Wheelahan v City of Casey (No 12)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

VALUATION, COMPENSATION & PLANNING LIST

No. 9776 of 2008

MATTHEW JOHN WHEELAHAN AND THERESA WHEELAHAN	Plaintiff
v
CITY OF CASEY AND ORS	Defendant

---

JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	29 APRIL 2013
DATE OF JUDGMENT:	20 JUNE 2013
CASE MAY BE CITED AS:	WHEELAHAN & ANOR v CITY OF CASEY & ORS (No 12)
MEDIUM NEUTRAL CITATION:	[2013] VSC 316

---

PRACTICE AND PROCEDURE – Pleadings - Application to strike out defence and counterclaim – complex proceeding with multiple claims and defences - Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005.

---

APPEARANCES:	Counsel	Solicitors
For the First Defendant	Mr A Monichino SC with Ms E Peppler of counsel	Ashurst Australia
For the Twelfth Defendant	Ms F McLeod SC with Mr R Wilson and Ms C Melis of counsel	Macquarie Lawyers & Strategists

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

The issues in dispute in the proceeding - generally.................................................................... 2

The structure of the challenged pleading...................................................................................... 6

Casey’s objections to the pleading.................................................................................................. 8

General principles.............................................................................................................................. 9

General responses to the application........................................................................................... 12

Allegations that don't go anywhere.............................................................................................. 14

The form of the separate particulars............................................................................................. 20

The notes and table introducing Part II of the pleading.......................................................... 23

The defence to the clause 4.3 claim............................................................................................... 26

Section T of the pleading – paragraphs 150–168........................................................................ 30

Status of the waste disposal agreement....................................................................................... 32

Paragraphs 11O and 142.................................................................................................................. 33

Superintendent allegations............................................................................................................ 35

Breach of implied term of SITA agreement................................................................................ 38

Casey’s negligence........................................................................................................................... 38

Allegations turning on the position of MWMG as agent of Casey........................................ 40

Cemetery Road landfill................................................................................................................... 41

Loss and damage.............................................................................................................................. 43

The common assumption pleading issues.................................................................................. 45

Frankston’s claim for repayment of costs paid by it to date (set off)...................................... 46

Proportionate liability defence...................................................................................................... 47

Statutory contribution claim.......................................................................................................... 50

Frankston's clause 4.3 claim........................................................................................................... 51

Miscellaneous complaints.............................................................................................................. 51

Orders on the application............................................................................................................... 51

Further directions............................................................................................................................. 52

HIS HONOUR:

Introduction

Residents and former residents of the Brookland Greens Estate, affected by the migration of landfill gas from an adjacent former municipal landfill, brought a group proceeding under Part 4A of the Supreme Court Act 1986 against the first defendant and others. Ultimately, there were 13 defendants and third parties in the proceeding. The plaintiffs compromised their claims and this court approved the settlement.[1] During 2012, other claims in the proceeding were compromised and duly struck out. Yet to be resolved are claims between the first defendant, City of Casey, the sixth defendant, Metropolitan Waste Management Group (MWMG) and the twelfth Defendant, City of Frankston. The proximate relationship between the remaining parties arises from the use and management of that adjacent former municipal landfill, the Stevensons Road landfill.
[1]Wheelahan & Anor v City of Casey & Ors [2011] VSC 215 (23 May 2011).

While the proceeding commenced in 2008, the dispute between Frankston and Casey only commenced in July 2011 with a counterclaim by Frankston against Casey. In November 2011, Casey formally advanced claims against Frankston. Frankston’s current May 2012 pleading is its first formal response to Casey’s claim. At a directions hearing before Osborn J (as his Honour then was) in April 2012, the parties remaining in the proceeding, for practical purposes the three defendants I have named, agreed that the disputes should be pleaded anew - a fresh slate as if the action were commencing again was suggested - and the court directed that the new pleadings stand in lieu of any pleading previously delivered between Casey, Frankston and MWMG. On 2 May 2012, Casey filed and served a statement of claim against Frankston. On 18 May 2012, Frankston filed and served a defence to Casey’s claims and a counterclaim, accompanied by separate particulars of that pleading, dated 21 May 2012.

On 21 December 2012, Casey filed a summons seeking, inter alia, pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules2005, that Frankston’s defence and counterclaim and its particulars be struck out, alternatively that nominated paragraphs of that pleading and the whole of the particulars be struck out. The proceeding has been allocated to me for judicial case management and trial and my first task is to hear and determine this application.

The issues in dispute in the proceeding - generally

In broad compass, the issues joined between the parties are generally understood. The particular focus of this application is the want of precision in the pleadings and the prospect that the real controversies cannot be easily identified and managed in an efficient and just way. Before turning to the particular criticisms that Casey levels at Frankston’s pleading, I will set out how the parties broadly identify the issues arising in the proceeding.

Casey, Frankston and MWMG entered into a waste disposal agreement that governed the use, operation, management, administration, and rehabilitation of the Stevensons Road landfill. MWMG managed the landfill, which was used by both Casey and Frankston for waste disposal. Casey contends that Frankston contributed 28 percent of the waste in the landfill. MWMG ceased to manage the landfill by July 2002. However, Casey and Frankston continued to tip waste into the landfill and Casey contends that the two councils continued to have shared decision making power in relation to it. There were later contracts with managers and consultants after MWMG withdrew.

Although the landfill was closed in June 2005, a problem emerged with escaping landfill gases. This proceeding was commenced in September 2008. In February 2009, Frankston advised Casey that it would no longer contribute to costs, including rehabilitation and remediation costs and it has not contributed to any such costs incurred since 1 July 2008. Casey contends that up to 30 June 2008 Frankston paid about 28 percent of costs, including rehabilitation and remediation costs and shared 28 percent of the profits of operating the landfill.

In this proceeding, Casey claims against Frankston 28 percent of the costs incurred by Casey between 1 July 2008 to the present. Casey seeks a declaration that Frankston is obliged to pay 28 percent of future costs in relation to the Stevensons Road landfill. The relevant costs include amounts paid in settlement of claims made by the residents and the costs of remediating and rehabilitating the Stevensons Road landfill. Detailed particulars of loss and damage have not been served and this issue will be addressed at future directions hearings.

The legal basis for the recovery of these costs is pursuant to terms of the waste disposal agreement, which Casey contends continued to operate after MWMG withdrew from that agreement or it had come to an end. Alternatively, Casey contends that the agreement continues to operate after July 2002 when MWMG ceased to be the manager by conventional estoppel, implied variation of the agreement, or a separate joint venture obligation. Further, Casey seeks rectification of the key operative clause, clause 4.3, on the grounds of mistake.

Frankston denies all liability for the claims made against it by Casey, placing in issue the precise content and the proper construction of the terms of the waste disposal agreement. Frankston further contends that statutory formalities affecting contracts involving municipalities preclude Casey’s allegations of estoppel and implied agreement.

Further, other issues are relevant. Adjacent to the Stevensons Road landfill, which belongs to Casey and lies within its municipal borders, is the Cemetery Road landfill that, although not the subject of the waste disposal agreement, has contributed to pollution and regulatory notices from the Environment Protection Authority (EPA) concerning environmental pollution related to pollution from both landfills.

Frankston also contends that Casey’s planning responsibilities in respect of the establishment and operation of both landfills and for the use and development of the adjoining and surrounding land are relevant. Frankston contends that Casey was negligent in the discharge of these responsibilities which caused or contributed to the damages which it now seeks to claim from Frankston.

Frankston contends that the indemnities in the waste disposal agreement on which Casey relies are highly qualified and do not apply in the event of breach of that agreement by Casey. Further, Frankston contends that the indemnities did not survive the withdrawal of MWMG from management of the Stevensons Road landfill. Frankston contends that Casey breached its contractual obligations to Frankston or breached a duty of care to Frankston and it is liable in damages to Frankston. Further it cannot claim indemnity for losses that it has suffered by its own breach of contract or negligence.

Frankston alleges legal consequences from the arrangements made after MWMG withdrew in 2002. In November 2001, Casey and Frankston contracted with Grosvenor Lodge Pty Ltd to operate this site and MWMG by its region manager, was appointed by the councils as superintendent. In March 2002, Casey contracted with Energex to permit extraction and use of landfill gas from the Stevensons Road landfill and in so doing acknowledged that it was the owner and operator of the landfill site with all rights to, and responsibilities for, landfill gas emanating from the landfill. Then in July 2002, Casey appointed Martin Aylward & Associates as an interim replacement landfill manager. It is in these circumstances that Frankston contends that the waste disposal agreement ceased to have any ongoing force or effect.

In June 2003, Casey and Frankston entered into an agreement with SITA Australia Pty Ltd to manage the landfill, with Casey’s director of infrastructure services as superintendent. In October 2006, after the Stevensons Road landfill was closed, its management was managed by Stuart Hercules, under contract with Casey.

From these circumstances, Frankston raises positive defences, which also support its counterclaim, as follows:

(a)clause 4.3 does not apply to actions or loss that Casey itself, or MWMG caused;
(b)on its proper interpretation, clause 4.3 is limited, including by reference to clause 4.5;
(c)by reason of Casey’s breach of clause 4.2, and an implied term of the waste disposal agreement that Frankston alleges, Casey is not permitted to rely on the indemnity in clause 4.3;
(d)the clause 4.3 indemnity is subject to the ‘carve-out proviso’ which is engaged in the circumstances;
(e)by reason of Casey’s breach of its obligations as superintendent under the SITA agreement, Frankston is not liable to Casey on the indemnity in clause 4.3;
(f)by reason of Casey’s negligence, Casey is not permitted to rely on the indemnity in clause 4.3;
(g)Casey negligently failed to comply with its obligations under the waste disposal agreement and with the licence and permit conditions relating to the landfill;
(h)Casey was negligent in relation to its landfills and specifically that it did not ensure that the Stevensons Road landfill was developed, operated and managed as it should have been;
(i)Casey was also negligent in allowing residential development up to the landfill boundary in the buffer zone and in not properly prosecuting before VCAT the case for the issue of permits within the buffer zone; and
(j)Casey’s claimed costs, loss and damages include costs and liabilities that Casey incurred in relation to the Cemetery Road landfill.

Further, Frankston contends that MWMG breached its obligations under the waste disposal agreement and was negligent in its management of the design, construction and operation of the landfill. Frankston contends that MWMG was Casey’s agent and Casey is vicariously liable for its negligence. Further, Casey can make no claim against Frankston to the extent that its loss or damage was caused by MWMG.

Frankston also contends that as the Stevensons Road landfill has been capped and grassed and is in a state of post-closure maintenance, the costs associated with ongoing site management are Casey’s responsibility, a contention that turns on the proper construction of the waste disposal agreement.

Frankston appears to claim to be entitled to set off so much of its counterclaim as extinguishes Casey’s claim and it seeks declarations, damages, and other relief.

The structure of the challenged pleading

Casey’s statement of claim is 110 paragraphs over 58 pages. The challenged pleading is a defence and counterclaim of 180 paragraphs over 113 pages. It has an index and it also includes notes, footnotes, document identification codes, and tables. It adopts the same headings and paragraph numbering as Casey’s pleading. Particulars are provided within the body of the pleading although separate particulars have been served where the particulars of pleaded allegations are lengthy. The separate particulars, at 151 pages, are lengthy.

Although the pleading is a defence and counterclaim, the pleading has an unusual structure. It does not expressly differentiate between the defence of Casey’s claim and Frankston’s separate counterclaim. Part I (comprising Sections A to L) entitled ‘Casey’s Statement of Claim’ appears to comprise a defence to the allegations in Casey’s Statement of Claim. Part II (comprising Sections M to X) is expressed as containing further claims made by Frankston against Casey by way of defence, and by way of counterclaim. Part II commences with a table purporting to summarise those further claims and defences. The table is not in a form that Casey can plead to, but it purports to identify various positive defences that Frankston advances in Part II of the pleading to Casey’s clause 4.3 claim.

By its written submission, Frankston offers an extensive explanation of its pleading and its allegations. Minor typographical errors identified by Casey have been clarified by an appended ‘Corrections Table’. I will not concern myself with such matters, assessing the substantive objections on the basis that such amendments will be permitted. In summary, Frankston contends that its claims need to focus on a longer time frame that the history of dealings pleaded by Casey, coupled with:

(a)the complexity of the tripartite nature of the waste disposal agreement with MWMG on which Casey sues and under which MWMG was responsible for management of the landfill until it was rehabilitated (which did not eventuate);
(b)the highly qualified indemnities on which Casey relies (and in respect of which Casey seeks rectification) and contends operate by conventional estoppel, implied variation or inferred joint venture;
(c)the significance of Casey’s own conduct in relation to the design, construction, operation and management of its two landfills in Cranbourne and in relation to planning matters within and outside the landfills,

all make it necessary to plead extensive relevant material facts, supported by detailed particulars, so Casey cannot complain to be taken by surprise.

Part II concludes with a prayer for relief. The opening four paragraphs of the prayer for relief seek extensive declarations; either that the waste disposal agreement has been discharged on grounds reflecting the defences pleaded, or, if it has continuing operation, the extent of that continuation and as to its proper construction and meaning. The remaining paragraphs claim substantive relief; damages, contractual indemnity pursuant to the waste disposal agreement, and Wrongs Act 1958 (Vic) remedies. The present particulars of loss, which also support a defence of set off, predominately allege a risk of future loss and past loss in the form of defence costs to claims made by the current, and former, parties to this proceeding. However, these particulars are too general to permit insight into the nature of the losses to be recovered by Frankston’s counterclaim.

No persuasive explanation was proffered for this unusual structure and no benefit from its use is apparent. I will say more about it when considering the introductory note that purports to explain it in due course.

Casey’s objections to the pleading

Casey’s objections relate to the following paragraphs of the pleading:

(a) Paragraphs 11A(b), 11P to 11X, 51A–53D (save for 51ZA, 51ZB, 52 and 53) and 111A–135. There are too many background allegations that confuse rather than enlighten the reader, and hence create a pleading that is embarrassing.

(b) The whole of the separate particulars dated 21 May 2012 - Frankston’s separate particulars are not in proper form.

(c) Paragraphs 112–135, 137-144 and 145-147 (to the extent that they are relied upon as a defence to Casey’s clause 4.3 claim), 148 and 170 which is the pleading of the defence to Casey’s clause 4.3 claim.

(d) The table that introduces Part II of the pleading is extraneous and confusing – the table on page 71 of the pleading.

(e) Paragraphs 150–168 - the role of Section T of the pleading is obscure and unrelated to pleaded defences and causes of action.

(f) Paragraphs 11Y and 11Z - the pleading of Casey’s alleged discharge or abandonment of the waste disposal agreement is deficient.

(g) Paragraph 142 – breach of clause 4.2 and of an implied term.

(h) Paragraphs 62A, 62C, 62D, 88B, 88C, 99B, 144-146, 147 and 169 - the superintendent allegations.

(i) Paragraphs 62B, 144(a) and 169 - breach of implied term of SITA agreement.

(j) Paragraphs 145, 147 and 169 - the cause of action against Casey in negligence.

(k) Paragraphs 142, 143, 149 and 169 - allegations that MWMG acted as Casey’s agent (solely) to establish certain breaches of the waste disposal agreement and that Casey is liable for the tortious acts and omissions of MWMG.

(l) Paragraphs 1A, 1B, 16, 17, 22, 25, 27, 32, 51A, 51C, 51D, 53F, 99A, 138, 139, 140, 142, 145, 147, 149 and 153 - allegations concerning the Cemetery Road landfill.

(m) Paragraph 169, the whole paragraph, alternatively the reference to paragraphs 150–168 in paragraph 169 - Frankston’s pleading of loss and damage.

(n) Paragraphs 88A, 88B, 93A and 94A(e) - Casey challenges the pleading of the alternative common bases alleged in response to its conventional estoppel claim.

(o) Paragraph 99A - Frankston’s claim for set off or repayment of monies, costs and expenditure, allegedly wrongly paid by Frankston to Casey.

(p) Paragraphs 172–178 - the proportionate liability defence under Part IVAA of the Wrongs Act is misconceived.

(q) Paragraph 179 - the alternative statutory contribution claim pursuant to section 23B of the Wrongs Act is incompetent.

(r) Paragraph 180 - Frankston’s claim for indemnity under clause 4.3 of the waste disposal agreement.

(s) Paragraphs 51(b)-(c) and 58A - Miscellaneous complaints.

General principles

Casey contended that three recent decisions of this court, SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors (Aust) Pty Ltd & Ors (No 2),[2] Environinvest Ltd v Pescott & Ors; Environinvest Ltd v Blackburne Pty Ltd & Ors,[3] and Clarke & Ors v Great Southern Finance Pty Ltd & Ors[4] identify the relevant principles that govern its application. Frankston took no issue in written or oral submissions with Casey’s contention as to the applicable principles. Relevantly:
[2][2011] VSC 492 (30 September 2011).
[3][2011] VSC 325 (19 July 2011).
[4][2010] VSC 473 (20 October 2010).

(a)Order 13 of the Rules set out the relevant requirements of a sufficient pleading, while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;
(b)the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;[5]
[5]The function of defining issues for trial is required from an early stage. Otherwise, discovery and other interlocutory process are likely to be misdirected: Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd& Ors (1996) ATPR 41-522 per Burchett J at 42,679.
(c)the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence).[6] The expression ‘material facts’ is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;[7]
[6]A reasonable cause of action or defence is one with a real chance of success, assuming the correctness of the allegations of fact in the challenged pleading.
[7] Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568 [13], citing Bruce v Oldhams Press Ltd [1936] 1 KB 697, 712-713.
(d)as a corollary, the pleading must be presented in an intelligible form – it must not be vague or ambiguous or inconsistent.[8] Thus a pleading is ‘embarrassing’ within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;
[8]In Environinvest, the pleading was struck out because it was confusing, often circular, sometimes inconsistent and contained no coherent narrative.
(e)the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;[9]
[9]SMEC at [8].
(f)pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);[10]
[10]SMEC at [9].
(g)a pleading which contains unnecessary or irrelevant allegations may be embarrassing – for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;[11]
(h)it is not sufficient to simply plead a conclusion from unstated facts.[12] In this instance, the pleading is embarrassing;
(i)every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));
(j)the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);[13]
(k)particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement – namely, to fill in the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met.[14] An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;[15]
(l)a pleading should not be so prolix that the opposite party is unable to ascertain with precision the causes of action and the material facts that are alleged against it;[16]
(m)extensive cross-referencing of facts in a pleading may render parts of the pleading unintelligible;[17]
(n)in an application under r 23.02, the court will only look at the pleading itself and the documents referred to in the pleading;[18]
(o)the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown;[19] and
(p)if the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.[20]
[11]SMEC at [28]–[31]. In SMEC, Vickery J remarked (at [5]) that good pleading calls for ‘judgment and courage to shed what is unnecessary’.
[12]Trade Practices Commission v David Jones (Australia) Pty Ltd & Ors (1985) 7 FCR 109, 114.
[13]In Gunns Ltd & Ors v Marr [2005] VSC 251, Bongiorno J remarked (at [52]) that the paragraphs in the pleading ‘contain quotations from newspapers, websites and correspondence which are inappropriate in form’.
[14]Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 per Mason CJ and Gaudron J at 286.
[15]Clarke at [9].
[16]Knorr v CSIRO & Ors (No 2) [2012] VSC 268.
[17]In Gunns, Bongiorno J noted (at [20]) that the particulars to the amended statement of claim under attack incorporated allegations of approximately 40 other paragraphs, requiring the defendants to navigate through a labyrinth of allegations. His Honour refused leave to file the amended statement of claim in the proposed form.
[18]Rule 23.04 and Day v William Hill (Park Lane) Ltd [1949] 1 KB 632.
[19]Clarke at [11].
[20]Davy v Garrett (1878) 7 Ch D 473.

General responses to the application

Frankston contends that:

(a)Casey understands Frankston’s defence and counterclaim. Frankston is not confined to the case pressed by Casey and frames its case differently, relying upon events occurring throughout a longer time period to plead that the history of dealings between the parties supports different conclusions to those pressed by Casey.
(b)Casey has previously pleaded to allegations put against it by Frankston. It has not previously said it cannot plead to such allegations and should not be permitted now to depart from that course. The court should hold Casey to its previously pleaded position except to the extent it is given specific leave to amend its previous defence to Frankston’s earlier counterclaim against it.
(c)To order fresh pleadings at this stage is not efficient, just or required where the fundamental positions of both parties on the issues between them have been well articulated in the previous exchanges of pleadings, and where the case may proceed efficiently and justly by statements of facts, issues and contentions.
(d)Frankston’s pleadings were filed in May 2012 and the parties then participated in a mediation. No relevant complaint was raised by Casey about Frankston’s pleading for six months until a letter from Casey’s solicitors on 14 November 2012.

I accept that, broadly and in general terms, Casey understands Frankston’s defence and counterclaim, but that is not to the point. Not only is Casey entitled to the detail of the defences and claims against it, but the court is requiring that this large and legally complex proceeding that raises a long and detailed history of dealings between the parties be case managed in order that the resources of the parties and of the court are applied justly and efficiently. I do not agree that the proceeding can readily move to identification of the real issues that are in dispute until the precise issues raised on the pleadings are properly identified and particularised.

I do not agree that Casey should be held to prior pleadings that developed in the context of claims, defences and cross-claims involving numerous other parties that have now resolved. In any event, Frankston consented to a clean slate approach to the remaining issues.

It is clear that there will be many issues arising in case preparation and at trial. There will be significant, and expensive, reliance on expert opinion at trial, many documents, and witnesses will be required to give evidence of events spanning a broad chronology. There is already a looming dispute concerning discovery. No party seems to have given much thought to detailed particulars of loss, even at the stage of categories of loss.

To assist practitioners with interlocutory management of this proceeding and subject to any submission at the next directions hearing, I propose, substantially, to manage the proceeding as if it is governed by Order 3 of Chapter II of the Rules and by reference to Practice Note No 2 of 2009. In particular, once the pleadings have closed, I will direct that the issues raised in the pleadings be reduced to a Statement of Issues which I may settle in consultation with the parties, and I will later further direct that the proceeding or part of the proceeding be conducted thereafter in accordance with and by reference to the Statement of Issues. I will direct that Casey’s summons also stand as a summons for directions.

Casey disputes that it did not raise any objection to Frankston’s pleadings until 14 November 2012. Frankston’s pleading was filed a few days before a mediation held on 25 May 2012. Casey contends that following the unsuccessful mediation, on 5 June 2012, its solicitors wrote to Frankston’s solicitors complaining not only about lack of particularity of the superintendent allegations, but also raising substantive pleading complaints about those and other allegations. The parties sought, to no avail, to resume the mediation. I am satisfied that, in context, there has not been unreasonable delay in prosecuting the pleading complaints. Further, the pleadings have not closed, the proceeding has not been fixed for trial, and Frankston has not identified any prejudice to it occasioned by any delay in bringing this application.

I turn now to the particular objections taken by Casey to the pleading.

Allegations that don't go anywhere

In SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors (Aust) Pty Ltd (No 2)[21] Vickery J said, and I agree:

[28]The Amended Statement of Claim contains a body of material which does not lead to making out any defined cause of action. This was said to be part of the background ‘matrix’ or narrative of the case against which the issues would need to be considered.
[29]However, pleading background ‘matrix’ or narrative material is rarely necessary. Further, in a complex case, it is likely to make the task of discerning the essential structure of the issues for determination, even more difficult, both for the defending party and for the court. […] Pleadings which serve to introduce the relevant actors who participated in the events in question or which describe the nature of the subject matter of the proceeding aside, background ‘matrix’ or narrative should not be introduced into a pleading if the effect is to obscure, rather than to clarify, the essential allegations sought to be advanced.

[21]SMEC at [28].

In a pleading, both the responding party and the court should be able to readily identify whether allegations are referrable to either a ground of defence or the counterclaim.

Casey contends, and I agree, that the following particular paragraphs of Frankston's pleading fall into this category of complaint.

Paragraph 11A(b) alleges that MWMG managed the Stevensons Road landfill pursuant to its statutory and constitutional functions, duties and powers, and paragraphs 11P to 11X set out those statutory and constitutional functions, duties and powers. Frankston’s pleading neither alleges that MWMG breached its statutory and constitutional functions, duties and powers nor pleads how a breach of such functions, duties and powers is relevantly a defence by Frankston to Casey’s claim, or supports any cause of action advanced by Frankston against Casey.

Frankston offers no particular justification for these parts of its pleading, and I will shortly refer to its general submission, but I do not regard these allegations as matters to which Casey would ordinarily be expected to respond in any meaningful way, for example ss 11P and 11Q which recite sections of statute law.

Section F of Frankston’s pleading comprises paragraphs 51A–53D and is headed ‘Conduct of the Parties’. In paragraphs 52–87 of its statement of claim, Casey pleads its claim of conventional estoppel in respect of the continuing operation of the waste disposal agreement beyond 2002. Paragraphs 52 and 53 of Frankston’s pleading respond directly to Casey’s allegations. Casey contends that the further allegations in Section F are predominately of background matters, leading up to entry into an agreement in 1995 for the design, establishment and operation of the Stevensons Road landfill. Frankston has not merely corrected or supplemented facts advanced by Casey.

Frankston’s submissions show that it contends that Casey knew of:

(a)the potential risks associated with landfill gas (LFG) generation, particularly in the context of an unlined landfill site and Casey’s predecessor (Cranbourne) allegedly insisting that the Stevensons Road landfill should be unlined (paras 51B–51R and 51Y).
(b)the intention of the owners of what was to become the Brookland Greens Estate was to develop that land for residential use.

In paragraphs 51T–51X, Frankston pleads Casey’s role as planning and responsible authority, in particular concerning:

(a)rezoning of land to the west of the proposed landfill in 1992 (paragraph 51T);
(b)a section 173 agreement dated 18 March 1992 (paragraphs 51U and 51V); and
(c)Amendment L71 to the Cranbourne Planning Scheme, which came into operation on 18 February 1993 (paragraphs 51W and 51X).

These paragraphs are not referred to elsewhere in Frankston’s pleading. It is not clear how these matters are linked to any ground of defence or counterclaim. They appear to be mere background facts. Possibly, the allegations might properly be the particulars of contentions that preclude the conventional estoppel that Casey pleads but such contentions ought to be articulated in the pleading as material facts rather than a morass of background facts. Possibly the allegations are relevant to a counterclaim, but there is nowhere any contention of any consequence by reason of the matters alleged in section F and the reader is not helped in identifying sequence and relationship between allegations by the extraneous notes, tables and indexes.

Section M in Part II of the pleading, headed ‘Amendment C6 to Casey Planning Scheme 1999-2000’ and comprising paragraphs 111A–120, sets out a factual history concerning the buffer zone issue and the amendment of the Casey planning scheme. These allegations appear to build to Frankston’s allegation in paragraph 120 that, with a particular knowledge (alleged in paragraph 119) Casey did not put any adequate evidence before, or make any adequate submission to, a panel appointed by the Minister for Planning concerning the appropriate buffer zone. I do not consider that the allegations in paragraphs 111A to 119 are necessary material facts.

Frankston does not articulate what it says is the consequence of conduct alleged in paragraph 120 or how it relies upon it as a matter of law.[22] I cannot determine to what defence or cause of action Section M is relevant.
[22]The only other reference to Amendment C6 in Frankston’s pleading and particulars is paragraph 7(a)(2) (on page 31) of the separate Particulars under the heading ‘Casey’s failures as planning and/or responsible authority’ (in the context of the allegation of negligence in paragraph 147 of Frankston’s pleading) where Frankston contends that Casey failed to ensure that the land adjacent to the Stevensons Road landfill and within the buffer was not rezoned under Amendment C6 from rural to residential.

Similarly, Casey advances like contentions attacking:

(a)Section N (paragraphs 121–126) concerning a section 173 agreement dated August 2000;
(b)Section O (paragraph 127–128) concerning permits for subdivision of land in the years 1998–2006;
(c)Section P (paragraph 129–132) concerning certain VCAT proceedings; and
(d)Section Q (paragraphs 133–135) concerning subdivision of various stages between stage 10 and 21.

These sections contain allegations that are not expressly referred to elsewhere in Frankston’s pleading, except in very general terms (in respect of Sections N, P and Q) at pages 31–37 of the separate particulars (in the context of an allegation of negligence by Casey). I cannot determine to what defence or cause of action Sections N to Q are relevant.

If Frankston does intend to rely on any of these matters in respect of particular defences or counterclaims set out elsewhere in its pleading, the link between the various allegations in the above mentioned parts of Frankston’s pleading and particular defences or causes of action advanced by it, needs to be made expressly so as to give Casey the ability to understand how Frankston puts its case. Otherwise, the offending paragraphs must be struck out.

If, for example, Frankston intends to allege that Casey’s conduct in the VCAT proceeding was negligent,[23] it should do so clearly in the body of its pleading. Moreover, in that instance, Frankston should articulate in the body of its pleading the consequences of that negligence, including loss suffered by it as a result. Frankston’s pleading does neither of these things. Alternatively, if Casey’s conduct concerning the VCAT proceeding is sought to be relied upon by way of a defence to Casey’s clause 4.3 claim, it is incumbent on Frankston to make clear how that conduct falls within the architecture of clause 4.3, whether by reason of those facts and matters clause 4.3 was not engaged, alternatively how it fits into the carve-out proviso.
[23]Page 33 of the separate Particulars (giving particulars of Casey’s negligence), under a sub heading ‘Casey’s failures as a planning and/or responsible authority’, includes allegations that Casey failed to do certain things in relation to the VCAT hearing.

Frankston submitted, rather unhelpfully, that Casey’s complaints about background matter are addressed through the outline of its pleading that Frankston set out in its written submission, drawing particular attention to the following matters.

(a)Frankston frames its defence and counterclaim over a longer time frame. Frankston has pleaded additional material facts. It is not only entitled to frame its defence and counterclaim in this manner, but, as a rule of pleading, is required to do so under r 13.07.
(b)The material facts are neither ‘extraneous’ nor ‘embarrassing’ and Frankston does not fail to articulate the consequences of the allegations of material fact.
(c)There is no paragraph of the pleading that is redundant. Each paragraph either contains a material fact relevant to Frankston’s positive defences to Casey’s claims against it or its counterclaim against Casey.
(d)Frankston’s pleading should be read as a whole, not sections in isolation as Casey has done.
(e)There is no rule of pleading that requires ‘cross-referencing’ or the pleading of legal consequences. In any event, sufficient cross-referencing has been provided throughout the pleading including by the use of Notes and indexes.

I do not accept any of these contentions. In Goldsmith v Sandilands,[24] Gleeson CJ was dealing with concepts of material and collateral facts when considering admissibility of evidence, but his Honour’s remarks are apposite in the present context.

The facts in issue in a civil action case emerge from the pleadings, which, in turn, are framed in the light of the legal principles governing the case. Facts relevant to facts in issue emerge from the particulars and the evidence. The function of particulars is not to expand the issues defined by the pleadings, but "to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial" Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713 per Scott LJ. The function of evidence is to advance, or cut down, the case of a party in accordance with the rules of statute or common law that determine the nature of the information a court will receive. The primary rule of evidence is that a court will receive, and will only receive, evidence that is relevant to the issues as defined by the pleadings. […] Collateral facts were described by Latham CJ in Piddington v Bennett and Wood Pty Ltd [1940] HCA 2; (1940) 63 CLR 533 at 546 as "facts not constituting the matters directly in dispute between the parties". An example of a collateral fact is one affecting the credibility of a witness.

[24][2002] HCA 31; (2002) 190 ALR 370; (2002) 76 ALJR 1024 (8 August 2002), [2]-[3].

Frankston’s pleading, in the context of the present objection, does not respect the fundamental distinctions to which the Chief Justice refers. Moreover, the summary of the pleading that was presented in submissions cannot substitute for careful consideration of the terms of the pleading itself. That is not to say that the summary was not helpful as an introduction to a complex dispute. Turning to Frankston’s emphasised contentions, proposition (a) is self-evident, but propositions (b) and (c) have not, as Casey’s submission demonstrates, been made out. Propositions (d) and (e) are related, because inadequate linkages between the allegations and the claims break the pleading into isolated sections that are not amenable to a holistic reading. Cross-referencing, or linkages, are usually necessary in complex pleadings that allege multiple causes of action or grounds of defence. Such linkages, if they are a necessary part of a pleading, must be contained within the pleading to draw an admission, denial, or further allegation referable to the linkage or cross-referencing from the responding party. The critical function of linkage or cross-referencing is for it to enable each separate claim to stand alone, succinctly and cogently articulated while avoiding unnecessary repetition. In this pleading, that objective has not been achieved.

Paragraph 58A of Frankston's pleading recites extracts from the agreement between Casey and Energex for no apparent purpose.

Accordingly, paragraphs 11A(b), 11P-11X, 51A–53D (save for 51ZA, 51ZB, 52 and 53), 58A and 111A–135 will be struck out as unnecessary background allegations that may prejudice, embarrass or delay the fair trial of the proceeding.

The form of the separate particulars

Paragraph 6B of the pleading alleges a purpose for buffer zones in Cranbourne’s (now Casey) application to the EPA for works approval for the Stevensons Road landfill. The particulars needed only to identify that the application was written, the document itself and where it may be inspected. However, the particulars fail to do so, instead identifying the EPA’s assessment report and setting out lengthy extracts from it. The particulars are irrelevant to the pleaded allegation.

Casey pointed to the separate particulars of the allegations in paragraphs 156 and 157 of the pleading. Frankston pleads that MWMG failed to design, construct or operate an effective leachate system at the Stevensons Road landfill and Casey failed to ensure that an effective leachate collection system was designed, constructed and put into operation. The method of pleading such breaches is well settled and requires a list that concisely articulates the particular alleged failures to either design, construct, supervise, or operate, an effective leachate collection system. Frankston has served 39 pages of narrative, peppered with documentary identification references, and with extensive extracts from documents quoted in the body of the particulars.

Frankston defended this practice of setting out substantial extracts of documents in its separate particulars by stating there is no hard and fast rule about how particulars are provided. Often it is simply a matter of style. I do not agree. The form of pleadings is governed by Order 13 of the Rules. Frankston’s approach requires that the reader, rather than the pleaders, synthesise from this material, whether it be a reference to a report or other document or a specific quotation from a document, or the relevant acts or omissions that are being relied on. The material presented is mostly not particulars. It is evidence and the pleaders require that its relevance as evidence must be assumed. This approach is unsound in principle and fails to generate particulars that satisfy most of the principles that I have set out above.

Casey further contends, correctly in my view, that the same complaint may be levelled at:

(a)paragraphs 9–16 of the separate particulars (pages 34–37) under the heading ‘Stage 10’ that support the allegations of negligence contained in paragraph 147, which do little more than set out extracts of documents relating to the development of Stage 10 as some form of chronology leading to a conclusion that I will return to shortly;
(b)pages 80–133 of the separate particulars, which support the allegations contained in paragraphs 160–162, concerning the failure to construct and operate an adequate landfill gas collection system, are also substantially a chronology of extracts from documents; and
(c)pages 134–138 of the separate particulars which purport to provide particulars of the allegations in paragraphs 166–168 concerning MWMG and Casey’s alleged failure to monitor for gas and leachate within and outside the Stevensons Road landfill;
(d)Casey contends a further point from pages 137–138 as an example of inappropriate pleading that can be seen in other places in the particulars. Those pages contain extracts from documents prepared by third parties which refer to breaches of licence conditions and Frankston purports to make allegations against Casey under the guise of setting out extracts from documents, raising the question of whether a precise allegation is made.[25]

[25]Another example of this complaint is the reference to Peet’s solicitors’ letter in paragraph 41 of the separate Particulars (page 99).

Yet another objection to the separate particulars is that in two places the separate particulars traverse beyond the material facts contained in the pleading.

(a)Paragraph 17 of the separate particulars (at page 37) travels beyond the allegation made in paragraph 147 of the pleading of a failure to take reasonable care, and goes on to allege consequences of Casey’s failure to take care, that is the loss and damage that was caused by the failure to take reasonable care specified in the separate particulars; and
(b)Paragraph 22 of the separate particulars (at page 138) travels beyond the allegation of failure to ensure monitoring of leachate and landfill gas within and without the Stevensons Road landfill (in the context of paras 166–167 of Frankston’s pleading) to allege consequences of that failure.

The cause of action in negligence against Casey might therefore be comprised by the allegation of breach at paragraph 147 and the allegation of loss at paragraph 169, or the breach at paragraph 147, as particularised in Part VI of the separate particulars, and the allegation of loss caused in paragraph 17 of Part VI of the separate particulars.

Frankston did not come to terms at all with this objection, responding that:

(a)The complaint does not support an application to strike out Frankston’s defence and counterclaim.
(b)The complaints made about the particulars are unfounded. The particulars given under each paragraph of the pleading support the pleaded allegation. They do not purport to ‘make allegations under the guise of setting out extracts from documents’ as alleged by Casey.
(c)Casey has only to prepare its defence by reference to the material facts which Frankston pleads.

I am satisfied that the separate particulars are not in proper form and are likely to prejudice, embarrass or delay the fair trial of this proceeding. I will order that the separate particulars dated 21 May 2012 be struck out. It is now unnecessary to deal with the application to amend those particulars to accord with the amended separate particulars dated 24 April 2013.

The notes and table introducing Part II of the pleading

There is much to be said in favour of devices such as headings, indexes, notes and tables that assist the reader of a complex document. It is necessary that the pleading can nonetheless stand apart from such aids. The table is not in a form that Casey can plead to. It is merely an introductory narrative. Casey contends that the pleading is irregular in that it does not expressly differentiate between the defence of Casey’s claim and Frankston’s separate counterclaim. The pleading does not, Casey contends, reflect what the table states.

Part II of the pleading comprises paragraphs numbered from 111A-180 and it purports to function as part of the defence of Casey’s claims and as Frankston’s counterclaim. The note states that the further claims set out in Part II are pleaded in the alternative and are relied on as defences and where damages or a money amount is claimed as a counterclaim. Yet the prayer for relief seeks other remedies. Most of the items in the table appear to be defences to Casey’s clause 4.3 claim, which is discussed next, but other items are set up as part of the counterclaim. As I have noted, Part II includes an allegation that loss and damage was sustained by reason of the matter alleged in paragraphs 142–168. I will return to these paragraphs later.

As a preliminary observation, although r 10.02 provides that a defendant who has a claim in a proceeding may counterclaim in the proceeding and that the defendant shall plead the defence and the counterclaim in one document, they remain separate pleadings. It follows that defences and counterclaims must be distinguishable as such within that one document. That is the usual pleading practice. Although a counterclaim can be a defence to an action, it is in substance a cross-action. The counterclaimant can join other parties with the plaintiff as defendants to a counterclaim. The court can, under r 10.06 order separate trials, exclude a claim from the counterclaim, strike out a counterclaim without prejudice to a separate proceeding or order that a defendant to a counterclaim cease to be a party. The plaintiff may file a reply to a defence and a defence to a counterclaim. Again, these are separate pleadings required to be incorporated into one document where a party is both a plaintiff and a defendant to a counterclaim.

It follows that the defence and the counterclaim should be distinct pleadings, albeit in one filed document. In this respect alone, the pleading is deficient and would constrain Casey, when attempting either to reply to it or to defend itself against the counterclaim, or when attempting to understand and adopt the unusual structure of a two part pleading joined by an explanatory note and table.

Paragraph 99B, in Part I of the pleading, attempts rather clumsily, to plead a set off against Casey’s claims without precisely identifying what it is that is being set off. That rather suggests that the primary function of Part II of the pleading is as a counterclaim. An authorative textbook on pleading, for example, Bullen & Leake & Jacobs, Precedents of Pleading, sets out the time honoured approach to structuring pleadings. Why a classic pleading structure was not used remains a mystery. If it be thought that the new, or innovative, pleading structure that has been adopted has any benefit, I am unable to see what it is. What has resulted is a pleading that is characterised by a want of clarity and certainty, a want of distinctly articulated, completed grounds of defence or claim and a demonstrable confusion between the role of pleadings, particulars and evidence.

Turning then to that table, Casey first contends that paragraphs 111A–135, which comprise sections M–Q of the pleading, are not referred to elsewhere in the body of Frankston’s pleading, except for the suggestion in the first row of the table that the indemnity in clause 4.3 does not apply to actions threatened or commenced as a result of Casey’s own conduct or extend to loss or damage caused by Casey or does not apply as a result of tipping operations (‘own conduct defence’). Nowhere following the table in Part II of the pleading is there any detail corresponding to the summary provided in the first row of the table. Paragraphs 111A–135 are a series of allegations about particular events: the circumstances of amendment C6 to the Casey Planning Scheme 1999-2000, a s 173 agreement dated 15 August 2000, the issue of permits to subdivide the land that became the Brookland Greens estate, and proceedings in VCAT. The pleading does no more than narrate a series of events and without the relation of these paragraphs to the own conduct defence by the statement in the introductory table that is the purpose that those paragraphs serve. At best the pleading is incomplete.

Casey raises a second issue with the table. It refers to Section T (paragraphs 150–168) of the pleading in relation to four separate claims/defences. While the table refers to Section T, the relevant parts of Frankston’s pleading corresponding to the separate claims/defences do not incorporate Section T. Consequently, there are inconsistencies.

(a)The table states that Frankston’s claim that Casey is in breach of the implied term alleged in para 11O is found in paragraph 142 and Section T. Paragraph 142 alleges the breach of this implied term but Section T is not referred to in the particulars under paragraph 142. Causation and loss are alleged in paragraph 169.
(b)The table refers to Section T in the context of Casey’s alleged breach of obligation as superintendent. Breach of that obligation is then alleged in paragraph 144. The particulars to paragraph 144 refer to paragraph 147(h). In turn the particulars to paragraph 147 refer to the separate particulars. Paragraph 15 of the separate particulars (on page 37) refers to paragraph 41 of the particulars to Section T of the separate particulars (on page 99). Until the hearing of the summons when Frankston proposed an amendment to the particulars to paragraph 144 that was the only reference to Section T in the context of the allegations of breach of the superintendent’s obligation. The reference in the table to Section T suggests that Frankston may seek to rely on other allegations in Section T in the context of the paragraph 144 claim.
(c)In paragraphs 145–149, Frankston pleads a negligence claim. The table refers to Section T in the context of Casey’s alleged negligence. The particulars to paragraph 147 refer to the separate particulars. As with the immediately preceding point, despite the lone reference in paragraph 15 of the separate particulars (on page 37) to paragraph 41 of the particulars of Section T (found on page 99), there is no other reference to Section T in the allegation of negligence made in paragraphs 145–147.

I will say more about Section T of the pleading below.

Frankston submitted that the Note on page 71 of the pleading explains the division between Part I and II and the ‘table’ that is part of the Note provides a summary to assist the reader. It provides the necessary linkages which Casey complains are missing. I do not accept Frankston’s submissions that nothing precludes Casey from pleading to Frankston’s allegations by way of reply and defence to counterclaim and stating whether or not it admits or denies the allegations of material fact put against it. These submissions do not address the objections taken. Further, Casey would be obliged to continue with the form of the pleading, which precludes it from serving a reply and a defence to counterclaim as distinct pleadings.

The table on page 71 will be struck out as embarrassing.

The defence to the clause 4.3 claim

As I have noted a number of positive defences are taken to this claim and Casey takes issue with the pleading of a number of them. I shall deal first with the ‘carve-out defence’. Frankston contends that clause 4.3 is limited by a proviso that no member of the sub-group, which is, relevantly, Casey, is entitled to the indemnity or to receive a contribution to the cost of remedial action or a payment of any costs, losses or damages, incurred as a result of actions threatened or commenced or loss and damage resulting from tipping operations that is due to the failure by MWMG to perform its obligations to Casey and Frankston under the waste disposal agreement, its negligence, or a failure to observe conditions or requirements of permits and legislation. I presently say nothing of the issues of the proper construction of clause 4.3.

Casey contends that to properly plead the engagement of the proviso to clause 4.3, Frankston must, but does not, plead:

(a)Casey’s specific offending conduct or that of its agent, identifying which, that Frankston relies on, including the time when the conduct occurred;
(b)the particular condition or requirement of a relevant permit, legislation or the waste disposal agreement, which that conduct breached;
(c)that Casey’s relevant conduct was a negligent or wilful (with supporting particulars) breach; and
(d)the specific costs, losses or damages that were caused by, or ‘due to’, that conduct are costs, losses or damages for which Casey seeks indemnity, or contribution, or a payment.

The identified deficiencies in the pleading are:

(a)It does not identify Casey’s acts or omissions that constitute a breach of a relevant licence condition, legislative provision or term of the waste disposal agreement, except by reference to paragraphs 150–168, to which I shall return.
(b)Notwithstanding that paragraph 143 alleges that there was a breach of the waste disposal agreement, no breach of a particular term is identified in the pleading. The separate particulars do not identify any term of the waste disposal agreement that was breached, but in any event will be struck out. Further, the pleading does not link any relevant conduct with particular licence conditions, legislative provisions or terms of the waste disposal agreement.

(c)Notably, there are no particulars of the ‘wilful or negligent’ character of any breach, offending r 13.10(3).
(d)The pleading does not identify any causal link between the relevant alleged breaches on the one hand and, on the other hand, the costs, losses or damages in respect of which Casey is disentitled from claiming by the clause 4.3 carve-out proviso.
(e)No such linkage is found in the separate particulars, had they stood. Section VIII purported to provide particulars of the failure to observe or comply alleged in paragraph 143. What Section VIII sets out is limited to sections of the EPA, a Works Approval, a Planning Permit, an EPA licence, and Pollution Abatement Notices that presumably constitute conditions or requirements to be observed or complied with. Section VIII incorporates a reference to Section T of the pleading, which is supported by 100 pages of the separate particulars in Section VII, dealing with factual matters relating to:
(i)the decision not to line the Stevensons Road landfill;
(ii)the design, construction and operation of the leachate collection system;
(iii)the aquifer;
(iv)the construction and operation of an effective landfill gas collection system;
(v)daily, intermediate and final cover; and
(vi)monitoring for gas and leachate.

No link is made, or alleged, between statutory, licence, and like conditions in Section VIII and particular conduct alleged in Section VII to identify how this aspect of the case is put against Casey.
(f)In Sections VII and VIII of the particulars, there are references to reports that appear to be evidence rather than particulars. Although, there are occasions when reports can provide particulars, that will mostly apply to expert reports prepared for the purposes of the proceeding, such as a quantum report by a forensic accountant. In this case, the reference, being to the reports of the environmental auditor, Anthony Lane, are clearly to evidence that is likely to be complex, detailed and voluminous. This is a further example of Frankston’s failure to identify the particulars of its allegations, preferring to identify the evidentiary material available to it without showing how such evidence can become relevant. There are also references to EPA notices without clarification whether a breach of an EPA notice amounts to a relevant breach of the waste disposal agreement, legislation, or permits for the purposes of clause 4.3.
(g)Casey took further objections[26] to the inadequate extent of the particulars that I need not further consider in view of my decision to strike out those particulars.

[26]Casey’s written submission at [50].

Again Frankston has, rather unhelpfully, submitted that Casey’s complaints are addressed through the outline and summary of its pleading in its written submission, drawing particular attention to the following matters:

(a)The material facts of Frankston’s positive defence to clause 4.3 have been properly formulated in summary form as required by r 13.01 and r 13.07. Frankston relies on the proviso to the indemnity in clause 4.3.
(b)In denying the allegation at paragraph 12, Frankston pleads that it relies on Part II. In Part II, the introductory note and table on page 71 explains this part of the pleading and identifies the paragraphs in Part II that provide defences to the clause 4.3 indemnity claim.
(c)In Part II Section S, Frankston pleads Casey’s breach of clause 4.2 and the paragraph 11O implied term, Casey’s wilful or negligent failure to observe the conditions and requirements of planning permits, licences, works approvals and legislation and the waste disposal agreement as well as Casey’s negligence, as the index and headings state.
(d)At paragraph 148, Frankston expressly pleads:
“By reason of the matters alleged in paragraph 142 to 147, Casey is not entitled to any indemnity under clause 4.3 of the WDA.”
(e)The particulars in Section S and separate particulars of these paragraphs in Section VII of the separate particulars particularise the specific conditions and laws breached by Casey. Frankston states it also relies on the matters pleaded and particularised in Section T which pleads and particularises the factual consequences of Casey’s (and MWMG’s) failures in relation to the landfill. These in turn are particularised at page 142 of the separate particulars.
(f)Any other complaints are not a matter for strike out but a matter for a proper request by Casey for further particulars.

Frankston’s submissions, both written and oral, failed to provide any analysis of the pleading that answers the contentions put by Casey. I am satisfied that Casey’s contentions have merit, which is evident on a careful reading of the pleading and the separate particulars, and I accept them. Paragraph 143 will be struck out, as it fails to disclose that the carve-out defence is arguable. As I have earlier stated, attention to the functions of pleadings, particulars and evidence is needed. It appears that arguable defences might be raised by Frankston.

Section T of the pleading – paragraphs 150–168

From what I have already said, the role of Section T of the pleading is not clear. There are three substantive references, the clause 4.3 proviso defence (paragraph 143), the allegations of MWMG’s agency and negligence (paragraph 149, particulars (b)), and the allegations of MWMG’s breaches of the waste disposal agreement (paragraph 170).

Paragraph 150 of Section T will be struck out as it unnecessarily pleads abstract propositions against Casey. Paragraphs 151–168 make allegations of fact against Casey, and alternatively MWMG, concerning the development, operation and management of the Stevensons Road landfill.

Before I set out Casey’s objections to this section of the pleading, Frankston’s response can conveniently be kept in mind. Frankston invites me to accept that it addresses these objections in its submission about the structure of its pleading. It contends that the substance of Casey’s complaints is not about the adequacy of Frankston’s pleadings but reflects its own failure to read the pleading as a whole and to read or appreciate what is alleged in Section T.

In respect of each of the following issues, raised by the pleading and supplemented by the separate particulars, Casey complains that these allegations are not referenced to any defence or cause of action advanced by Frankston, when Frankston could squarely reference such allegations to the clause 4.3 proviso defence, or any other defence or cause of action if that be its case, or allege whether particular conditions or requirements of licences, permits or legislation were breached by such events. Frankston does not plead consequences of the acts or omissions alleged and the allegations float in its pleading, unanchored to identifiable defences or claims.

(a) Paragraphs 151–155 allege that Casey and MWMG decided, against advice, not to line the Stevensons Road landfill causing sub-surface migration of leachate and landfill gas beyond the boundaries of the Stevensons Road landfill.

(b)Paragraphs 156–158 allege that Casey and MWMG failed to design, construct or operate an effective leachate collection system.
(c)Paragraph 159 alleges a failure by Casey and MWMG to deal with the exposure of an aquifer in about January 1996.
(d)Paragraphs 160–162 complain about Casey’s and MWMG’s failures to construct and operate an adequate landfill gas collection system. These allegations are imprecise.
(e)Paragraphs 163–165 allege that MWMG and Casey failed to implement appropriate cover procedures which adversely affected the collection and control of leachate and landfill gas.
(f)Paragraphs 166–168 allege that Casey and MWMG failed to monitor for gas and leachate within and outside the Stevensons Road landfill. In this case, the separate particulars identify relevant conditions of the licence affecting monitoring obligations and Frankston directly alleges in the separate particulars that MWMG was in breach of relevant licence conditions. Although Frankston has identified relevant licence conditions, it falls short of what is required for an adequate pleading. For one thing, allegations of breaches of licence conditions should be in the pleading and in its separate particulars, particularly as the separate particulars are to be struck out.

I am not persuaded by Frankston’s contentions about the pleading of these paragraphs and consider that Casey’s submissions have merit. The allegations are isolated, not readily identifiable as part of a completely alleged ground of defence or counterclaim. I do not find that reading the material parts of the document as a whole assists the responding party or a court to any different conclusion. If these allegations do make out, or form part of a ground of defence or counterclaim, Frankston must succinctly and clearly demonstrate that by its pleading. Section T, paragraphs 150–168 will be struck out.

Status of the waste disposal agreement

This is a central issue in the proceeding, as Frankston contends that the waste disposal agreement was discharged, waived, or abandoned following MWMG’s withdrawal. In paragraph 11Y, Frankston’s pleading alleges that the waste disposal agreement was discharged from on or about 1 November 2001, alternatively about July 2002, by express or implied agreement, alternatively by the conduct of MWMG, Casey and Frankston. In paragraph 11Z, Frankston pleads that further or alternatively the waste disposal agreement was waived or abandoned.

However, the deficiencies to which Casey points lie in the particulars given and Casey submits, that given the pivotal nature of these paragraphs of Frankston’s pleading, they ought to be struck out and Frankston should be required to address the deficiencies. I do not agree that it is appropriate to strike out these paragraphs although Frankston will need to reconsider the particulars that have been given as they are obscure and embarrassing.

I will order that the particulars to paragraphs 11Y and 11Z be struck out and that Frankston provide proper particulars, with material dates, of:

(a)each of the express agreement, the implied agreement, and the conduct of the parties that constitutes the discharge alleged; and
(b)the acts or omissions that constitute the waiver and constitute the abandonment alleged.

Paragraphs 11O and 142

In this paragraph, Frankston pleads breach by Casey of clause 4.2 of the waste disposal agreement and breach of the implied term it alleges in paragraph 11O. The role of paragraph 142 in the pleading is complex and to understand it, the reader must return to paragraphs 11K and 11O.

In paragraph 11K, Frankston pleads that clause 4.2 of the waste disposal agreement requires that Casey agreed to comply with all conditions and requirements of the EPA licence and permits for the waste disposal agreement. The allegation of breach of clause 4.2 is made in paragraph 142(i).

In paragraph 11O, Frankston alleges that arising by implication of law from the nature of the ‘arrangements between Casey and Frankston or to give efficacy to those arrangements’ is a term that Casey was obliged to conduct its affairs concerning the Stevensons Road landfill in a manner which would ensure that Frankston was not adversely exposed to liability or otherwise deprived of the benefits of the waste disposal agreement for the disposal of its waste at the Stevensons Road landfill. Casey does not directly challenge the pleading of the implied term, but takes issue with the allegations of breach of such a vaguely expressed obligation. The allegation of breach of the implied term is made in paragraph 142(ii).

The particulars given apply to each alleged breach and, mostly, refer the reader to Section V of the separate particulars, which I have already determined will be struck out.

The consequence of each breach, as alleged in paragraph 148, is that Casey is disentitled to the indemnity in clause 4.3 or to payments under the waste disposal agreement. Further, Frankston suffered loss and damage by reason of the breaches as alleged in paragraph 169.

Casey, by its submissions, mounts a number of objections to paragraph 142. I consider that four of these objections are significant.

(a)First, the paragraph alleges that breach is said to arise ‘by reason of the matters alleged below’. There are 38 paragraphs over 15 pages of the pleading below paragraph 142. It is not for the reader to attempt to discern what matters ‘below’ are relied on. I agree.
(b)Second, the allegation that Casey failed to comply with ‘all’ conditions and requirements of the licence and permits in so far as it was able to do so is unnecessarily broad and fails to define the real issues, forcing the reader to the particulars to identify the allegation being made. When the reader goes to the separate particulars, the respects in which Casey had the capacity or ability to ensure compliance with the licence and permits is first alleged and followed by a discursive history of contracts for the management of the Stevensons Road landfill. Next, the particulars identify EPA notices received by MWMG, Grosvenor Lodge, and Casey which, presumably, stand as the particulars of breach of the licence and permits, except that the particulars state that the particulars of ‘Casey’s breach of the waste disposal agreement and its non-compliance with all conditions and requirements of the licences and permits insofar as it was able to do so are set out elsewhere’.[27] Further, referencing numerous EPA notices does not clearly articulate Casey’s particular conduct in breach of any relevant condition or requirement of a licence or a permit. The particulars then make further allegations concerning the Cemetery Road landfill. The particulars do not explain the relevance of the Cemetery Road landfill to the allegation of breach of either clause 4.2 or the implied term. The cross-referenced Part VIII of the separate particulars sets out particulars of breach of clause 4.3 of the waste disposal agreement that is alleged in paragraph 143. I have already struck out paragraph 143.
(c)Third, Frankston neither pleads nor particularises the consequences of any breach of licence or permit conditions. The failure by Frankston to spell out the consequences of the alleged breach of clause 4.2 means that Casey is left guessing as to which losses claimed under clause 4.3 it is disentitled to, and, further, the amount of the loss that Frankston seeks to set off.
(d)Fourth, the breaches of clause 4.2 and the implied term are separate and distinct matters that Frankston has rolled up together, or else it gives no particulars of the breach of the implied term.

[27]On the application, Casey noted that the cross reference was to Part H and that where was no such part. Frankston seeks to correct that reference to Part VIII of the separate Particulars.

Frankston refers to its response to the challenge to paragraph 143. I do not find this response satisfactory for the reasons I have already stated[28] and paragraph 142 of the pleading will be struck out.
[28]See above at paragraph [69] and following.

Superintendent allegations

It is necessary to say a little more about Frankston’s allegations to understand Casey’s complaints under this heading. Commencing at paragraph 62, Frankston alleges that Casey agreed, in June 2003, with SITA Australia Pty Ltd that SITA provide consultancy services for the operation of the Stevensons Road landfill. Frankston alleges that Casey ‘assumed’ the contractual obligations of the superintendent under that agreement and that it was an implied term of the SITA Agreement that Casey’s Director of Infrastructure Services, as superintendent would exercise reasonable care, skill and diligence in providing services to Casey and Frankston as principals under that contract.

In paragraph 144(b), Frankston alleges that Casey breached this implied term. The particulars of the alleged breach are stated as set out in paragraph 147(h), which alleges that Casey failed to take reasonable care acting through its nominated officer, the Director, as superintendent under the SITA Agreement and refers the reader to the separate particulars. There are no specific particulars referable to paragraph 147(h) set out in Part VI of the separate particulars, which I have already struck out.

Further, Frankston alleges that Casey owed it a duty of care acting through its Director, as the superintendent under the SITA Agreement, to exercise reasonable care, skill and diligence in providing services to Frankston (paragraph 62D(a) and 145(a)(viii), and 146) and further in the design, planning, use, operation, occupation, conduct and rehabilitation of the Stevensons Road landfill and the Cemetery Road landfill and in the exercise and discharge of its functions, duties and powers as a municipal council under the Local Government Act1989 and as a planning authority and a responsible authority under the Planning and Environment Act 1987 and under the Building Act1993.

Frankston alleges, in paragraph 169, that by reason of the matters alleged in paragraphs including 144–147, it suffered loss and damage which, inter alia, it is entitled to set off.

Casey submits that the pleading:

(a)does not articulate, properly or at all, what the superintendent failed to do under the SITA Agreement, which is not mentioned in the separate particulars. The separate particulars do not focus on the period of the SITA agreement. Although paragraph 62A(k) of the pleading refers to what the superintendent was required to do under the SITA Agreement, what the Director allegedly did wrong in exercising his powers under the SITA Agreement is nowhere stated. Casey contends that due to the complete lack of particularity of any negligence on the part of the superintendent, each of these causes of action is hollow and ought be struck out.
(b)of the duty of care in paragraph 145(a)(viii) is in hopelessly wide terms, because of the rolled up nature of the plea of duty of care contained in paragraph 145.
(c)does not identify any link between any alleged breaches of duty by the Director, or by Casey in respect of the Director, and the loss claimed. I will separately discuss the pleading of loss under paragraph 169.
(d)nowhere alleges that the Director breached the duty of care allegedly owed by him personally and that this caused Frankston loss and damage.

Accordingly, Casey contends that paragraphs 62C, 144–147, and 169 of the pleading ought to be struck out.

Frankston again contends that the answer to these objections is discernable through the outline of its pleading provided by its submission, the further particulars dated 28 March 2013, and a ‘Corrections Table’ that it provided. Further, complaints about a lack of particulars do not provide a ground to strike out a pleading.

In its reply submission, Casey is critical of aspects of the further particulars, but I do not propose to grant leave to Frankston to rely on those further particulars.

I will not strike out paragraph 62C, but I will strike out the particulars to that paragraph and require that Frankston properly particularise how the term alleged is implied. I accept the criticisms of Casey that the defences/claims in paragraph 144–147 are deficiently pleaded and those paragraphs will be struck out. Paragraph 169 is dealt with below.

Breach of implied term of SITA agreement

By paragraph 62B of the pleading Frankston alleges an implied term of the SITA agreement to the same effect as is alleged in paragraph 11O should be implied into the waste disposal agreement. For the reasons I have given in that context, I will not strike out the allegation but will strike out the particulars Frankston has given of paragraph 62B and require Frankston to provide proper particulars of the implication.

Breach by Casey of the implied term is alleged in paragraph 144(a) without particulars. That paragraph also alleges, in sub-paragraph (b), breach of an implied term that the superintendent would exercise due care and I have struck that paragraph out in that context. The allegations are distinct and need to be separated out and particularised to produce a viable pleading. The path of the allegations from obligation, through breach and causation to damage is not discernable or clear. That is made clear by Frankston’s reliance in submissions on the Note on page 94, a part of the pleading to which Casey cannot respond which is not reflected in the body of the pleading.

Casey’s negligence

I touched on paragraph 145 of the pleading above when dealing with superintendent allegations. The paragraph was more generally attacked by Casey as pleading a duty of care in hopelessly wide terms. Paragraph 145 alleges that Casey owed a duty of care to Frankston and the plaintiff group members. The duty of care is alleged to exist in Casey’s various capacities, including:

(a)as owner, user, and occupier of the Stevensons Road landfill and Cemetery Road landfill;

(b)      as designer and planner of the two landfill sites;
(c)       as applicant for and holder of Works Approvals and permits;
(d)      in encouraging and promoting Frankston to use the Stevensons Road landfill;
(e)       as a municipal council;
(f)       as a planning authority and responsible authority; and
(g)      as an entity holding powers and functions under the Building Act.
The duty of care is to use reasonable care in the design, planning, use, operation, occupation, conduct and rehabilitation of both landfills and in the exercise and discharge of its functions duties and powers as a municipal council under the Local Government Act and as a planning authority and responsible authority under the Planning and Environment Act and under the Building Act.

The allegation of a duty owed to the plaintiff group members appears irrelevant.

Frankston’s submission[29] misses the point.
[29]At paragraphs 159–165.

I agree that the duty as presently pleaded is unacceptably wide and I will strike out paragraph 145. The duty alleged against Casey appears to be to avoid inflicting pure economic loss on Frankston, as that is all that is particularised under paragraph 169. The particular requirements for a duty of care in economic loss cases are not pleaded. In the context of pre-existing contracts, it is incumbent on Frankston to identify the characteristics of the relationship between Frankston and Casey or the applicable statutory framework that gives rise to a duty of care. No attempt is made to reference allegations about such matters in other parts of the pleading. Further precise identification of the functions, duties or powers exercised by Casey that were subject to this duty of care is needed.

Casey further objects to the particulars of breach which address various topics including Casey’s failure to monitor and carry out works, its failure in relation to the Cemetery Road landfill, its failure to respond to the emerging problems, its failure to control or monitor LFG and leachate, its failures as planning and/or responsible authority, and Stage 10. Unsurprisingly, the particulars mostly do not follow the structure of paragraph 147 making it unreasonably difficult to relate allegations of breach to duty. It is unnecessary to address each complaint concerning the particulars of breach. In my view, the deficiencies in the pleading of paragraph 145 explain the difficulties that Frankston experiences in particularising breach of that duty.

There is no causal link pleaded between the alleged breach of duty and damage allegedly suffered as a result. It is not appropriate to expect either Casey, or the court, to discern such matters for themselves from the mass of allegation that has been made in the pleading.

Paragraphs 145 and 147 of the pleading will be struck out because they do not disclose a cause of action or defence or otherwise may prejudice, embarrass or delay the fair trial of the proceeding.

Allegations turning on the position of MWMG as agent of Casey

Paragraph 149 of Frankston’s pleading alleges that prior to its withdrawal MWMG acted on behalf of Casey, (but not Frankston) in relation to the development of the Stevensons Road landfill and the operation and management of the Stevensons Road landfill and the Cemetery Road landfill. It alleges that Casey is vicariously liable for the tortious acts and omissions of its agent. For those acts and omissions the reader is referred to Section T of the pleading and to Frankston’s defence and counterclaim against MWMG, a separate pleading that is incorporated by a reference to it in sub-paragraph (b) of the particulars to paragraph 149. That pleading runs to 79 pages. Casey reasonably complains that it is not at all clear what matters pleaded by Frankston against MWMG are sought to be relied on as conduct engaged in on behalf of Casey and not Frankston.

How those acts and omissions are tortious is not evident, rather it is assumed by the pleaders. Casey contends that Frankston should in its pleading against Casey directly allege the material facts (with proper particulars) that establish when proved that:

(a)MWMG owed a duty of care to Frankston;
(b)MWMG breached that duty of care;
(c)Frankston suffered (an identified and particularised) loss caused by that breach; and
(d)Casey is vicariously liable for MWMG’s negligence.

I expect that what Frankston needs to clearly allege will be more extensive than this list of elements, although I cannot identify how that claim ought to be pleaded from the information before the court. I am satisfied that what Frankston is presently attempting to allege is a most complex claim and that paragraph 149 as presently drafted does not disclose an arguable cause of action.

The reference to Section T as detailing the tortious conduct of MWMG is also problematical and obscures, rather then clarifies, the relationship between duty, breach, causation and damage that Frankston must allege. Moreover, for the reasons given above, Section T of the pleading will be struck out, which will undermine the basis of this allegation.

Paragraph 149 does not disclose a cause of action or defence and otherwise may prejudice, embarrass or delay the fair trial of the proceeding and will be struck out. Paragraphs 142 and 143 are also affected by the presence of the reference to MWMG as a servant or agent of Casey in relation to the matters therein pleaded, but I have already determined that those paragraphs must be struck out.

Cemetery Road landfill

Casey complains that littered throughout Frankston’s pleadings and particulars are references to Casey’s Cemetery Road landfill and that Frankston provides no cohesive narrative or clear articulation of the legal defence or counterclaim arising from these references. Frankston’s response demonstrates that what occurred in relation to the Cemetery Road landfill is a matter of evidence that has inappropriately been made the subject of material allegation.

Frankston submitted that Casey’s knowledge about landfill gas and warnings about its risks and about leachate migration from the Cemetery Road landfill are material to Casey’s knowledge and responsibilities in connection with both the Stevensons Road landfill and planning decisions made by Casey. The material allegations appear to be Casey’s knowledge about landfill gas and warnings about its risks and about leachate migration from the Cemetery Road landfill. Further, Frankston contends that Casey seeks to recover from it expenditure incurred in relation to the Cemetery Road landfill and that its pleading puts Casey on notice of Frankston’s contention that Casey’s costs claims cannot wholly fall under the alleged indemnity. However, that issue does not make material the general Cemetery Road landfill allegations. Frankston should seek from Casey proper particulars of Casey’s expenditures claims against Frankston and then identify those amounts claimed by Casey which relate to the Cemetery Road landfill and the basis for contending that any indemnity obligation does not extend to such sums. In any event, Casey points out that nowhere is it specifically alleged by Frankston that the amounts claimed by Casey in respect of post 1 July 2008 costs were caused by the management of the Cemetery Road landfill or that the management of the Cemetery Road landfill caused Frankston loss and damage.

Casey contends that allegations, other than minor mention, concerning the Cemetery Road landfill are made in paragraphs 1A, 1B, 16, 17, 22, 25, 27, 32, 51A, 51C, 51D, 53F, 99A, 138, 139, 140, 142, 145, 147, 149 and 153 of the pleading, and pages 8, 19, 21, 22, 23, 25, 26, 28, 29, 34, 37, 39, 42-77, 78 and 88 of the separate particulars. Casey submits these allegations are embarrassing, irrelevant to any pleaded defence or cause of action because no ground of defence or counterclaim is drawn from these references. Nevertheless, Casey can point to important factual allegations emerging from the separate particulars concerning the Cemetery Road landfill. There is a general allegation that leachate migrated from the Cemetery Road landfill into Stevensons Road landfill as a result of the Stevensons Road landfill being unlined. Moreover, the separate particulars allege that as a result of the Stevensons Road landfill being unlined and the failure to install and operate an effective leachate collection system, leachate from the Cemetery Road landfill ‘got into’ the Stevensons Road landfill. Detail of these important factual allegations was not provided.

It can be reasonably anticipated that leachate migration from the Cemetery Road landfill is a matter that would draw expert opinion. The pleadings need to explicitly make relevant such opinion evidence because in due course expert evidence will be subject to close and specific management by the court under the Civil Procedure Act and by reference to the TEC List practice.

The references to the Cemetery Road landfill in paragraphs 1A, 1B, 16, 17, 22, 25, 27, 32, 51A, 51C, 51D, 53F, 99A, 138, 139, 140, 142, 145, 147, 149 and 153 of the pleading will be struck out.

Loss and damage

The pleaders have assigned many functions to paragraph 169 by which Frankston alleges that it has suffered loss and damage. It opens with the phrase ‘by reason of the matters alleged in paragraphs 142-168’. That phrase serves to allege causation of loss in respect of at least seven claims. Casey’s submissions identify the following:

(a)breach of clause 4.2 of the waste disposal agreement (paragraph 142);
(b)breach of the implied term of the waste disposal agreement referred to in paragraph 11O (paragraph 142);
(c)breach of clause 4.3 of the waste disposal agreement (paragraph 143);
(d)breach of the implied term of the SITA agreement alleged in paragraph 62B (paragraph 144(a));
(e)breach of the implied term of the SITA agreement alleged in paragraph 62C (paragraph 144(b));
(f)negligence of Casey (paragraph 147); and
(g)the matters alleged in paragraphs 150–168 (Section T).

Frankston does not plead facts which establish any causal link between the alleged breaches of contract or duty of care and the loss allegedly suffered by Frankston either collectively, if it be truly alleged that Frankston has suffered one indivisible loss, or individually if it be alleged that the damage that Frankston has suffered, say in negligence, differs from the loss that Frankston has suffered say for breach of the implied term not to deprive Frankston of the benefits of the waste disposal agreement.

In Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd[30] the majority in the High Court observed that:

In Hawkins v Clayton, Gaudron J pointed out that in an action for negligence causing economic loss it will almost always be necessary to identify, with some precision, the interest infringed by the negligent act. In that case, it was necessary to identify the interest in order to answer the question as to when the cause of action accrued. Its identification is also necessary for a proper understanding of the harm suffered and for the determination of what acts or omissions may be said to have caused that damage. As her Honour observed, economic loss may take many forms. In Wardley Australia Ltd v Western Australia, it was said that the kind of economic loss which is sustained, as well as the time when it is sustained, depends upon the nature of the interest infringed and in some cases, perhaps, upon the nature of the interference to which it is subjected. (Citations omitted)

[30][2013] HCA 10 (3 April 2013), (2013) 296 ALR 3, [25].

Yet again Frankston’s submission in response is superficial and fails to demonstrate any appreciation of the complexities of the work that has been required of paragraph 169. Frankston does not contend that it has suffered one indivisible loss and in the circumstances that have been explained in submissions, it is most improbable that separate loss would not have been caused by reason of the various breaches of contract or duty of care alleged by it. I am not satisfied that any claim that is dependent on paragraph 169 for the elements of causation and loss has been pleaded to properly disclose the cause of action.

It must be noted that Frankston’s particulars of loss are generic statements. Frankston will suffer loss and damage to the extent that it is liable to pay money or provide indemnity or contribution or pay costs to MWMG. Frankston will suffer loss and damage in respect of any amount it is required to pay or to contribute to remediation works. Frankston has and will incur loss and damage by incurring defence costs in other claims and as a result of claims against it in this proceeding. Although Casey presently makes no submission about the nature of the losses that are generically identified, there would appear to be complex legal issues lying beneath the surface of these particulars that are likely to prejudice, embarrass or delay the fair trial of the proceeding. Further, the proceeding commenced in 2008 and in February 2009, Frankston advised Casey that it would no longer contribute to costs, including rehabilitation and remediation costs. Frankston has had four and a half years to identify expenditure losses. The plaintiff’s settlement was approved in May 2011, allowing more that two years to develop a more detailed and sophisticated analysis of loss and damage than is evident at present.

Paragraph 169 of the pleading will be struck out. The consequence is that claims set out earlier in the pleading that depend on paragraph 169 and which have not otherwise been struck out are left failing to properly disclose a cause of action.

The common assumption pleading issues

It will be recalled that Casey alleges an estoppel that precludes Frankston from contending that the waste disposal agreement did not continue to operate from July 2002. Frankston denies the common assumption alleged by Casey. Frankston further contends that the common assumption alleged by Casey could not have legal effect because it was contrary to s 186, alternatively s 193, of the Local Government Act. Frankston alleges that if there was any common assumption made by Frankston and Casey following MWMG’s departure in about November 2001, alternatively July 2002, it was on the basis set out in paragraph 88A (the common basis), or, alternatively, paragraph 88B (the alternative common basis).

I cannot determine the point of this alternative pleading. Frankston does not contend for a different estoppel precluding it, or Casey, from unconscionably resiling from the alternative common assumption. Casey’s submissions appear to interpret paragraphs 88A and 88B as alleging that if the waste disposal agreement continued in operation following July 2002 and was impliedly amended, it was impliedly amended to incorporate as contractual terms the matters comprising one or other of the alleged common bases. If that is what is to be alleged, and I am not persuaded of that, there is no impediment to that allegation being directly pleaded. Presently paragraphs 88A and 88B serve no function in the pleading and fail to disclose any arguable ground of defence or are otherwise likely to prejudice, embarrass or delay the fair trial of the proceeding and will be struck out. Casey pointed to additional problems with the form of the pleading of these paragraphs that I need not presently consider.

The possible implied amendment of the waste disposal agreement by paragraphs 88A and 88B are raised again in response to Casey’s pleading that the waste disposal agreement continued to have effect, albeit in an impliedly amended state following the withdrawal of MWMG. Frankston denies this allegation and further alleges that the restrictions on the powers of councils under the Local Government Act precludes the implication. It also alleges, by paragraph 93A, that if there was an implied amended agreement, there were terms in such agreement as set out in paragraphs 88A or 88B. Apart from being left uncertain as to what Frankston alternatively contends to be the operative terms of the waste disposal agreement after July 2002, the consequences, either as a ground of defence or a counterclaim, are not anywhere articulated.

The consequences of this unsatisfactory pleading also infect what ever is being alleged by paragraph 94A(e).

For these reasons, paragraph 88A, 88B, 93A and 94A(e) of the pleading will be struck out.

Frankston’s claim for repayment of costs paid by it to date (set off)

Paragraph 99A of Frankston’s pleading claims a set off or repayment of monies allegedly wrongly paid by Frankston to Casey. The paragraph refers to costs and expenditure relating to the Cemetery Road landfill and maintenance of the Stevensons Road landfill. The claim is not cross referenced to any other allegation and Frankston articulates no legal basis for an entitlement to set off, alternatively recoup, amounts of the type in question. No particulars are given of the categories of costs and expenses wrongly paid by Frankston. Casey contends that as the pleadings identify three categories of costs relating to development costs, rehabilitation costs and airspace contributions, the failure to identify the categories is embarrassing. I agree. This is not a mere matter of particulars, because of the failure of the pleading to identify the legal basis of the claim.

Paragraph 99A will be struck out.

Proportionate liability defence

Paragraph 178 of the pleading purports to set up a proportionate liability defence under Part IVAA of the Wrongs Act as a general defence to Casey’s pleading as opposed to a defence to particular causes of action. It must be read with paragraphs 172–177.

In Utility Services Corporation Limited v SPI Electricity Pty Ltd,[31] when sitting as an acting justice of appeal, I observed that to establish a tenable[32] proportionate liability defence, a defendant must allege material facts that demonstrate:
[31][2012] VSCA 158 (24 July 2012).
[32]Meaning a real (not a fanciful) prospect of success; s 63 Civil Procedure Act 2010 (Vic).

(a) that the claim against it is an apportionable claim;

(b) that in relation to that claim the defendant is a concurrent wrongdoer;

(c) that another defendant to the proceeding is a concurrent wrongdoer, or, that another person, not a party to the proceeding, who is dead or has been wound up, is a concurrent wrongdoer in relation to the plaintiff’s claimed loss and damage;

(d) in relation to all of the apportionable claims in the proceeding for the same damage, the material facts by reference to which the court is to assess the extent of that defendant’s responsibility for the plaintiff’s damage, which can include regard to the comparative responsibility of other defendants for the plaintiff’s damage;[33] and

(e) if the plaintiff has not alleged a claim against a concurrent wrongdoer whose comparative responsibility is alleged by the defendant to be material, the material facts that establish the responsibility of that other concurrent wrongdoer[34] for the loss and damage claimed by the plaintiff in the proceeding.

[33]It is important to bear in mind the requirement, peculiar to Victoria, that a concurrent wrongdoer must be a party to the proceeding – see s 24AI(3), s 24AL and the definition of ‘defendant’ in s 24AE. See generally Woods v De Gabriele and Ors [2007] VSC 177, (Hollingworth J); Atkins v Interprac Financial Planning Pty Ltd and Anor [2007] VSC 445, (Hargrave J); P & V Industries Pty Ltd v Secombs (a firm) [2008] VSC 209 (Judd J); Suncorp Metway Ltd v Panagiotidis & Anor [2009] VSC 126 (Evans AsJ); and Main Road Property Group Pty Ltd & Ors v Pelligra & Sons Pty Ltd & Ors [2010] VSC 5 (Croft J).

[34]The wrongdoer must be joined as a party to the proceeding to satisfy s 24AI(3) - see s 24AL.

Casey’s first objection to paragraph 178 is that each of its causes of action against Frankston is not based on any failure by Frankston to take reasonable care and is contractual, or equitable, in nature and not an apportionable claim under Part IVAA of the Wrongs Act. Frankston avoids responding to this contention submitting it is a matter for trial, not for strike out. I do not know what the issue for trial actually is. Frankston, on this first issue, does not plead any material fact. Rather it pleads that ‘each of the claims against Frankston is a claim to which the provisions of Part IVAA of the Wrongs Act apply’. I do not know what provision of Part IVAA the pleaders have in mind. If it is s 24AF ‘Application of Part’, the pleading can easily so state. Although the submissions of each party note the contractual nature of Casey’s claims, the character of the cause of action is not determinative.[35]
[35]Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10, (2013) 296 ALR 3.

Leaving aside deceptive or misleading conduct, the claim for damages must arise from a failure to take reasonable care. The fact that Casey’s claims against Frankston are contractual is not the answer to the question whether a claim arises from a failure to take reasonable care.[36] In Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd,[37] the Court of Appeal said, following a trial:

[94]An apportionable claim, so the Bank argued, does not go beyond, relevantly, a claim for damages for a failure to take reasonable care, although, as Pt IVAA of the Wrongs Act makes clear, a claim in an action for damages may be in tort or in contract. Identifying the source of the obligation nevertheless remains important because, if the source of an obligation is contractual, this must invite attention to the terms in which that obligation is cast. A claim for breach of contract is not an apportionable claim, it was argued, unless the relevant contractual obligation was in terms an obligation to take care. Moreover, the Bank’s claim arising from the alleged breach of the Origination Agreement was a claim for indemnity, not a claim in an action for damages, as is required under the apportionment legislation. (Citations omitted)

In the circumstances of the present case, this defence calls for a pleading of the material facts that engage the statute. In this respect, the pleading is deficient. Moreover, notwithstanding the way in which the matter arose in Reinhold v New South Wales Lotteries Corporation (No 2),[38] the material facts that engage and make out the statutory limitation on the plaintiff’s damages must ordinarily be pleaded.[39]

[36]Compare Reinhold v New South Wales Lotteries Corporation (No 2) [2008] NSWSC 187.

[37][2010] VSCA 355 (20 December 2010), [94].

[38][2008] NSWSC 187.

[39]Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; (2007) 244 ALR 552; [2007] FCA 1216.

Casey’s second objection is that, in paragraph 178(c), Frankston alleges that there were ten concurrent wrongdoers who caused the loss and damage suffered by Casey. Under s 24AI of the Wrongs Act concurrent wrongdoers must be joined as parties to the proceeding before the court can have regard to the comparative responsibility of that wrongdoer. Each of those concurrent wrongdoers was previously a party to the proceeding but the claims against them were settled and they have been released as parties. Frankston responds that the alleged concurrent wrongdoers were in fact parties to the proceeding when the defences were raised by Frankston and Casey pleaded to the allegation. If Casey seeks to contend that some legal consequence flows from it having since settled with those parties, it must itself plead it. It is not a matter for strike out.

I do not accept Frankston’s contention. In my view, Frankston, as the party seeking to raise proportionate liability, was obliged to seek orders that retained the parties that it alleged to be concurrent wrongdoers in the proceeding when they settled. As Frankston accepts that it has not done so, and that the concurrent wrongdoers have been released as parties, it must seek leave under s 24AL of the Wrongs Act for joinder of those alleged concurrent wrongdoers as defendants to its counterclaim.[40]
[40]Another procedural issue that is complicated by the unusual structure of the pleading.

It appears that all consequential orders dealing with the release of parties to the proceeding have not been made and I will hear from counsel as to whether I should now order that Casey have leave to amend the writ to name City of Casey as plaintiff, and Metropolitan Waste Management Group and City of Frankston as defendants, such amendment to be without prejudice to any remaining party’s rights or obligations that turn on the date or content of the original writ, or any subsequent joinder of parties.

A further difficulty, although not presently raised by Casey, is that Frankston has not pleaded the material facts that support the conclusion pleaded that the acts and omissions of the identified 10 persons caused Casey’s loss and damage and that those persons are concurrent wrongdoers. The pleading does not allege the material facts by reference to which the court can assess the extent of Frankston’s responsibility for Casey’s damages or the comparative responsibility of the concurrent wrongdoers.

For these reasons, paragraphs 172–178 of the pleading will be struck out.

Statutory contribution claim

In the alternative, Frankston seeks contribution from Casey pursuant to s 23B of the Wrongs Act.

A defendant cannot seek contribution from a plaintiff under s 23B. Contribution can only be recovered from another person liable to the plaintiff for that same damage.

Frankston submits that it is not precluded from seeking contribution (in the alternative) against Casey in respect of MWMG’s claims against Frankston but paragraph 179 makes no such claim.

Paragraph 179 will be struck out.

Frankston's clause 4.3 claim

Frankston, by paragraph 180 of its pleading claims, in summary form, indemnity from Casey under clause 4.3 of the waste disposal agreement in respect of Frankston’s exposure to claims made by MWMG, or any other party in the proceeding, including Frankston’s costs in defending those claims.

The material facts of a clause 4.3 claim are not pleaded. Casey gives the example that no environmental event or actions are pleaded, but the point is made out by comparing this paragraph with the pleading by Casey of its clause 4.3 claim by paragraphs 12–44 of its statement of claim.

Paragraph 180 does not disclose a cause of action or defence and otherwise may prejudice, embarrass or delay the fair trial of the proceeding and will be struck out.

Miscellaneous complaints

Paragraph 51(b) of the pleading denies that the waste disposal agreement should be rectified, because it has been discharged by agreement, alternatively waived or abandoned. I do not consider that this paragraph discloses a defence with a real prospect of success.

Paragraph 51(c) of the pleading raises a defence of laches and delay by Casey to Casey's rectification claim. No material allegations of fact that might disclose a defence with a real prospect of success are made.

Paragraphs 51(b)-(c) will be struck out.

Orders on the application

The strike out by the particular paragraph by paragraph analysis is a substantial emasculation of the pleading especially its Part II, of which only a couple of isolated paragraphs remain standing. However, for the reasons I have given, I require that Frankston plead a distinct defence and a distinct counterclaim as one pleading and I will strike out paragraph 99B and the whole of Part II. I expect that Frankston will take account of, but not be confined to, the observations that I have made in formulating its amended pleading. Subject to any further submission from counsel, I do not consider this proceeding to be one where the just and efficient determination of the real issues in dispute will be advanced by a substantially marked up document that tracks all amendments. I will permit a substituted pleading that does not show or track the changes that have been made.

I will make the following orders.

Paragraphs 1A, 1B, 11A(b), 11P–11X, 51(b)-(c), 51A–53D (save for 51ZA, 51ZB, 52 and 53), 58A, 88A, 88B, 93A, 94A(e), 99A and 99B, and insofar as they refer to the Cemetery Road landfill, paragraphs 16, 17, 22, 25, 27, 32 and 53F in Part I and the whole of Part II of Frankston's defence and counterclaim dated 18 May 2012 are struck out.

The whole of Frankston’s separate particulars to Frankston's defence dated 21 May 2012 and the particulars to paragraphs 11Y, 11Z, 62B and 62C are struck out.

I grant leave to Frankston to serve, and file, by 22 July 2013 an amended defence and counterclaim properly particularised, which may, if Frankston be so advised, be a pleading in substitution for both the surviving and the struck out paragraphs of the defence and the counterclaim and I direct that Frankston is excused from compliance with r 36.05(4).

Casey shall serve, and file by 20 August 2013, its reply and defence to counterclaim.

Paragraph 3 (discovery issues) of Casey’s summons filed 21 December 2012 is adjourned to a date to be fixed.

I will hear counsel as to the form of the orders and costs.

Further directions

Subject to any submission from counsel, I will make the following directions. I will direct that:

(a)Casey has leave to amend the writ to substitute City of Casey as plaintiff, and Metropolitan Waste Management Group and City of Frankston as defendants and to remove all other persons named as parties to the proceeding and shall comply with r 9.11 within 14 days of this order.
(b)An electronic copy (in Word format) of all current pleadings filed in the proceeding by the remaining parties be provided to my associate within 7 days of this order or within 7 days of filing with the court.
(c)Following the close of pleadings the proceeding thereafter be conducted in accordance with a List of Issues, being the issues raised in the pleadings as settled by the judge in consultation with the parties.
(d)By 23 September 2013, the legal representatives for Casey, Frankston and MWMG shall have conferred and co-operatively used reasonable endeavours to develop, from a first draft prepared by the legal representatives for Casey and exchanged within 14 days of service by it of its reply and defence to counterclaim, a structured statement of the issues raised in the pleadings that remain in contention between the parties.
(e)No party to the proceeding take any step, or any further step, to procure expert evidence to be adduced at the trial of the proceeding otherwise than in accordance with a direction of the court.
(f)By 30 August 2013, the solicitors for the parties shall have conferred to co-operatively use reasonable endeavours to agree how best to use technology in interlocutory steps and at the trial. The solicitors for the parties shall prepare and file by 23 September 2013, a joint report to the court addressing all aspects of the technology which might be used by the parties and the court including, but not limited to, the following matters:
i.agreed common protocols for imaging and electronic formatting of documents;
ii.the preparation of an electronic court book;
iii.agreed common protocols for chronologies, lists of documents and indexes, to enable data sorting, hyperlinking, revision and any other matter arising under sub-paragraph (f);
iv.hyperlinking between chronologies, narratives, witness outlines, expert reports and submissions, including an agreed protocol for the electronic format of such documents (e.g. whether in Microsoft® Office Excel, Microsoft® Office Word, PDF or other format);
v.whether, and if so, when and by which party a hard copy core bundle is to be prepared containing those documents which are likely to be repeatedly referred to at the trial or for which a hard copy is otherwise considered desirable including as to how such bundle is to be paginated, formatted and produced;
vi.the procedures or protocols to be adopted in relation to amendment, addition or substitution of any document within the court book; and

vii.such further or other matters of technology protocol as may be considered desirable for the needs of the parties prior to trial, the needs of the parties and the court during trial, and the needs of the trial judge after the trial.

[Regard is to be had generally to Practice Note No 1 of 2007].

(g)Casey’s summons filed 21 December 2012 shall otherwise stand as a summons for directions in the proceeding on which the court may give such directions as the judge thinks conducive to the effective, complete, prompt and economical management and determination of the proceedings.
(h)Casey’s solicitors shall serve a copy of this order, and its summons filed 21 December 2012, on MWMG.
(i)The summons for directions will be adjourned to a date to be fixed in September or October 2013.
(j)The costs of directions, if any, are reserved.

I will hear counsel as to the form of the directions.

---

[2013] VSC 316

20 JUNE 2013