Walthamstow Pty Ltd v Caratti [No 4]

[2024] WASC 1

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   WALTHAMSTOW PTY LTD -v- CARATTI [No 4] [2024] WASC 1

CORAM:   LUNDBERG J

HEARD:   23 NOVEMBER 2023 AND ON THE PAPERS

DELIVERED          :   5 JANUARY 2024

FILE NO/S:   CIV 2283 of 2021

BETWEEN:   WALTHAMSTOW PTY LTD

Plaintiff

AND

ALLEN BRUCE CARATTI

First Defendant

TINA MICHELLE BAZZO

Second Defendant

FILE NO/S:   CIV 3136 of 2019

BETWEEN:   WALTHAMSTOW PTY LTD

Plaintiff

AND

ALLEN BRUCE CARATTI

First Defendant

TINA MICHELLE BAZZO

Second Defendant

Catchwords:

Practice and procedure - Several interlocutory applications heard in lead up to trial of the actions - Turns on own facts

Practice and procedure - Pleadings - Application by defendants for leave to file rejoinder - Rejoinder pleads intelligible claims in response to plaintiff's reply - Issues arising as to validity of the application of funds by plaintiff financier to discharge loan agreements - Unconscionable conduct pleading introduced - Leave granted

Practice and procedure - Particulars - Requests for further and better particulars of the defences - Requests for further and better particulars of the plaintiff's reply - Certain requests granted - Consideration of exercise of power to grant case management directions pursuant to O 4A r 2(1) RSC as an alternative to exercise of power in O 20 r 13(3) RSC - Power exercised and case management directions made

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B, O 4A r 2(1), O 4A r 4, O 4A r 5(1), O 20 r 13(3)

Result:

Orders made as set out in Attachments B, C, D and E

Category:    B

Representation:

CIV 2283 of 2021

Counsel:

Plaintiff	:	R J S French
First Defendant	:	Dr J Schoombee and A P Rumsley
Second Defendant	:	Dr J Schoombee and A P Rumsley

Solicitors:

Plaintiff	:	Bennett
First Defendant	:	Alan Rumsley
Second Defendant	:	Alan Rumsley

CIV 3136 of 2019

Counsel:

Plaintiff	:	R J S French
First Defendant	:	Dr J Schoombee and A P Rumsley
Second Defendant	:	Dr J Schoombee and A P Rumsley

Solicitors:

Plaintiff	:	Bennett
First Defendant	:	Alan Rumsley
Second Defendant	:	Alan Rumsley

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

Ammon v Consolidated Minerals Ltd [2005] WASC 156

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 267 CLR 1

Civmec Construction & Engineering Pty Ltd v Mann [No 2] [2023] WASC 99

Murdock v Virgin Australia Airlines Pty Ltd [2022] FCA 1074

Ogbonna v Qantas Airways Ltd [No 4] [2023] WASC 21

PSAL Ltd v Kellas [2012] QSC 31

Walthamstow Pty Ltd v Caratti [2023] WASC 76

Walthamstow Pty Ltd v Caratti [No 2] [2023] WASC 363

Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413

Table of Contents

A.     Introduction

B.      Applications in CIV 3136

Application by defendants for leave to file a rejoinder

Plaintiff's request for further and better particulars

Further case management orders made on 1 December 2023

C.     Applications in CIV 2283

Plaintiff's request for further and better particulars

Further case management orders made on 1 December 2023

Defendants' request for further and better particulars

D.     Conclusion

ATTACHMENT A Chronology of recent interlocutory events and orders

ATTACHMENT B Orders made in CIV 3136 on 24 November 2023

ATTACHMENT C Orders made in CIV 3136 on 1 December 2023

ATTACHMENT D Orders made in CIV 2283 on 24 November 2023

ATTACHMENT E Orders made in CIV 2283 on 1 December 2023

LUNDBERG J:

A.     Introduction

1. These reasons concern several interlocutory disputes which have required the court's intervention in a rather intensive fashion during the course of November and early December 2023, in the lead up to the court's summer recess and the looming trial of the actions which is listed to commence on 29 January 2024.

2. The broad nature of the issues arising in the two actions can be discerned from the reasons published in March 2023, in September 2023, and in October 2023, each of which address earlier interlocutory disputes in the actions.[1] 

   [1] Walthamstow Pty Ltd v Caratti [2023] WASC 76; Walthamstow Pty Ltd v Caratti [No 2] [2023] WASC 363; Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413.

3. In essence, the plaintiff financier claims against the defendants in CIV 3136 in their capacity as guarantors of a loan made to GH1 Pty Ltd.  These financing arrangements relate to a property development situated at 82 Treeby Road in Anketell.[2] 

   [2] Amended Statement of Claim in CIV 3136, [5].

4. In CIV 2283, the plaintiff claims against the first defendant as guarantor of a loan made to both Keris Pty Ltd and the second defendant, and also claims against the second defendant as a party to the loan agreement itself.  These financing arrangements relate to a property development of various lots situated in Hocking,[3] which was marketed as the 'Tuxedo Rise Estate'.

   [3] Amended Statement of Claim in CIV 2283, [6].

5. The trial of the two actions (which are being heard together) was originally listed for hearing in November 2023.  That trial was vacated by order of the court made on 25 October 2023, for the reasons explained in Walthamstow v Caratti [No 3].[4]  An application to set aside the order vacating the trial dates in respect of CIV 3136 was dismissed on 27 October 2023.[5]  The actions are now listed for a 10 day trial commencing on 29 January 2024.

   [4] Walthamstow Pty Ltd v Caratti [No 3] [23] – [26].

   [5] Walthamstow Pty Ltd v Caratti [No 3] [27] – [41].

6. A chronology of the recent interlocutory events and orders in the actions is set out in Attachment A to these reasons.  It is abundantly clear that the proximity of the trial of the actions has generated a rigorous assessment by both parties as to the state of their opponent's pleadings and evidence, as well as their own.  To facilitate the hearing of the multiple interlocutory applications, and to ensure as far as possible the listing of the trial of the actions was not put in jeopardy, the court has accommodated the parties by listing numerous fixtures which have occupied a significant amount of court time.  I refer in this regard to the following hearings: 20, 24 and 27 October 2023; 8 and 23 November 2023; and 15 and 22 December 2023.

7. As a result of the hearings in November and December, several sets of orders have been made by the court, both procedural and substantive in nature.  The purpose of the present decision is to explain my reasoning for making several of those orders, having regard to the detailed submissions made by both parties.  Counsel for the plaintiff throughout these hearings has been Mr French, with Dr Schoombee and Mr Rumsley appearing for the defendants (with Mr Rumsley appearing on his own at the hearings on 20, 24 and 27 October, and on 22 December).

8. The following reasons explain why I made the orders on 24 November 2023 and 1 December 2023.  Separate reasons will be published to address the questions of pleading amendment and the defendants' applications to set aside several subpoenas, which were heard on 15 and 22 December 2023.

B.     Applications in CIV 3136

Application by defendants for leave to file a rejoinder

1. Following the hearing on 23 November 2023, I made various orders in CIV 3136. Among those orders, I granted the defendants leave to file and serve a rejoinder to the second amended substituted reply filed 20 October 2023, in terms of the minute filed on 20 November 2023, save that the reference in [7] thereof to s 12CA of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) be deleted.[6]  Leave was opposed by the plaintiff.

   [6] Counsel for the defendants abandoned reliance on s 12CA of the ASIC Act at the hearing on 23 November 2023, indicating the defendants would rely only on the statutory unconscionability provision: ts 418.

2. The defendants' application for leave to file the rejoinder was initially developed at the strategic conference on 8 November 2023, with a minute of the proposed rejoinder being filed on 20 November 2023 pursuant to the directions made by the court.  The question whether leave would be granted for the rejoinder was held over to the hearing on 23 November 2023.[7]  That was because I considered it inappropriate, given the stage of the proceedings, to grant the defendants leave to file a rejoinder in a vacuum, without first reviewing the draft pleading.

   [7] Leave is required for a rejoinder to be filed: O 20 r 6 RSC.

3. In substance, the rejoinder responded to [29] of the plaintiff's reply filed on 20 October 2023.  That paragraph (which has some drafting difficulties within it which led to some spirited argument during later hearings in this matter, to which I will return) responds to [39] of the fourth amended defence, which introduced fresh allegations on 17 September 2023.  The pleadings of both parties in this respect can thus fairly be described as somewhat dynamic over the last few months of 2023.  The fluidity of the pleadings represented a further factor in my reasoning to require (as explained later in these reasons) the parties to provide further particulars of the allegations in the pleadings which lack appropriate particularity, or to explain certain matters through the exercise of the case management powers available to the court.

4. In essence, the fourth amended defence introduced allegations that the plaintiff financier had collected the proceeds of settlement of the lots at Waverley Estate in discharge of the mortgage over certain property in the name of Herdsman Technology Pty Ltd, but the plaintiff had only applied the proceeds of two of the lots in reduction of the principal loan agreement which is the subject of the plaintiff's claims in CIV 3136.[8]  The defendants have particularised amounts received by the plaintiff in respect of the sale of 9 additional lots which it is alleged the plaintiff failed to apply in discharge of the mortgage just mentioned.[9]

   [8] Fourth Amended Defence in CIV 3136, [39.1].

   [9] Fourth Amended Defence in CIV 3136, [39.2].

5. Through their second amended substituted reply, the plaintiff proposes to meet the foregoing allegations by contending that the payments in question were applied to discharge an earlier higher-ranking mortgage over the property at Waverley Estate given by Herdsman Technology Pty Ltd, in support of a separate loan from the plaintiff to another company associated with the defendants, being Byford River Pty Ltd.[10]  That is, the plaintiff contends the payments were lawfully applied to discharge another liability.

   [10] Second Amended Substituted Reply in CIV 3136, [29].

6. The plaintiff has provided, within its pleading, detailed particulars of the mortgages in place over the Waverley Estate, particulars of the defendants' association with both Herdsman Technology Pty Ltd and Byford River Pty Ltd, and particulars of the manner in which the funds from the sale of the Waverley Estate were applied by the plaintiff.[11]

   [11] Second Amended Substituted Reply in CIV 3136, [29] at particulars (i) to (ix).

7. In this context, the desire of the defendants to now make plain its response to the plaintiff's contentions is not surprising.  The terms of the proposed rejoinder, in substance, raise the following four cascading contentions, as I understand the pleading:

   (a)First, the defendants deny that the plaintiff's application of the sale proceeds to an earlier, higher-ranking mortgage was relevant as there is no contest between securities, and the defendants are sued as guarantors.  Further, the defendants contend that the mortgage given to cover the loan agreement was registered before the mortgages pleaded by the plaintiffs.  Further still, the defendants say that the alleged interests of the defendants in Herdsman Technology Pty Ltd and Byford River Pty Ltd do not support the plaintiff's case against the defendants as guarantors.[12]

   (b)Second, the defendants rely on cl 5.4 of the underlying loan agreement.  The defendants contend that, by cl 5.4, the loan agreement provided that all payments made by the borrower to the lender when received by the lender had to be applied in reduction of the loan amount.  Further to this, as the plaintiff collected the sale proceeds of the lots at the Waverly Estate from Herdsman Technology Pty Ltd in discharge of the relevant mortgage given by  Herdsman Technology Pty Ltd it was obliged to apply the proceeds in reduction of the loan and the failure to do so constitutes a breach of the loan agreement and renders the guarantees unenforceable.[13]

   (c)Third, and further or in the alternative to the pleading based on cl 5.4 of the loan agreement, the defendants contend that the plaintiff's collection of the proceeds of sale 'caused the relevant proceeds to be appropriated' to the loan agreement, which appropriation bound the plaintiff.[14]

   (d)Fourth, in any event, the defendants contend that the plaintiff's conduct amounts to unconscionable conduct in terms of s 12CB of the ASIC Act which renders the guarantees unenforceable.[15]  The conduct relied upon is as follows:

   (i)the alleged breach of cl 5.4 of the loan agreement;

   (ii)the defendants were given no notice of the intention of the plaintiff to apply the relevant proceeds otherwise than in accordance with cl 5.4;

   (iii)in circumstances pleaded at point (c) above;

   (iv)the defendants contend they were prejudiced by the plaintiff's failure to apply the relevant proceeds in reduction of the debt under the loan agreement in that their liabilities in respect thereof were not reduced and their liability for interest increased by a failure to reduce the outstanding amount;

   (v)the defendants contend the plaintiff had no legitimate commercial interest to apply the relevant proceeds to the loan to Byford River Pty Ltd rather than the principal loan itself, as at the time Byford properties were under contract to sell and the proceeds would discharge the Byford River loan and mortgage, which it is alleged occurred on 31 August 2017.

   [12] Rejoinder in CIV 3136, [3].

   [13] Rejoinder in CIV 3136, [4] and [5].

   [14] Rejoinder in CIV 3136, [6].

   [15] Rejoinder in CIV 3136, [7]. Section 12CB(1) provides, inter alia, that a person must not, in trade or commerce, in connection with the supply of financial services to a person engage in conduct that is, in all the circumstances, unconscionable. The scope of this provision is not limited by the unwritten law relating to unconscionable conduct: s 12CB(4)(a) ASIC Act.

8. As summarised above, the proposed rejoinder advances, in my respectful view, an intelligible series of contentions in response to the plaintiff's pleas. The merits of these contentions will be a matter for trial. Whether, for example, the conduct alleged (if proven) constitutes unconscionable conduct within the meaning of s 12CB(1) will require an analysis of the principles expressed in cases such as Australian Securities and Investments Commission v Kobelt,[16] in which Gageler J observed:[17]

   The correct perspective is that s 12CB operates to prescribe a normative standard of conduct which the section itself marks out and makes applicable in connection with the supply or possible supply of financial services. The function of a court exercising jurisdiction in a matter arising under the section is to recognise and administer that normative standard of conduct. The court needs to administer that standard in the totality of the circumstances taking account of each of the considerations identified in s 12CC if and to the extent that those considerations are applicable in the circumstances.

   [16] Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 267 CLR 1.

   [17] Australian Securities and Investments Commission v Kobelt [87].

9. Ahead of the hearing on 23 November 2023, to assist the parties, I communicated to both parties my provisional view that leave should be granted to the defendants to file the rejoinder, subject to hearing from counsel for the defendants as to the scope and purpose of [7] of the rejoinder[18] and subject to hearing from both parties generally on the question of leave.[19]

   [18] Which included the unconscionable conduct plea.

   [19] See the 'Judge's draft agenda of issues for the hearing on 23 November 2023'.

10. The plaintiff opposed the filing of the rejoinder on the grounds that leave should not be granted where a pleading is liable to be struck out pursuant to O 20 r 19(1) RSC. In essence, I understand counsel for the plaintiff to be concerned that the rejoinder had failed to plead out the necessary material facts to support the contentions.[20]   This was described as the 'real vice' of the proposed pleading.[21]

    [20] ts 416 – 426.

    [21] ts 421.

11. I should observe that a brief witness statement of Ms Bazzo was filed by the defendants on 21 November 2023 in support of the rejoinder.  In part, the statement discloses that Ms Bazzo will give evidence at trial that she did not consent to any proceeds of the settlement from Waverly Estate being diverted from the loan agreement which is the subject of the claims in CIV 3136.[22]  The statement also includes some further proposed evidence regarding the settlement process.[23]

    [22] Witness statement of Ms Bazzo dated 21 November 2023, [4].

    [23] Witness statement of Ms Bazzo dated 21 November 2023, [5] – [8].

12. Further to the proposed evidence of Ms Bazzo, the plaintiff had earlier filed a supplementary witness statement of Ms Masel dated 17 October 2023.  That statement appears to largely underpin the plaintiff's position as pleaded at [29] of the second amended substituted reply concerning the allocation of the sale or settlement proceeds.

13. The view I formed, following the hearing on 23 November 2023, was that although I accepted the rejoinder is pleaded in a relatively general manner, the nature of the contentions advanced by the defendant can readily be apprehended by the reader, there are adequate material facts presented particularly when read with Ms Bazzo's statement, and the pleading is not likely to prejudice the fair trial of the action. 

14. No  issue was taken with the proximity of the pleading relative to the trial, which is understandable given the chronology of the amendments and consequential amendments to the pleadings to which I have earlier referred. 

15. I accepted that the pleas in the rejoinder will raise a number of additional issues for consideration at the trial, both factual and legal, but those matters are directly connected to the plea introduced by the plaintiffs in the second amended substituted reply on 20 October 2023.

16. Thus, I did not discern any challenge to the pleading on the basis of lateness or the potential to jeopardise the trial of the matter in early 2024.  That is, considerations of case management, cost and delay were not relied upon.[24]

    [24] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.

17. The principal challenge was to the adequacy of the material facts.  Further material facts could have been pleaded.  That is true.  But the contentions are detailed enough, in my view.  The plaintiff also has an ability to pursue further details through requests for particulars.  In addition, the defendants will be held to the pleaded allegations at trial. 

18. Accordingly, I formed the view that leave should be given to the defendants to file the rejoinder, other than in relation to the allegation concerning s 12CA of the ASIC Act, as noted above.

Plaintiff's request for further and better particulars

1. On 16 November 2023, the plaintiff filed, in CIV 3136, a request for further and better particulars of the fourth amended defence.  I heard argument on that request on 23 November 2023.  On 24 November 2023, I ordered that the defendants file and serve further particulars as sought by requests 2 and 4 of the plaintiff's request, but otherwise dismissed the plaintiff's request.  My reasons for disposing of the application in this manner are set out below.

Request 1

1. The first request was as follows:

   As to paragraph 21.4, provide particulars as to when, for the purposes of the alleged Enforcement Representation, the plaintiff was to be taken to have exhausted its rights against the Secured Property, whether it be by sale of the Secured Property or at some other time, and if some other time, which other time.

1. The allegation in [21.4] of the fourth amended defence concerns a representation pleaded to have been made by the plaintiff, described as the 'Enforcement Representation'.  The same representation is pleaded to have contractual significance as well in [21.5].  It is contended at [21.4] that Mr Masel said words to the effect that, if the defendant consented to the assignment of the guarantee, the plaintiff would, in effect, exhaust its rights against the assets secured by the facilities before seeking to recover any shortfall from the defendants.

2. The first request is not a proper request for particulars.  It seeks to elicit from the defendants clarification as to the operative effect of the pleaded representation.  That is, the request asks for an explanation as to precisely when the defendants say the plaintiff exhausted its rights against the secured property.  That is not a matter addressed in the pleaded allegation, which concerns the making of a particular representation.

Request 2

1. The second request was as follows:

   As to paragraph 28.2, provide particulars of the alleged detriment the defendants would suffer if the plaintiff were permitted to resile from the alleged Enforcement Representation.

2. The pleading asserts the defendants would suffer detriment if the plaintiff was permitted to resile from the Enforcement Representation.  No particulars of the detriment were supplied.  Detriment is an element of the pleaded claim.  It is appropriate that the defendants supply proper particulars of the allegation, consistent with the overriding principle that the litigation between the parties should be conducted fairly, openly and without surprise, and to reduce costs.[25]  I accordingly granted this request.

Request 3

[25] Ammon v Consolidated Minerals Ltd [2005] WASC 156 [3].

1. The third request was as follows:

   As to paragraphs 28.3, 32.1 and 37.1, provide particulars of the type of the estoppel alleged by the defendants (i.e. whether it is an alleged estoppel by representation, promissory estoppel or otherwise).

2. I declined to grant this request.  Seeking particulars of the 'type' of an estoppel which is pleaded is not an orthodox request for particulars of a pleaded allegation.  Rather, it is a request for the defendants to explain the legal basis of the estoppel plea, which is fundamentally a matter for submissions.  That is not a proper request for particulars. 

Request 4

1. The fourth request was as follows:

   As to paragraph 41, provide particulars as to:

   4.1 the date of the alleged Settlement Agreement;

   4.2 whether the alleged verbal agreement was made in person, by telephone or otherwise; and

   4.3 if in person, where the alleged verbal agreement was made.

2. The pleading asserts the existence of a settlement agreement reached between the plaintiff and Ms Bazzo by way of verbal agreement.  It is pleaded the agreement was reached in May 2022.  Several terms of the asserted agreement are pleaded, including the terms of payment, the resolution of the court proceedings, and the preparation and provision of a written settlement agreement.  The particulars sought by the plaintiff do not sufficiently appear from the pleading, and are relatively orthodox particulars of a pleaded agreement.  I considered it was proper for these particulars to be provided to ensure the defendants' case was sufficiently clear to allow the plaintiff a fair opportunity to meet the case being advanced.[26]  Additionally, I was of the view that the provision of these particulars would not be burdensome from the defendants' perspective.

Further case management orders made on 1 December 2023

[26] Ammon v Consolidated Minerals Ltd [3].

1. Although I declined to order that the defendants comply with requests 1 and 3 above, the issues raised by those requests nonetheless appeared to me be important to the action. I therefore gave consideration as to whether I should make a case management direction in order to ensure the plaintiff was properly apprised of the case being mounted by the defendants. A case manager is permitted to give consideration to the making of a case management direction on their own initiative: O 4A r 5(1)(a) RSC.

2. In this regard, I directed the parties on 24 November 2023 to file short submissions as to whether the broad power in O 4A r 2(1) RSC should be exercised to make an appropriate case management direction to facilitate the objects referred to in O 1 r 4B(1) RSC, to the effect that the defendants would be ordered to file and serve a memorandum which:

   (a)identified the category or categories of estoppel which are the subject of the estoppels pleaded in paragraphs 28.3, 32.1 and 37.1 of the fourth amended defence dated 17 September 2023; and

   (b)described the meaning of the phrase 'exhaust its rights against the assets secured by the facilities' which the defendants will assert at trial as being the subject of the representation and/or the subject of the agreement, as pleaded in paragraph 21.4 of the fourth amended defence dated 17 September 2023.

3. The parties duly filed submissions.  In substance, the defendants accepted the court had power to make the orders and did not oppose the orders being made.  The plaintiff supported the making of the orders.

4. In my view, O 4A r 2(1) RSC is a facultative provision and should be given a broad interpretation. The examples of case management directions which may be made under this rule demonstrate the breadth of the power. For example, the court has power to direct the parties to file and exchange memoranda before a hearing in order to clarify the matters in issue before the hearing (O 4A r 2(2)(g)(i) RSC).

5. The following observations of Tottle J in Civmec Construction & Engineering Pty Ltd v Mann [No 2][27] support the foregoing approach:

   [45]Order 4A r 2 facilitates the system of positive case flow management described in O 1 4B. In that respect its significance in the practice and procedure of this court is emphasised by the precedence accorded to its provisions by O 4A r 4.

   [46]Order 4A r 2 is to be construed beneficially and given the widest interpretation that the language used permits: Bridge Shipping Pty Ltd v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231, 248 (Toohey J), 260 - 261 (McHugh J)…

   [27] Civmec Construction & Engineering Pty Ltd v Mann [No 2] [2023] WASC 99 [45] – [46].

6. Tottle J also examined the breadth of the O 4A r 2(1) RSC in Ogbonna v Qantas Airways Ltd [No 4].[28] His Honour's analysis in that matter led him to conclude that, in combination, s 16(1)(d) of the Supreme Court Act 1935 (WA) and O 4A r 2(1) and O 1 r 4B(1) RSC confer powers on this court to make directions for the just and efficient conduct of proceedings that are as extensive as those conferred on the Federal Court by the provisions which were considered in Murdock v Virgin Australia Airlines Pty Ltd.[29]  On that basis, His Honour was satisfied the power extended to making directions regulating the manner in which the parties communicate with each other, as effective communication between parties is essential for the efficient conduct of litigation.  Apart from anything else, effective communication 'reduces the potential for the parties to be distracted by false issues created by miscommunication'.[30]

   [28] Ogbonna v Qantas Airways Ltd [No 4] [2023] WASC 21 [85].

   [29] Murdock v Virgin Australia Airlines Pty Ltd [2022] FCA 1074.

   [30] Ogbonna v Qantas Airways Ltd [No 4] [86].

7. In the present circumstances, I was satisfied that the requests in question were genuinely advanced by the plaintiff to understand the case being mounted by the defendants, and that further clarification of these matters would assist the plaintiff in its preparation for trial and avoid the parties being distracted by false issues. Whilst the requests did not fall within the more traditional power to order the provision of particulars, in O 20 r 13(3) RSC, that did not preclude the exercise of the more flexible power in O 4A r 2(1) RSC to make a case management direction, given the operation and effect of O 4A r 4 RSC.[31]

   [31] Order 4A r 4 RSC provides that: 'If a provision in this Order is inconsistent with these rules or the Supreme Court (Corporations) (WA) Rules 2004 , the provision in this Order prevails.'

8. I should also note that plaintiff had raised its concerns as to these matters at the strategic conference and then formalised the requests through the request for particulars.  The requests were directed to obtaining disclosure of the nature of the pleaded estoppels and the meaning of the pleaded representations, which will be matters of some importance at the trial of the action.  In the context of the pleadings, further clarification of these matters would, in my view, promote the just determination of the litigation.  The   

9. Further, these matters were quite likely to be matters addressed in the defendants' trial submissions in any event and so, in some respects, the proposed directions would simply accelerate the point in time at which the defendants would need to 'nail its colours to the mast' as to the formulation of the estoppel claim and the explanation of the representation.   

10. For these reasons, I considered it appropriate to exercise the power to make a case management direction as follows:

    By 12 December 2023, the defendants are to file and serve a memorandum (being no more than 3 pages) which:

    (a) identifies the category or categories of estoppel which are the subject of the estoppels pleaded in paragraphs 28.3, 32.1 and 37.1 of the fourth amended defence dated 17 September 2023; and

    (b) describes the meaning of the phrase 'exhaust its rights against the assets secured by the facilities' which the defendants will assert at trial as being the subject of the representation and/or the subject of the agreement, as pleaded in paragraph 21.4 of the fourth amended defence dated 17 September 2023.

11. I will now turn to address the orders made in CIV 2283 following the hearing on 23 November 2023, which were similar in nature to the orders made in CIV 3136.

C.     Applications in CIV 2283

1. The plaintiff did not oppose the filing of a rejoinder in CIV 2283,[32] and so orders were made to facilitate this occurring on 24 November 2023. The two matters of dispute on which I should comment are the plaintiff's request for further particulars of the substituted amended defence and counterclaim dated 17 September 2023,[33] and the defendants' request for particulars of the plaintiff's reply dated 2 November 2023.[34]

Plaintiff's request for further and better particulars

[32] ts 413.

[33] The plaintiff's request is dated 16 November 2023.

[34] The defendants' request is dated 10 November 2023.

1. On 16 November 2023, the plaintiff filed, in CIV 2283, a request for further and better particulars of the substituted amended defence and counterclaim.  I heard argument on that request on 23 November 2023.  On 24 November 2023, I ordered that the defendants file and serve further particulars as sought by request 2.1 of the plaintiff's request, but otherwise dismissed the plaintiff's request.  My reasons for disposing of the application in this manner are set out below.

Request 1

1. The first request was as follows:

   As to paragraph 4.3.2, provide particulars of the alleged Capitalisation Representation, namely:

   1.1 the rate at which it is alleged interest was to be calculated (i.e. whether interest was to be calculated at the 'Higher Rate' or the 'Lower Rate' under the Loan Agreement or at some other rate);

   1.2 whether the quantum of the alleged capitalised interest was to be calculated as follows: 1.2.1 simple interest only calculated by reference to the Advance amount (as if interest had been paid on time each month at the rate specified in the answer to request 1.1 above); or 1.2.2 compound interest calculated by reference to the Outstanding Amount (including accumulated unpaid monthly interest at the rate specified in the answer to request 1.1 above) on the basis that interest had not been paid each month; or 1.2.3 in some other way, and if some other way, which other way; and

   1.3 the time(s) at which the Loan was to be repayable (i.e. whether the 'Outstanding Amount' was to be repayable at the maturity of the loan or at some other time(s) and if some other time(s) which time(s)).

2. The pleading includes an allegation that a representation was made by Mr Masel on behalf of the plaintiff to the effect that interest on the advance would be capitalised, being the Capitalisation Representation.  The representation is also pleaded to form the basis of an agreement.[35]

   [35] Substituted Amended Defence and Counterclaim in CIV 2283, [4.3.2].

3. For the same reasons I declined to grant the similar request in CIV 3316 as to the Enforcement Representation, I considered this request was not a proper request for particulars of any pleaded allegation advanced by the defendants.  Rather, the request seeks details of matters which are not pleaded by the defendant as forming part of the representation or agreement.  I therefore declined to grant this request.

Request 2

1. The second request was as follows:

   As to paragraph 4.3.4, provide particulars of:

   2.1 the alleged detriment the defendants would suffer if the plaintiff were permitted to depart from the alleged Capitalisation Representation; and

   2.2 the type of the estoppel alleged by the defendants (i.e. whether it is an alleged estoppel by representation, promissory estoppel or otherwise).

2. The pleading asserts that the defendants would each suffer material financial detriment if the plaintiff was allowed to depart form the Capitalisation Representation, but offers no particulars of that detriment.  Accordingly, the request for particulars of detriment is a proper request and I formed the view the particulars sought in request 2.1 should be provided.  However, for the same reasons I declined to grant the similar request in CIV 3136, I considered that request 2.2 was not a proper request for particulars and declined to grant that request.

Further case management orders made on 1 December 2023

1. Although I declined to order that the defendants comply with requests 1 and 2.2 above, the issues raised by those requests nonetheless appeared to me be important to the action.  Consistent with the approach I adopted in CIV 3136, I considered it appropriate to make case management directions on 1 December 2023 as follows:

   By 12 December 2023, the defendants are to file and serve a memorandum (being no more than 3 pages) which:

   (a) identifies the category or categories of estoppel which are pleaded in paragraph 4.3.4 of the substituted amended defence and counterclaim dated 17 September 2023; and

   (b) describes the meaning of the term 'capitalised' which the defendants will assert at trial as being the subject of the representation and/or the subject of the agreement, as pleaded in paragraph 4.3.2 of the substituted amended defence and counterclaim dated 17 September 2023.

2. As I have earlier noted, clarification of the nature of the estoppel pleaded appeared to me to be a step which would promote the just determination of the litigation and may well allow the plaintiff to prepare its trial submissions in a more efficient and cost effective manner. 

3. As to the capitalisation representation, I was of the view that the pleading did not itself adequately explain the defendants' preferred or asserted meaning of this term.  Counsel for the plaintiff described the plea as 'somewhat amorphous'.[36] I tend to agree. Requiring the defendants to explain the term was, in these circumstances, also consistent with the objects in O 1 r 4B(1) RSC.

Defendants' request for further and better particulars

[36] ts 478.  As an aside, the subject of capitalisation of interest was explored by Applegarth J in PSAL Ltd v Kellas [2012] QSC 31 [108] – [120], although from a different perspective to the manner in which the issue is raised by the defendants in the present matter.

1. On 10 November 2023, the defendants filed, in CIV 2283, a request for further and better particulars of the plaintiff's reply.  I heard argument on that request on 23 November 2023.  On 24 November 2023, I ordered that the plaintiff file and serve further particulars as sought by requests 1, 2.1 and 2.2 of the defendants' requests, but otherwise dismissed the defendants' requests.  My reasons for disposing of the application in this manner are set out below.

Request 1

1. The first request was as follows:

   As to paragraph 6(aa) of the Reply, and the request by the First Defendant there pleaded:

   1.1 Was the request made in writing or orally, or partially in writing, partially oral?

   1.2 If made in writing or partially in writing, identify the relevant document or documents and where the same may be inspected.

   1.3 If made orally or partially oral: 1.3.1 give the substance of each relevant oral request; and 1.3.2 state to whom on behalf of the Plaintiff each such request was made.

2. The reply pleads an allegation that the first defendant made a request to the plaintiff to make payment to the City of Wanneroo of a certain amount.  The details of the request are rather general, expressed to be sometime after 2 October 2015.[37]  A request for particulars of such a pleaded request is a proper request for particulars.  I considered it was appropriate for these particulars to be provided to ensure the plaintiff's case was sufficiently clear to allow the defendant a fair opportunity to meet the case being advanced.[38]  Additionally, the provision of such particulars did not strike me as being onerous in any respect.

Request 2

[37] Reply in CIV 2283, [6(aa)].

[38] Ammon v Consolidated Minerals Ltd [3].

1. The second request was as follows:

   As to paragraph 6(bb) of the Reply, and the allegation that during the period 2 October 2015 and 8 November 2016 (herein the Period), the plaintiff was not satisfied with the security available to pay the $470,551 requested by the first defendant, state:

   2.1 What natural person or persons so formed the state of nonsatisfaction on behalf of the Plaintiff?

   2.2 In reaching such state of non-satisfaction, state each security considered and the value attributed to the same, and if the same changed at any time (the relevant time) during the Period, state the security and value attributed to it at each relevant time.

   2.3 Was the state of non-satisfaction communicated the defendants?

   2.4 If the state of non-satisfaction communicated to the defendants, was the communication in writing or orally, or partially in writing, partially oral?

   2.5 If made in writing or partially in writing, identify the relevant document or documents and where the same may be inspected.

   2.6 If made orally or partially oral: 2.6.1 give the substance of each relevant oral communication; and 2.6.2 state to whom on behalf of the defendants each such communication was made.

2. The reply pleads an allegation that the plaintiff was not satisfied with the security available to pay the amount which had been requested by the first defendant.  A period of time was pleaded, being between 2 October 2015 and 8 November 2016.[39]  No particulars of the basis of the plaintiff's lack of satisfaction were otherwise pleaded.  Evidence has been filed in relation to the issue, but that is quite a different matter from requiring a party to fully particularise an important allegation. 

   [39] Reply in CIV 2283, [6(bb)].

3. A request for particulars of such a pleaded assertion (that the plaintiff was not 'satisfied as to the security available') is a proper request for particulars.  I considered it was appropriate for these particulars to be provided to ensure the plaintiff's case was sufficiently clear to allow the defendant a fair opportunity to meet the case being advanced.[40]

   [40] Ammon v Consolidated Minerals Ltd [3].

1. However, the particulars requested in requests 2.3 to 2.6, as to whether the non-satisfaction was communicated by the plaintiff to the defendants, travelled beyond the proper purpose of a request for particulars.  I reached this view because the plaintiff had not pleaded any allegation as to the 'communication' of the state of non-satisfaction.

D.     Conclusion

1. For the foregoing reasons, I made the relevant orders on 24 November 2023 and 1 December 2023 in these actions.

ATTACHMENT A
Chronology of recent interlocutory events and orders

Date

         Event / Orders

20 October

Special appointment (1½ hours).

24 October

Special appointment (half-day).

27 October

Special appointment (half-day).

30 October

Decision delivered: Walthamstow Pty Ltd v Caratti [No 3] [2023] WASC 413.

8 November

Strategic Conference (half-day).

23 November

Special appointment (half-day).

24 November

Orders made in both actions as to discovery, pleadings, evidence of the second defendant at trial, the order of evidence at trial, as to the plaintiff's request for further and better particulars of their defences.

Orders also made in CIV 2283 as to the defendants' request for further and better particulars of [6(aa)] and [6(bb)] of the plaintiff's Reply.

1 December

Case management directions made in CIV 3136 to require the defendants to file a memorandum as to the categories of estoppel and meaning of 'exhaust its right' in their Fourth Amended Defence.

Case management directions made in CIV 2283 to require the defendants to file a memorandum as to the categories of estoppel and meaning of 'capitalised' in their Substituted Amended Defence and Counterclaim in CIV 2283.

15 December

Extended directions hearing with orders made to program disputed issues to a special appointment (half-day).

22 December

Special appointment (over a half-day).

Orders made in both actions as to pleadings, subpoenas and papers for the judge.

5 January

Decision delivered in respect of orders made on 24 November 2023 and 1 December 2023: Walthamstow Pty Ltd v Caratti [No 4] [2024] WASC 1.

29 January

Trial of both actions listed to commence for 10 days.

ATTACHMENT B
Orders made in CIV 3136 on 24 November 2023

ATTACHMENT C
Orders made in CIV 3136 on 1 December 2023

ATTACHMENT D
Orders made in CIV 2283 on 24 November 2023

ATTACHMENT E
Orders made in CIV 2283 on 1 December 2023

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

THE HONOURABLE JUSTICE M LUNDBERG

5 JANUARY 2024