GIRGIS -v- POLIWKA [No 4] [2018] WASC 321 (24 October 2018)

Expressed broadly, the plaintiffs' claim relates to advice allegedly provided by Mr Poliwka (a real estate and business agent) to Mr Girgis as to investments, including the purchase of shares in the registered proprietor of a Midland property on which a hotel business operated, shares in that hotel business, a vessel used for a charter business and a Joondalup property on which a nightclub operated.[3]

1. A more comprehensive account of part of the pleaded claim is provided in the reasons of Derrick J in Girgis v Poliwka [No 3].[4] (Derrick J succeeded BanksSmith J as case manager and preceded me in that role.)
2. I will, in due course, have to examine some parts of the parties' pleaded cases. However, it is unnecessary and would be unproductive to attempt to summarise the pleadings as a whole. The current version of the statement of claim runs to 127 pages with schedules, the defence and counterclaim is 35 pages and the reply and defence to counterclaim the subject of the defendants' present application is 18 pages. Of that the amendment the subject of the disallowance application is no more than six lines.
3. The plea in dispute is par 22.3 of the amended reply and defence to counterclaim. This part of the pleadings concerns the Midland property and the hotel business operated on that property (defined elsewhere as the 'Pub Business').
4. The present applications arise out of the ex tempore ruling I delivered on 27 June 2018. It is necessary to refer to that ruling in a little more detail to put the current applications in context.
5. The 27 June 2018 ruling concerned the plaintiffs' application by letter dated 23 April 2018 for leave to adduce additional evidence at trial. As I then explained:
   1. Orders for leave to adduce expert evidence were made by Mitchell J on 18 November 2015. His Honour made orders that the parties have leave to adduce expert evidence in the form of responses to a common expert brief approved by the court for each group of experts sharing common areas of expertise.
   2. Further orders provided for the parties to confer as to the form of the common expert brief. That conferral occurred. On 26 April 2016 Mitchell J approved the expert briefs. A timetable was then provided for the expert reports to be served.
   3. The present application is for further expert evidence outside of that regime. Leave is sought to adduce additional expert evidence in the form of two reports:

(1) First, a historical valuation of 32-36 Helena Street, Midland. This property is known in the proceedings as the 'Midland property'. The Eastern Hotel, Midland traded from the property. The report in issue provides the opinion of a valuer, Mr Cameron, as to the market value of the Midland property as at 23 October 2008 and 1 November 2008.

(2) Second, a document examiner's report as to the authenticity of purported signatures of the first plaintiff, Mr Girgis, as appear on two pages to an attachment sent on behalf of the first defendant, Mr Poliwka, on 13 March 2009.

1. I granted leave to adduce further expert evidence at trial in the form of the valuation evidence. However, I refused leave to adduce further expert evidence in the form of the document examiner's report. In deciding whether to grant leave I adopted a test of apparent relevance[5] for the reasons I then explained.[6] Based on the pleadings I was not satisfied that the document examiner's report met the standard of apparent relevance such that leave was appropriate.
2. In my 27 June reasons I stated:
   1. ...The document examiner, Mr McGinn, concludes in relation to two signatures that purport to be those of Mr Girgis that:

The evidence is more supportive of the proposition that the questioned signatures are completed by a writer other than the specimen writer [who, I interpose, was Mr Girgis] than any other proposition.

1. The signatures appear on an attachment to an email sent on behalf of Mr Poliwka to Members Equity Bank. The relevant parts of the attachment appear to consist of an asset statement as to the Girgis Group and a Privacy Act notice. The email chain shows that Members Equity Bank sought a signed statement of assets and liabilities on the part of, among others, Mr Girgis.
2. Based on paragraphs of his witness statement, which I was referred to in the course of oral submissions, Mr Girgis will state at trial that he does not recall signing the documents and that the signatures do not appear to be his. Presumably, at trial, the court will be asked to infer that Mr Poliwka forged Mr Girgis' signature on the attachment.
3. The defendants say that the document examiner evidence goes only to Mr Poliwka's credibility.
4. A witness may be cross-examined as to credit, but the relevant question for present purposes is whether further evidence may be adduced to contradict the witness's response. It is further contended that evidence that only affects credit of an opposing witness is collateral and is not admissible unless it falls into one of a number of recognised exceptions. I accept that submission. As was stated by Mazza J in Liu v State of Western Australia:

... a fact that affects the credibility of a witness is a collateral fact.

1. I did not understand counsel for the plaintiffs to contest that the document examiner's report would not be relevant, and therefore would be inadmissible, if it only went to Mr Poliwka's credibility. Instead, counsel for the plaintiffs contended that the report was otherwise relevant as to various pleaded issues. (citations omitted)
2. I then referred to the parts of the pleaded case that counsel for the plaintiffs relied on to make good that submission. It was asserted that the document examiner's opinion was relevant to establishing the transactions and dealings by and between the first plaintiff, Mr Girgis, and the first defendant, Mr Poliwka. In particular, the evidence was said to go to their respective roles in investments and requests for finance made. The evidence was said to consume central issues concerning the plaintiffs' claim. Counsel for the plaintiffs made reference to pars 53, 53.1, 53.2, 114, 114.1 and 114.2 of the statement of claim, pars 17.4 and 24.6 of the defence and counterclaim and pars 5.4.2, 22 and 34 of the reply and defence to counterclaim.
3. In my 27 June 2018 reasons I then considered each of those parts of the pleaded case as relied on by the plaintiffs with a view to examining this question:

[W]ould Mr McGinn's opinion, namely that the evidence is more supportive of the proposition that the questioned signatures on the attachment to the email are completed by a person other than Mr Girgis than any other proposition, arguably rationally affect, either directly or indirectly, proof of the relevant parts of the pleaded case?[7]

1. I noted, however, that it would be sufficient if the document examiner's evidence had apparent relevance in this sense.[8]
2. After reviewing the parts of the pleaded case that the plaintiffs relied on to establish relevance, for the reasons I gave on 27 June 2018,[9] I was not satisfied that the proposed evidence of the document examiner had apparent relevance beyond impugning Mr Poliwka's credibility.[10] The intended evidence that the apparent signatures of Mr Girgis on the documents were completed by a person other than Mr Girgis did not rationally affect, either directly or indirectly, the factual assessment required as to the pleaded issues.[11]

1. On 13 July 2018 the plaintiffs filed a further re-amended reply and defence to counterclaim. The sole amendment was to par 22 which was amended in the following way:
   1. As to para 17.14 of the defence, the plaintiffs:

22.1. repeat paras 17.3.4 and 23.2.1 of the statement of claim;

22.2. deny that Mr Girgis agreed to take responsibility for marketing and business development in relation to the Hotel;

22.3. say that Mr Poliwka represented to Mr Girgis to the effect that Mr Poliwka would handle bookkeeping and accounting for the Midland Property and the Pub Business, and that Mr Poliwka did go on to handle bookkeeping and accounting and related matters for the Midland Property and the Pub Business including by Mr Poliwka responding to an email from Stewart Higgins of ME Bank dated 12 March 2009 (4:42pm) by submitting a documents (sic) purportedly on behalf of Mr Girgis purporting to set out Mr Girgis' assets and liabilities and purporting to have been signed as being true and correct by Mr Girgis but which was not signed by Mr Girgis; and

22.4. otherwise join issue with the defendants. (emphasis in original to show amendment)

1. Following the amendment the plaintiffs again applied, this time by letter dated 24 July 2018, for leave to adduce as expert evidence at trial the document examiner's report of Mr McGinn. The defendants responded by making an application to disallow the amendment.
2. Counsel for the defendants contended that the amendment should properly be seen as an attempt to circumvent my ruling of 27 June 2018. I do not accept the pejorative nature of that contention. I do accept, however, that the amendment was intended to plead the document examiner's report into relevance. That inference arises from the timing of the amendment (all the more so given that the allegation had not been introduced despite two earlier amendments). Also, when asked, counsel for the plaintiffs did not dispute that the 27 June 2018 ruling was the impetus for the amended plea.[12]
3. Counsel for the defendants did not seriously contest the proposition that the document examiner's report was of apparent relevance if the amended par 22.3 was allowed to stand.[13] The most that was said was that the defendants' witness statements do not contradict Mr Girgis' foreshadowed evidence that the impugned handwriting is not his and Mr McGinn's report does not help establish who in fact signed the documents.[14] But, as I observed in my 27 June 2018 ruling, relevance is determined by reference to the pleaded issues[15] rather than the absence of any contradictory evidence on the part of the defendants.
4. As to whether, following the amendment to par 22 of the reply, there was an issue to which Mr McGinn's report was of apparent relevance, counsel for the defendants accepted that the amendment took the original allegation in the statement of claim a little further[16] and there was technically an issue on the pleadings.[17] It was said, however, that this was only because the factual assertion was introduced in a reply and there was thus a deemed joinder insofar as the defendants could not respond to the reply without leave.[18]
5. I considered it was appropriate to give the defendants leave to file and serve a rejoinder to the amended plea. Thus the defendants were afforded an opportunity to demonstrate whether the apparent issue on the pleadings was technical or actual. I informed the parties that I would take into account the content of any rejoinder in dealing with the application.[19]
6. The defendants filed a rejoinder on 26 September 2018. Generally, it joins issue with the further re-amended reply and defence to counterclaim. As to par 22.3 of the reply, the defendants:

2.1 repeat paragraphs 17.14 of the Re-Amended Defence and Counterclaim dated 16 September 2016;

2.2 admit that Mr Poliwka responded to an email from Stuart Higgins of ME Bank dated 12 March 2009 at 4.42pm, including submitting documents on behalf of Mr Girgis setting out Mr Girgis' assets and liabilities;

2.3 admit that the documents purported to have been signed by Mr Girgis;

2.4 do not know, and therefore do not admit that any of the said documents were not signed by Mr Girgis; and

2.5 otherwise does not admit paragraph 22.3 of the Reply. (emphasis added)

1. Paragraph 17.14 of the defence and counterclaim is reproduced below (see par 72). Relevantly, it asserts an agreement between Mr Girgis and Mr Poliwka. It is said that: (1) Mr Girgis would take responsibility for marketing and business development in relation to the hotel (the pub business conducted at the Midland property); and (2) Mr Poliwka would handle bookkeeping and accounting for the hotel. The first part of the alleged agreement is denied in par 22.2 of the reply. Then, in par 22.3 of the reply, the second part of the alleged agreement is put in terms of a representation rather than an agreement. It is also pleaded that this is in fact what happened, ie that Mr Poliwka did go on to handle bookkeeping and accounting and related matters for the Midland property and the pub business.
2. The terms of the rejoinder establish that there are pleaded issues as to at least two matters. First, whether Mr Girgis signed the documents submitted by Mr Poliwka to ME Bank on 12 March 2009 (rejoinder par 2.4). Second, whether Mr Poliwka did handle bookkeeping and accounting and related matters for the Midland property and the pub business (rejoinder par 2.5).
3. As to the second matter, in oral submissions counsel for the defendants suggested that it was common ground between the parties that Mr Poliwka did in fact handle the bookkeeping and accounting.[20] It was said to be not in dispute that Mr Poliwka handled the bookkeeping.[21] However, in answer to a question by me, counsel accepted that there was no plea in the defence that Mr Poliwka actually did the bookkeeping and accounting.[22] It was this that was said to mean that, due to the deemed joinder, there was - in counsel for the defendants' submission - a technical issue rather than a real issue.[23]
4. The rejoinder does not admit that in fact Mr Poliwka handled the bookkeeping and accounting and related matters for the Midland property and the pub business. The defendants did not take the opportunity presented by the grant of leave to file a rejoinder to admit the allegation. There is, as the plaintiffs submit, an express joinder of issue.[24] Accordingly, despite what was said in oral argument, I must approach the applications before me on the footing that there is a pleaded issue as to whether Mr Poliwka did handle bookkeeping and accounting and related matters for the Midland property and the pub business.
5. In any case, as the plaintiffs' supplementary submissions dated 15 October 2018 record, the rejoinder confirms that there is an issue between the parties as to whether the documents submitted by Mr Poliwka to ME Bank, as apparently bore Mr Girgis' signature, were in fact signed by Mr Girgis.
6. Accordingly, if the amendment to par 22.3 of the reply is permitted to stand in the terms as pleaded, the proposed document examiner's expert evidence of Mr McGinn has apparent relevance. Indeed, it will be of direct relevance to the issue introduced by par 22.3 of the amended reply, namely, whether the documents purportedly signed by Mr Girgis were 'not signed by Mr Girgis'. Mr McGinn's proposed evidence is logically probative of whether the purported signatures on the documents are those of Mr Girgis or another. The real question for determination on the two applications is whether the amendment ought to be allowed to remain in its present form.

Plaintiffs' argument for leave irrespective of par 22.3 amendment

1. I am satisfied that Mr McGinn's report has apparent relevance given the current terms of par 22.3 of the reply as amended. There is apparent relevance due to the words 'but which was not signed by Mr Girgis' in the addition to par 22.3 (refer to par 17 above). Whether the amendment should be allowed to stand, however, is a matter for further consideration.
2. The plaintiffs contended that there was apparent relevance in any event,[25] ie even if the amendment was disallowed.
3. The argument as to relevance was advanced on the basis that the expert evidence was relevant not only to credit but also as to the relationship between Mr Girgis and Mr Poliwka.[26] Counsel for the plaintiffs referred to the evidence having apparent relevance to:[27]
   • whether and how Mr Girgis relied on the alleged advice he was given; and
   • if so, whether that leads to an inference that Mr Girgis was given the alleged advice.
4. Counsel for the plaintiffs developed this by reference to various parts of the pleaded case. Specifically, I was taken to pars 17.3, 23.2, 28.2, 40.1, 40.2, 53, 54, 89.2, 89.4 and 89.5 of the statement of claim, par C of the prayer for relief, pars 17.14 and 28 of the defence and par 22 of the reply. It was said that these paragraphs were not analysed at the last hearing.[28] I was invited to consider amending or cancelling my previous case management direction that leave not be granted to adduce Mr McGinn's report at trial.
5. I do not accept the submission that all of the parts of the pleadings now relied upon were not analysed at the last hearing. To the contrary, as I recorded in my 27 June 2018 ruling, I then reviewed and addressed the specific parts of the pleaded case that counsel for the plaintiffs relied on.[29] I specifically addressed the case for apparent relevance based on par 53 of the statement of claim,[30] par 17.14 of the defence[31] and par 22 of the reply (before the current amendment)[32] as it was then presented to me by counsel for the plaintiffs.
6. The submission put as to the significance of par 22 of the reply was, however, in somewhat different terms at the earlier hearing. In the plaintiffs' submissions for the purpose of the 27 June 2018 hearing counsel, in referring to par 22 of the reply, directed attention to alleged representations made by Mr Poliwka.[33] For the present hearing counsel for the plaintiffs instead focussed on whether Mr Poliwka did go on to handle bookkeeping and accounting matters for the Midland property and the pub business.[34]
7. Counsel for the plaintiffs accepted responsibility for the pleaded matters now relied on not being raised at the last hearing.[35] Among other things, counsel stated:

Those paragraphs were not analysed at the last hearing. I accept that. And the problem is mine, not your Honour's. Your Honour is dealing with what's put before you, and I accept I got the cart before the horse. I kind of approached the application on the basis that the parties had in their witness statements dealt with this issue.

...

I didn't refer to the paragraphs I've just mentioned. I accept that, your Honour, but when one looks at those paragraphs, the outcome is that this expert evidence is and always was relevant, and this being an application to cancel or amend a case management direction, and I accept responsibility for the problem that has happened because I argued it based on the witness statements as saying, well, it shows there's an issue and I didn't hark back to the pleadings enough.

So I've caused the problem and I accept that and I apologise for it ...[36]

1. Counsel for the plaintiffs referred to the court's power to amend or cancel previous case management directions. I accept that there is a general power to re-visit an interlocutory order and a specific power, under O 4A r 2(3)(b) of the Rules of the Supreme Court 1971 (WA), to amend or cancel another case management direction.
2. Essentially, as Corboy J found in Commonwealth Bank of Australia Ltd v Saraceni:[37]
   • A court may discharge or vary an interlocutory order in its inherent jurisdiction.
   • That will be so even if the order was made by consent.
   • An order that has been entered may be discharged or varied.
   • The court may vary or discharge an order that deals with 'substantive' rather than 'procedural' rights and obligations.
   • The overriding consideration is the 'interests of justice' in the particular case.
3. Corboy J also referred to a statement that the power to discharge or vary an order should be exercised with care and only in the most unusual circumstances. His Honour went on to observe:

It may well be that a discretion to discharge or vary an interlocutory order according to the interests of justice in the particular case should not be further circumscribed by imposing a requirement that the power only be exercised in the most unusual circumstances. However, I accept that the interests of justice must encompass the interests of the parties and the public in the efficient management of the interlocutory processes involved in civil litigation. Efficient and economical case management will generally require interlocutory disputes and associated issues to be finally determined as they arise. It is, in my view, in that sense that it may be said that the circumstances in which a court will revisit an interlocutory order that it has previously made will be rare.[38] (emphasis added)

1. I agree. In most cases is antithetical to efficient and economical case management, and contrary to the objects in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA), to allow a party to re-visit case management directions made after a contested hearing and determination. I accept, however, that finality is of lesser weight in this interlocutory context. So too it is relevant that most case management directions deal with procedural matters rather than substantive rights and obligations. But a litigant should not expect as a matter of course that the court will accept that it is in the interests of justice to amend or cancel a previous case management direction following a contested hearing on which it was unsuccessful.
2. The basis on which I am asked to re-visit my earlier 27 June 2018 ruling - and thereby determine that Mr McGinn's expert report has apparent relevance even if the amendment to par 22.3 of the reply is disallowed - is that parts of the pleaded case now relied on were not analysed at the last hearing. Counsel for the plaintiffs has accepted that this was due to the way he presented the case at the earlier hearing. In the circumstances of the present case I consider that is not a proper or adequate basis on which to consider amending or cancelling my previous case management direction. It is not in the interests of justice to do so. Ordinarily a litigant is bound by the way he or she presents a case. There is nothing unusual about the present case that ought to enable the plaintiffs to litigate the question afresh by reference to additional parts of the pleaded case.
3. In so concluding I have had regard to the consequences that result for the plaintiffs from my earlier ruling. The consequences of the plaintiffs not being able to adduce Mr McGinn's expert evidence at trial are not so substantial that it is in the interests of justice that the plaintiffs be permitted to re-litigate by advancing matters that could have been raised at the earlier hearing but were not. It will remain open, at trial, to contend that the signatures on the documents are not those of Mr Girgis.
4. I have also, in concluding that I should not allow in effect a general re-opening of the question of apparent relevance, had regard to the various parts of the pleadings that counsel for the plaintiffs referred to. As will be seen, that was necessary to address the strike-out application.
5. Were it obvious that my earlier ruling as to lack of apparent relevance was incorrect because some part of the pleadings was not brought to my attention, it might have been appropriate to reconsider the earlier case management direction as the plaintiffs invited me to do. I am not, however, satisfied that there is any such obvious error. The effect of Mr McGinn's report is that the evidence is more supportive of the proposition that the purported signatures on the attachments to the email responding to ME Bank's 12 March 2009 email are those of a person other than Mr Girgis. As will be seen, I consider below the parts of the pleadings that counsel for the plaintiffs referred to in support of the contention of actual relevance. With the exception of the amendment to par 22.3 of the reply, the pleaded issues are concerned with other matters.
6. Accordingly, I do not accept that it is appropriate to consider granting leave to adduce the document examiner's report other than by reference to its apparent relevance given the terms of par 22.3 of the reply as amended. I reject the plaintiffs' invitation to consider amending or cancelling my previous case management direction more generally. It is not in the interests of justice to effectively discard or discharge my 27 June 2018 ruling by determining that Mr McGinn's expert evidence is and always was relevant due to the pleaded case as it stood before the amendment to par 22.3 of the reply.
7. It is, however, selfevident that I should reassess the question of leave by reference to the amendment in par 22.3 of the reply. Indeed, counsel for the defendants did not contend otherwise.
8. The plaintiffs were entitled to amend their pleadings without leave under O 21 r 3(1) of the Rules of the Supreme Court 1971 (WA). If the amendment survives the defendants' disallowance application there will be a material change in circumstances that justifies the reconsideration. The question of leave should be assessed by the new plea as has been permitted under the processes of the court.

The basis for the defendants' disallowance application

1. By O 21 r 3(3) a party served with a pleading amended under O 21 r 3(1) may apply for an order that the amendment be struck out. If the case manager is satisfied that, had there been an application for leave, the amendment or part of it would have refused, the case manager must order that the amendment or that part of it be struck out.
2. The court will not give leave to a party to make a defective amendment.[39]
3. The defendants advanced three grounds for the strike-out application. First, that the amendment introduced material facts that do not disclose or have relevance to any reasonable cause of action. Second, that the amendment was embarrassing. Third, that the amendment was an abuse of process. Thus, the grounds relied on by the defendants echo those found in O 20 r 19(1)(a) (no reasonable cause of action), O 20 r 19(1)(c) (prejudice, embarrass or delay the fair trial of the action) and O 20 r 19(1)(d) (otherwise an abuse of process).
4. In the peculiar circumstances of this case the real question is whether the material facts introduced by the amendment to par 22.3 of the reply are embarrassing.
5. It is inapposite to refer to a plea in a reply as not disclosing a reasonable cause of action. The purpose of a reply is to meet the requirements of O 20 r 9.[40] It is to identify matters which make a defence not maintainable,[41] which might otherwise take the defendant by surprise[42] or which raise issues of fact not arising out of the preceding pleading.[43]
6. In short, the purpose of a reply is to raise new facts which were not necessary ingredients of any cause of action pleaded in the statement of claim, but which are necessary to meet some issue raised by the defence.[44] Accordingly, it is not necessary that a plea in a reply disclose a good cause of action - for the elements of the cause of action must be pleaded in the statement of claim rather than a reply. Indeed, a reply must not raise any new cause of action.[45]
7. What is properly pleaded in a reply is to be understood by the different function served by that form of pleading as provided for in O 20 r 9. The real question is whether it pleads matters that are relevant - or at least arguably relevant - to answering the defence. Alternatively, it might be necessary to include something in a reply as it has relevance to material facts in the statement of claim in the context of what is pleaded by way of defence. But here too the reply is really seeking to answer the defence.
8. If, however, the impugned plea is not relevant in this sense it ought not be struck out as not disclosing a reasonable cause of action. As the plea is superfluous, given the true function of a reply, it is, I consider, better struck out on the ground that it may embarrass the fair trial of the action.
9. A pleading may be struck out on the ground that it may prejudice, embarrass or delay the fair trial of the action. The ground evokes a composite phrase.[46] The accepted categories include that: (1) the pleading is evasive; (2) the pleading conceals or obscures the real questions in controversy; (3) the pleading is ambiguous or not reasonably intelligible; (4) the pleading raises immaterial or irrelevant issues; (5) the pleading fails to confine the issues or state the case of the party in question with reasonable particularity; and (6) the pleading raises a case in terms which are simply too general.[47] For present purposes the issue is whether the reply raises immaterial or irrelevant issues.
10. The ground of abuse of process was advanced on the basis that the sole purpose of the amendment was to allow the reception into evidence of Mr McGinn's expert report.[48] The defendants contended that the amendment ought not be regarded as genuinely augmenting any existing cause of action[49] and was properly seen as an attempt to circumvent my ruling of 27 June 2018.[50]
11. It is not necessary that a plea in a reply augment any existing cause of action. Accordingly, mere failure to do so does not bespeak abuse of process.
12. If the sole purpose (or perhaps even the predominant purpose) of the amendment was to provide a platform for the reception of the document examiner's report so as to attack Mr Poliwka's credit there would be an abuse of process. But this would require me to make a factual finding to that effect in the absence of any evidentiary materials other than the circumstances and timing of the two applications. I might be able to draw such an inference if (and, in the absence of any additional evidentiary materials, only if) the amendment to the reply otherwise raised an immaterial or irrelevant issue. But the inference is not inescapable. And, if - other than providing a basis to attack credit - the amendment does no more than raise an immaterial or irrelevant issue, it will be a plea that will prejudice, embarrass or delay the fair trial of the action. Accordingly, the amendment may instead be struck out on the ground that the material facts introduced by the amendment to par 22.3 of the reply are embarrassing; it is not necessary to go on and address the necessary factual foundation to determine that there is an abuse of process.
13. I thus intend to examine the question of whether the material facts introduced by the amendment to par 22.3 of the reply may prejudice, embarrass or delay the fair trial of the action. The amendment ought to be struck out as embarrassing if it raises an immaterial or irrelevant issue.

Does the amendment to par 22.3 raise an immaterial or irrelevant issue?

1. The defendants' contention was that the amendment introduced allegations that were irrelevant to the Midland property claim or any other cause of action.[51] The insistence that the amendment be relevant to a cause of action is misplaced. It is enough if the plea raises matters that are relevant - or at least arguably relevant - to answering the defence. The defendants appear to recognise that this is sufficient because it is later contended that the amendment is not responsive to any positive allegation that is put by the defendants in their defence.[52]
2. In substance, however, the defendants' contention was that the amendment raised a false issue[53] which went nowhere in supporting the plaintiffs' pleaded case or negating the defendants' defence to that pleaded case.[54] It was said that the amendment only went to credit and there was nothing else that it was relevant to.[55] While it was accepted that par 22.3 unamended provided relevant context, it was said that the amendment to augment par 22.3 to provide specific reference to a series of emails was not necessary to provide relevant context.[56]
3. By contrast, drawing the battleline for the determination of the strike-out application, the plaintiffs contended that the allegation in the amendment was of 'central' relevance - it was said to be 'central to the whole matter of the advice that was given, the breach of the duty of care and in particular the reliance on that advice'.[57] As to relevance I also understood counsel for the plaintiffs to rely on the matters referred to in saying that the document examiner's report had apparent relevance irrespective of the amendment, ie that the amendment was relevant so far as it went to the relationship between Mr Girgis and Mr Poliwka.[58]
4. In contending that the plea the subject of the amendment in par 22.3 of the reply was relevant in responding to the defence, and relevant in furtherance of the claims pleaded in the statement of claim given the defence, counsel for the plaintiffs referred me to Northern Beaches Council v Built Development (Manly) Pty Ltd.[59] Counsel pointed out that in that case it was held that particular contextual matters might be relevant in determining what representations were impliedly conveyed and whether the representations were relied on.
5. As a matter of principle that cannot be doubted. It should be noted, however, that in that case it was the defendant who relied on the contextual matters so as to gainsay the making of the alleged representation and the alleged reliance. I also note that the Court of Appeal clarified that the claims could properly be resisted by reference to contextual matters known at the relevant times.[60] Plainly the timing of the alleged contextual matter must be considered to assess whether there is any logical connection between it and the assertion that there was, or was not, a pleaded representation or matter of advice or reliance thereon.
6. Moreover, it would be wrong to suggest that the statements and outcome in Northern Beaches Council v Built Development (Manly) Pty Ltd are determinative of the strike-out application before me. The decision turned on the specific pleaded case that was before the court. So too I must examine the nature of the pleaded case in these proceedings.

1. In assessing whether there is relevance in the sense required for a reply it is best to commence by considering the pleas to which par 22.3 of the reply is said to be immediately responsive. That provides the initial context for the relevance question.
2. Paragraph 17 of the statement of claim is part of a section headed 'Purchase of The Eastern Hotel Midland'.
3. At par 17.1 the plaintiffs plead certain alleged representations, said to have been made in mid-August to early October 2008, as to the Midland property. Among other things, it is said that Mr Poliwka represented that he had conducted due diligence investigations and that the investment would be profitable. There is a reliance plea (par 17.2). At par 17.3 it is then pleaded that:

Mr Poliwka advised the plaintiffs to the effect that Mr Girgis and Mr Poliwka should together invest in the Midland Property by:

17.3.1 acquiring the assets and assuming the liabilities of the entity which owned the Midland Property, including the bank loan referred to in para 17.1.9A, by becoming beneficial owners of that entity; and

17.3.4 having Mr Poliwka oversee all aspects of the investment.

1. Other alleged representations are pleaded in par 17A. Paragraphs 18 to 19 deal with various entities, ownership and leasehold structures and financial arrangements. At par 20 the plaintiffs plead facts said to exist when Mr Poliwka made the alleged representations in pars 17.1 and 17A and gave the alleged advice in par 17.3. Further context is pleaded including alleged non-disclosures (pars 20A - 21). It is then alleged that certain representations constituted misleading or deceptive conduct (pars 21A - 22). At par 23 it is pleaded that in reliance on the representations and advice (including the par 17.3 advice) the plaintiffs, among other things: (1) adopted the advice pleaded in par 17.3 (par 23.1); and (2) caused or permitted Mr Poliwka to oversee all aspects of their investments in the Midland property and the pub business (par 23.2.1).
2. At par 50 the plaintiffs plead that, contrary to the advice given, they have received no return and instead are likely to incur losses from investing in the Midland property and the pub business. A misleading conduct claim is pleaded relying on, among other things, the alleged advice referred to in par 17.3 (par 51). There is an alternative claim in negligence based in part on the alleged advice (pars 53 - 54). At par C of the prayer for relief the plaintiffs seek damages in tort.
3. The defendants respond to par 17 of the statement of claim in par 17 of the defence. There is a general denial of the whole of the plea in par 17 of the statement of claim. Then the defendants state their account of what is said to have occurred between the parties over the period mid-August 2008 to early October 2008. As part of the defendants' version of events it is pleaded at par 17.14 that:

Mr Girgis and Mr Poliwka agreed that Mr Girgis would take responsibility for marketing and business development in relation to the Hotel, and Mr Poliwka (through FWA [referring to the third defendant First Western Administration Pty Ltd]) would handle bookkeeping and accounting for the Hotel.

1. The defence otherwise denies the relevant parts of the statement of claim as relied on by the plaintiffs. See par 23 (as to pars 23.1 and 23.2), par 53 (as to par 53) and par 54 (as to par 54).
2. It will be recalled that par 22 of the reply responds to par 17.14 of the defence. Par 22.1 repeats pars 17.3.4 and 23.2.1 of the statement of claim (dealing with the advice that Mr Poliwka should oversee all aspects of the investment and the alleged reliance on that advice). There is a denial that Mr Girgis agreed to take responsibility for marketing and business development (par 22.2). Instead there is the alleged representation that Mr Poliwka would handle bookkeeping and accounting and that he went on to do so (par 22.3).
3. In addition to the pleas I have referred to in pars 68 to 74 above, which provide the immediate context for the impugned amendment to par 22.3 of the reply, counsel for the plaintiffs referred me to a number of other paragraphs of the pleadings. In the main, these drew on the alleged advice as pleaded in par 17.3 of the statement of claim.
4. Specifically, in submitting that par 22.3 of the reply directly affected matters in issue centrally relevant to the negligence case (and was relevant context with respect to the misleading conduct claims) counsel for the plaintiffs also referred to the following parts of the statement of claim:[61]

(1) pars 28 and 28.2.1: these allege continuing reliance on the par 17.3 advice, in very similar terms to par 23 and 23.2.1, but here in the context of the claim as to the vessel and charter business;

(2) pars 40, 40.1 and 40.2: par 40 also alleges reliance on 'advice given by Mr Poliwka from time to time pleaded above'. It is said that in reliance on the advice Mr Girgis provided a guarantee and indemnity (par 40.1) and the plaintiffs caused or permitted the accounting treatment of loan funds to be decided by Mr Poliwka in consultation with certain accountants (par 40.2); and

(3) pars 84, 89.2, 89.4 and 89.5: par 84 refers to other alleged representations and advice on the part of Mr Poliwka over the period of about late 2009 to February 2010. This included, at par 84.1.3, that Mr Poliwka would take certain action on the plaintiffs' behalf. Paragraph 89 is then a reliance plea in which, among other things, the plaintiffs are said to have acted in reliance on the advice by causing or permitting Mr Poliwka to conduct certain negotiations. These pleas are in the context of the claim as to the Joondalup property.

1. I observe, for completeness, that there are various other references to the alleged advice in par 17.3 of the statement of claim that were not relied on by counsel for the plaintiffs in the course of argument (eg pars 33 and 51). Similarly, par 23.2.1 is also referred to elsewhere in the statement of claim (eg par 36) but was not relied on by counsel for the plaintiffs in that respect.

1. The amendments made to par 22.3 of the reply (which are all the subject of the defendants' strike-out application) may be broken down into three components:

(1) the addition of the words 'and related matters' to the description of that which was undertaken by Mr Poliwka in relation to the Midland property and the pub business (par 22.3 previously only referring to bookkeeping and accounting matters);

(2) the particularisation that what was done included Mr Poliwka responding to the ME Bank email dated 12 March 2009 by submitting documents purporting to be on behalf of Mr Girgis and setting out Mr Girgis' assets and liabilities; and

(3) the additional allegation that those documents were purported to have been signed as being true and correct by Mr Girgis but were not in fact signed by Mr Girgis.

1. I consider the first two components of the amendment to par 22.3 to be uncontroversial additions to the plea which ought not be struck out. I will commence my conclusion as to whether the amendment raises immaterial or irrelevant issues by explaining why this is so.
2. The defendants never sought to strike-out the former par 22.3. They were correct to do so. Paragraphs 22.1 and 22.2 of the reply were responsive to par 17.14 of the defence. So too was the alleged representation that is found at the commencement of par 22.3 of the reply. The plea that Mr Poliwka did go on to handle the bookkeeping and accounting for the Midland property and the pub business is then a proper plea. If it is established that this occurred it may assist an inference that there was advice as pleaded in par 17.3 of the statement of claim or a representation as pleaded in par 22.3 of the reply, rather than the agreement as pleaded in par 17.14 of the defence.
3. This analysis explains why counsel for the defendants was correct to accept, in his oral submissions in reply, that in its unamended state par 22.3 of the reply provided relevant context.[62]
4. Once it is accepted that the former par 22.3 was properly pleaded, it follows that the first two components of the amendment to par 22.3 are uncontroversial. The words 'and related matters' simply extend the description of what Mr Poliwka did without altering its innate character. And the reference to the sending of the email to ME Bank is no more than a particularisation of one of the things allegedly done by Mr Poliwka in handling the bookkeeping and accounting and related matters for the Midland property and the pub business. It is, as counsel for the plaintiffs submitted, an example;[63] but that does not make this aspect of the amendment objectionable.
5. Accordingly, I will not strike out those two components of the amendment to par 22.3 of the reply. That, however, is not sufficient for leave to adduce Mr McGinn's report. The apparent relevance of the report is not due to those two aspects of the amendment but rather the further plea that the documents accompanying the email, as purported to be signed by Mr Girgis, were in fact not signed by Mr Girgis.
6. I turn then to consider whether that additional pleaded issue - namely whether the documents accompanying the email, as purported to be signed by Mr Girgis, were in fact not signed by Mr Girgis - is immaterial or irrelevant for the purposes of the reply.
7. The confined nature of the plea should be appreciated. The plaintiffs allege only that Mr Girgis did not sign the documents. The plaintiffs do not plead who is alleged to have signed the documents using Mr Girgis' purported signatures. The materiality and relevance of the additional issue as pleaded must be assessed on the basis that the factual contention being raised for adjudication at trial is whether Mr Girgis did not sign the documents.
8. The impugned amendment puts in issue whether, in mid-March 2009, documents were submitted by Mr Poliwka to ME Bank purportedly on behalf of Mr Girgis and bearing his signature that were not in fact signed by Mr Girgis. Contrary to the plaintiffs' submissions, I do not accept that a positive finding to that effect will either:

(1) answer, or arguably answer, an issue raised by the defence (in particular the matters as pleaded in par 17.14 of the defence to which par 22.3 of the reply is said to be responsive); or

(2) support, or arguably support, relevant matters in the statement of claim that have been put in issue in the defence or relevant matters in the reply.

1. The alleged circumstance that Mr Girgis did not, in mid-March 2009, sign the documents submitted to ME Bank will not affect disposition of the issue of whether, in October 2008, there was an agreement that Mr Girgis would take responsibility for marketing and business development in relation to the hotel while Mr Poliwka would handle bookkeeping and accounting.[64] I accept that post-contractual conduct may inform the question of whether a contract was formed. But in the present context whether Mr Girgis did or did not sign the documents has no bearing on whether there was an agreement as alleged by the defendants. For example, let it be assumed that Mr Girgis did sign the documents in mid-March 2009. That in no way assists the defendants in establishing their alleged agreement of October 2008. There is no logical connection between the two events. The documents may have been signed by Mr Girgis whether or not there was an agreement as asserted by the defendants. The converse is also true. The probability that there was an agreement as asserted is not rationally affected by whether Mr Girgis signed the documents or did not do so.
2. So too, for essentially the same reasons, the additional fact contended for by the amendment to par 22.3 of the reply will not assist the plaintiffs in establishing their pleaded case as to the alleged mid-August to October 2008 advice[65] - including that Mr Girgis should oversee the investment - or the alleged representation that Mr Poliwka would handle bookkeeping and accounting for the Midland property.[66] The probability that those things occurred in mid-August to October 2008 is not rationally affected by whether, in March 2009, Mr Girgis signed the documents or did not do so. The additional pleaded issue is essentially neutral to those issues.
3. I also cannot see a logical connection between the issue that is the subject of the remaining component of the par 22.3 amendment and whether the plaintiffs relied on the alleged advice pleaded in par 17.3 of the statement of claim.[67] The probability that the plaintiffs invested in the Midland property (in October 2008)[68] and caused Mr Poliwka to oversee the investment in the Midland property and the pub business (including handling bookkeeping and accounting) in reliance on the alleged advice (alleged to have been provided in mid-August to October 2008) will not rationally be affected by a finding that Mr Girgis did not sign the documents as submitted to ME Bank in March 2009.
4. The most that can be said is that, if in fact Mr Girgis did not sign the documents, that is consistent with Mr Poliwka overseeing the investment and handling the bookkeeping and accounting and related matters. But, in my opinion, were it to be that Mr Girgis did sign the documents, that is not inconsistent - indeed it is also consistent - with Mr Poliwka overseeing the investment and handling the bookkeeping and accounting and related matters. The pleaded issue as introduced by the amendment to par 22.3 of the reply is neutral.
5. The plaintiffs' contention that the question of whether the documents were not signed by Mr Girgis was not an immaterial or irrelevant issue rested, in substance, on the proposition that success in establishing this fact at trial would lead to inferences that answered the defendants' case and supported the plaintiffs' case more generally.[69] (I interpose that this was advanced in terms of pleaded factual issues rather than Mr Poliwka's credit.) I have assessed that proposition by reference to the specific parts of the pleadings that counsel for the plaintiffs relied on. The proposition is not made out by reference to the pleadings. The other pleaded matters referred to by counsel for the plaintiffs are not rationally affected by whether Mr Girgis did not sign the documents.
6. Whether the documents were in fact not signed by Mr Girgis (although purporting to be) is correctly characterised as a 'false issue' as was submitted by counsel for the defendants. In this respect the amendment to par 22.3 of the reply raises an immaterial and irrelevant issue.
7. In coming to this conclusion I have not overlooked the plaintiffs' broader submission that the allegation was of relevance in as much as it went to the relationship between Mr Girgis and Mr Poliwka.
8. There are two difficulties with that submission. First, relevance as to the pleaded issues should be established by reference to the pleaded allegations themselves rather than resort to generalities. The reference to 'relationship' begs the question: what relationship? Here the relevant relationship is that alleged in the form of the alleged dealings between the parties as provided for in the pleadings. I have examined the particular parts of the pleading that the plaintiffs relied on and am not satisfied as to relevance. Second, the submission was predicated on the unstated premise that the allegation established, by way of the alleged 'relationship', control on the part of Mr Poliwka whereby he would take it upon himself to do that.[70] But the impugned plea does not go that far. The allegation is only that the documents as submitted were not signed by Mr Girgis.
9. For these reasons the third aspect of the amendment to par 22.3 of the reply, as identified in par 78 above, raises an immaterial and irrelevant issue. It is a pleading that is 'embarrassing' in the sense as described in the authorities.
10. Often, given the modern approach to pleadings, the court will not be too concerned about the raising of a single irrelevant issue. Also, mere embarrassment is not sufficient to justify striking out a pleading or part of a pleading. The impugned plea must be such that it will prejudice, embarrass or delay the fair trial of the action. In this respect, as indeed in most procedural matters, the touchstone must be to act so as best to achieve the goal in O 1 r 4A and the objects in O 1 r 4B(1) of the Rules of the Supreme Court 1971 (WA). That guideline has recently been recognised in relation to the power to disallow an amendment pursuant to O 21 r 3(5).[71]
11. Having regard to those matters I am satisfied that the embarrassing portion of the amendment to par 22.3 of the reply should be struck out.
12. The amendment raises a false issue. If not struck out the false issue will be relied on to adduce expert evidence in the form of Mr McGinn's document examiner's report. A further front will be opened in what is already a large and complex litigation that is estimated to require a trial of 25 days. In my opinion, disallowing the amendment is consistent with the goal in O 1 r 4A and best achieves the objects in O 1 r 4B. For the reasons I have given the amendment does not raise an issue in contention. Disallowing the amendment will promote the just determination of the litigation, more efficiently dispose of the business of the court and maximise the efficient use of the parties' and the court's resources.

1. I will order that the amendment to par 22.3 of the reply is disallowed to the extent that the following words are struck out:

and purporting to have been signed as being true and correct by Mr Girgis but which was not signed by Mr Girgis (emphasis in original to show amendment)

1. It is that part of par 22.3 of the amended reply that provides the apparent relevance for Mr McGinn's expert report. Without it, as I am not persuaded that I should re-visit my earlier 27 June 2018 ruling and find that Mr McGinn's expert report has apparent relevance even if the amendment to par 22.3 of the reply is disallowed, the renewed application for leave to adduce Mr McGinn's expert report must be dismissed. I will so order.
2. I will hear from the parties as to the costs of the two applications.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Girgis v Poliwka [2015] WASC 446; Girgis v Poliwka [No 2] [2017] WASC 9; Girgis v Poliwka [No 3] [2018] WASC 133.

[2] Girgis v Poliwka [2016] WASCA 158.

[4] Girgis v Poliwka [No 3] [4] - [8].

[6] 27 June 2018 reasons [11] - [13].

[9] 27 June 2018 reasons [34] - [50].

[10] 27 June 2018 reasons [46], [50].

[18] Defendants' Reply Submissions dated 6 September 2018 par 2; ts 153, 157.

[24] Plaintiffs' Supplementary Submissions dated 15 October 2018 par 4.

[25] Plaintiffs' Submissions dated 30 August 2018 pars 10, 15 - 16, 24; ts 162 - 163, 178.

[30] 27 June 2018 reasons [34] - [36].

[31] 27 June 2018 reasons [37] - [38].

[32] 27 June 2018 reasons [42] - [43].

[33] Plaintiffs' Reply Submissions dated 15 May 2018 par 33.

[34] Plaintiffs' Submissions dated 30 August 2018 pars 3.2, 4 - 5, 7, 10, 15 - 16, 24.

[37] Commonwealth Bank of Australia Ltd v Saraceni [2013] WASC 115 [9] - [10].

[38] Commonwealth Bank of Australia Ltd v Saraceni [11].

[39] Nyoni v Patterson [2012] WASCA 171 [38].

[40] See Rules of the Supreme Court 1971 (WA) O 20 r 5(1).

[41] Rules of the Supreme Court 1971 (WA) O 20 r 9(1)(a).

[42] Rules of the Supreme Court 1971 (WA) O 20 r 9(1)(b).

[43] Rules of the Supreme Court 1971 (WA) O 20 r 9(1)(c).

[44] See eg Duke Group (in liq) v Arthur Young (No 13) (1991) 5 ACSR 212, 216 - 217; Harris Scarfe Ltd (in liq) v Ernst & Young [2005] SASC 113 [90]; Adelaide Steamship Co Ltd v Spalvins [1999] FCA 781 [88].

[45] Williamson v London and North Western Railway Co (1879) 12 Ch D 787, 793; University of Western Australia v Gray [No 17] [2007] FCA 924 [42(8)].

[46] Bertola v Australia and New Zealand Banking Group Ltd [2016] WASC 165 [21].

[47] DM Drainage and Constructions Pty Ltd v Karara Mining Ltd [2014] WASC 170 [34]; David Clarke Air Conditioning Pty Ltd ATF David Clarke Air Conditioning Trust v Quann [2016] WASC 73 [15]; Bertola v Australia and New Zealand Banking Group Ltd [21]; Insurance Commission of Western Australia v Woodings [No 2] [2017] WASC 372; (2017) 124 ACSR 45 [33].

[48] Defendants' Submissions dated 16 August 2018 par 5.

[49] Defendants' Submissions dated 16 August 2018 par 6.

[50] Defendants' Submissions dated 16 August 2018 par 7.

[51] Defendants' Submissions dated 16 August 2018 par 8.

[52] Defendants' Submissions dated 6 September 2018 par 19.

[53] See eg Defendants' Submissions dated 6 September 2018 par 16; ts 156 - 157.

[54] See eg Defendants' Submissions dated 16 August 2018 pars 2, 6, 8 - 16; Defendants' Submissions dated 6 September 2018 pars 4 -16, 19; ts 152 156, 159 - 160, 181 - 182.

[57] ts 162. See also Plaintiffs' Submissions dated 30 August 2018 pars 2 - 9, 16, 20 - 24; ts 160 - 168, 170, 172, 183.

[58] See par 32 above.

[59] Northern Beaches Council v Built Development (Manly) Pty Ltd [2018] NSWCA 193 [22], [24] - [26].

[60] Northern Beaches Council v Built Development (Manly) Pty Ltd [26].

[61] See ts 165 - 168. See also ts 160 - 162, 183.

[64] See Further Re-Amended Defence and Counterclaim dated 14 September 2018 par 17.14.

[65] See Third Further Re-Amended Statement of Claim dated 31 August 2018 par 17.3.

[66] See Further Re-Amended Reply and Defence to Counterclaim dated 13 July 2018 par 22.3.

[67] See primarily Third Further Re-Amended Statement of Claim dated 31 August 2018 pars 23.1, 23.2.1; Further Re-Amended Reply and Defence to Counterclaim dated 13 July 2018 par 22.3. See also Third Further Re-Amended Statement of Claim dated 31 August 2018 pars 28, 28.2.1, 40, 40.1, 40.2, 89.2, 89.4 and 89.5. The lack of connection is particularly manifest with pars 89.2, 89.4 and 89.5 since these do not even rely on the alleged advice in par 17.3. Rather, those pleas allege reliance on the representations and advice pleaded in par 84.

[68] See Third Further Re-Amended Statement of Claim dated 31 August 2018 par 23.2.

[69] See eg Plaintiffs' Submissions dated 30 August 2018 par 24.

[71] Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3] [2018] WASC 73 [43].