Phillis v J Anderson Constructions Pty Ltd & Ors; Stephan & Anor v J... [2020] NTSC 70 | Case summary

[3]

Building Act 1993, ss 4, 54AB, 54AC, 54AD, 54B, 54BA, 54BC, 54FA, 54FC, 54FE.

Phillis v J Anderson Constructions Pty Ltd & Ors; Stephan & Anor v J... [2020] NTSC 70 | Case summary | Zoe

[42]

[1] Three summonses in these proceedings were heard concurrently on 13 October 2020. There are two separate proceedings but the issues in both proceedings are largely identical. Both proceedings are based on the same causes of action and the pleadings in each are largely identical. Common interlocutory issues arise in both proceedings. Therefore, unless something is specifically identified as applicable to only one proceeding, these reasons apply interchangeably to both proceedings.
[2] By summons filed 4 February 2020, the First Defendant sought orders for summary judgment and strike out and, in the alternative, for preliminary determination of a question in the proceedings. That question is a jurisdiction question, namely whether this Court has jurisdiction to hear a claim under Part 5A of the Building Act 1993 ("Act").
[3] By summons also filed 4 February 2020, the Second Defendant sought an order for summary judgment and, in the alternative, a strike out of the Plaintiffs' claims.
[4] By summons filed 19 May 2020, the Plaintiffs sought an order to join two additional parties,[1] and secondly, for leave to further amend their Statement of Claim. The leave to amend was not sought merely in consequence of the joinder of the additional parties. If leave is granted that will result in the Plaintiffs having filed three versions of a Statement of Claim.[2]
[5] By the time of the hearing, the Second Defendant's summonses were effectively resolved and the First Defendant abandoned its summary judgment application as well as the application seeking preliminary determination of the jurisdiction question. Further, neither Defendant opposed the Plaintiffs' application to join the proposed Third and Fourth Defendant. Appropriate orders were therefore made.
[6] The only contentious applications remaining were the First Defendant's application for strike out and the Plaintiffs' application for leave to amend.
[7] The jurisdiction question was the basis of part of the First Defendant's strike out application, and that interrelated with the First Defendant's opposition to the Plaintiffs' application for leave to amend.
[8] The other part of the First Defendant's strike out application related to other paragraphs of the proposed amended Statement of Claim which the First Defendant alleged were "embarrassing". That again interrelated with the First Defendant's opposition to the Plaintiffs' application for leave to amend.
[9] The Plaintiffs' application for leave to amend was initially made in respect of the version of the Statement of Claim annexed to the affidavit of Michael Penman made 19 May 2020. By the time of the hearing a number of further iterations of that proposed amended Statement of Claim had been provided to the Defendants. The latest version, which included pleadings in relation to the two new Defendants, was put in evidence before me by consent as Exhibit P1. All parties agreed that the Plaintiffs' application for leave to amend was to be based on that version. An appropriate amendment was ordered to be made to the Plaintiffs' summonses.
[10] Some brief background facts will help to put the proceedings, and the issues on the summonses, into context. The claims relate to a development in Alice Springs to convert a former motel site into residential townhouses. The First Defendant was the builder. The Second Defendant was the certifier. The Third Defendant was the owner of the development site. Another company related to the Third Defendant, who is not a party, was the entity which engaged with the builder. The Fourth Defendant was engaged by the Third Defendant as its real estate agent to sell the townhouses. Each of the Plaintiffs bought one of the residential townhouses off the plan through the Fourth Defendant as selling agent.
[11] After the building works were completed and the Second Defendant certified that the premises were fit for occupation, each Plaintiff settled on their contract and took possession. Numerous defects in each of the townhouses were later identified. Those defects are the subject matter of the various claims made by the Plaintiffs.
[12] There is no contractual relationship between the Plaintiffs and the First Defendant. The Plaintiffs' claims against the First Defendant are based on the 2011 amendments to the Act which established a consumer protection scheme of statutory warranties (referred to as "consumer guarantees" in the Act), to be provided by a builder to an owner. Those warranties apply notwithstanding the absence of a contractual relationship.[3]
[13] Separately to the action under the Act, the Plaintiffs also claim against the First and Second Defendants in negligence and, additionally against the First Defendant, pursuant to section 60 of the Commonwealth Australian Consumer Law 2010 (Cth) ("ACL").
[14] There is an overlap between the principles relative to amendments and to strike out.[4] Some of the principles relative to amendment derived from the cases[5] and relevant to the current applications, are:-
- applications for leave to amend should be made in good faith;
- an amendment must not result in prejudice or injustice to other parties which cannot be remedied by an order for costs;
- the amendment must disclose an arguable case;
- as the Court is not concerned with the merits, a pleaded case will be allowed even if it has low prospects of success;
- however, an amendment that is bad in law will not be allowed as it would be futile to allow an amendment that is liable to struck out;
- an amendment cannot be embarrassing or prejudicial to a fair trial;
- a pleading must set out the case to be met with clarity so that the Defendant can properly plead to it;[6]
- the requirements of proper pleading, both at common law and pursuant to Rule 13 of the SCR must be complied with;[7]
[15] It is readily apparent that an overlap exists between bullet points 3, 4 and 5. In their written submissions, the Plaintiffs made a number of general submissions related to these points in respect of the strike out applications. Firstly, that a Court should not strike out a pleading if it raises an arguable point. Secondly, and conversely, that only obviously unsustainable pleadings should be the subject of strike out. Thirdly, that as the current case involves a developing area of law, the Court should refrain from determining a difficult question of law on a summary application, and presumably should instead leave the question for trial, which I agree is an option. Another option is to have the question determined by way of a preliminary determination before trial pursuant to rule 47.04 of the SCR.[8]
[16] The Plaintiffs did not support these submissions with reference to authorities. I assume they are largely based on the discretionary nature of an order for strike out of pleadings.[9] I accept that an order to strike out a pleading is discretionary and should not be ordered where a pleading raises a debatable point of law.[10] Contra Williams and Humbert Ltd v W & H Trade Marks (Jersey) Ltd,[11] which held that a Court should decide a point of law if the Court is satisfied that it can be decided appropriately and thereby avoiding the necessity for, and the expense of, a trial.[12]
[17] I think the Plaintiffs' submissions on this point are highly pertinent. Before the hearing, I had formed a preliminary view that it was appropriate that the jurisdiction question should be the subject of a preliminary determination. Whether this issue is determined at trial, or by way of preliminary determination, or as part of a strike out application seems to make little difference in the end result. Indeed, that was one reason given by Mr Roper, counsel for the First Defendant, for abandoning the application for a preliminary determination and proceeding instead by way of the strike out application.
[18] As the First Defendant abandoned its application for a preliminary determination of the jurisdiction question, without objection from the Plaintiffs, and as the parties have now fully argued the jurisdiction question on the strike out application, it seems more practical that I now determine that issue to avoid the waste of costs that would result if it was now to be re-ventilated at trial or as part of a preliminary determination. I think that total costs already expended are likely to be a significant proportion of the quantum of each claim.
[19] As there is an overlap between the Plaintiffs' application for leave to amend and the First Defendant's strike out application, I will deal with both concurrently. The First Defendant's opposition to the Plaintiffs' proposed amendments is on the basis firstly, of the futility of allowing amendments to plead a claim under Part 5A of the Act as they would then be liable to strike out. Secondly, that parts of the proposed pleading are embarrassing. Thirdly, that some of the amendments seek to plead a cause of action which is now statute barred.
[20] Rules 23.02 and 36.01 of the SCR are the rules respectively dealing with strike out and amendment of pleadings. For reference purposes, I now set out the parts of those rules relevant to the current applications, namely:

[51]

[21] The first part of the First Defendant's strike out application relied on the principle which derives from Doe v Bridges.[13] The principle was first applied by the High Court in Josephson v Walker[14] and has since been applied in a number of other cases.[15] The principle is that where legislation creates a right and also specifies a remedy or an enforcement process, the remedy or enforcement process is exclusive and the right may not be enforced in any other manner. Where appropriate this operates an ouster of the jurisdiction of any Court not provided for in the specified enforcement process. Clearly, Part 5A of the Act creates a statutory right of action[16] for a "current owner"[17] against the "residential builder"[18] (the First Defendant), absent which the Plaintiffs would have no contractual claim against the First Defendant due to privity.
[22] The First Defendant otherwise concedes that the Act applies to the building work the subject of the proceedings and that the Plaintiffs have the benefit of the consumer guarantees provided for in the Act,[19] notwithstanding that they are not contracting parties.
[23] Mr Roper argued that the principle is a presumption which applies unless it is rebutted by clear language in the Act demonstrating that the enforcement process is not intended to be exclusive. The Plaintiffs did not submit anything to the contrary.
[24] There is ample support for the view that the principle operates as a presumption. Griffith CJ in Josephson v Walker said that the rule was a very strong presumption, rebuttable if the language of the legislation shows that the legislature did not intend the enforcement process to be exclusive.[20]
[25] Isaacs J also described the principle as a presumption. He said that as a specific method of enforcement was created in that case, it was presumed that the method of enforcement was intended to be exclusive. He added that the enforcement process is presumed to be exclusive unless, on consideration of the legislation, a different legislative intention is determined.[21]
[26] Mr Floreani, counsel for the Plaintiffs, broadly argued that the legislative intention of Part 5A of the Act was not to create an exclusive remedy and jurisdiction. He submitted that, looking at the language of the Act and the Building (Resolution of Residential Building Work Disputes) Regulations ("Regulations") holistically, and coupled to the beneficial nature of the legislation and the broad interpretation that usually follows, it is evident that Parliament did not intend the process under Part 5A of the Act to be an exclusive remedy.
[27] The specific matters relied on by the Plaintiffs to support their argument were:-

[129]

[28] Lastly, the Plaintiffs relied on a possible scenario which, it was submitted, was also contra-indicative of exclusive jurisdiction for the Commissioner. This again interrelated with the point concerning the multiplicity of proceedings. That scenario involves the case where a builder commences proceedings against an owner for payment of a contract sum. Where the owner then seeks to raise a set-off or counterclaim based on the consumer guarantees under the Act, notwithstanding that proceedings would have been commenced in a Court, if the Commissioner's jurisdiction was exclusive the owner would be required to seek a remedy from the Commissioner. The owner would not be able to raise a defence or set off in the existing proceedings. If correct, clearly, that would be duplicitous and would be a good point in favour of the interpretation proffered by the Plaintiffs, in which case my comments in paragraph 27(c) would equally apply to this situation.
[29] However, that scenario could never arise and is not a valid basis to support the Plaintiffs' argument. A builder can only take action directly against an owner if there was a contractual relationship between them. Although in that case, that owner would still be a "current owner" (as the definition of that term in section 54AD of the Act includes a "contracting owner"[26]), the Commissioner would not have jurisdiction in any case. That is because any dispute between that owner and the builder in that situation would not be a "consumer guarantee dispute" by reason of section 54FC(2)(b) of the Act read in conjunction with regulation 18(1) of the Regulations.[27]
[30] I have already set out above, in part at least, the First Defendant's position in respect of the Plaintiffs' arguments. The First Defendant also put forward positive arguments which it asserted demonstrated the intended exclusivity of the Commissioner's jurisdiction.
[31] Firstly, section 54FE(1), which inter alia sets out the circumstances when an owner or a builder may start proceedings in a court or tribunal. That provision treats proceedings pursuant to the Construction Contracts (Security of Payments) Act 2004 in a similar way. That section provides:-

[133]

[32] Mr Roper argued that the section only permits such actions where it does not involve a "consumer guarantee dispute" as that is specifically provided in section 54FE(1)(a). Therefore, that demonstrated that the legislative intent was that a "consumer guarantee dispute" is required to be dealt with differently. I suspect this, in part at least, is why Mr Floreani argued that the Plaintiffs' claims are not pleaded as a "consumer guarantee dispute". Mr Roper's interpretation appears to accord with the Tribunal decision which the Plaintiffs' supplementary submissions referred me to.[28] The First Defendant's point is that section 54FE(1)(a) would be superfluous if the Commissioner's jurisdiction was not exclusive. That is a strong point in favour of exclusivity of the process in the Act.
[33] The First Defendant also relied on the Act and the Regulations overall to argue how exhaustive the legislative scheme is, arguing that indicates that Parliament intended the process to be exclusive. In Josephson v Walker Griffith CJ similarly relied on the extent of the legislative scheme to arrive at the same conclusion. His Honour considered that it was also relevant that the process in that case provided for a specialist tribunal as the final arbiter of disputes.[29] In that case there was no appeal beyond that tribunal.
[34] Mr Roper's argument in the current case is similar and also relies on the Tribunal having unlimited jurisdiction.[30] He argued that the scheme places the Tribunal in the position of final arbiter, albeit that under the legislative scheme in Part 5A of the Act there is a limited right of appeal from the Tribunal to this Court, limited to appeals on questions of law only.[31] In support Mr Roper relied on regulation 32(3) of the Regulations, which requires the Commissioner to mandatorily refer applications in respect of compensation assessed in excess of $100,000 to the Tribunal and, in conjunction, regulation 86(3), which grants the Tribunal power to make an order in excess of $100,000 and without fixing an upper limit. That is also a good point in favour of exclusivity of the process in Part 5A of the Act.
[35] Further, that the extent of the scheme was reflected in the Regulations which provide for possible mediation, conciliation, the ability to commission technical reports and, lastly, broad powers to deal generally with the dispute.[32] The extent of the provisions in respect of the process under the Act is also a good point in favour of exclusivity.
[36] For the reasons I give in paragraph 27, only the points made by the Plaintiffs in sub-paragraphs (c) and (k) have merit and overall the First Defendant's points are stronger. The question is not to be determined by a process of balancing the respective merits. The correct approach is to determine the legislative intent from the language of the legislation. If the presumption approach in Josephson v Walker were to be applied, then the enforcement process in the Act would apply unless the language of the legislation demonstrated that Parliament did not intend the enforcement process in the legislation to be exclusive and to oust the jurisdiction of the courts.
[37] Whatever approach is taken, I have come to the conclusion that the enforcement process in the legislation is intended to be exclusive. Most of the points made by the Plaintiffs have been effectively countered. The strongest remaining point of the Plaintiffs concerns the avoidance of an interpretation which can result in multiplicity of proceedings. Other related procedural points[33] are less significant. None of the remaining points of the Plaintiffs relate to the language of the legislation and are simply a direct consequence of exclusive jurisdiction. If, as I have concluded, Parliament intended exclusivity then Parliament would likely have had regard to, and accepted, the possibility of multiplicity of proceedings when devising the legislative scheme. I think that is demonstrated by the extent of the duality of jurisdiction in the scheme as Parliament has decided to deny the Commissioner jurisdiction in cases where there is a contractual relationship between an owner and a builder.[34] Parliament has still provided that a contracting owner still has the benefit of the consumer guarantees,[35] but a dispute in that instance is not a "consumer guarantee dispute".[36] In that event, proceedings in a Court are required to enforce the consumer guarantees.
[38] In the end I am of the view that provisions such as section 54FE(1) of the Act (discussed in paragraphs 31 and 32 above), the extent of the scheme and that the Tribunal can be regarded as the final arbiter of disputes, are all strong indicators that Parliament intended the enforcement process in the legislation to be exclusive and to oust the jurisdiction of the Courts.
[39] I now deal with other general matters raised in the Plaintiffs' written submissions. Although they were not the subject of oral argument at the hearing, nor were they abandoned.
[40] First, the Plaintiffs submitted that the First Defendant's strike out application should be dismissed as the First Defendant's summons did not identify the specific sub-paragraph of rule 23.02 pursuant to which the application was brought. The SCR require a summons to specify the rule or legislative provision pursuant to which an application is made.[37] The submission that non-compliance with that rule should result in dismissal of the application was unrealistic. To the extent that it was not apparent from the First Defendant's summons, I am in no doubt that the Plaintiffs were aware of the basis of the strike out application when the First Defendant's submissions were served as the First Defendant's submissions make the basis clear. That was on or about 17 July 2020, and that was well before the hearing. Rule 46.04 of the SCR does not set consequences for non-compliance. I cannot contemplate anything as drastic as dismissal of an application for such a minor, although too regularly occurring, infraction. The more likely consequence would be that the defaulting party would be required to amend the summons to comply with the rule.
[41] In any case, I am not convinced that the First Defendant's summons is non-compliant. Although the First Defendant has not identified specifically the two sub-paragraphs of that rule that the First Defendant relies on, it does identify that the application is made pursuant to rule 23.02 of the Supreme Court Rules. I think that is sufficient compliance, especially where two of the four grounds are relied on.
[42] The Plaintiffs also submitted that the First Defendant should be precluded from challenging that this Court has jurisdiction to hear the Plaintiffs' claims under the Act. The evidence reveals that the Plaintiffs had initially made an application before the Commissioner. In correspondence[38] the First Defendant complained that the nature of the dispute, involving experts and complex issues, rendered it unsuitable for determination by the Commissioner or the Tribunal and threatened an anti-suit injunction. The Plaintiffs did not proceed with the application before the Commissioner, apparently because of the matters raised in that correspondence. The Plaintiffs argued that the First Defendant should therefore be precluded from now challenging jurisdiction. I presume this is based on estoppel principles but the Plaintiffs' submissions did not specify that precisely nor were any authorities provided in support of the proposition.
[43] The decision not to proceed before the Commissioner was a decision of the Plaintiffs alone. The First Defendant's correspondence did not represent that a jurisdiction point would not be taken subsequently. Indeed, it is not apparent from the correspondence that the First Defendant's legal representatives were alert to the possibility of a jurisdictional challenge on the basis as argued before me at that time. I am not convinced that the Plaintiffs can establish detrimental reliance on anything done by the First Defendant.
[44] There is also a practical reason not to preclude the First Defendant's challenge in this way. The Plaintiffs' submission overlooks that a want of jurisdiction renders proceedings a nullity. Precluding the challenge to jurisdiction would leave what is a bona fide jurisdiction question unresolved. Allowing a matter to proceed when there is a possibility that the proceedings might be a nullity is pointless. Courts will always be wary of precluding bona fide challenges to jurisdiction for that reason.
[45] I reject the Plaintiffs' submission.
[46] The Plaintiffs' written submissions also contained some irrelevant discussion, for example, paragraphs 6.3, 69-75 dealing with whether the First Defendant should have entered into a residential building contract with the Third Defendant, and paragraphs 80-81 dealing with whether the First Defendant had breached the contracting out prohibition in the Act. As far as I can see, these were unrelated to any issue between the parties on the current application. Nor is that a matter that could be put in evidence on a strike out application.[39]
[47] On 20 October 2020, seven days after the hearing, I received supplementary submissions from the Plaintiffs. This came about in unusual circumstances. At the conclusion of the hearing before me, Mr Hayes, junior counsel for the Plaintiffs who appeared by telephone from Melbourne, sought to raise a matter but wished to first discuss that with Mr Floreani, who appeared in person. As the hearing was then otherwise completed, I suggested that Mr Hayes confer with Mr Floreani over the lunch break and, if necessary, I would resume after lunch to hear any further argument. Although a suggestion had been made before I adjourned that the parties might deal with any further issues by written submissions, I was subsequently advised that it was not necessary to resume the hearing, but it appears the parties had also agreed amongst themselves that the Plaintiffs would provide further written submissions.
[48] After considering the supplementary submissions, I think it was more appropriate that further oral argument should have been presented instead. Notwithstanding the Plaintiffs' initial submissions, and the full argument presented by Mr Floreani at the hearing, some new matters were raised in the supplementary submissions.
[49] Nonetheless, I will deal with the Plaintiffs' supplementary submissions. They raise issues going to discretionary procedural matters such as the desirability of avoiding multiplicity of proceedings (which I think had been already dealt with in the Plaintiffs' initial submissions and oral argument), and joinder of parties. A submission was also made that the complexity and novelty of the current case warranted Supreme Court consideration as opposed to a hearing before the Tribunal. Even if I were to accept that to be correct, that cannot have any bearing on the interpretation of the statute. It would be relevant perhaps to an argument concerning an application for a preliminary determination but the First Defendant abandoned that application and the Plaintiffs' neither objected nor sought to make a similar application.
[50] A submission was also made that the Court should endeavour to avoid the need for the Plaintiffs to seek a stay of the Supreme Court proceedings pending determinations by the Commissioner and/or the Tribunal. I thought that last submission was curious noting that the Plaintiffs had, before commencing the proceedings in this Court, commenced and then abandoned proceedings before the Commissioner.
[51] The basis for the supplementary submissions concerning joinder of claims and parties was made in the context of the possibility of further actions by other purchasers of townhouses in the subject development. That is also a curious submission given that the Plaintiffs in the current proceedings, being represented at all times by the same legal advisers, have opted to issue separate proceedings. Nonetheless, I doubt that leave would be given to join other parties or claims. It is more likely that, in those circumstances, there would be an order, if appropriate, pursuant to rule 9.12 of the SCR, for either joint hearing or consolidation. I suspect that a joint hearing at least will be ordered for the two current proceedings.
[52] I also refer to what I said in paragraph 27(c) above. I otherwise fail to see the relevance of discretionary procedural matters to the determination of the jurisdiction argument. It was at least unnecessary to revisit that in the supplementary submissions.
[53] The submission was also made that contemporary building law supports the hearing of the current dispute by the Supreme Court. This submission was supported on the basis of legal texts which seem to be predicated on the Commonwealth cross-vesting legislation and two Victorian statutes. The submission was somehow coupled to this Court having unlimited civil jurisdiction, something which is clearly correct but the relevance of which was not made clear. Separately, the Plaintiffs also relied on the inclusion of a specific privative clause in the Victorian Domestic Building Contracts Act 1995, which conferred jurisdiction on the Victorian Civil and Administrative Tribunal. I fail to see how that is relevant to a determination of whether Parliament intended the enforcement process under the Act to be exclusive.
[54] I was also referred to an authority of the Tribunal namely, Kulda & Kulda v System Homes Pty Ltd[40] where the same jurisdiction issue was raised. In that case, after a claim in relation to a consumer guarantee dispute under the Act had been rejected by the Commissioner, the applicant owners commenced proceedings in the small claims jurisdiction of the Tribunal. The Tribunal considered that the claim was founded on section 54FE(1)(a) of the Act which permits actions in courts and tribunals in specified circumstances. The most relevant of those circumstances is that the dispute does not involve a "consumer guarantee dispute". The Tribunal in that case must have concluded that the claim was not in respect of such a dispute. I think that is correct as the Tribunal reasons describe the applicants as the owners of the premises. In that case, section 54FC(2)(b) would take that dispute outside the definition of a "consumer guarantee dispute", as presumably there was a contractual relationship between the applicants and the builder.[41]
[55] After a relatively brief consideration of the provisions of the Act, the Tribunal member concluded that the intention of the legislature was clearly to provide legislative processes while still preserving those available at common law. Although very little elaboration was provided for that conclusion, I agree with that conclusion if it was because the existence of a contractual relationship between the applicant owners and the respondent builder. In that way that case accords with my decision. If however it was meant to be a general conclusion that the legislative scheme does not provide for exclusivity of the enforcement process, then I disagree and that decision does not bind this Court.
[56] It was also submitted that the Tribunal member applied the High Court in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission.[42] Noting that Tribunal decisions are not binding on this Court, I am not sure why the Plaintiffs did not refer directly to that High Court case. That case held that provisions of legislation are not to be construed such that they abrogate important common law rights in the absence of clear words, or necessary implication, to that effect in the language of the legislation. I agree with that principle and there is no real controversy in regard to the applicable principles of statutory interpretation. I am unsure of the purpose of the reference to this aspect of that case and I do not see that it was necessary for this to be the subject of supplementary submissions.
[57] The second aspect of the First Defendant's strike out application is that certain pleadings are embarrassing within the meaning of that term in rule 23.02(c) of the SCR, thereby justifying strike out of those pleadings and/or the refusal of leave to amend.
[58] I recently considered the question of "embarrassing" pleadings in Kiranou v Black[43] and LKAJ Two Pty Ltd v Squire Patton Boggs & Anor.[44] Without repeating in full what I said there, for current purposes it suffices to restate that a pleading which fails to comply with pleading requirements is embarrassing. That includes not only pleadings which do not comply with the pleading requirements set out in the SCR but also the common law pleading rules. The pleading of conclusions and the provision of particulars as a substitute for material facts are examples of the latter.[45]
[59] The Plaintiffs did not address this in their written submissions. Mr Floreani addressed the point during oral argument without really challenging that the pleading was defective. His was more a submission that all of the alleged defects could be cured and that an opportunity to correct the defects should be given.
[60] The Second Defendant does not oppose the Plaintiffs' application for leave to amend but has pointed out a number of typographical errors which require attention. Obviously the Plaintiffs should address those errors when making amendments, if leave is given for that purpose.
[61] The First Defendant does oppose the Plaintiffs being granted leave to amend but this is very much relative to the First Defendant's strike out application. If I understand the position of the First Defendant correctly, the First Defendant is more concerned to ensure the matters raised in the strike out application are addressed in any further pleading. To that extent I do not understand the First Defendant's position to be one of strictly opposing leave on an absolute basis.
[62] In any case, when a Court orders strike out of a pleading, whether in whole or in part, usually leave is given to re-plead. As I agree that all of the identified defects can be readily cured, I think the current case is one of the usual cases notwithstanding the number of iterations of the Statement of Claim to date.
[63] The First Defendant identified a number of pleading faults. Firstly, paragraphs 20 and 21 in Exhibit P1, which plead matters related to the fidelity certificates provided for in section 54AC of the Act. The issue is that these paragraphs do not relate to any other part of the proposed amended Statement of Claim or to the relief sought. To that extent that cannot be a pleading of material facts. I doubt that those paragraphs are even the pleading of mode of proof,[46] as mode of proof must relate to material facts in any case, and the pleaded facts are not that. Unless there is some relevance, and nothing was put in answer to this complaint, the Plaintiffs should omit those paragraphs from any further version of the Statement of Claim.
[64] Secondly, paragraph 22.4 in Exhibit P1 purports to provide particulars of the consumer guarantees on which the Plaintiffs' claims are based. As that paragraph largely paraphrases the entirety of section 54AB of the Act, therefore all seven of the consumer guarantees in that section are apparently relied on. However, that is inconsistent with the pleadings in respect of breach in paragraph 23.1, which refer to only four of the seven available consumer guarantees. That inconsistency alone is enough to render the pleading embarrassing but, in any case, the pleadings in respect of the three consumer guarantees not apparently relied on cannot therefore be a pleading of a material fact. That renders the pleading in breach of the rule that only material facts are to be pleaded.[47]
[65] Thirdly, and again in respect of the paragraphs dealing with breach, paragraphs 23.1 and 23.2 in Exhibit P1 simply re-state the terms of the consumer guarantees as an allegation of breach. What is required however is the pleading of material facts which inform the First Defendant specifically how it is alleged that the First Defendant breached the consumer guarantees. Alleging breach by simply repeating the provisions of the statute does not achieve that. Those paragraphs are a classic example of an impermissible conclusory plea and is directly at odds with Trade Practices Commission v David Jones (Australia) Pty Ltd[48] and Northern Territory of Australia v John Holland Pty Ltd.[49]
[66] Fourthly, the particulars of breach are given by reference to a number of experts reports. Although particularising in that way is generally permissible, nonetheless they must inform the First Defendant of the specific allegations of breach. The First Defendant complains that the extensive tables appearing in the Exhibit P1 merely list all of the defects and do not inform as to which defect relates to which of the alleged consumer guarantees. The First Defendant is entitled to know that as part of the general pleading principle that a pleading is to inform the other party of the case to be met.[50]
[67] Next, paragraph 28 pleads the Plaintiffs' case in negligence. That paragraph demonstrates that the Plaintiffs are apparently again relying on the statutory consumer guarantees as the basis for the duty of care. Although that is acceptable for pleading purposes, the paragraph carries over the same fault as appears in the pleading of breach of the consumer guarantees in paragraphs 23.1 and 23.2. That is because the particulars of negligence in paragraph 28 simply rely on and repeat the particulars in paragraph 23.3. As a result, the pleading does not specifically inform the First Defendant as to which of the implied terms are the subject of each defect. As sated above, the First Defendant is entitled to know that.
[68] Sixthly, the proposed paragraph 29 pleads a claim under section 60 of the ACL. There are a number of requirements which must be satisfied before there is an entitlement to claim based on that section. Material facts demonstrating satisfaction of those requirements must be pleaded[51] and the Plaintiffs have purported to comply. The specific challenge of the First Defendant is with respect to the pleading of the requirement as to the supply of services. Paragraph 29(c) of the proposed amended Statement of Claim purports to plead the necessary material facts but that paragraph pleads a bare allegation and is insufficient. The First Defendant is entitled to proper and detailed material facts establishing how the requirement is alleged to be satisfied, including precisely what services, within the meaning of the ACL, the First Defendant is alleged to have provided.
[69] There is an additional issue with the pleading in respect of the claim under section 60 of the ACL. The First Defendant alleges that the limitation period for a claim by the Plaintiffs pursuant to that provision has expired. The First Defendant opposes leave to amend to include that claim for that reason. The basis for opposing leave to amend was only touched on briefly by Mr Roper in the course of oral argument. Upon further consideration, I assume Mr Roper was referring to the rule in Weldon v Neal[52] that an amendment to plead a cause of action which has since become statute barred will not be allowed.
[70] However, the rule in Weldon v Neal has been abrogated in the Northern Territory with certain qualifications[53] and rule 36.01(6) of the SCR specifically empowers the Court to allow amendments notwithstanding the expiration of an applicable limitation period.
[71] There is in any case an exception to the rule in Weldon v Neal namely, where there is the power to extend an applicable limitation period.[54] Query if that applies where the power to extend is a Territory law, such as section 44 of the Limitation Act, and the time limit is fixed by Commonwealth legislation. Likewise, I query whether there is a power to extend a limitation period in respect of claims under ACL, whether under the ACL itself or under generally applying Commonwealth legislation.
[72] Overall this issue was not sufficiently argued. Rather than proceed on assumptions as to the basis of the First Defendant's objection, what I intend to do is to further reserve this aspect of my decision. I will give directions for further submissions if the First Defendant seeks to press that objection.
[73] The orders that I propose are firstly that the parts of the Statement of Claim being Exhibit P1 which plead a claim under Part 5A of the Act, as well as in respect of the pleadings which I have identified as defective and embarrassing, be struck out. Secondly, that the Plaintiffs have leave generally to file and serve a further Amended Statement of Claim. I will hear the parties as to the time that should be allowed for that purpose and as to costs and any other consequential orders.
[74] I also give the First Defendant liberty to apply, on seven days notice to all other parties, in respect of the objection to the amendment of the claim under section 60 of ACL.

Phillis v J Anderson Constructions Pty Ltd & Ors; Stephan & Anor v J Anderson Constructions Pty Ltd & Ors [2020] NTSC 70

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