Tableau Holdings Pty Ltd v Joyce
[1999] WASCA 49
•14 JUNE 1999
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE FULL COURT (WA)
CITATION: TABLEAU HOLDINGS PTY LTD -v- JOYCE & ORS [1999] WASCA 49
CORAM: OWEN J
STEYTLER J
PARKER J
HEARD: 9 APRIL 1999
DELIVERED : 14 JUNE 1999
FILE NO/S: FUL 201 of 1998
BETWEEN: TABLEAU HOLDINGS PTY LTD (ACN 009 273 901)
Appellant (Third Defendant)
AND
NEIL KEVIN JOYCE
KEITH GRAEME LINGARD
NICK CHRISTOU
First Respondents (Plaintiffs)STAN MICHAEL PALASSIS
Second Respondent (First Defendant)CHATTOCK HOLDINGS PTY LTD (ACN 009 357 895)
Third Respondent (Second Defendant)
Catchwords:
Equity - Fiduciary obligations - Second category of Barnes v Addy [1874] LR 9 Ch App 244 - What comprises assistance
Appeal - Practice and procedure - Application to strike out statement of claim as not disclosing cause of action against appellant - Plea of knowing assistance in breach of fiduciary obligations by "passive role" found by Master to be arguable - Whether cause of action disclosed
Legislation:
Nil
Result:
Appeal allowed
Representation:
Counsel:
Appellant (Third Defendant) : Mr G R Donaldson
First Respondents (Plaintiffs) : Mr D M Stone
Second Respondent (First Defendant) : No appearance
Third Respondent (Second Defendant) : No appearance
Solicitors:
Appellant (Third Defendant) : Clayton Utz
First Respondents (Plaintiffs) : Williams & Hughes
Second Respondent (First Defendant) : No appearance
Third Respondent (Second Defendant) : No appearance
Case(s) referred to in judgment(s):
Barnes v Addy [1874] LR 9 Ch App 244
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Karak Rubber Co Ltd v Burden (No 2) [1972] 1 All ER 1210
Rowlandson v National Westminster Bank Ltd [1978] 1 WLR 798
Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 All ER 1073
United States Surgical Corporation v Hospital Products International [1983] 2 NSWLR 157
Wickstead v Browne (1992) 30 NSWLR 1
Wilson v Metaxas [1989] WAR 285
Case(s) also cited:
Australian Securities Commission v A S Nominees Ltd (1995) 62 FLR 504
Bond Corporation Holdings Limited v Western Australia (1991) 5 WAR 40
Farrow Finance Company Ltd (In liq) v Farrow Properties Pty Ltd (In liq) (1997) 26 ACSR 544
Fyler v Fyler (1841) 3 Beav 550
Giorgianni v R (1985) 156 CLR 473
Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1
Hospitals Contribution Fund of Australia Ltd v Hunt (1982) 44 ALR 365
Koorootang Nominees Pty Ltd v Australia & New Zealand Banking Group Limited [1998] 3 VR 16
MacQuarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133
Unilan Holdings Pty Ltd v Kerin (1992) 107 ALR 709
OWEN J: I have read the reasons to be published by Steytler J. I agree with those reasons and have nothing further to add.
STEYTLER J: This is an application for leave to appeal against a decision of a Master of this Court made on an application brought by the appellant to strike out allegations made against it in a statement of claim prepared on behalf of the first respondents.
In their statement of claim the first respondents plead that they practised in partnership as accountants under the name "Stanton Partners" ("the partnership") together with Mr Stan Palassis. Under the terms of the partnership agreement Mr Palassis was until February 1997 the partnership's managing partner. As such, the first respondents plead, he was responsible for the administration of the partnership and controlled its bank account and was authorised to and did draw cheques on its bank account without the knowledge of or consultation with the first respondents. The first respondents plead that he owed the fiduciary duties of partner to them.
Mr Palassis was until 28 July 1997 a director and secretary of a company, Chattock Holdings Pty Ltd ("Chattock"). He was also the holder of 33 per cent of the issued shares in the appellant, of which company he was a director and secretary.
The appellant was at all material times until 1995 the holder of one quarter of the issued shares in Chattock and has, since 1995, been the holder of half of the issued shares in that company. Another company, Marjoe Nominees Pty Ltd ("Marjoe"), was at all material times until 1995 the holder of half of the issued shares in Chattock.
The first respondents plead that in or about 1992 Mr Palassis, on behalf of Chattock, proposed to the first respondents that the partnership should take a lease of premises forming part of a building ("the building") at 5 Ord Street, West Perth which were at all material times owned by Chattock. Negotiations for the terms of a lease ensued in the course of which Mr Palassis acted on Chattock's behalf.
Next, the first respondents plead that during discussions which occurred between November 1992 and January and February 1993 Mr Palassis, as agent for Chattock, made oral proposals to them in respect of the rent and outgoings payable under the proposed lease, for the payment to the partnership of management fees in respect of the management of the building and in respect of rights of pre‑emption which
the partnership would have over the shares in Chattock and the building (together referred to as "the Proposals").
In par 10 of the statement of claim the first respondents plead that between November 1992 and January 1993 Mr Palassis delivered to the first respondents a written statement of some of the Proposals ("the written Proposals"). These included a variety of proposals relating to rent for the premises, the term of the lease and the receipt by the partnership of a management fee in respect of the building but are said not to have included further proposals (which had been included in the Proposals) that:
".1the partners would have, and Chattock would procure that the partners had, a right of pre‑emption over the shares in Chattock ['the right of pre‑emption proposal'] ... ;
.2if the total rental received or receivable in respect of the building should exceed the sum of $450,000 plus unrecoverable outgoings per annum ... then the partners would receive 74.27 per cent of the ... [excess] ('the excess rent proposal')."
Next, the first respondents plead that they and Mr Palassis, as partners, orally agreed to the Proposals including the right of pre‑emption proposal and the excess rent proposal and that on 7 February 1993 they entered into occupation of the premises and commenced to pay rent. Consequently, they allege, they and Chattock entered into an agreement for lease which encompassed terms to the effect that Chattock would procure that the partners had a right of pre‑emption over the shares in Chattock and that they would receive rent from the building in terms of the excess rent proposal.
Paragraph 15 of the statement of claim alleges that it was Mr Palassis' duty as managing partner to ensure that a lease was prepared and executed containing the terms of the agreement for lease but that in breach of fiduciary obligations owed by him, and to the knowledge of Chattock, he did not do so. The first respondents plead also that Chattock "did not submit a lease to the Partners which contained the Proposals nor request [that] they execute such a lease".
In par 16 of their statement of claim the first respondents plead that in or about 1995 Marjoe proposed to sell its shares in Chattock and did so by selling one half thereof to Klemap Pty Ltd ("Klemap"), another shareholder of Chattock, and the other half to the appellant. Marjoe did not offer to the partners a first right of refusal in respect of those shares and nor did Mr Palassis disclose to the first respondents that the shares had been sold to Klemap and the appellant.
The first respondents go on to plead that in or about 1995 or 1996 the total rentals received or receivable in respect of the building exceeded $450,000 "plus unrecoverable outgoings per annum" but that Chattock has not paid 74.27 per cent of the excess to the partners or any sum. Consequently, the first respondents allege, Mr Palassis has breached the fiduciary duties owed by him to the partners and Chattock has breached the terms of the agreement for lease with the consequence that Chattock and the appellant have profited and the partners have suffered loss and damage in the form of the loss of the opportunity to acquire half of the issued shares in Chattock and also loss of the agreed proportion of the excess rent payable under the terms of the excess rent proposal.
It is important to note, at this point, that in para 4 of the statement of claim the first respondents plead that at all material times (being times which encompassed each of the claims made against the appellant) Mr Palassis acted with the authority of, and at the request of and in the interests of the appellant (which "as a shareholder in Chattock stood to gain and did gain from all sums paid by the partnership or by tenants of the ... [building] to Chattock") and Chattock.
The first respondents make eight other claims in their statement of claim.
The first of these, being the second of the claims made, is pleaded in par 19 and par 20 of the statement of claim. In par 19 of the statement of claim, the first respondents plead that from 7 February 1993 Mr Palassis, as managing partner for and on behalf of the partners but without the knowledge and consent of the first respondents, made payments of rent, variable outgoings and rates and taxes from the partnership bank account to Chattock and that these payments materially exceeded the rental, variable outgoings and rates and taxes payable to Chattock in accordance with the written Proposals and/or the agreement of lease. In so doing, they allege, Mr Palassis breached the fiduciary obligations owed by him to the partners. In par 20 those payments are said to have been made by Mr Palassis with the knowledge of and for the benefit of Chattock and the appellant. The first respondents allege that in all respects the knowledge of Mr Palassis was that of Chattock and the appellant. Consequently, they plead, each of Mr Palassis, Chattock and the appellant must account to them for the sums paid by Mr Palassis to Chattock which exceeded the sums due in accordance with the written Proposals and/or the agreement for lease and/or each of those parties must compensate the first respondents for the loss of those sums.
The third claim relates to gratuitous payments said to have been made out of the partnership's bank account to Chattock totalling $69,587.56 "with the knowledge of and for the benefit of Chattock and ... [the appellant]". The knowledge of Mr Palassis is said in all respects to have been that of Chattock and the appellant and the first respondents seek orders that Mr Palassis, Chattock and the appellant must account to them for those sums or compensate them for the loss thereof and/or account to them for the profits made by them, if any, from the use of such sums.
The fourth claim is brought by way of alternative to the third and is to the effect that the sum of $69,587.56 was a loan by the partners to Chattock which was repayable on demand but which has not been repaid.
There is next a claim to the effect that Mr Palassis has, in breach of duties owed by him to the partnership, between February 1993 and December 1996, without the knowledge and consent of the first respondents, paid the total sum of $167,031.29 from the partners' bank account to discharge liabilities owed by Chattock to third parties. These payments, too, are said to have been made with the knowledge of and for the benefit of Chattock and the appellant and, once again, the knowledge of Mr Palassis is said to have been that of Chattock and the appellant. Relief is sought against each of those parties.
The sixth claim is brought by way of alternative to the fifth and is to the effect that the sum of $167,031.29 was loaned by the partners to Chattock and that this sum was repayable on demand but has not been paid.
The seventh claim relates to dealings which Mr Palassis had with a law firm, Wojtowicz Kelly. The first respondents plead that in or about August and September 1993 Mr Palassis, on behalf of Chattock, entered into negotiations with Wojtowicz Kelly to lease part of the building to it. They say that during the course of those negotiations Mr Palassis proposed to Wojtowicz Kelly, as an incentive for that firm to enter into a lease with Chattock, that if Wojtowicz Kelly should lease that part of the building from Chattock the partners would enter into a retainer agreement with Wojtowicz Kelly by the terms of which the partnership would pay to that firm fees in respect of legal services to be rendered to the partnership and its clients. They go on to plead that in or about October 1993 Wojtowicz Kelly took a lease of that part of the building from Chattock and that on or about 12 October 1993, Mr Palassis, without the knowledge and consent of the first respondents, made a written retainer agreement with Wojtowicz Kelly for and on behalf of the partnership under which there was payable a fixed annual fee of $60,000 in return for which that firm was to provide legal services to the partnership and its clients of up to 15 hours per week. However, they plead, there were many types of legal work to which the retainer agreement did not apply and the fee was payable regardless of whether or not Wojtowicz Kelly provided 15 hours of legal services per week. Consequently, they allege, the agreement was uncommercial and disadvantageous to the partnership.
They go on to plead that between March 1994 and December 1996 Mr Palassis, on behalf of the partners and under the terms of the retainer agreement, but without the fully informed consent of the first respondents, caused payments totalling $138,252.25 to be made to the firm of Wojtowicz Kelly from the partnership bank account. They allege that from December 1996 to April 1997 the partnership, without knowledge of all of the facts, continued payments and the total value of legal services rendered by the firm to the partnership or to its clients between March 1994 and April 1997 was no more than $44,908. They say that in making such payments Mr Palassis breached the fiduciary duties owed by him to the partners and that the retainer agreement and payments were made by Mr Palassis with the knowledge of and for the benefit of Chattock and the appellant. They plead that in all respects his knowledge was that of Chattock and the appellant and relief is sought against each of Mr Palassis, Chattock and the appellant.
The eighth claim relates to the alleged payment, by Mr Palassis on behalf of the partnership but without the knowledge and consent of the first respondents, of sums totalling $45,713.92 to Dayman Holdings Pty Ltd, a tenant of part of the building. They plead that Mr Palassis has failed to account to them for these payments "or their purpose". The payments are said to have been made by Mr Palassis with the knowledge of and for the benefit of Chattock and the appellant and to have been made in breach of the duties owed by Mr Palassis to the partners. Once again, relief is sought against each of Mr Palassis, Chattock and the appellant.
The last of the claims is one to the effect that, between June 1993 and February 1995, Mr Palassis, on behalf of the partners but without the knowledge and consent of the first respondents, paid sums totalling $60,831 from the partnership bank account to Geoff Slade Holdings Pty Ltd which was also a tenant of part of the building. Mr Palassis is said not to have accounted to the first respondents for these payments "or their purpose". The payments are said, once again, to have been made by Mr Palassis with the knowledge of and for the benefit of Chattock and the appellant and to have been made in breach of fiduciary obligations owed by Mr Palassis to the partners. Relief is sought against each of Mr Palassis, Chattock and the appellant.
In the proceedings before the learned Master the appellant contended that the statement of claim disclosed no cause of action against it. Its counsel submitted that a plea that it owned shares in Chattock and that at all material times Mr Palassis acted with its authority and at its request in circumstances in which, as a shareholder in Chattock, it stood to gain from and did gain from sums paid by the partnership or by tenants of the building to Chattock is not enough to disclose a cause of action against it. In his reasons for decision the learned Master said that the response of the first respondents was to argue that the appellant was in the position of a third party who had aided a fiduciary in breach of his fiduciary duty and was therefore liable to account and that this had sufficiently been pleaded. He said that the contention was made that these facts were sufficient to bring the appellant into the class of cases "covered by the second category of Barnes v Addy [1874] LR 9 Ch App 244". He said that the requirement of this so‑called second category is summarised in Jacobs' Law of Trusts in Australia 6th ed at 338 as being:
"(1)the existence of a fiduciary duty (as trustee or otherwise);
(2)a dishonest and fraudulent design by the fiduciary;
(3)the assistance by the third party in that design; and
(4)with knowledge."
The learned Master went on to record the submission by counsel for the first respondents that the pleading encompassed all four elements of the second category to which he referred and that what had been pleaded amounted to a dishonest, if not fraudulent, design by Mr Palassis as a person owing fiduciary duties to the first respondents. He said that it was also contended that the pleading showed that assistance was given by the appellant, as a third party, in that design. The learned Master went on to express some doubts in that respect pointing out that there was no pleading to the effect that any active role was taken by the appellant in the fraudulent design. However, he said, it was at least arguable that "it took all three defendants (Mr Palassis, Chattock and the appellant) to ensure that the alleged dishonest design was carried into effect". The learned Master went on to say:
"The learned authors of Jacobs' Law of Trusts in Australia (supra) at 339 put the position as follows:
'What constitutes "assistance"? The third party certainly affords assistance if, without steps being taken by him, the breach of duty by the fiduciary could not have occurred or been implemented.'
While I have some doubts on this question, I do not see it as being a matter which should properly be determined on a strike‑out application. It is at least arguable that the passive role of ... [the appellant] is sufficient to allow it to be said that the company assisted in the breach of fiduciary duty."
The learned Master next said that, so far as the issue of knowledge is concerned, he was satisfied that the pleading in par 4 of the statement of claim (to the effect that Mr Palassis acted with the authority of and at the request of, and in the interests of the appellant) was sufficient to ground a claim that the appellant knew of the dishonest conduct.
Counsel for the appellant had contended that further and better particulars which had been provided in respect of that paragraph cast doubt upon the plea of express authority. The appellant had sought particulars of the facts and circumstances relied upon in alleging that Mr Palassis had acted with its authority or at its request and in its interest. The response was to the following effect:
"Mr Palassis was a director of, secretary and holder of 33½% of the issued shares in ... [the appellant]. He and his wife together held one half of the issued shares. Mr Palassis' brother, Kevin, was the other director of, and he and his wife the other shareholders in ... [the appellant]. Mr Palassis' authority is to be inferred. Further particulars may be provided after discovery and interrogatories."
The learned Master held that the appellant's argument with respect to the inadequacy of these particulars was not open to it. He said that if an application was to be made to strike out par 4 on the basis that inadequate particulars made it untenable then such an application should have been brought to be heard in conjunction with the application to strike out the cause of action against the appellant. However he went on to say that even if reference is had to the particulars it seemed to him that the argument that Mr Palassis had express authority was open to the first respondents. The inference referred to in the particulars was, in his view, neither unreasonable nor untenable.
The appellant raises four grounds of appeal, as follows:
"(1)The Learned Master erred in law in allowing the pleading to stand as disclosing a reasonable cause of action against the third defendant [the appellant], by holding that on the pleading all four elements of the second category of Barnes v Addy [1874] LR 9 Ch App 244 existed.
(2)The Learned Master should have found that there is no pleading to the effect that the Third Defendant assisted in the alleged breach of fiduciary duty or alternatively the Learned Master should have held that the statement of claim does not sufficiently plead the facts constituting the requisite element of assistance by a third party.
(3)Further, the Learned Master erred in law in holding that a passive role by a third party is sufficient to allow it to be said that the Third Defendant assisted in any breach of a fiduciary duty.
(4)Further, the Learned Master erred in law in not fully considering the question of what constitutes the element of assistance on a strike‑out application, as a determination of the question is necessary to determine whether the pleading fails to disclose a reasonable cause of action against the Third Defendant."
It was common cause between the parties at the hearing of the appeal (as it seemingly was below) that the pleading against the appellant rested on the second limb of the so‑called rule in Barnes v Addy [1874] LR 9 Ch App 244. In that case Lord Selborne said (at 251):
"Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees ... ."
That dictum has since been considered in many cases and it has become customary to speak of the first and second limbs of Lord Selborne's propositions, the first being that which refers to agents who receive and become chargeable with trust property and the second referring to agents who assist with knowledge in a dishonest and fraudulent design on the part of trustees (see Jacobs' Law of Trusts in Australia, supra, par 1334). It has also become clear, since such cases as Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 397 and United States Surgical Corporation v Hospital Products International [1983] 2 NSWLR 157 (reversed on other grounds in (1984) 156 CLR 41), that the reference to trustees in the second limb extends to involvement of a third party in misconduct by a fiduciary or fiduciaries who was or were not trustees. Moreover, as is pointed out in Jacobs, supra, ibid, later cases have also extended the role of the stranger beyond that of agents in a strict sense (see Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 All ER 1073; Karak Rubber Co Ltd v Burden (No 2) [1972] 1 All ER 1210 and Rowlandson v National Westminster Bank Ltd [1978] 1 WLR 798).
Jacobs, supra, ibid, also points out that it is wrong to treat the two limbs of Barnes v Addy as an exhaustive statement of the circumstances in which a third party may become accountable as a trustee. The learned authors of that book say (ibid) that:
"[Lord Selborne] ... also treated as clearly liable as trustees third persons 'actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust' and, while the second limb may be seen as a species of this genus, there was well established authority at the time Lord Selborne spoke whereunder third parties who had not received trust property as agents and who had not as agents participated in a fraudulent design within the second limb and who had not acted as trustees de son tort, were held accountable as trustees. This has now been affirmed by the Privy Council in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378. Among the pre‑Barnes v Addy authorities to which their Lordships refer is Eaves v Hickson [1861] 30 Beav 136; 54 ER 840, in which the trustees had been guilty of breach of trust by paying over trust funds to the illegitimate children of one Knibb upon the faith of a marriage certificate which Knibb had produced to them knowing it was forged; Knibb was made responsible, with the trustees, for the moneys lost. The fraudulent design was that of Knibb, not the trustees he duped, and on neither limb of Barns v Addy would he have been liable. ... "
It seems to me that it is difficult, in the light of these authorities, to contend, in an application of this kind, that no arguable cause of action is disclosed by the pleading against the appellant under the second limb of Barnes v Addy if par 4 of the statement of claim is viewed in isolation and if it consequently be assumed that the various acts pleaded to have been done by Mr Palassis were done at the appellant's request and with its authority.
However I do not consider that par 4 can be viewed in isolation. It must be read together with the particulars upon which it relies. Those particulars make it plain that the first respondents' case is that the fact of a request and/or authority is to be inferred. All of the facts said to ground the inference are set out. If they are insufficient even arguably to give rise to the inference contended for then the plea of a request and/or the giving of authority must fail.
In my opinion they are insufficient. It seems to me to be manifestly untenable to contend that the inference contended for should be drawn merely because Mr Palassis was a director of the appellant, its secretary and the holder of 33.1/2 per cent of its issued shares and because he and his wife together held half of its issued shares at a time when his brother Kevin was the other director of, and he and his wife were the other shareholders in, the appellant. All that may be inferred from those particulars is that Mr Palassis and the three other persons referred to controlled the appellant. That cannot, without more, lead to an inference that Mr Palassis was authorised or requested by the appellant to engage in each of the alleged breaches of fiduciary duty. There is, in my opinion, simply no basis for the contention that, because the appellant stood to benefit, indirectly, from breaches of fiduciary duty by Mr Palassis (Chattock having allegedly benefited directly from them), one or more of Mr Kevin Palassis, his wife and Mr Stan Palassis' wife (each of whom may have known nothing of any of those breaches) should be taken to have procured, or joined with Mr Stan Palassis in procuring, the appellant to authorise or request Mr Stan Palassis to engage in conduct of the kind alleged.
As to the claim in relation to the shares in Chattock counsel for the appellant submitted that there could, in that respect, be no action against the appellant for knowing assistance. He submitted that the claim against Chattock was one for breach of the terms of the Agreement for the Lease and that there can be no action of being knowingly concerned in or knowingly assisting a breach of contract. That is plainly correct. However, the claim against the appellant in this respect appears to be based upon its lending of knowing assistance to Mr Palassis in assisting him to breach the fiduciary duties owed by him to the partnership in respect of his involvement in the matters giving rise to this claim.
That, in turn, raises the question whether what has been pleaded in par 4 is sufficient to raise a case of knowing assistance in this respect. It seems to me that it is not. If the plea of request or authority fails, as it seems to me it must, the first respondents are left only with their plea that Mr Palassis acted in the interests of the appellant. That, in itself, cannot support a claim of knowing assistance on its part. I should mention, in this respect, that in Wickstead v Browne (1992) 30 NSWLR 1 it was doubted by Handley and Cripps JJA (with whom Kirby P was relevantly in agreement) that allegations that one person permitted or allowed breaches of duty by another disclosed any basis for liability on Barnes v Addy principles. In the case of this pleading there is, if the plea of request by, or authority of, the appellant fails, not even any basis for suggesting that permission was given by the appellant to Mr Palassis to engage in the conduct relied upon, even if its permission be assumed to be relevant to that conduct. Moreover there is, in my opinion, simply no basis for contending that mere inactivity on the part of the appellant, at least in the circumstances of this case as pleaded, could amount to the lending of assistance for the purposes of the second limb of Barnes v Addy. Inactivity of that kind could not sensibly be said in any way to have facilitated the breaches of duty by Mr Palassis (see Jacobs, supra, par 1339). It follows that the pleading, as particularised, discloses no arguable cause of action against the appellant in respect of this claim.
Each of the other claims made against the appellant likewise relies upon what has been pleaded in par 4 of the statement of claim, as particularised, for the allegation of knowing assistance. It follows, for similar reasons, that no arguable cause of action has been pleaded against
the appellant in respect of those claims also. That being so the entirety of the claim against it should, in my opinion, be struck out.
Once that conclusion is reached it follows, in my opinion, that a substantial injustice would be done by leaving the decision unreversed (as to which see Wilson v Metaxas [1989] WAR 285 at 294). It is enough, in that respect, that the appellant would, if the decision below is not reversed, be required to defend proceedings in which the first respondents have, as the pleading stands, no prospect of success against it at the trial.
I would consequently grant leave to appeal and uphold the appeal by setting aside the orders made by the learned Master and ordering, in lieu thereof, that the statement of claim be struck out as against the appellant. I would hear further from the parties as to the form of any consequential orders which should follow from this.
PARKER J: I agree with the orders proposed by Steytler J and with his reasons for decision and I have nothing to add.
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