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[2001] WASC 46
procedural. The strike-out application succeeded in part: paragraphs 16 and 23 were struck out with leave to replead, paragraph 24 was struck out consequentially, and paragraph 26 was struck out with leave to...
This was a procedural ruling about the adequacy of a statement of claim, not a decision on whether the plaintiffs' allegations were true. The court required the plaintiffs to add material facts or clarify parts of their pleading about implied warranties, knowledge and unconscionability. It held that the negligence allegation was sufficiently pleaded. It also required some further particulars but declined others, including where the defendants were best placed to know the requested information.
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Master Bredemeyer dealt with two applications by the first and second defendants in the Supreme Court of Western Australia. The first sought to strike out parts of the plaintiffs' statement of claim. The second sought further and better particulars of that pleading. The judgment identifies the plaintiffs as Wayne and Faye Marinkovich, the first defendant as Morkim Pty Ltd, and the second defendants as Christine and Kimberley Morrison. Cabassi Pty Ltd was the third defendant, but did not appear. The applications were heard on 30 January 2001 and decided on 23 February 2001.
1 cited instrument linked from this judgment.
The plaintiffs' claim arose from their purchase of Lot 203. As described in the pleading and the court's reasons, they alleged that the land was represented as having abundant fresh underground water and being suitable for horticulture or a commercial market garden. Their pleading also referred to restrictions on the amount of groundwater that could be pumped, a need for a licence, and water availability that might be inadequate for the proposed commercial use. Those are allegations underlying the pleading dispute, not factual findings by the court.
The defendants' strike-out objections concerned several different forms of pleading. Paragraph 16 alleged three warranties implied into the purchase contract, but did not later allege that the warranties had been breached. Paragraphs 23 and 24 addressed the defendants' knowledge of matters related to the representations. Paragraph 26 alleged unconscionable conduct under the unwritten law of Western Australia and s 51AA of the Trade Practices Act 1974 (Cth). Paragraph 28 alleged a duty of care to bring groundwater restrictions, suitability concerns and the need for a licence to the purchasers' attention.
The court also dealt with eleven requests for particulars. It did not treat the requests as an all-or-nothing matter. It assessed whether the pleading was clear enough, whether the information sought was already within the requesting defendants' knowledge, and whether its absence would cause embarrassment at trial. The result was mixed: some pleading paragraphs were struck out, but paragraph 28 survived; some particulars were ordered, while others were refused.
The decision reflects the distinction between pleading a conclusion and pleading the material facts that support it. Paragraph 16 stated the alleged implied warranties, but there was no corresponding allegation of breach. The court considered the objection sound and said the gap could be cured by pleading breach, potentially in a new paragraph 22A, with breaches corresponding to the three warranties [2]. The paragraph was struck out with leave to replead. This was not a ruling that no warranties existed or that they had not been breached.
The court treated paragraphs 23 and 24 as problematic for a different reason. The defendants' knowledge was pleaded, but the claim did not make withholding that knowledge an element of a cause of action. If the plaintiffs intended to allege misleading conduct by silence, the court said they needed to plead that the defendants failed to disclose the matters in circumstances giving rise to an obligation to disclose [3]. It also identified another possible pleading function: the listed matters could be further particulars supporting the alleged falsity of representations in paragraph 22. The court struck out paragraph 23 with leave to replead and paragraph 24 as consequential [3].
The unconscionability allegation needed more than the label. The court said material facts were required to explain why the defendants' conduct was unconscionable and identified serious disadvantage as necessary to the pleaded case [4]. It referred to Commercial Bank of Australia Ltd v Amadio as a source of examples of disadvantage, including sickness, age, infirmity, drunkenness, illiteracy, lack of education, and lack of assistance or explanation where that assistance or explanation was needed. The judgment did not say that this list was exhaustive. In the circumstances described, the plaintiffs' proposed basis for disadvantage appeared to concern the absence of an explanation about groundwater limitations, licensing requirements and the property's suitability for commercial market gardening [4]. Paragraph 26 was struck out with leave to replead.
The statutory damages objection to paragraph 26 was treated separately from the deficiency in pleading unconscionability. The court accepted that s 82, by its terms, provided damages for contraventions of specified parts of the Trade Practices Act, and that s 51AA was in Part IVA rather than those listed parts. But it held that this was not ultimately a winning objection because s 87(2)(d) could allow damages for a contravention of s 51AA [5]. The point is limited to what the court said about those provisions; the judgment did not determine damages or the substantive claim.
The court rejected the challenge to the negligence plea. It explained that a familiar category, such as negligence on the highway, may not require every element to be pleaded in detail where the duty is well established. By contrast, a less common situation near the boundaries of negligence law may need a more comprehensive pleading [7]. The court mentioned economic loss in Perre v Apand Pty Ltd and failure to exercise a statutory power in Pyrenees Shire Council v Day as examples of situations requiring more detailed analysis. It treated alleged misleading information by a vendor to a purchaser about the subject matter of the sale as a well-known category, and found paragraph 28 adequate [7].
The particulars decisions similarly turned on practical pleading functions. Request 2, as amended, sought details of an advertisement referred to in paragraph 6.1, and was allowed [10]. Request 4, about the road signs, was allowed. The court indicated that an answer could identify the proposed inference that the second defendants lived locally, saw and approved the signs, and instructed their agent to erect them, if those matters were not known more precisely to the plaintiffs [12]. Requests 7 and 8 were allowed because the plaintiffs could state the matters from which they would ask the trial judge to infer that the second defendants were knowingly concerned in Morkim's conduct [15].
Other requests were refused because the court considered the requested information clear, unnecessary, or better known to the defendants themselves. For example, it declined a request about instructions the second defendants gave Morkim, reasoning that those instructions were within the defendants' knowledge and that the plaintiffs might not be able to say more before discovery and interrogatories [11]. It also refused requests where the pleaded representations or the basis of the plaintiffs' proposed inferences were apparent from the statement of claim [13]-[14]. In the court's view, the defendants would not be embarrassed at trial by the absence of those particulars.
The judgment is a procedural decision applying pleading principles to the particular statement of claim. It does not purport to change the substantive tests for contractual breach, unconscionability, misleading conduct, or negligence. Its practical contribution is its explanation of how much factual detail the court required in these pleadings.
Before the ruling, paragraph 16 identified alleged implied warranties but did not plead breach. After the ruling, that paragraph could remain only if repleaded to identify that the warranties were breached and how, as the court suggested [2]. For paragraphs 23 and 24, the court required the plaintiffs to clarify whether they relied on silence and, if so, to plead circumstances creating an obligation to disclose; alternatively, relevant matters could be framed as particulars supporting the alleged falsity of the express representations [3].
For s 51AA, the court distinguished the legal characterisation from the facts said to justify it. The pleaded case needed material facts showing why the conduct was unconscionable, including the alleged serious disadvantage [4]. The court also addressed the statutory route to damages: it considered s 82 unavailable on the provision's terms for s 51AA, but identified s 87(2)(d) as a possible basis for damages [5]. That observation should not be enlarged into a determination of the plaintiffs' entitlement to damages.
For negligence, the court stated a contextual pleading approach. Where the alleged duty fell into a settled category, a concise pleading could suffice; where the situation approached the boundaries of negligence law, greater detail might be necessary [7]. It found this vendor-to-purchaser information allegation adequate on its face, without deciding whether a duty existed or was breached at trial.
The ruling also illustrates that particulars are not an automatic entitlement to every detail sought. The judge considered whether the recipient could understand the case and whether the missing information would cause trial embarrassment. Information known primarily to the defendants did not necessarily have to be supplied by the plaintiffs before discovery [11], [14], [16]. Conversely, the plaintiffs were required to identify the advertisement and certain inferences they intended to rely on [10], [12], [15].
At [2], the court said paragraph 16 could be cured by pleading that the implied term was breached and identifying the breaches. In plain English, stating what the contract allegedly promised was not enough: the pleading also had to say what the defendants allegedly did that broke those promises.
At [3], the court explained that a silence-based misleading conduct claim required an allegation that the defendants failed to disclose information when the circumstances required disclosure. In plain English, alleging that a defendant knew something does not by itself explain why that knowledge mattered legally. The pleading needed to connect the knowledge to an alleged failure to disclose and the relevant obligation.
At [4], the court stated that material facts were needed to explain why the conduct was unconscionable. In plain English, using the word “unconscionable” did not substitute for describing the disadvantage and circumstances said to make the conduct unconscionable. The judgment identified the plaintiffs' proposed concern about water information and licensing as a possible basis to plead, rather than making a finding that those matters were established.
At [5], the court said a s 51AA contravention could result in damages under s 87(2)(d), notwithstanding the objection concerning s 82. In plain English, the defendants' point about the wording of s 82 did not answer whether another remedial provision might apply.
At [7], the court explained that greater pleading detail may be needed when a negligence claim is in a less common or developing category, but found the vendor-to-purchaser information context sufficiently familiar. In plain English, the amount of detail expected depends on how settled the alleged duty is. This conclusion concerned the sufficiency of the pleading, not proof of negligence.
At [11], the court said the defendants would not be embarrassed by a lack of particulars where the requested information concerned instructions they themselves would know. In plain English, a party was not required to provide details that the opposing party was better placed to know, particularly where the pleading already made the case understandable.
The ruling is most relevant as a procedural reference where a statement of claim alleges an implied contractual promise but does not separately allege breach. It also matters where a party relies on non-disclosure: the pleading should identify the alleged failure to disclose and the circumstances said to create an obligation to disclose, rather than relying only on the other party's knowledge [2]-[3].
For an unconscionability pleading under s 51AA, the decision is relevant where the claim uses a broad legal label without identifying facts said to show serious disadvantage or explain why the conduct was unconscionable [4]. The examples in the judgment are drawn from the authorities it refers to and should not be treated as an exhaustive checklist.
The negligence discussion may be relevant where a party challenges the level of detail in a pleaded duty. The judgment distinguishes a familiar category, where a concise plea may suffice, from a less established or boundary case, where more detailed facts may be needed [7]. Its treatment of the pleaded vendor-to-purchaser information duty is tied to the case before Master Bredemeyer and does not determine every duty arising from a property transaction.
The particulars reasoning may be useful where the requested information is allegedly already known to the requesting party, or where a party is asked to explain inferences it proposes to invite at trial. The judgment considered clarity and possible embarrassment at trial, not simply whether further detail could be useful [9]-[18].
The supplied judgment text contains no later decisions discussing or applying Marinkovich & Anor v Morkim Pty Ltd. It therefore does not support a reliable account of how later courts treated this decision, whether they followed it, distinguished it, or questioned any part of its reasoning.
The judgment itself cites or discusses authorities including Commercial Bank of Australia Ltd v Amadio, Perre v Apand Pty Ltd and Pyrenees Shire Council v Day. Those are authorities considered in the reasons, not later treatment of Marinkovich. The case list supplied with the judgment includes other decisions, but the reasons reproduced here do not explain their relationship to the outcome. No later-history claim can be made from this source alone.
The judgment determined pleading sufficiency and particulars, not the truth of the allegations or the ultimate legal merits. It did not decide whether the defendants made the alleged water representations, whether those representations were misleading, whether the plaintiffs were in fact seriously disadvantaged, or whether any defendant owed or breached a duty of care. Those matters remained for later determination.
The reasons also do not set out the precise amended pleading eventually filed, if any. The court gave leave to replead paragraphs 16, 23 and 26, but the supplied text does not show how those amendments were made or whether they were later contested.
The statutory discussion is confined to the objection before the court. It identifies s 87(2)(d) as a possible damages route for a s 51AA contravention, but does not resolve the availability, measure or proof of any remedy in the plaintiffs' circumstances. Likewise, the court's statement that the negligence context was a well-known category does not explain how the duty would ultimately be assessed on a developed evidentiary record.
Finally, the source does not provide later treatment of this ruling. Any assessment of its subsequent standing, or of how later courts have approached its pleading observations, would require additional legal sources not supplied here.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on, or using this analysis, have a qualified Australian lawyer check it.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : MARINKOVICH & ANOR -v- MORKIM PTY LTD & ORS [2001] WASC 46
Attorney General of the Duchy of Lancaster v L & NWR [1892] 3 Ch D 274
Beach Petroleum NL & Anor v Johnson & Ors (1991) 105 ALR 456
Bruce v Odhams Press Ltd [1936] 1 All ER 287
Charlie Carter Pty Ltd v Shop, Distributive and Allied Employees Association of Western Australia (1987) 13 FCR 413
Dalgety Australia Ltd v Rubin, unreported; FCt SCt of WA; Library No 5485; 24 August 1984
Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62
Gala v Preston [1991] HCA 18; (1991) 172 CLR 243
General Steel Industries Inc v Commissioner for Railways NSW [1964] HCA 69; (1964) 112 CLR 125
Goddard v BHP Iron Ore Ltd, unreported; SCt of WA (Murray J; Library No 950018; 20 January 1995
Hackshaw v Shaw [1984] HCA 84; (1984) 155 CLR 614
Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365
Hubbuck & Sons v Wilkinson [1899] 1 QB 86
Jaensch v Coffey [1984] HCA 52; (1984) 155 CLR 549
Katina Pty Ltd v Westfield Design and Construction Pty Ltd, unreported; SCt of WA (Master Sanderson); Library No 980059; 13 February 1998
Kimberley Downs Pty Ltd v State of Western Australia, unreported; SCt of WA (Master Staples); Library No 6141; 25 August 1986
Knowles v Robert [1888] 38 Ch D 263
Mayor of London v Horner (1914) 111 LT 514
Meckiff v Simpson [1968] VicRp 7; [1968] VR 62
Nagle v Fieldren [1966] 2 QB 633
National Mutual Life Association of Australasia Ltd v Coffey & Partners Pty Ltd & Ors (1992) BCL 74
Niven v Grant [1903] VLR 103
Packard v Transport Trading and Agency Co Ltd (1912) 14 WALR 191
Pancontinental Mining Ltd v Posgold Investments Pty Ltd [1994] FCA 983; (1994) 121 ALR 405
Phillips v Phillips [1878] 4 QBD 127
Ron Hodgson (Trading) Pty Ltd v Belvedere Motors (Hurtsville) Pty Ltd [1971] 1 NSWLR 472
San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340
Southern Resources Ltd v Techmonin Australia NL [1990] WAR 72
Stevens v Broadribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424
Todd v Novotny, unreported; SCt of WA (Master Sanderson); Library No 970029; 7 February 1997
1 MASTER BREDMEYER: I have before me two applications by the first and second defendants, whom I will refer to as "the defendants". The first is an application dated 2 November 2000 to strike out parts of the plaintiffs' statement of claim. In an attempt to meet some of the objections the plaintiffs have drafted an amended statement of claim dated 27 November 2000, which I will refer to as "the statement of claim". The second application is to obtain particulars of that statement of claim as set out in a request dated 30 November 2000. I will deal first with the defendants' application to strike out parts of the statement of claim.
2 Paragraph 16 pleads three warranties by Morkim Pty Ltd ("Morkim") as an implied term of the purchase contract. The objection is that it is not pleaded later that this implied term was breached. I consider that is a good objection and could be cured by a plea of breach (possibly a new par 22A) stating that the implied term was breached and spelling out, perhaps, three breaches to agree with the three warranties. I will strike out par 16 with leave to replead.
3 Paragraphs 23 and 24 are said to be objectionable in that they contain evidence rather than material facts. They plead the defendants' knowledge of certain matters, but the withholding of that knowledge is not said to be an element of any cause of action. I consider there is some merit in that objection. If the pleader intends, by par 23, to plead misleading and deceptive conduct by silence, he needs to plead that the defendants failed to disclose those matters to the plaintiffs when the circumstances gave rise to an obligation to disclose those matters: Miller's Annotated Trade Practices Act (1999) 1.52.50. Then the particulars given could be designated particulars of knowledge. Alternatively, the particulars themselves are useful without the opening words of par 23. They are useful as further particulars of the falsity of the three representations given in par 22 which are particularised at (a) and (b) of par 22. In other words, particulars (a) and (b) of par 23 can be regarded as further particulars in support of particulars (a) and (b) of par 22. I will strike out par 23 with leave to replead. I will strike out par 24 as consequential.
4 Paragraph 26 pleads "unconscionable conduct within the meaning of the unwritten law of Western Australia and thereby breached section 51AA of the TPA". The objection here is that more is needed in this plea and I agree with that. It is not necessary to mention any particular case, such as Commercial Bank of Australia Ltd v Armadio [1983] HCA 14; (1983) 151 CLR 447, but it is necessary to plead some material facts as to why the defendants' conduct was unconscionable. It is necessary to plead that the plaintiffs were in a position of serious disadvantage with the defendants. A list of matters, which is not exhaustive, is set out in that case at 462 which place a person at serious disadvantage with another. These include sickness, age, infirmity of body and mind, drunkenness, illiteracy, lack of education, lack of assistance or explanation where assistance or explanation is necessary. The latter phrase may be apt. From what I understand of the plaintiffs' case, they claim to be under a serious disadvantage vis à vis the defendants, because they were not given an explanation about the limited ground water available on the property, the need to obtain a licence before that water could be accessed, and that ground water was not available in suitable quantities to make it suitable for commercial market garden operation. I will strike out par 26 with leave to replead.
5 A second objection to par 26 is that it is said that damages cannot be obtained under s 82 for breach of s 51AA. That is because s 82, in its terms, provides damages for contraventions of provisions in Parts IV, IVB, V or s 51AC of the Trade Practices Act, and s 51AA is found in Part IVA. The point is a good one but is not ultimately a winning one because a contravention of s 51AA can result in damages under s 87(2)(d) of the Act.
"28. Further, and in the alternative, in the premises, Morkim and the second defendants owed the plaintiffs a duty of care to bring to their attention:
(a) that restrictions did or might apply on the amount of ground water that could be pumped on Lot 203;
(b) Lot 203 may be unsuitable for a commercial market garden due to restrictions on groundwater use; and
(c) the ATP,
because it was foreseeable that if the plaintiffs purchased Lot 203 to use as a commercial market garden and expended funds to establish improvements on Lot 203, for that purpose, they would suffer loss and damage if there was not sufficient water available for that purpose due to lack of groundwater or due to restrictions on the use of groundwater."
7 This plea is said to be defective because it does not spell out the various necessary elements of the tort of negligence. In particular, it does not spell out the proximity to explain why these vendors should be liable in negligence for misrepresentations to their purchaser. I disagree with that objection. As I pointed out to counsel in the course of argument, the tort of negligence applies in various factual situations and the court has extended it from time to time, in an incremental way, to new situations. In a well-known category, such as negligence on the highway, it is not necessary to plead out the various elements of the cause of action because it is well established in the cases, that a driver of a vehicle owes a duty of care to other road users. However, if the plea of negligence was in a less common situation and getting towards the boundaries of the law of negligence, a more comprehensive plea would be required. Examples of that would be in the situation of negligence for economic loss covered in Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180 and for failure to exercise a statutory power in Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330. The context of this present plea of misleading information given by a vendor to a purchaser about the subject matter of the sale is a well-known category and I consider the plea is adequate.
8 I turn now to the defendants' application for further and better particulars of the statement of claim. I refer to the first and second defendant's request dated 30 November 2000.
9 I reject request 1 which relates to par 2 of the statement of claim. As worded, the request only relates to what is meant by "all material times" in par 2, and that is clear enough from the pleading. It means at all times anything is alleged against the defendants. The defendants sought to amend their request to cover a different matter, namely the plea that the second defendants, inter alia, "acted on their own behalf". I decline to allow that amendment.
10 I allow request 2 in an amended form. The amendment was reached in the course of argument, namely: "State details of the advertisement referred to in par 6.1 of the Statement of Claim."
11 Request 3 relates to pars 5, 6 and 7 of the statement of claim. It seeks particulars of the instructions given by the second defendants, Mr and Mrs Morrison, to their company Morkim. I decline to grant that. I consider the defendants will not be embarrassed by that lack. Clearly, whether both or either of them gave instructions to their company on various matters is entirely within their own knowledge and they are at a great advantage in that, vis-à-vis, the plaintiffs. I do not consider the defendants will be embarrassed at trial for this lack of particulars. The plaintiffs are unlikely to be able to give any more than to say: "Particulars will be given after discovery and interrogatories".
12 Request 4 relates to par 12 of the statement of claim and relates to large coloured road signs erected adjacent to the lots for sale, advising that the land had abundant fresh underground water and could be used for horticulture. I will allow this request. Unless the plaintiffs have any more precise knowledge, I consider it could be answered along these lines: the second defendants lived in the area (if that be a fact) and the plaintiffs will ask the court to infer that they saw the signs, approved of them, and instructed their real estate agent, the third defendant, to erect the signs.
13 I decline request 5, which relates to par 13 of the statement of claim. That paragraph pleads implied representations. It is obvious from earlier pleas that the plaintiffs will ask the court to infer those representations from the brochure and the road signs and to infer that the second defendants knew of them and approved them.
14 Request 6 relates to par 23 of the statement of claim. I decline this request. I have struck out par 23 and it will be repleaded. As I said in relation to request 3, what instructions Mr or Mrs Morrison gave to their company is well known to them, and probably not known to the plaintiffs. At trial the plaintiffs will ask the court to draw inferences that they knew what their company was doing and instructed its real estate agent in the conduct of the sale. The defendants will not be embarrassed by the lack of particulars.
15 I allow requests 7 and 8 relating to par 26(b) and par 27(b), that the second defendants were knowingly concerned in the misleading and deceptive conduct perpetrated by their company, Morkim. Again, as outlined above, if the plaintiffs are going to argue at trial that the Judge should draw that inference from certain stated matters, then they may state that as a proper answer to this particular.
16 I reject request 9 which seeks particulars of the allegation that the second defendants were engaged in trade and commerce, as alleged in par 20 of the statement of claim. I reject the request as unnecessary. The land was being sold by Morkim as a commercial venture. There were at least 31 lots for sale and clearly it was as a commercial venture. It was not a sale of the family home or the family farm. I realise that the question particularly relates to the second defendants. As I understand the plaintiffs' argument, it is that they were the directors of Morkim and, as such, must have instructed their company to do the subdivision and sell the lots. As previously stated, whether they, or each of them, did or did not, is within their knowledge. The plaintiffs will rely on inferences. The defendants will not be embarrassed by a lack of particulars.
17 Request 10 relates to par 25 of the statement of claim. It pleads that by making the water representation and the market garden representation, Morkim and the second defendants engaged in misleading or deceptive conduct contrary to s 52 of the TPA and s 10 of the FTA. I regard that as a wrap-up plea. The material facts supporting the elements of the cause of action are pleaded elsewhere and no particulars of the second defendants' role in that need be given in reference to par 25.
18 Request 11 relates to par 28 of the pleading which is the plea of negligence. Again, the request is directed to the second defendants, as to why they owed a duty of care to advise the plaintiff purchasers about the water restrictions etc. Again, this is a wrap-up plea, and, except insofar as I have required the plaintiffs to say something about the inferences they will ask the court to draw at trial, I do not consider any further particulars are necessary.
19 In summary, I allow requests 2 as amended, 4, 7 and 8.
Marinkovich & Anor
Morkim Pty Ltd & Ors [2001] WASC 46
(1991) 105 ALR 456
(1987) 13 FCR 413
(1949) 78 CLR 62
(1991) 172 CLR 243
(1964) 112 CLR 125
(1984) 155 CLR 614
(1983) 44 ALR 365
(1984) 155 CLR 549
(1994) 121 ALR 405
(1986) 162 CLR 340
(1986) 160 CLR 16
(1985) 157 CLR 424
(1983) 151 CLR 447
(1999) 198 CLR 180
(1998) 192 CLR 330
The strike-out application succeeded in part: paragraphs 16 and 23 were struck out with leave to replead, paragraph 24 was struck out consequentially, and paragraph 26 was struck out with leave to replead. The objection to paragraph 28 was rejected. Of the particulars requests, requests 2 as amended, 4, 7 and 8 were allowed; the others were declined.