Property Law Act 1969, s 34(1)(a)

Supreme Court Rules O 20 r 8, O 20 r 19, O 26 r 6

Bailey v Federal Commissioner of Taxation [1977] HCA 11; (1977) 136 CLR 214

Bruce v Odhams Press Ltd [1936] 1 KB 697

Campagnie Financiere et Commerciale Du Pacifique v Peruvian Guano Company (1882) 11 QB 55

Charlie Carter Pty Ltd v SDAEA of WA (1987) 13 FCR 413

Donaldson v Harris & Anor (1973) 4 SASR 299

Western Australia v Bond Corporation Holdings Ltd (1991) ATPR 41-018

Zierenberg v Labouchere [1892] 3 QB 183

1 HASLUCK J: This is an application by the first defendant for orders and directions concerning various procedural matters in respect of an action that was commenced two years ago. The relevant chamber summons was filed on 3 July 2001 and raises three matters, being first an application to strike out certain paragraphs of the prayer for relief in the amended substituted statement of claim dated 1 May 2001, an application that the plaintiff be required to provide further and better particulars of certain paragraphs of its statement of claim and an application for further and better discovery. I will henceforth refer to the amended substituted statement of claim filed by the plaintiff's solicitors on 1 May 2001, which contains the disputed paragraphs in the prayer for relief, as "the statement of claim".

2 The first defendant's chamber summons was supported by three affidavits which were principally directed to the application for further and better discovery. The affidavits in question are the affidavit of Darren Bruce South sworn 29 June 2001, the affidavit of the first defendant sworn 2 July 2001 and a further affidavit of the first defendant sworn 19 July 2001. The plaintiff did not file and serve any opposing affidavit. Each party filed and served written submissions prior to the hearing.

3 In order to understand the procedural issues, it will be useful to begin by looking at the nature of the dispute between the parties. The matters in controversy are reflected in the pleadings filed to date, that is to say, the plaintiff's statement of claim, the first defendant's substituted defence and counterclaim filed 12 April 2001 and the plaintiff's reply and defence to counterclaim filed 1 May 2001.

4 On the plaintiff's case, the plaintiff and the first defendant were friends. The plaintiff had some experience in providing accommodation to students. This allegedly led to a partnership agreement being entered into between the parties in or about early August 1998 whereby the parties agreed to purchase a property for the common purpose of running a boarding house business with a view of profit. The partnership agreement was allegedly constituted by a conversation that took place between the plaintiff and the first defendant in August 1998.

5 The plaintiff says that it was an express oral term of the partnership agreement that the parties would look for and acquire a suitable property to the value of approximately $160,000 in the Victoria Park area. The first defendant would purchase the partnership land in her name to enable her to obtain suitable mortgage finance through her employer, Telstra Australia, and would execute all necessary finance and security documents in her name. Both parties would contribute equally to the cost of purchasing the partnership land, including any money borrowed for that purpose.

6 The partnership arrangements envisaged that the first defendant would live in the partnership premises, rent-free, but with an equivalent reduction in her entitlement to profit and the plaintiff would provide any reasonable assistance in operating the boarding house when requested by the first defendant.

7 The plaintiff says that these arrangements were carried into effect, with the result that the partnership land was acquired and a joint bank account at the National Australia Bank, Booragoon, was opened. The plaintiff proceeded to pay various sums of money into the partnership bank account and at least some of these funds were used to attend to outgoings and expenses.

8 The amount advanced by the plaintiff appears to have been an amount in the vicinity of $25,000, although it seems that some moneys were subsequently returned to the plaintiff, with the result that the relevant amount is now in the vicinity of $22,540.

9 It seems that the parties had a falling-out which may or may not amount to a termination of the partnership agreement (if any) or a repudiation of any contractual relationship between the parties.

10 It is against that background that the plaintiff seeks a declaration that the arrangements made between the parties constituted a partnership within the meaning of the Partnership Act, with the result that the land in question should be regarded as partnership property. The plaintiff also seeks an order that the partnership be wound up and there be a taking of account.

11 In the alternative, the plaintiff seeks a declaration that the partnership land is held on trust equally for the plaintiff and the first defendant and an order that the land be sold and the net proceeds be divided between the plaintiff and the first defendant equally.

12 To these claims, the plaintiff has recently sought to add a further alternative prayer for relief in these terms:

"F. the sum of $22,540

1. either pursuant to paragraph 8 of the reply and defence to counterclaim; or

2. pursuant to paragraph 6.4 of the defence and counterclaim.

G. interest on the sum of $22,540 at the rate of six percent per annum pursuant to s 32 of the Supreme Court Act from 31 January 1999 till payment or judgment whichever is the earlier."

13 The first defendant by its defence and counterclaim has denied that there was any partnership agreement entered into between the parties or that the plaintiff has any equitable interest in the land. The first defendant says that any advances were in the nature of a loan and says further, by way of counterclaim, that as a consequence of the plaintiff's representation that she could put up certain funds, being a representation which was allegedly not fulfilled, the first defendant was induced to proceed with the purchase of the land and thereby incurred certain expenses and losses which she now seeks to recover from the plaintiff by way of compensation.

14 For present purposes, it is material to note that the plaintiff in her statement of claim does not assert that the advances were made by way of loan. The first defendant pleads, however, in par 6.4 of her defence and counterclaim that the plaintiff and first defendant orally agreed that a sum of $25,200 would stand as a loan and that the plaintiff would have no interest in the property. In par 17, the first defendant pleads further that the alleged partnership agreement contended for by the plaintiff is unenforceable by reason of the provisions of s 34(1)(a) of the Property Law Act 1969.

15 The plaintiff by her reply joins issue with these and other matters raised by the defence and counterclaim and says further, in par 8 of the reply, that:

"8. Further, in or about January 1999 the plaintiff informed the first defendant that if she forthwith paid to the plaintiff all monies that the plaintiff had paid pursuant to the Partnership Agreement then the plaintiff would agree to the termination of the Partnership Agreement and in particular to relinquish any and all rights she had in the Partnership Property. The first defendant has not paid the plaintiff the said sum."

16 Before turning to the striking-out issue and the issue concerning further and better particulars, it will be useful to look briefly at some of the legal principles bearing upon such issues.

17 Generally, a statement of claim must fulfil two pleading functions. It must allege the facts the plaintiff claims confer a cause of action, and second it must claim the relief sought in respect of the wrong done by the defendant.

18 To reveal a cause of action, the statement of claim must set out the fact or combination of facts which give rise to a right to sue and show a connection between the plaintiff, the facts alleged and the relief sought. All the material facts essential to the cause of action must be stated in summary form and with sufficient particularity to make the defendant aware of the case made against him: Cairns: Australian Civil Procedure (2nd ed) page 212.

19 These principles are reflected in the rules of court. By O 20 r 8, every pleading must contain, and contain only, a statement in summary form of the material facts on which the party pleading relies, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits.

20 In Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, it was noted at page 664 that pleadings and particulars must furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it. They define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial. They give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings.

21 Pre-trial processes can include both discovery of documents and the delivery of interrogatories, but interrogatories are not, like pleadings, confined to the material facts on which the parties intend to rely. They should be, and generally are, directed to the evidence by which the party interrogating desires to establish such facts at the trial. Interrogatories may assist a party to obtain an admission of anything which he has to prove on any issue which is raised between him and the defendant. Odgers: Principles of Pleadings and Practice (22nd ed) page 276.

22 It is apparent, then, that interrogatories are principally directed to evidentiary issues. Nonetheless, in Dougherty v Nationwide News Pty Ltd (1967) 86 WN (Pt 1) (NSW) 181, the court indicated that if a request for further and better particulars is similar to interrogatories, provided the request is not too detailed, and does not impose a burden disproportionate to their importance in the action, the court will order delivery of the particulars sought.

23 Let me now turn to the first defendant's application to strike out pars F and G of the plaintiff's prayer for relief, being a prayer for relief which is presented "in the further alternative".

24 Order 20 r 19 provides that the court may, at any stage of the proceedings, order to be struck out or amended any pleading on the ground that it discloses no reasonable cause of action or it may prejudice, embarrass or delay the fair trial of the action. Counsel for the first defendant in the present case made it clear that he seeks to strike out the disputed prayer for relief on the ground that it is embarrassing. The pleading is said to be embarrassing because the statement of claim does not plead any material facts, or combination of facts, which are sufficiently connected to a claim in the sum of $22,540 on the basis proposed, that is to say, having regard to facts and matters of the kind referred to in par 6.4 of the defence and counterclaim and par 8 of the plaintiff's reply. If the claim for this amount is struck out, then the claim for interest in par G must be struck out also.

25 In my view, the prayer for relief in its present form is embarrassing and should be struck out. It is apparent from my review of the relevant legal principles that the prayer for relief in a statement of claim must be connected to a statement of material facts set out in the statement of claim giving rise to a cause of action so that the first defendant knows the case to be met at trial and is able to assemble evidence accordingly.

26 If the plaintiff in the present case sees some merit in the view of the matter reflected in the first defendant's statement of defence and counterclaim that the nature of the original discussion between the parties could be viewed as a loan arrangement, rather than as a partnership or a joint venture, then it would be open to the plaintiff to plead the facts and matters it seeks to rely on, as an alternative to its principal claim, in the body of the statement of claim. It must, however, advance a claim of this kind as a positive assertion rather than simply seeking to pick up certain passages from the opposing pleading or by touching upon such matters in its reply.

27 Accordingly, I uphold the first defendant's objection to the statement of claim and will order that pars F and G of the prayer for relief be struck out as embarrassing, but with leave to replead.

28 I must now turn to the issue concerning the plaintiff's alleged failure to answer the first defendant's request for further and better particulars of the statement of claim.

29 It will not be necessary to canvass the entire range of the matters in issue. Broadly described, the first defendant's request for further and better particulars of the statement of claim was directed to par 3 of the claim concerning the making of the partnership agreement, certain passages in par 4 of the claim concerning the terms of the agreement, certain passages in par 5 concerning a decision to proceed with the purchase of the land and the financial contributions of the parties, par 8 concerning the allegation that the plaintiff "paid various sums of money into the partnership bank account", par 9 concerning an allegation that the first defendant had expended $26,300 of the funds deposited on behalf of the partnership and par 14 concerning the services provided to students. In each case, the request for further particulars was put in the form of precise questions which resembled the form in which interrogatories are often delivered. The plaintiff's response to the disputed requests usually took the form that the request was not a proper request for particulars.

30 The plaintiff contended at the hearing by counsel and in its written submissions that the disputed requests were in the form of interrogatories and the bulk of the questions did not relate to matters in issue. I note in passing that at the hearing counsel for the first defendant conceded that he would not press the request for particulars concerning question 1 (which related to par 3 of the claim) and question 2 (which related to par 4.5). Accordingly, I will make no ruling in regard to those paragraphs.

31 This brings me to the refusal to answer questions 3(b) and (c) concerning par 4.6 of the claim, which sought particularity as to what was the first defendant's alleged entitlement to profit. It follows from my review of the legal principles, including the decision of the court in Dougherty v Nationwide News (supra) that a court can require that particulars be provided as to matters in the nature of material facts, even though the request might arguably be cast in the form of an interrogatory. Accordingly, in my view, the plaintiff is obliged to answer this request.

32 For the reason just given, I consider that the plaintiff is also obliged to answer all parts of question 4 of the request concerning the costs of running the business and acquiring the land, all parts of question 5 of the request concerning the calculation of income and expenses and the obligation under the loan agreement, questions 6(c) and (d), question 9(e) concerning moneys allegedly paid into the partnership account by the plaintiff and questions 10(a)(i) to (v) concerning moneys expended by the first defendant.

33 However, I consider that the plaintiff is not obliged to answer certain of the requests upon the grounds that they are in the nature of interrogatories directed to evidentiary issues rather than being requests for particulars of material facts underpinning causes of action relied upon by the plaintiff. More particularly, I consider that the plaintiff is not obliged to answer questions 7(a) to (b), questions 7(d) to (e), questions 8(b), questions 13(a) to (b), and questions 13(d) to (f).

34 I must now turn to that part of the chamber summons concerning the application for further and better discovery.

35 I was informed at the hearing that the parties have filed and served affidavits of discovery, but the plaintiff's documents have not yet been inspected. The order sought by the first defendant was that the plaintiff do make and file an affidavit stating whether the classes of documents described in the schedule to the summons have been in her possession or, if not now in her possession, when she parted with them.

36 The first category of documents identified in the schedule is documents relating to a representation allegedly made by the plaintiff that she had $40,000 available to contribute to the venture under discussion between the parties. The second category concerns documents relating to any other alleged partnership activity or boarding house activity of the plaintiff, including title searches, mortgage documents, cheque books and bank statements, and (as a matter added at the hearing) business name registration documents relating to the parties.

37 The first defendant relies upon O 26 r 6 of the Supreme Court Rules which provides that the court may at any time make an order requiring a party to make an affidavit stating whether any document specified is in his possession notwithstanding that he may already have filed a list of documents. An application under the rule must be supported by an affidavit stating the belief of the deponent that the party form whom discovery is sought has had the document in his possession.

38 The general rule concerning discovery is reflected in the judgment of Menzies J in Mulley & Anor v Manifold [1959] HCA 23; (1959) 103 CLR 341 at 345, where his Honour indicated that reference must be made to the pleadings to determine what are the matters at issue between the parties, because discovery is a procedure directed towards obtaining a proper examination and determination of these issues and not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would either advance a party's own case or damage that of this adversary or lead to a train of inquiry having either effect.

39 The power to order further and better discovery is discretionary and is confined to an order for discovery of the particular documents to which the application relates. An affidavit of discovery is presumed to be conclusive unless displaced by evidence: Weir v Greening [1957] VicRp 38; [1957] VR 296. It follows that the court must be fairly certain that there are further documents which ought to be disclosed before ordering further discovery: Beecham Group Ltd v Bristol Myers Co [1979] VicRp 27; [1979] VR 273 at 279. The affidavit offered in support of the application must offer substantial assistance in establishing whether the documents to which the application relates exist and relate to a matter in question: Seaman: Civil Procedure par 26.6.2.

40 The plaintiff in the present case filed an affidavit of discovery sworn 18 May 2001. The list of documents includes reference to letters and bank statements pertaining to the partnership bank account as from 12 August 1998 and DOLA transfer and mortgage documents dated 30 June 1999. The list does not refer to documents of the kind specified in the first defendant's application, that is to say, bank statements and the like relating to the plaintiff's financial position going back to 1 January 1998, related documents including Family Court documents, or documents bearing upon the plaintiff's experience in the operation of boarding houses. It is apparent from the way in which the case is pleaded, however, and from the facts and matters referred to in the affidavits relied upon by the first defendant that documents of the kind sought probably do exist. These affidavits evidence assertions that the plaintiff had $40,000 cash and was involved in a dispute with her de facto husband bearing upon her financial situation.

41 It follows that, in my view, further and better discovery in the manner defined by the first defendant's chamber summons dated 3 July 2001 should be ordered. Documents of the kind sought are relevant to the pleaded issues or could lead to a train of inquiry that would advance the first defendant's case.

42 Paragraphs F and G of the plaintiff's prayer for relief will be struck out as embarrassing with leave to replead within 14 days. The plaintiff is required to answer in respect of the request for further and better particulars of claim dated 12 April 2001 questions 3(b) and (c), all parts of questions 4 and 5, questions 6(c) and (d), question 9(4) and questions 10(a)(i) to (v). The plaintiff is required to provide further and better discovery in terms of the summons dated 3 July 2001.