LKAJ Two Pty Ltd v Squire Patton Boggs

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Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279.

RTA Pty Ltd v Brinko Pty Ltd [2011] NTSC 103.

Chapman v Australian Broadcasting Commission [2000] SASC 146; (2000) 77 SASR 181.

Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252.

Environinvest Ltd v Prescott; Environinvest Ltd v Blackburne Pty Ltd [2011] VSC 325.

Trade Practices Commission v George Weston Foods Pty Ltd [1979] FCA 26; (1979) 39 FLR 182.

Gordon v Gordon [1947] VicLawRp 72; [1948] VLR 57.

Bruce v Oldhams Press Ltd [1936] 1 KB 697.

Trade Practices Commission v Australian Iron & Steel Pty Ltd [1990] FCA 23; (1990) 92 ALR 395.

Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228; (1985) 7 FCR 109.

Northern Territory of Australia v John Holland Pty Ltd [2008] NTSC 4. Fortescue Metals Group Ltd v ASIC [2012] HCA 39; (2012) 247 CLR 486.

Wickham Point Pty Ltd v Commonwealth of Australia [2018] NTSC 7. Carpenter v Epplewhite [1939] 1 KB 347.

Williams v Melky [2011] NTSC 77.

Matz v The Gove Flying Club Inc [1994] NTSC 17.

Life Insurance Co of Australia Ltd v Phillips [1925] HCA 18; (1925) 36 CLR 60.

Ryan v Worthington [2015] QCA 201.

Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228; (1985) 7 FCR 109.

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564.

Centrebet Pty Ltd v Baasland [2013] NTSC 59.

Alcoota Aboriginal Corporation v Justice PRA Gray [2002] NTSC 48.

Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 139 ALR 663. Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564.

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Governor and Company of the Bank of Scotland v A Ltd [2001] EWCA Civ 52.

Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421.

Concrete Constructions Pty Ltd v Government Insurance Office of NSW (1967) 85 WN (NSW) 104.

Sea Culture International v Scoles [1991] FCA 523; (1991) 32 FCR 275.

JMT Builders Pty Ltd v Ryan & Ors [2016] NTSC 6.

Fisherman's Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd & Anor [2006] QSC 104.

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LKAJ Two Pty Ltd v Squire Patton Boggs (AU) & Anor [2020] NTSC 45

• [1] By summons filed 22 May 2020 the Second Defendant sought a strike out of the Plaintiff's claim as against the Second Defendant. The application is made pursuant to rule 23.02 of the Supreme Court Rules ("SCR").
• [2] The substantive proceedings were initially commenced against the First Defendant only. The First Defendant is a firm of solicitors and the Plaintiff's claim against the First Defendant is in negligence and/or breach of retainer.
• [3] The Second Defendant was subsequently joined as a party. Consequent on the joinder, the Plaintiff was given leave to file and serve an Amended Statement of Claim.
• [4] The background facts, as distilled from the pleadings,[1] are that the Plaintiff engaged the First Defendant to represent it in negotiations for the sale and purchase of a parcel of land ("Land") from the Second Defendant. Those negotiations resulted in a contract of sale ("Contract") between the Plaintiff and the Second Defendant in June 2016. Completion occurred in October 2016.
• [5] The current proceedings mostly centre around the construction of clause 2(c) of the Contract. That provided that the Second Defendant was to "ensure that there is sufficient infrastructure services to the Property to the satisfaction of the Development Consent Authority and any other Authority, at no cost to [the Plaintiff]".
• [6] Although the Plaintiff's claim against the Second Defendant turns on the interpretation of clause 2(c) of the Contract, it is not for me to determine the interpretation of that clause as part of the current application. However, in the course of argument, the parties identified the various alternative interpretations that are available. They are firstly, that the Second Defendant's obligations under the clause, whatever those obligations may be, do not extend beyond completion of the Contract. Secondly, that the Second Defendant's obligations are to provide, or pay for, any infrastructure services that are required by the Development Consent Authority, or other "authority", if and when those authorities approve a development on the Land and irrespective of whether that approval is given after completion. Thirdly, that the Second Defendant's obligations are only to provide, or pay for, those infrastructure services in respect of the Land itself and not in respect of any future development on the Land.
• [7] The Second Defendant argues for the strike out of the Plaintiff's claim on three separate bases. Firstly, pursuant to rule 23.02(c) of the SCR on the basis that the pleadings are embarrassing by reason of the inconsistent pleadings as to the interpretation of clause 2(c).
• [8] Secondly, that the pleadings lack the necessary material facts to properly found the intended claim and also that the pleadings plead a claim that is not known to law. The latter is based on the pleading as to what is the "position" of the Plaintiff and the Second Defendant in respect of the interpretation of clause 2(c) of the Contract.
• [9] Lastly, on the basis of the impossibility of the Plaintiff securing the declaratory relief sought as against the Second Defendant.
• [10] The relevant pleadings in the current Statement of Claim, in summary form are as follows:-

(a) Paragraph 12A(a) which pleads the wording of clause 2(c) of the Contract (as set out in paragraph 5 above);

(b) Paragraph 12B which pleads, as an allegation of breach of the retainer by the First Defendant, that the proper construction of clause 2(c) is the third basis set out in paragraph 6 above;

(c) Paragraph 16, which is pleaded in the alternative to inter alia paragraph 12B, but not to paragraph 12A, to the effect that clause 2(c) is uncertain, invalid or unenforceable because the phrase "sufficient infrastructure services" in clause 2(c) does not precisely identify the nature and extent of infrastructure services that the Second Defendant was required to provide pursuant to clause 2(c);

(d) Paragraph 18A, that the only infrastructure service currently connected to the Land is a basic sewer service;

(e) Paragraph 19(b), that the Second Defendant claims that it has no outstanding contractual obligations pursuant to clause 2(c) and, per paragraph 19C, that the Second Defendant claims that the Land currently has sufficient infrastructure services to the satisfaction of the Development Consent Authority;

(f) Paragraph 19B, where the Plaintiff pleads its "position" as regards the Second Defendant. This is largely consistent with the second basis of interpretation set out in paragraph 6 above. (That then appears to contradict paragraph 12B in any case, as paragraph 12B appears to rely on the third basis of interpretation of clause 2(c) set out in paragraph 6 above);

(g) Paragraph 19C which pleads, at subparagraph (a), that the Second Defendant's "position" is that it has no outstanding obligations to the Plaintiff and, at subparagraph (b), pleads the Second Defendant's "position" as to the interpretation of clause 2(c), which is an interpretation consistent with the third basis of interpretation set out in paragraph 6 above;

(h) Paragraph 19D which alleges that, in consequence of paragraphs 19, 19A, 19B and 19C, there is a dispute between the Plaintiff and the Second Defendant as to the proper construction of clause 2(c);

(i) The prayer for relief then seeks, as against the Second Defendant, the following declarations, namely that:-

(1) the Second Defendant has not satisfied its obligations under clause 2(c);

(2) the Second Defendant can only satisfy its obligations under that clause, "if and when" a development on the Land is approved. (This declaration assumes continuing obligations on the Second Defendant post completion of the Contract);

(3) the Second Defendant will have further obligations "if and when" there is approval of a development on the Land. (This declaration has some overlap with that in (2)) and also assumes continuing obligations on the Second Defendant post completion of the Contract);

(4) the Second Defendant will, "if and when" there is approval of a development on the Land, be obliged to provide or pay for "sufficient infrastructure services, including power, water, sewer and telecommunications, to the proposed development...".

• [11] The relevant provisions of the SCR are now set out for reference purposes, namely:-

(1) A party may in a pleading make inconsistent allegations of fact if the pleading makes it clear that the allegations are pleaded in the alternative.

(1) Where a proceeding generally or a claim in a proceeding:

the Court may stay the proceeding generally or in relation to a claim or give judgment in the proceeding generally or in relation to a claim.

the Court may give judgment in the proceeding generally or in relation to the claim.

(3) In this Rule a claim in a proceeding includes a claim by counterclaim and a claim by third party notice and a defence includes a defence to a counterclaim and a defence to a claim by third party notice.

Where an endorsement of claim on a writ or originating motion or a pleading or a part of an endorsement of claim or pleading:

(a) does not disclose a cause of action or defence;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court,

the Court may order that the whole or part of the endorsement or pleading be struck out or amended.

• [12] I first make some general observations in respect of applications for strike out pursuant to rule 23.02 of the SCR. I will also highlight the difference between a strike out application and an application for summary judgment under rule 23.01 of the SCR in case there is any confusion as to the differing effect of those applications.
• [13] The phrase "may prejudice, embarrass or delay the fair trial of the proceeding" in rule 23.02(c) of the SCR is a single concept.[2] The term "embarrassing" in the context of pleadings, in general terms means that the pleadings do not state allegations sufficiently clearly against the opposite party so that the opposite party is in doubt as to what is alleged.[3] As the core function of pleadings is to clearly and unambiguously inform the other parties of the case that must be met, the failure to do so renders a pleading embarrassing.[4] The purpose of rule 23.02 is to secure compliance with the pleading rules.[5]
• [14] Examples of pleadings which have been found to offend against rule 23.02(c) are:
  1. An unintelligible or ambiguous pleading;[6]
  2. A confusing or circular pleading;[7]
  3. A pleading which pleads irrelevancies;[8]
  4. A pleading containing evasive denials;[9]
  5. A pleading which is too vague and general;[10]
  6. A pleading which lacks a coherent narrative;[11]

1. A pleading which fails to comply with the pleading rules,[12] such as:-

(i) A pleading which does not allege all the material facts which a party relies on, as that is a breach of the pleading requirements and does not conform to the rules of pleadings, in particular rule 13.02(1)(a);[13]

(ii) A pleading which pleads particulars instead of material facts;[14]

1. A pleading which pleads conclusions;[15]
2. A pleading that relies on allegations which are false to the knowledge of the pleader;[16]
3. A pleading which pleads inconsistent allegations;[17]
4. A pleading which necessitates background knowledge of matters separate to the pleading;[18]
5. A pleading claiming a declaration where there is no dispute between the parties in respect of the subject matter;[19]
6. A repetitive pleading;[20]

• [15] As to the difference between a strike out application and an application for summary judgment, the latter is a summary determination of the proceeding on the ground that the claim, or defence, is bad in law. In contrast, in a strike out application, it is assumed that an arguable claim or defence exists but the pleading fails to properly express that claim or defence.[21] The strike out of a Statement of Claim is not a final determination of the proceedings unless the proceedings are also dismissed. Until an order for dismissal is made, leave can be sought to file and serve an amended Statement of Claim.[22] However, if the party whose pleadings are struck out fails to re-plead, the proceedings are liable to be dismissed but only in consequence of the failure to re-plead and not as a direct consequence of the strike out.
• [16] I now deal with the first of the three stated bases of challenge of the Second Defendant. In my view the pleadings in paragraph 12B and 19B are inconsistent. That is because, in simple terms, the Plaintiff alleges a different construction of clause 2(c) of the Contract in each paragraph. That is only permissible if done in compliance with rule 13.09 of the SCR namely, if the inconsistent allegations are pleaded in the alternative. The use of the words "in the alternative" (as appears in paragraph 16 of the Amended Statement of Claim), is the classic way to demonstrate that but it will also suffice if it is clear by the words of the pleadings.
• [17] The Plaintiff argues that there is no inconsistency on the basis that rule 13.09 only applies to inconsistent allegations of fact, whereas the construction of a contractual term is a question of law.[23] However, as the pleadings plead the background allegations as allegations of fact, then in my view rule 13.09 applies notwithstanding that there is an overlap with the nature of the construction of a contractual term.
• [18] The Plaintiff also claims there is no inconsistency as the allegations essentially pleaded (as against the First Defendant), are the construction of clause 2(c) on the one hand, and the prayer for relief for a declaration (as against the Second Defendant), on the same basis of interpretation of clause 2(c), on the other hand. I disagree. Although that is likely to have been the intended effect, the pleading does not achieve that due to the identified inconsistencies namely, between paragraphs 12B and 19B, coupled to non-compliance with rule 13.09 of the SCR.
• [19] I remain of the view that rule 13.09 has not been complied with notwithstanding that paragraph 12B relates more to the breach of the retainer in respect of the First Defendant. A pleading is equally embarrassing if it alleges inconsistent facts differentially between Defendants. Hence the pleadings are inconsistent and therefore embarrassing within the meaning of rule 23.02(c) of the SCR.
• [20] The Second Defendant also complained that the pleading in paragraph 19D compounds the problem. With that I agree but for different reasons. The Second Defendant argues that it is compounded as the pleading purports to allege that there is a dispute between the Plaintiff and the Second Defendant as to the meaning of clause 2(c), however the Second Defendant submits that there is no such dispute. More relevantly, paragraph 19D, being pleaded as prefaced on the basis of, inter alia, paragraph 19B, carries over the inconsistency with paragraph 12B.
• [21] Although that renders those parts of the pleading liable to strike out, the pleading defect can be easily rectified hence it is appropriate to allow the Plaintiff an opportunity to correct the deficiency by further amendment.
• [22] The second basis of strike out pressed by the Second Defendant has two parts. Firstly, a failure to plead necessary material facts. Secondly, that the pleading of a "position" in paragraph 19B of the pleading is not a claim known in law.
• [23] As to the former, the complaint also relates to paragraph 19B of the pleading. Specifically, that it does not set out the necessary material facts. As the pleading of all necessary material facts is a requirement of pleadings (see paragraph 14.7(i) above), if that is established, that is a recognised basis for strike out, both on the basis of a breach of rule 23.02(c) and the failure to comply with the pleading rules.
• [24] There are numerous authorities dealing with the purpose of pleadings and there are also some specific pleading requirements in the SCR. The specific requirements in the rules are contained in Order 13. Rules 13.02(1) and 13.10 are particularly relevant and they provide:-

(a) contain in a summary form a statement of all the material facts on which the party relies but not the evidence by which those facts are to be proved;

(b) where a claim, defence or answer of the party arises by or under an Act identify the specific provision relied on; and

(c) state specifically the relief or remedy, if any, claimed.

(1) A pleading shall contain the necessary particulars of a fact or matter pleaded.

(2) Without limiting subrule (1), particulars shall be given if they are necessary to enable the opposite party to plead or to define the questions for trial or to avoid surprise at the trial.

• [25] The basic principle is that the pleadings must, by alleging all necessary material facts, clearly and unambiguously inform the other party as to what the case of the pleading party is, sufficient to inform the other party of the case that must be met.
• [26] As to what are material facts, Angel J in Northern Territory of Australia v John Holland Pty Ltd[24] stated that the material facts are those necessary to formulate the complete cause of action. His Honour added that the material facts are not to be expressed in terms of great generality and they should have sufficient particulars to enable the trial to be conducted fairly to all parties.[25]
• [27] The specific complaint regarding paragraph 19B is that, as the Plaintiff's contention is that clause 2(c) creates obligations post completion (as is evident from the pleading), the failure to plead how or why that is the case, or what timeframe applies (at least, that it operates post completion), is a failure to plead all material facts. In general terms, I agree and I think it is compounded by the Plaintiff's failure to plead what it says are the obligations placed on the Second Defendant by clause 2(c).
• [28] Paragraph 19B(a) purports to set out what those obligations on the Second Defendant are by reference to clause 2(c) itself as it pleads "...its obligations under Clause 2(c).." Although the content of that clause has been pleaded (in paragraph 12A, refer paragraph 5 above), in my view, that is not sufficient as that is then no more than a pleading of a conclusion. That is because it merely recites part of clause 2(c) without stipulating the meaning or construction which the Plaintiff contends. It is therefore a bare allegation and therefore it is conclusionary in the same way as in Trade Practices Commission v David Jones (Australia) Pty Ltd[26] and Northern Territory of Australia v John Holland Pty Ltd.[27] The same applies in respect of the reference to "sufficient infrastructure services" in subparagraph 19B(c) of the Amended Statement of Claim which is also conclusionary for similar reasons.
• [29] It is also apparent from the Second Defendant's submissions that the Second Defendant at least expects that some supervening event may be in play, and the Second Defendant submits that if so, that should be pleaded. The Plaintiff's submissions demonstrates intended reliance on a merger clause in the Contract. That merger clause has not been pleaded, as the Plaintiff's submissions concede. The Plaintiff's submissions go further and stipulate that the merger clause would be pleaded in a Reply if the Second Defendant files and serves a Defence which pleads an interpretation providing that the Second Defendant's obligations under clause 2(c) of the Contract have a temporal limit, for example, the completion date. Although the Plaintiff's position might be correct if the Plaintiff was simply complying with the pleading rule that a statement of claim should not plead in anticipation of a defence being raised,[28] that does not prevail in the case of material facts necessary to establish the Plaintiff's cause of action.
• [30] If the effect of the merger clause is as put in the Plaintiff's submissions, then I think it is pivotal to the Plaintiff's overall interpretation of clause 2(c). It is therefore a material fact in respect of the Plaintiff's case such that it ought to have been pleaded in the Statement of Claim. Moreover, as the strike out application must be determined by reference only to the pleading in the current Statement of Claim,[29] whatever might occur in a subsequent pleading is not relevant.
• [31] The second aspect of this basis is, if I have understood the Second Defendant's submission correctly, that the reference to a "position" in paragraph 19B amounts to a pleading of a cause of action which is not recognised by law. Subject to the pleading of a novel cause of action, in principle, if that were to be the case, then such a pleading would be liable to strike out under rule 23.02(a). However, I do not read the relevant paragraph as pleading that a "position" is a claim in its own right. Although the pleading could have been better expressed, I read that as asserting a statement of fact, which therefore is a necessary material fact, upon which the prayer for relief of the declaration as to the interpretation of clause 2(c) of the Contract is to be based.
• [32] Overall however, in my view, paragraph 19B of the current Statement of Claim should be struck out.
• [33] The Second Defendant's last basis for strike out relates to the declaratory relief sought and is predicated on the impossibility of the Plaintiff being granted that declaratory relief.
• [34] The parties are largely in agreement as to the principles to be applied in respect of declaratory relief and the determination of the question of whether the relief is impossible. The dispute is as to the application of those principles in the circumstances of the case. Nonetheless, it is useful to restate the principles to the extent that they are relevant to this application.
• [35] The power to grant declaratory relief is specifically provided for in section 18 of the Supreme Court Act ("Act"). That provides:-

(1) The Court may, in relation to any matter in which it has jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

(2) A proceeding is not open to objection on the ground that a declaratory order only is sought.

• [36] Relevant also, in a confirmatory sense, is rule 23.05 of the SCR which provides:-

No proceeding is open to objection on the ground that only a declaratory judgment or order is sought in the proceeding, and the Court may make binding declarations of right whether or not a consequential relief is or could be claimed.

• [37] In any case, superior courts have an inherent power to grant declaratory relief[30] and that inherent power is not modified by the statutory power.[31] Put succinctly, the availability of declaratory relief requires that there be more than a hypothetical case, as that is what renders declaratory relief different to an advisory opinion. The latter is traditionally avoided by the courts.[32] In Ainsworth v Criminal Justice Commission,[33] Mason CJ and Dawson, Toohey and Gordon JJ said that the discretionary power

"... is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'."[34]

• [38] Overall, the power of the Court to grant declaratory relief must be read in conjunction with principles set out in a number of authorities[35] which elaborate on the appropriateness of granting declaratory relief. Insofar as they are relevant at least to the current case, in summary form, those principles are:-

(a) The question to be determined by declaration must be a real, and not an abstract or hypothetical, question and the resolution of that question must be necessary to determine a legal controversy.

(b) The declaratory relief must have consequences for the parties and cannot relate to circumstances that have not occurred, nor may ever occur.

(c) The party seeking declaratory relief must have a real interest in the relief.

• [39] Bass v Permanent Trustee Co Ltd[36] is the commonly relied upon authority for the principle referred to in subparagraph 38(a). There the High Court approved of the statement[37] that "...a declaration will not be granted where the question under consideration is not a real question, nor where the person seeking the declaration has no real interest in it, nor where the declaration is sought without proper argument, eg in default of defence or on admissions or by consent".[38] The High Court said:-

The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy.

Because the object of the judicial process is the final determination of the rights of the parties to an action, courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions. The jurisdiction with respect to declaratory relief has developed with an awareness of that traditional attitude.[39]

• [40] The High Court also explained the difference between permissible declaratory relief and an advisory opinion in the following terms:-

However, one crucial difference between advisory opinion and a declaratory judgement is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties.[40]

• [41] In Governor and Company of the Bank of Scotland v A Ltd[41] Lord Woolf CJ said that "...the court's powers are discretionary and only to be used where there is a real dilemma which requires their intervention".[42] Hiley J in this Court made similar comments in Centrebet Pty Ltd v Baasland,[43] where his Honour adopted Gibbs J in Forster v Jododex Australia Pty Ltd,[44] which adds that the jurisdiction to make a declaration is a "very wide one".
• [42] The Plaintiff referred me to Concrete Constructions Pty Ltd v Government Insurance Office of NSW[45] where McFarlan J said:-

Obviously, if a dispute has arisen between two parties to a commercial contract which requires performance of the contractual obligations over a period of time in the future, the need of those two parties is to be told the meaning of their contract document and what their obligations under it are for the future. At that point of time the resolution of the dispute may not require an order for payment of money or delivery of property. But something is required, and the judge is, by s. 7B, empowered to determine their 'dispute' and in my judgment the illustration I have given shows that the use by Parliament of the word 'determine' is a statement that the judge is empowered to do whatever is necessary to make a determination of that dispute. This may be in some cases simply a statement of what are the rights and obligations of the disputants and nothing more and if that is the appropriate method of determining a particular dispute, it is a determination which, in accordance with the section, the judge is empowered to make. That, in my opinion, simply means that in appropriate cases the judge is empowered to determine commercial disputes by making declarations of right, which by virtue of sub-s. (5) are binding on all parties before the court.

• [43] Although that appears to support the Plaintiff's position, I do not read that as negating the need for the existence of a real controversy between the parties. I read that as applying only after it has been established that the principle in paragraph 38(a) above has been satisfied else it would have the effect of overruling the many other authorities (including the High Court in Bass v Permanent Trustee Co Ltd[46]), which establishes and maintains the need for a real, as opposed to a hypothetical, dispute.
• [44] Turning now to apply the foregoing principles to the current dispute, the Second Defendant argues that the declaratory relief sought is not based on sufficient pleaded facts and that the facts which are pleaded are too vague or general. Secondly, that the relief sought is hypothetical such that if the Court were to grant the declaration sought, that would not dispose of the issues between the Plaintiff and the Second Defendant. In other words, that res judicata would not be raised between the parties.
• [45] The hypothetical aspect is, according to the Second Defendant, due to the lack of the pleading of any application to the Development Consent Authority and/or any other authority referred to in clause 2(c) of the Contract. To the extent that the declaratory relief requires determination of the obligations on the Second Defendant, the complaint is that the Amended Statement of Claim does not plead what the Plaintiff says are the obligations on the Second Defendant, which I alluded to earlier at paragraphs 27 and 28. As I have already concluded that paragraph 19B is insufficient as it is a conclusory pleading, essentially I agree with the Second Defendant.
• [46] Clause 2(c) of the Contract refers to "sufficient infrastructure services". The Second Defendant argues that the Plaintiff is required to plead what it contends is the meaning of that phrase as simply seeking a declaration asking the Court to specify what that term means in the absence of such a pleading renders the declaration sought an advisory opinion. As I said earlier, the failure to plead precisely what obligations the Plaintiff says are imposed on the Second Defendant by clause 2(c) is a major pleading defect. As is apparent from the Plaintiff's submissions, but not demonstrated by the pleadings, the Plaintiff's case is that "sufficient infrastructure services" in clause 2(c) at least means whatever services are stipulated in an approval given by the Development Consent Authority or other "authority". If that is to be the Plaintiff's case, then that needs to be pleaded to satisfy rule 13.02(1)(a) and the cases regarding the requirements of pleadings discussed above. Likewise, the Plaintiff must plead what specific infrastructure services it contends are comprised within the phrase "sufficient infrastructure services".
• [47] Mr Roper for the Second Defendant attempted to demonstrate that the relief sought by the Plaintiff amounts to an advisory opinion by reference to Fisherman's Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd & Anor ("Fisherman's Wharf").[47] That case involved a shopping centre lease which contained a clause commonly known as a relocation clause. It was the case of the lessee that the clause was invalid as being contrary to a provision of relevant legislation regulating commercial shopping centre leases. There had been an intimation of a possible redevelopment of the shopping centre when the lease was negotiated but the notice which the lease required the lessor to give to trigger the operation of the relocation clause and its related provisions was never served. The related provisions in the lease dealt with the compensation to be paid to the lessee, which in part turned on the ability of the lessee to secure a transfer of a licence in respect of the lessee's business. The lessee applicant sought a declaration that the relocation clause in the lease was void as aforesaid.
• [48] The Court noted that there was no evidence of any possible redevelopment on the site and observed that until a relocation notice has been served, and it was established that approval for the transfer of the relevant licenses could not be obtained, it was neither certain, nor likely, that there would be a dispute between the parties as to the applicant's right to compensation pursuant to the legislation. The Court further said:-

The declaration sought by the applicant will not resolve a dispute between the parties. It may be accepted that the making of a declaration is a remedy of great utility in resolving disputes at an early stage and before parties have become entrenched in conflict or commit themselves to a course of action which will involve one or both in loss. Nevertheless there must be a dispute which can be resolved by the declaration before it is appropriate to make it. The court should not, under the guise of giving declarations, express opinions on abstract propositions of fact or law or disputes which are fictitious.[48]

• [49] Mr Pynt, counsel for the Plaintiff made a number of preliminary points. Firstly, that it was only on the date of the argument of the application that the Plaintiff learnt of the Second Defendant's interpretation of clause 2(c) of the Contract. That might explain why the pleading is structured as it is, but it cannot excuse defects in the pleadings. I fail to see the relevance of this to the current application. At the current stage of the pleadings the concern is about the Second Defendant knowing the case that it must meet, not about when, or if, the Plaintiff became aware of what the Second Defendant says its case will be.
• [50] As to the Second Defendant's complaint that there must be some temporal limit on its obligations under clause 2(c), Mr Pynt said that if the Second Defendant had concerns regarding the open-ended timeframe in clause 2(c), it could have, and should have, attempted to negotiate a suitable amendment to the clause at the time that the Contract was negotiated. That is also irrelevant. The sufficiency of the pleadings must be determined based on the pleaded material facts, which necessarily will be based on events that have actually occurred, not what might have occurred in different circumstances.
• [51] In conjunction with this point, Mr Pynt intimated that an amendment to seek a further declaration namely, a declaration relating to the determination of whether the Second Defendant's obligations under clause 2(c) came to an end on completion of the Contract, might be required. I think that is clearly necessary and, to that extent at least, that highlights the insufficiency of the current Statement of Claim, specifically in respect of the need to plead the merger clause as is discussed in paragraphs 29 and 30. I am also of the view, following on from matters discussed above, that additional declarations are required seeking determination of firstly, what the Second Defendant's obligations under clause 2(c) of the Contract are and secondly, what the phrase "sufficient infrastructure services" in clause 16 of the Contract means.
• [52] The third preliminary point arises as the Plaintiff appears to be of the view that, in lieu of joining the Second Defendant, it could have separately taken proceedings by Originating Motion against the Second Defendant seeking the same declarations as sought in the current proceedings. I accept that procedure may have been available to the Plaintiff and the Plaintiff's current dilemma may then have been resolved by seeking a joint hearing of both matters. However, as presently put, the Plaintiff's point appears to be predicated on the basis that there is no dispute between the Plaintiff and the Second Defendant, therefore permitting an application by Originating Motion.[49] Although the Second Defendant currently argues that there is no dispute between the Plaintiff and the Second Defendant as to the construction of clause 2(c), the Plaintiff's case on the current Statement of Claim is that there is a dispute, thereby warranting a declaration. If the Plaintiff is suggesting that it could rely on different allegations in different proceedings, then that would likely be an abuse of process.[50] In any case, what other process the Plaintiff may have utilised is also irrelevant on the current application and I am required to decide the current application as things currently stand.
• [53] The Plaintiff also sought to draw support from the Second Defendant's failure to seek an order setting aside the joinder of the Second Defendant. It is clear that the Second Defendant has chosen not to do so. However, the fact of the joinder, and whether the Second Defendant could have challenged that, is not a relevant consideration on this application.
• [54] Other submissions of the Plaintiff appeared to confuse the effect of the current application, specifically whether a strike out would summarily determine the Plaintiff's claim. The first instance was Mr Pynt's submission that the Court should hear all of the evidence before making a summary determination in respect of a discretionary remedy. I would agree with that entirely, and that would be relevant, if the Second Defendant was seeking summary judgment or summary dismissal of the Plaintiff's claim against it. However, the Second Defendant's summons only challenges the sufficiency of the Plaintiff's pleading. It therefore does not, as Mr Pynt suggested, summarily pre-empt the exercise of the Court's discretion. It is no answer to a claim that a pleading is embarrassing to assert that the question is a matter for argument at trial based on the evidence.[51]
• [55] Similarly, in respect of the determination of whether the Plaintiff's claim against the Second Defendant is hypothetical, Mr Pynt submitted that the question should be weighed with other considerations that the Court will take into account in exercising its discretion. That is true in respect of the substantive questions but in respect of the interlocutory procedural issue, my comments in paragraph 54 above apply equally to this submission.
• [56] Mr Pynt also told me that ultimately the Plaintiff would seek determination of the issue of the construction of clause 2(c) as a preliminary point pursuant to rule 47.04 of the SCR. Such an application may well be made. Such an application may well be appropriate. There appears to at least be an arguable basis for such an order. However, it is irrelevant at this point and does not add anything to determination of the Second Defendant's strike out application.
• [57] Mr Pynt also relied on the Second Defendant's submissions before me to support his contention that there is a real controversy. In those submissions, the Second Defendant contended that, whatever obligations the Second Defendant had under clause 2(c), ceased on completion of the Contract. I do not see how that aids the case for the Plaintiff. I agree only that if that was reflected on the pleadings, then there might be a controversy sufficient for current purposes. However, that is not an answer to the question of the sufficiency of the pleadings. As the strike out application is to be determined on the pleadings itself, the material facts to establish that controversy must appear in the pleading. The Second Defendant's submissions are not a pleading, nor are they evidence.[52]
• [58] The last of the Plaintiff's preliminary issues was the complaint that the Second Defendant's submissions in respect of whether the declaratory relief sought is only hypothetical, disregards all of the available evidence. In his oral submissions, Mr Pynt said:-

Its obligations on the state of the claim; that is, without looking in the whole of the contract, without looking at the tender documents, or without legislative context, ended on completion; and, fourthly that the claim could not possibly continue in effect in perpetuity. In other words, this is about the plaintiff's right to insist on the performance of an obligation, which the city is saying today has been exhausted. In that sense, we say, this is a dispute about a present right or, if not, not future right.[53]

• [59] This may have been intended as reliance on Hongkong Bank of Australia Ltd v BPTC Pty Ltd (in liq)[54] which held that the term "pleading" in the context of a rule similar to 23.02 of the SCR, included documents referred to in the pleadings. If that is the purport of that point then it is misguided as all that means is that, notwithstanding rule 23.04(2) of the SCR, evidence of documents referred to in the pleadings would be admissible on the current application. For that purpose, evidence of those documents is still required to be led and no such evidence has been led. In the absence of such evidence, the current Statement of Claim would still need to plead the relevant material facts.
• [60] Dealing now with the substantive argument of the Plaintiff in respect of the impossibility of relief, Mr Pynt argued that the declarations were not hypothetical because it is certain that the Land will be developed at some point. Leaving aside the evidentiary nature of this submission, I suspect that a development occurring on the Land is likely. The argument proceeds that when that occurs then the issue of the construction of clause 2(c) will then require resolution. Although Mr Pynt was attempting to distinguish Fisherman's Wharf from the current case, it seems to me, as the Second Defendant submitted, that Fisherman's Wharf is squarely on point with the current case and precisely counters Mr Pynt's submission. There it was decided that the question was hypothetical, largely because a relocation notice had not been given. In the current case the Plaintiff submits that when a development occurs the question will then be actual and not hypothetical. I accept that, but I think all that does is to highlight that at present the issue is hypothetical on the current pleading.
• [61] The position may have been different had the Plaintiff sought negative declarations, if appropriate, against the Second Defendant. The Courts appear more willing to accept hypothetical situations where a negative declaration is sought. See for example Centrebet Pty v Baasland[55] were Hiley J said "... in more recent years, the High Court has expressed a greater willingness to allow negative declarations even in respect of conduct which has not yet taken place".[56]
• [62] Mr Pynt also sought to distinguish Fisherman's Wharf on a number of other bases. Firstly, that there was no third party involved in Fisherman's Wharf. I fail to see the relevance of that. Although the distinguishing feature relied on clearly exists, I do not how the involvement of a third party in the current case restricts the application of Fisherman's Wharf.
• [63] The second basis put to distinguish Fisherman's Wharf was that there is a real controversy in the current case. That is all that was put to me, no doubt relying on previous submissions on the controversy issue. That bare statement however adds nothing further. That does not change the view I previously expressed.
• [64] Thirdly, that the Plaintiff in this case, in contrast to the applicant in Fisherman's Wharf, is the party who can control, or crystallise the dispute. That is, it is only the Plaintiff in the current case who can make a development application in respect of the Land whereas in Fisherman's Wharf it was the respondent that would have initiated the dispute by giving a relocation notice. I do not see how that changes anything. If the Plaintiff had initiated a development then clearly different considerations would apply as to declaratory relief. In that event it is more likely that the declarations sought would be actual and not hypothetical. That however, is precisely what the Second Defendant argues, and I think correctly so, namely that until there is a development application in respect of the Land, the question remains hypothetical. That only the Plaintiff can make such an application is not the relevant consideration in my view.
• [65] Despite attempting to distinguish Fisherman's Wharf as aforesaid, Mr Pynt also argued that Fisherman's Wharf supported his propositions. He relied on the statement in that case, which was as follows:-

The second factor raised by the respondents is that they have never contended that, should there be a redevelopment, and events fall out so that cl 5.25(b)(iii) is put into operation, and the respondents exercise the option to purchase the applicant's business, they will dispute the applicant's right to compensation in addition to the receipt of the purchase price for the business.[57]

• [66] It was argued that this indicated the lack of dispute was a relevant factor. Firstly, I do not read it that way. Secondly, it is not clear how the Plaintiff reconciles this with its case. As stated above, although the Second Defendant submitted that there was no dispute between the Plaintiff and the Second Defendant, that is not the Plaintiff's case. Currently the Plaintiff positively pleads that there is a dispute and that forms the basis of the declaratory relief sought. That therefore does not assist the Plaintiff in my view.
• [67] The net result is that in my view, as the pleadings currently stand, the declarations sought are hypothetical and therefore impermissible. Having said that, it is possible that a case for appropriate declaratory relief, including negative declarations could be properly pleaded.
• [68] For the foregoing reasons, I think that critical parts of the Amended Statement of Claim are liable to strike out. It is appropriate that the whole of the pleading be struck out as I think that it will not be possible to rectify the deficiencies with piecemeal amendments.[58]
• [69] I therefore make an order in terms of paragraph 1 of the Second Defendant's Summons but I give the Plaintiff leave to file and serve a Further Amended Statement of Claim.
• [70] I will hear the parties as to consequential orders and on the question of costs.

[1] Rule 23.04(2) of the SCR provides that, on an application under rule 23.02, no evidence shall be admissible on the question whether the pleading offends against that rule.

[2] Australian Civil Procedure, Cairns, B., The Law Book Library at paragraph 6.610.

[3] Gunns Ltd v Marr [2005] VSC 251.

[4] Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; RTA Pty Ltd v Brinko Pty Ltd [2011] NTSC 103.

[5] Chapman v Australian Broadcasting Commission [2000] SASC 146; (2000) 77 SASR 181.

[6] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252.

[7] Environinvest Ltd v Prescott; Environinvest Ltd v Blackburne Pty Ltd [2011] VSC 325.

[8] Trade Practices Commission v George Weston Foods Pty Ltd [1979] FCA 26; (1979) 39 FLR 182.

[9] Gordon v Gordon [1947] VicLawRp 72; [1948] VLR 57.

[10] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252.

[11] Environinvest Ltd v Prescott; Environinvest Ltd v Blackburne Pty Ltd [2011] VSC 325.

[12] Meckiff v Simpson [1968] VicRp 7; [1968] VR 62.

[13] Bruce v Oldhams Press Ltd [1936] 1 KB 697.

[14] Trade Practices Commission v Australian Iron & Steel Pty Ltd [1990] FCA 23; (1990) 92 ALR 395.

[15] Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228; (1985) 7 FCR 109; Northern Territory of Australia v John Holland Pty Ltd [2008] NTSC 4.

[16] Wickham Point Pty Ltd v Commonwealth of Australia [2018] NTSC 7.

[17] Environinvest Ltd v Prescott; Environinvest Ltd v Blackburne Pty Ltd [2011] VSC 325.

[18] Environinvest Ltd v Prescott; Environinvest Ltd v Blackburne Pty Ltd [2011] VSC 325.

[19] Carpenter v Epplewhite [1939] 1 KB 347.

[20] Williams v Melky [20202011] NTSC 77.

[21] Matz v The Gove Flying Club Inc [1994] NTSC 17.

[22] Civil Procedure Northern Territory, Grant, M., Presidian, at 5.23.25.

[23] Life Insurance Co of Australia Ltd v Phillips [1925] HCA 18; (1925) 36 CLR 60; Ryan v Worthington [2015] QCA 201.

[24] [2008] NTSC 4.

[25] RTA Pty Ltd v Brinko Pty Ltd [2011] NTSC 103; Northern Territory of Australia v John Holland Pty Ltd [2008] NTSC 4.

[26] [1985] FCA 228; (1985) 7 FCR 109.

[27] [2008] NTSC 4.

[28] Fortescue Metals Group Ltd v ASIC [2012] HCA 39; (2012) 247 CLR 486.

[30] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564; Centrebet Pty Ltd v Baasland [2013] NTSC 59.

[31] Alcoota Aboriginal Corporation v Justice PRA Gray [2002] NTSC 48.

[32] Civil Procedure Northern Territory, Grant, M., Presidian at para 8.18.10.

[33] [1992] HCA 10; (1992) 175 CLR 564.

[34] Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at p 582.

[35] Principally see Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 139 ALR 663; Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564; Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334.

[36] [1999] HCA 9; (1999) 198 CLR 334.

[37] Per Lord Goff of Chieveley in In re F (Mental Patient: Sterilisation) [1991] UKHL 1; (1990) 2 AC 1.

[38] [1999] HCA 9; (1999) 198 CLR 334 at 356.

[39] [1999] HCA 9; (1999) 198 CLR 334 at 355-356

[40] [1999] HCA 9; (1999) 198 CLR 334 at 356.

[41] [2001] EWCA Civ 52.

[42] [2001] EWCA Civ 52 at para 46

[43] [2013] NTSC 59.

[44] [1972] HCA 61; (1972) 127 CLR 421 at 435.

[45] (1967) 85 WN (NSW) 104.

[46] [1999] HCA 9; (1999) 198 CLR 334.

[47] [2006] QSC 104.

[48] Fisherman's Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd & Anor [2006] QSC 104 at para 11.

[50] Sea Culture International v Scoles [1991] FCA 523; (1991) 32 FCR 275; JMT Builders Pty Ltd v Ryan & Ors [2016] NTSC 6.

[51] Williams v Melky [2011) NTSC 77.

[52] If the submissions were evidence then in any case they would have to be disregarded by virtue of rule 23.04(2) of the SCR.

[54] (1995) Aust Torts Reports 81-358.

[55] [2013] NTSC 59

[56] [2013] NTSC 59 at paragraph 115.

[57] Fisherman's Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd & Anor [2006] QSC 104 at para 8.

[58] Turner v Bulletin Newspaper Co Pty Ltd [1974] HCA 25; (1974) 131 CLR 69.