Westpoint Corporation Pty Ltd v Fieldmont Holdings Pty Ltd
[2000] WASC 319
•20 DECEMBER 2000
WESTPOINT CORPORATION PTY LTD & ANOR -v- FIELDMONT HOLDINGS PTY LTD & ORS [2000] WASC 319
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 319 | |
| Case No: | CIV:2491/2000 | 20 DECEMBER 2000 | |
| Coram: | MURRAY J | 20/12/00 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application generally unsuccessful | ||
| PDF Version |
| Parties: | WESTPOINT CORPORATION PTY LTD WESTPOINT CONSTRUCTIONS FIELDMONT HOLDINGS PTY LTD (ACN 009 470 044) MONTEATH PROPERTIES PTY LTD (ACN 009 458 093) BRUCE JOHN MONTEATH DONNA JOY MONTEATH |
Catchwords: | Practice and procedure Application to strike out paragraphs of statement of claim Turns on own facts |
Legislation: | Nil |
Case References: | Bridgetown-Greenbushes Friends of the Forest v Executive Director, Department of Conservation and Land Management (1997) 18 WAR 126 Concut Pty Ltd v Worrell [2000] HCA 64 Hungerfords v Walker (1989) 171 CLR 125 Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Monarch SS Co Limited v A/B Karlshamms Oljesabriker [1949] AC 196 Owners of the Dredger Lelsbosch v Owners of SS Edison [1933] AC 449 Port Kennedy Golf Country Club Pty Ltd v Port Kennedy Resorts Pty Ltd [1999] WASC 253 Port Kennedy Golf Country Club Pty Ltd v Port Kennedy Resorts Pty Ltd [2000] WASC 136 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- WESTPOINT CONSTRUCTIONS
Plaintiffs
AND
FIELDMONT HOLDINGS PTY LTD (ACN 009 470 044)
First Defendant
MONTEATH PROPERTIES PTY LTD (ACN 009 458 093)
Second Defendant
BRUCE JOHN MONTEATH
DONNA JOY MONTEATH
Third Defendants
Catchwords:
Practice and procedure - Application to strike out paragraphs of statement of claim - Turns on own facts
(Page 2)
Legislation:
Nil
Result:
Application generally unsuccessful
Representation:
Counsel:
Plaintiffs : Mr A H Karp
First Defendant : Mr J C Giles
Second Defendant : Mr J C Giles
Third Defendants : Mr J C Giles
Solicitors:
Plaintiffs : Karp Steedman Ross-Adjie
First Defendant : Solomon Brothers
Second Defendant : Solomon Brothers
Third Defendants : Solomon Brothers
Case(s) referred to in judgment(s):
Bridgetown-Greenbushes Friends of the Forest v Executive Director, Department of Conservation and Land Management (1997) 18 WAR 126
Concut Pty Ltd v Worrell [2000] HCA 64
Hungerfords v Walker (1989) 171 CLR 125
Case(s) also cited:
Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Monarch SS Co Limited v A/B Karlshamms Oljesabriker [1949] AC 196
Owners of the Dredger Lelsbosch v Owners of SS Edison [1933] AC 449
Port Kennedy Golf Country Club Pty Ltd v Port Kennedy Resorts Pty Ltd [1999] WASC 253
Port Kennedy Golf Country Club Pty Ltd v Port Kennedy Resorts Pty Ltd [2000] WASC 136
(Page 3)
1 MURRAY J: The application before the court raises some interesting points. It is, of course, an application to strike out various paragraphs of the statement of claim and its incorporated prayer for relief. It is an application which can be dealt with by discussing the three points which remain at issue between the parties, the points made with respect to par 13 and par 14 of the statement of claim having been conceded prior to the matter coming before the court. The plaintiffs have placed before the court a proposed amended statement of claim which Mr Karp will want me to address by way of order, ultimately, in any event, but upon which the debate has centred and so it may be regarded as the vehicle for these remarks.
2 The first point that is raised by Mr Giles is, I think, one which may be shortly put in this way, in the hope that I do not do an injustice to his argument which I think may have much practical merit attached to it. It is that although the central claim is to recover against the defendant parties the principal sum of the money loaned, together with interest thereon to the date of payment calculated pursuant to the letter of offer and the deed of loan, there is in addition a claim for damages for breach of what is described in the proposed amended statement of claim as the letter of offer and the deed of loan.
3 Mr Giles argues that no such claim is maintainable when it is seen that the loan was made upon commercial rates or better than commercial rates of interest applicable until payment. In response to that, Mr Karp submits that such a claim for damages can be made and would depend ultimately at trial upon the plaintiffs' capacity to establish that had the moneys provided for in the loan agreement been paid in a timely way, the plaintiffs would have had the capacity to place that money commercially in circumstances calculated to earn income above that recoverable by way of interest under the loan agreement.
4 There seems to me to be no doubt that in such circumstances of fact such a claim is maintainable. It stems in this country from the decision of the High Court in Hungerfords v Walker (1989) 171 CLR 125 and the succinct statement of the principle emerges best, I think, from the joint judgment of Brennan and Deane JJ, as their Honours then were, at 152 of the report where it is said that an award of damages, it is accepted, may be made to compensate a plaintiff where there has been wrongfully caused loss of money or holding out of the possession of money, wrongfully in the sense that that has occurred by means of a tort or breach of contract. In that circumstance the assessment of the compensation to be provided
(Page 4)
- may be by reference to the interest which might have been earned upon, or in other words the return which might have been obtained from, the commercial use of the money from which the plaintiff has wrongly been held out.
5 That is described as being an assessment tested by considering what the evidence establishes in relation to the return which might have been achieved by those funds safely invested, and hence, one sees the, with respect, sensible limitation upon this process of the assessment of damages which shuts out, as I agree with Mr Giles is the effect of the law, a plaintiff from coming to the court and saying that in the particular case a much greater return on his funds might have been achieved than would sensibly or generally be available to a prudent investor. Be that as it may, the claim for damages is maintainable and it seems to me that under the Rules I may not strike it out upon any of the grounds developed in O 20 r 19 at this juncture without regard to, or speculation about, what the evidence might establish or might fail to establish.
6 It is the case that, as Mr Karp has said, if upon more complete investigation for the plaintiffs it proves to be the case that in the particular circumstances such a claim is not maintainable, as I suspect might be the case, although that is an observation which, perhaps, I should not permit myself, then that claim would be abandoned. Of course, if that were to occur and the defendants in the meantime had incurred costs in dealing with the claim during the time that it was maintained, the court would have a capacity to provide the defendants with protection by an appropriate order in respect of costs in that regard.
7 In short it seems to me that the point raised here does not elevate itself to one which would justify the court or compel the court to take the view that the claim under discussion should be struck out.
8 That brings me to the second point, which concerns the claim made in respect of both the guarantee and the indemnity provided under the deed of guarantee and indemnity, and it is correct that so far as the guarantors are concerned there is a discrete claim for relief by the plaintiffs which relies upon the indemnity and seeks to recover damages for breach of the contract of guarantee and indemnity.
9 The question here then is whether there is a maintainable or arguable cause of action and the traditional view is that only if that is not the case should the pleading be struck out. It involves a question of construction of the document and that of itself is no reason for the court to shrink from
(Page 5)
- addressing the point at this stage. It is well established that where such an issue can be resolved on the face of the documents and in the light of the pleading at this preliminary stage, with the consequent confining of the issues of trial and reduction in the possible length of trial, the court ought to roll its sleeves up and get on with it. A good recent example of that approach is the case cited by Mr Giles, Bridgetown-Greenbushes Friends of the Forest v Executive Director, Department of Conservation and Land Management (1997) 18 WAR 126 and that was precisely, in circumstances of some complexity, the approach which the Full Court endorsed in that case.
10 Turning then to the document itself, the point which Mr Giles really makes is that the indemnity is an additional and separate obligation and a true understanding of the way in which the claim is formulated against the guarantor parties is that there is no cause of action which may possibly be relied upon separately under the indemnity. Mr Karp argues that it is open to construe the document reasonably in such a way that it creates not only the obligation of guarantee, but upon the circumstance arising which would enliven that obligation, there will also be brought into life the obligation of indemnity if the circumstances in the relevant clause of the deed, cl 2.3.1, or any of them operate. That which is relied upon is that the guarantor unconditionally and irrevocably indemnifies the plaintiff as lender against any loss the plaintiff may suffer because the lender does not for any reason recover from the borrower any of the guaranteed money.
11 It is said that it would be submitted that that occurred in this case when there was a breach of the loan agreement and the moneys were not paid. That is said to be the meaning which should be given to the word "recover" in that context and so it is said that not only does this document, properly construed, provide an unconditional and irrevocable guarantee of punctual payment, but thereupon there would be enlivened an indemnity against any loss suffered by reason of there being a failure to make or achieve punctual payment. That is a claim which it is said may properly be brought against the guarantor as and by way of that additional, but closely related in the circumstances in which it may arise, obligation.
12 That, as I have said, is not the interpretation which the guarantor parties, as I have described them, would place upon the document. Upon their interpretation, which I agree may be reasonably open, the argument put for the plaintiffs is tantamount to one which effectively replaces the obligation of guarantee with the obligation to provide a complete indemnity against any loss which might be sustained.
(Page 6)
13 Both arguments seem to me to be respectable and to be arguments which might attract the support of a trial court, but for my part, if it is necessary to do so, I lean towards the argument which is put for the plaintiffs in relation to the proper construction of the document. It seems to me that it does not involve the consequence for which the defendants argue that no separate life can be seen within the context of the deed for the obligation of guarantee. That seems to me, once that view is, as I take it to be, at least arguably open, to mark the end of the court's capacity to conclude that in respect of that limb of the claim no cause of action is disclosed and the plea should be struck out.
14 I turn then to the third point on which the application is based and this is a general proposition that it appears that this loan was achieved pursuant to two documents, both of which are pleaded in the statement of claim. The contract, it is said, arose out of a letter of offer and a deed of loan ultimately entered into as envisaged by, or indeed almost required by, the letter of offer itself. The deed of loan when entered into, however, at a number of points refers to the obligations expressed in the letter of offer and incorporates as covenants in the deed specific terms of the letter of offer. The defendants make the point that there can only on any view of the matter be the one contract, relying upon observations of the High Court in the as yet unreported decision of Concut Pty Ltd v Worrell [2000] HCA 64, a decision delivered on 14 December 2000.
15 The point is undoubtedly correct that there is a unity of contract in the circumstances pleaded in the statement of claim. There was undoubtedly simply the one loan agreement, the terms of the agreement being derived from a combination of the letter of loan and letter of offer in the sense that the letter of offer is incorporated into the deed of loan so that the two are, as they must be, to be read as one.
16 In my view there is no difficulty, however, in the way in which the statement of claim pleads that circumstance. I can see nothing to cause concern in relation to the manner of pleading in either of two ways. In the first place it does not seem to me that the manner of pleading misapplies the nature of the contractual relationship or misstates it in the sense that what is relied upon is two separate agreements rather than the one, so that there is nothing in that regard which would lead to the conclusion that what is in truth relied upon discloses no reasonable cause of action; nor, I think, is there anything in the pleading which so lacks clarity or a capacity to understand what the issues are or what is being relied upon as to cause the court to conclude that the pleading or particular clauses should be struck out upon the ground that they may prejudice, embarrass or delay
(Page 7)
- the fair trial of the action by reason of the incapacity to plead to them in such a way as to lead to the issues between the parties being clearly defined.
17 For those reasons, in my opinion, in relation to the paragraphs other than the abandoned par 13 and par 14, and the amendments which follow upon that, the application should be dismissed.
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