Consideration
240 For the reasons set out in more detail below, there was no unfairness to the appellants resulting from the primary judge permitting the respondents to rely on the unpleaded assignment. There are two main reasons for that conclusion. First, the deed of assignment was used to answer the point based on Powell & Thomas and Novoship. That point was itself an unpleaded point of law the appellants raised for the first time in their oral closing submissions. It would have been unfair to the respondents to have allowed the appellants to raise that point and not allow the respondents to meet that point with evidence of the unpleaded assignment. The appellants made no clear submission to the effect that the respondents could not rely on the unpleaded assignment to meet that unpleaded point of law. Second, and in any event, from the context in which the ruling was made, after the primary judge ruled that the deed of assignment was admissible, the parties must be taken to have known, viewed objectively, that the primary judge was permitting the respondents to rely on the unpleaded assignment, at least, in support of the secret commissions claim as pleaded in the statement of claim. Ultimately, the unpleaded assignment was used for that purpose and no other. Therefore, the primary judge did not permit the respondents to rely on the assignment outside the scope of what had been contemplated when it was tendered into evidence. Otherwise, it was used fairly to answer a new unpleaded point of law raised after the evidence had closed.
241 The respondents pleaded the material facts upon which they relied for the secret commissions claim in [35] to [76] of their statement of claim. Until May 2021, the appellants' defence consisted of bare denials of those allegations. In May 2021 the appellants were granted leave to amend their defence. Within that suite of amendments, [35] of the defence was amended to plead 'if (which is denied) Steven had received any secret commissions, the proper plaintiff is AusPods, not Fairfield No 1, and the allegations are therefore denied'.
242 Rule 16.08 of the Rules provides that in a pleading subsequent to a statement of claim, a party must expressly plead a matter of fact or point of law that: raises an issue not arising out of the earlier pleading; or if not expressly pleaded, might take another party by surprise if later pleaded; or the party alleges makes another party's claim or defence not maintainable. Thus, the amendment to [35] of the defence appears to have been an attempt to comply with the requirements of r 16.08 by raising the alleged absence of title of FPH No 1 to sue on the secret commissions cause of action. However, the defence pleaded no material facts in support of that conclusion. Further, there was no plea that, in point of law, AusPods held the title to sue on the cause of action pleaded in [35] to [76] of the statement of claim. Therefore, although the point was apparently not taken at the time the amendments to the defence were made, the plea in [35] was insufficient to meet the requirements of r 16.08 and was liable to be struck-out on the ground that it was evasive or ambiguous and (or) likely to cause prejudice, embarrassment or delay in the proceeding: see r 16.21(1)(c) and r 16.21(1)(d) of the Rules.
243 Nonetheless, the appellants' case, as articulated in their written and oral opening submissions, was to the effect that the evidence would demonstrate that AusPods, as principal, engaged Steven directly, as agent. As a consequence, if Steven received any secret commissions (which was denied), then AusPods and not FPH No 1 was the proper claimant. So articulated, the appellants opened an unpleaded factual case that AusPods engaged Steven directly as its agent. Further, as noted above, the appellants had not raised any point of law as a defence to the secret commissions cause of action pleaded in the statement of claim in their opening submissions. No objection was taken to the appellants opening a case that was not pleaded, by material facts, in their defence.
244 After the appellants had amended their defence, AusPods and FPH No 1 executed the deed of assignment (which is dated 31 July 2021). The fact of execution of the deed was referred to in [141] of an affidavit Dr Hamilton swore dated 2 August 2021. The appellants objected to [141] of the affidavit and the tender of the deed on the grounds that the respondents pleaded the cause of action was a personal claim of FPH No 1 and that no assignment of any cause of action from AusPods to FPH No 1 had been pleaded. The appellants' written outline of opening submissions also records that they objected to any attempt by the respondents 'to advance an unpleaded case as Auspods' assignee' and that they would oppose any attempt to amend the statement of claim to plead a claim by FPH No 1 as AusPods' assignee.
245 The primary judge dealt with the appellants' objection to [141] of Dr Hamilton's affidavit in a pre-trial ruling on the admissibility of evidence recorded in a schedule of the appellants' objections to the respondents' proposed evidence, the respondents' response, the appellants' rejoinder and the primary judge's ruling. The respondents' response to the objection to [141] was that it was relevant to the issues pleaded in [35] of the defence and [35] of the statement of claim. Paragraph 35 of the statement of claim pleaded that FPH No 1 was appointed the corporate project manager by AusPods for the development of the Yennora property. Paragraph 36 of the statement of claim pleaded that FPH No 1 appointed Steven to act as project manager and its agent for the Yennora property development. The primary judge overruled the objection and permitted the evidence to be adduced at the trial.
246 Then, at the trial, the appellants renewed their objection and objected to the tender of the deed of assignment. The appellants made a submission to the effect that the deed was not admissible for any purpose other than to permit FPH No 1 to prosecute the cause of action of AusPods. The appellants submitted that their interest in having the tender of the deed ruled upon was because they had 'cut [their] cloth' according to the pleaded case and that if the primary judge ruled against them then the appellants needed 'immediately to go on a subpoena war' because there had not been discovery from AusPods. The appellants submitted that the ruling would affect their cross-examination of the respondents' witnesses. The appellants also submitted that it was necessary for the respondents to amend their statement of claim and that any amendment would be opposed because there would be prejudice to the appellants as they had approached their defence on the basis that AusPods, not FPH No 1, was the proper claimant. Further, the appellants submitted that they would also raise the effectiveness of the assignment on the ground that it was champertous and that issue could not be raised because the assignment had not been pleaded.
247 The respondents submitted that it was not necessary to amend the statement of claim to raise the deed of assignment because it was tendered in answer to the allegation that AusPods was the proper claimant. The respondents submitted that their case remained as pleaded in [35] to [76] of the statement of claim, but a 'belts and braces' approach had been adopted and that if 'the secret commissions claim should rest in the hands of Auspods, not [FPH No 1], there should be an assignment'. That is, the respondents relied on the assignment if AusPods, not FPH No 1, had title to sue on the secret commissions cause of action pleaded in the statement of claim. Thus, the respondents were not seeking to tender the deed of assignment in support of any unpleaded cause of action. Rather, the tender concerned only the question of whether AusPods or FPH No 1 was the proper claimant in respect of the secret commissions cause of action pleaded in the statement of claim.
248 The material facts pleaded in a statement of claim should include all those necessary to prove, if traversed, to support the relief claimed. In general, the facts upon which an applicant's title to sue are founded are material. Therefore, in general, if an applicant's title to sue is derived from an assignment of the right to do so, the assignment must be alleged in the statement of claim and, if traversed, proved by evidence at trial: Re Kenneth Wright Distributors Pty Ltd; WJ Vine Pty Ltd v Hall [1973] VR 161 at 173 (Kaye J). It follows that, here, the fact of the assignment of the cause of action in respect of secret commission from AusPods to FPH No 1 was a material fact relating to the second respondent's title to sue on that cause of action. However, the purpose for which the respondents tendered the deed of assignment was, in effect, to support an allegation, in the nature of confession and avoidance, regarding the title to sue on the secret commissions cause of action pleaded in the statement of claim. That is, the respondents sought to advance a case that if AusPods was the proper claimant (which was denied), then the cause of action had been assigned to FPH No 1. Ordinarily, a plea by way of confession and avoidance by which it is alleged that a defence is not maintainable should be raised and pleaded in a reply: Hall v Eve (1876) 4 Ch D 341 at 345-346 (James LJ). Further, it is well-established that it is not appropriate to plead matters in a statement of claim in anticipation of the defence: see, e.g., Adelaide Steamship Co Ltd v Spalvins [1999] FCA 781 at [88] (O'Loughlin J), citing Hall v Eve at 348 (Bramwell JA), and McEwan v Federal Commissioner of Taxation [2022] QSC 279 at [193] (Freeburn J).
249 It follows that there could be debate as to whether it would have been more appropriate to amend the statement of claim so as to allege, in the alternative, that FPH No 1 was entitled to relief on the pleaded cause of action because it had been assigned from AusPods to FPH No 1 or raise the assignment in a reply by way of confession and avoidance. In any event, whatever may have been the most appropriate form of pleading, the assignment should, at least, have been pleaded in a reply to satisfy the requirements of r 16.08. However, those requirements were met, in substance, by the exchange of Dr Hamilton's affidavit before the trial, the respondents' opening submissions and the respondents' submission on the appellants' objection to the tender of the deed of assignment. Therefore, it was clearly within the power and discretion of the primary judge to permit the respondents to advance an unpleaded case of assignment as a matter that made the allegations in [35] of the defence not maintainable without requiring the respondent to amend their statement of claim or file a reply.
250 The primary judge overruled the respondents' objection to the tender of the deed of assignment. The primary judge expressed his reasons for so doing briefly at the trial. In substance, he accepted the respondents' submission that the deed was relevant to the issues joined in the pleadings; namely [35] of the defence and [75] and [76] of the statement of claim. (Paragraph 75 pleaded that '[i]n the premises' Steven had received secret commissions that he had not paid over to FPH No 1. Paragraph 76 pleaded that '[i]n the premises the secret commissions were payable to FPH No 1 and FPH No 1 claimed an account of the secret commissions.) The primary judge said: '[t]he deed of assignment goes to … or is, of itself, capable of being [probative] of the issue raised by [para 35 of the defence] as to who is the proper plaintiff to pursue the secret commissions claim'. That is consistent with the primary judge's summary of his reasons for admitting the deed of assignment into evidence in his reasons for judgment (PJ [576]).
251 In context, the only manner in which the deed of assignment could be said to 'go to' or be 'probative' of the allegation that AusPods was the proper claimant was if the deed were used as evidence of the title of FPH No 1 to sue on the cause of action pleaded in [35] to [76] of the statement of claim in the event that AusPods were found to be the proper claimant in respect of that claim. Further, by the appellants' submissions in support of their objection (referred to earlier), they implicitly (if not explicitly) conveyed an understanding and acceptance that, if the deed of assignment were admitted into evidence, the assignment would form part of the case the appellants would have to meet. Were that not the case, there would be no need to issue subpoenas, cross-examine on the deed of assignment, or take issue with its validity. It is also evident that the primary judge also considered that to be the effect of the parties' submissions and his ruling on the admissibility of the deed (PJ [576], [577], [582]).
252 Having regard to the nature of the appellants' objection to the tender of the deed of assignment, the respondents' articulation of the ground upon which it was relevant, the foundation for its tender and the primary judge's ruling, it was clear that the primary judge was permitting the respondents to raise the assignment of the cause of action from AusPods to FPH No 1 as a matter which the respondents contended made the allegation in [35] of the defence not maintainable. Therefore, if it was not clear before the primary judge's ruling on the admissibility of the deed of assignment, then it was clear after that ruling that the issue of assignment was, to that extent, 'in play' in the proceedings.
253 Consistently with the primary judge's observation that the appellants had not raised denial of procedural fairness (PJ [582]), the appellants' written closing submission did not engage with the respondents' contention that the deed of assignment could be relied upon to support the assignment of the cause of action pleaded in [35] to [76] of the statement of claim. That is, the appellants made no formal submission to the effect that, contrary to the primary judge's ruling on admissibility, the deed of assignment was not relevant to and could not be used for the purpose for which it had been accepted into evidence; namely to support an allegation that [35] of the defence was not maintainable.
254 Then, in the appellants' oral closing submissions they raised, for the first time, a new legal argument relying on Powell & Thomas and Novoship. As already mentioned, the primary judge accepted the correctness of these authorities and the appellants' submissions (PJ [562]-[569]). Whether he was wrong to do so is the subject of the respondents' notice of contention.
255 The new point of law the appellants raised in their closing submissions was not pleaded. It was not raised squarely, or at all, in [35] of the defence and it was not raised in the appellants' opening submissions. It was also not raised in the appellants' written closing submissions. In accordance with r 16.08 of the Rules, the new point of law should have been, but was not, pleaded in the appellants' defence. Ordinarily, a party is not entitled to raise a point of law after the close of evidence unless that point could not have been met by evidence: Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 497. (While that case concerned the issue of raising a new point of law on appeal, the same principles apply to raising a new point of law at trial after the evidence is closed.) Here, the respondents were able to meet the new point of law with evidence; namely, the deed of assignment.
256 Due to the absence of notice of the new legal point, counsel for the respondents was not able to make any substantive oral submissions in response to it but sought and was granted leave to file further written submissions. The appellants were also granted leave to file a written reply to any submissions the respondents filed. As these submissions were not included in the appeal book, I assume that there is nothing in them that has any bearing on the question of whether the respondents should have been permitted to use the deed of assignment as evidence in answer to the new point of law.
257 While the respondents were not able to deal with the substance of the new point of law in their oral closing submission, counsel for the respondents submitted that, even if the new legal point were correct, it ignores the assignment which made the point 'somewhat academic' and FPH No 1 was entitled to recover as assignee under the deed of assignment. Further, the respondents submitted that if the primary judge accepted the correctness of the appellants' submissions on the new legal point then it would be necessary to make minor amendments to the statement of claim to plead the assignment of the cause of action from AusPods to FPH No 1, in the alternative.
258 The appellants objected to treating the assignment of the cause of action from AusPods to FPH No 1 as, in effect, a pleaded issue or an issue in the proceedings. In substance, the appellants submitted that they had conducted the trial and made forensic decisions on the basis that the issues were confined to those raised in the pleadings. Therefore, it was unfair and too late to allow an amendment to the statement of claim to plead an assignment or to permit the respondents to advance a case that went outside the pleadings. However, that submission overlooked that it was the appellants, not the respondents, which had raised an unpleaded issue that had taken the respondents by surprise. Further, it was in response to the new legal point that the respondents had accepted that the statement of claim may require amendment to plead the assignment. Additionally, earlier when making their oral submissions in which they raised the new legal point, the appellants had not submitted that the respondents would not be able to use the deed of assignment to answer that point. In the course of making their submissions regarding Powell & Thomas and Novoship, the appellants anticipated that the respondents would rely on the assignment to answer the legal point and their submissions concerning the assignment imply that the appellants accepted the respondents were permitted to do so.
259 In the appellants' oral closing submissions, counsel for the appellants cited the following passage from Novoship where, after referring to the reasons of Stirling LJ in Powell & Thomas, Longmore LJ said:
124 If this analysis is right, then it must follow that NOUK ([A] in the example) was not the correct claimant. The correct claimants were the ship owning companies ([P] in the example). For most of the vessels that does not matter very much because the ship owning companies were also joined as claimants and judgment was entered in their favour. But so far as the KUZBASS and the KASPIY are concerned it matters a good deal. Not only are the companies that owned those vessels not parties to the action, they no longer exist. If NOUK recovers Mr Nikitin's profits relating to those two vessels then, on the face of it, it will recover a profit to which it is not entitled, retention of which would itself be a breach of fiduciary duty as regards those companies. Mr Brindle sought to meet that point by saying that NOUK would be under a liability to account for any recovery attributable to those vessels. But that appears to be no more than theoretical. In practical terms the companies no longer exist; we do not know whether they can be revived and if so by whom. As things stand therefore we do not consider that, even if we are wrong about causation, the account of profits should include those attributable to the KUZBASS and the KASPIY. We reach that conclusion for two reasons. First, we find the substance of Stirling LJ's point persuasive and consider that the real claimant was the ship owning company in question. To put the point another way Mr Nikitin's profits were not profits "which ought to have been made" for NOUK: see Murad at para 85. Second, even if that is wrong, on the facts as we know them the inclusion of profits attributable to the KUZBASS and the KASPIY would amount to an unjust enrichment of NOUK because it would leave them with an unauthorised profit in circumstances where there is no practical possibility that that profit would be passed on to the person "really entitled to receive it".
260 Counsel for the appellants then made the following submission:
…
That's the position here. Indeed, all that's said is that, by the deed of assignment that our learned friends seek to avail themselves of, that, somehow, we will talk about this at the end of it as to who gets the share. But in our respectful submission, that isn't such as to avoid the answer that they would be unjustly enriched if Fairfield was to be compensated in circumstances where it was never entitled to the commission. The entitlement of the commission was solely that of [AusPods], even if your Honour is against me as to who the relevant fiduciary duty was owed to and satisfied that our learned friends have satisfied the court that there is, in fact, a relevant fiduciary duty that would see a claim in equity for the secret commissions here available.
…
Counsel for the appellants then moved to the topic of the fraudulent conveyance claim.
261 It follows that there was no clear oral submission by the appellants to the effect that FPH No 1 was not able to rely on an unpleaded assignment to allege that the new point of law defence was not maintainable. Rather, the appellants' submission was that assignment of the cause of action was analogous to the circumstances prevailing in Novoship where the principal had ceased to exist and, as such, the secret commissions could not be recovered at all because AusPods had assigned it right of recovery to FPH No 1.
262 In all the circumstances, there was no unfairness to the respondents or the appellants in the primary judge permitting the appellants to raise a new and unpleaded point of law as a defence to the cause of action pleaded in [35] to [76] of the statement of claim or in permitting the respondents to rely on an unpleaded assignment in answer to that unpleaded point of law. On the other hand, it would have been manifestly unfair for the primary judge to have decided the case against the respondents on the basis of an unpleaded point of law (that was able to be answered by evidence) on the ground that the respondents had not pleaded the material facts in answer to that point of law. The circumstances of this case fall squarely within the principles referred to in Betfair. The parties chose to deal, or acquiesced in dealing, with the relevant issue of the title of FPH No 1 to sue on the pleaded cause of action being determined by reference to an unpleaded legal point and unpleaded material fact by which it was alleged that the defence was not maintainable.
263 Separately and in any event, in the circumstances in which it was made, the primary judge's ruling on the admissibility of the deed of assignment, viewed objectively, had already conveyed to the parties that the issue of assignment of the cause of action pleaded in [35] to [76] of the statement of claim from AusPods to FPH No 1 was 'in play' in the proceedings. The parties must be taken to have known that the primary judge was permitting the respondents to run a case to the effect that, if AusPods was the proper claimant in respect of that cause of action, then, by reason of the assignment, FPH No 1 held the title to sue on that cause of action. The primary judge permitted the respondents to use the deed of assignment for that purpose and no other.
264 As was observed in Betfair, the Court has power to dispense with the requirements of the Rules, including those relating to pleadings. Further, s 22 and s 37M(2) of the Federal Court Act encourage the Court to finally determine all matters in controversy between the parties to the proceedings. Where a material fact or issue is clearly 'in play' either because the parties have treated it as so, or the Court in the exercise of its power to control the course of the conduct of proceedings has permitted it to be so, any deficiency in which the matter is pleaded should be dealt with as a matter of substance rather than as a point of pleading. It follows that the primary judge made no error in refusing to reject the respondents' assignment case on the ground that the respondents had not pleaded the assignment as a material fact either in the statement of claim or in a reply to the defence.
265 Grounds 6 to 10 of the notice of appeal must be dismissed.