Claim in Negligence: The PCS Directors
46 The applicants may be able to show a relationship with the companies such as to found a duty of care on their part. It does not automatically follow, however, that directors of the company personally owed a duty of care to members of the group. In this respect, the directors have referred to Williams v Natural Life Health Foods [1998] 2 All ER 577, 584. It may be that the further particulars to be given of the directors' involvement in the making of the representations will provide a sufficient basis for a duty of care. I will not make an order striking out the claim in negligence for the moment, although it is liable to be. When the applicants have completed their amendments, if the relationship is not properly specified that order will be made.
Loss and Damage
47 Each of the respondents has consistently contended that, absent allegations of material facts to show loss and damage suffered, the causes of action under the TPA and in negligence are deficient and liable to be struck out (see in that respect Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215, 222). It is sometimes the case that an outline of the claims for loss and damage appears in other parts of the pleadings. This may sometimes overcome an order for striking out and provide a further opportunity for the specification of loss and damage. Here, some indication is given in the plea of reliance, but there is still much to speculate about.
48 In these proceedings, the usual problems created by the failure to plead loss and damage are multiplied. The causes of action suggest the possibility of duplication or overlap. It would obviously be in the interests of the group members if the source of any remedy for them was properly identified and the action confined to it. This should always, of course, be the aim in litigation but it is likely to be of greater importance in class actions, where there is a need to reduce differentiation between group members. There is said to be loss caused by the Dubai Group members being induced to enter into contracts of employment with one of the Patrick companies, and then further loss when that contract was terminated although employment was continued with the PCS companies and again terminated. A number of questions readily arise: as to whether the principal loss arose because of the termination of one or both of the contracts of employment and whether the representations inducing entry into those contracts add much to the loss said to have been suffered. I have already referred to the question of where the claim in negligence fits in.
49 There is also the difficulty that the individual circumstances of group members will differ. It is already apparent from the pleading that their positions prior to entry into the first contract of employment were different. The extent to which their individual circumstances differ substantially may depend upon the cause of action upon which their principal claim for loss and damage is to be founded. One difference as between some of the group members is the time at which they entered the picture. Identification of loss and damage will be necessary to determine whether these are properly representative proceedings and whether there are identifiable groups and even sub-groups. That may require the identification of loss and damage if not of all group members, who number some 250, then at least of sufficient of them to be representative of different losses.
50 The loss and damage said to have been suffered are essential to be pleaded in these proceedings. Not only are they necessary to complete two of the causes of action, little sense can be made of the claims without them. That is so not only for the respondents but for the Court, if effective case management is to be applied. Since the loss to which the applicants are alleged to have been exposed in some respects seems minor and because of the likelihood of overlap, they should quantify their claims with respect to each cause of action.
51 I have also considered requiring each of the group members identified in the pleadings to plead loss and damage. Whilst these proceedings have not been notified as representative proceedings, and persons given the opportunity to opt out, I take it that the applicants' solicitors are likely to have instructions with respect to those group members already referred to. The identification of the likely extent of an individual claim and of any overlap between the causes of action relied upon should be provided by orders requiring the applicants to specify their loss and damage. Beyond that it will be necessary, for the further conduct of the proceedings, to identify any major differences in loss suffered and associated issues such as reliance, as amongst the other group members. For the present purpose, I consider the applicants should also provide examples of claims for loss and damage from those group members of whom they are aware and which differ in nature from those of the applicants.
Other Defects in the Pleading
52 Because of the orders I propose making, it has not been necessary to deal with each of the numerous, complaints raised by the Minister and the Commonwealth concerning the further amended statement of claim. The PCS respondents however took up much of those submissions, in so far as they concerned parts of the pleading relevant to them. The principal contention of these and the other respondents was the issue of loss and damage, with which I have already dealt. The question of particularisation of knowledge does not seem to me to require further consideration. I have considered each of the complaints raised and will deal with some of them shortly. Others were not sufficiently significant to warrant such treatment.
53 The PCS respondents point to errors appearing in the representations pleaded. This follows the argument for the 34th and 35th respondents. For example, the advertisement referred to by schedule G1 does not contain the representations referred to in paragraph 70(a) to (d), as it is said to. This appears to be the case although the applicants' case also alleged that the representations were made orally and so do not depend entirely on the advertisements. There are other complaints that some group members do not appear to have been the recipients of the representations, even though the relevant schedule has been subject to recent amendment in an attempt to overcome this problem. I do not propose to make orders striking out or requiring further particulars with respect to these matters, but these errors should be attended to. Other submissions concern the inconsistency of claims of falsity of representations with those of future intention. In my view, there are unnecessary and repetitious pleas with respect to the representations and this should be considered by the applicants' legal representatives; but I do not propose making any orders with respect to them. What the representations are alleged to have conveyed should be made clear.
54 There were other problems said to arise with respect to the description of the group members, although it was not clear that the PCS respondents were taking up the Minister's submission in this regard. It was alleged that members of the Dubai group relied upon representations by resigning or taking leave from the Army or resigning employment. The group members falling into one of these categories are listed, respectively, in Schedules D1, D2 and E. It is pointed out, however, that the three lists do not equate with all group members. This leaves a number who did not do any of those things, the extent of whose loss suffered from any inducement to enter into employment is unclear. This should be remedied by the description of the group members to whom I have referred.
55 The PCS respondents complain of "oppressive terms" namely the reference to the "NFF interests" and the "PCS companies". I do not see any difficulty or prejudice arising from the reference to the "PCS" companies, and, as I have said, it is apparent that they are sued at present as if they had some common purpose. The reference to the "NFF interests", however, is in a different category, and it is both embarrassing and confusing that the allegations against the National Farmers' Federation on the one hand and the directors on the other is not made clear. I have already foreshadowed an order striking out such references.
Further and Better Particulars sought by the Patrick Companies
56 The principal concern of these respondents was for specification of the loss and damage said to have been suffered. The orders to be made should provide sufficient details.
Costs
57 It is conceded by the applicants that the costs thrown away by the two amendments to the statement of claim are to be paid by them. Each of the respondents seeks orders that costs be taxed and paid forthwith.
58 The Commonwealth and the Minister seek indemnity costs with respect to the claims brought under the Trade Practices Act. There seems to me to be good ground for the making of such an order.
59 The applicants' inability to sue the Commonwealth was only recently accepted, in the most recent amendment of the statement of claim, despite it being pointed out in discussion at the first directions hearing. The claim against the Minister was amended to attempt to get around the plea of immunity, but it was never based on the Minister's direct involvement in the contraventions pleaded. It appears to me to have been something of a desperate attempt to keep the Minister in the action, and not one which was well-founded. It can be seen from the series of statements of claim that the applicants considered that the Minister had been acting on behalf of the Commonwealth, but they now sought to raise one anterior piece of conduct, not directly connected with the misrepresentations sued upon, in an endeavour to subject him to the claim.
60 Each of the PCS respondents and the Patrick directors and companies, including the Lang Corporation, are entitled to the costs occasioned by the amendments and on the motions together with costs reserved with respect to the hearings on 3February 1999 and 28 April 1999. With respect to the Commonwealth and the Minister, there will be an order for indemnity costs with respect to the claims brought under the TPA. To simplify the taxation of such an order, I estimate the costs associated with those claims to be one-quarter of those respondents' costs, having regard to the other matters raised in connexion with the statements of claim.
61 The question which then remains is whether there should be an order that the costs be taxed and paid forthwith, notwithstanding that the proceeding is not concluded: O 62 r 3(2). There is no need for such an order in favour of the Commonwealth and the Minister: see O 62 r 7.
62 It is not necessary for me to detail the correspondence passing between the applicants and the other respondents. The need for loss and damage to be pleaded was drawn to the applicants' attention early in the proceedings. Despite indications, from time to time, that the information would be provided, the position ultimately adopted was refusal for no valid reason other than that it would be too cumbersome at present and because they would prefer liability to be determined separately. No such order had been sought and even if that course were taken, it would not overcome the need for a proper plea in negligence and under s 82 TPA. Nothing said in argument suggested to me that pleading the two applicants' cases of loss and damage was likely to be a very difficult task, although I apprehend it was appreciated that the case may appear somewhat simpler, and in smaller compass, if loss and damage were specified and any duplication or overlap between the claims made apparent. Whilst the respondents also required other parts of the statement of claim to be corrected, and I have not made orders with respect to them, it could not be said that those complaints were groundless. In any event, it seems to me that the grounds in this case for the making of an order requiring payment notwithstanding the proceedings have not been concluded are principally connected with the omission of the pleas of loss and damage. The matter cannot proceed until these facts are pleaded.
63 In Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545, Branson J reviewed some cases where orders under O 62 r 3 had been considered. Amongst the cases identified by her Honour as justifying a departure from the ordinary rule leaving costs to the conclusion of the substantive proceedings, were those where significant costs had been incurred, costs which would not normally have been incurred in the litigation, and which a party could not be expected to carry to the conclusion of proceedings. In Vasyli v AOL International Pty Ltd [1996] FCA 805, Lehane J made such an order where an unsatisfactory statement of claim required substantial amendment such that the proceedings could be viewed as having been commenced afresh. In this case, whilst the statement of claim was not wholly deficient, it has taken almost a year and three attempts to constitute the action, and when loss and damage are pleaded that will be the first time when the pleading could be regarded as complete. I will make the orders requiring payment of costs following taxation.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.