Belcastro v Gabriel Nakhl & Ors

Supreme Court of NSW|2014-09-24|Before: Campbell J

The application of Ashmere Cove principle 44Subject to the plaintiffs re-pleading their case about the liability of SydFA's insurer's to indemnify it, I am satisfied that the plaintiffs have made a case for joining the insurers under Rule 6.24. Adopting the approach of Lindsay J in Mestrez, and acknowledging that there was no strong opposition to the application of the principle from the insurers, my reasons for applying those principles to present case are: (a)although indemnity has not been formally denied, the frank and proper concession by Mr Donaldson that it is extremely unlikely that the insurers would admit the claim conforms to one's legal experience. This is not to express cynicism, rather when faced with a complex and complicated claim, said to be worth millions, and in which the acts and omissions said to form the plaintiffs' entitlements span many years, and many different legal categories, not all of which may be covered by the policy, experience suggests that prudent insurers are likely to contest the claim, and, indeed, the issue of indemnity, unless the claim is clearly shown to be an accepted peril, not specifically qualified or excluded; (b)in circumstances where the liquidators of SydFA are without funds to either actively defend the litigation or bring a cross-claim against the insurers, s 562 Corporations Act provides an appropriate legal context to permit the plaintiffs to seek a declaration that the insurers are liable to indemnify SydFA for its liability to them, if any. No abuse of process is involved. Joinder of the insurers as co-defendants in the current proceedings will avoid a multiplicity of proceedings enabling all matters in controversy between the parties to be completely and finally determined once and for all. (c)the limited utility of s 6 of the 1946 Act in many cases involving "claims made and notified" liability insurance policies as illustrated by Chubb v Moore, supports the adoption of another legally available path lest plaintiffs who have a strongly arguable claim for redress go without an effective remedy. That possibility is not in the interest of justice, or, I might add, the administration of justice; (d)there would be a substantial impediment standing in the way of obtaining a binding determination of the liability of the insurers to indemnify SydFA unless the plaintiffs were permitted to join them to these proceedings. With respect it is unnecessary for me to consider Lindsay J's views about the "invocation of a more general equitable jurisdiction (at [57])" in the present context.

The application under s 500(2) Corporations Act 2001 45I am satisfied that I should grant leave to the plaintiffs to commence, and proceed with, the proceedings against the second, third and fourth defendants under s 500(2) Corporations Act 2001. 46In coming to this conclusion I have taken into account the views of the liquidator of each of the companies, which as I have stated already are to the effect that he or she neither consents nor objects to the order, but given the lack of available funds neither can take an active part in the litigation. The absence of the liquidators as active contradictors of the plaintiffs is not of itself a bar to the leave sought in circumstances where consent orders have already been made for the insurers of the fourth defendant, Australian Financial Services Limited, to be joined as defendants in the proceedings. Once the case against the insurers of SydFA is re-pleaded in accordance with orders I will pronounce, another active contradictor will be supplied. It is true that not all of the causes of action pleaded, in the end, are likely to be covered by the professional liability policies (of course, I make no final judgment about that), but it will be in the interest of the insurers to contest much of what is advanced by the plaintiffs against their various insured. 47I accept that the causes of action pleaded in the proposed Amended Statement of Claim against the various insured raise serious questions to be tried: Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 at 153 (albeit in a somewhat different context). The evidence of Mr Belcastro, affirmed in his affidavit of 7th December 2013, on its face supports the causes of action against the companies in liquidation. 48I accept Mr Ashhurst's argument, that many of the factors identified by Gilmour J in Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749 at [29] as relevant to a favourable exercise of the discretion are established here, including the following: (a)the case involves a large claim of over $2 million; (b)the claim is serious involving comprehensive facts supported appropriately by evidence and is concerned with the loss of the lifesavings of Mr and Mrs Belcastro; (c)the legal and factual issues involved are complex giving rise to a prospect that a proof of debt will be rejected, even if the subject matter of the claims is legally amenable to that alternative; (d)in any event, given the evidence of the liquidators, the prospects of recovery will depend upon the availability of the insurance monies which, under the Act are earmarked in the winding up for third party claimants including the plaintiffs by s 562, and the insurers are likely to deny indemnity to the liquidators; (e)the claims have more than arguable merit having regard to the evidence of Mr Belcastro; (f)the proceedings will not result in prejudice to other creditors because of the potential availability of the insurance monies and the consideration that the liquidators are not the active parties in the proceedings; (g)any necessary outstanding pre-trial procedures are unlikely to inconvenience the liquidators or involve them in any additional expense, given that the plaintiffs have secured much of the evidence required and the main thrust of the case will be engaging the insurance policies; and (h)the likely attitude of the insurers renders litigation the more appropriate avenue in the first instance.

Necessary form of orders 49In the course of argument, Mr Donaldson pointed out a possible difficulty in pronouncing the consent orders made on 7th July concerning the insurers of Australian Financial Services in circumstances where there is a live question about whether leave should be granted to file the Amended Statement of Claim, given his objections to the formulation of the case against his client-insurers. Notwithstanding the force of this argument, I was persuaded by Mr Ashhurst to enter the orders as Mr Yezerski consented. Accordingly, it has not been necessary for me to make any decision about the adequacy of the pleading, otherwise than in respect of Mr Donaldson's client. I should not be taken as implicitly suggesting that other material non-compliance is evident in aspects of the pleading not the subject of argument before me. 50It seems to me that I should make orders under s 500 (2) of the Corporations Act; grant leave to the plaintiff to file the Amended Statement of Claim attached to the Notice of Motion on 1st of April 2014 excluding the claims for relief and averments directed at SydFA's insurers; and grant the plaintiff leave to re-plead as against SydFA's insurers having regard to my reasons. 51As I am of the view that I should permit the plaintiffs to join SydFA's insurers once their pleading is in order, I consider that the requirements of s 56 Civil Procedure Act 2005 are better served by making orders now that facilitate their joinder. This will avoid further applications and unnecessary delay. In these circumstances it seems appropriate to bring the matter back before me for directions with a view to checking whether the plaintiffs have taken good advantage of the opportunity to re-plead which I have allowed. 52I have not heard the parties in relation to costs. One view of it is that SydFA's insurers have won the only point substantially in issue which is whether the proposed pleading against them adequately complied with the rules. Another view is that I have been persuaded to permit the joinder of the insurers now rather than later after the insurers have satisfied themselves about the plaintiffs' re-pleading. The "event", therefore, may be characterised as something of a draw. This suggests that the costs of the parties should be in the cause. I will pronounce an order in that form but grant liberty to the parties to apply to vary that order by lodging written submissions within 14 days of today. 53My orders are: (1)Under s 500(2) Corporations Act 2001 (Cth) grant the plaintiffs leave, nunc pro tunc, to commence , and proceed with, these proceedings instituted by statement of claim filed on 10th December 2013 against SydFA Pty Ltd (in Liquidation) ACN 14005594, Sydney Financial Advisors Pty Ltd (in Liquidation) ACN 133317236 and Australian Financial Services Limited (in Liquidation) ACN 116900362. (2)Grant leave to the plaintiffs to file and serve the Amended Statement of Claim annexed to the Amended Notice of Motion filed on 1st April 2014 excluding the following matters pleaded therein: (a)The claim for a declaration of right against the ninth, tenth, eleventh and twelfth defendants appearing on page 3; (b)Paragraphs 11 to 14, and 336 to 344. (3)Grant leave to the plaintiffs to file a further amended Statement of Claim within 28 days of today, naming the proposed ninth, tenth, eleventh and twelfth defendants as defendants pursuant to Rule 6.24 Uniform Civil Procedure Rules 2005 and re-pleading in accordance with the rules its claim for a declaration that those defendants, and each of them, are bound to indemnify the second defendant under the terms of the professional indemnity insurance policy issued by it or them in respect of the second defendant's legal liability to the plaintiffs, if any; (4)Except to the extent to which its prayers for relief have merged in the orders pronounced on 11th July 2014, and today, the amended Notice of Motion filed on 1st April 2014 is otherwise dismissed; (5)The parties costs are costs in the cause; (6)The parties to have liberty to apply in respect of the costs order by lodging written submissions not exceeding three pages in length seeking a variation of order (5) within 14 days; (7)List the matter for directions before Campbell J on Friday 31st October 2014 at 9:30 a.m. at which time the parties are to bring in short minutes of order formulating an agreed timetable for the taking of remaining interlocutory steps in the proceedings.

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The proposed amended statement of claim 12Mr and Mrs Belcastro claim damages from Mr Nakhl and his associated corporations for breach of contract, breach of fiduciary duty, misrepresentation, unconscionable conduct of various types, in negligence and for various statutory causes of action which I will not list fully but they include breaches of the duties owed by licensed financial services providers under s 12GF of the Australian Securities and Investments Commission Act 2001 (Cth), and arising under the Australian Consumer Law forming part of Competition and Consumer Act 2010 (Cth) . Statutory causes of action under six separate enactments are pleaded. 13Amongst the remedies sought is a declaration that the 9th, 10th, 11th and 12th Defendants are liable to indemnify SydFA "in respect of the judgment sought against the second defendant by the plaintiffs in these proceedings." As explained by Mr Ashurst, this declaration is sought on what he referred to as the Ashmere Cove principle (see Employers Reinsurance Corp v Ashmere Cove Pty Ltd [2008] FCAFC 28; 166 FCR 398). 14The case against SydFA's insurers is set out at [11] to [14] and [336] to [344] of the proposed Amended Statement of Claim. The whole pleading covers 95 pages excluding formal and preliminary parts. 15The 9th and 10th defendants underwrote the professional indemnity policy for SydFA for the 2012/2013 year. The 2013/2014 policy was underwritten by the 9th, 10th, 11th and 12th Defendants. 16In terms the claim against the insurers of SydFA invokes s 6 Law Reform (Miscellaneous Provisions) Act 1946 (NSW); s 562 Corporations Act 2001; and s 601 AG of the same Act. I interpolate that the prayer for leave under 6(4) of the 1946 Act contained in the ANOM was not pressed at the hearing. 17The averments expressing the plaintiffs' case against SydFA's insurers are brief and, I think, not especially informative. [337] pleads the existence of a policy of professional indemnity insurance and sets out, by way of particulars, the operative part of the insuring clause. [338] avers the following: By reason of SydFA professional negligence, and other breaches and statutory contraventions by it referred to in the relevant paragraphs above the plaintiff has suffered loss and damage. There is no express repetition and recital of the matters said to constitute "breach of professional duty" within the operative words of the insurance clause, nor is there is any attempt in [338] to equate its terse content with those words idea in the policy. 18By [339] there is an averment that the plaintiffs made a claim on 19th February 2013 when Mr Belcastro demanded the immediate return of their funds. Understanding this averment depends upon the particulars which incorporate the earlier pleadings in [127], [128], [133] and [137] - [139], appearing under the heading "the plaintiffs' discovery of the defendants conduct and aftermath". 19[339A] and [339B] advance alternatives to [339] by averring the plaintiffs made a claim in writing to SydFA, first on 17th March 2013 and secondly, by commencing proceedings on 10th December 2013. These alternatives are capable of engaging the second policy only, but there is no attempt to distinguish between them, notwithstanding that the 11th and 12th defendants are only concerned with the second policy. 20[340] is in the following terms: In the relevant circumstances pleaded above in respect to SydFA, the plaintiffs say that: a. They are entitled to recover damages from SydFA; b. SydFA is entitled to be indemnified by SydFA's insurers under relevant policies in respect of a plaintiffs' claim for damages referred to in a. hereof (same as above for AFSL); c. They are entitled to a charge on all insurance monies that are or may become payable by SydFA Insurers to SydFA in respect of SydFA liability to them pursuant to s 6 of the Law Reform (Miscellaneous) Provisions Act 1946; (same as above for AFSL). Particulars: (i) Charge attached on all money claimed as:

Applicable principles 27It is unnecessary for me to detail the considerations informing a grant of leave under s 500(2) of the Corporations Act as that matter is not hotly contested and I will grant the orders, stating my reasons at the end of this judgment. 28Mr Ashhurst and Mr Donaldson were in furious agreement about the principles informing my decision whether to order the joinder of SydFA's insurers under Rule 6.24. They strongly disagreed about whether the occasion for their application had yet arisen. Both learned Senior Counsel accept that the principles discussed in the Ashmere Cove case govern this case. The course of decision has moved on somewhat since then and the principles have been fully expounded by Lindsay J in Owners - Strata Plan 62658 v Mestrez Pty Ltd [2012] NSWSC 1259 under the epithet of "the Anjin line of cases", a reference to Anjin No 13 Pty Ltd v Allianz Australia Insurance Ltd (2009) 26 VR 148: see Mestrez at [44] - [59]. His Honour summarised the key aspects of the reasoning, and the principles, underpinning the Ashmere Cove principle at [54] in the following terms: The reasoning underlying Anjin, and its antecedents, can be summarised as follows in an NSW context: (a) When an insurer has denied indemnity, the insured can, uncontroversially, file a cross claim against it for the purpose of enforcing their contract. (b) It would be an abuse of the processes of the court if a third-party Plaintiff, without a cause of action against the insurer, simply sought to join the insurer as a co-defendant with an insured defendant against which the Plaintiff had a cause of action. (c) However, the interests of justice, and the convenient administration of justice, may authorise an order that an insurer be joined as a co-defendant with its insured, whether on the application of the third-party Plaintiff or otherwise, if: (i) the insurer has denied liability to indemnify the insured against the Plaintiffs' claim. (ii) there is a bona fide dispute as to the entitlement of the insurer to deny liability. (iii) there is a substantial impediment (including insolvency on the part of the insured) standing in the way of the proceedings being conducted simply by the Plaintiff against the insured defendant, with a cross claim filed by the defendant against the insurer. (iv) the dispute as to the liability or otherwise of the insurer to indemnify the insured defendant can properly be made the subject of a grant of declaratory relief pursuant to the Supreme Court Act 1970 (NSW), s 75. (v) there is, in particular, a true legal controversy between the Plaintiff and the insurer such as would ensure that each of those parties might reasonably be relied upon by the court to serve as a contradictor for the other. (vi) joinder of the insurer as a co-defendant with its insured might reasonably be relied upon to avoid a multiplicity of proceedings, and to enable all matters in controversy between the parties (namely, the Plaintiff, the insured and the insurer) to be completely and finally determined. (d) A true legal controversy between the Plaintiff and the insurer may be taken to exist where, on the facts of the particular case, there is a realistic prospect of s 562 of the Corporations Act having scope for operation. (e) A decision to allow joinder of the insurer as a co-defendant is one which is discretionary and fact-based, not available as of right. 29As I have said, but for the objections Mr Donaldson takes to the proposed pleading itself, he agrees that these principles would be engaged in the circumstances of the present case. 30I repeat that the real contest is about the adequacy of the proposed pleading as against SydFA's insurers, which I have analysed above at [14] to [22], not uncritically. The parties accept that relevant principles are summarised by McLaughlin AsJ in Gee v Burger [2009] NSWSC 149 at [19] - [21], which I will set out for completeness: At the outset, it should be recognised that liberal use of the power to amend (in the instant case, to amend a pleading) is one of the hallmarks of the modern judicial system. Nevertheless, the Court will not grant leave for the amendment of a pleading where the amended pleading is itself liable to be struck out. The principles regarding the striking out of a pleading, or the dismissal of proceedings, upon the ground that no reasonable cause of action is disclosed are well settled. (See General Steel Industries Inc v Cmr for Railways (1964) 112 CLR 125, especially the judgment of Barwick CJ.) The power of summarily striking out a pleading or dismissing a claim, or of summarily depriving a party of the opportunity of having a final hearing of the cause of action which it desires to propound, should be exercised with caution and only in the clearest of cases. Time and again Courts of the highest authority have cautioned against denying a party the opportunity to place his or her case before the court in the ordinary way and after taking advantage of the usual interlocutory measures. (See, for example, Agar v Hyde [2000] HCA 41 ; (2000) 201 CLR 552 at 575, where Gaudron, McHugh, Gummow and Hayne JJ observed that contested issues should not be summarily decided except in the clearest cases; Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27 ; (2006) 226 CLR 256 at 275; John Fairfax Publications v Hitchcock [2007] NSWCA 364 ; (2007) 70 NSWLR 484 at 487, 490, 527, 528-529.) In exercising the discretionary power of the Court, provided by s 64 of the Civil Procedure Act 2005, and implied by r 19.1 of the Uniform Civil Procedure Rules 2005 (to grant the leave to amend), as sought by the Plaintiffs, or by r 14.28 (to strike out the pleading) and r 13.4 (to dismiss the proceedings), as sought by the First Defendant, it is necessary only that the Court be satisfied that the claim of the Plaintiffs is arguable. It is not necessary that a party in the position of the present Plaintiffs establish that at a final hearing the party will undoubtedly succeed in its claim. 31Mr Donaldson says the pleading is liable to be struck out as offending Rule 14.28 UCPR, as I have said, because it has a tendency to cause prejudice, embarrassment or delay. Mr Ashhurst emphasises that the power to strike out should be exercised with caution, and in only the clearest of cases. 32Mr Donaldson pointed out that there is no evidence that indemnity has been denied by the insurers. At the same time he frankly acknowledged "it was very unlikely that indemnity would be extended" (20.20T). He submitted that the pleading as against his clients was affected by "twin vices". They were a lack of clarity in the pleading, and the claims for relief, and then a lack of an attempt to link the pleading to the insuring clause. This prejudiced the insurers in formulating a defence that enabled them to properly raise matters in answer to, or exclusion of, the plaintiffs' claim. Mr Donaldson submitted that the narrative contained in the proposed Amended Statement of Claim as a whole was unnecessarily tortuous and prolix. This made it hard to judge how much of what was said against SydFA was also said against the insurers in circumstances where some heads of claim against SydFA must necessarily fall outside the policy's cover. The pleading did not meet the basic requirements of the rules that "a party's pleading must contain only a summary of the material facts on which a party relies and not the evidence by which those facts are to be proved"; Rule 14.7 UCPR; and brevity so far "as the nature of the case allowed": Ruled 14.8 UCPR. 33Mr Ashhurst argued that from the detailed argument of Mr Donaldson, it was clear that the insurers understood the nature of the claims made against SydfFa. If this was so, then those claims which it said fell outside the insuring clause, either by way of interpretation of it, or by way of express exclusion, could be identified and spelt out in a properly drawn defence. Senior Counsel argued "whether or not a pleading could be better is not the test" (28.35T). Mr Ashhurst rejected a question from me that the failure to seek leave under s 6(4) of the 1946 Act itself was a reason not to permit the averments against the insurers to proceed in their present form. Both Mr Donaldson and Mr Ashhurst observed that given the decision in Chubb Insurance Co of Australia Ltd v Moore [2013] NSWCA 212; 302 ALR 101, s 6 may become redundant as a means of joining an insurer to proceedings which have their foundation in a "claims made and notified" policy like those in question here.

Consideration 34It is not necessary for me to review the principles of law concerning the adequacy of the pleadings, they have been fully discussed in many places, including the decision of Johnson J in McGuirk v University of New South Wales [2009] NSWSC 1424 at [21] - [35]. I have borne these principles in mind. However, it is well to keep a basic rule at the front of one's mind. In Banque Commerciale SA En Liquidation v Akhil Holdings (1990) 169 CLR 279, Mason CJ and Gaudron J said at 286: The function of pleadings is to state with sufficient clarity the case that must be met ... in this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and incidentally, to define the issue for decision. The rule that, in general relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. (Citations omitted). 35In Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135 (at [20] to [21]) Hodgson JA considered the interplay of the predecessors of Rules 14.7 UCPR and 14.4 UCPR. The latter providing that the plaintiff must plead any matter which if not pleaded specifically may take the defendant by surprise: It might appear that these rules do not require that causes of action be stated in pleadings: the requirement is to have a statement of material facts, and indeed to have only such a statement. However, in my opinion - (1) "Material" means material to the claim, that is, to the cause orcauses of action which are relied on. (2) The requirement of a statement of material facts does not exclude the allegation of legal categories, such as duty of care, fiduciary duty, trust and contract. (3) The general requirement to avoid surprise means that material facts must be stated in such a way that a defendant can understand the materiality of the facts, that is, how they are material to a cause of action. Accordingly, even on the basis of these rules which are common to the District Court and the Supreme Court, I do not take cases such as Konskier as establishing that there is never any requirement to do more than set out facts. Where there is a danger of surprise, which arises particularly where there is lack of precision and clarity in the pleading, it may well be appropriate torequire a plaintiff, either in a statement of claim or in particulars, to explicitly relate the facts it pleads to specified causes of action. (Emphasis added) This statement of principle has continuing vigour under the Uniform Civil Procedure Rules. It may be taken as indicating that where, on the basis of the same facts, a number of different causes of action are said to arise, there is an obligation on the part of the party whose pleading is called into question to demonstrate that it is well organised so that those matters going to each relevant legal category are clearly identifiable. This may extend to showing the differing application to various causes of action of facts common to some or all of them. Repetition or recitation may be called for where the same fact is material to more than one legal category relied on; especially where, as here, the pleading is long and complex. The responding party ought not to be left in a position where it must guess about the legal significance of an averment, or a particular. Generally, material facts should be pleaded rather than merely included in a pleading as a particular of another material fact. The question is not what the defendant has made of the statement of claim but rather what reasonably can be made of it. 36These considerations are relevant to the pleading against the insurers discussed at [14]-[22] above. I accept the argument of the insurers that the effect of this pleading is to do no more than say everything pleaded previously in this voluminous document goes to show that SydFA is in breach of its professional duty within the meaning of the policy. To my mind, to plead in this fashion is not to state the material facts relied upon against SydFA's insurers in such a way that SydFA's insurers can understand how what has gone before is material to the cause of action SydFA would have had on either policy against the insurers: what is in question, of course, is the liability of the insurers to indemnify under the policy. 37Moreover, as I have tried to demonstrate above, in many respects the pleading does not make grammatical sense. One is left to guess what is meant by much of, and what allegations are sought to be incorporated in, the pleading against the insurers. An example of this is the reference to other paragraphs of the Statement of Claim out of sequence which when considered with the pleading against the insurers seems to have nothing whatsoever to do with the claim against the insurers. These are more than mere infelicities of language. 38Given that the liability of at least the 11th and 12th defendants will depend upon which of the policies, if either, and to what extent, applies, it is necessary that SydFA's entitlement to cover under each be spelt out separately. The separate material facts said to engage each policy, and why, must be identified, by repetition and recital if appropriate. 39There are two other substantive points. First, it is obvious from the evidence led by the plaintiffs that s 601AG is not engaged. SydFA has not been deregistered. And, as I have said, the likelihood is that it will not be at least until the proceedings are completed. There is certainly no evidence that deregistration is on the cards. That claim cannot be justified even if only to cover all possible contingencies. Naturally, that pleading should not be allowed to proceed. 40I do not regard it as a proper exercise of my discretion to allow a pleading to go forward which, so far as I can make out (see [16] and [20] above), seeks to enforce the statutory charge created by s 6 of the 1946 Act, unless the plaintiff frankly, and first, faces up to the requirement to obtain leave under s 6(4). It is unsatisfactory, with great respect, to simply leave the question whether leave under s 6(4) may or may not be required hanging until some future time. It has been clear law since the decision of the Court of Appeal in National Mutual Fire Insurance Co Limited v Commonwealth [1981] 1 NSWLR 400 "that a failure to obtain the leave of the Court in advance (of commencement) invalidates the action and renders it incapable of being revived by leave retrospectively given": at 408 by Glass JA, Moffitt P and Samuels JA agreeing. This approach has inured beyond the decision of the High Court of Australia in Emanuele v Australian Securities Commission (1997) 188 CLR 114. 41The continued force of the decision in National Mutual, which is binding on me anyway, is demonstrated by its application in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [93]. See also Correa v Wittingham [2003] NSWCA 263 at [78] - [83] by Gleeson JA, Barrett JA and Tobias AJA agreeing. 42It is one thing for the plaintiff to prefer the Ashmere Cove principle to avoid the complexities of Chubb v Moore, and quite another to leave the question of the applicability of the statutory charge in a state of suspended animation from which it cannot be revived as this case proceeds. That situation is embarrassing within the meaning of Rule 14.28. 43In McGuirk at [35] Johnson J said: It is not the function of the court to draw or settle a party's pleading. The court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. Objectionable matter that is so mingled with other matter may lead to the conclusion that the pleading as a whole would tend to embarrass the fair trial of the action [and] ought be struck out (Citations omitted). In my judgment this statement is apposite in the present case. Leave should not be granted to the plaintiffs to bring forward the amended Statement of Claim attached to ANOM naming SydFA's insurers as defendants on the basis of the averments at [336] to [334] and I will not grant leave to file the Amended Statement of Claim in this form. I will, however, allow the plaintiffs an opportunity to re-plead their claim so far as it relates to those insurers. I wish to make it clear that notwithstanding a degree of prolixity in other parts of the pleading, given the lack of opposition to the rest of it, had this been a strike out application I would only have struck out the pleading against SydFA's insurers. The plaintiffs may wish to preserve the balance of their pleading and my orders will permit that.

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