Misleading and deceptive conduct
7 SC pars 18 to 24 allege that the applicants suffered the same damage as is the subject of the contract claim in consequence of representations made by the first respondent which were misleading or deceptive. I treat those paragraphs as at least notionally amended in the manner indicated in the applicants' "Schedule of Amendments to the Statement of Claim".
8 This section of the pleading is framed in an embarrassing manner, and, if only for that reason, should be struck out. The following is not necessarily an exhaustive list of the deficiencies in the claim as pleaded, but it is sufficient to indicate why this section of the pleading, in its current form, is unacceptable.
9 The representations in pars 18(a), (b) and (c) are not specifically referred to in par 21, which addresses the "erroneous" nature of the par 18 representations. But par 21(f) alleges that each representation was inaccurate, without saying why or in what way. This deficiency is not merely a matter of particulars, and in any event, no such particulars have been supplied. There is no pleaded or apparent connection between the pars 18(a), (b) and (c) (mis)representations, and any loss or damage sustained by the applicants (see par 24) as alleged in par 16.
10 The par 18(h) representation is not listed in par 19(b) as being a representation as to a future matter. Clearly it is a prediction as to the future, unless the pleader intended to allege a false representation as to the respondents' then state of mind. That is not the allegation which is made. Considered as a representation as to the future, the issue is whether there were reasonable grounds for making the prediction; not, as alleged in par 21(e), whether there was in fact a failure (presumably by the applicants rather than the first respondent) to achieve the profits as represented.
11 Paragraphs 18(i), (j) and (k): These representations, and the alleged breaches of them, are entirely unparticularised and it is not clear how these breaches (unless they are simply another way of expressing the complaints as to "Pizza to Go") could result in the par 16 loss. For example, how could a failure to provide a proper account of moneys paid, lead to that consequence?
12 Paragraph 19(c): The respondents are entitled to know what the misleading and deceptive conduct is alleged to be, when it was engaged in and what consequences it is alleged to have had in terms of reliance and damage. This is not stated with any specificity or clarity. For example, the applicant cannot have entered into the 1991 agreement in reliance on the 1995 representation. But the "rolled up" form of pleading includes an assertion to this effect. Nor is it clear whether the applicant is asserting that there were misrepresentations made outside the limitation period which first caused it loss within that period, or whether it is alleging that the misleading and deceptive conduct occurred after 18 October 1997. If the applicant wishes to rely on:
- misleading and deceptive conduct which occurred in 1991 which caused loss after October 1997, and/or
- misleading and deceptive conduct which occurred in 1995 which caused loss after October 1997; and/or
- misleading and deceptive conduct which occurred on specified occasions thereafter which caused loss after October 1997;
then these are different cases, which should be pleaded as such.
13 Paragraphs 22(a) - (c): It is unclear when the first respondent is alleged to have formed the intentions referred to in these paragraphs, which is critical to the question of whether failure to disclose those intentions is capable of being misleading and deceptive conduct, and if so, when that conduct occurred.
14 Paragraphs 22(d) - (e): These allegations are framed at an unacceptable level of generality and are unparticularised.
15 Unlike Saunders v Glev Franchises Pty Ltd (1995) 33 IPR 349, it is not common ground in the present case that the loss was suffered as soon as the franchise agreement was entered into. It is only in a very clear case that a limitation question should be decided in an interlocutory context. If it were clear that the applicants could not formulate a case other than one which was barred by s 82(2) Trade Practices Act 1974 (Cth) ("TPA"), then it might be appropriate simply to strike out the offending paragraphs and refuse leave to replead.
16 In Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1988) ATPR ¶40-853 at p 49,195 Pincus J said:
"... in the ordinary case, where an applicant claiming relief on the basis of misleading conduct inducing him to enter into obligations under a contract points to a series of losses of various kinds flowing from the transaction, there are not as many causes of action as distinct losses. I think the cause of action accrues by the time the applicant has entered into the relevant transaction ..."
Nonetheless, when loss or damage is sustained is a question of fact, to be determined in all the circumstances of the case.
17 The proper course is to afford the applicant an opportunity of repleading so as to formulate the case which it seeks to make in a precise, particularised manner. Whilst it may be that a statement of claim may not be made the subject of an objection in point of law by reason of its failure to show that the cause of action arose within the limitation period (Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] 1VR 27, 75), in a very clear case the claim may be struck out on the ground that it is frivolous, vexatious and an abuse of the process of the Court (Ronex Properties Ltd v John Laing Construction Ltd [1983] 1 QB 398). Whether this is such a case should await the reformulation of the pleading.