as at that stage damage was prospective only, or when the first payment was made, as under s.82(1) a party can only recover for actual loss or damage, and it is not known when a payment was first made containing any portion of the $2.5 million.
I consider it is arguable that the cause of action commenced to run when the building contract was entered into. However, it is not certain that is so. The contract was not in evidence, and I do not know its terms. It may be that conditions were placed upon the making of progress payments, e.g. by requiring the presentation of a quantity surveyor's report, or production of invoices or the like. If that was the case, it is arguable that the cause of action accrued at some point of time other than the time of entry into the contract or the time of the first payment. Further, as the applicant submits, it cannot be ascertained, on the evidence at the present time, when the first payment containing any component of the $2.5 million was made, so that it cannot be said when damage was sustained. However, the pleadings as they presently stand do not permit this argument to be made and counsel for the applicant seeks leave to further amend the statement of claim, so as reflect this submission. The respondents resist any further attempts at amendment, the applicant having already amended four times. However, this is a case where the information as to how the amount of the $2.5 million was included in the contract price, if at all, is within the knowledge of McCloy Hutcherson and probably solely within its knowledge. The proceedings are still at an early stage in that they have not gone beyond the pleadings. Other preparatory steps for hearing such as discovery and the filing of evidence have not yet been undertaken. In these circumstances I consider that it is appropriate to allow the amendment subject to appropriate orders as to costs.
The applicant also submits that the principle of fraudulent concealment arguably applies to claims under s.82(1), so that even if the cause of action would otherwise have accrued at the time of entry into the contract, or the time of first payment thereunder, the limitation period did not commence to run until at least 1991 when evidence was given before the Royal Commission. The applicant acknowledges that there is authority that the principle of fraudulent concealment does not apply to limitation periods under the Trade Practices Act: (Fenech and Anor. v. Sterling (1983) ATPR 40-413; Keen Mar Corporation Pty. Limited v. Labrador Park Shopping Centre Pty. Limited and Anor. (1988) ATPR 40-853). However, it submits that there is an indication in two decisions of Toohey J that the principle may apply: Arcadi and Anor. v. Colonial Mutual Life Assurance Society Limited and Anor. (1984) ATPR 40-743 at 45,455 and James and Ors. v. Australia and New Zealand Banking Group Ltd. and Ors. (1986) 64 ALR 347 at 395.
In Arcadi, Toohey J refused to strike out a cause of action under s.82, in circumstances where the applicants alleged that the cause of action did not arise until they became aware that representations which had been made to them were false. The most that can be said about this decision is that on an interlocutory application his Honour did not consider that the applicants' case was so untenable that it should be struck out. It does not provide any clear support for the proposition which the applicant seeks to advance. In James, Toohey J, in dealing with the provisions of s.87 prior to the enactment of s.87(1CA) which provides for a three year limitation period for a claim under that section, took the limitation period in s.82(2) into account in determining whether a remedy under s.87 should be granted outside a period of three years, and said that the court might exercise its discretion in favour of an applicant in the case of fraudulent concealment. That decision said nothing however about the availability of such an argument where the statute provides for a clear three year limitation period.
The applicant next argued that this case falls within the equitable principle that the court will not allow reliance on a limitation period where there has been concealment of a cause of action until after the limitation period has expired, and relied upon the judgment of Deane J in Hawkins v. Clayton 164 CLR 539, at p 590. Alternatively, the applicant submits that the same construction should be given to s.82 as his Honour gave to s.14 of the Limitation Act 1969 (NSW) namely that
"... it could not have been the legislative intent that the effect of provisions such as s.14(1) of the Limitation Act should be that a cause of action for a wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings".
It cannot be definitively said that the Trade Practices Act claims are statute barred. There are factual issues to be determined which may bear upon the time the causes of action accrued. Further, it is not appropriate to determine on an interlocutory application the matters relied upon by the applicant arising out of the judgment of Deane J in Hawkins and Clayton, particularly where there are factual issues to be determined which may impinge upon the principles to be applied.
As to the claim in deceit, it is submitted by the respondents that the cause of action accrues when the representation is acted upon: Briess and Ors. v. Woolley and Ors. (1954) AC 333 at p 353. The applicant says that even if this is correct, the claim is protected by the provisions of s.55 of the Limitation Act 1969 (NSW). That section provides:
"55.(1) Subject to subsection (3) where:
(a) there is a cause of action based on fraud or deceit; or
(b) a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed, the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by him or by a person claiming through him against a person answerable for the fraud deceit or concealment.
(2) Subsection (1) has effect whether the limitation period for the cause of action would, but for this section, expire before or after the date mentioned in that subsection".
In Hamilton v. Kaljo and Ors. (1989) 17 NSWLR 381 McLelland J held that to obtain the benefit of s.55 it was necessary to prove some form of dishonesty or moral turpitude in the sense understood in relation to ss.42 and 43 of the Real Property Act, 1900. In Bahr and Anor. v. Nicolay and Ors. (No. 2) (1988) 164 CLR 604 at p 613-615, Mason CJ and Dawson J instanced as an example the circumstances in Latec Investments Limited v. Hotel Terrigal Pty. Limited (in Liq.) (1965) 113 CLR 265 at p 273-274, where a collusive and colourable sale by a mortgage company to its subsidiary was a clear case of fraud, the court there referring to the "dishonest course" which had been engaged in by the mortgagee and its subsidiary. In my opinion, in circumstances where it was alleged that it was part of the arrangement between the tenderers that the unsuccessful tenderers' fees not be disclosed to the PWD, the applicant has established sufficient grounds to argue that the provisions of s.55 of the Limitation Act 1969 (NSW) operate in its favour.
Accordingly, I reject the application that these claims be struck out on the grounds that they are statute barred.
Strike-out application further particulars
61. Claim pursuant to Part V of the Trade Practices Act 1974: The respondents had originally submitted that there was no duty to disclose any information in the present case such that no representation by silence could arise. (Winterton Constructions Pty. Limited v. Hambros Australia Limited (1993) ATPR 41-205). However, counsel conceded that the amendment contained in paragraph 33(1B) made on 23 February 1993, "that the ... tender was in accordance with the proper practice within the industry", was such as to reduce this challenge to a claim for the provision of further particulars. I agree and shall make an appropriate order in this regard. The secondary liability claim against the individual respondents in respect of the s.52 contraventions should be dealt with similarly.
Money had and received - unjust enrichment claim: The respondents argued that a count for money had and received cannot apply to a valid and subsisting contract and in the case here, for such a claim to succeed, it must be based in mistake which was not alleged, although it is acknowledged that the common money count includes claims in respect of money paid for a consideration which has wholly failed, or where money has been paid under duress or has been affected by illegality. (see Bullen and Leake and Jacob's Precedents of Pleadings (12th Edition); David Securities Pty. Limited v. Commonwealth Bank of Australia (1992) 175 CLR 353.
Counsel for the applicant explained that the common money count claim was based upon mistake, illegality in that there was a breach of the criminal law and a contravention of s.52 of the Trade Practices Act, and a total failure of consideration in respect of the $2.5 million component of the tender price. He further submits that the applicant is not limited to these traditional categories and referred to the recent developments in the High Court in relation to unjust enrichment, unconscionable or unconscientious conduct and estoppel, the boundaries of which, he said, remained uncertain. Reference was made to the High Court's decision in David Securities where the High Court stressed that unjust enrichment was not a definitive legal principle, and that recoverability could not be determined by reference to "some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality". (p 379). Reliance was also placed upon the High Court's earlier decision in Pavey and Matthews Pty. Limited v. Paul (1987) 162 CLR 221 where Deane J at p 256-257, had referred to unjust enrichment as the conceptual basis by which the law explains in a variety of distinct categories of case "an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case". (See also Australia and New Zealand Banking Group Limited v. Westpac Banking Corporation (1988) 164 CLR 662 at p 671-673).
Without conceding any necessity to amend, counsel produced a further document entitled "Rough draft of proposed common money count". Sub-paragraphs (a) to (d) of this document contain historical particulars. The applicant says that with one exception the balance of the paragraphs fall within the traditional categories of mistake, failure of consideration, illegality, unconscientious conduct, acting in breach of an implied term, illegal purpose and an illegal or excessive charge, of which the concept of unjust enrichment forms the basis. Sub-paragraph (i) however is pleaded in very broad terms, alleging that by retaining money, "the respondent was and is thereby unjustly enriched". Counsel says that this sub-paragraph is intended to set up the broader basis which the applicant says it ought to be permitted to argue, having regard to the continuing developments in this area of the law.
The respondents also oppose this application to amend. However, I again consider it appropriate that there be an amendment with an appropriate order for costs. I do not consider that I should bind the applicant to the precise formulation of the proposed common money count contained in the "Rough draft". That document was prepared under pressure in the course of the proceedings, and all parties and the court may well benefit from the applicant having time to consider the precise form of pleading which is proposed.
Claim in conspiracy: The respondents claim that the conspiracy alleged by the applicant is no more than the making of the agreement itself, and that in such circumstances the conspiracy merges in the substantive claim.
In Trade Practices Commission v. Allied Mills Industries Pty. Limited and Ors. (1980) ATPR 40-178 Sheppard J held at 42,460:
"... that it is not appropriate to charge, as an alternative to charging arrangements or understandings made unlawful by sec.45, conspiracies which are themselves such arrangements or understandings".
His Honour considered that the pleadings in that case made it clear that the conspiracies on the one hand and the arrangements and understandings on the other were identical. His Honour stated "that is plainly and demonstrably a situation which the Act does not permit or provide for". His Honour also referred to the decision of Denning LJ in Ward v. Lewis and Ors. (1955) 1 WLR 9 where his Lordship said at p 11:
"... when a tort has been committed by two or more persons an allegation of a prior conspiracy to commit the tort adds nothing. The prior agreement merges in the tort. A party is not allowed to gain an added advantage by charging conspiracy when the agreement has become merged in the tort. It is sometimes sought, by charging conspiracy, to get an added advantage, for instance in proceedings for discovery, or by getting in evidence which would not be admissible in a straight action in tort, or to overcome substantive rules of law, such as here, the rules about republication of slanders. When the court sees attempts of that kind being made, it will discourage them by striking out the allegation of conspiracy, on the simple ground that the conspiracy adds nothing when the tort has in fact been committed". (emphasis added)
His Honour thereby struck out the claims alleging conspiracy. See also Rubenstein v. Truth and Sportsman Ltd. (1960) VR 473.
In my opinion, in both Allied Mills and Ward v. Lewis the court was expounding a rule of practice, but if I am wrong in so categorising them, then I must respectfully disagree. I do not consider there is any such substantive rule. Assuming that the rule is one of practice, it is not one which is appropriate to apply in the circumstances here, where the applicant is faced with a limitations defence to the substantive claim. If that defence succeeds, the only claim which the applicant will have in this regard will be the conspiracy claim. Further, I do not see anything in the Trade Practices Act which prohibits the pleading of a conspiracy charge. Accordingly, I do not consider this claim should be struck out.
Claim pursuant to Part IV of the Trade Practices Act - Contravention of ss.45 and 45A: Section 45A(1) requires that an offending arrangement have the purpose or likely effect of fixing, controlling or maintaining "the price for, or ... allowance ... in relation to, goods or services ... to be supplied ... by the parties to the ... arrangement ... or by any of them ... in competition with each other".
The respondents say that the applicant has failed to allege a purpose or effect in contravention of O.11, r.2 of the Federal Court Rules. This is correct, and I agree with the assertion that this should be pleaded and I propose to give leave to amend to enable this to be corrected.
They also submit that the statement of claim does not allege that the extent of the provision to be made was part of the unsuccessful tenderers' fee arrangement, and further that if each tenderer retained a discretion as to what portion of the unsuccessful tenderers' fee was to be included in the price, then neither the price nor the allowance could be fixed, controlled or maintained so that there could be no breach of s.45A. Counsel referred to the applicant's further handwritten amendments to the statement of claim whereby the applicant seeks to allege that the sum of $2.5 million or part thereof was included in the building contract. The respondents submit that the applicant cannot have it both ways, that is, it cannot allege that the amount included in the building contract was $2.5 million or part thereof in all claims except the s.45 and s.45A claim, in which it alleges the whole amount was included in the price. I do not consider that there is substance in this complaint. It seems to me that a party is entitled to allege a claim in the alternative.
Claim in deceit/fraud
72. The respondents submit that the claim in deceit and fraud cannot be made out by mere silence, there being no duty to disclose the matters alleged in the pleadings. (see Winfield and Jolowicz on Tort p 262); Trindade and Cane: The Law of Torts p 144). In its particulars in respect of these claims, the applicant alleges that the representations were partly express and partly implied. It gave particulars of the basis of the implication including:
"(d) The proper practice of procedure traditionally and openly relied on in the tender process from the stage of invitation through to the awarding of the contract;
(e) The failure of the tenderers to disclose to the Public Works Department and/or the active concealment of the tenderers of all matters relating to the fees the subject of the claim; ...
(g) The implications arising from the proper practice and usage of the trade;
(h) The implications arising from the natural meaning of the word, "tender", used in the invitation to tender and in the tender offer."
Having regard to these particulars, and in circumstances where no evidence has been called, I do not know how it is possible to say at such an early stage in the proceedings that the claim for deceit and fraud cannot be made out.
Contract/Implied terms
74. The respondents allege that the terms which are pleaded as implied terms, would never be implied by a court, being neither necessary for business efficacy nor obvious, stating "it would be extraordinary if any Court in our jurisprudence was prepared to imply terms of the kind alleged". The particulars which have been provided as to the circumstances giving rise to the implications include the proper practice of the trade, the invitation to tender, the proper tender process, the nature of the tender, the making of the tender, the documents which came into existence concerning the tender and the invitation to compete by way of tender offer, and the proper practice of the procedure traditionally and openly relied on in the tender process from the stage of invitation through to the awarding of the contract. Having regard to these particulars, it is not possible to say that the terms alleged could not, as a matter of law, be implied.
Therefore, I dismiss the notice of motion. I give the applicant leave to amend the statement of claim in respect of its claim for damages, moneys had and received, the claim for breach of Part IV of the Trade Practices Act.
Having regard to the continuing amendments which have been made to the statement of claim and which remain to be made, I do not propose to make any specific order as to the provision of particulars, but give the parties liberty to apply. I shall hear the parties as to costs.
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