Equity - General Principles - Fiduciary Obligations - Conflict of Interest and Duty - Solicitor-Client relationship.

Procedure - Supreme Court - Tasmania - Practice under the Rules of Court - Pleadings - Striking Out.

Procedure - Supreme Court - Tasmania - Jurisdiction and Generally - Abuse of Process - What Constitutes - Dismissal of Proceedings - Grounds.

Judgment Number: [2009] TASSC 23

1 The plaintiff, who is self-represented, has sued his former lawyer for breach of fiduciary duty. The relief claimed is equitable compensation. The matters alleged occurred more than 20 years ago. The writ was issued in 2003. (The action is maintainable, despite the effluxion of time, because the statutory limitation periods for the bringing of proceedings do not apply to claims for breach of fiduciary duty. Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 at 463.) This is the ninth version of the statement of claim. The defendant has applied to have it struck out.

"That the Statement of Claim filed and served on 29th January 2009 be struck out on the grounds that it will prejudice or delay the fair trial of this action."

3 The Supreme Court Rules 2000, r258(1) relevantly provides:

"The Court or a judge may order to be struck out or amended in any endorsement or pleading any matter that -

(a) ...

(b) may tend to prejudice or delay the fair trial of the proceeding."

4 The whole of the statement of claim should only be struck out if the objectionable matter is so closely intertwined with other matter that the pleading as a whole may tend to embarrass the fair trial of the action. Coe v Commonwealth [1979] HCA 68; (1979) 24 ALR 118 at 132.

5 As observed by the Full Court of the Supreme Court of Victoria in Meckiff v Simpson [1968] VicRp 7; (1968) VR 62 at 70 in relation to the equivalent rule in Victoria, the rule "is one to ensure compliance with the rules of pleading and nothing else".

6 The cardinal rule of pleading is contained in r227(1)(b). It is as follows:

"Statements in pleadings

(1) A pleading is to -

(b) contain only a statement of all the material facts in summary form on which the party relies ..."

7 Material facts are those facts "necessary for the purpose of formulating a complete cause of action". Bruce v Odhams Press Ltd (1936) 1 KB 697 at 712.

8 So, what are the material facts for there to exist a cause of action against a lawyer for breach of fiduciary duty? There must firstly be a lawyer and client relationship. It is the relationship which gives rise to the fiduciary duty. The existence of the retainer or the facts constituting it need to be set out. Sometimes the retainer will have been created by express words. Other times its existence and terms can be inferred or implied from the circumstances. Pegrum v Fatharly (1996) 14 WAR 92. A lawyer will be in breach of fiduciary duty, where, without the informed consent of the client, the lawyer places himself or herself in a position of conflict, or he or she profits by reason of the fiduciary position, or by reason of opportunity or knowledge resulting from it. Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 198 - 199 and Breen v Williams (1996) 186 CLR 71 at 113. As stated in Meagher Gummow & Lehane's Equity Doctrines and Remedies, 4th ed at par5-110, intention is always irrelevant where there is a conflict between duty and interest and a profit is made. Nationwide Building Society v Balmer Radmore (A firm) (1999) PNLR 606.

9 Matters which should not be in the pleading include:

η An allegation that the lawyer acted without the informed consent of the client. It is for the lawyer to show, by way of defence, the existence of the consent, if he or she is to negate what otherwise was a breach of the duty. Maguire v Makaronis (supra) at 466 - 467.

η An allegation that there was fraud, dishonesty or wrongdoing on the part of the lawyer. Although often a breach of fiduciary duty will involve such matters their absence is irrelevant to the existence of the liability. Boardman v Phipps [1966] UKHL 2; (1967) 2 AC 46 at 104, 105 and 112.

η The facts linking loss to the breach. Such linking facts are not material facts unless resultant loss is an element of the cause of action itself. Bond Corp Pty Ltd v Thiess Contractors Pty Ltd [1987] FCA 84; (1987) 14 FCR 215 at 222. The fact of loss is not part of a cause of action for breach of fiduciary duty. It is merely a matter which, if it exists, affects the range of remedies available. If there is loss, relief by way of equitable compensation may be appropriate. With, or without loss, remedies such as an account of profits may be available. Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544 at 569 - 570. In order to comply with the rules of pleading, the matter of the facts linking loss to the breach should be left for inclusion in particulars to be delivered independently of the pleading.

10 In conflict cases, not involving profiteering, the material facts, for the purpose of formulating a complete cause of action, are:

η The facts which disclose the existence and subject matter of the retainer.

η The facts constituting the competing interest or duty, for example, that the lawyer owned the land which the client was purchasing.

11 There are further requirements for pleadings specified in the rules. Reasonably explicit notice of the grounds of action must be given (r227(3)) and the relief sought must be stated (r229). Taking the example, as in the present case, where the claim is for equitable compensation for loss suffered, the pleading outlined above might continue as follows:

η By reason of these matters the defendant was in breach of fiduciary duty.

η And the plaintiff claims equitable compensation.

12 I now turn to the impugned statement of claim. It runs to 14 pages and comprises about 80 paragraphs.

13 Paragraphs 1, 2, 3, 3A, 4 and the claim for relief (including typographical errors) are as follows:

a the defendant was a legal practitioner employed by Page Seager a firm of solicitors carrying on a professional practice as such in Hobart in Tasmania.

b the defendant maintained to the plaintiff that he was a very competent solicitor and that his firm, Page Seager, was a large and powerful one with great influence in the legal profession in Hobart.

d the plaintiff maintains the defendant was personal friend an confident of the plaintiff.

2 The legal firm of Page Seager with the defendant as solicitor acted for the plaintiff and, or, companies or other entities in which the plaintiff had an interest in at various times and pursuant to various retainers commencing in or about 1983, and ending on 26 November 1991. The most significant retainer's being:

A The purchase of a red gravel Quarry at Old Beach by the plaintiff from the defendant on or about the 5th May 1986.

B The purchase of the defendants equitable interest in 50 acres known as Lot 7 from the defendants staged rural stratum title subdivision of the whole of the land on on CT 4270 Fol 50 that the defendant purported to be the vendor of on 1st November, 1986.

C The reluctant sale of the plaintiff and his wife's fishing vessel Valda "S" together with it's fishing rights and entitlements in both Tasmanian and Commonwealth waters in order to raise $45,000 in cash to complete the purchase of the defendants equitable and legal interest in Lot 7 described more specific in B supra on 1st November, 1986.

D The purported sale of the plaintiff and his wife's equitable interest in Lot 7 on the 24 July, 1987 to Mr Stephen Douglas Knight, solicitor and Kathryn Mary Knight his wife with the defendant and Page Seager acting for the plaintiff in that purported sale.

E The establishment of the Spaulding family trusts no 1 & 2 by the defendant and Page Seager in April 1989. As a consequence the defendant became;

a a trustee of trust no two (2)

and

b the holder of the plaintiffs shares in Sandman No 4 Pty Ltd and Allscrap Pty Ltd companies owned by the plaintiff and his wife in equal shares at the time.

F The purchase of the plaintiffs and his wife's family home at 47 Merindah St Howrah and financed through Pasedo Nominees the lending arm of Page Seager in 1987 for $147,000.

G the purchase of 58 acres of land by the plaintiff and his wife located at the corner of Baskerville Road Old Beach and the East Derwent highway in late October or early November 1986 and financed through Pasedo nominees the lending arm of Page Seager property identification No 724121. Purchase price $147,000.

3 In each of the retainers listed in 2 supra the plaintiff suffered loss either directly or indirectly as a consequence of the defendant being in breach of his fiduciary duty while acting for the plaintiff in those retainers by;

a putting his personal and business interests before the interests of his clients the plaintiff and his wife.

b gaining a financial advantage over the plaintiff and his wife as a consequence of being dishonest in his dealings with them.

3A In each of the retainers listed in 2 supra the plaintiff suffered loss either directly or indirectly as a consequence of the defendant acting with reckless indifference to the plaintiffs interests constituting fradulent conduct by the defendant.

4 By virtue of the defendant acting as solicitor for the plaintiff and his wife in the retainers listed in 2 supra the defendant was empowered and entrusted to act for the plaintiff and his wife in the following terms

(a) the defendants would not knowingly act contrary to the best interests of the plaintiff and his wife;

(b) if the defendant was, by virtue of any conflict of interest was, unable to act only in the best interests of the plaintiff and his wife, he would at once advise the plaintiff and his wife of that and cease to act for them

(b) equitable compensation as a consequence of breach of fiduciary duty by the defendant.

(c) compensation as a consequence of fraudulent conduct by the defendant."

14 The balance of the statement of claim is set out as follows. Paragraphs 5 - 13 concern the par2A retainer (the quarry plea). Paragraphs 14 - 37 concern the par2B retainer (the lot 7 purchase plea). Paragraphs 38 - 48 concern the par2C retainer (the fishing boat plea). Paragraphs 50 - 58 concern the par2D retainer (the lot 7 sale plea). Paragraphs 59 - 70 concern the par2E retainer (the family trusts plea). The pars2, F and G retainers (the Howrah and Baskerville Road property purchase pleas) are not further mentioned. Paragraphs 71 - 79 (the assignment of the chose in action plea) recite the fact of the plaintiff's bankruptcy in 1990 and contain the allegation that the plaintiff's chose in action against the defendant was given back to him by the Official Trustee in Bankruptcy by a deed executed in 1999.

15 The first plea, being the quarry plea, illustrates some deficiencies in the statement of claim. The plea at pars5 - 13 (typographical errors included) is as follows:

"5 THE QUARRY RETAINER

6 On the 9th December,1985 Compton Pty Ltd transferred to the defendant and six other couples hereafter referred to as ( 'the syndicate') 766 acres of land on CT Vol 2321 Fol 67 at Gunner's Quoin Old Beach in Tasmania ('the land') as a tenant in common in equal shares.

7 The Memorandum of Transfer referred to in the preceding paragraph was registered by the Recorder of Titles on the 22 May,1986.

8 In December 1985 the defendant engaged the services of the plaintiff to form and gravel a road relating to ('the land') and was completed by the plaintiff in October 1986.

9 In May of 1986 the defendant acting as the plaintiffs solicitor transferred to the plaintiff a red gravel quarry located at Old Beach in lieu of moneys earned in forming the road as described in 9 supra.

10 In respect to the pleadings in 3 supra and in particular paragraph 3(a) by putting his personal and business interests before the interests of his clients the plaintiff and his wife in the purchase of a red gravel quarry from the defendant.

PARTICULARS

(a) The defendants continued to act for the plaintiff while negotiating with the plaintiff for the supply of cheap gravel for himself and his syndicate members thereby putting his interests and those of his fellow syndicate members before those of the plaintiff.

(b) the defendant was in a position where his interest was in conflict with that of the plaintiff, and failed to advise the plaintiff of that state of affairs and that the plaintiff ought seek independent legal advise before he completed the quarry purchase as a consequence of the pleadings in (a) supra

11 In respect to the pleadings in 3 supra and in particular to paragraph 3(b) gaining a financial advantage over the plaintiff and his wife as a consequence of being dishonest in his dealings with them

PARTICULARS

(a) the defendants need for cheap red gravel for himself and his syndicate

(b) failing to inform the plaintiff of the need to establish a 300 metre buffer zone around the quarry operation. The eventual cost to the plaintiff was $120,000 way beyound the financial capabilities of the defendant and the syndicate.

(c) the plaintiff maintains he was entitled to a fair and reasonable profit for supplying and delivering red gravel to the defendant and ('the syndicate')

12 In respect to the pleadings in 3A supra the defendant acted with reckless indifference towards the plaintiff and his wife by failing to disclose;

(i) the plaintiff repeats the pleadings in 11 supra

(ii) his sole interest in that quarry at the time was that of a purchasing option over the quarry only.

(iii) the desperate need for the defendant or his nominee to complete the quarry purchase.

(iv) the desperate need for the defendant to complete his staged rural stratum title subdivision of all the land contained in CT Vol 2321 Fol 67 in order to gain title to designated lots for himself and his syndicate members.

(v) the lack of financial resources by the defendant and his syndicate members at the time in order to complete the defendants staged rural stratum title subdivision of all the land contained in CT 2321 Fol 67.

13 But for the defendant's breach of fiduciary duty, the plaintiff: would not have had to sell a thirteen acre waterfront investment property at Elbow Hill Parsons Bay Nubeena in order to supply gravel at below costs to the defendant. Independent legal advice would have advised the plaintiff not to accepted the quarry under the terms and conditions negotiated by the defendant the plaintiffs solicitor."

16 The following allegations appear from pars1 - 4, the quarry plea and the claim for relief:

η He sold land containing a quarry to the plaintiff.

η The consideration for the sale was the waiver by the plaintiff of his charges for the road construction work.

η The defendant acted as the plaintiff's lawyer in the transaction.

η By so acting he was in breach of fiduciary duty.

η As a result of the breach the plaintiff suffered loss.

η The plaintiff claims equitable compensation.

17 This much constitutes what I would perceive to be a satisfactory plea. The matter of the facts linking loss to the breach can be left for particulars to be delivered at a later time. Those particulars would need to specify the information withheld, the impugned conduct, the impugned advice or the lack of it and the way in which it operated to cause detriment.

18 However, the plea as drafted tends to distract and confuse. For example, par10 refers to the defendant negotiating with the plaintiff for the supply of cheap gravel, but there is no mention of the defendant having been retained by the plaintiff to provide any legal services in respect of such supply. There are a large number of allegations which are not material facts. Examples of irrelevant and distracting information in the introductory paragraphs are: that the defendant "maintained ... that he was very competent" and "was (a) [sic] personal friend an [sic] confident of the plaintiff" and engaged in "fradulent [sic] conduct". Paragraphs 10, 11 and 12 are defective in that they contain conclusions drawn from facts which have not been sufficiently stated. They, unnecessarily, respectively allege, amongst other things, that the defendant put his interests before those of the plaintiff taking financial advantage of him and acted with reckless indifference. Also, the plea does not make it completely clear that the claim is confined to a claim for equitable compensation for breach of fiduciary duty. The claim for relief seeks, in addition to equitable compensation, "compensation as a consequence of fraudulent conduct by the defendant".

19 "The function of pleadings is to state with sufficient clarity the case that must be met." Banque Commerciale SA (In Liq) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286. The quarry plea is lacking in clarity. However, the offending parts are not so closely intertwined with other matter that they cannot be disentangled. Only the offending matter, and not the whole of the plea, will be struck out as tending to prejudice or delay the fair trial of the action. It follows that par1 of the application cannot succeed and must be dismissed.

20 Next, the defendant seeks to have the quarry plea, and several others, struck out as vexatious and an abuse of process. Paragraph 2 of the application is as follows:

"Alternatively, that the following paragraphs of the Statement of Claim be struck out on the grounds that they will prejudice or delay the fair trial of the action, are vexatious and, or, are an abuse of process:

paragraphs 2, 3, 3A and 4;

paragraphs 5 to 13 (inclusive);

paragraphs 34, 35 and 36; and

paragraphs 38 to 70 (inclusive)"

21 The submission in support of the application was as follows:

"The statement of claim seeks to revive issues which the Plaintiff has previously abandoned by earlier amendments or which have been struck out of earlier pleadings; as such it is embarrassing, vexatious and, or, an abuse of process."

22 The quarry plea, albeit in different form, was contained in earlier statements of claim. However, it, and some other pleas, were omitted from the plaintiff's fifth statement of claim dated 9 November 2004 and did not re-emerge until the delivery of the present statement of claim dated 29 January 2009.

23 The discontinuance of a claim or part of a claim is not a bar to its reintroduction unless that is made a condition of the discontinuance. The Kronprinz (1887) 12 AC 256. It follows that mere abandonment, by the delivery of a new pleading, cannot of itself create a bar.

24 The defendant in the application at par3 seeks an order dismissing the entire action on the grounds that it is "vexatious and an abuse of process". Counsel made the following submission:

"But the continuation of this action without any reason at all to believe that the Plaintiff is ever going to provide a statement of claim that presents his case in an intelligible and appropriate form, properly and concisely pleaded, can only fairly be regarded as now being 'seriously and unfairly burdensome, prejudicial or damaging' and 'productive of serious and unjustified trouble and harassment' for and towards the Defendant."

25 However, in the course of argument, counsel said:

"If, your Honour leaves any part of the statement of claim in tact so we have a continuing action then I don't think we get to paragraph 3."

26 As I do not propose to strike out the whole of the statement of claim, I do not need to further consider questions relating to vexation and abuse of process. Paragraph 3 of the application will be dismissed.

27 There will be an order striking out the offending matter in the quarry plea. The plaintiff might consider that what is left, after the excisions, does not accurately or adequately set out what he intends to allege or claim. An opportunity to apply for leave to amend will be given. Accordingly, unless amended, the plea in relation to the quarry, as appears at pars1 - 4, 6 - 13 and the claim for relief will be struck out, with the exception of the following words contained respectively within pars1a, 8, 9, 3 and the claim for relief:

"(T)he defendant was a legal practitioner.

In December 1985 the defendant engaged the services of the plaintiff to form and gravel a road.

In May of 1986 the defendant acting as the plaintiff's solicitor transferred to the plaintiff a red gravel quarry located at Old Beach in lieu of moneys earned in forming the road.

(T)he plaintiff suffered loss as a consequence of the defendant being in breach of his fiduciary duty.

And the plaintiff claims equitable compensation."

28 The second plea is the lot 7 purchase plea contained in the introductory paragraphs and in pars14 - 37. Paragraphs 34, 35 and 36, like pars10, 11 and 12 in the quarry plea, allege, amongst other things, that the defendant put his interests before those of the plaintiff taking financial advantage of him and acted with reckless indifference and fraudulent intent. For the same reasons that these allegations were excised from the quarry plea they will be struck from the lot 7 plea. Counsel for the defendant submitted that the striking out of pars34, 35 and 36 "would necessitate further pleading to give substance to pars15 - 33 as pleading material facts supporting the existence of a cause of action". There is no need for me to set the plea out in full. The effect of these paragraphs and the remaining part of the claim for relief is as follows:

η In December 1985 the defendant and others acquired a parcel of land at Old Beach.

η In March 1986 the defendant agreed to sell to the plaintiff part of the land comprising 50 acres and referred to as lot 7.

η The defendant acted for the plaintiff in the transaction.

η By so acting the defendant was in breach of fiduciary duty.

η The defendant threatened legal action against the plaintiff if he did not proceed with the purchase.

η In November 1986 the defendant signed an agreement for the sale of lot 7 to the plaintiff and his wife for the purchase price of $45,000. The contract was drawn so that the plaintiff was arguably obliged to settle and take the defendant's equity in the land even if legal title was not then available. In particular, the contract described what was to be transferred as "all the vendor's property known as lot 7 on the CT Vol 4270 Fol 50 and his interest therein."

η The defendant could not convey the legal title to lot 7 until the land was subdivided. The defendant's interest in the unsubdivided land being a one-eighth share as tenant in common.

η In December 1986 the defendant purported to settle the purchase of the land on behalf of the plaintiff and his wife and took the purchase price of $45,000.

η The transfer of the legal title to lot 7 did not occur until December 1988.

η Because there was no legal title the purchase of lot 7 was not funded through mortgage finance.

η In order to finance the purchase the plaintiff sold his fishing boat and by so doing lost his primary source of income.

η The plaintiff claims equitable compensation for the breach.

29 I regard the lot 7 plea as containing a complete cause of action. Paragraphs 14 - 33 and 37 will not be struck out.

30 The third plea is the fishing boat plea. It is contained in the introductory paragraphs and pars38 - 48. Paragraphs 46, 47 and 48 are to the same effect as pars10, 11 and 12 which will be excised from the quarry plea. For the same reasons these paragraphs will be struck out. As to the balance of the plea counsel for the defendant submitted that there are insufficient material facts to constitute a cause of action. I do not need to set the plea out in full to deal with the submission. The effect of pars38 - 45 when combined with the part of par3 which I have said will be allowed to remain, the lot 7 plea and the remaining part of the claim for relief, includes the following:

η The plaintiff sold his fishing boat and fishing rights.

η The fishing boat was the plaintiff's primary income producing asset.

η The sale was for the purpose of raising funds to pay the defendant for lot 7.

η The defendant acted for the plaintiff in the sale.

η Accordingly there was a conflict, and so by acting the defendant was in breach of fiduciary duty.

η By reason of the breach the plaintiff suffered loss.

η The plaintiff claims equitable compensation for the breach.

31 I consider the fishing boat plea to be sufficient to constitute a complete cause of action. Paragraphs 38 - 45 will not be struck out.

32 The fourth plea is the lot 7 sale plea. It is contained in the introductory paragraphs and in pars49 - 58. Paragraphs 56, 57 and 58 are to the same effect as pars10, 11 and 12 of the quarry plea and for the reasons, which those paragraphs were struck out, so also will pars56, 57 and 58 be struck out. The balance of the plea (including typographical errors) is as follows:

"49 The sale of Lot 7 on the 24 July 1987 by the Plaintiff and his wife to Mr Stephen Douglas Knight Solicitor and Kathryn Mary Knight his wife Retainer

50 The plaintiff and his wife led to believe by the defendant and Page Seager by way of documentation from them they had purchased Lot 7 from the defendant on payment of $45,000 in December, 1986.

51 Having waited the six months that the defendant said title to Lot 7 would take to issue the plaintiff spoke to the defendant requesting title.

52 The defendant said again title would issue in six months I then informed the defendant that I intended to sell Lot 7.

53 The defendant came back a few days later stating his friend and fellow solicitor Mr Stephen Knight wanted to buy Lot 7 from me.

54 The defendant drew up a contract of sale again for Lot 7 between the plaintiff and the Knights. The purchase price for Lot 7 was $47,500 Mr and Mrs Knight was to pay the plaintiff a deposit of $25,000 and the balance monies were to be financed by the plaintiff and his wife at current bank interest.

55 In the contractual arrangements drawn up by the defendant the plaintiff had to form and gravel substantial road works to the property and excavate a dam on the property at his expense."

33 Counsel for the defendant submitted that it "is impossible to discern from any of the allegations in paragraphs 50 to 58 an intelligible allegation of any facts material to an allegation of fraud or breach of fiduciary duty". The plea is to the effect that the defendant acted as agent for the purchasers and as the lawyer for the plaintiff in the creation of the sale contract. Accordingly, the defendant was in a position of conflict and so by acting was in breach of fiduciary duty. There is also the remaining part of par3 which alleges loss and the remaining part of the claim for relief claiming equitable compensation. I reject the defendant's submission that the plea fails to disclose a cause of action in an intelligible way. If my interpretation does not accord with what the plaintiff intends to allege he will need to apply to amend the plea. Paragraphs 49 - 55 will not be struck out.

34 The fifth plea is the family trusts plea. It is contained in the introductory paragraphs and in pars 59 - 70. Counsel for the defendant submits that the plea is unintelligible. There is no need for me to set it out in full. Doing the best which I can, it is:

η The plaintiff owned shares in the companies Sandman No 4 Pty Ltd and Allscrap Pty Ltd.

η In 1988 the defendant asked the plaintiff to make him a shareholder in these companies and the plaintiff refused.

η In 1989, when it was likely that the plaintiff would become bankrupt, the defendant suggested that a family trust be established with the defendant to hold the shares as trustee for the plaintiff and his family.

35 Then follows pars67 - 70 which (including typographical errors) are as follows:

"67 In respect to the pleadings in 3 supra and in particular paragraph 3(a) putting his personal and business interests before the interests of his clients the plaintiff and his wife.

PARTICULARS

(a) The defendant should not have asked for shares in Allscrap Pty Ltd at the time he decided to incorporate Allscrap as the plaintiffs Solicitor.

(b) The defendant should not have requested to the plaintiff to be a trustee of the Spaulding Family Trust No 2 while acting as the paintiffs solicitor if at all.

68 In respect to the pleadings in 3 supra and in particular paragraph 3(b) gaining a financial advantage over the plaintiff and his wife.

PARTICULARS

The defendant gained possession of the plaintiffs shares by way of deceit. The defendant as the plaintiffs solicitor knew that Allscrap was incorporated before the Spaulding trusts no two (2) came into existence.

69 In respect to the pleadings in 3 A supra by acting with reckless indifference to the plaintiffs interests;

(a) The plaintiff repeats the pleadings in 68 supra.

(b) The defendant knew or in the alternative should have known that he was holding Allscrap Pty Ltd shares for and behalf of the plaintiff outside any trust arrangement made with him by the plaintiff.

(c) Upon being discharged from bankruptcy the plaintiff had no legal way of retaining those shares in Allscrap Pty Ltd held by the defendant.

(d) The conflicting interest between the Defendant Mr Nielson the Plaintiff and Page Seager in relation to Sandman No 4 Pty Ltd over Mr Nielsons shares in that company and the way the defendant disposed of his shares to Allscrap Pty Ltd.

70 Allscrap Pty Ltd was wound up while the defendant held the plaintiffs shares in that company as a consequence of the defendant being threatened with litigation by its director Mr Peter Nielson of Wielys Quarries as a consequence of him loosing his shares in Sandman No 4 Pty Ltd as a direct result of the defendant's actions."

36 It is impossible to ascertain from this plea with any precision or certainty what the dealings were which give rise to the complaint. As stated at the beginning of these reasons, the function of pleadings is to state with sufficient clarity the case which must be met. That function has not been performed and so, unless amended, pars59 - 70 will be struck out.

37 Next, there are the Howrah and Baskerville Road property purchase pleas. All that appears in relation to these matters is contained in pars2F, 2G, 3, 3A, 4 and the claim for relief. These pleadings have already been set out in full in these reasons. It may be that the complaint is not that the defendant acted in the purchases for the plaintiff and his wife, but instead, the complaint is, that the defendant arranged the mortgage finance when the defendant or his firm had a financial interest in the business or company which was the mortgagee. If this is so it would be for the defendant to show that he had the informed consent of the plaintiff and his wife, to negate what otherwise would be a breach of fiduciary duty. The plaintiff may be able to provide particulars linking loss to the claimed breach. However, as things stand at the moment the case to be met has not been made sufficiently clear. This being so the pleas, unless amended, will be struck out.

38 The assignment of the chose in action plea is at pars71 -79. There is no complaint regarding these paragraphs and they will not be struck out. I comment, however, that there is no need for their inclusion. If the matter of the bankruptcy and the vesting of the chose in action in the trustee is to be raised, it is a matter for the defence. The existence of the deed of assignment would only then become relevant and the plaintiff could plead it by way of reply.

39 Finally, and before coming to the orders, I wish to emphasise that this matter came before me on a pleading application. Such applications are generally determined without evidence and solely by reference to the pleadings. The focus is entirely on the form and content of the allegations. No occasion arises to consider whether there is a basis for the allegations. Accordingly, nothing in these reasons can be taken as giving any indication whatsoever that there is, or may be, substance in what the plaintiff is asserting.

40 The application pars1 and 3 will be dismissed. As to the balance, subject to any amendment application, there will be an order striking out pars1 - 4, 6 - 13, 34 - 36, 46 - 48, 56 - 70 and the claim for relief except for the following words contained respectively in pars1a, 8, 9, 3 and the claim for relief:

"(T)he defendant was a legal practitioner.

In December 1985 the defendant engaged the services of the plaintiff to form and gravel a road.

In May of 1986 the defendant acting as the plaintiff's solicitor transferred to the plaintiff a red gravel quarry located at Old Beach in lieu of moneys earned in forming the road.

(T)he plaintiff suffered loss as a consequence of the defendant being in breach of his fiduciary duty.

And the plaintiff claims equitable compensation."

41 The application will stand adjourned for mention in approximately three weeks' time. This should give to the plaintiff sufficient time to file and serve any amendment application. The opportunity to bring such an application, will afford to the plaintiff a chance to salvage the parts of the statement of claim which otherwise will be struck out. It will give a chance to the plaintiff to re-plead, the matters which are not to be struck out, with greater precision. It will also provide an opportunity to the plaintiff to delete the assignment of the chose in action plea, which is unnecessary, and to delete the matters linking loss to breach, which matters can be left for the delivery of particulars at a later time.