Supreme Court of WA|2003-11-04|Before: Hasluck J

Green & Ors v Wilden Pty Ltd & Ors [2003] WASC 239 (4 November 2003)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : GREEN & ORS -v- WILDEN PTY LTD & ORS [2003] WASC 239

Practice and procedure - Application to strike out - Lack of particularity with respect to various claims for damages - Turns on own facts

First Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Second Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Third Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Fourth Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Fifth Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Sixth Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Seventh Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Eighth Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

Ninth Defendant : Mr M J McCusker QC, Mr R H B Pringle QC & Mr T Galic

First Plaintiff by Counterclaim : Mr M J McCusker QC,

Second Plaintiff by Counterclaim : Mr M J McCusker QC,

1 This is an application by the defendants to strike out certain paragraphs of the statement of claim. I will turn to the procedural history of the matter and the details of the application in due course. For the moment, it is sufficient to note that the application was brought before me on the morning of the listed trial date, being a matter listed for hearing for 21 days. I am therefore obliged to deal with the application expeditiously and to speak succinctly in providing my reasons for decision.

2 The litigation has been on foot for over 12 years. The book of pleadings contains 338 pages. Broadly described, the plaintiffs seek relief in respect of an allegedly improper administration of certain trusts.

3 The first three defendants, Wilden Pty Ltd, Magenta Nominees Pty Ltd and Tace Pty Ltd, are the trustees of unit trusts known respectively as The Balga Trust, The Kelmscott Trust and The Summerfield Trust. These were constituted by trust deeds in similar form. The other defendants are said to be directors of or otherwise linked to the trustee company.

4 The plaintiffs are some of the unit holders in the trusts. In each case the deed permits unit holders to require the trustee to repurchase units. The relevant clauses provide that the price payable on the repurchase of a unit (which is called the "current repurchase value") when there is no agreed value is to be determined by an independent qualified valuer nominated by the Australian Institute of Valuers (WA Division).

5 The "current repurchase value" is defined in the deed by reference to a formula. It can best be described as the net asset backing of a unit. In each case the principal asset of the trust was a suburban shopping centre.

6 The plaintiffs alleged that in the early 1990s they lodged repurchase requests with the trustees and that a price was not agreed. The defendants say that valuers were appointed to assess the value in the prescribed manner but this is disputed by the plaintiffs. There is a dispute as to the scope of the valuers' appointments and the way in which the valuers carried out the investigations in question including an issue as to whether the valuers brought an independent discretion to bear on the materials before them or whether they simply adopted figures in certain audited accounts.

7 The plaintiffs contend that the trustee has failed to complete the repurchase of the plaintiffs' units in terms of the relevant repurchase procedure or at all. They allege also breaches of trust in that the defendants have allegedly failed to make adequate disclosure to the plaintiffs of their conduct of the affairs of the trust. There are various other matters in issue including also claims of misleading conduct under the Trade Practices Act. However, it could be said that the repurchase issue lies at the heart of the controversy between the parties.

8 I note in passing that if it be held as a matter of declaratory relief that the repurchase procedure was not followed correctly then this is likely to produce an outcome that the plaintiffs remain as members of the various trusts and will then be obliged to consider their position having regard to the financial performance and standing of the various trusts. The prayer for relief in respect of each trust includes not only declaratory relief but claims for equitable damages or, alternatively, damages.

9 There have been various interlocutory skirmishes along the way. However, on 28 August 2002 the plaintiffs entered the matter for trial pursuant to a certificate of readiness which suggested that the matter could be listed for trial. The defendants did not apply to countermand the entry and it can therefore be said that thereafter both parties were of the view that the matter was ready to proceed to trial.

10 As it happened, in following months, there were further amendments to the pleadings. On 3 October 2002 Master Sanderson made a ruling as to certain issues concerning discovery. That ruling was concerned essentially with the question of whether documents should be discovered relevant to the exercise of an independent discretion issue bearing upon the work of the valuers. The legal advisers to the plaintiffs seemed to have assumed thereafter that the effect of the ruling stood in the way of the obtaining of further discovery concerning the financial standing of the trusts at certain key stages of the dispute.

11 In due course, pursuant to the usual case management process, orders were made by Steytler J for the exchange of witness statements and it was against that background that at a callover on 29 May 2003 the matter was listed for trial on 4 November 2003, although it was recognised that witness statements had not yet been exchanged and discovery issues remained outstanding.

12 I pause to note that in various passages, the statement of claim was expressed in a general form, to the effect that as to certain allegations that the plaintiffs had suffered loss and damage further particulars would be provided after the trustee company had provided discovery, answered interrogatories and expert reports had been exchanged.

13 It seems that the procedural state of affairs I have described remained in that form until early October 2003. By letter dated 2 October 2003, that is to say, about one month prior to the listed trial date, the solicitors for the defendants pressed the plaintiffs to provide particulars concerning the loss allegedly suffered with respect to certain of the causes of action.

14 The particulars were not forthcoming with the result that on 13 October 2003 the defendants lodged the present application for orders that certain paragraphs in the statement of claim be struck out on the grounds that the plaintiffs had failed to provide particulars of alleged loss and damage or, alternatively, unless the particulars be provided the plaintiffs' action be dismissed.

15 The application to strike out was listed for hearing in chambers before myself as the trial judge on 4 November 2003, that is to say, on the date the trial was due to commence. On the morning of the hearing the solicitors for the plaintiffs filed submissions in response to the defendants' application dated 4 November 2003. Broadly described, these submissions indicated that in some cases the general description of loss would not be relied upon and in other cases the particulars, or description of the claim, were said to be sufficient. It was against this background that the matter was brought on for hearing before me.

16 I will not traverse the submissions made on both sides in their entirety. In essence, counsel for the defendants acknowledged that the application could have been brought earlier. He appeared to accept that the statement of claim in its present form disclosed various causes of action in that in each case there was an allegation of loss sufficient to complete the constituents of the cause of action relied on. However, his central contention was that the various paragraphs complained of and especially those suggesting that further particulars would be provided were gravely embarrassing because, first, they did not inform the defendants of the case to be met at the hearing and, second, they did not define the issue to be adjudicated with precision: see Cairns: Australian Civil Procedure (5th ed) at 180.

17 Counsel for the defendants submitted that, having regard to the procedural history I have described, the defendants had a reasonable expectation that the promise inherent in the pleadings to supply particulars before trial would be met. Counsel said that the delay in making the application to strike out was explained by the fact that the plaintiffs had failed to deliver witness statements in accordance with directions previously made. The defendants had held their hand in the belief that the witness statements would make clear the nature of the case to be met.

18 Counsel for the plaintiffs acknowledged that the plaintiffs' witness statements had not been delivered and that particulars of the kind envisaged by the statement of claim had not been supplied. He contended that the plaintiffs had been unable to finalise their position in regard to certain aspects of the claims for damages because of a failure on the part of the defendants to provide discovery. He submitted that the defendants would not be taken by surprise because the plaintiffs had no intention of leading expert evidence or other evidence bearing upon the disputed passages of the claim and it would be unfair to the plaintiffs if these passages were struck out.

19 Importantly, as I see it, counsel for the plaintiffs did not submit that the plaintiffs in fact wished to provide certain particulars and were now equipped to do so. In effect, his stance was that the nature of the plaintiffs' claim, as supplemented by his written and verbal submissions at the hearing of the application, had been made sufficiently clear.

20 I will turn to each of the disputed passages in a moment. However, I have to say in general terms that, in my view, at this stage of the proceedings I have difficulty in accepting that a plea in the general form, that further particulars will be provided, could be regarded as sufficient. To my mind, against the procedural background I have described, the plaintiffs have had an ample opportunity to take whatever steps are necessary by way of pre-trial procedures to obtain the relevant information and define the claim with particularity. I consider that a plea in the general form is certainly embarrassing and should be struck out because the relevant particulars have simply not been provided.

21 However, in some of the instances I will come to in a moment, that view of the matter leaves outstanding the question of whether the remaining particulars of loss and damage referred to in the statement of claim should be struck out as embarrassing because they do not fulfil the essential requirements of particulars of informing the other party of the case to be met and of limiting the generality of the pleading. However, that having been said, I remain conscious of the broad consideration that in a case of this kind with a multiplicity of issues it is important, by and large, that both parties have an opportunity to contest all matters truly in issue so that the dispute can be finally resolved.

22 With that thought in mind I canvassed with counsel the possibility of splitting the trial so that the assessment of damages could be attended to after rulings were obtained with respect to the central issues. In the event, neither party pressed for this course and, in any event, upon reflection I consider that the plaintiffs have had ample time since the entry for trial to refine the plaintiffs' case and to determine how the trial should be conducted. No special arrangements were made for assessment of damages.

23 I digress briefly to say that in the circumstances of the present case I am conscious also that the matter principally in dispute between the parties is the repurchase issue. A successful application to strike out will not preclude the plaintiffs from obtaining declaratory relief in respect of that central issue.

24 The general observations I have just made, and especially the notion that the plaintiffs have had sufficient time before trial to particularise the various claims, bear upon my approach to a number of the specific paragraphs in issue. Thus, for ease of reference, where I invoke this line of reasoning, I will refer simply to my general observations.

25 The defendants seek to strike out par 37(c) which is in the general form that further particulars will be provided after discovery, interrogatories and exchange of expert reports. The plaintiffs acknowledge that this paragraph is not relied upon because the loss and damage is particularised in par 37(a) and (b). Accordingly, pursuant to my general observations and having regard to the plaintiffs' concession, this paragraph will be struck out.

26 Paragraph 66 alleges that the defendant Chesson, in breach of a duty not to gain from his position as a director of Wilden, obtained an advantage particulars of which include reference to the purported issue to him of certain shares and options. There is a reference in the general form to full particulars being provided.

27 This allegation must be considered in conjunction with pars 75, 76.10 and 77 in which it is said essentially that by reason of an alleged improper use of position Wilden, Chesson, Denboer, Callao, Benrone and Deltabrook obtained a significant financial advantage, to the detriment of the plaintiffs, particulars of which are said to include the issue of additional units "at a reduced value".

28 It is said in par 77 that the plaintiffs have suffered loss and damage full particulars of which are to be provided. I am of the view that the plea concerning a reduced value is too broadly expressed and, on the face of it, is one that is likely to require the expression of an expert opinion. For this reason and for the reasons expressed in my general observations I consider that the plea in its present form is embarrassing with the result that pars 66, 75, 76.10 and 77 should be struck out.

29 Paragraph 78 contains a plea beneath the heading "Hungerford's Claim for Damages" that by reason of Wilden's failure to complete the repurchase the plaintiffs have "each lost the use of the funds due to them on completion of their repurchase requests". Again, reference is made to particulars being provided in due course.

30 To my mind, the concept of a party losing the use of funds is too broadly expressed to define the nature of the loss sought to be recovered. For this reason and for the reasons referred to in my general observations I consider that the plea in this form is embarrassing and should be struck out. The observations I have just made apply with equal force to par 95(b) and to par 98. Those paragraphs will be struck out also.

31 For the reasons I have just given I consider that par 121, which contains an allegation that the plaintiffs have lost the use of the balances payable to them upon repurchase, should be struck out as embarrassing because the further particulars promised by the pleading have not been provided.

32 For the reasons I have just given I consider that par 129 and par 144 should be struck out. I note in passing that par 144 relates to a claim of misleading conduct contrary to s 52 of the Trade Practices Act and this is certainly a case in which one would expect to find particularity as to the nature of the loss suffered.

33 I am conscious that in the course of argument counsel for the plaintiffs referred to loss referable to arrangements made with the ANZ Bank. The implications of this were not fully made clear. Accordingly, I will allow leave to replead with respect to par 129 and par 144 to the intent that any issue of the opposing party being taken by surprise in regard to the ANZ matter can be dealt with at that time.

34 For the reasons given in my general observations I will strike out par 149 and par 151. In the latter case there is a reference again to a Hungerford's claim for damages and the notion that the plaintiffs lost the use of funds due to them. The observations I made previously apply in the same way.

35 In summary, then, it follows from what I have said that I will generally allow the defendants' application to strike out. I will hear from the parties as to whether any further directions are required as to how these orders should be reflected on the face of the pleadings.

Green & Ors v Wilden Pty Ltd & Ors [2003] WASC 239

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Judgment (50 paragraphs)

Green & Ors v Wilden Pty Ltd & Ors [2003] WASC 239 (4 November 2003)

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