ENGLISH -v- VANTAGE HOLDINGS GROUP PTY LTD [2021] WASCA 47 (23 March 2021)

ENGLISH -v- VANTAGE HOLDINGS GROUP PTY LTD [2021] WASCA 47 (23 March 2021) - WASCA 2021 case summary — Zoe

[3]

The pleading before the primary judge was the first, third and fourth respondents' further re-amended statement of claim dated 15 January 2019 (SOC).[5]
The SOC is difficult to read and more difficult to adequately summarise. It suffers from a familiar problem. The appellants - who we will refer to as 'the auditors' - were relatively late additional parties who were joined to the plaintiffs' claim. The various claims against the auditors have been bolted on to a pleading that was originally directed to various other defendants against whom separate and distinct claims are made. The pleading itself is in its fourth major iteration. One of the original plaintiffs - Reliance Franchise Partners Ltd (in liq) (Reliance Partners) - had become subject to external administration by the time of the hearing before the primary judge. The external administrators had stated that they did not intend to cause Reliance Partners to take any steps in the proceedings. In those circumstances the primary judge determined that Reliance Partners should be removed as a party to the proceedings.[6] Nevertheless, the SOC contains continual reference to Reliance Partners.
The confluence of these factors is that the SOC presents as being disjointed, difficult to follow and replete with matters of little, if any, relevance to the plaintiffs' claims against the auditors. Much of the problem arises because the pleader has chosen to work within the original architecture of a pleading that never contemplated a claim against the auditors.
The primary judge summarised the relationship between the parties and provided a synopsis of the SOC[7] before going to the details of the pleading.[8] Her Honour also developed some observations as to what were described as 'common threads' of the pleaded case against the auditors.[9] For now, although the primary judge's account of the SOC is more than sufficient, to give coherence to these reasons it is necessary to labour through an outline of the plaintiffs' pleaded case.

[6]

The plaintiffs plead that in the ordinary course of their business, funds were received from clients on account of premium payments which were required to be paid and were paid into Australian Reliance's and Reliance Partners' respective trust accounts (SOC par 7). They plead:
1. The effect of various legal requirements under the corporations legislation as to the holding of such money on trust and the terms on which withdrawals were permitted (SOC pars 8 - 9).
2. The effect of their obligations as trustees (SOC par 10).
Importantly, Australian Reliance and Reliance Partners were required by s 912D of the Corporations Act to notify ASIC if they breached, or were likely to breach, the relevant corporations legislation provisions or the conditions of their respective AFSLs (SOC par 8.6). And, if there was any misapplication of the trust funds, Australian Reliance and Reliance Partners were obliged to reconstitute their respective trust accounts (SOC par 10.3).
The plaintiffs identify Mr Donnelly's and Mr Hanson's relevant duties as officers of Australian Reliance and Reliance Partners both at general law and in terms of s 180(1), s 181(1), s 182(1) and s 183(1) of the Corporations Act (SOC pars 11 - 12).
The plaintiffs also refer to: (1) the engagement of PA Audit as auditor and Mr English as lead auditor (SOC pars 12J - 12K, 12AM - 12AS); (2) various auditing obligations and standards of the auditors as to financial and other reporting obligations of Australian Reliance and Reliance Partners (SOC pars 12A - 12I, 12L - 12AK). These included obligations under s 311 of the Corporations Act to notify the ASIC as soon as practicable (and in any case within 28 days) if becoming aware of circumstances, among others, whereby Mr English had reasonable grounds to suspect a significant contravention of the Corporations Act (SOC par 12AL); (3) PA Audit's contractual duties as auditor of Australian Reliance and Reliance Partners for the 2014 and 2015 financial years (SOC par 12AM - 12AS); and (4) PA Audit's and Mr English's tortious duty of care in relation to the audits of Australian Reliance and Reliance Partners for the 2014 and 2015 financial years (SOC par 12AT - 12AW).
The SOC pleads the audit work undertaken (SOC pars 12AZ - 12BI). For the 2014 audits there was an unmodified audit opinion (SOC par 12BE). The 2015 audits were not completed (SOC par 12BI).

[18]

Accordingly, broadly speaking, the plaintiffs allege that Mr Donnelly and Mr Hanson contravened one or more of s 180(1), s 181(1), s 182(1) or s 183(1) by:
1. Transferring or causing or not preventing the transfer of client funds out of the trust accounts maintained by Australian Reliance or Reliance Partners (by payment into the relevant entity's respective operating account) when neither entity was entitled to the funds.
2. Not informing or causing anyone else to inform the ASIC of the trust account defalcations, the trust account deficits or the alleged contraventions of the Corporations Act and the Corporations Regulations on the part of Australian Reliance and Reliance Partners.
The plaintiffs allege that the auditors were knowingly concerned in, or a party to, Mr Donnelly's and Mr Hanson's contraventions and thus involved in those contraventions.
The statutory accessorial liability claims against the auditors (in respect of the primary contraventions of both the companies and the directors) rely on the facts pleaded at pars 21C - AL of the SOC. These extend over some 14 pages. Essentially, however, there are pleas falling within the categories of what a reasonable auditor would have done and what in fact was known and was done by the auditors.
The alleged facts pleaded at pars 21C to 21AL of the SOC said to ground the statutory accessorial liability claims against the auditors concern:
1. The statutory, contractual and tortious duties of the auditors in relation to the conduct of Australian Reliance's and Reliance Partners' 2014 and 2015 audits (SOC par 21E; see also pars 12AM - 12AY).
2. Mr English and a senior employee of PA Audit being informed of a deficit in Reliance Partners' trust account in about October 2014 and thereby being put on inquiry that: (a) Australian Reliance's trust account may be in deficit; and (b) funds may have been misapplied from Reliance Partners' and Australian Reliance's trust accounts (SOC pars 21N, 21O, 21P, 21Q).
3. A number of pleas going to the steps that would have been taken, the risks that would have been recognised and the facts that would have been ascertained or concluded by a reasonable auditor conducting Australian Reliance's and Reliance Partners' 2014 and 2015 audits including that:

[26]

The particulars to par 27B of the SOC provide that Hawkstone sold the Steadfast shares in April and September 2014 (SOC pars 27B.1, 27B.4).
The plaintiffs plead that the auditors knowingly assisted in the directors' various alleged breaches of duty (SOC par 29CA). The basis of the alleged knowledge (SOC par 29CB) and assistance (SOC par 29CC) is the subject of discrete pleas. Relevantly, the earliest that the directors are pleaded to have knowledge is after the 7 August 2013 allotment (SOC par 29CB.3.1) and in terms of an actual timeframe all that is mentioned is in or about September 2014 (SOC par 29CB.1). However, the primary reasons suggest that there are particulars which clarify that the alleged knowledge arose before the September 2014 sale of the remaining Steadfast shares.[18]
The alleged assistance in the directors' putative contraventions of the statutory duties (and the breach of the general law duties) is said to arise by reason of: (1) advice given by Mr English in September 2014 in relation to proposals for the use of funds to be acquired by Hawkstone from the sale of the Steadfast shares (SOC pars 29CB.1, 29CC.1); (2) failing to notify the ASIC of what had occurred when it was reasonable for Mr English to suspect that the circumstances amounted to a contravention (in breach of s 311 of the Corporations Act) (SOC par 29CC.2); (3) providing an unmodified audit opinion in relation to Australian Reliance's 2014 audit on 31 October 2014 (SOC par 29CC.3); and (4) failing to withdraw the unmodified audit opinion (SOC par 29CC.4). Self-evidently, the last two categories of alleged assistance occurred after the sale of the Steadfast shares.
The plaintiffs claim that:
1. The auditors were involved in Mr Donnelly's and Mr Hanson's alleged contraventions of their statutory duties as officers of Australian Reliance within the meaning and for the purpose of s 79(c) of the Corporations Act (SOC par 29CD).
2. By assisting in the directors' various alleged breaches of duty and failing to inform the ASIC of the circumstances:

[34]

The principles relevant to the strike out application are as follows:

(a) the essential functions of a pleading are to define and limit the issues for decision, to provide the basis for determining discovery and the admissibility of evidence for trial, and to ensure a fair trial by putting the other side on notice of the case it must meet;

(b) a statement of claim must not plead allegations at too high a level of generality. A pleading must be sufficiently particular to conform with one of the primary objects of pleadings, to inform the opposing party of the case that it must meet;

(c) a statement of claim must state specifically the relief or remedy claimed;

(d) the court should proceed with caution before striking out a pleading on the ground that it does not disclose a reasonable cause of action. While the court may determine a difficult question of law on such an application, it would usually be appropriate to leave the determination of such questions for trial;

(e) in alleging no reasonable cause of action:

(i) the question to be decided is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to the party (on its pleadings) to prove facts at the trial which would constitute a cause of action; and

(ii) 'reasonable' means reasonable according to law. If the facts pleaded conceivably give rise to relief, then the cause of action should be held to be reasonable;

(f) the mere fact that a case appears weak is not of itself sufficient to strike out the action;

(g) in considering a strike out application, it is now necessary to consider the role of pleadings in the context of case management techniques. Case management considerations are not, however, necessarily antithetical to the observance of pleading rules. The objects of O 1 r 4A and 4B of the Rules of the Supreme Court 1971 (WA) are often promoted by a clear and precise statement of the issues for decision;

(h) provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action (or defence), and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleading rules that evolved in, and derive from, a very different case management environment;

(i) pleadings may be struck out on the ground that they may prejudice, embarrass or delay the fair trial of the action because they are evasive, they conceal or obscure the real questions in controversy, they are ambiguous or not reasonably intelligible, they raise immaterial or irrelevant issues, they fail to confine the issues or state the case of the party in question with reasonable particularity, or they raise a case in terms which are simply too general; and

(j) irrelevant or unnecessary pleas in a statement of claim will be struck out on the grounds that they will prejudice, embarrass or delay the fair trial of the action where the defendant must traverse the allegations and, thereby, raise false issues.[27] (citations omitted)

[41]

The primary judge identified, correctly, that acquisition of knowledge after the fact was not sufficient.[39] Her Honour went on to conclude that if a contravention is alleged to be continuing it may be sufficient to acquire knowledge before the contravention is complete.[40] That conclusion was not in issue on the appeal.
After summarising the SOC, and identifying the common threads of the plaintiffs' pleaded case, the primary judge made reference to the statutory obligations of auditors.[41] No complaint is made as to her Honour's summary. It is not necessary to repeat the primary judge's observations. The primary judge also referred to many of the various statutory obligations which grounded the SOC - including those pertaining to the holder of an AFSL.[42]
In considering the auditors' complaints in relation to the SOC so far as it concerned the trust account defalcations, the primary judge concluded:
1. While it was common ground that only funds paid from Australian Reliance's and Reliance Partners' operating accounts to third parties for 'non-genuine purposes' were recoverable, her Honour was 'not persuaded that the pleadings do not raise an arguable case of loss and damage of this category'.[43] To the extent that the defalcations resulted in payments as particularised that were in fact for an authorised purpose that would, in her Honour's view, constitute a defence involving matters of evidence to be considered at trial.[44]
2. It was arguable that it could be inferred that Mr English had actual knowledge of the alleged primary contraventions from: (a) the pleaded suspicious circumstances; and (b) Mr English's pleaded failure to make inquiry when it was arguable that he had a duty to inquire.[45] Her Honour said that there was an arguable case that Mr English was wilfully blind[46] - a finding apparently influenced by his alleged duties to enquire and report meaning that the pleaded case was not only of wilful blindness but also action or inaction.[47] The primary judge was also satisfied that it was arguable that Mr English had participated in the alleged contraventions by failing to make enquiries and provide necessary reports.[48]
3. It was open on the pleaded case to attribute Mr English's knowledge and acts to PA Audit.[49] So too it was arguable that the knowledge of the PA Audit senior employee was attributable to PA Audit and that the knowledge of Mr English and the employee was to be aggregated.[50] Thus it was arguable that, by at least the end of October 2014, PA Audit had knowledge of the trust account misapplications and participated in the alleged contraventions of Mr Donnelly and Mr Hanson.[51]
4. The pleaded case against PA Audit and Mr English for breach of contractual and tortious duties was arguable.[52] Her Honour made specific reference to a contention that any duties were confined by the completion of the 2014 audits (on 31 October 2014) and entry into a contract on 29 May 2015 to prepare audit reports for 2015.[53] However, the primary judge was not satisfied that the SOC did not raise an arguable case that the duties were ongoing and were not confined by the periods when the specific contracts were entered into.[54]
5. Australian Reliance's case as to the trust account defalcations was so factually bound together with the pleaded factual matrix as to the alleged Reliance Partners trust account defalcations that the latter allegations should not be struck out.[55]
With one exception these findings are challenged by the appeal. The exception is that the auditors do not seek to disturb the primary judge's finding that there is an arguable case that Mr English's knowledge and acts may be attributed to PA Audit (as might the knowledge of the senior employee of PA Audit). The other findings are challenged by grounds 1 - 4.
The primary judge only had to consider the statutory accessorial liability claim against the auditors in relation to the Steadfast shares (see [54] above). The primary judge found that the matters pleaded at pars 29CB.1 - 29CB.3 of the SOC sufficiently identified facts that could conceivably establish that the auditors were involved in (and in any case became 'associated with' and thus 'partic[56]ated in')56 Mr Donnelly's and Mr Hanson's alleged con[57]aventions57 (although, as mentioned at [41] - [42] above, par 29CB is a 'knowledge' plea rather than an 'assistance' or 'participation' plea). Moreover, so far as what is pleaded are 'continuing contraventions', the primary judge found it was arguable that Mr English - and thereby PA Audit - had actual knowledge of the essential facts constituting one or more of the contraventions[58]t the time of their occurrence.58
The findings in relation to the Steadfast shares are challenged by ground 5.

[42]

The grounds of appeal are prolix (something of an irony given the nature of ground 4). For that reason we will not set them out in full. It is enough to state their effect.
In substance the grounds of appeal contend:
1. The primary judge erred in law in finding that the SOC discloses a reasonable cause of action against the auditors insofar as the SOC discloses no cause of action that the auditors caused Australian Reliance to suffer loss or damage in a personal capacity rather than in Australian Reliance's capacity as trustee (ground 1). Ground 1 directs attention to SOC pars 21A, 21B and 21AL.
2. The primary judge erred in law in finding that the SOC discloses a reasonable cause of action against the auditors insofar as the SOC discloses no cause of action that the auditors were involved in Mr Donnelly's and Mr Hanson's alleged contraventions - there being no arguable case that the auditors had actual knowledge of and participated in the contraventions (ground 2).
3. The primary judge erred in law in finding that the SOC discloses a reasonable cause of action insofar as the SOC discloses no cause of action based on contractual or tortious breach in relation to the 2015 audit or that Australian Reliance suffered any loss or damage caused by any such breach (ground 3).
4. The primary judge erred in law in finding that pleas within the SOC would not prejudice, embarrass or delay the fair trial of the action insofar as various pleas and the statement of claim as a whole were prolix and uninformative and failed to comply with the rules (ground 4). Ground 4 directs attention to SOC pars 6.6, 6C.5.1, 6E.3, 7 - 10, 12B - 12D, 12E.2, 12F, 12H, 12BI and 13 - 21AL.
5. The primary judge erred in law in finding that pars 29C, 31, 31A and 31D of the SOC (in relation to the Steadfast shares claim) disclose a reasonable cause of action against the auditors insofar as the SOC discloses no cause of action because on the facts as pleaded the alleged contraventions were completed and the alleged loss suffered before the auditors were alleged to have obtained knowledge of and to have participated in the contraventions (ground 5).
Two of the grounds of appeal did not expressly identify the pleas within the SOC to which they were directed. Senior counsel for the auditors was asked to identify the pleas that, on the auditors' case, would be struck out if a particular ground was upheld. The response is summarised in the schedule to these reasons. Viewed by individual ground, the response exceeds what was stated in the grounds of appeal and auditors' written submissions in support of the ground. For example, the express terms of ground 5 only direct attention to pars 29C, 31, 31A and 31D of the SOC; yet the auditors seek to strike out pars 29CA - 29CD, 31C - 31D and various references in 29C, 31 and 31A. However, the pleas challenged at the appeal hearing do not in their totality exceed the scope of that challenged before the primary judge and the orders wanted in the appellant's case.
There is significant overlap between the grounds. In particular both grounds 1 and 3 raise whether there is any or any sufficient plea identifying that the plaintiffs had suffered compensable loss for which there might be a claim for compensation or damages. Ground 4 is also a catch-all which applies to the paragraphs attacked by grounds 1 - 3.
The plaintiffs pointed out that, by ground 4, the auditors seek to strike out numerous pleas setting out, among other things, relevant background facts and material facts as to claims against other defendants. The plaintiffs submitted that this went beyond what was sought by the auditors before the primary judge. Then, by par 3(b)(ii) of their minute,[59] the auditors only sought that those pleas be struck out so far as they contained allegations concerning Reliance Partners.
The plaintiffs' contention that in this respect the auditors advance a new case on appeal must be accepted. At the appeal hearing senior counsel for the auditors accepted that the auditors advanced a new argument so far as it was now sought to strike out the relevant pleas in their totality on the basis that they may prejudice, embarrass or delay the fair trial of the action.[60] Ground 4 should be assessed in light of the auditors' concession that it advances a new argument not pressed before the primary judge.
More generally, the plaintiffs contended that leave to appeal should be refused. The plaintiffs submitted that the auditors know the case they have to meet and the causes of action are reasonably arguable and sufficiently pleaded. The plaintiffs said that no error had been identified and that no substantial injustice would be done by leaving the decision unreversed.[61]

[45]

The necessity for that amendment became apparent when counsel for the plaintiffs was asked to step through the statutory provisions that were said to ground the statutory accessorial liability claim. The relief sought is compensation under s 1317H of the Corporations Act. One of the conditions for relief by way of a compensation order under s 1317H is that the relevant defendant has 'contravened a corporation/scheme civil penalty provision in relation to the corporation'.[64] At the material time the term 'corporation/scheme civil penalty provision' was defined in s 1317DA by reference to items 1 - 13 and 46 of the table in s 1317E.[65] Involvement in a contravention of s 981B(1)(c) or s 981C(b) of the Corporations Act and reg 7.8.01(5) or reg 7.8.02(6) of the Corporations Regulations (the relevant contraventions pleaded in SOC pars 13 - 16) is not a contravention of a corporation/scheme civil penalty provision as so defined.
Accordingly, there is no reasonable cause of action for relief pursuant to s 1317H so far as the plaintiffs plead that the auditors were involved in Australian Reliance's and Reliance Partners' contraventions. That part of par 21Aii of the SOC is untenable - as counsel for the plaintiffs correctly identified by the proposed amendment.
There is, in this respect, a similar overreach so far as the statutory accessorial liability claim relies on primary liability in the form of a contravention of s 180(1) of the Corporations Act.
Section 181(2), s 182(2) and s 183(2) provide, in relevant effect, that a person who is involved in a contravention of s 181(1), s 182(1) and s 183(1) respectively contravenes the earlier subsection (ie s 181(2), s 182(2) or s 183(2)). Each of s 181(2), s 182(2) and s 183(2) is a corporation/scheme civil penalty provision. However, as at the material time, there was no similar provision whereby a person involved in a contravention of s 180(1) thereby contravened a provision that constituted a corporation/scheme civil penalty provision.[66] Accordingly, the plea that the auditors were involved in Mr Donnelly's and Mr Hanson's alleged contraventions of s 181(1), s 182(1) and s 183(1) of the Corporations Act could ground a claim for a compensation order pursuant to But that is not the case with the plea that the auditors were involved in Mr Donnelly's and Mr Hanson's alleged contravention of of the . There is no reasonable cause of action in this respect.
One difficulty with par 21Aii of the SOC as it is proposed to be amended is that it refers in a rolled-up way to Mr Donnelly's and Mr Hanson's contraventions of their 'Statutory Directors' and Officers' Duties' - a plea that invokes s 180(1), s 181(1), s 182(1) and s 183(1) without discrimination.
The problem adverted to above in [78] - [80] above also applies to pars 29CD and 31 of the SOC insofar as the statutory accessorial liability claim against the auditors relies on a putative contravention of s 180(1) of the Corporations Act by Mr Donnelly and Mr Hanson.
Third, the plaintiffs proposed to modify par 16 of the SOC as follows:[67]

[51]

From the auditors' perspective, there was some confusion as to the nature of the plaintiffs' case. Senior counsel for the auditors posited that the plaintiffs' claim involved two steps: the first the trust account defalcations and the second the payments out from Australian Reliance's operating account for non-corporate purposes.[73] It was suggested that the plaintiffs' true case was one where the trust defalcations were part of a wider scheme that led to payments to the benefit of the directors or companies related to them.[74] The auditors submitted that only the second step could lead to a loss - no loss ever being attributable to the first step alone - and there was no plea that the auditors were knowingly concerned in or a party to the second step or even that the directors were guilty of a relevant primary contravention in that respect.[75]
It was however contended that, irrespective of an admitted breach of trust, the mere removal of funds from a trust account into a general account did not in itself result in a loss to the trustee.[76]
The plaintiffs clarified their case in oral submissions to the court. Counsel for the plaintiffs submitted that, where a corporate trustee misapplied trust funds and had an obligation to restore the funds, it had a cause of action against the officers who were responsible for the misappropriation.[77] Australian Reliance sued Mr Donnelly and Mr Hanson in this way for contraventions of their statutory obligations. But Australian Reliance also sued the auditors as being involved in the directors' contraventions. Thus the claim was in respect of the first step as posited by the auditors.[78]
According to counsel for the plaintiffs, the so-called 'second step' went only to loss - the money obtained by the trust account defalcations becoming available to be used and in fact being used for non-corporate purposes.[79] Counsel accepted that a causal question arose in this respect but said this was a question for trial[80] - going to no more than the measure of the damage resulting from the trust account defalcation.[81] Breaking down the case in this way was of importance as, on the plaintiffs' case, there was no need for knowledge or participation on the part of the auditors at the stage of the second step as a breach occurred irrespective of whether there was loss and there was no need for knowledge of the damage independent of knowledge of the contravention.[82]
As explained by counsel for the plaintiffs, the loss was the misapplication - by the corporate trustee personally - of the funds it had obtained in breach of trust by the trust account defalcations.[83]
The difficulty with this analysis, as we see it, is that on the material facts as pleaded it is not reasonably arguable that the alleged loss as identified by counsel for the plaintiffs is caused by the trust account defalcations. There would be no loss but for the funds the subject of the trust account defalcations subsequently being misapplied by being used for a non-corporate purpose. Any loss suffered by Australian Reliance personally is relevantly caused by the subsequent misapplication for a non-corporate purpose rather than Australian Reliance's initial trust account defalcation.
An example may assist. Let it be assumed that a trustee - say a professional executor company - misappropriates $100 by transferring that amount from a trust account to its general account. The executor company has an obligation to restore the $100; and, to the extent that the $100 is traceable, the $100 remains impressed with the trust. But what is the loss to the executor company while the executor company retains the $100 which was misapplied? There can be no loss. The executor company holds the $100 and it may be applied to meet the obligation to restore.
Counsel for the plaintiffs accepted that there was no loss in this situation.[84]
Continuing with the illustration, what if the $100 is applied in meeting a debt of the executor company? There is still no loss. The countervailing benefit, in the form of the reduction in the personal liabilities of the executor company, offsets and cancels out the obligation to restore the $100. That will also be the position if the $100 is expended in purchasing some asset (although, here again, the asset may be impressed with the trust). The only circumstance by which the executor company is worse off (to use a neutral term) is if there is a further misapplication or some other waste of the $100. Then the executor company remains obliged to restore the $100 but no longer has any countervailing benefit. However, in this latter scenario any 'loss' is not caused by the misappropriation from the trust account; it is caused by the further misapplication or other waste.
The material facts as pleaded by the plaintiffs were premised on the trust account defalcations resulting in a transfer into Australian Reliance's operating account (SOC par 17B.1; Particulars par 7 and sch B; EM pars 5, 34).[85] That alone - on the plaintiffs' admission - did not result in an actionable loss vis-à-vis the auditors. It was only to the extent that thereafter Australian Reliance applied the funds to a non-corporate purpose - ie not to discharge genuine liabilities or to make fully recoverable loans (Particulars par 1) - that a loss was claimed.
Counsel for the plaintiffs accepted, correctly, that a causation question arose. That is self-evident in relation to the general law claims alleging contractual breach (at least to the extent that non-nominal damages are sought) and tortious breach. The plaintiffs' plea in this respect was in the terms of pars 21AK and 21AL as reproduced at [36] above. At the appeal hearing there was no explanation of how the proposed amendment to par 16 of the SOC would affect what was asserted at par 21AL - the plea at par 21AL referring to par 16 of the SOC.
The causal requirement for the statutory accessorial liability claim arises under s 1317H. There s 1317H(1)(b) necessitates consideration of whether the damage suffered for which the corporation seeks a compensation order is damage that 'resulted from the contravention'. These words require a causal connection between the alleged damage and the contravening conduct; only damage which as a matter of fact is caused by the contravention can be the subject of an order for compensation.[86]
The problem in the present case is the not uncommon problem of differentiating between a breach (or a contravention) which causes the claimed loss and a breach (or a contravention) which merely provides the occasion or opportunity for the subsequent suffering of the claimed loss.
The plaintiffs' pleaded causation case is in one respect perfunctory and in another respect non-existent. In relation to the general law claims, par 21AL of the SOC asserts, without more, that by reason of the alleged breaches Australian Reliance suffered loss and damage as pleaded in par 16 of the SOC - thus apparently simply directing attention to the obligation to restore. The statutory accessorial liability claim merely invokes s 1317H. There is not even a plea to the effect that damage resulted from the auditors' alleged contraventions. In both respects the SOC does not allege a causal connection between the alleged contraventions (as to the statutory claims) or the alleged breaches (as to the general law claims) and the relevant loss as identified by counsel for the plaintiffs (that being Australian Reliance's misapplication of the funds it obtained in breach of trust by the trust account defalcations).
Sometimes a causal link between a breach or contravention and a particular head of damage may be obvious. In such a case an expressly pleaded causal link may be unnecessary. A general plea, such as that found at par 21AL, may suffice. If, however, the alleged causal link is not obvious, a claimant should plead the material facts relied on to establish the causal link between the breach (or contravention) and the claimed loss - and the alleged causal link must at least arguably establish the necessary causal connection between the breach (or contravention) and the alleged suffering of such a loss.
In short, as French J (as his Honour then was) said in a misleading conduct case, 'the material facts establishing the necessary causal link should be pleaded'. Moreover, it is necessary to plead material facts which give rise to a 'reasonable inference' that the breach or contravention and the alleged loss stand to each other 'in the relation of cause and effect'.[87]
A cause of action should only be struck out as not being reasonable due to the absence of the requisite causal link where the allegation of causation is clearly untenable on the pleading. In this context the term 'reasonable' means reasonable according to law. The question of law stands independently of the facts giving rise to it. The court must proceed on the basis that the facts alleged in the pleading are established. The question is whether, on the facts as pleaded, there is a sufficient causative relationship alleged between the alleged breach (or contravention) and the alleged loss. Any question of causation is quintessentially a question of fact and degree. The question is fact sensitive and will be affected by the evidence. This accentuates the need to take a cautious approach in assessing whether a pleaded claim is untenable. Nevertheless, the basal requirement remains: the material facts as pleaded must be capable of being regarded as sufficient to establish that the required causal connection between a breach (or a contravention) and the loss exists.
The SOC as pleaded does not disclose a reasonable cause of action in this respect. There is no loss so far as the trust account defalcations saw a misappropriation from Australian Reliance's trust account to its operating account. That is as far as the material facts pleaded in the SOC go.
A somewhat wider case was alleged in the Particulars and the EM - as further explained by counsel for the plaintiffs - in terms of loss due to the misapplication by Australian Reliance for non-corporate purposes of the funds it so obtained in breach of trust. There are two difficulties with that wider case. First, the material facts are not pleaded. That shortcoming might be excused. The auditors did not rest on niceties; they were content to deal with the allegations as they appeared from the Particulars and the EM. Second, and more fundamentally, the paucity of the material allegations on the question of causation of loss reading the SOC, the Particulars and the EM as a whole are insufficient to establish - arguably or by reasonable inference - the required specific causal connection between the alleged contraventions or breaches and the loss said to be suffered. On the facts as alleged, while it may be said that the auditors' alleged contraventions and breaches were circumstances that were antecedent to the loss, they were not causative of the loss.
On the plaintiffs' present pleading it is not reasonably arguable that there is a causative link between, on the first part, the auditors' alleged statutory contraventions or their alleged general law breaches, and, on the second part, the claim for loss as articulated on behalf of the plaintiffs. There is, for this reason, no reasonable cause of action for the loss as claimed against the auditors in relation to the trust account defalcations. We consider, respectfully, that the primary judge was in error in coming to the contrary conclusion. Subject to the question of leave to appeal, we would uphold ground 1.
Assuming, subject to leave to appeal, that ground 1 is upheld, consideration ought to be given to what results in terms of the SOC. The auditors sought orders striking out numerous pleas. This goes too far. It may be that by pleading additional material facts the plaintiffs can establish a reasonable cause of action for the losses they presently claim. Alternatively, having considered their position in light of the appeal hearing, the plaintiffs may consider the sort of claim posited by the auditors in the course of argument is tenable. In any event other possible kinds of loss were mentioned in the course of argument.[88] These, being unpleaded, are presently irrelevant. There may or may not be a factual basis to claim such loss. It does mean, however, that while it is appropriate to strike out parts of the SOC as presently pleaded, there should be leave to replead.
As there will be leave to replead, we would not strike out all of the factual pleas going to the auditors' alleged involvement in the directors' statutory contraventions and the auditors' alleged breaches of contractual and tortious duties. It may be that, in giving the pleading further consideration, the plaintiffs will think it appropriate to amend in some respects; but that will be a matter for the plaintiffs and their advisers. Insofar as ground 1 is concerned with establishing compensable loss we consider it sufficient to strike out pars 21A and 21AL and the words 'and the Auditors' in par 21B.

[53]

The essence of ground 2 is a complaint that the SOC does not plead material facts from which a reasonable inference of actual knowledge could be drawn; nor, according to the ground, is it pleaded that the auditors intentionally participated in the alleged contraventions.
At the outset it should be acknowledged that the SOC does not follow an orthodox approach in identifying the pleaded basis for the alleged knowing involvement in the directors' statutory contraventions. In particular:
1. There is no plea to the effect that the auditors had actual knowledge of the essential facts which constitute the relevant statutory contraventions by the directors - namely, those matters summarised at [30] - [32] above.
2. Nor is there any plea to the effect that, by reason of what was actually known by the auditors and other matters, it should be inferred that the auditors had actual knowledge of the relevant contraventions.
The second alternative mentioned in [111] above is one available means of pleading a claim that a person was knowingly involved in a contravention by being knowingly concerned in or party to the contravention in terms of s 79(c). If, however, that is the kind of case which a claimant seeks to advance, the claimant's pleading should ordinarily identify - as a material fact and in the same way as any other material fact - the inferences which the claimant will seek to have drawn and the material facts relied on which the claimant will contend permit those inferences to be drawn. The pleaded case must disclose a cause of action. It is not enough that a cause of action may materialise in the future from evidence that emerges at trial.
It is regrettable that the pleader did not follow such an orthodox approach. It makes what in many respects is a difficult pleading to follow even more difficult in terms of identifying, with precision, the pathway by which the plaintiffs seek to sheet home actual knowledge by the auditors of and participation in the directors' alleged contraventions - and the individual alleged matters which are relied on in this regard. This, at bottom, informed much of the auditors' complaints as to the SOC. The auditors complained, with justification, that the allegations of involvement (ie knowledge and participation) were left to be divined from numerous paragraphs without adequate identification of the material facts (including material facts arising by inference from other material facts) relied on to sustain the conclusion that the auditors were involved in Mr Donnelly's and Mr Hanson's alleged contraventions.[89]
For example, it appears that the plaintiffs rely on a series of alleged trust account defalcations and thus a series of continuing alleged contraventions on the part of the directors in which the auditors were allegedly knowingly concerned. Based on sch B to the Particulars these occurred over the period 4 September 2014 to 30 November 2015.[90] Presumably, based on the pleading, it is the plaintiffs' case that the auditors accumulated relevant actual knowledge over time. But at no point does the SOC seek to pinpoint what is alleged to have been known by when and why. In this respect the pleading is inadequate and defective.
Counsel for the plaintiffs accepted that the SOC did not plead out the claim in an orthodox fashion (as described at [111] - [[[91]](2021_47.html#_Ref661 [I]t is arguable, on the pleadings, that it can be inferred that Mr English had actual knowledge of the alleged contraventions of the Corporations Act and/or Regulations from pleaded suspicious circumstances and his failure to make an inquiry; in other words, there is an arguable case that Mr English was 'wilfully blind'. That is so, having regard to the following pleaded matters which it is arguable are suspicious because they appear to reveal that the Corporations Act and/or Regulations have not been complied with:

(a) the fact that the Reliance Partners trust account was in deficit in April 2014;

(b) the fact that the Australian Reliance trust account was in deficit in September 2014; and

(c) the matters reported to [PA Audit's senior employee] and Mr English in October 2014 (being shortly before the 2014 independent auditor's reports were completed) that the balances of Reliance Partners' and Australian Reliance's trust funds, or one of them, had fallen below the minimum balance.

It is arguable that Mr English had a duty to enquire into those matters, having regard to PA Audit's contractual duties, and Mr English's and PA Audit's statutory duties.[104]

[60]

Ground 4 challenges the primary judge's finding, at [198] - [199] of the primary reasons, that the pleaded trust fund defalcations in relation to Australian Reliance are so factually bound up with the pleaded factual matrix of the alleged Reliance Partners' trust fund defalcations that the pleas relating to Reliance Partners should not be struck out. The auditors assert that:[111]
1. The allegations in relation to Reliance Partners should be struck out as they may prejudice, embarrass or delay the fair trial of the action.
2. The allegations in relation to Reliance Partners are prolix and uninformative and fail to comply with O 20 r 8(1) and r 13(1)(b) of the Rules of the Supreme Court 1971 (WA).
In support of ground 4 the auditors develop minutiae as to the pleaded case (much of which was also explored in relation to grounds 2 and 3) to advance the proposition that the parts of the pleading attacked by ground 4 lack precision, do not identify as alleged material facts what inferences, if any, should be drawn, contain many irrelevancies and are otherwise prolix and uninformative. The auditors emphasise alleged inadequacies as to: (1) the manner in which Australian Reliance is alleged to have suffered loss; and (2) the nexus between any breach of an obligation and loss. The auditors assert that the SOC does not fulfil the basic function of a pleading as it does not fairly inform them of the case they have to meet.[112]
The auditors' substantive complaints with the SOC at the level of principle have been raised and dealt with in grounds 1 and 2. Ground 4 seeks to leverage off those matters, in part overlapping with and repeating the complaints made in grounds 1 and 2, to seek that a much wider portion of the pleading be struck out. There is no merit in this aspect of the appeal. The additional non-overlapping complaints under the rubric of ground 4 are either misconceived or pleading niceties. The latter ought simply to have been dealt with, and may still be dealt with, by appropriate requests for particularisation and need not now be further considered.
The initial point raised by ground 4 was a broad submission that all the allegations concerning Reliance Partners introduced 'completely' irrelevant and unnecessary material.[113]
There was no error in the primary judge's finding that, so far as the case against the auditors is concerned, the Australian Reliance trust account defalcations were factually bound up with the similar defalcations in relation to Reliance Partners - meaning that the allegations relating to Reliance Partners should not be struck out. Australian Reliance and Reliance Partners were part of the same corporate group. The auditors were engaged to conduct the audits of both entities. Knowledge, in relation to one entity, that its trust account had fallen below the minimum balance or was in deficit, may mean that the auditors were put on inquiry as to any contraventions in relation to the other entity. That is particularly so given the auditors' pleaded obligations to make due enquiries and report. In the circumstances the forensic significance of any trust account defalcation, trust account deficit or contravention in relation to Reliance Partners is obvious. It is, on the plaintiffs' case, relevant factual context on which they intend to rely at trial in their case concerning Australian Reliance - and as such must be pleaded.
The auditors went on by ground 4 to contend that, even if this was so, the pleas as to Reliance Partners were prolix and may prejudice, embarrass or delay the fair trial of the action (this being the aspect of the ground that was conceded to raise a new point; see [70] - [71] above).
That argument has little force when consideration is given to many of the pleas sought to be challenged in this way. For example, par 6.6 of the SOC pleads that Mr Hanson was an authorised representative of Australian Reliance and Reliance Partners. How this plea was prolix or uninformative, or proof of that fact might prejudice, embarrass or delay the fair trial of the action, was ignored by the auditors' argument on appeal. Many of the impugned pleas are similarly benign (see eg SOC pars 6C.5.1, 6E.3, 7 - 10, 12B - 12D, 12E.2, 12F, 12H, 12BI).
When this was raised with senior counsel for the auditors he submitted, in substance, that the auditors' real complaint was that they had to rake through all the material to discern what was being relied on in the case against them. Senior counsel submitted that the allegations relevant to the claims against the auditors should be pleaded clearly and distinctly. To the extent that the facts concerning Reliance Partners were relevant to the drawing of inferences in the claims concerning Australian Reliance, it should not be for the auditors or the court to try and work out what facts were relied on and what inferences were sought to be drawn.[114]
To the extent that this concern is validly based it is no more than the concern that underpins ground 2. It will, in our view, be substantially alleviated so far as ground 2 is upheld and par 21Aii of the SOC is struck out. We are unable to identify any independent error on the part of the primary judge in terms of ground 4. That is all the more so where the argument now advanced is conceded to amount to a new case on appeal.
We do not consider this to be one of the exceptional circumstances in which a new point might be entertained on appeal. The argument could and should have been agitated before the primary judge who, as case manager, was far better placed than this court to assess this type of complaint. It is inconsistent with the interests of justice, and the public interest in the finality of litigation, that the argument be advanced for the first time in the context of an interlocutory appeal.
Ground 4 should be dismissed.

[62]

Ground 5 concerns the claim made against the auditors that relates to the Steadfast shares as summarised in [37] - [45] above.
The auditors submitted that the primary judge should have found that the pleaded facts did not disclose a reasonable case that: (1) the auditors participated in the directors' alleged contraventions at the time of the contraventions; or (2) loss could have resulted from the alleged participation. The auditors contended that any contravention was complete, and any loss was suffered by no later than, allotment of the shares (on 7 August 2013) - well before the auditors' alleged knowledge and participation in September 2014.[115]
Accordingly, as senior counsel for the auditors summarised the argument, it was purely a timing question.[116]
The plaintiffs' initial response to ground 5 was to point out that, on appeal, the auditors seek to challenge the claim against them in contract and tort relating to the Steadfast shares. However, before the primary judge the claim as to the Steadfast shares was only challenged to the extent that it relied on s 79 of the Corporations Act. That answer must be accepted (see [54] and [64] above). In the same way that we would not permit a new case on appeal in relation to ground 4, we would not permit a new case on appeal in relation to ground 5. Ground 5, if upheld, should be limited to the statutory accessorial liability claim. It cannot justify the striking out of pars 31C and 31D of the SOC. Insofar as those pleas should not be struck out it would be inappropriate to strike out the pleas in pars 29CA - 29CC and 29C. Instead, consideration ought to be confined to the part of the pleading that is exclusively concerned with the statutory claim.
The plaintiffs go on to refer to the pleading - focusing on pars 27A and 27B of the SOC - and the primary judge's characterisation of the SOC as pleading continuing contravening conduct as to the alleged diversion of the Steadfast shares. The plaintiffs say that steps could have been taken to return the Steadfast shares to Australian Reliance prior to the sale of the shares but that, once sold, the shares could not be recovered.[117]
The primary judge was correct to identify that the plaintiffs pleaded continuing contraventions by the directors: first, as to procuring the allotment (SOC pars 26 - 26A); second, in not taking steps to procure the return of the Steadfast shares to Australian Reliance (SOC par 27A). The former was complete by 7 August 2013 - the date of allotment of the Steadfast shares. The latter continued until the Steadfast shares were sold in mid-September 2014.
While, on the pleaded case, there were continuing contraventions, the rolled-up way in which the plaintiffs put their various claims of primary and accessorial liability creates serious difficulty. One of the difficulties has already been mentioned (see [81] above). There is no reasonable cause of action so far as a compensation order is sought under s 1317H based on an allegation that the auditors were involved in the directors' alleged contravention of s 180(1) of the Corporations Act. There is a further difficulty. The primary judge identified that it was arguable, on the pleaded facts, that Mr English (and thereby PA Audit) had actual knowledge of the essential facts constituting one or more of those contraventions at the time of their [118]urrence.118 However, the primary judge did not find that there was the requisite actual knowledge and involvement in all of the contraventions.
In our view, the SOC reveals no reasonable cause of action to the extent that the plaintiffs claim the auditors were knowingly concerned in, or a party to, a contravention by the directors insofar as Mr Donnelly and Mr Hanson allegedly procured that the Steadfast shares were allotted to Hawkstone.
The allegations of knowledge and involvement on the part of the auditors are pleaded at pars 29CB and 29CC of the SOC respectively (see also SOC pars 29CA, 29CD). These have been summarised at [41] - [42] above. There is no allegation of knowledge that pre-dates the allotment. Nor does the alleged participation or involvement precede the allotment. The absence of any pleaded material facts in these two respects is fatal to par 29CD of the SOC so far as - in its rolled-up fashion - par 29CD claims that the auditors were involved in the directors' contraventions of the director duty provisions of the Corporations Act in allegedly procuring the allotment of the Steadfast shares to Hawkstone.
For these reasons, subject to the question of leave, ground 5 should be upheld.
However, at the most success on ground 5 results in par 29CD being struck out and the consequential striking out of the words 'PA Audit, Mr English' in par 31 and 'PA Audit and Mr English' in par 31A. There must also be leave to replead insofar as we otherwise respectfully agree with the primary judge's conclusions as to the continuing contraventions in not taking steps to procure the return of the Steadfast shares to Australian Reliance.

[63]

The auditors' submissions in support of leave to appeal were perfunctory.[119] It was suggested that substantial injustice would occur if the decision was left unreversed because the auditors would be required to spend substantial legal costs defending an unmeritorious claim and in giving discovery on irrelevant issues. Costs will seldom provide a sufficient basis for the grant of leave to appeal against an interlocutory order on a matter of practice or procedure. Any such costs may be dealt with by appropriate order after trial. There is no interference with substantive rights as is normally required to justify leave.
In this case the professed concern as to costs was hollow. Even if the appeal was successful: (1) the SOC made other claims against the auditors (not mentioned in these reasons because they are not otherwise relevant) which meant that the auditors would remain parties to the action; and (2) the auditors' orders wanted on the appeal provided, appropriately, that if the appeal was successful the plaintiffs should have leave to replead.[120] The auditors will remain subject to the claims and other claims whatever the outcome of the appeal.
A basis for leave to appeal could only be found in the interests of justice in the wider sense rather than the decision under appeal causing substantial injustice to the auditors.
We are acutely conscious of the tendency of interlocutory appeals to fragment litigation, delaying the time for resolution of the case at first instance and generally consume the parties' and the court's resources in a way that is unjustified. To a degree that has occurred in the present case. It would have been better, for example, had the auditors not sought to enlarge their challenge beyond what was advanced before the primary judge. The appeal could and should have been confined to matters of principle.
Balancing these considerations we are ultimately persuaded that there should be leave to appeal. A material error has been established in relation to ground 1. That error may, if unreversed, see large and complex litigation proceed to a lengthy trial on a flawed basis in a manner which is inconsistent with the objects in O 1 r 4B(b), (c), (e) and (f) of the Rules of the Supreme Court. Insofar as ground 1 justifies a grant of leave to appeal, and all grounds were fully argued and have been addressed in these reasons, we would grant leave to appeal generally.

[84]

This case illustrates the threat that protracted arguments about pleadings, extending to appeals against interlocutory pleadings decisions, pose to the efficient and fair determination of litigation.
Mr English and PA Audit were joined as defendants in the primary proceedings by amendment of the writ made on 2 October 2017. The statement of claim which is the subject of the appeal was filed on 15 January 2019. It prompted the appellants to make a summary judgment and strike-out application filed on 16 April 2019. The primary judge found that it was appropriate to grant a 70-day extension of the time to bring the strike-out application given the legally complex and factually dense nature of the pleading.[125] The application was heard on 20 June 2019. Understandably, given the complexity of the pleadings and the arguments advanced in relation to them, the primary judge was not able to deliver judgment on the application until 8 November 2019. At that point, almost a whole year had been consumed by arguments about the plaintiffs' pleaded case against the appellants.
The primary judge delivered a lengthy judgment in relation to the pleadings and certain other issues. As Murphy and Vaughan JJA have explained, the primary judge correctly identified all of the relevant legal principles. Her Honour applied those principles to the detail of the pleading which she was considering, and reached a carefully reasoned conclusion that some, but not all, of the pleadings attacked by Mr English and PA Audit should be struck out. Formal orders were made on 8 November 2019.
On 22 November 2019, Mr English and PA Audit instituted the present appeal against the primary judge's orders refusing to strike out certain paragraphs of the statement of claim. On 19 December 2019, the primary judge stayed orders for the filing of the appellants' defence and a reply to that defence until further order. No doubt that stay was prompted by the institution of this appeal. It appears from the primary court file that no substantive progress has been made towards the resolution of the primary proceedings since that time.
The appeal was heard on 16 October 2020. This court has not been in a position to resolve the appeal until March 2021. Murphy and Vaughan JJA, after very careful and detailed analysis, have reached a different conclusion to the primary judge on some aspects of the strike‑out application. I respectfully agree with their reasoning on the merits of the appeal.
I have, however, taken a different view on the question of whether leave to appeal should be granted on what is a pleading point. The determination of this appeal has taken about 16 months from its institution. In the meantime, there has been no substantive progress of the primary proceedings. The benefits arising from the determination of this appeal have been limited. The outcome of the appeal has not been to finally resolve any substantive aspect of the dispute between the parties. Some additional paragraphs of the statement of claim will be struck out, but the matter is to be remitted for the plaintiffs to be given leave to re-plead some deficiently pleaded causes of action. Over 3 years and 5 months after Mr English and PA Audit were joined in the proceedings, and over 2 years 2 months after the SOC was filed, the plaintiffs are to be given the task of reformulating aspects of their claim against Mr English and PA Audit. The prospect of further disputes about the adequacy of the reformulated pleadings remains. The appellants still face the prospect of a long complex trial on challenging pleadings.
Much of the responsibility for this sorry state of affairs rests with the legal advisors to the plaintiffs who prepared a statement of claim of almost impenetrable density and complexity. I say 'almost' impenetrable because, after considerable time and effort, the primary judge, as well as Murphy and Vaughan JJA, have been able to divine meaning from the text. However, it also appears that the appellants' advisors have sufficiently understood the pleading to be able to identify some fundamental defects in the case pleaded against them. I am not convinced that the current state of the pleadings precludes the appellants from receiving a fair trial. Perhaps undeservedly given their approach to the pleadings, the plaintiffs appear to be the principal beneficiaries of the exercise which has identified those defects and the plaintiffs now have an opportunity to address them before trial. They have avoided the prospect that the fundamental defects would simply result in their claim as pleaded being dismissed on its merits at trial.
A factor counting towards the grant of leave to appeal at this stage is that, looking forward from this point, the litigation will be conducted more efficiently if the fundamental defects in the case as currently pleaded are addressed. I accept that there is something to be said in favour of a grant of leave on that basis, when the detriment of the delay, fragmentation and increased cost of the primary proceedings resulting from the appeal has now been incurred in any event.
On the other hand, notwithstanding that the detriment has already been incurred, the court should not unjustifiably reward the bringing of an application for leave to appeal which should not have been granted at the time it was made. Further, it is necessary to weigh the impact of this appeal on the efficient conduct of the primary proceedings and the delay and fragmentation of the primary proceedings occasioned by this appeal. To that must be added the cost to the parties of prosecuting and defending this appeal, and the diversion of the limited public resources of this court to addressing a complex and detailed pleading question that is appropriately resolved in the general division of the court. In my view, the overall deleterious impact of this appeal on the fair and efficient resolution of the substantive dispute between all parties to the primary proceedings outweighs the benefits which may flow from the determination of the pleading questions raised by the grounds of appeal.
In my view, on balance, the interests of justice are best advanced by this court respecting the role of the primary judge as case manager of the primary proceedings, even though it might adopt a different view in some respects. This court should not, by the grant of leave to appeal, encourage the additional expense, delay and fragmentation of primary proceedings which inevitably results from interlocutory pleadings appeals of this kind. In my view, the grant of leave to appeal in such cases ought to be exceptional. On balance, in my view, the particular circumstances of the present case do not warrant a departure from the general approach of refusing leave to appeal against interlocutory pleadings decisions.
For these reasons, I would refuse leave to appeal in this case. However, this is a minority view. The majority of this court would grant leave to appeal. Once leave to appeal is granted, I agree that orders 2 - 4 proposed by Murphy and Vaughan JJA should be made for the reasons which their Honours give.

At a glance

Court

Decision date

Before

Source

Judgment (148 paragraphs)

Legislation Cited (1)

Cases Cited (13)