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File Number: SC 276 of 2020

Kennett J:

Introduction

1. The plaintiff in this proceeding (Nova) is the owner of a development site in Greenway (the site). The first defendant, which traded as “Benex” and is referred to by that name, performed earthworks on the site between November 2019 and March 2020. From about 3 March 2020, in circumstances that will likely be the subject of competing contentions at the trial, Benex ceased to do work on the site and was replaced in that capacity by the second defendant (Civil & Civic).

2. Nova commenced proceedings on 7 August 2020, seeking interpleader relief on the basis that entitlement to a sum of $438,078.93 was disputed as between Benex and Civil & Civic. The Court granted that relief on 17 September 2020 and ordered the sum to be paid into Court, which was done.

3. Both defendants then filed applications, which were considered by McWilliam AJ in a judgment published on 18 November 2021: [2021] ACTSC 295. What emerged was, in substance, that interpleader was not the appropriate method for resolving the parties’ disputes, which went beyond a simple question of who was entitled to the sum that had been paid into Court. Larger sums were sought by way of intersecting claims, and it was not feasible for Nova to avoid an active role in the litigation.

4. Following further interactions about the appropriate orders, orders were made on 24 February 2022. A Statement of Claim previously filed by Benex was struck out. Civil & Civic was to file an Amended Statement of Claim first, following which Nova and Benex were to file Defences. Those things have been done. Benex was then to file an Amended Statement of Claim.

5. Benex filed its Amended Statement of Claim on 28 April 2022. The Application in Proceeding now before me, filed by Nova, seeks to have five paragraphs of that document (which consists of only 14 paragraphs in total) struck out.

The pleadings

6. Before considering Benex’s Amended Statement of Claim and the complaints made about it, it is necessary to note some aspects of the pleadings already filed by the other parties.

7. Civil & Civic claims against Nova a sum of $462,003.93 plus interest. It alleges that:

(a) Nova and Benex made an agreement on 8 November 2019 for Benex to carry out certain work (at [10]);

(b) Nova and Benex made a further agreement in January 2020 for Benex to carry out further work (at [11]);

(c) on 3 March 2020, Civil & Civic and Benex both informed Nova that Benex would no longer be working on the site and Civil & Civic would be taking over, an arrangement to which Nova agreed, and Civil & Civic subsequently carried out works on the site (at [12]–[15]);

(d) in the premises, either there was a novation of the agreement previously made between Nova and Benex or those parties were estopped from denying the existence of a novation (at [17]–[18]); and

(e) Civil & Civic completed works on the site and issued invoices (for a total corresponding to the amount paid into Court) (at [19]), which Nova had admitted it was liable to pay (at [21]), and was also entitled to the release of certain retention monies (at [20]).

8. By its Defence, Nova:

(a) admits the agreements between it and Benex (at [3]); (b) denies or does not admit important aspects of Civil & Civic’s version of events in March 2020, and importantly says that it does not know which of the defendants was carrying out works on the site after 3 March (the works were apparently being conducted under the direction of a Mr Moseley, who up to that time was the manager of Benex) (at [4]–[9]);

(c) does not plead to Benex’s propositions as to novation or estoppel, on the footing that these are conclusions of law (at [10]); and

(d) admits that Civil & Civic completed the works but says it does not know on what date Civil & Civic commenced (at [11]), and does not know whether Civil & Civic is entitled to claim release of any or all of the retention monies (at [12]).

9. Nova also counterclaims against Civil & Civic for unjust enrichment in the sum of $550,000 (at [14]–[23]). It says that:

(a) Benex undertook the works stipulated in the agreements referred to above;

(b) Mr Mosely (who “at all material times prior to 3 March 2020” worked for Benex) issued two invoices, each for $275,000, in January and February 2020;

(c) the invoices were couched in terms leading Nova to believe that payments in accordance with those terms would go to, or benefit, Benex, and it paid both invoices believing that to be the case; and

(d) in fact, Nova’s payment went to Civil & Civic (which had not done the work) and the money never went to Benex.

10. Benex’s Amended Statement of Claim is short enough for its key paragraphs to be set out in full.

11. Pursuant to an agreement, admitted by Nova in paragraph 3 of its Defence to the Claim from Civil & Civic, Benex agreed to undertake works at Greenway in the ACT as requested by Nova in a first agreement for 7 [sic] $350,000 plus GST and a second for $520,000.00 plus GST. 3. As requested by Nova the work done by Benex was earthworks between about 8 November 2019 to 3 March 2020 at Greenway in the ACT (the earthworks). 4. Benex was not in a joint venture with anyone while performing the earthworks. 5. Benex performed all the earthworks prior to 3 March 2020. 6. Nova substituted Benex with Civil & Civic to complete the earthworks from about 3 March 2020. 7. Benex on 30 March 2020 issued Nova an invoice for the earthworks performed prior to 3 March 2020. 8. Benex’s claim is against Nova for $666,726.96 being due from Nova to Benex for work done and materials supplied by Benex for Nova at its request. 9. Nova has not paid Benex for the earthworks. 10. In the premises Nova is in debt to Benex in the sum of $666,726.96

The present application

11. The paragraphs that Nova seeks to have struck out are [2], [3], [6], [8] and [10]. Its essential complaints are: (a) paragraph [2] pleads a conclusion of law without pleading the facts from which that conclusion is drawn, is not sufficiently particularised, and (in so far as it refers to the agreement being admitted by Nova) pleads evidence;

(b) paragraphs [2] and [3] on the one hand and [8] on the other plead inconsistent claims;

(c) paragraph [6] pleads a conclusion (“substituted”) whose legal significance is unstated and can only be inferred from the underlying facts (which are not pleaded); and

(d) paragraph [10] must be struck out consequentially upon [2], [3] or [8] being struck out.

12. Prolix pleadings are frequently deplored. Benex’s Amended Statement of Claim is the opposite. It is so condensed that the import of several paragraphs requires explanations in some instances longer than the paragraphs themselves. Some explanation was provided by Benex’s solicitor in correspondence between the parties. This was expanded upon by Mr McKeown, who appeared for Benex, in submissions on the application.

13. As to [2] itself, Mr McKeown emphasised that in referring to an “agreement” it does not plead the existence of a contract. I will return to this point later. For present purposes it means that, because the agreement itself is not pleaded as the basis for the legal rights asserted by Benex, the absence of specificity as to its terms is not fatal.

14. The words “admitted by Nova in paragraph 3 of its Defence to the Claim from Civil & Civic” were described as no more than a convenient way of identifying the agreement without having to restate the detail set out in Civil & Civic’s Amended Statement of Claim. I do not understand the words to have been intended to have any more force than that (although, clearly, it would be difficult for Nova to deny the existence of an agreement that it has expressly admitted as against another party). On this basis, while a more felicitous approach might possibly have been found, I do not consider these words objectionable.

15. Mr Arthur, who appeared for Nova, also criticised some looseness and lack of particularity in [3]. Certainly, if Benex claims in contract, the reference to a “request” by Nova is perplexing; but the claim as explained by Mr McKeown is not of that nature. Conversely, if the claim is in quantum meruit, it is necessary for Nova to know with some precision the work that is alleged to have been done. However, I am told that this work has already been sufficiently identified in exchanges between the parties. If that is not so, the problem can be remedied by provision of particulars.

16. Coming to the relationship between [2], [3] and [8], these paragraphs are somewhat opaque about the juridical basis of Benex’s claim. A quantum meruit claim cannot succeed if a contract between the parties was on foot when the work was done. Benex must therefore pick one or the other, or explicitly plead the two as alternatives.

17. As noted above, however, Mr McKeown explained that Benex’s claim is in quantum meruit and not in contract and submitted that the Amended Statement of Claim is sufficient to explain this. He referred to two provisions of the Court Procedures Rules 2006 (ACT) (the Rules) concerning the requirements for pleading, which were in effect used as aids to the interpretation of the Amended Statement of Claim. (a) First, r 407 includes “breach of contract” among matters that must be specifically pleaded. Thus, it is said, by referring to an “agreement” at [2] and not a “contract”, and by not referring expressly anywhere to a “breach of contract”, the pleading eschews breach of contract as an asserted basis for liability.

(b) Secondly, r 408 provides that certain types of claim may be pleaded in short form. One of these is “work done or materials provided by the plaintiff for the defendant at the defendant’s request” (subr (1)(c)). Pursuant to subr (2), the plaintiff may plead the facts using that form of words (although the defendant may then, under subr (3), file a notice requiring the facts to be pleaded in full).

18. Where a decision-maker is required to set out in a statement of reasons their findings on material questions of fact, courts are used to inferring that a fact not referred to in the reasons was not regarded by the decision-maker as material (eg, Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323, [35] (Gleeson CJ), [69] (McHugh, Gummow and Hayne JJ)). Thus, requirements regarding the contents of a document can assist in construing the document. Such reasoning involves a presumption that the writer has complied with those requirements, which may be controversial in the world of pleading.

19. However, in circumstances where counsel for Benex has pointed to these rules in order to explain what lies behind the choice of words in [2], [3] and [8], and said that this is how the words are to be read, the Court and the other parties can proceed on that basis. I therefore construe the Amended Statement of Claim as advancing only a quantum meruit claim, and consider that it is capable of being responded to on that basis. Although this makes the reference to “debt” in [10] somewhat confusing, the paragraph can be construed in the light of the explanation of [2], [3] and [8] as merely identifying the sum Benex says it is entitled to recover.

20. Paragraph [6] is also to be read in that light. If the Amended Statement of Claim does not plead a contract, the expression “substituted” in [6] can be read as alleging something that happened in fact and not a reference to some reconfiguration of contractual rights (which, if suggested, would clearly need the underlying facts to be set out). The paragraph is highly condensed (Civil & Civic, for example, took five paragraphs to set out its version of the same events) and Nova may need further particulars. However, I do not think it is liable to be struck out.

21. This proceeding is somewhat complicated. It involves three parties with intersecting claims against each other, with each named defendant being in substance a plaintiff (and the named plaintiff being in substance a defendant and cross-claimant). It would be preferable if each party’s case against each other party could be found in a single document, with no need to go to other documents in order to understand it. However, the test for striking out a pleading under r 425 of the Rules is not what is desirable but whether the pleading (relevantly) tends to prejudice, embarrass or delay the fair trial of the proceeding. On the basis outlined above, the impugned paragraphs of Benex’s Amended Statement of Claim do not have that tendency.

Orders

22. Nova’s application to strike out these paragraphs will therefore be dismissed.

23. Although the application has been unsuccessful, the coherence of the pleading has emerged only through its being explained in Court by counsel for Benex. That explanation provides the understanding upon which Nova will be able to respond to the Amended Statement of Claim. In these circumstances, each party should bear its own costs.

24. The orders of the Court will therefore be:

(1) The Application in Proceeding filed on 5 May 2022 is dismissed.

I certify that the preceding twenty-four [24] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Kennett

Associate:

Date: