THE CROSS-CLAIM
14 The Cross-claim is based upon conduct of the applicant at points in time after the settlement of the six sale transactions referred to in the Statement of Claim. It is convenient now to use the terms cross-claimant and cross-respondent. It alleges an agreement between the cross-respondent and the first cross-claimant called the AWEX membership agreement, apparently by virtue of their respective membership of the AWEX, so that the cross-respondent and the first cross-claimant are each bound by its rules and regulations.
15 There are four causes of action pleaded in the Cross-claim:
(1) Breach by the cross-respondent of the AWEX membership agreement, (pars 94 to 112 of the Cross-claim) in particular of the terms that any new test of wool should be done in accordance with IWTO specifications or regulations. It is not necessary to refer in detail to those specifications or regulations. The Cross-claim alleges that, in breach of the AWEX membership agreement, the cross-respondent altered bale descriptions of certain wool after its delivery, procured retesting of certain wool by the AWTA without informing the first cross-claimant, did not notify the AWTA of the previous test results on the wool, and procured a retest in circumstances not as prescribed in the appropriate IWTO specifications or regulations. (In submissions, senior counsel for the cross-respondent said that the cross-respondent said that the cross-respondent took steps to ensure that the AWTA retested the wool in question in conditions of anonymity).
(2) Inducing breach by the AWTA of an agreement between the first cross-claimant and the AWTA (pars 113-120 of the Cross-claim). The agreement between the first cross-respondent and the AWTA (the Westgate/AWTA agreement) is alleged to include conditions that the AWTA would comply with the IWTO Regulations, including that it notify the first cross-claimant of any retest of wool sold by the first cross-claimant and that it act in good faith towards the first cross-claimant. It is then alleged that the AWTA breached those terms of the Westgate/AWTA agreement by retesting certain wool sold by the first cross-claimant to the cross-respondent without informing the first cross-claimant of its intention to do so. The cross-respondent is alleged to have had knowledge of the terms of the Westgate/AWTA agreement, so that by procuring the AWTA to retest certain wool sold by the first cross-claimant to the cross-respondent it procured or induced the AWTA to breach those terms of the Westgate/AWTA agreement;
(3) Contravention of s52 of the TPA by the cross-respondent in remaining silent about its intention to request from the AWTA new test results from the AWTA concerning the wool sold and supplied by the first cross-claimant to the cross-respondent, in the face of an obligation under the AWEX membership agreement not to engage in misleading or deceptive conduct and to notify the first cross-respondent of that intention before arranging those retests (pars 121-128 of the Defence); and
(4) Unconscionable conduct by the cross-respondent in contravention of s 51AC of the TPA by failing to notify the first cross-claimant of its intention to have the wool sold and supplied to it by the first cross-claimant retested by the AWTA in contravention of the AMEX membership agreement (pars 129-132 of the Defence).
16 The cross-respondent seeks to strike out pars 111, 119, 120, 128 and 132 of the Cross-claim. Those paragraphs are relevantly in the same terms. It is convenient to quote par 111, which provides:
"By reason of the said breaches of the membership agreement Westgate has suffered loss and damage and continues to suffer loss and damage."
I accept the contentions of senior counsel for the cross-respondent that, although the circumstances constituting the breach of the AMEX membership agreement are alleged, no allegations of fact are made as to how the alleged contraventions of that agreement have caused loss to the first cross-respondent. The formulaic expression "By reason of …" does not fill the place of such allegations. Sometimes, such a formula may suffice to properly and fairly put the other party on notice of the case it has to meet. See, for example, the observations of Carr J in Bartlett v Swan Television & Radio Broadcasters Pty Ltd (1995) 17 ATPR 41-434 at 40,887. That will depend upon the nature and circumstances of the case. But in this instance, that connection is not self-evident. For example, what is alleged to be the consequence of the cross-respondent having altered the bale descriptions of certain wool such that the first cross-claimant suffered loss and damage? Similar rhetorical questions could be asked in respect of the other allegations of breaches by the cross-respondent of the AMEX membership agreement specified in par 110 of the Statement of Claim, and in the corresponding paragraphs concerning the other causes of action.
17 I also accept the submissions of senior counsel for the cross-respondent that those pars of the Cross-claim fail to provide any allegations of material facts about the nature of the loss or damage alleged. Senior counsel for the cross-claimants acknowledged that that information would have to be provided by the cross-claimants. It is often the case that full particulars of claimed damage cannot be given when a claim or a Cross-claim is initiated. Sometimes the detailed expression of the claim for damages must await the completion of an expert's report, and indeed such an expert's report is sometimes ordered to stand as containing the particulars of a claim for damages. In the circumstances of this matter, however, I consider that the cross-claimants should identify in their Cross-claim the material facts concerning their respective claims for loss and damage. The nature of that loss and damage is not self-evident. Senior counsel for the cross-claimants, in submissions, indicated orally the sorts of matters which might be alleged. He did not suggest that the cross-claimants were unable presently to do so. The full particulars of their claimed loss and damage may have to await the preparation of an expert's report. Those particulars may need to be altered subsequently as events unfold. But, in my judgment, the cross-respondent is entitled to know the nature of the claimed loss and damage at this stage of the proceedings. It may wish to consider whether to apply to strike out the Cross-claim having regard to the loss and damage alleged. It may wish to investigate the allegations before the evidentiary trail cools. It may need to have regard to the nature and extent of the Cross-claim in its decisions as to how to progress its claim, or indeed in whether to provide in any way for the Cross-claim in its accounts.
18 The cross-claimants contend, correctly in legal terms, that damage is not an element of the cause of action for breach of contract. But, in this matter, par 111 in fact alleges such loss and damage so the cross-respondent is entitled to be informed of the material facts upon which that claim is made. As I have found, the Cross-claim does not allege how the pleaded breaches of the AMEX agreement cause the first cross-claimant loss and damage, nor the nature of that loss and damage.
19 In respect of the cause of action alleged of inducing the AWTA to breach provisions of the Westgate/AWTA agreement, pars 119 and 120 of the Cross-claim allege:
"119. By reason of the matters aforesaid, damage was occasioned or likely to be occasioned to Westgate.
120. By reason of the matters aforesaid Westgate suffered loss or damage and is continuing to suffer loss and damage."
In my judgment each of those paragraphs of the Cross-claim suffers from the like deficiencies as par 111 of the Cross-claim. There are no material facts alleged by which the cross-respondent can know how the first cross-claimant alleges that it suffered or was likely to suffer loss and damage from the conduct of the AWTA in retesting certain of the wool sold by the first cross-claimant to the cross-respondent without notice to the first cross-claimant. Nor are there material facts alleged which indicate to the cross-respondent the nature and extent of the loss and damage which the first cross-claimant has suffered or is likely to suffer.
20 I do not consider it necessary to discuss in detail the objections to pars 128 and 132 of the Cross-claim. They relate to the third and fourth causes of action in the Cross-claim referred to above. Their terms and effect are similar to par 111 of the Cross-claim. That is, they allege that the first cross-claimant suffered loss and damage by reason of the alleged misleading and deceptive conduct on the part of the cross-respondent, and by reason of the alleged unconscionable conduct of the cross-respondent. For the reasons already given in respect of pars 111, 119 and 120 of the Cross-claim, I consider that these two paragraphs also fail to plead the material facts by which the contraventions of the TPA by the cross-respondent are said to have caused loss and damage to the first cross-claimant, or the nature and extent of that loss and damage.
21 I observe that the first three causes of action pleaded in the Cross-claim are said to result in loss to the first cross-claimant only. At present, the claim based upon unconscionable conduct is alleged in par 132 of the Cross-claim to result in loss to each of the cross-claimants. In relation to the personal cross-claimants, I think the need to provide proper pleadings as to how the alleged conduct caused them loss and damage, and the nature of that loss and damage, is probably clearer, given the expressed foundation for that claim.
22 There are then discrete attacks by the cross-respondent upon pars 123, 124 and 126-131 of the Cross-claim. The cross-respondent contends that par 123:
· does not properly particularise the allegation that the representation by silence was made "in trade or commerce",
· does not identify when the representation was made, and
· does not identify to whom the representation was made.
I agree that the pleaded representation, namely that the cross-respondent did not intend to request AWTA for a new test result in respect of certain wool, does not identify when or to whom it was made. Paragraph 123 refers to pars 121 and 122 of the Cross-claim. They allege that the cross-respondent was at all material times under the obligation to notify the first cross-claimant if it intended to request the AWTA to retest certain wool sold by the first cross-claimant to the cross-respondent, and that it did not do so prior to requesting that retest. I consider that those cross-references make the time of the representation clear, namely at the time that, and shortly before, the cross-respondent requested the AWTA to conduct those retests. If further clarification is necessary, that can be sought through particulars. I also consider that the provision of particulars as to the person or persons within the first cross-claimant to whom the alleged representation was made will adequately protect the cross-respondent's interests.
23 The cross-claimants have, in par 93 of the Cross-claim, adopted various allegations in the Defence and the admissions in par 3 of the Defence. Relevantly, for the purpose of the allegation that the cross-respondent made the representation alleged in par 123 in trade or commerce, it alleges that both the first cross-claimant and the cross-respondent were at all material times a member of the AWEX, and that the cross-respondent purchased various lots of wool from the first cross-claimant, of which details are given, and that wool was delivered to the cross-respondent. As noted above, the Cross-claim then alleges the AWEX membership agreement, and certain obligations under that agreement, and the conduct of the cross-respondent in procuring the AWTA to retest certain wool sold by the first cross-claimant to the cross-respondent. So far as I can discern, they are the allegations of fact upon which the assertion could be made that the conduct of the cross-respondent referred to in par 123 of the Cross-claim was in trade or commerce. In my judgment, although the cross-claimant has not expressly said that that is the basis of its allegation in that regard, it could readily do so (if indeed I have accurately apprehended its case). If I have not, it should plead the material facts upon which it claims that the alleged representation was made in trade or commerce. The cross-respondent is entitled to know the case pleaded, so that it may be in a position to respond.
24 I think that the cross-claimants should be given the opportunity to address those rulings. It might address them by the presentation of a proposed amended cross-claim, or by provision of further particulars or in some other way. The strict line between pleadings of material facts and particulars no longer seems to be so severely drawn: see per von Doussa J in Beach Petroleum NL v Johnson (1991) 105 ALR 456 at 466. At present, I propose simply to stand over the Applicant cross-respondent's notice of motion to enable the cross-claimants to consider these reasons and, if so advised, to propose amendments to the Cross-claim in the light of them.
25 Paragraph 124 was accepted by senior counsel for the cross-claimants to be no more than a notice to the cross-respondent that, to the extent that the representation in par 123 is a representation as to a future matter, the cross-claimants propose to rely upon s 51A of the TPA. I doubt whether the representation pleaded is as to a future matter. It concerns the cross-respondent's intention, at a particular time or over a particular short period. That intention is a state of present fact, related to the time or period referred to. However, as par 124 does no more than identify a possible use of s 51A of the TPA, I do not propose to strike it out. The cross-respondent accepts that its challenge to par 126 of the Cross-claim stands or falls within its challenge to pars 123 and 124 of the Cross-claim. In view of my rulings about those paragraphs, I will not strike out par 126 of the Cross-claim.
26 Paragraph 127 of the Cross-claim pleads that "By reason of the matters aforesaid …" the cross-respondent contravened s 52 of the TPA. Whether that is an adequate pleading depends on all the circumstances. In this matter, senior counsel for the cross-claimants has confirmed what I think was clear enough in any event, namely that the "matters aforesaid" are those alleged in pars 121-126 (incorporating by reference to matters alleged in pars 100-109) of the Cross-claim. The cross-claimants, in that circumstance, have in my view fairly put the cross-respondent on notice as to the case it must meet. I do not propose to strike out par 127 of the Cross-claim.
27 Paragraphs 129-131 of the Cross-claim seek to enliven s 51AC of the TPA. They do so by adopting expressions used in that section, including in par 129 wording taken from s 51AC(4)(i) of the TPA. In my view, in a matter where it is sought to rely upon that section, it is incumbent upon the party pleading to identify:
· the "interests" which it asserts which might be affected,
· the "risks" which the cross-respondent should have foreseen which "would not be apparent" to the first cross-claimant, and
· the material facts upon which the failure of the cross-respondent to disclose to the first cross-claimant the proposed procuring of further tests of certain of the wool purchased by the cross-respondent from the first cross-claimant was "unreasonable".
The cross-claimants have not done so. In accordance with the approach I propose in respect of other paragraphs of the Cross-claim, I will give the cross-claimant the opportunity to address those deficiencies in pars 129 and 130. Paragraph 131 attracts the same criticisms from the cross-respondent as proffered in relation to par 123. I reach the same conclusions. I will not repeat them. I will therefore give the cross-claimants the opportunity to address further their plea that the relevant conduct of the cross-respondent was in trade or commerce.
28 In the result, I have rejected the applications to strike out certain paragraphs of the Defence. I have however concluded that pars 111, 119, 120, 128, 129, 130 and 132 of the Cross-claim are inadequate for the reasons given. Rather than strike out those paragraphs at present, I propose to stand over the applicant/cross-respondent's motion to enable the cross-claimants to consider these reasons and, if so advised, to respond by proposing an amended Cross-claim or by presenting further and better particulars of the Cross-claim or in some other way. Of course, it is up to the cross-claimants to decide what, if any, steps they wish to take in that regard. I have also interpreted the reference to the cross-respondent's conduct being "in trade or commerce" in pars 123 and 131 in a certain way. I require the cross-claimants to indicate whether that understanding of those pleas is correct. If it is not, in the period allowed, the cross-claimants may also consider what, if any, steps they wish to take in respect of those paragraphs of the cross-claim as presently expressed.
29 I therefore adjourn the applicant/cross-respondent's motion to a date to be fixed. I give liberty to call on the motion on reasonable notice. I will hear the parties as to the orders which should be made on the motion at that time. The applicant/cross-respondent may also seek such orders as it may be advised as to the adequacy of the particulars of the Defence and Cross-claim on that motion.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.