Spectrum Decorating P/L v State of South Australia & Anor

PARTIES : State of South Australia (First Defendant)

State of Victoria (Second Defendant) JUDGMENT OF : Master Harrison

Mr John Fitzgerald (Plaintiff) COUNSEL : Ms Rena Sofroniou (Defendants) Mr G Shelton of G Shelton & Associates (Plaintiff) SOLICITORS : Ms Fiona Kerr Crown Solicitors Office (Defendants) CATCHWORDS : Strike out application - injurious falsehood - misfeasance in public office - interference with economic interests - negligence - breach of statutory duties Supreme Court Rules - Part 15 r 25 & Part 13 r 5 Tobacco Products (Licensing) Act 1986 (South Australia) Business Franchises (Tobacco) Act 1974 (Victoria) National Crime Authority Act 1984 LEGISLATION CITED : Service and Execution of Process Act 1992 Courts (Cross Vesting) Act 1987 (NSW) Taxation (Reciprocal Powers) Act 1987 (Vic) - ss 5 & 7 Taxation (Reciprocal Powers) Act 1989 (SA) - ss 7 & 24 Privacy Act 1988 - s 93 Limitation of Actions Act 1936 (SA) Air Services Australia v Zarb (NSWSC, unreported 26 August 1998) Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62 General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 Webster & Anor v Lampard (1993) 177 CLR 598 Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373-374 Gibson v Parkes District Hospital (1991-92) 26 NSWLR 9 at 35 Giraffe World Australia Pty Limited v Australian Competition and Consummer Commission (1999) ATPR 41-669 Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 at 799 Sanders v Snell [1998] 72 ALJR 1508 at 1517 CASES CITED : Elliott v Chief Constable of Wiltshire & Ors, Sir Richard Scott, Vice Chancellor, The Times Law Reports 5.12.1966 Northern Territory v Mengel (1995) 185 CLR 307 at 345 Mogul Steamship Co v McGregory Gow & Co (1889) 23 QBD 598 at 613 Torquay Hotel Co Ltd v Cousins (1962) 2 Ch 106 Sovar v Henry Lane Pty Limited (1966-67) 116 CLR 397 at 405 Stubbs v NRMA Insurance Ltd [1997] 42 NSWLR 550 at 555 Byrne v Australia Airlines Limited (1995-96) 185 CLR 410 at 424 Onus v Alcoa of Australia Limited (1981) 149 CLR 27 at 67-68 Preston v Star City Pty Ltd [1999] NSWSC 1273 at paras 63 to 94 Sampson v Zadker (NSWCA, unreported 11 December 1996) DECISION : See para 54

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20369/99 - SPECTRUM DECORATING PTY LIMITED ACN 059 944 008 v STATE OF SOUTH AUSTRALIA & ANOR

JUDGMENT (Strike out application; injurious falsehood; misfeasance in public office; interference with economic interests; negligence; breach of statutory duties)

1 MASTER: By notice of motion filed 31 July 2000 the defendants seek that the plaintiff's amended statement of claim be struck out pursuant to Part 15 r 25 and Part 13 r 5 of the Supreme Court Rules (SCR). No affidavits were filed as the arguments were essentially legal ones. The strike out application proceeded on the basis of the amended statement of claim which was handed up in court and marked as Ex A. The first defendant is the State of South Australia, and the second defendant is the State of Victoria. 2 Paragraph (1) of the amended statement of claim alleges that at all material times there was a corporation styled the South Australian State Taxation Office (SATO), which was established under the Tobacco Products (Licensing) Act 1986 (the South Australian Act). SATO acted as the Crown in the right of the State of South Australia, and the person holding that office did so as the Crown in the right of the State of South Australia. The person holding that office was at all material times M K Walker (Walker). It is alleged that the Crown in the right of the State of South Australia was vicariously liable for the acts and omissions of its officers employed in SATO. Mr Don McPhee was an employee of SATO and held the position of Chief Inspector (McPhee). 3 Paragraph (2) states that at all material times there was a corporation styled as the Victorian Stamp Duties Office (VICSDO), which was established under the Business Franchises (Tobacco) Act 1974 (the Victoria Act). Like South Australia it is alleged that VICSDO acted as the Crown in the right of the State of Victoria, and the Crown was vicariously liable for the acts and omissions of its officers employed in VICSDO. It is alleged that VICSDO was jointly liable for the acts and omissions of those persons employed by SATO done in furtherance of any joint enterprises with VICSDO. 4 Mr Stephen Arthur Leask (Leask) was engaged in the business of trading cigarettes by wholesale to other wholesalers and retailers mainly located in the State of South Australia. Leask's business was transacted throughout Australia while Leask remained domiciled in the State of New South Wales. Mr Leask has been declared bankrupt. 5 On 3 April 2000 by deed of assignment between Geoffrey David McDonald, the Trustee in Bankruptcy for Leask, all Leask's rights, title and interests in this claim were signed to the plaintiff, Spectrum Decorating Pty Limited. Between 1990 and 9 July 1991, Mr Leask entered into contractual relations with State Wide Tobacco Services Limited who were located in South Australia (Statewide). Statewide were engaged in the wholesale trade of tobacco products. 6 In 1990 Leask conducted business from premises in the Northern Territory. He purchased tobacco products from Statewide and later resold these goods to customers around Australia. On 1 February 1999 Leask entered into a contract for the sale of goods with Statewide as vendor, Leask as the purchaser. The goods were tobacco products and the price for sale was about $80,000. This contract was entered into in South Australia and provided for the tobacco products to be transported to the Northern Territory. Contracts of a similar nature were entered into each week by Leask and Statewide until the end of July 1991. 7 On 26 February 1990 Mrs H J Douglas, an officer of SATO wrote to both Leask and Statewide with the advice that in calculating licence fees payable under the South Australian Act, the value of tobacco products delivered and consumed outside of South Australia could be disregarded. Based on this advice Statewide did not add to the sale price any figure representing licence fees payable under the South Australian Act. 8 On 20 December 1990 the National Crime Authority pursuant to s 11 of the National Crime Authority Act 1984 established a joint taskforce with the first and second defendants called Operation Quit taskforce. This taskforce was controlled by a management committee. The management committee comprised of officers of SATO and VICSDO. The purpose of this operation was to investigate breaches of State tobacco licence fee laws. 9 In Paragraph (22) it is pleaded that by 18 June 1991 members of the management committee held suspicions that the tobacco products sold by Statewide to Leask were being consumed in South Australia or Victoria without payment of tobacco licence fees in either State. 10 On 24 and 26 June 1991 David Wilson, the manager of Statewide for South Australia, was interviewed by the officers of SATO about the commercial relations between Statewide and Leask. On 28 June 1991 the management committee agreed to conduct surveillance about the movement of tobacco products by Statewide to Leask. 11 As a result of the surveillance operation there are alleged a number of statements made by McPhee to Wilson and Walker. These are particularised in paragraphs (29) and (30) of the amended statement of claim. I should emphasise that as serious allegations have been made against two individuals, the truth of these allegations can only be tested at trial. For the purposes of this application only, I have taken the plaintiff's allegations at their highest. McPhee allegedly stated that the tobacco products sold by Statewide to Leask and placed under surveillance had not been transported in its entirety to a destination outside of South Australia. It is alleged that McPhee knew that the statement was untrue. It is not alleged that Walker knew that the statements were untrue. As a result of the statements by Mr McPhee, Mr Walker of Statewide wrote to Mr Leask the plaintiff. Mr Walker said that significant doubt existed in the minds of the officers of SATO that the tobacco products sold by Statewide to Leask were able to be disregarded in assessing the licence fees under the Act, and that future contracts of the sale of tobacco products by Statewide to Leask would be subject to stringent verification in the assessment of licence fees under the South Australian Act. Statewide then ceased trading in tobacco products with Leask. It is alleged that the statements made by McPhee were false and McPhee knew that these statements were false. 12 Paragraph 36(a) alleges that these first and second statements were made with the intention to further the administration of the Victorian Act by causing the cessation of commercial relationships between Statewide and Leask. Paragraph 38 says that the defendants are liable to pay damages to the plaintiff for injurious falsehood, interference with contractual relations and misfeasance in public office. Paragraph (40) is a claim for negligence that McPhee owed a duty of care to Leask to take care in the making of statements about this matter to Wilson and Walker. Paragraph (41) alleges a breach of duty of care. Paragraphs (44) to (49) alleges breaches of statutory provisions that give rise to a cause of action. 13 The plaintiff claims loss of earnings and loss of opportunity to profit from the continuation of his business and loss of business goodwill. The law in relation to summary judgment 14 Part 13 r 5 says: "(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings - (a) no reasonable cause of action is disclosed;

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings."

15 In a recent decision Air Services Australia v Zarb (NSWSC unreported, 26 August 1998) Rolfe AJA found it useful to remind himself of the highly demanding test imposed on a party seeking summary judgment. His Honour referred to Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 and Webster & Anor v Lampard (1993) 177 CLR 598. I have reproduced some of the passages quoted in Zarb. 16 In General Steel Barwick CJ, who heard the application alone stated: "Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." 17 Barwick CJ also said: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of cause of action - if that be the ground on which the Court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; be manifest that to allow them' (the pleadings) 'to stand would involve useless expense." 18 In Webster Mason CJ, Deane and Dawson JJ reinforced the rigorous testing stating, at 602: "The power to order summary judgment must be exercised with 'exceptional caution' and 'should never be exercised unless it is clear that there is no real question to be tried."' 19 According to Rolfe AJA in Zarb: "The demanding nature of the test is in no way lessened in circumstances where there are the potential for difficult factual and legal issues to arise. Rather, as the decision in Webster made clear, it is heightened: see also Wickstead & Ors v Browne (1992) 30 NSWLR 1 and Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241." 20 The defendant submitted that this is a novel case and one which should not be stifled. In summary judgment applications where the law is ripe for development, Master Allen (as he then was) in Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373-374 said: "…It is not by any means rare in the history of the development of the common law that a high appellate court, in enunciating a novel development in the law, albeit one avowedly based on a miscellany of old cases, has chosen to use general words of imprecise limits in meaning to facilitate the arrival, in later cases, of the final form of the development without the need to overrule what earlier had been stated. That being so I am of opinion that a court at first instance should be particularly astute not to risk stifling that development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie. The risk of injustice to the plaintiff, which summary termination of his claim would entail, is real. One cannot predict, with firm assurance, what the future holds as the final formulation of the new development." 21 This passage was quoted with approval by Justice Badgery-Parker in Gibson v Parkes District Hospital (1991-92) 26 NSWLR 9 at 35. 22 The defendant submitted that the statement of claim should be struck out on six grounds. They are firstly, that the defendants' claim lacks jurisdiction, secondly, that the elements of the causes of action have not been made out; thirdly, the claim is statute barred; fourthly, if interstate legislation has been breached, how does it give rise to a cause of action in New South Wales; fifthly, no case has been pleaded against the State of Victoria; and sixthly, the hearing will be a lengthy one and such costs of a hearing will be high. 23 In relation to jurisdiction, the plaintiff has pleaded that Leask was domicile in New South Wales and his business records were kept in New South Wales. The defendants have been served with the statement of claim in accordance with Part 10 SCR and the Service and Execution of Process Act 1992. The jurisdiction of the Courts (Cross Vesting) Act 1987 (NSW) gives the Supreme Court of the States and Territories to exercise all of the original jurisdiction and appellate jurisdiction of every other such court. It may be that the matter should be cross vested to either South Australia or Victoria. This submission fails. 24 The causes of action pleaded are injurious falsehood, interference with contractual relations any misfeasance in public office and negligence and breaches of statutory duty. I shall deal with them in turn.

Injurious falsehood 25 In Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR 41-669, Lindgren J of the Federal Court referred to the elements of falsehood as: "(a) that a statement was made of and concerning the plaintiff's goods or business; (b) that the statement was false; (c) that the defendant published the statement to a third person; (d) that the publication of the statement was malicious ( i.e. mala fide or with lack of good faith); and (e) that the publication caused the plaintiff particular and unidentifiable loss or damage."

See also Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 at 799. 26 It is my view that the amended statement of claim makes out a case in injurious falsehood. Statements were allegedly made by McPhee when he knew they were false, it was published to and by Walker and caused the plaintiff's business to suffer. This should be allowed to go to trial.

Misfeasance in public office 27 In Sanders v Snell [1998] 72 ALJR 1508 at 1517, the High Court commented that it must be accepted that the precise limits of this tort are still undefined. In Elliot v Chief Constable of Wiltshire & Ors, Sir Richard Scott, Vice Chancellor, The Times Law Reports 5.12.1996 similarly stated that the boundaries of this cause of action had not yet been precisely defined. The Vice Chancellor declined to strike out the claim for misfeasance in public office as disclosing no cause of action. 28 In Northern Territory v Mengel (1995) 185 CLR 307 at 345 the High Court stated: "…the weight of authority here and in the United Kingdom is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power." 29 In Mengel, the majority of the High Court held that: "The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability. And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach." 30 This principle was reaffirmed in Sanders. The amended statement of claim does not plead that McPhee was acting in excess of his power. Rather paragraph 36(a) pleads that the statements were made with an intention to further the administration of the Victoria Act. This pleading of the statement of claim should be struck out.

(i) Tort of inducing breach of contract 31 In Sanders, the High Court as with misfeasance in public office, held that the law in regard to what has become known as the "economic tort" is far from settled. The High Court stated that this tort is emerging or has emerged in the United Kingdom as a tort of interference with trade or business interests by an unlawful act directed at the persons injured. The element of unlawfulness is essential to the defence of the tort. Otherwise conduct of the most remarkable kind would be tortious. 32 The High Court (at para 32) rejected the definition of intentional conduct posited by Bowen LJ in Mogul Steamship Co v McGregor Gow & Co (1889) 23 QBD 598 at 613, but did not consider it necessary to attempt to define the boundaries of unlawfulness for the purposes of a tort of interference with trade or business interests by unlawful means. However, the High Court stated that an "infringement of some right" may well be a useful description of what is meant by saying that the alleged tortfeasor is engaged in an unlawful act. It also made the point that very different consideration arises between private persons and those person holding public office who may be sought to be held liable for acts done apparently in furtherance of their duty. Misfeasance in public office is concerned with the misuse of public power. Again, the plaintiff has pleaded not a misuse of public power, but an intention by the defendants to further the administration of the Victorian Act. This paragraph of the amended statement of claim should, as it is currently pleaded, be struck out.

(ii) Interference with contractual relations 33 In Torquay Hotel Co Ltd v Cousins (1962) 2 Ch 106, Lord Denning MR stated that there were three elements of the tort. They are: "(i) There must be interference in the execution of an existing contract. The interference is not confined to the procurement of a breach of contract. It extends to a case where a third person prevents or hinders one party from performing his contract, even though it be not a breach. (ii) The interference must be deliberate. The person must know of the contract or, at any rate, turn a blind eye to it and intend to interfere with it - see Emerald Constructions Co v Lowthian [1966] 1 WLR 691. (iii) The interference must be direct." 34 The torts major role has been in area of trade rivalry and labour relations but now applies to all kinds of contractual relations including commercial contracts. Negligence 35 The plaintiff has pleaded that McPhee owed a duty of care to Leask to take care in the making of statements about this matter to Wilson and Walker. The defendant submitted that the particulars of the duty referred to "would arouse suspicions" and "once these suspicions were aroused" that the breach of the duty of care is a alleged to be the making of the statements when he was indifferent to their accuracy, or alternatively knew that they were false. It is assumed the damages are the loss of future business contracts and loss of the goodwill of the business.

Statutory claims 36 In relation to the law as to whether a breach of statutory duty gives rise to a private right, in Sovar v Henry Lane Pty Limited (1966-67) 116 CLR 397, Kitto J at 405 stated: "…The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then 'imputed' to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation." 37 The above quote was cited with approval in Stubbs v NRMA Insurance Ltd [1997] 42 NSWLR 550 at 555. 38 It is alleged that McPhee was a member of the National Crime Authority (NCA) within the meaning of the National Crime Authority Act 1984, and that information was disclosed to him under the terms of the Act, and he breached his obligation of confidentiality under s 51 of that Act. Section 51 provides: "Secrecy (1) This section applies to: (a) a member of the Authority; and (b) a member of the staff of the Authority. (2) A person to whom this section applies who, either directly or indirectly, except for the purposes of this Act or otherwise in connection with the performance of his or her duties under this Act, and either while he or she is or after he or she ceases to be a person to whom this section applies: (a) makes a record of any information; or (b) divulges or communicates to any person any information; being information acquired by him or her by reason of, or in the course of, the performance of his or her duties under this Act, is guilty of an offence punishable on summary conviction by a fine not exceeding $5,000 or imprisonment for a period not exceeding 1 year, or both. …" 39 This section intends that the person who divulges information should be penalised. It does not intend to give an individual a private right. In Byrne v Australia Airlines Limited (1995-96) 185 CLR 410 at 424 per Brennan CJ and Dawson and Toohey JJ, where their Honours said: "Cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection." 40 The question of construction posed is not, however, answered by asking whether the enactment is for the protection of the public at large, or for the benefit of a class of persons of which the plaintiff is a member: see Onus v Alcoa of Australia Limited (1981) 149 CLR 27 at 67-68. It is my view the argument that this section gives a private right is untenable. - see Preston v Star City Pty Ltd [1999] NSWSC 1273 at paras 63 to 94. 41 The plaintiff also referred to breach of McPhee's obligations under ss 5 and 7 of the Taxation (Reciprocal Powers) Act 1987 (Vic) and ss 7 and 24 of the Taxation (Reciprocal Powers) Act 1989 (SA) and s 93 of the Privacy Act 1988. 42 Section 7 of the Taxation (Reciprocal Powers) Act refers to a State Commission or person authorised by the State Commissioner disclosing information to the NCA, Deputy Commissioner of Taxation, and the Australian Securities Commission. As the statement of claim alleges that McPhee is employed by the NCA, it is difficult to see how these State Acts are applicable and these paragraphs should be struck out. 43 Section 89 of the Privacy Act refers to a Commonwealth officer as having an obligation of confidence. Section 93 permits a confider to recover damages from a confidant in respect of a breach of an obligation of confidence with respect to personal information. Mr Leask was not a confider nor a confidant. However, s 93(3) provides: "(3) Where an obligation of confidence exists with respect to personal information about a person other than the confider, whether the obligation arose under a contract or otherwise, the person to whom the information relates has the same rights against the confidant in respect of a breach or threatened breach of the obligation as the confider has." 44 Personal information is defined under s (1) as: "'personal information' means information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably, be ascertained, from the information or opinion. As it is alleged that McPhee is a Commonwealth officer it is my view that the plaintiff has an arguable case under s 93 of the "…The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then 'imputed' to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation." 45 As it is alleged that McPhee is a Commonwealth officer it is my view that the plaintiff has an arguable case under s 93 of the Privacy Act. 46 I turn to the defendants' submission that the cause of action is statute barred. The alleged events that gave rise to the causes of action occurred in 1991. The statement of claim was filed on 6 August 1999. The limitation period under the Limitation of Actions Act 1936 (SA) is six years. The statement of claim should have been filed in 1997. The proceedings commenced outside that period and are statute barred. The defendants referred to a passage in Sampson v Zadker (NSWCA, unreported 11 December 1996) where the Court of Appeal per Gleeson CJ dismissed an appeal from Pattern DCJ who struck out a statement of claim upon the basis it was beyond argument, not maintainable because it was statute barred. In Sampson, the defendant had not filed a defence raising the limitation period. 47 The plaintiff referred to the general power to extend periods of limitation under the Limitation of Actions Act 1936 (SA) and argued that his case fell into an extension provision, namely s 48(3)(ii). 48 Section 48(3)(ii) provides: "that the plaintiff's failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances." 49 There is no action pleaded that the defendants took which resulted in the plaintiff's failure to institute proceedings. It is clear that on the current amended statement of claim, the action is statute barred and on that basis alone is not maintainable. 50 The defendants' fourth submission has already been dealt with above. The defendants' fifth submission is that there is no cause of action pleaded against the State of Victoria. It is my view that there is no action pleaded against Mr Walker and the State of Victoria. Accordingly, the amended statement of claim should be struck out against the second defendant. The defendants' sixth ground to strike out the amended statement of claim was a discretionary one, namely that the hearing will be lengthy and costly. This is a matter to be taken into account, not reason in itself to strike out a pleading. 51 In light of these matters I have come to the conclusion that the amended statement of claim (Ex A) in its present form is defective. This does not mean, and I emphasise, that there is no case that the plaintiff can bring against the defendant. That is a matter for another day. What it does mean is that pleading in the form in which it is, is such that it does not properly articulate the cause of action and it does not give the defendants the opportunity of pleading properly to it. 52 In light of this I have come to the conclusion that the defendants must be successful in their motion. Because of the number of deficiencies in the pleading I have taken the view that striking out various paragraphs would achieve little and may in fact tend to mislead. 53 The appropriate order is that I strike out the amended statement of claim, but I grant leave to the plaintiff to file a further amended statement of claim within 28 days. Costs are discretionary. Costs should follow the event. The plaintiff has been successful in having the amended statement of claim struck out. The plaintiff is to pay the defendants' costs of the motion. 54 The orders I make are:

(2) Leave is refused to file the amended statement of claim (Ex A).

(3) The plaintiff is to file and serve a further amended statement of claim within 28 days.

(4) The plaintiff is to pay the defendants' costs of the motion. **********

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