Townhill v Argonaut Capital Ltd

[2006] WASC 249

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   TOWNHILL -v- ARGONAUT CAPITAL LTD & ANOR [2006] WASC 249

CORAM:   MASTER SANDERSON

HEARD:   21 SEPTEMBER 2006

DELIVERED          :   3 NOVEMBER 2006

FILE NO/S:   CIV 1151 of 2006

BETWEEN:   TIMOTHY JAMES TOWNHILL

Plaintiff

AND

ARGONAUT CAPITAL LTD (ACN 099 761 547)
First Defendant

EDWARD GODFREY RIGG
Second Defendant

Catchwords:

Practice and procedure - Application to strike out statement of claim - Pleadings dispensed with - Matter entered into CMC List

Legislation:

Trade Practices Act 1974 (Cth)

Result:

Application to strike out refused

Category:    A

Representation:

Counsel:

Plaintiff:     Mr D J Pratt

First Defendant             :     Mr S J Lemonis

Second Defendant         :     Mr S J Lemonis

Solicitors:

Plaintiff:     Jackson McDonald

First Defendant             :     Fairweather & Lemonis

Second Defendant         :     Fairweather & Lemonis

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

Nil

Case(s) also cited:

Glenys Anne Syred (As Administratrix of the Estate of Gary Vernon Syred) v BGC (Australia) Pty Ltd [2004] WASC 87

Malec v JC Hutton Pty Ltd (1990) 169 CLR 638

Sellars v Adelaide Petroleum NL (1994) 179 CLR 332

Vodafone Pacific Ltd & Ors v Mobile Innovations Ltd [2004] NSWCA 15

Westpac Banking Corporation v Thorpe, unreported; SCt of WA; Library No 970465; 18 September 1997

1. MASTER SANDERSON:  This is the defendants' application to strike out the plaintiff's statement of claim.  The defendants say that the statement of claim is defective in a number of respects.  That is clearly so.  In the ordinary course of things I would be disposed to strike out the statement of claim and give leave to replead.  However, in this case, I am satisfied that the better course is to dispense with pleadings, have the parties prepare statements of matters in issue and proceed to mediation and, if necessary, to trial as soon as possible.

2. The matter will be entered into the CMC List.  In explaining why I have decided on that course, it is appropriate to begin with a summary of the case.  In or about January 2005, the plaintiff entered into an employment agreement with the first defendant.  Prior to entering into that agreement, discussions took place between the plaintiff and the second defendant as to the terms of the agreement.  Most of the discussions appear to have taken place via email.  The plaintiff says that it was a term of the agreement that if he commenced employment with the first defendant, he would be granted an option to purchase 10 per cent of the issued share capital of the first defendant.

3. He says further that it was agreed if all parties were "comfortable", then the share options would be exercisable by him after he had been employed by the first defendant for a period of six months.  He says that the exercise price for the share options was agreed.  The first defendant terminated the plaintiff's employment in December 2005.  At that stage, no share options had been issued.

4. The plaintiff brings his claim under the provisions of the Trade Practices Act 1974 (Cth) and for breach of contract. So far as the Trade Practices Act is concerned, it is alleged by the plaintiff that representations made to him prior to his commencing employment were misleading and deceptive.  He says that he relied on those representations in taking up employment and as a consequence he has suffered loss and damage.  So far as the breach of contract claim is concerned, the plaintiff seeks an order for specific performance of the contract.  That is, that he be issued with the share options he was promised.  As an alternative, he seeks damages either at common law or in equity for breach of the terms of the contract.

5. While there are difficulties with the statement of claim, the matters at issue between the parties clearly emerge.  They can be summarised as follows:

   •What representations were made to the plaintiff prior to his entering into the contract of employment?

   •Were those representations false or misleading under the provisions of the Trade Practices Act?

   •Did the plaintiff rely on those representations in entering into the contract?

   •As a consequence of that reliance, has the plaintiff suffered loss and damage?  Is the second defendant, who is a director of the first defendant, accessorily liable to the plaintiff for losses he has suffered?

   •What were the terms of the employment contract between the plaintiff and the defendants?

   •Have the terms of that employment contract been breached and, if so, to what remedy is the plaintiff entitled?

6. These issues emerge not just from the statement of claim, but from the defences filed by the defendants.  In fact, the defences were filed some time ago so that leave would be required to bring the strike out application.  Given the defendants were able to make enough of the statement of claim to plead to it, in my view there would be no purpose served in requiring the statement of claim be further amended with all the delay occasioned by such a course of action.  Far better that the matter proceed without pleadings on a statement of issues between the parties.

7. Although I have set out what I see as the issues between the parties, it should not be thought that the case of either party would be limited to those issues.  Each party should be at liberty to put forward what they see as the issues in the case and whoever eventually tries the matter should determine for him or herself based upon the views of the parties just what the issues are.  But there is no purpose to be served in permitting further arguments over the pleadings.

8. The orders, then, will be as follows:

   (1)the matter be entered into the CMC List with Master Sanderson as manager;

   (2)pleadings are dispensed with;

   (3)costs of this application be costs in the cause;

   (4)liberty to apply.