BETWEEN : PORT KENNEDY GOLF COUNTRY CLUB PTY LTD (ACN 060 885 252)

Practice and procedure - Pleading - Statement of claim - Striking out - Pleading of contract - Not in proper form - Pleading of multiple propositions in single paragraph - Pleading of denial in statement of claim - Failure to plead material facts relating to causation - Embarrassing - Parts of plea struck out

Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485

Bond Corporation Pty Ltd v Theiss Contractors Pty Ltd [1987] FCA 84; (1987) 71 ALR 615

Broken Hill Pty Co Ltd v Bell Resources Ltd (1984) 8 ACLR 609

Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337

Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8; (1997) 188 CLR 241

Ferguson v Wilson (1866) LR 2 Ch App 77

GJ Coles & Co Ltd v Goldsworthy [1985] WAR 183

Gracia Pty Ltd v Qcapt Pty Ltd [1998] WASC 102; (1998) 16 ACLC 1134

H 1976 Nominees Pty Ltd v Galli [1979] FCA 74; (1979) 30 ALR 181

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4; [1964] AC 465

March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506

San Sebastian Pty Ltd v Minister Administering Environmental Planning & Assessment Act 1979 (NSW) [1986] HCA 68; (1986) 162 CLR 340

Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514

Waterhouse v Waterhouse, unreported; SCt of NSW; Library No 9802602; 4 June 1998

1 ANDERSON J: This is an application to strike out a statement of claim or, alternatively, certain paragraphs of it.

2 The statement of claim is a consolidated statement of claim running to 48 pages. Paragraphs 10 to 13 are in the following terms:

"10 In or about April 1995 PKGCC and Pac-Asia entered into an agreement with PKR and Fleuris with respect to PKGCC and Pac-Asia's participation in the project (the 'Investment Agreement').

(a) undated facsimile from Fleuris to Lt Gen Ng Jui Ping (retired) a former director of Pac-Asia ('General Ng'), enclosing facsimile dated 31 January 1995 from Freehill Hollingdale & Page to General Ng;

(b) letter from Tan Jin Hwee Eunice Lim Choo Eng ('TJELC') to Lukin on behalf of Fleuris dated 10 February 1995;

(c) letter from TJELC to Lukin on behalf of Fleuris dated 11 February 1995;

(d) letter from Lukin and Sheehan on behalf of PKR to TJELC dated 13 February 1995;

(e) letter from Lukin on behalf of Fleuris to TJELC dated 4 April 1995;

(f) letter from TJELC to Lukin on behalf of Fleuris dated 12 April 1995;

(g) series of meetings and discussions, both in person and by telephone, between Lukin, Sheehan, General Ng, Tan Jin Hwee of TJELC, and John Robin Hayward of Freehill Hollingdale & Page between December 1994 and April 1995, the substance of which is reflected in the exchange of correspondence referred to above.

11 There were express terms of the Investment Agreement, in effect, that:

(a) Pac-Asia would lend to Fleuris the sum of $6 million, which loan would be secured by a share mortgage and which funds would be used by Fleuris to subscribe for 6 million $1 shares in the capital of PKR;

(b) PKGCC would subscribe for 2 million shares in the capital of PKR;

(c) Pac-Asia would arrange for the provision to PKR of a bank standby credit facility in an amount of $5 million;

(d) Fleuris would grant to Pac-Asia a call option in relation to 6 million shares to be held by Fleuris in the capital of PKR;

(e) formal documents would be executed to secure the obligations of Fleuris and PKR under the Investment Agreement, and to enable the immediate and lawful advance of funds to finance the development of the project by PKR pending Foreign Investment Review Board approval and approval under the provisions of the State Agreement;

(f) the Board of directors of PKR would consist of no more than 6 persons, and Fleuris would (unless otherwise approved by Pac-Asia) appoint or replace or substitute only 2 of the 6 directors of PKR, and the balance would be appointed by Pac-Asia.

12 There were express, alternatively implied terms, of the Investment Agreement, in effect, that:

(a) approval of the Foreign Investment Review Board ('FIRB') would be sought, when and to the extent lawfully required, in accordance with the terms of the Foreign Acquisitions and Takeovers Act of the Commonwealth of Australia; and

(b) when and to the extent lawfully required, approval of the Minister under clause 20 of the State Agreement would be sought;

such approval to be sought by Fleuris, PKR and the second defendants, each using reasonable endeavours to obtain such approval.

Documents referred to in paragraph 10(a) and (b) above.

(a) It was, at the time the Investment aAgreement was made, known to the parties, as was the fact, that an investment of the kind provided for under the Investment aAgreement was regulated by Commonwealth Statute and would duly require approval of the FIRB, and that the project was regulated by the State Agreement, under which Ministerial approval would duly or might be required;

(b) the requirements for FIRB approval and Ministerial approval under the State Agreement were discussed and acknowledged by the parties;

(c) the term is reasonable and equitable, is necessary to give business efficacy to the Investment Agreement, is sufficiently obvious so as to go without saying, is capable of clear expression, and does not contradict any express term of the Investment Agreement.

13 In order to give effect to, and fulfil the terms of, the Investment Agreement, the following documents were executed:

(a) a shareholders agreement between PKGCC, PKR and Fleuris dated 1 June 1995 ('Shareholders Agreement');

(b) a share mortgage between Fleuris and Pac-Asia dated 1 June 1995 ('Share Mortgage');

(c) a deed of charge between PKR and Pac-Asia dated 1 June 1995 ('Deed of Charge');

(d) a call option deed between Fleuris, Pac-Asia and the second defendants dated 1 June 1995 ('Call Option');

(e) a deed between Fleuris, PKGCC and Pac-Asia dated 1 June 1995 ('Consent Deed');

(f) a call option deed between PKGCC, Pac-Asia, Fleuris and the second defendants in relation to 1.5 million shares in the capital of PKR held by PKGCC (the 'PKGCC Call Option');

(g) a share mortgage between PKGCC and Pac-Asia over 1.5 million shares in the capital of PKR held by PKGCC ('PKGCC Share Mortgage');

(h) a deed between PKGCC, Pac-Asia and Fleuris dated 1 June 1995 ('PKGCC Consent Deed')."

3 These paragraphs are objected to, essentially on the ground that they are not a proper pleading of a contract or contracts, as to which see Bullen and Leake "Precedents of Pleadings" (12th Ed) at pp 345 - 350. This submission must be accepted. Where an action is brought on an agreement which is not under seal, the statement of claim should say whether the agreement is in writing, oral, or to be implied or partly in writing, partly oral and partly to be implied. There is no such averment in the pleading set out above, nor can the question be resolved satisfactorily by reference to the matters actually pleaded. It is not at all clear whether the communications pleaded in 10(a) to (f) are said to constitute the written part of an agreement or whether they are evidence of an oral agreement. Standing alone, par 10(a) to (f) might be taken as a plea of an agreement in writing. However, they do not stand alone. Included in the particulars in par 10 is 10(g) which is a plea of a "series of meetings and discussions" between various people. This looks like a particular of the oral part of an agreement partly in writing and partly oral. The trouble is that it is pleaded that the substance of the oral communication "is reflected in the exchange of correspondence". It is entirely unclear what this means. If it means the whole agreement is contained in the documents, the reference to oral discussions is otiose, embarrassing and likely to give rise to false issues. If the agreement is not wholly contained in the documents and the oral discussions are relied on to prove terms of an agreement not contained in the documents, this should be made clear and the substance of the oral discussion (and, thus, the oral terms) must be set out.

4 According to par 10, the Investment Agreement was made between four parties: the first plaintiff, the fourth plaintiff, the first defendant and the fourth defendant. Because of the unorthodox form of the plea, it is uncertain whether the agreement is alleged to contain joint or several obligations or both. That is, it is not clear whether what is alleged is an agreement between the two plaintiffs of the one part and the two defendants of the other part. The introductory words "In or about April 1995 PKGCC and Pac-Asia entered into an agreement with PKR and Fleuris" imply that it is such an agreement, but the particulars pleaded in par 10(a) to (f) suggest that it is not. For example, in par 10(a), it is not pleaded that the "undated facsimile from Fleuris" was a communication on behalf of the first and fourth defendants. Nor is it clear in what capacity it is alleged that the recipient of the facsimile received it; ie, whether he received it on behalf of the fourth plaintiff or on behalf of the first and fourth plaintiffs. As to par 10(b), it is pleaded that the recipient of that letter received it "on behalf of Fleuris". This is, of course, not a proper particular of an agreement alleged to have been made with anyone other than Fleuris. And so on.

5 The result is that the defendant cannot know whether the obligations enumerated in par 11 are joint obligations or several obligations or both. So, as to the term pleaded in par 11(a) that "Pac-Asia would lend to Fleuris the sum of $6 million" this manner of pleading leaves it altogether uncertain whether that is said to be an obligation binding on Pac-Asia only or on PKGCC and Pac-Asia jointly. Nor is it clear whether the obligation that is pleaded in par 11(a) as to the use which the borrowing was to be put, that is, that the funds "would be used by Fleuris to subscribe for 6 million $1 shares in the capital of PKR" is alleged to be an obligation on Fleuris only, owed only to Pac-Asia, or whether it is an obligation on Fleuris and PKR jointly, owed to one or other of PKGCC and Pac-Asia. Nowhere in any of the particulars of the agreement is there a reference to any communication by or on behalf of PKGCC or to PKGCC or to anyone on its behalf. Yet in par 11(b) it is pleaded that the exchange of correspondence particularised in par 10 resulted in PKGCC assuming an obligation to "subscribe for 2 million shares in the capital of PKR".

6 Further confusion arises from the plea in par 12 of the "Particulars of Express Agreement". The particulars which are given are "documents referred to in paragraph 10(a) and (b) above". The meaning of this is quite unclear. On one view, only the documents pleaded in 10(a) and (b) are relied on to prove the express terms of the agreement. That would render superfluous and therefore, embarrassing all of the par 10(c) to par 10(f).

7 Where terms of an agreement are said to be implied, it is necessary to give particulars of the facts, matters and things said to give rise to the implication or to state whether the implication arises as a matter of law. In the plea under the heading "Particulars of Basis for Implication" this is sought to be done. However, par (b) is clearly not a proper particular. It is a plea of mere evidence, contrary to O 20 r 8(1).

8 Another serious problem with par 10, par 11 and par 12 on the one hand and par 13 on the other is that par 13 appears to plead that the Investment Agreement was fully performed on both sides by the entry into the various instruments pleaded in par 13. Otherwise, the words in par 13 "in order to give effect to, and fulfil the terms of" the Investment Agreement do not mean what they say. Either the Investment Agreement was a preliminary arrangement supplanted by or subsumed within the subsequent deeds and agreements entered into by the various parties, in which case it is ancient history and has no place in the statement of claim, or the Investment Agreement is still executory in the sense that it still stands as a discrete source of obligations now sought to be enforced, in which case the introductory words "in order to give effect to, and fulfil the terms of" are of uncertain meaning and, therefore, embarrassing.

9 I would order that par 10 to par 13 be struck out with liberty to replead. Before parting with these paragraphs, I will mention another matter. It is a basic rule of pleading, codified by O 20 r 7(2) that "every pleading must ... be divided into paragraphs ... each allegation being so far as convenient contained in a separate paragraph". It is part of the general rule that the plaintiff must state his case with precision. A paragraph which contains multiple averments will usually be embarrassing. There are many paragraphs in this statement of claim which are of that character. Paragraph 11(e) is an example. On any analysis, it contains many factual allegations, some of which may be in dispute, others not.

10 The plaintiffs seek to further amend par 14, the introductory part of which is as follows:

"14. By the Shareholders Agreement and Share Mortgage, Pac-Asia, PKGCC and Fleuris recorded their agreement, or alternatively, agreed on their respective rights and obligations as shareholders in PKR, with the assent of PKR, including terms to the effect that:"

11 The proposed amendment cannot be allowed. The words sought to be introduced are of uncertain meaning, or they are unnecessary. In one sense, whenever parties enter into a written agreement, they "record their agreement". If something more than that is intended, it is unclear what is intended. One possibility is that the written instruments are relied on only as evidence of an antecedent oral agreement. If that is the plaintiffs' case, it should be made clear. Another possibility is that "their agreement" means the Investment Agreement and that these two agreements represent the formalisation of the Investment Agreement. The point is that it is not possible to be sure what is being put forward.

12 Although the defendants do not make a point of it, I should say that it is not clear to me why two agreements are pleaded in par 14. That is, prima facie, a contravention of O 20 r 7(2). A plea in the orthodox form would deal with one agreement at a time, so as to enable the defendants to plead their defences in an orderly manner.

13 There is an application to amend par 15(a) by inclusion of the words "recorded its agreement, or alternatively". For the same reasons I have given with respect to the application to include those words in par 14, I would not allow that amendment.

14 I make that same ruling, mutatis mutandis, with respect to the application to amend par 16, par 17, par 18 and par 19.

15 By par 20 it is pleaded that "By an agreement in writing dated 1 December 1997, Pac-Asia, PKR and Fleuris agreed to vary the Investment Agreement ('Variation Agreement')." There are then pleaded express terms of the so-called Variation Agreement. The first thing to notice is that, whereas in par 10 it is pleaded that the Investment Agreement was a four-party agreement, one party being the first plaintiff, it would appear from par 20 that the first plaintiff was not a party to the Variation Agreement. The pleading does not make it clear on what basis it is contended that the Investment Agreement could be varied by only some of the parties to it. I mention this in passing because, of course, par 20 cannot stand if the paragraphs which plead the Investment Agreement are struck out. That will also be so with respect to par 22. However, there are other problems with par 22 which I should mention. In par 22, it is pleaded that:

"22. Pursuant to the Investment Agreement (as varied by the Variation Agreement) and the documents pleaded in paragraph 13 executed to give effect thereto:"

16 The trouble is that on the face of the statement of claim "the documents pleaded in paragraph 13" were not executed "to give effect thereto", that is, to give effect to "the Investment Agreement (as varied by the Variation Agreement)". They were executed long before the Variation Agreement. The other point to notice is that most of the things alleged to have been done by the fourth plaintiff "pursuant to the Investment Agreement (as varied by the Variation Agreement)" were done before the Variation Agreement was executed. Another problem affecting the whole of par 22 can be illustrated by reproducing par 22(a):

"22 Pursuant to the Investment Agreement (as varied by the Variation Agreement) and the documents pleaded in paragraph 13 executed to give effect thereto:

(a) Pac-Asia, in accordance with the terms of the Share Mortgage, advanced sums totalling $6,000,000 to Fleuris or at the direction of Fleuris during the period from May 1995 to May 1996 which sums were applied by Fleuris in subscribing for shares in PKR;"

17 The plea is obviously embarrassing, as it is not clear what is being said as to the relationship between the obligations under the Investment Agreement (as varied) and the Share Mortgage. Were the funds advanced pursuant to the Investment Agreement, or pursuant to the Investment Agreement as varied by the Variation Agreement, or pursuant to the Share Mortgage or pursuant to the obligations contained in each of those agreements and securities? The plea suffers from a problem already identified, namely, that it appears to reiterate that the execution of the documents pleaded in par 13 was a performance of the Investment Agreement and, therefore, displaced it, subsumed it, or discharged it.

18 The same problem arises in par 22(b). In subpar (b) it is pleaded that"

"(b) Pac-Asia, in accordance with and in consideration of, inter alia, the Deed of Charge, directly advanced funds to or in favour of PKR (in satisfaction of its (Pac-Asia's) obligation to provide a standby letter of credit facility securing loans from a third party bank), during the period from June 1996 to November 1996 in a total of $5 million (the 'Deed of Charge Advance') particulars of which are contained in Schedule 2(a) hereto;"

19 It is at once pleaded that Pac-Asia advanced funds to PKR "pursuant to the Investment Agreement (as varied by the Variation Agreement)", that Pac-Asia did so "in accordance with" the Deed of Charge, that it did so "in consideration of" the Deed of Charge and that it did so "in satisfaction of" some differently described obligation, that is, its "obligation to provide a stand-by letter of credit facility securing loans from the third party bank". I think such a plea is plainly embarrassing. At the very least, there is an unnecessary array of factual allegations sought to be compressed into the one paragraph in contravention of O 20 r 7(2). All of the subparagraphs of par 22 suffer from the same defects. Even if par 22 could survive the striking-out of the paragraphs which plead the Investment Agreement, it would be struck out as embarrassing.

20 I would make one other point. The use of the phrase "inter alia" in par 22(b) is itself embarrassing. If the unpleaded consideration is not material, it should not be referred to. If it is material, it should be pleaded. The use of the phrase "inter alia" is neither one thing nor the other; the defendant therefore not knowing whether the phrase refers to immaterial matters or unpleaded material matters.

21 There is an application to amend par 23 by the inclusion of "the Investment Agreement" and "paragraph 11(f)". I would not allow these amendments because of the striking-out of the paragraphs relating to the Investment Agreement.

22 Paragraph 27 pleads a repudiation of the Investment Agreement and each of "the instruments giving effect to the Investment Agreement". This plea, of course, could not stand if the paragraphs relating to the Investment Agreement remain struck out, but it has another problem. It is not at all clear what is the purpose of pleading a repudiation which has not been accepted. A repudiation by one party of that party's contractual obligations has no legal consequence unless and until the repudiation is accepted.

"48. The Deed of Charge Advance and Further Advances to PKR pleaded in paragraph 22(b) and (c) above comprises 'Secured Moneys' under the Deed of Charge, the same comprising loans or advances in connection with or contemplated by the Paribas letter."

24 The last 15 words are of uncertain purport. If the matters there pleaded are material facts, they should be set forth in a separate paragraph or paragraphs. If they are mere particulars, they should be so identified. If their purpose is to state the reason why the plaintiffs contend that the Deed of Charge Advance and the Further Advances are Secured Moneys under the Deed of Charge, they would appear to be mere argumentation, in which case they would have no place in the statement of claim. Anyway, the paragraph cannot survive the striking-out of par 22.

"60. Further or alternatively to paragraphs 48 to 59 above, if (which is denied) the Investment Agreement, the Variation Agreement, or the documents pleaded in paragraph 13 above (including the Deed of Charge and Share Mortgage) are void or are unenforceable for any reason, then:"

26 The defendants complain that it is improper to plead a denial in the statement of claim. The plaintiffs say that the denial is merely intended as a reinforcement of the alternative character of plea and adds nothing to the word "alternatively". I think the trouble with par 60 is that it introduces a substantive plea to the effect that the various agreements referred to may be "void or ... unenforceable for any reason". It has the hallmarks of an anticipatory plea. Perhaps the fourth plaintiff is only trying to say that, alternatively to its claims pursuant to the collection of agreements referred to, it is entitled to recover the sums advanced as money paid to its use, or by mistake, or for consideration which has totally failed. Money paid by a plaintiff for a consideration that has totally failed may be recovered as money had and received to his use. There is no reason why a plaintiff cannot sue on an alleged contract for the consideration due to him under the contract, alternatively, for his money back as money had and received to his use. This pleading has got into difficulty because it seeks to plead as material facts (voidness and/or unenforceability) the matters which would, if they exist, deny the right to relief under the contract. That is quite unnecessary. See Bullen and Leake (supra) at p 672 et seq. Paragraph 60 cannot stand in its present form. There is an application to amend it, but the amendments do not cure the defect. In fact, they exacerbate it. It is sufficient to say that par 60 should be struck out because, in its terms, it is based on a denial and is therefore anticipatory and, on that ground, embarrassing. There is one other small problem. The particulars to par 60(a) and (b) contain matters that are not particulars, but evidence. An allegation of an acknowledgment of payment is not a particular of payment.

27 The defendants mount an attack on par 63(a) to (c), par 64(b) and par 66 and the prayer for relief item 10(b). Paragraphs 63(a), (b) and (c) plead a breach of s 232(2), (4) and (6) of the Corporations Law on the part of the second defendants and in par 64(b) it is pleaded that the third defendants have aided, abetted or otherwise been involved in the alleged contraventions. In par 66 it is pleaded that, by reason of these contraventions, the plaintiffs have suffered loss and damage and damages are claimed in item 10(b) of the prayer for relief. The damages are claimed pursuant to s 1324 of the Corporations Law.

28 There are now several decisions on the question whether s 1324 gives rise to a civil cause of action for damages on the part of a person aggrieved by contravention of s 232(2), (4) and (6). See especially Mesenberg v Cord Industrial Recruiters Pty Ltd (1996) 14 ACLC 519. In that case, Young J held, in the Supreme Court of New South Wales, that except insofar as s 1324 can be used by the Commission in aid of its rights under Part 9.4B, or insofar as a delegate of the Minister is a person affected, there is no longer any right for a person affected (not being the Commission or person referred to in s 1317EB) to seek an injunction in respect of an alleged contravention of s 232. That decision was doubted in Airpeak Pty Ltd v Jetstream Aircraft Ltd (1997) 15 ACLC 715 by Einfeld J in the Federal Court. See also Allen v Atalay (1993) 11 ACSR 753; 12 ACLC 7. In my opinion, the nature of the relief that may be claimed under s 1324 and who may claim that relief is not definitely settled. I am not inclined to strike out these parts of the statement of claim.

29 The plaintiffs wish to amend the prayer for relief in item 10(b) to include the following:

" ... such injunctive relief as the Court sees fit under section 1324 of the Corporations Law in respect of breaches of section 232 of the Corporations Law by those defendants, and further or alternatively ... "

30 These words are sought to be added presumably because the defendants notified an intention to have item 10(b) struck out on the ground that it was not permissible simply to claim damages for contravention of the section. The defendants' argument was that, however else the remedies may be confined, the remedy of damages as a primary head of claim is not available. Damages is only available as an alternative to the grant of an injunction. If that was the only complaint against it, I would not refuse the amendment. However, I am not inclined to allow the amendment for another reason. I do not think it is fair to the defendant for a plaintiff to simply claim "such injunctive relief as the court sees fit under section 1324". Such a claim is too vague and too general. The plaintiff should be required to formulate, with some degree of specificity, the form of the injunction which it seeks. I do not allow the amendment in its present form.

31 The plaintiffs make a claim for negligent representations and negligence. This part of the statement of claim is in par 67 to par 71. The defendants attack this plea on a number of grounds. It is contended that the paragraphs fail clearly and distinctly to set forth the facts relied on to establish that the first, second and third defendants owed a duty of care to the fourth plaintiff to take care in the making/adoption of the "representations". It is contended that par 70 is insufficient to establish a duty of care because it fails to define any eligible class of persons of which the fourth plaintiff is alleged to be a member. I am not persuaded that the plea fails to properly identify the relevant representations and conduct, or that it fails to properly identify the circumstances and relationship in which the representations were made and the conduct occurred. Whilst better particulars may have to be given, I am not persuaded the plea of the material fact is so deficient that it fails to disclose a cause of action or otherwise ought to be struck out.

32 In par 73 and par 74, the plaintiffs plead breach of duty and loss and damage. The defendants complain that there is an inadequate plea of the causal nexus between the various breaches pleaded in par 73 and the loss and damage pleaded in par 74. I think this is correct. It can be illustrated in the following way. In par 67(a) it is pleaded that between June 1994 and April 1995 the fourth defendant made an express representation to the fourth plaintiff that $6,000,000 of funding would enable the completion of phase 1 of the project and take phase 2 of the project "to a point where cash flows would provide the ongoing funding for the project". That is just one of the many representations pleaded. In par 70 it is pleaded that the representations (including the particular representation that I have set out) were made in circumstances in which they were intended to be relied on by the fourth plaintiff. In par 71 it is pleaded that, in those circumstances, the fourth defendant owed a duty to the fourth plaintiff to be careful in making the representation. In par 72 it is pleaded that the fourth plaintiff relied on the representation. In par 73 it is pleaded that the fourth defendant breached its duty of care in that there were no reasonable grounds to make the representation and in par 74 it is pleaded that "by reason of the above" the fourth plaintiff has suffered loss and damage. I accept the defendants' submission that what is missing are the material facts which reveal to the defendant how the making of an untrue representation in the terms pleaded has caused damage. However, neither par 73 nor par 74 should be struck out at this stage. It may be that, when particulars of damage are delivered, the causal link between the allegations and the damage will be plain. Of course, if that is not so, the defendants may renew the application.

33 By par 75 to par 81 the plaintiffs plead a cause of action for misleading and deceptive conduct contrary to the Trade Practices Act. The defendants attack this part of the statement of claim on a number of grounds. Set out below are the paragraphs of the statement of claim complained of:

"75 Fleuris and PKR are, and were at all material times, corporations for the purposes of the Trade Practices Act (the 'Act').

76 The express and implied representations were as to future matters within the meaning of section 51A of the Act.

77 The conduct of the defendants as pleaded below was conduct in trade and commerce.

78 The plaintiffs repeat paragraphs 67 to 70 and 72 above.

79 By virtue of section 51A of the Act, Fleuris, PKR and the second defendants, in making the express and implied representations, engaged in conduct which was deceptive and misleading or likely to be deceptive or misleading in breach of section 52 of the Act.

The express and implied representations were as to future matters, and the fourth plaintiff relies upon section 51A of the Act.

80 Further, the second defendants were knowingly concerned in the making of the express and implied representations.

81. By reason of the matters pleaded in paragraphs 75 to 80 above, the plaintiffs have suffered (and further or alternatively were and are likely to suffer) loss and damage, full particulars of which will be provided prior to trial.

The second defendants were, at all material times, the persons by whom Fleuris and PKR conducted their affairs.

82. In the premises, the fourth plaintiff is entitled to the relief sought in paragraph 12 of the prayer for relief below.

12 Pursuant to paragraphs 75 to 82 above, as against PKR, Fleuris and the second defendants:

(a) damages pursuant to section 82, or alternatively, section 87(1), of the Act;

(b) further or alternatively, an order pursuant to section 87(2)(b) declaring that the Investment Agreement have effect in accordance with prayers for relief 1(b) and (c) above;

(c) further or alternatively, pursuant to section 87(2)(c) of the Act an order directing PKR, Fleuris and the second defendants to refund to the first and fourth plaintiffs the amounts invested by them in the project, such amounts to be assessed by the Court;

(d) further or alternatively, pursuant to section 87(1A), of the Act an order that, subject to any necessary Ministerial Approval under the State Agreement, PKR issue 3 (three) million shares in its capital to Pac-Asia, and (subject to any necessary like approval) that Fleuris transfer to Pac-Asia all shares held by it in the issued capital of PKR (to the extent to which Pac-Asia is not already lawfully entitled to such shares pursuant to the Investment Agreement)."

34 The defendants complain that, in the first place, causation is not properly pleaded and I think this is so, but the particulars of loss may overcome this deficiency. It is not a ground to strike out the pleadings at this stage, but the defendants should be at liberty to renew the application in due course, after the particulars of loss have been delivered.

35 The defendants complain that by prayer for relief 12(b) the plaintiffs seek a declaration to the effect that the fourth plaintiff is entitled to the transfer and issuing of a defined number of shares in the first defendant, pursuant to s 87(2)(b) of the Trade Practices Act. The defendants submit that nothing is pleaded in par 75 to par 81 to support the claim for this declaration. This submission must be upheld. The material facts which are incorporated by reference into par 78 to par 81 (by the repeating of par 67 to par 70 and par 72) do not disclose an entitlement to the relief sought. The defendants complain that in any event prayer for relief item 12(b) does not make sense. It purports to seek a declaration that "the Investment Agreement have effect in accordance with the declarations sought in prayers for relief 1(b) and (c)". I agree that the plea is confusing. The declaration that is sought should be spelled out.

36 The defendants also complain that no facts are pleaded to support the claim pursuant to prayer for relief 12(c) - that is, the claim for a refund. What is missing is a plea that "money" or "property" was paid by the first and fourth plaintiffs to the first, second and/or fourth defendants which could be made the subject of an order for refund or return. I think this submission must also be upheld. It is extremely difficult, as the statement of claim now stands, to identify exactly what money or property is within the ambit of the relief claimed under the section. All that is said (par 72) is that the fourth plaintiff "invested" in the "project" pursuant to the Investment Agreement. There is no plea that the first plaintiff "invested" in the project. Nor is it clear what is meant by "invested". The fourth plaintiff is apparently a financier and, to the extent that some of its "investment" may have been by way of loans, either secured or unsecured, they would be, prima facie, recoverable as loans. At all events, the discretion of the court to make an order pursuant to s 87(2)(c) is a discretion to make an order against the person who received the money. It is only that person who may be ordered to refund it or return it. Haydon v Jackson [1988] ATPR 49-094. Without a plea of material facts sufficient to identify the basis upon which the order is sought against the defendants referred to in item 12(c), no cause of action for that relief is disclosed.

37 In my opinion, the paragraphs in question - that is, par 75 to par 82 inclusive - ought to be struck out and the prayer for relief item 12 ought also to be struck out.

38 By par 61, the plaintiffs claim relief pursuant to s 246AA of the Corporations Law on the ground of oppression. So much of the oppressive conduct as relates to the alleged breach of obligations under the Investment Agreement must fall with those paragraphs which plead the Investment Agreement. They are par 61(d)(1) and (3); par 61(e)(4), (5) and (12).

39 I am not otherwise persuaded that par 61 is embarrassing. There are problems with par 61(f). There are difficulties in seeing how 61 (f) has any work to do. On balance, however, I am not persuaded that it is so clearly embarrassing as to warrant an order that it be struck out.

40 I have not gone through the amended statement of claim to see how the striking-out orders will affect other paragraphs. The interaction between the various paragraphs is not necessarily easy to appreciate at first glance.

41 What I propose to do is publish these reasons, which will inform the parties of the paragraphs which I consider ought to be struck out and I will then hear the parties further as to whether there should be consequential orders.

42 I propose that the plaintiffs should have general liberty to replead and that generally there should be liberty to apply.