Century Medical v THLD Ltd [1999] NSWSC 731 | Case summary

JUDGMENT 1 HIS HONOUR: There is before the Court a notice of motion filed on 1 March 1999 in which the plaintiff, Century Medical Inc, seeks the following orders: 1. Order that the plaintiff be granted leave to file and serve a further amended summons on terms that the plaintiff pay the costs of and occasioned by the amendment; 2. Order that the time for the plaintiff to file its further amended summons be extended from 12 February 1999 to 5 March 1999. The application is for costs to be costs in the cause. 2 The proceedings commenced on 9 April 1998 upon the filing of a summons in the Commercial Division of the Court. An amended summons was later filed on 13 November 1998. That amended summons came before Rolfe J in November 1998, when the defendants, THLD Limited and others, by motion dated 24 November 1998, sought to have the summons struck out. By judgment delivered on 27 November 1998, his Honour directed that the amended summons be struck out and granted leave to the plaintiff to file a further amended summons, directing that this take place by 4pm on Friday 5 February 1999. 3 By letter dated 4 February 1999, the plaintiff's solicitors informed the defendant's solicitors that they were in the process of finalising a further amended summons which, it was said, had been completely redrafted. The plaintiff's solicitors said that they had the objective of filing and serving that summons on 5 February as ordered by the Court. However, the plaintiff's solicitors advised that Mr Saegusa of the plaintiff had been abroad that week and would not be returning to Japan until Wednesday or Thursday on the following week, and in view of that, advised that the plaintiff did not anticipate being in a position to file the further amended summons before Friday 12 February. The plaintiff's solicitors sought the defendant's consent to a filing of the further amended summons on or before 12 February. 4 By letter dated 8 February 1999, the defendant's solicitors advised that they were instructed to agree to adjourn the directions hearing for seven days, but to require that the amended summons be delivered as soon as possible that week. They advised that no further extensions for delivery of the amended summons would be afforded. 5 It is common ground that on 12 February 1999 the plaintiff obtained an extension of time within which to file its further amended summons to the close of business on that day, which had been agreed to by the defendants on 8 February 1999. The foreshadowed further amended summons was not filed by 12 February 1999 and the defendants have refused their consent to any further extension of time within which that document might be filed. In consequence, on 1 March 1999 the notice of motion now before the Court was filed. 6 Mr G F Dowd, a solicitor with the plaintiff's solicitors, deposed that during the week commencing 5 February the relevant person at the plaintiff from whom he required instructions in relation to certain matters was abroad, and when that person returned to Tokyo, Mr Dowd ascertained that he needed to obtain instructions from the former president of the plaintiff in relation to certain matters pertaining to the further amended summons. That person was no longer employed by the plaintiff and had been retired for some time, and Mr Dowd was only able to obtain instructions from the former president of the plaintiff on 25 February 1999. He then communicated instructions to counsel and the notice of motion was filed on 1 March 1999. 7 Extensive submissions have been addressed to the Court in relation to the motion now before the Court. Those submissions centred on the content of a document which became exhibit P1 on the hearing of the motion, being a further amended summons now sought to be propounded by the plaintiff. That summons covers some 82 pages. 8 In opposing the making of the orders sought in the notice of motion, the defendant's counsel has relied upon four particular complaints. These are: 1. The absence in the pleading to identify properly and distinctly the conduct of each defendant as referable to liability recoverable against that defendant; 2. The failure of the document to identify the causal nexus between the conduct complained of against each defendant and the loss or damage sought to be recovered from each defendant. 3. The document itself is said to offend in a number of respects which are said to be not merely pleading points. Here it is said that the document fails to spell out material facts necessary to complete causes of action and to sustain heads of liability in respect of which relief is sought. 4. A complaint is made that the amended summons being propounded does not conform to the reasons of Rolfe J to which I have referred in certain respects. 9 The amended summons which had been struck out by Rolfe J included under the heading "Nature of the Dispute" definitions of "supplying defendants" and "manufacturing defendants." Rolfe J had on page 2 of his Honour's judgment stated that these definitions in themselves had failed to illuminate the parties to which reference was being made, save for the first defendant, because they had referred "to it and/or its subsidiary or affiliated companies, including one or more of the defendants." His Honour had pointed out that one was "then left, when reading the pleading and seeing either of those defining words, to speculate as to which of the defendants reference is being made." 10 The extensively redrafted amended summons now sought to be propounded by the plaintiff includes a section (III) commencing at page 13, which is an entirely new section of the pleading. It had not previously been included in the summons struck out. It follows section (II) which commences on page 13 and which in turn deals with the topic "the parties and their representatives." 11 Section (III) in the pleading is in the following terms: 'III. The Telectronics group of companies 18. CMI contends that the first to fifth defendants (inclusive) ("the Telectronics group of companies") jointly carried on the business of manufacturing, packaging and supplying of Telectronics brand heart pacemaker products; the business being carried on either via a joint venture, a partnership, an agency relationship or some other arrangement the details of which are not know by CMI and are in the peculiar knowledge of the defendants. Particulars (a) The first to fifth defendants (inclusive) all carried on business under the name "Telectronics Pacing systems"; (b) The initial approach to CMI was in fact made by Pacific Dunlop which asked Itochu if CMI was interested in distributing Telectronics brand heart pacemaker products in Japan; (c) Thomas and/or Vale, prior to entry into the Distribution Agreement, represented to CMI that the business of "Telectronics Pacing Systems" was carried on in Australia and the USA by a group of companies named Telectronics and that the Telectronics companies were all subsidiaries of Nucleus, which in turn was the "Medical Division" or "Medical Group" of Pacific Dunlop; (d) Vale and Thomas purported to and did negotiate the entry into written agreements on behalf of : (i) the second defendant, then known as Telectronics International, in particular the Cordis Neich Agreement dated 25 October 1991 and subsequent agreements dated 28 June 1993 and 18 March 1994; and (ii) the first defendant, Telectronics Holdings, in particular the Distribution Agreement dated 5 December 1991; (e) Vale was at all relevant times a director and/or senior executive of all of the first-fifth defendants; (f) At all relevant times, Thomas was the chief executive officer of: (i) Telectronics Holdings; (ii) Medical Telectronics; (iii) TPLC; and (iv) Nucleus; (g) The written Distribution Agreement dated 5 December 1991; (i) makes reference in the first recital to "subsidiary companies of Telectronics". (ii) refers to heart pacemaker products with "the trade name Telectronics which are manufactured, sold or distributed by Telectronics, its subsidiary or associate or affiliate companies, anywhere in the world . . .". (iii) on page 6 makes specific reference to the "Telectronics Group of companies"; (h) The Distribution Agreement dated 5 December 1991 was executed by the first defendant as agent for all of the companies in the Telectronics group of companies; (i) The Distribution Agreement dated 5 December 1991 was ratified by the subsequent conduct of the second to fifth defendants (inclusive); (j) Invoices received by CMI used the name "Telectronics Pacing Systems"; (k) Promotional material received by CMI used the name "Telectronics Pacing Systems"; (l) The various recall notices/safety alerts which were issued in respect of Telectronics brand heart pacemaker products were variously issued by the second defendant, the third defendant, the fourth defendant and the fifth defendant on behalf of the Telectronics group of companies; (m) The recall notices/safety alerts were issued under the name "Telectronics Pacing Systems"; (n) All of the Telectronics brand heart pacemaker products were manufactured by the fifth defendant (see admission made on behalf of the defendants by their solicitors' letter of 29 January 1999) but none of the products were actually supplied by the fifth defendant itself; (o) The first defendant, which executed the Distribution Agreement, did not itself either supply or manufacture Telectronics brand heart pacemaker products, which reflects the fact that the supply of the Telectronics brand heart pacemaker products was a group enterprise and not an enterprise of the first defendant solely; (p) Telectronics brand heart pacemaker products which were subject to recall and surgically removed from patients ("explanted") were returned by CMI to the second defendant on behalf of the Telectronics group of companies irrespective of whether the particular unit of heart pacemaker product was supplied by the second defendant, and, further, the second defendant examined each explanted unit and returned an advice to CMI in relation to that particular explanted unit; (q) During the period of the supply of Telectronics brand heart pacemaker products to CMI, communications emanating from the Telectronics group of companies were not on the letterhead of the first defendant but were largely on the letterhead of the second defendant; (r) The first, second and third defendants all carried on business from the same business premises, being premises from which Nucleus carried on business in Australia; (s) The fourth and fifth defendants both carried on business from the same sets of business premises; (t) From time to time, some of the claims for compensation and rebate made by CMI in respect of Telectronics brand heart pacemaker products were paid by the second defendant; (u) the second and third defendants implemented instructions given in the USA by the FDA to "Telectronics"; (v) Statistical failure analyses for all Telectronics brand heart pacemaker products are conducted by the "Returned Product Analysis Group" on the premises of fourth defendant; (w) Complaints in respect of Telectronics brand heart pacemaker products were and continue to be administered by "Clinical Engineering/Product Performance Groups" on the premises of the fourth and/or fifth defendants; (x) By the "Dear Doctor" letter of 23 August 1991, the third defendant gave undertakings on behalf of the fourth defendant.' 12 Mr Walker of counsel, appearing for the defendants, addressed what I understood to be the principal ground of attack on the amended pleading in a number of ways. The submission refers to paragraph 18 of the contentions section of the new summons as a "linchpin" section. The submission is that on the basis of the pleading now sought to be propounded, there are no specifically identified bases upon which each of the defendants are said to become liable for conduct of the others in relation to the conduct that is complained of. The submission is that a central problem with paragraph 18 is that on the one hand, it seeks to group the first five defendants as a group, generally referred to on numerous occasions throughout the documents as "the Telectronics Group of Companies," and on the other hand, that the allegations of fact to be found generally referred to from time to time in the pleading, allege conduct carried out "on behalf of the group." 13 Mr Walker submitted, inter alia, that the pleading walks between, as I understood him, alleging that the group is a legal entity itself and on the other hand, alleging conduct by one or other member of the group or by one or other defendant said to have been carried out on behalf of the group. 14 The pleading, it was said, does not identify the actions on behalf of one defendant for and on behalf of the other defendants being complained of. What was missing, for example, it was suggested, was an allegation that the second defendant supplied for and on behalf of the first defendant, product pursuant to the distribution agreement and that thus the plaintiff had established liability against the first defendant by reason of that agency. It was necessary, so Mr Walker submitted, to properly spell out the conduct of each party and any vicarious responsibility of another party which likewise, he submitted, required to be set forth. 15 Mr Walker's submission was that in essence this is a product liability case. The submission was that there was plainly a contract being the distribution agreement of 5 December 1991 entered into, so he submitted, between the plaintiff and the first defendant. The submission was that the plaintiff plainly complains about product supplied pursuant to that agreement. The submission was that it is then open to the plaintiff to sue on that contract and on the contractual warranties in the document, including any alleged fitness for purpose and merchantable quality clauses. Hence Mr Walker submitted that there is no good reason for the elaborate device which the plaintiff is, so it was submitted, here engaged in, by way of outflanking or getting around the suggested fact that any liability, (should there be any established), in contract, was a liability of the first defendant. 16 A short outline of the Group of Companies comprising, on the plaintiff's allegation, the defendant group, was given in a judgment delivered by Judge Spiegel in case number 1-CV-95-087-MDL-1057, sitting as the United States District Court of the Southern District of Ohio, Western Division, on February 3 1997. Those proceedings were brought by recipients of pacemakers who had claimed that their pacemakers were defective for various reasons. Pages 1 to 7 of that judgment are set out below and were received in evidence before me on this notice of motion as background material. 'This case involves a discussion of the limits of personal jurisdiction over out-of-state defendants who own corporations that do business in the forum. Pacific Dunlop Limited ("PDL") and Nucleus Limited ("Nucleus") (collectively the "Australian Defendants") are Australian corporations who have moved to dismiss this action against them for lack of personal jurisdiction. PDL is the beneficial owner, through Nucleus as the holding company, of TPLC, Inc., the manufacturer of an allegedly defective pacemaker. The Australian Defendants argue they are not subject to personal jurisdiction because they do not have sufficient contacts with any forum involved in this consolidated matter. The Australian Defendants further argue that they are only subject to jurisdiction if they are shown to be the alter ego of the Telectronics Companies. In Part I, the Court will provide some background on this litigation and generally describe the facts pertinent to the question of personal jurisdiction. Part II delineates the general rule for the exercise of personal jurisdiction and Plaintiffs' arguments in favor [sic] of jurisdiction. In Part III, the Court evaluates whether this case presents a situation where it is appropriate to depart from the traditional forum based minimum contacts inquiry. The Court then determines in Part IV the proper test for personal jurisdiction in cases where jurisdiction is based upon a parent corporation's contacts with a subsidiary. Finally, in Part V, the Court analyzes whether the facts here satisfy the test of International Shoe as applied to the context of the parent-subsidiary relationship. I. A. BACKGROUND This is a products liability action concerning pacemakers containing the Accufix Atrial "J" Lead. A pacemaker is a device that uses electrical impulses to reproduce or regulate the rhythms of the heart. Dorland's Illustrated Medical Dictionary , (28th ed. 1994). It is driven by a battery and connected to the heart by leads and electrodes. Id. The heart pacing system at issue here consists of three main parts: a pulse generator, leads, and a programmer. Each pacing system usually contains one or two leads, which traverse through a person's veins, directly from the pulse generator to inside the heart. The lead utilizes a retention wire to hold the atrial lead in the "J" shape. The lead's retention wire is a filament of one of two metal alloys, Elgiloy or MP35N. Telectronics Pacing Systems, Incorporated, Letter of Duane A. Schultz, Vice President Clinical and Regulatory Affairs, Premarket Notification to FDA, December 18, 1989. Both Elgiloy and MP35N are nickel-cobalt based alloys. Id. The retention wire is not electrically active in the pacing circuit. Consequently, it has nothing to do with the conduction of the electrical signal or the operation of the pacing system. The retention wire is encased in polyurethane insulation and bends back and forth within the system. Plaintiffs are recipients of pacemakers containing the "J" lead and their spouses. Plaintiffs claim that their pacemakers are defective because the retention wires will occasionally break because of the bending and poke through the polyurethane. Such a fracture can cause serious injury to the heart or blood vessels. Plaintiffs, Elise and Eugene Owens, filed and lead action in this case on February 13, 1995, alleging injury due to a defective "J" lead. The Panel on Multi-District Litigation ("MDL Panel") selected this Court as the transferee court for all claims involving the Accufix "J" lead. Presently, over 400 cases are pending before this Court for pretrial proceedings. The Court appointed Plaintiffs' Steering Committee ("PSC") to coordinate discovery and other pretrial proceedings on behalf of Plaintiffs in the cases transferred to this Court. The Court ordered the PSC to file a Master Complaint. On July 20, 1995, Plaintiffs filed an Amended and Consolidated Master Class Action Complaint asserting claims for negligence, strict liability, failure to warn, breach of warranty, fraud, medical monitoring and emotional distress. B. JURISDICTIONAL FACTS Defendant, TPLC, Inc., ("TPLC") is a Delaware Corporation engaged in the business of designing, manufacturing, and marketing medical devices including the Accufix atrial "J" lead pacemakers at issue in this case. Defendant, Telectronics Pacing Systems, Inc. ("TPSI"), is a corporation organized under the laws of the State of Delaware. TPSI owns 100% of the stock of TPLC. TPSI's sole business is to hold certain industrial property rights, real estate and the equity interest in TPLC. Nucleus Limited ("Nucleus") is a corporation organized under the laws of Australia. It is a holding company involved in the medical products industry. Nucleus owns a group of companies that design, manufacture and sell pacemakers and defibrillators around the world under the trade name "Telectronics Pacing Systems" or "Telectronics" (collectively referred to as the "Telectronics Companies"). TPLC and TPSI are the two Telectronics Companies that operate in the United States. Until 1988, Nucleus was a publicly-held Australian company. In 1988, Pacific Dunlop Limited ("PDL" or "Pacific Dunlop) purchased Nucleus and thus became beneficial owner of TPLC and TPSI. Pacific Dunlop is organized under the laws of Victoria, Australia. It is in the business of manufacturing, marketing and distributing industrial and consumer products on a worldwide basis. PDL is organized into five core business areas (automotive, distribution, consumer products, building and construction and health care) consisting of over 225 separate corporate affiliates and subsidiaries with annual sales worldwide of approximately $5.5 billion. Pacific Dunlop is a publicly held corporation. Its shares trade on the NASDAQ. It maintains bank accounts in the United States - New York. Pacific Dunlop also files reports with the Securities and Exchange Commission ("SEC") as the law requires of publicly traded companies. Four divisions of Pacific Dunlop conduct business in the United States, but none of which conducts business in Ohio. The four divisions have total sales in the United States of $1.1 million, none of which is in Ohio. Nucleus, TPSI and TPLC are all subsidiaries in Pacific Dunlop's health care business. These three Defendants plus the other Telectronics Companies and other Nucleus' owned medical companies make up the "Nucleus Group" which is the medical products group of the Pacific Dunlop Family. The companies of the Nucleus Group are all separately incorporated but operate as part of a "functional organization." Pacific Dunlop Holding Co. USA (PDH), a United States holding company which directly owns most of TPLC through TPSI, requires any subsidiary in which it owns 80% or more of the stock to file a consolidated United States income tax return. This allows for the offset of operating losses with operating profits of the various corporations. PDL's and Nucleus' performance results, however, are not included in this consolidated return. The Telectronics Companies and other companies of the Nucleus Group "functionally cooperate" through an entity called the Nucleus Management Board ("NMB"). The NMB is an oversight committee made up of officers and directors of Nucleus and PDL. William Thomas, as Nucleus' Chief Executive Officer ("CEO"), designates the members of the NMB which includes Nucleus' Chief Financial Officer ("CFO"), PDL's managing director, and PDL's CFO. The NMB meets monthly and reviews the financial and management reports provided by TPLC's officers. PDL is involved in establishing the budget for the companies of the Nucleus Group from the early stages of budget formulation through final approval. TPLC's annual budget is consolidated with the budgets of the other Telectronics Companies. Happ Aff. This consolidated budget is submitted to Nucleus, which prepares a further consolidated budget for the Nucleus Group. The budget of the Nucleus Group is then transmitted to PDL for approval and reporting purposes. Id . PDL and Nucleus are also involved in the approval of TPLC's capital expenditures. TPLC must submit for approval any capital expenditure for more than $100,000 to Nucleus. All expenditures between $100,000 and $500,000 must be submitted to the Nucleus Management Board. The PDL's managing director reviews and approves capital expenditures greater than $500,000 but less than $2 million. The Board of Pacific Dunlop reviews and approves any capital expenditure over $2 million. PDL provides financial services to its subsidiaries. The subsidiaries may borrow from or invest money with PDL (at all market rates) but are not required to do so. PDL is also involved in the risk management activities of its subsidiaries. PDL manages and coordinates risk by arranging for insurance coverage for itself and its subsidiaries. Finally, PDL has on a few occasions agreed to indemnify TPLC suppliers. It claims to have done this only on two occasions when the supplier refused to do business with TPLC without the agreement from PDL. PDL felt this was the only way to protect its investment in TPLC by insuring that TPLC had supplies to carry on its business.' 17 The plaintiff pleads, as has already been seen, that the first five defendants jointly carried on the business of manufacturing, packaging and supplying of Telectronic brand heart pacemaker products, that business being carried on either through a joint venture or a partnership or an agency relationship or some other arrangement, details of which are in the pleadings said to not be presently known to the plaintiff. 18 The pleading alleges a number of specific allegations with respect to the place within the group of the respective defendants. Hence paragraph 16 pleads that the seventh defendant at all material times engaged in the business of manufacturing, marketing and distributing industrial and consumer products in Australia and worldwide. Particular 8 to paragraph 18 pleads that the first to fifth defendants all carried on business under the name "Telectronics Pacing Systems." Particular (g)(ii) to paragraph 18 pleads that the written distribution agreement entered into between the plaintiff and the first defendant (alleged to have been entered into by the first defendant as agent for all of the companies in the Telectronics Group of Companies), referred to heart pacemaker products with "the tradename Telectronics which are manufactured, sold or distributed by Telectronics, its subsidiary or associate or affiliate companies anywhere in the world." 19 Particular (r) to paragraph 18 pleads that the first, second, third and sixth defendants all carried on business from the same business premises. Particular 18(s) pleads that the fourth and fifth defendants carried on business from the same sets of business premises. 20 Particular (o) to paragraph 18, pleads that the first defendant did not itself supply or manufacture Telectronics brand heart pacemaker products, which it is said "reflects the fact that the supply of such products was a group enterprise and not an enterprise by the first defendant solely." 21 The case clearly throws up the question of a plaintiff's entitlement to pierce the corporate veil. In Briggs v James Hardie and Co (1989) 16 NSWLR page 549, Rogers AJA at page 567 referred to the threshold problem which arises "from the fact that there is no common unifying principle, which underlies the occasional decision of courts to pierce the corporate veil." His Honour went on to say "although an ad hoc explanation may be offered by a court which so decides, there is no principled approach to be derived from the authorities...in the result, it is a matter of extreme difficulty to say whether the evidence adduced meets even the less than exacting requirements of the section (referring to section 58 of the Limitations Act 1969 there under consideration). 22 Rogers AJA examined a number of authorities dealing with attempts to pierce the corporate veil. I do not intend to here set out the whole of his Honour's observations in relation to those authorities. Suffice it to say that his Honour referred, inter alia, to Smith, Stone and Knight Limited v Birmingham Corporation (1939) 4 All ER 116, where the profits of a subsidiary were treated a profits of the holding company which had appointed the persons who had conducted the business and were in effectual and constant control. Atkinson J had in that case at page 120 said, "It is also well settled that there may be such an arrangement between the shareholders and a company as will constitute the company, the shareholders' agent, for the purpose of carrying on the business and make the business the business of the shareholders." 23 Atkinson J had cited from the judgment of Cozens-Hardy MR in Gramophone and Typewriter Limited v Stanley (1908) 2 KB 89 pages 95-96. In that passage the Master of the Rolls had said, inter alia: 'The fact that an individual by himself or his nominees holds practically all the shares in a company may give him the control of the company in the sense that it may enable him by exercising his voting powers to turn out the directors and to enforce his own views as to policy, but it does not in any way diminish the rights or powers of the directors, or make the property or assets of the company his, as distinct from the corporation's. Nor does it make any difference if he acquires not practically the whole, but absolutely the whole, of the shares. The business of the company does not thereby become his business. He is still entitled to receive dividends on his shares, but no more. I do not doubt that a person in that position may cause such an arrangement to be entered into between himself and the company as will suffice to constitute the company his agent for the purpose of carrying on the business, and thereupon the business will become, for all taxing purposes, his business. Whether this consequence follows is in each case a matter of fact. In the present case I am unable to discover anything in addition to the holding of the shares which in any way supports this conclusion.' 24 Atkinson J had extracted a number of points which he deemed relevant for determination of the question as to who was really carrying on the business, and these included whether the persons conducting the business were appointed by the parent; whether the parent was the hidden brain of the trading venture, whether the parent governed the adventure and decided what should be done and whether the parent was in effectual and constant control. 25 Ford's Principles of Corporation Law at paragraph 4.400 expresses the view that in Australia "it is still impossible to discern any broad principle of company law indicating the circumstances in which a court should lift the corporate veil." Agency or partnership, implied or imputed, is dealt with in paragraph 4.370 of Ford. Ford expresses the following view: "But where a parent company withholds from the subsidiary company the normal consequences of being a separate legal entity, there is a possibility that the courts will identify it with the controller. This may happen where a parent company forms or requires a subsidiary ostensibly to do something for which the subsidiary needs a minimum level of resources, but the parent does not give it adequate proprietors, capital or loan money, or equip it to run its own business by loan of personnel or other resources, or give it a reasonable chance of independently obtaining credit or resources from third persons. In such a case a court may hold that the dominated subsidiary is an agent of the parent or a partner with it." 26 Several English cases are then cited which are said to illustrate that approach. 27 It is particularly important, it seems to me, to recall that the present application is essentially an application for an extension of the time, which Rolfe J granted in which the plaintiff would be entitled to re-plead. True it is that as at the present moment there is no leave granted to file an amended summons, and in form it may be appropriate to suggest that the plaintiff is presently engaged in an exercise of simply seeking leave to amend. However, to my mind, it is fair to describe the plaintiff's application as in effect a combination of an application for an extension of time in which to file an amended summons, and an application for leave to appropriately amend. 28 In Briggs v James Hardie (1989) 16 NSWLR 549 at 544, Hope JA, albeit in referring to the tortious base, pointed out that where a plaintiff brought an action against two defendants alleging that one or both were liable, and there was some evidence to connect each defendant with the events the subject of the action, then provided the plaintiff established a prima facie case against of the defendants, the other defendant would not be dismissed from the action until the whole of the evidence had been heard. As it seemed to his Honour, "this means that a plaintiff is entitled to bring an action against two defendants if he has evidence to establish a prima facie case against one of the defendants and also has evidence pointing to the possibility of the other defendant being liable." 29 To my mind, it is particularly important to treat the subject notice of motion as dealing with a pleading point or matter going to pleadings. This is not an occasion in which evidence of the underlying facts is appropriate to be examined or to be examined in any real detail. The question is quite simply whether or not the pleading in the form now sought to be propounded offends against the necessary requirements for a pleading before the Commercial list [previously called the Commercial Division]. The pleading must provide, as Justice Rolfe pointed out at page 7 of his Honour's judgement, a sufficient statement of the case which is made against the defendant. The plaintiff must plead allegations which have a sufficient degree of specificity to enable the defendants to know precisely what case it is that is being made against those defendants. Practice note 100, paragraph 6 (ii) states that the plaintiff's contentions should (a) avoid formality, (b) state the facts on which the plaintiff relies together with adequate particulars, and (c) identify the legal grounds for the relief claimed. 30 To my mind and subject to the particular matters to be referred to hereafter, the amended summons now sought to be propounded does specify and does specify with sufficient particularity, what the plaintiff's case is against the respective defendants. This is not to suggest for a moment that the plaintiff's pleading seeking in a number of ways to fix the first five defendants and in other ways to fix the sixth and seventh defendants with liability for relevant conduct, is a simple pleading. 31 In so far as the defendants have complained that the plaintiff's allegation that the first to fifth defendants defined as "the Telectronics Group of Companies" had jointly carried on the particular business of manufacturing, packaging and supplying Telectronics brand heart pacemaker products, and had carried out that business via a joint venture, a partnership or an agency relationship, to my mind the pleading does not offend the above principles. As I understood Mr Walker, he accepted in argument that the defendants do not submit that it is conceptually a legal impossibility to find a group of companies who jointly carry on a particular business and who, as I understood his concession, from time to time, by any of those companies, might act on behalf of the others. 32 The plaintiff asserts that the first defendant did not itself supply or manufacture Telectronic brand heart pacemaker products and that, as I understand the pleading, this evidences the fact that the supply of such products was a "group enterprise" and not an enterprise by the first defendant solely. 33 Having closely examined each of the particulars to paragraph 18 of the pleading, to my mind the plaintiff clearly pleads with sufficient particularity to satisfy the requirement that the defendants know the case sought to be made against them, how it is that the defendants are drawn into the proceedings and into each of the causes of action specifically relied upon. In this regard I note that paragraph 21 and following contains alternative modes of putting the plaintiff's case against the second to seventh defendants. These are paragraphs which commence from the platform that the plaintiff would fail in its contention in paragraph 18 that the first to fifth defendants jointly carried on the business of manufacturing, packaging and supplying Telectronics brand heart pacemaker products. 34 The proper approach to the notice of motion in my view, is to treat the motion by applying the same principles as would be applied had the summons now sought to be propounded, been filed and had the defendants in fact sought to strike that summons out. 35 Returning to the four complaints of the plaintiff, I have dealt I believe with the submission that the new summons does not comply with so much of Rolfe J's reasons as are set out on page 2.9 of his Honour's judgment - the so-called linchpin issue. To my mind, the pleading now sought to be propounded addresses in an entirely detailed and ultimately acceptable fashion the manner in which the several defendants are sought to be pursued. The complaint dealt with at page 2.9 in Rolfe J's reasons has, to my mind, been satisfied by the extensive additional material to be found in the summons now sought to be propounded. 36 In so far as Rolfe J on page 4 of his judgment had referred to the need for specification with respect to the representation case, to my mind paragraph 24 of the pleading now sought to be propounded, in furnishing particulars there to be found satisfies the requirement of specificity. 37 It is appropriate to then travel through the whole of the propounded pleading and to identify those areas in respect of which the defendants pursued complaints and to deal with them seriatim. 38 The linchpin paragraph and section have already been dealt with. However, I accept the defendant's submission that particular (c) to paragraph 18 ought to be substantively pleaded - to my mind, as long as that paragraph is pleaded as an independent paragraph in the pleading and presumably to be pleaded prior to paragraph 18, the fact that subparagraph (c) to paragraph 18 remains as a particular to that paragraph, does not raise any particular difficulty. The particular purpose in pleading paragraph 18(c) in substance in an independent paragraph and not simply as a matter of particulars, it has been suggested, will permit the defendants then to join appropriate issue. Whilst that exercise may not be a matter of grave significance in relation to the pleading, the point having been made by Mr Walker, the short minutes to be brought in after the delivery of this judgment should include provision for that subparagraph to be independently pleaded in the fashion to which I have referred. 39 In so far as paragraph 25 is concerned, Mr Walker addressed submissions in relation to the use of the word "impliedly." The submission was that the defendants did not know the facts, matters and circumstances from which the alleged implication was said to arise. A similar complaint, as I understood his submissions, was directed to the use of the word 'impliedly' which appears in paragraph 30. 40 To my mind, those submissions are not of substance in this sense. To my mind, the words "by the representation," being the first three words in paragraph 25, are to be read and are only to be read, as referable to the representations pleaded in paragraph 24. To my mind, the words "by the representation" appearing as the first three words to paragraph 30, are to be read and are only to be read, as referable to the representation which is pleaded in paragraph 29. 41 The representation pleaded in paragraph 24 is one in respect of which detailed particulars are furnished. Apparently the allegation is that the representations were made orally. 42 The representation pleaded in paragraph 29 is a representation by the submission by the Telectronics Group of Companies to CMI of a draft distribution agreement. Those words are to be read in terms of the proper construction of paragraphs 29 and 30 as referable only to the communication of that document by the Telectronics group to CMI. In other words, should the plaintiff in due course seek to call evidence to the effect that at one and the same moment as the handing over by the Telectronics group to CMI of the draft distribution agreement, certain matters are stated which are relied upon as part and parcel of the so-called "submission," the trial judge in presumably being referred back to this judgment, will appreciate that the parties have been required as part of the leave to be granted today to the propounding of the amended pleading, to confine the plaintiff to the representation in terms of a simple communication by way of delivery or facsimile or letter, of the document from the one company to the other company. 43 It does not seem to me appropriate in a judgment of the type presently being delivered to set out large segments of the pleading now sought to be propounded, nor indeed to refer with particular specificity to very many segments of that document. The document before the Court requires to be read in full. It is divided, in so far as the plaintiff's contentions are concerned, into nine segments. They are conveniently summarised by subheads and appear in paragraph 1 on page 9. The most convenient mode of proceeding seems to me to simply travel through the document, pausing from time to time at segments where Mr Walker for the defendants has addressed particular attention and to endeavour to deal with those submissions. Not every particular matter raised by Mr Walker will be dealt with. Those submissions which were put with respect to the suggested deficiencies in the pleading are generally taken into account, but there were numerous attacks on many segments of the pleading, often overlapping and in some cases discrete, which the Court has had to take into consideration in giving these reasons. 44 The definitional section from pages 9 to 13 requires no particular attention. 45 The section dealt with under the head "Parties and their Representatives" is reasonably short. It is convenient to at this point in time note that a close examination of the pleading records the specific allegations, as I have understood them, with respect to shareholding to be as follows. The seventh defendant owned, it is alleged, 72.7 per cent of the shares in the first defendant and owned all of the shareholding in the sixth defendant. The sixth defendant, it is alleged, owned 27.3 per cent in the first defendant. The sixth defendant, it is alleged, owned 100 per cent of the shareholding in the second defendant. The first defendant, it is alleged, held 100 per cent of the shareholding in the third defendant. The fourth defendant, it is alleged, held 100 per cent of the shareholding in the fifth defendant. 46 The judgment of Judge Spiegel already referred to at page 4 in relation to the fourth and fifth defendants stated, inter alia, as follows: "TPLC and TPSI are the two Telectronics companies that operate in the United States." 47 In the following paragraph, Judge Spiegel said: "Until 1988, Nucleus was a publicly held Australian company. In 1988, Pacific Dunlop Limited...purchased Nucleus and thus became beneficial owner of TPLC and TPSI. " 48 An important allegation is to be found in paragraph 184 which pleads that 'the first to fifth defendants inclusive as companies of the Nucleus group were affiliated through an entity called the Nucleus Management Board'. Paragraph 185 then pleads that 'at all material times the Nucleus Management Board was an oversight committee constituted by officers and directors of Nucleus and Pacific Dunlop including Pacific Dunlop's managing director, Philip Brass, and Pacific Dunlop's chief financial officer'. The following paragraphs refer to the activities of the Nucleus Management Board and to Mr Thomas, alleged to have been the chairman of the board of Nucleus and the chief executive officer of Nucleus. The pleading in paragraphs 188 to 191 continues: "188. Nucleus owns a group of companies that design, manufacture and sell pacemakers and defibrillators in a number of countries under the tradename 'Telectronics Pacing Systems' or "Telectronics". 189. Nucleus is the "Medical Products Group" of Pacific Dunlop. 190. Pacific Dunlop acquired Nucleus in 1988 and thus became beneficial owner of all of the other defendants. 191. At all material times, Nucleus exercised significant control over the first to fifth defendants inclusive." 49 Relevant to one of the matters raised by Mr Walker which concerned, so it was suggested, the lack of necessary precision in the document in terms of the mode in which the plaintiffs asserted the sixth and seventh defendants to be appropriately joined and pursued alleged causes of action against the sixth and seven defendants, are the references to Nucleus and to Pacific Dunlop to be found within part II of the pleading. In paragraph 13 there is pleaded the allegation that 'Nucleus is the holding company of the first to fifth defendants inclusive', and in paragraph 16 there is pleaded the allegation that 'Pacific Dunlop at all material times engaged in the business of manufacturing, marketing and distributing industrial and consumer products in Australia and world wide'. 50 I have already treated with paragraph 18. The section of paragraph 18 which to my mind is objectionable and ought not be permitted to be propounded in the amended pleading, comprises the words in the third and fourth lines "or some other arrangement, the details of which are not known by CMI." To my mind, those words are inappropriate in a pleading such as this. They are not precise. They do not appropriately inform the defendants of precisely what it is that the plaintiffs are seeking to posit as their case. When the short minutes of order giving effect to these reasons are brought in, they should reflect the fact that those words will not be presently permitted to be propounded in this document. 51 The particulars to paragraph 18 have already been referred to. Subparagraph (n) was the subject of some particular submissions by Mr Walker. The submission was that there was an inconsistency or an arguable inconsistency between this subparagraph and other paragraphs in the pleading which allege that other defendants manufactured Telectronics brand heart pacemaker products. During the course of argument, Mr Foster, SC, conceded that what was intended to be put by particular (n) was simply that the actual products were manufactured by the fifth defendant physically, but it was said were so manufactured on behalf of the several defendants from time to time referred to in the pleading. That particular reading of subparagraph (n) is the reading which pursuant to that concession is to be given to the subparagraph. To my mind, it is appropriate for a further sentence to be added to (n) when the pleading is filed so that there can in future be no doubt about that particular matter. 52 Subparagraph (o) of the particulars plainly alleges that the first defendant, which executed the distribution agreement, did not itself either supply or manufacture Telectronics brand heart pacemaker products which, it is said in this particular, 'reflects the fact that the supply of the Telectronics brand heart pacemaker products was a group enterprise and not an enterprise of the first defendant solely'. I have already dealt generally with the submissions put by Mr Walker which were to the impropriety, as it were, of the inclusion throughout the pleading in so many places of the words "the Telectronics Group of Companies" as having engaged in particular conduct or breached particular terms of agreement and the like. The allegation that the supply of the products was a group enterprise and not an enterprise of the first defendant solely was plainly relevant to an understanding of the way in which, as I have understood this pleading, the plaintiff is putting its case, at least at one level. 53 In so far as Mr Walker's submissions then dealt with the assertion that the pleading falls short in failing to identify properly and distinctly the conduct of each defendant as referable to liability recoverable against that defendant, and fails to identify the causal nexus between the conduct complained of against each defendant and the loss or damage sought to be recovered from each defendant, those submissions are rejected. To my mind, in a case such as the present in which the plaintiff in a number of ways seeks to assert a responsibility of the first to fifth defendants inclusive, called the Telectronics Group of Companies, on various causes of action, the pleading is not one which is inappropriate. It does sufficiently clearly make plain to the defendants what the nature of the case to be made against them is. 54 Ultimately it must always be a question of degree in any given case, as to whether the plaintiff's contentions fall short of giving the facts on which the plaintiff relies together with adequate particulars, and identifying the legal grounds for relief claimed, in which case an amendment ought be disallowed, or if the pleading had been filed, the relevant paragraphs struck out. In contradistinction to that is the situation in which the plaintiff can be seen to give the best particulars which the plaintiff is then able to give with respect to those matters. To my mind, in this type of case where the corporate veil is sought to be pierced and/or the plaintiff seeks by one of a number of means to fix liability in the relevant defendants for acts of one another or of a group, the defendants retain an entitlement through other interlocutory steps and particularly following discovery, to revisit as it were, those matters or a number of those matters which Mr Walker on the motion before me had sought to agitate. In other words, to my mind, there may well come a time prior to the hearing in these proceedings where the defendant may be able to persuade the Court on an appropriate application, that more detailed particulars in terms of specificity of pleading have become appropriate. This is not to say that such an application if pursued will necessarily be successful. It is merely to point up that, to my mind, there are certain types of class of case and this, it seems to me, may well be one, when the degree of specificity of particulars furnished in a pleading may at one stage be sufficient and at another stage prove insufficient. 55 I have already dealt with paragraphs 24, 25, 29 and 30. 56 Paragraph 32 importantly pleads that the distribution agreement was executed by Mr Thomas on behalf of the first defendant "which in turn entered into the distribution agreement on behalf of the Telectronics Group of Companies." The particulars to that paragraph include a particular that at all material times Telectronics Holdings carried on business as part of a group of companies comprising it and the second to seventh defendants which group, it is said, was and is ultimately controlled by the seventh defendant. Hence at that point in the pleading one finds the seventh defendant and its role referred to in a significant fashion. 57 Paragraphs 34 and following represent significant segments of the pleading. It is in these paragraphs that I read what are said to have been the obligations imposed by the distribution agreement. Later in the pleading, when one finds for example on page 46 Section (vi) paragraph 1 and following, allegations of breaches of the distribution agreement, it is my understanding that the allegations of breach are to be read as allegations of breach of the terms and conditions of the distribution agreement earlier referred to and set out in that earlier section including paragraphs 34 and following. 58 To my mind, the criticisms which were levelled at the reliance paragraphs, particularly paragraph 40 and following, are without substance. I fail to understand why it must be the case that a plaintiff is disentitled from alleging its reliance upon representations made, albeit made prior to execution of a contractual agreement. I can readily understand arguments which may be put at the hearing to the effect that, so it may be put, precontractual representations merge in the contract. That is not to say however that it is not possible for a plaintiff to make good a case that it relied upon representations in negotiations which led to an agreement and so relied on those representations subsequent to execution of the agreement. A great deal depends of course on the particular cause of action upon which such a plaintiff would ground his or her case. 59 There is then a complaint levelled at paragraph 48 and in particular at paragraph 48(c) where the words "key types" are used. As I read paragraph 48(c), the word "key" is to be read as synonymous with the word "particular", which it will be noticed is in fact the word used in paragraph 48(d). 60 Paragraph 48 is an important paragraph in the scheme of the pleadings. Following paragraph 48 one has, as I read it, paragraphs 49 through to 87 which are generally the particular pleading of defects relied upon by the plaintiff. To my mind, the way in which the pleading ought be read is to include as it were particulars to paragraph 48. In short, a paragraph entitled Particulars should be added to paragraph 48 and the content of those particulars should be referable to paragraphs 49 to 87. A short statement to that effect, it seems to me, ought be included and this will have the effect of unambiguously confining the plaintiff's allegation in paragraph 48 to the particular defects then pleaded in the many pages which follow. 61 Further criticism was levelled at the mode of expression under the column 'Defect' which appears on page 29 in table A. To my mind, at this stage in these proceedings, that criticism is not justified and is not of substance. I do however accept what I understood Mr Walker to be putting, namely that the paragraph in parentheses at the end of the table ought be deleted. I can accept that the defendants ought not be in the invidious position of having to face a case which is, to use Mr Walker's words I believe, more appropriately described as a "moving feast". In short, the defendants ought know at any particular time through the proceedings precisely which products are said to have been defective and for what particular reason. 62 Should it be the case that the plaintiff in the fullness of time determines to endeavour to extend the reach of the pleading beyond the products presently complained of, an application will be required to be made by way of a further amendment. The alternative approach is that no doubt the plaintiff may then see fit to simply start a second set of proceedings referring to the particular additional products, and no doubt at some point in time there may be an application to have those proceedings heard at the same time as these proceedings. Whatever the vehicle be which in the future may, should the plaintiff be disposed to do so, move the plaintiff to seek to extend the reach of the products the subject of this pleading, the defendants are at all material times clearly entitled to know precisely which products the plaintiffs complain of, what those complaints are, and what is the relevant loss with respect to the complaints - in short what are the elements of the respective causes of action. 63 I do not accept that there is substance in the submission that the precise date of identification of defects referred to generally at the commencement of each of the following segments, that is, the segments which follow the table, now require to be specified in particulars. The defendants have an opportunity to, again perhaps following discovery, press for further and more detailed particulars. That may alternatively simply be a matter of evidence. 64 I pass then from those sections of the pleading which follow the table through to the subheading "Other Defective Telectronics Brand Product Types" and paragraph 86. Paragraph 86 read as follows: '86 Other Telectronics brand heart pacemaker products which were not acquired by CMI for distribution in Japan, but were the subject of product recall/safety alerts are as follows: (a) implant generator model 5281; (b) implant generator model 5282; (c) pacing lead model 329-201; (d) implant generator model 6291; (e) implant generator model 188A7; (f) pacing lead model 329-701; (g) pacing lead model 330-158; (h) pacing lead model 033-448. 65 To my mind, paragraph 86 is entirely unacceptable and Mr Walker's submissions in respect of that paragraph are accepted. The paragraph presently does not seem to me to go to an issue. I did not understand Mr Foster, SC, to press paragraph 86 in submissions when the difficulties which the Court perceived the plaintiff had with that paragraph were raised. It may not be included in the document which is taken in as propounded. 66 There was a degree of attention levelled at paragraph 88. To my mind, that paragraph is unexceptional, and it and paragraphs 90 and 96, and in particular 96(b), seem to me to be perfectly acceptable pleaded paragraphs. 67 The causes of action segment in (vi) of the proposed amended summons commencing on page 46 seem to me to be reasonably clear. Care has been taken to divide the causes of action into the breach of the distribution agreement section, the negligent misrepresentations section, the negligent manufacture and packaging section, the Trade Practices Act breach section and the Sale of Goods Act section. The submission Mr Walker made that the words "the Telectronics Group of Companies" at the commencement of paragraph 139 were inappropriate, is rejected. I have already sought to deal with the question of the mode in which and particular manner in which, the plaintiff seeks to treat with the so-called first to fifth defendant group of companies. It is important, it seems to me, to recognise that against the background and context of the framework of the pleading, it is entirely proper for the plaintiffs to plead - and after all this is simply a pleading - that that group of companies owed a duty of care to the plaintiff to ensure that any representations made as to the Telectronics brand heart pacemaker products were accurate and reliable. One has to keep in mind steadfastly that the pleader has pleaded that the first to fifth defendants, namely the Telectronics Group of Companies as defined, jointly carried on the business of manufacturing, packaging and supplying Telectronics brand heart pacemaker products. 68 I interpolate that I did not understand there to be any issue raised by the defendants, but that the words "joint venture"; "partnership"; and "agency relationship" were clearly understood in terms of conventional legal principle. Of course, there are partnerships and partnerships. Of course, there are joint venture and joint ventures. Of course, there are agency relationships and agency relationships. However, the purpose of the pleading is to seise the defendants of the way in which the plaintiff puts its case against the several defendants, and it seems to me that using those terms in a case of this type is entirely unexceptional when the pleading is viewed in full. 69 I do not intend then to go through each of the segments of the pleading, particularly on and after approximately page 56, where one finds the words "Telectronics Group of Companies." 70 There was a submission made by Mr Walker, as I understood him, to the effect that paragraph 146 and following dealing with breaches of the Trade Practices Act failed to include any allegation that what I understood Mr Walker to say had been an implied representation or implied representations were falsified. I understood Mr Walker in that regard to particularly refer to paragraph 146(c) and by reference back to paragraph 25. This is the alleged representation that the Telectronics brand heart pacemaker products had and would continue to have a good reputation in the marketplace. Having read paragraph 147B both subparagraphs (a) and (b), I fail to understand the complaint in this regard. To the extent that the representations are said to have been continuing representations or representations with respect to future matters, paragraph 147B(b) clearly alleges that as to those statements there was no reasonable basis for making any of them at the time that each of them was made, nor did the defendants it is alleged believe that each of them was accurate at the time it was made. In so far as statements of fact are concerned, they are dealt with in paragraph 147B(a). 71 I do accept Mr Walker's criticism of particular (iii) in paragraph 147B. The words "in particular" are to be regarded, it seems to me, and only regarded, as exhausting the plaintiff's case in this regard. In short, Mr Walker's apprehension was that the plaintiff may rely upon those words as simply exemplifying and not exhausting the plaintiff's claims. That is not the way in which that subparagraph is to be read. To my mind, the plaintiff ought be obliged to delete the words "in particular" so that the criticism which Mr Walker it seemed to me fairly levelled at that particular, will disappear. 72 I reject the submission that there is a difficulty with particular (iv) to paragraph 147B. To my mind, that criticism is not made out as one of substance. 73 Criticism was made of the way in which paragraph 149, as I understood Mr Walker, is pleaded. The words "the contract" appearing in the second line to paragraph 149 do, it seems to me, require appropriately to have particulars. I read the words "the contract" appearing in the second line of paragraph 149 as referring to the contract alleged in paragraphs 31 and 32 of the pleadings. If I be correct in my understanding of the pleader's intent it should, it seems to me, be a relatively simple task to add as a particular to paragraph 149, words such as 'the contract referred to is that pleaded in paragraph 31 and 32'. 74 There were also submissions addressed by Mr Walker to the categories of loss and damage segment of the pleading. To my mind, the pleading fairly apprises the defendants at this stage in the proceedings of the heads of category of loss and damage sought to be relied upon by the plaintiff. I do not accept the submission that there is no sufficient allegation in the pleading of the relevant causal nexus between the loss and damage claimed and the causes of action in terms of breach of agreement, negligent misrepresentation, breach of Trade Practices Act and other causes of action relied upon. 75 To the extent that Mr Walker submitted that it was important that the plaintiff make plain, were it the case, that it is entitled to recover general damages in respect of the damage to its business reputation, to my mind, that criticism is met by the terms of paragraphs 173 to 176 inclusive on page 71 of the document, which seem to me to cover that matter. 76 With respect to the question of the appropriateness of the pleading in terms of the joinder of the sixth and seventh defendants, the sixth and seventh defendants are generally dealt with in the section of the pleading entitled VIII which commences on page 72. I do not, as I have said, intend to set out all of those paragraphs, but paragraphs 181 up to and including 211 require careful reading in that regard. One finds references to Pacific Dunlop and to Nucleus scattered throughout the pleadings. The submission that the pleader has not made good in this pleading the proposition that the sixth and seventh defendants are relevantly liable in respect to the causes of action pleaded, is not made out. The allegation that Pacific Dunlop exercised significant control over the first to sixth defendants is to be found, for example, in paragraph 197. The allegation that at all material times Pacific Dunlop was or is the indirect parent, principal and alter ego of the first to sixth defendants inclusive is to be found in paragraph 196, replete with particulars. The allegations with respect to Pacific Dunlop directly and/or through Nucleus, or in the alternative Nucleus, exercising control, inter alia, over the activities of some or all of the other defendants are squarely, it seems to me, pleaded in paragraph 203. See also paragraph 211 which reads as follows: "As a result of, inter alia, the common management, officers and board members, and the central treasury function of Pacific Dunlop, the significant exercise of control by Pacific Dunlop and the day to day involvement of Pacific Dunlop and Nucleus in the other defendants' affairs, Pacific Dunlop and Nucleus are both liable to CMI as the alter egos and principals of the other defendants for the defects of the Telectronics brand heart pacemaker products and the loss and damage that CMI has suffered and will continue to suffer as a result of the defects of the Telectronics brand heart pacemaker products." 77 The pleading includes in relation to paragraphs 214 and following a number of ways in which the second to fifth defendants are sought to be pursued. 78 Paragraph 214B, for example, pleads that: "The second to fifth defendants were or became parties to the distribution agreement by reason of their authorisation of the entry into the distribution agreement of the first defendant or alternatively, subsequent ratification of their entering into the distribution agreement on their behalf." 79 Paragraph 214(c) reads: "The second to fifth defendants became bound by the distribution agreement when they, to their knowledge, performed tasks and/or functions contemplated by the distribution agreement, namely the manufacture, packaging and supply of Telectronics brand heart Pacemaker products to CMI." 80 Subparagraph (d) to paragraph 214 reads: "And as such it is the second to fifth defendants inclusive which are liable pursuant to the cause of action set out in section (vi) above under the heading "(1) Breach of distribution agreement."" 81 To my mind, the pleading does to the extent necessary to enable the defendants to understand the nature of the case put against the defendants, the causes of action and the facts, identify the causal nexus between the conduct complained of against the defendants and the loss or damage sought to be recovered from each defendant. Many of Mr Walker's submissions went back to the as it were linchpin question. The fact is that the conduct complained of against the particular defendants are often addressed by reference to the defendants as a class. In other cases, being cases where the background and context and overview manner in which the plaintiff puts its case against a group, a pleading may be quite defective for failing to identify such a causal nexus. It is however absolutely crystal clear from the wording of this pleading in these proceedings, that the first to fifth defendants are sued as having jointly carried on the relevant business. To my mind, the same degree of precision to the extent necessary to satisfy the rules, and the rules of pleading, appear in this pleading in relation to the role of the sixth and seventh defendants. 82 I turn then to the question of limitations. There is no real issue, as I have understood it, but that the court has power pursuant to part 20 of the rules to allow a pleading to be amended. Part 20 Rule 1 provides that the Court may at any stage of any proceedings on application by any party or of its own motion order that any document in the proceedings be amended, or that any party have leave to amend any document in the proceedings, in either case in such manner as the court thinks fit. Were it the case that new causes of action were sought to be added in an amendment, Part 20 Rule 4(5) provides that: "Where a plaintiff, in his statement of claim, makes a claim for relief on a cause of action arising out of any facts, the court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action." 83 In paragraph 37 of the defendant's submissions, the defendants asserted that the proposed amendments in respect of causes of action founded on: (a) breaches of contract as alleged in paragraphs 126, 127, 130(a) and (b), 131(a) and (b); (b) the representations referred to in paragraph 135; (c) the acts and omissions alleged to be negligent in paragraph 145, are the subject of expired statutory limitation periods and ought not be allowed. 84 Alternatively, the submission put was that to such extent as is applicable, the proposed amendments did not fall within Part 20 Rule 4(5) of the rules. 85 Alternatively, it was submitted that if, to the contrary, it is held that such amendments are within Part 20 Rule 4(5), injustice to the defendants occasioned by such amendments inclines against allowance of the same in exercise of the court's discretionary power. 86 Mr Foster, appearing for the plaintiff, has pointed out that the causes of action referred to, namely the breaches of contract paragraphs, the representations paragraph and the acts and omissions alleged to be negligent paragraph, are all causes of action which were pursued by the amended pleading which Justice Rolfe struck out. 87 As I have understood both counsel, no submissions were put to Justice Rolfe on the occasion of the application to strike out the previous amended summons to the effect that there were limitation difficulties inherent in the order which his Honour made, striking out the then amended summons and granting leave to the plaintiff to replead by a particular date. To my mind, that circumstance is an important circumstance in considering the manner in which the undoubted exercise of the court's discretion should here be exercised. In a real sense, the present is a case in which the plaintiff has simply allowed approximately two weeks to lapse after the time in which, pursuant to Justice Rolfe's order, the plaintiff was entitled to replead. Both counsel referred to the circumstances in which the proceedings had commenced in April 1998. I understood from Mr Walker that the correspondence had included references to the strikeout application for a period of time. Ultimately, the exercise of the Court's discretion requires to take into consideration as a matter of fundamental fairness on the one hand, prejudice to the defendants if the amendments are allowed with the effect that the operation of the rules will result in the amendments being effective as from commencement of the proceedings and on the other hand, prejudice to the plaintiff if the amendments are not so allowed. 88 In all of the circumstances, I am of the view that the discretion ought be exercised so as to allow the pleading to be filed as an amended pleading with the result that the amendments will be deemed to have been in operation from commencement of proceedings. I propose to allow the plaintiff to amend in that fashion. Had it been appropriate to treat with Part 20 Rule 4(5) I would clearly have been of the view that it is appropriate for the plaintiff to have this leave, as the same facts and claims for relief generally appear to me to be sought in the pleading now proposed to be propounded as had been previously sought to be pleaded, with one qualification. The qualification is that without a shadow of a doubt, the pleading now sought to be propounded includes a very large number of very detailed particulars, no doubt a logical concomitant of the previous pleading being struck out. 89 To my mind, at the end of the day the plaintiff, subject to the matters which I have specifically referred to, ought be permitted to replead in the form of a document generally in the form of exhibit P1 but which, when propounded, will require to embrace those matters which I have sought to make plain. 90 There is one further matter which it is appropriate to refer to. As I have understood counsel, although there is no live notice of motion in this respect, both parties treated before Justice Rolfe and have sought to treat before me with an application understood to be made by the defendants for further security for costs. In the result, it was unnecessary for any argument to take place on that head as the parties agreed to terms of the plaintiff furnishing such further security. The agreement is noted in short minutes of order which have been handed to the Court. 91 I make orders (1) and (2) in the document which is entitled Short Minutes of Order, signed by counsel for each of the parties, which I have initialled and date 19 May 1999, and will leave with the Court papers.

Century Medical v THLD Ltd

At a glance

Court

Decision date

Before

Source

Judgment (9 paragraphs)

Parties

Cases Cited (1)