BETWEEN : DOMINION INVESTMENTS PTY LTD (ACN 078 465 362)

Practice and procedure - Strike out pleading - Premature claim - Order 59 r 9 certificate

Trade Practices Act 1974, s 82

Dalgety Australia Ltd v Ruben, unreported; FCt SCt of WA; Library No 5485; 24 August 1984

Day v William Hill (Park Lane) LD [1946] 1 KB 632

Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62

Downs v Chappel [1996] 3 All ER 344

East v Maurer [1990] EWCA Civ 6; [1991] 1 WLR 461

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Gould v Vaggelis [1984] HCA 68; (1985) 157 CLR 215

Kimberley Downs Pty Ltd v State of Western Australia (1986), unreported; SCt of WA; Library No 6414; 25 August 1986

Kizbeau Pty Ltd v WG & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281

Marks v GIO [1998] HCA 69; (1999) 158 ALR 333

Smith New Court Securities Ltd v Citibank NA [1996] UKHL 3; [1996] 3 WLR 1051

Toteff v Antonas [1952] HCA 16; (1952) 87 CLR 647

Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514

1 ACTING MASTER CHAPMAN: The defendants by way of chamber summons filed on 16 February 2000 seek that the whole of the statement of claim be struck out on the basis that it fails to disclose any cause of action or, alternatively, because it may prejudice, embarrass or delay the fair trial of the action. The plaintiff resists the application.

2 The first point the plaintiff makes is that there has been no O 59 r 9 memorandum filed. The chamber summons is endorsed with what purports to be an O 59 r 9 certificate. That certificate does not state that the parties conferred "to try to resolve the matter" and the plaintiff says it could not as no proper conferral took place.

3 The defendants argue that there has been sufficient conferral and that in any event there has been ample opportunity to confer in relation to all matters in issue prior to the special appointment. The latter observation to me seems to miss the point. The whole purpose of the rule is to avoid the issue of unnecessary interlocutory applications. If that is to be achieved a proper conferral prior to the issue of the chamber summons is necessary. I must say that the time allowed in the defendants' solicitor's letter dated 2 February 2000, annexure "DGS1" to affidavit of David Gary Stewart sworn 3 March 2000, does not seem to me to comply with, at the very least, the spirit of O 59 r 9.

4 Having said that, O 20 r 19(3) places a time limit upon which such an application can be made and that should not be overlooked. In an endeavour to comply with this limit the degree of conferral the parties can undertake may be limited. Given the particular circumstances of this case, I am satisfied that O 59 r 9 has been complied with.

5 Some of the differences between the parties can be attributed to the fact that documents in the possession of the plaintiff contain different information from what on their face appear to be the same documents held by the defendants. Any amount of conferral would not have resolved those differences unless the documents had been compared. In the normal course this would seem unlikely as it is a situation which would not usually be anticipated.

6 The parties are in general agreement as to the law applicable to the application and each have set out the general principles in their respective written submissions. In general, I agree with those submissions.

7 The first complaint made by the defendants in relation to the amended statement of claim relates to par 6. The complaint relating to par 6.2.2 and par 6.2.3 can be explained by the fact that the documents referred to by each party, although on their face appear to be the same, in fact are not. I am satisfied that the information pleaded is contained within the documents relied upon by the plaintiff and the issue as to which documents are the actual ones relied upon may need to be dealt with at trial.

8 There is a secondary complaint about par 6 which is not resolved by the conflict between the documents. It relates to which documents contain the information relied upon. The plaintiff concedes that the plea as it presently stands is not as clear as it could be. I agree. The plea requires amendment.

9 The second challenge relates to par 13.2 of the amended statement of claim. The defendants argue that in this paragraph the plaintiff pleads various types of loss and damage none of which is claimable under s 82 of the Trade Practices Act or as damage for fraud. It is submitted that the plea seeks expectation losses which it is said are losses which cannot be claimed under s 82 of the Trade Practices Act. The plaintiff does not challenge this. It is argued by the defendants that a plaintiff is compensated for losses flowing from altering its position in reliance upon misrepresentations and would only be entitled to damages if it can show that it is worse off as a result of having altered its position in reliance on the representations.

10 The plaintiff on the other hand contends that it seeks historical losses of profits pursuant to s 82 of the Trade Practices Act and expectational loss of profit pursuant to the common law cause of action of fraudulent misrepresentation. Counsel for the plaintiff argues that damages for loss of all profits are recoverable as a result of fraudulent misrepresentation or deceit and referred me to a number of authorities to support that proposition. Counsel for the defendants submits that the cases to which the plaintiff refers do not support the argument put forward by the plaintiff.

11 The cases are conveniently gathered in an article by R Halson, "Damages for the tort of deceit" (1997) LMC LQ 423. What is clear from the cases and highlighted by the article is the fact that this area of the law is not static. A claim should not be struck out at this stage if the effect may be to stifle the development of the law: Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365 at 373. To strike out this pleading on the basis sought by the defendants could well have this effect and I would decline to do so.

12 The defendants also attack the adequacy of the plea in par 13 of the amended statement of claim. I agree that it is inadequate. In my view the particulars pleaded at par 13.1 are far from clear and on their face appear to obtain material facts which should be properly pleaded. Given the explanation by counsel for the plaintiff at the special appointment, some of the issues raised by the defendants at par 11 of their written submissions may be touched upon but it is far from clear.

13 In general I agree with the contentions of the defendants contained in par 11. Whilst expert evidence may be required in relation to some of the issues, I would have thought that much of the details would be known to the plaintiff and should be properly pleaded now.

14 I also agree that par 13.2 of the amended statement of claim is defective. The plaintiff contends that the amended statement of claim does not plead how the plaintiff is worse off. I think the basis of the plea is there but it could and should be pleaded in a clearer way.

15 The defendants argue that the claim for damages under s 82 of the Trade Practices Act and the claim for damages as a result of fraudulent misrepresentation or deceit are premature as it will not become clear until the development is concluded and all the units are sold whether the plaintiff will have suffered any loss.

16 In support of the proposition counsel for the defendants referred me to St George Bank Ltd v MJK Pty Ltd [1999] FCA 1752 (21 December 1999) where at 9 O'Loughlin J said:

"[31] This line of reasoning in Van Win's case also leads to the conclusion that the respondents in these present proceedings do not yet have a cause of action for misleading or deceptive conduct - they have not suffered loss or damage for the purposes of s 82 of the TPA until there is an actual or certain liability: Wardley v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525. I am satisfied that the respondents' intended claims against the accountant under the TPA and the FTA and the intended claim in negligence cannot be maintained at this stage."

17 In answer to this, counsel for the plaintiff referred me to the affidavit of Mr Gary Michael Catlin sworn on 21 March 2000. He submitted that the estimated value acknowledges the increase in the market of the property as constructed and that if the property had been constructed on the basis of the misrepresentations it also would have afforded a greater profit to the plaintiff. Paragraph 13.2 contains the term "Estimated Sales" which is said to be based on anticipated increase in the estimated market values and expert evidence in support will be provided prior to trial.

18 Whilst I understand the argument, I do not consider that such a plea can be readily distilled from the amended statement of claim. The inclusion of the term "Estimated Sales" as it presently exists does not, in my view, achieve this result. The claim as it presently exists might well fail because it would be seen as premature. It may be that if the plea was on the basis of the concept outlined in the affidavit of Mr Catlin the difficulty would be overcome. Further the figure pleaded at par 4.16 is said to be the net figure but no details as to how that net figure was arrived at has been given. In my view the defendants are entitled to that detail.

19 Given my findings, I consider the most efficient way of dealing with this matter is to strike out the amended statement of claim and allow the plaintiff an opportunity to replead its case.