LBS Holdings P/L v The Body Corporate for Condor Community Title Scheme 13200 & Ors [2004] QSC 229

[1] DOUGLAS J: The plaintiffs own a lot in a private building known as Condor. The body corporate for Condor Community Title Scheme 13200 is the first defendant and attacks the pleading by the plaintiff against it. The plaintiffs' lot in the building is one which, by the community management statement, "shall be used for restaurant or licensed restaurant purposes only". The plaintiffs have been in possession of the lot since 19 April 2001 but complain in their further amended statement of claim of continuing activity from 19 April 2001 until the present which has unreasonably interfered with their enjoyment of their rights in "the restaurant premises".

[2] The pleading then proceeds to allege that the first defendant has committed private nuisances and trespasses against the plaintiffs. It describes a number of separate allegations as "the restaurant premises nuisance", "the exhaust system nuisance", "the intercom nuisance" and "the gas pipelines nuisance" as well as two claims in trespass which it describes as "the toilet trespass" and "the basement storage area door trespass". It then seeks to plead facts relevant to relief it seeks by way of injunction and equitable damages and common law damages between paragraphs 38 and 42.

[3] The principal complaint made against the pleading is that it does not identify the facts which establish any causal relationship between the acts of nuisance or trespass complained of and the loss which is said to result from those acts. The principle relied on is that facts must be set out which lead to a reasonable inference that the acts complained of and the loss claimed stand to each other in the relation of cause and effect and that the plaintiff must plead the necessary facts showing that causal link; see Dow Hager Lawrance v Lord Norreys (1890) 15 App Cas 210, 221; Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd [1987] FCA 84; (1987) 14 FCR 215, 221-222; Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499 at [43]- [49]; [1999] FCA 499; (1999) ATPR 41-691, 42,833-42,834; McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 at [25]- [26], [1999] FCA 1101; (1999) 165 ALR 409, 419.

[4] The only link alleged between the activity complained of and the damage said to have been suffered is pleaded as an assertion that "by reason of" the activity complained of the plaintiffs have suffered the damage referred to in paragraphs 39 to 43 of the pleading; see paras 17, 24, 31, 32F, 37(b) and 37E(b) of the pleading. The criticism is not merely idle as, when one examines the particulars pleaded of the conduct complained of, many of them have no logical connection with the allegations made in the paragraphs claiming damages. The main claim for damages is based on the allegation that the plaintiffs have lost the opportunity to use or lease the restaurant premises from on or about 27 June 2001 for a period thereafter of at least 6 years; see para 39 of the pleading. The complaint made by the solicitors for the first defendant in the correspondence before the application was brought summarised their problem with the pleading as follows:-

"(a) the Further Amended Statement of Claim contains a bare and un-particularised allegation of causation in a number of paragraphs, such as paragraph 17. It suggests that events which occurred in 2001 was [sic] caused by events which had not occurred until sometime thereafter. It suggests that every wrongful act, many of which are of an insubstantial, including transient or trivial, nature caused the inability to operate the restaurant. It suggests that loss and damage continued even after many of the complaints had ceased to be in issue. You have not pleaded a causal link between each wrong complained of and the loss or damage claimed."

[5] When one examines the pleading in more detail it is apparent that those criticisms are valid. They were amplified in the written and oral submissions made on behalf of the first defendant by Mr O'Shea SC. For example, one of the complaints made in the pleading related to an alleged refusal by the first defendant to connect an intercom system for use by the restaurant premises. It is clear that one was installed and fully operational by 30 October 2002 but it was not pleaded why the absence of such a system prevented the plaintiffs from using the premises as a restaurant from 27 June 2001. It may be, for example, that there was only one means of entry to the restaurant and that use of an intercom is vital to enable customers to access it. No such facts are pleaded.

[6] A related claim in the pleading concerns the locking of the doors to the foyer of the apartment block after 5.00pm each day as obstructing access to and from the main entrance to the restaurant premises even where the intercom system was available for use; see para 15(i)(b) and (kk). Again no relevant facts are pleaded to establish why, in those circumstances, the plaintiff lost the opportunity to use the premises for a restaurant from 27 June 2001.

[7] Another example relates to the "basement storage door trespass" where the material fact pleaded is that on 19 November 2003 the first defendant jammed the locking door mechanism to the basement storage area door; see para 37(d). Paragraph 37E(b) goes on to allege that by reason of the trespass referred to in paragraph 37D the plaintiffs claim the damages referred to in paragraphs 39 to 43. The conclusion is then expressed in para 39 that "by... the basement storage area door trespass, the first and second plaintiffs lost the opportunity to use ... the restaurant premises as a themed restaurant". There is no obvious connection between the event complained of and the loss of the opportunity to use the premises as a themed restaurant from 27 June 2001 nor is any causal link pleaded. Similar comments can be made about the toilet trespass and the gas pipelines nuisance.

[8] The plaintiffs contend, however, that, on its face, the pleading adequately makes a case of continuing conduct by or on behalf of the first defendant over a period of time designed to have the effect of preventing it from using the premises as a restaurant and that has had the effect of preventing or deterring the plaintiffs from doing that. That is not the case that they have pleaded, however, as each of the categories of conduct referred to is said to have caused the loss starting from 27 June 2001 until the present. For those reasons and because of the failure to plead any material facts linking the conduct complained of with the loss complained of the pleading deserves the criticism made in the letter of the first defendant's solicitors of 27 May 2004 that it suggests that events which occurred in 2001 were caused by events which had not occurred until some time thereafter and suggests that every wrongful act, including transient conduct, caused the inability to operate the restaurant.

[9] It may well be possible to replead to make the plaintiffs' case clearer and to establish the causal links between the conduct complained of and the continuing loss claimed showing how each item of conduct complained of caused or contributed to the loss complained of by allegations of material facts connecting the two. The pleading as it stands also suffers from the inclusion as alleged particulars of many references to evidence that are not obviously connected to the material facts pleaded in the relevant paragraphs of the pleading. They are not currently, however, the subject of complaint. In the circumstances I propose to order that paragraphs 17, 24, 31, 32F, 37(b) and 37E(b) of the statement of claim be struck out together with paragraphs 39, 40, 41 and 42 but with the opportunity given to the plaintiff to replead.

[10] The first defendant makes a number of further complaints about particular paragraphs of the pleading. Paragraph 38 pleads the plaintiffs' reasonable apprehension that the first defendant will continue to permit the nuisances and trespasses complained of but the first defendant rightly points out that there are no material facts pleaded suggesting that the basement storage area door trespass, toilet trespass, the intercom nuisance or the exhaust fan nuisance are continuing. In the absence of such allegations I agree that the reference to those nuisances and trespasses should be removed from paragraph 38 of the pleading.

[11] Paragraph 42 pleads common law damages for future loss. Mr Amerena for the plaintiff submitted that the loss claimed in the pleading may well already have accrued. That allegation has not been made in the pleading and Mr O'Shea SC argued that the plaintiffs cannot sue for damages accruing later than the date of trial, referring to McGregor on Damages (16th ed. 1997) particularly at paras 389-390, 398-400 and 412-413, Barbagallo v J & F Catelan Pty Ltd [1986] 1 Qd R 245, 249-250, 264 and r. 512 of the Uniform Civil Procedure Rules. There is a claim for equitable damages in paragraph 38A of the pleading which is not attacked but it seems to me that paragraph 42 in its current form should be struck out for these reasons also. Again, that is subject to liberty to replead being given.

[12] Similarly in paragraph 40 the following phrase has been added by an earlier amendment to the calculation of profits the plaintiffs allege they would have earned:

"subject to the First and Second Plaintiffs as landlord of lot 1 taking an increasingly larger amount of such net profit as rent as the themed restaurant demonstrated its profitability."

[13] According to the plaintiffs' written submissions that pleading was meant to indicate "that though the First and Second Plaintiffs are the registered co-owners of the lot, it was contemplated by them that only the Second Plaintiff was to be the tenant in respect of a business to be conducted from that lot. The last three lines in paragraph 40 make it plain that the rent given in the preceding particulars is not alleged to have been a firm figure. Rather, not surprisingly (and hardly uncommonly given the close relationship between the tenant and the landlords) it is alleged it was envisaged it might change. That is, it might increase as the proposed themed restaurant demonstrated its profitability." I confess to a complete lack of imagination in failing to equate the words pleaded with the assertion made as to their meaning. Again, if the matter is repleaded, those allegations will need to be clarified.

[14] The application includes an attack on paragraphs 43 and 45 of the further amended statement of claim which were not pursued at this stage. Submissions were also made to me concerning costs. It seems to me that, having regard to the content of the correspondence between the solicitors before the application that the applicant first defendants should have its costs of and incidental to the application. It was substantially successful on the major issues argued by it relating to the absence of a causal link between the conduct complained and the damage alleged. It had initially complained of the pleading of equitable damages in paragraph 38A but did not pursue that on the hearing. I do not regard that as a sufficient reason to deprive it of its costs.

[15] Accordingly, I order that paragraphs 17, 24, 31, 32F, 37(b), 37E(b), 39, 40, 41 and 42 of the further amended statement of claim be struck out with liberty to replead within a time to be determined after further submissions. I shall also order that the plaintiffs pay the first defendant's costs of and incidental to the application.