Thorpe v NK Ceilings (1992) Pty Ltd - [2008] WADC 5

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: THORPE -v- NK CEILINGS (1992) PTY LTD [2008] WADC 5

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: 6 DECEMBER 2007

DELIVERED : 24 JANUARY 2008

FILE NO/S: CIV 1994 of 2006

BETWEEN: ANDREW CECIL THORPE
Plaintiff
AND
NK CEILINGS (1992) PTY LTD (ACN 057 779 978)
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application to strike a pleading under O 19 r 20, r 19(1)(c)

Legislation:

Nil

Result:

Application successful

Representation:

Counsel:

Plaintiff: Mr A Aristei
Defendant: Mr D J Garnsworthy

Solicitors:

Plaintiff: B W Duckham & Co
Defendant: Hotchkin Hanly

Case(s) referred to in judgment(s):

Nil

DEPUTY REGISTRAR HARMAN: By his application under O 20 r 19 (1) (c) the plaintiff seeks leave to strike out the defence and that result. He carries the onus of persuasion.
As to the issue of leave the defendant referred to the plaintiff's delay in applying and submitted that there was no evidence on the point. As I indicated at the hearing, it would not be appropriate to determine the issue on any want of evidence. I accept that the reason leave is required is that the application was brought late however once it is necessary to obtain leave that is the issue to be determined. The application is not simply to extend the time within which to apply.
The plaintiff's claim in the action is for the cost of services provided by a legal practitioner under a retainer. According to par 3 of his pleading the plaintiff was retained by the defendant to conduct an action on its behalf in the Supreme Court. In pars 2 to 6 of its substituted defence, the defendant pleads a number of allegations and at par 7, that other than to the extent of those allegations, it does not admit par 3 of the statement of claim.
At par 2 it pleads that the plaintiff made representations concerning the fees that would be generated under the retainer, in particular, that they would be limited to $50,000.00 and be generated at hourly rates of $300 by the plaintiff and $150 by other fee earners. At par 3, it contends that it accepted those representations; at par 4, that thereby the retainer was established; at par 5 that the representations were incorporated into the retainer as terms; and at par 6, that other terms ought to be imported.
The fundamental issue raised by the plaintiff in relation to that part of the defence was that the pleaded impact of the defendant's acceptance of the representations would prejudice embarrass or delay the fair trial of the action. Central to that proposition is the submission that the acceptance of representations would not establish an enforceable agreement.
As it was likely that my decision on the balance of the application would be delayed, on determining that part of it in favour of the plaintiff, so as to give the defendant the option to immediately proceed to recast its defence I expressed that result and provided some reasons.
To plead a contract ought to be considered to be a relatively straightforward task. In the context of the defendant’s admission of the identity of the parties, it would only need to assert some identifying feature or features of the retainer and its relevant terms.
Although the defendant pleads that the retainer was established by its acceptance of the plaintiff's representations, it would only be by the acceptance of an offer either implicit or explicit in the representations that it would be established. There is nothing to suggest that the context in which the offer was made would have any significance. The plea that the representations were accepted is an unnecessary part of the defendant's pleading.
As to the terms of the retainer, the defendant's pleading of implied terms illustrates that all that is required is that an allegation be made. As it is inappropriate to justify a plea and appropriate to consider that the pleader was aware of that consideration, the fact that the terms are justified as representations creates scope for at least confusion as to the defendant's intention.
It became evident during the course of submissions that the defendant accepted that the acceptance of a representation would not establish an enforceable agreement; however the concession did not extend to any re‑pleading of the defence. I understood that the defendant relied on recent authority that would suggest that an opponent's knowledge or understanding of the case it confronts would be taken as drawing upon more than the terms of a pleading. That may be an appropriate consideration in instances where there could only conceivably be one case. In this instance the interactions between the parties have produced different pleaded cases. In my opinion it is inappropriate for a party to be coming to an appreciation of its opponent's case or cases at trial. If what I have expressed is somehow at odds with authority then I am content with that result. However there is more than simply scope for confusion as a significant feature of the defendant's case would appear to be the importation of particular implied terms into the retainer. A feature of the process of such importation is that the term proposed would not be inconsistent with any other term. The defendant's pleading leaves open scope for debate as to the context in which the terms sought to be implied would be imported. I will later deal with the attack made by the plaintiff on the particular terms sought to be implied.
Because the plaintiff required leave I also considered whether it would be appropriate to strike out the relevant part of the pleading. The function of pleadings is to isolate the issues to be tried. It is by allegations of material fact that each party communicates its case. A just result and fairness in the trial process are properly measured against the pleadings. The touchstone of the pleading process is clarity. It was my opinion that the defendant's pleading did not meet the appropriate standard. It failed not only as it promotes context and obscures substance but also because in putting a case in contract the pleader has utilised terminology by which an allegation that bears upon a different form of relief would be put. It is incidental that the defendant also pleads a case for such relief: in order for pleadings to serve their purpose it is preferable that separate allegations that draw upon the same evidence be put rather than that there be scope for interpretation of the pleader's intention. It was my opinion that the plaintiff ought to have leave and the defendant's pleading of the retainer ought to be struck out.
The only other determination that I made was in relation to the issue raised by the plaintiff in relation to par 8 of the defence. It is an unusual in that it puts the allegation that that beyond the representations and the acceptance pleaded, there were no other communications or correspondences between the parties in relation to the fees to be charged pursuant to the retainer. At best, that is an anticipatory plea but even as such it is an inappropriate plea.
At that point and at later points there is no need to give particular consideration to the issue of leave. If the defendant is to be sent back to the drafting process on one significant point then there is no reason why it ought not to be called upon address the balance upon which the applicant was substantially successful.
As I have indicated, the plaintiff took issue with parts of the defendant's pleading of implied terms. At par 6.2, it proposes that all accounts would "be reasonable as to quantum". In the context of party and party taxation, in assessing quantum it is appropriate for a taxing officer to consider what would be reasonable. No feature of that context would apply to the case presented by the defendant. In any event, for whatever it is that the defendant contends, in the context provided, the term 'reasonable' is so vague as to convey no useful meaning.
At par 6.3 it proposes that the accounts would identify the services for which claims for fees were made and by whom they were provided. The expression "services" is not defined elsewhere in the pleading although at pars 2.2 and 2.3, by implication the term has been utilised to describe the plaintiff's input into the defendant's proposed action in the Supreme Court (in contrast with "works", described at par 2.4 as having been provided to the same end by persons other than by the plaintiff). Although the term sought to be implied may convey a meaning it is unclear for what it is that the defendant contends. An illustration of my point is that on an assessment of the pleading that relates to the accounting process, most of the contests relate to what under par 2.3 would be characterised as 'works'. There is nothing to suggest that it was a requirement or that there was any expectation that any particular activity on the defendant's behalf would be undertaken by the plaintiff. Perhaps the fundamental point is that it is not clear whether the defendant would contend that the retainer would be regulated by determinations of the Legal Costs Committee. I make that observation despite the reference in par 6.4 and par 6.5 to the importation of determinations made by the Legal Costs Committee. Absent any reference to the determinations the defendant's case would simply be that the plaintiff was entitled to charge at hourly rates for himself and others to a maximum of $50,000.00. It is not clear whether under the retainer it would be open to the plaintiff to simply charge for time spent. Absent any commitment to whether the retainer would be regulated it is difficult to discern the significance of the references to the determinations. In my opinion pars 6.2 to 6.5 inclusive should be struck out.
At par 7 of the statement of claim the plaintiff pleads a claim for agreed costs of ancillary proceedings in his favour to the tune of $600.00. At par 12 of the defence the defendant has gone to what I would characterise as unnecessary lengths to assert a case to found the contention that payment would follow upon receipt by it of an itemised account in accordance with the Legal Practice Act 2003. Be that as it may, the first flaw in par 12 is that it puts critical allegations; that which introduces the Act and the time for producing the itemised account as admissions. No such allegations were made by the plaintiff. Exactly the same error is repeated in the allegation of the terms of the agreement. The second is that it does not specify the provision of the Act with which the itemisation would accord. It is probably appropriate to record such a provision in every case, however in this case it ought to be identified as I have not been able to locate it on a cursory reading.
Apart from the fact that par 13, amounts to an unnecessarily argumentative admission, the defendant pleads that the itemised account was not in accordance with the Act or the agreement. The pleading that it was not drawn "by reference to the relevant scale of fees by showing the relevant item of the scale to which the alleged services related and the amount referrable to it, derived from the Supreme Court (Contentious Business) Determination", is insufficient. The provision of the Act is not thereby identified.
At par 14 the defendant pleads a series of allegations that relate to the process of itemisation of the relevant account. The allegation of general application is that the document in which the account is itemised does not disclose an accurate description of the services performed. I return to my observations in relation to par 6.3 of the defence: that it was unclear what the term 'services' is intended to convey. I note that not all of the complaints raised at pars 14.1 to 14.19 go to the identification of the service rendered but rather to discrepancies between the expression of the account and its itemisation. Returning to the terms of the particular agreement for itemisation, I note that the defendant does not plead that in providing itemisation that the plaintiff would be constrained by the account.
In my opinion if the defendant wishes to maintain the attacks expressed at pars 12 to 14 inclusive of its defence it ought to re‑plead.
At par 17 it pleads estoppel. Although it pleads the representations and reliance it does not plead the necessary ingredient of detriment.
Under the heading "set off" at par 18 the defendant pleads:
"The amounts counterclaimed by the defendant herein arise by virtue of:
18.1 the Representations and the express and implied terms of the Retainer pleaded in paragraphs 5 and 6 of the defence; and
18.2 the plaintiff's conduct of and pursuant to the Retainer, as pleaded in the counterclaim."
It adds nothing to the pleading.
At par 21 the defendant pleads on the part of the plaintiff a duty to act in accordance with the retainer until it was terminated. At par 22 it pleads the unilateral termination of the retainer and at par 23, that the termination did not accord with the grounds for permissible termination expressed at par 21. The defendant goes on to plead loss as a result of its appointment of alternative solicitors and consequential loss. The fundamental difficulty with the defendant's case is that upon what I take to be common ground, the retainer was brought to an end as the result of the plaintiff becoming ineligible to provide services pursuant to a retainer: not one of the specified permissible grounds for termination. Be that as it may, I was not invited to address the pleading on that basis. The plaintiff sought to have the defendant identify the particular term or terms upon which the pleaded duty to act was founded. It also contested the pleading of breach.
Of the three pleaded grounds for permissible termination the defendant characterises the termination as having been other than on reasonable notice and without any just cause. In the particulars to par 22 it specifies the period of the notice and that no reason was given. The detail of that pleading suggests the operation of a particular term but it is not pleaded. When it comes to the pleading of breach it is not clear whether the defendant’s case is that it was in the notice that the reason ought to have been provided. Paragraphs 21 to 23 inclusive ought to be struck out.
The next issue contested was the pleading of the defendant's case of breach of the Fair Trading Act1987. At par 32 it pleads that the plaintiff engaged in false and misleading conduct as the content of his accounts contravened his representations. As the representations related to future matters it would be upon the plaintiff to satisfy the court that he had reasonable grounds for making them at the time they were made.
I understand that it was in November 2005 that the plaintiff accounted for fees in excess of $50,000.00, almost 3 years after the date of the representations. In my opinion that event would not amount to sufficient particulars of the allegation of false and misleading conduct. The same observation and assessment applies equally to the complaints relating to the hourly rates.
At par 33 the defendant commences;
"Insofar as the Representations were representations as to future matters …"
It is not appropriate to put ones opponent to the task of seeking to discern the matters upon which he would carry the onus rather it is for the pleading party to assert which representations were as to future matters.
In my opinion the pleading of the case under the Act should be struck out.
I will make these reasons available to the parties prior to an order being made as they may reveal a broader impact than I have indicated.