Practice and procedure - Costs - Security for costs - Corporations Act 2001 (Cth), s 1335 - Factors to consider in test for security for costs - Security for costs not awarded - Turns on own facts

Competition and Consumer Act 2010 (Cth)

Corporations Act 2001 (Cth)

Taxation Administration Act 1953 (Cth)

1 This is an application by the defendant for security for costs under Corporations Act 2001 (Cth) s 1335(1). Cliffs Asia seeks security for costs as a payment into Court with proceedings stayed until payment.

2 The threshold requirement to enliven the discretion to order security for costs is met: it appears by credible testimony that there is reason to believe that Westonia will be unable to pay the costs of Cliffs Asia if the latter is successful in its defence. The discretion to order security for costs has been described as unfettered. Numerous factors have been enumerated as relevant to the exercise of the discretion. In all the circumstances of this case, including all the factors relied upon by the parties, it is not appropriate for the Court to exercise discretion to order Westonia to provide security for costs.

The test for security for costs and the relevant considerations

3 The Corporations Act 2001 (Cth) s 1335(1), provides that:

Where a corporation is plaintiff in any action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.

4 The 'threshold requirement',[1] or 'touchstone of jurisdiction',[2] is that it appears by credible testimony that there is reason to believe that Westonia will be unable to pay the costs of Cliffs Asia if the latter is successful. It is common ground that this threshold requirement is satisfied.[3] I accept from an 'evaluation of the evidence'[4] that there is credible testimony supporting such a reason for belief. A director of Westonia, Mr Walter Geier, says in his affidavit that Westonia is unable to pay security for costs.[5] Westonia had an outstanding debt of $1,473,692 to the Australian Taxation Office.[6] It appears that this amount has been reduced to $1,350,962.[7] In July and September 2012, the Australian Taxation Office has issued garnishee notices in relation to this debt.[8] Westonia has only been able to continue to trade because of arrangements made with creditors and forbearance by the Australian Taxation Office.[9] On 31 January 2013 an administrator was appointed to Westonia.[10]

5 The question, therefore, is whether this Court should exercise its discretion to award security for costs. The discretion has been described as 'unfettered',[11] but it must be exercised 'judicially', by reference to established principles. The factors which have developed to guide the discretion broadly strike a balance between the interests of the plaintiff corporation in conducting litigation to protect or enforce its rights and the interests of a defendant in not being exposed to the prejudice of being unable to recover costs if it is successful.[12]

6 Depending on the circumstances, various factors may have different strength and effect on the exercise of the discretion to award security for costs. The most commonly cited, nonexclusive, factors include the following, most of which I extrapolate from the cases footnoted:[13]

(i) the strength and bona fides of the plaintiff's case;

(ii) the likelihood of the plaintiff being unable to pay the defendant's costs;

(iii) whether the plaintiff's impecuniosity was caused by the defendant's conduct which is the subject of the claim;

(iv) whether the application for security is oppressive;

(v) whether the award of security would deny an impecunious applicant a right to litigate;

(vi) whether there are persons standing behind the plaintiff who were likely to benefit from the litigation;

(vii) whether the persons standing behind the plaintiff have offered any security or personal undertaking to be liable for the costs, and if so, the form of such an undertaking;

(viii) whether the applicant was in substance a plaintiff or the proceedings were defensive in the sense of directly resisting proceedings already brought or seeking to halt the defendant's selfhelp procedures;

(ix) whether the application for security had been brought promptly;

(x) whether the applicant has any rights which it can exercise against assets of the plaintiff to satisfy an order for costs in its favour; and

Whether discretion should be exercised to order security for costs

7 The applicant bears the persuasive onus to satisfy the Court that the discretion should be exercised.[14] It is common ground that Cliffs Asia has brought this application promptly. As the hearing progressed the parties agreed the application for security for costs should cover costs incurred in the period until mediation is held between the parties. It also became common ground that if Cliffs Asia is successful its recoverable costs to mediation would be in the region of $35,000 to $40,000.

8 The parties have relied upon a number of the other factors described above in support of their submissions concerning the exercise of my discretion. Each of those matters is considered below.

(i) The strength and bona fides of Westonia's claim

9 In broad summary, in Westonia's substituted statement of claim of 8 January 2013 it pleads as follows.

10 Westonia acted at all material times by its directors, Mr Walter Geier and Mr Darren Geier.

11 Westonia entered a contract with Cliffs Asia where Westonia would promised to construct works for Cliffs Asia.

12 Clause 13 of the written terms of the contract provided that Westonia provide security to secure the due and proper performance of the contract. It is pleaded that an oral term of the contract was that Westonia could satisfy its obligations under cl 13 by paying the security by instalments at the rate of 10% of the certified value of each Milestone Payment Claim by deduction from Cliffs Asia's milestone payments to Westonia.[15]

13 Westonia pleads that Cliffs Asia breached the contract in a number of ways as follows:

(i) by Cliffs Asia failing to supply meals and accommodation for all of Westonia's employees and subcontractors;[16]

(ii) by Cliffs Asia failing to supply raw materials in accordance with and at the locations specified in the contract;[17]

(iii) by Cliffs Asia failing to issue to Westonia the Direct Costs incurred by Westonia of rectifying Cliffs Asia's errors in specifying the position, level or alignment of the Works;[18]

(iv) by the Engineer's failure to issue appropriate site instructions and give directions to Westonia in a timely fashion as and when required;[19] and

(v) by repudiation of the contract by rejecting and failing to pay Westonia's claims and treating the contract as a lump sum contract when it was a schedule of rates contract.

14 Westonia claims losses arising from the five breaches, (i) to (v) above, of $5,900,402 (which includes repayment of the Security of $400,000).[20] Westonia pleads that if any of these works were outside the scope of the contract then 'the reasonable value of such goods and services' is claimed as a _quantum meruit (_as much as the services are worth).[21] The basis for this claim for a quantum meruit is not pleaded.

15 Westonia also pleads that parts of the total claim are alternatively recoverable under other causes of action.

16 First, the pleaded breach in (ii) above is also separately pleaded as involving representations which were 'false and misleading in breach of s 52 of the Trade Practices Act 1974 (Cth) or s 18 of the Australian Consumer Law,[22] occasioning loss and damage, in total, of $2,817,650.[23]

17 Secondly, Westonia pleads breaches of contract by Cliffs Asia by the acts of Cliffs Asia's agent (Roadswest Engineering Group WA Pty Ltd), described in shorthand as the Engineer, who (i) deducted the sum of $580,417 from progress certificate 9,[24] and (ii) who understated in progress certificates the GST payable by Cliffs Asia by the amount of $98,012.[25]

18 Thirdly, Westonia also pleads that Cliffs Asia breached the contract by another agent of Cliffs Asia (Mr Tony Saraullo), described as the Representative of the Engineer. The pleaded breach by the Representative is the failure to issue to Westonia a Final Payment Certificate evidencing money that is finally due and payable from Cliffs Asia to Westonia.[26] Westonia pleads that this caused it to be unable to recover the money it was owed under the contract, including the Security.

19 As a separate claim, Westonia also pleads that Cliffs Asia breached an office unit contract by failing to pay $37,354.59 which is due under that contract.

20 In written submissions, Cliffs Asia submitted that Westonia's case is weak.[27] Westonia denied this.[28] I have concluded, for the reasons that follow, that none of the matters raised by Cliffs Asia, singly or in combination, is sufficient to show that Westonia's case is weak. Rather, with one exception, an assessment of the merits of Westonia's case is inappropriate at this stage.

21 First, Cliffs Asia relies upon an affidavit from Mr Dodge, its manager for procurement and contracts, to assert weakness in Westonia's case. Mr Dodge relies on the assessment of the Engineer, who Cliffs Asia engaged to assess Westonia's payment claims and issue payment certificates.[29] Mr Dodge deposes to the Engineer's assessment and rejection of Westonia's claims save for an invoice for $33,958.72 (which appears to be the amount claimed for the office unit contract without GST).[30] He says that liability is denied on the basis of the Engineer's assessment.

22 Mr Dodge's statement concerning the assertion by the Engineer may be a key fact in contest at trial. No defence has yet been filed by Cliffs Asia. No reply has been filed by Westonia. It also appears from the correspondence that there will be considerable dispute at trial concerning both factual and legal claims made by Westonia in its pleading.[31]

23 Secondly, Cliffs Asia submits that it 'believes' it has a counterclaim or set off.[32] No counterclaim has been filed, although Cliffs Asia also asserts a right to retain $385,000 of the security arising from the rights asserted in its counterclaim. This does not establish weakness in Westonia's claim for a much larger sum.

24 Thirdly, Cliffs Asia says that, excluding the security amount, Westonia's claim amounts to 86% of the contract value and 'is clearly an ambit claim'. The short answer to this submission is that a claim for damages is not confined by the contract sum. Subject to issues of remoteness of damage there is no reason why a claim for damages cannot exceed, even substantially, the contract sum. In any event, the percentage is disputed. Westonia says that this percentage is calculated by Cliffs Asia on the misunderstanding that the contract is a fixed sum contract rather than a schedule of rates contract.

25 Fourthly, Cliffs Asia asserts that there are 'key weaknesses' in Westonia's claim, including failures to:

(ii) support particular claims by pleadings of material facts or a basis for the entitlement to the 'retention moneys';

(iii) follow variation procedures in the contract; and

(iv) support pleadings of misleading or deceptive conduct, quantum meruit and collateral contract by material facts or proper particulars.

26 These are matters which might be the subject of amendments or which condescend to detail beyond that which it would be appropriate to consider at this stage.

27 My conclusion is that, apart from the admitted liability on the office unit contract, it is not appropriate to make an assessment of the strength of Westonia's claim on this application for security for costs because of:

(i) the lack of sufficient evidence from the parties to permit any 'detailed evaluation of the merits of the claim';[33]

(ii) the absence of any defence and the absence of any reply; and

(iii) errors in at least one of the bases upon which Cliffs Asia says that Westonia's claim is weak, namely that this inference of weakness can be drawn simply from the quantum of the claim as 86% of the contract price.

28 At this stage of the litigation all that can be said is that in the 'absence of evidence to the contrary',[34] the claim is brought bona fide and on its face may have merit.

29 The exception is Westonia's claim for $33,958.72 for the office unit contract. This claim is admitted in affidavit evidence.

30 This factor is commonly raised in circumstances in which it is alleged that the application is brought for the purpose of shutting out the plaintiff from its claims.[35]

31 In this case, there is no basis for an inference that Cliffs Asia is bringing this application for security for costs for the purpose of stifling the litigation. There is no suggestion that Cliffs Asia does not have a serious defence; indeed, it appears that it may also assert a counterclaim. Nor has Cliffs Asia so far conducted the defence in a manner that unnecessarily prolongs the proceedings or adds to the costs of the proceedings.[36]

32 Westonia relies upon a comment of Basten JA in the New South Wales Court of Appeal, which was not essential to his Honour's decision, in Pioneer Park Pty Ltd (In Liq) v Australia and New Zealand Banking Group Ltd:[37]

It may be that a court will be more sympathetic to an application from a respondent with limited funds than a respondent which is a major corporation.[38] Nevertheless, as implied by Brooking J in Prime Forme Cutting Pty Ltd v Baltica General Insurance Co,[39] large corporate defendants should not be seen as standing 'outside the policy of the security for costs provisions'. However, to accept that they do not, does not in turn require the Court to ignore the fact that they 'stand in no special need of care and protection', as Brooking J expressed the point. Thus, it might be seen as oppressive to allow a large corporate defendant to obtain an order for security for costs which would be likely to stifle the litigation in circumstances where it could be seen that the claim had potential merit and that the quantum of costs would in any event be a relatively insignificant amount for the corporate defendant, though beyond the capacity of the corporate plaintiff to pay. To order security in such circumstances may constitute a form of 'oppression'.

33 The other Justices in that case did not join in these comments. It may be that his Honour meant that where a corporate defendant has considerable means, it might be possible to infer that the application for security for costs is being brought to stifle the litigation rather than to protect the interests of the defendant. If so, then, with respect, I agree. But, as I have explained, in this case, no inference can be drawn that the defendant intends to stifle the litigation by this application.

34 Westonia seeks to attribute a wider significance to Basten JA's comments. Westonia submits that the means of the ultimate parent of Cliffs Asia should, by itself, be taken into account as a factor weighing against the award of security for costs. Westonia points to the third quarter revenues of the ultimate parent of Cliffs Asia ($1.5 billion) and its total assets of $15.3 billion.[40]

35 I do not accept this submission. Basten JA went on to refer to the following passage of Prime Forme Cutting Pty Ltd v Baltica General Insurance Co,[41] where Brooking J said, referring to powerful companies in sectors prone to litigation:

These large corporations stand in no special need of care and protection. Suing and being sued is for them a normal part of this imperfect world. They can afford to pay the piper, just as they will expect to call the tune. But if one of these wealthy, powerful institutions is sued by an insolvent company, why should it be viewed as outside the policy of the security for costs provisions?

36 The sentiment of the last sentence is important. It explains why Westonia cannot sustain its submission that the means of companies related to Cliffs Asia can militate against an order for costs in favour of Cliffs Asia. As Master Newnes (as his Honour was then) said in this Court, the ability of a company such as Cliffs Asia to absorb the costs of proceedings is, of itself, not a relevant consideration.[42]

(iii) The likely inability of Westonia to pay any costs order and whether litigation would be stultified

37 It is common ground that Westonia is unlikely to be able to pay any substantial order for costs against it. The likely inability to meet a costs order is 'a matter which not only opens the jurisdiction but also provides a substantial factor in the decision whether to exercise it'.[43]

38 Although the likely inability to meet a costs order is a matter which favours security for costs, this must be weighed against the consideration that the mere impecuniosity of a plaintiff such as Westonia should itself not be a bar to it pursuing proceedings.[44] Therefore, a factor weighing against an order for security for costs is the extent to which the likely effect of an order for security would be to stultify Westonia's claim.[45] This directs attention to whether any other person might be able to satisfy an order for security for costs against the company.

39 The onus lies on the plaintiff company to establish that those who stand behind the company, and who will benefit from the litigation if it is successful, are also without means[46] and are unable to provide adequate security in place of the company itself.[47] This is usually done by a full and frank statement of the assets and liabilities of the shareholders of the plaintiff. A court might decline to exercise discretion to order security for costs if both the plaintiff company and the persons standing behind the company are impecunious, or unable to meet an order for security for costs.[48]

40 In this case, it may be that those who stand behind the company have some means. But the only evidence of means provided to the Court and to Cliffs Asia is that Mr Walter Geier and Mr Darren Geier, the directors of Westonia, hold half of the ordinary shares of that company each.[49] A statement of assets and liabilities of the directors was requested by Cliffs Asia on 23 January 2013. It was not provided to the Court or to Cliffs Asia.[50]

41 The offer of a personal undertaking by a person standing behind the company was once described as a factor 'weighing heavily against the making of an order against the applicant for provision of a cash or other security for costs'.[51] There remains disagreement about whether this factor is decisive,[52] but I consider that the better view, which was taken by the Full Court of this Court, is that the availability of an undertaking of personal liability by persons who stand behind the company' is no more than a factor, albeit an important factor, to be taken into account in the exercise of discretion'.[53] The exercise of discretion has to be considered in light of all of the factors. An important factor is the value of any potential personal undertaking and the means of the person giving it.[54]

42 Contrary to the submission of counsel for Westonia, the decision of Connolly J in Harpur v Ariadne Australia Ltd[55] does not detract from the importance of this statement of means. Rather, it emphasises the importance of providing a statement of means, although in the particular circumstances considered in Harpur, a statement of means was irrelevant because the claim in that case was not, in substance, brought by the respondent companies to that application.

43 In correspondence Westonia offered various undertakings. By the time of the oral hearing the undertaking which remained was an undertaking by Mr Walter Geier to meet up to $35,000 of an order for costs in favour of Cliffs Asia.

44 The undertaking is of very little weight. First, counsel's submissions concerning the nature of the undertaking were far from clear. But it appears that the undertaking was only given on the basis that it be an alternative to an order for security for costs if that order was made by the Court. Secondly, as I have explained, Westonia declined to provide any evidence of the assets and liabilities of Mr Walter Geier. The value of the undertaking is speculative and it certainly could not be seen as the equivalent, or even anything close to the equivalent, of a court order for security for costs.

45 Westonia submits, and Cliffs Asia denies, that Cliffs Asia's conduct has contributed to Westonia's impecuniosity.[56] In Melunu Pty Ltd v Claron Constructions Pty Ltd,[57] Brownie AJ said that this submission that the defendant is the cause of the plaintiff's impecuniosity:

[S]eems to be made frequently in response to an application for security for costs. I respectfully agree with the decision of Rolfe J in Dalma Formwork Pty Limited v Concrete Constructions Group Ltd,[58] where his Honour said that a respondent to a motion for security for costs relying upon this as a ground for resistance, must establish a real causal connection between the conduct and impecuniosity which, in the exercise of the Court's discretion, would make it unjust to require security, and it must be established that the applicant for security for costs has been guilty of some form of misconduct or unacceptable business dealings qua the respondent, such as in this case, inappropriately making claims for and receiving monies for variations, which payments caused the respondent's impecuniosity. Mere general assertions, not supported by evidence, will not suffice. To hold to the contrary would be to defeat the purpose of the rule and to the section.

46 I agree. In this case, although Cliffs Asia admits Westonia's claim under the office unit contract (an amount of $33,958.72) the substantial immediate cause for Westonia's impecuniosity is Westonia's debt to the Australian Taxation Office of $1,350,962. In the absence of a defence and counterclaim it is not appropriate to engage in a detailed examination of the facts underlying Westonia's statement of claim in order to ascertain the extent to which Cliffs Asia has also contributed to Westonia's financial hardship.

(vi) Whether the applicant was in substance a plaintiff or the plaintiff's proceedings were defensive

47 Some examples of circumstances in which a defendant applicant for security for costs is in substance a plaintiff or brings defensive proceedings include:

(i) proceedings brought to resist 'selfhelp' measures available to the defendant under the contract;[59]

(ii) where the plaintiff had no practical alternative but to commence proceedings to defend its property or rights;[60]

(iii) where the other party should have been the one to commence proceedings had they acted appropriately;[61] or

(iv) where a crossclaim arises out of the same facts.[62]

48 Westonia submits that it has been forced to litigate because of the conduct of Cliffs Asia which has deprived Westonia 'of the fruits of its labour and contributed to its impecuniosity'.[63] Westonia relies on Cliffs Asia's admission of a debt of $37,354.59 and its erroneous payment of $40,000 GST on the security (although this error is not pleaded in the statement of claim). It also relies on the failure of Cliffs Asia to issue a certificate of final completion which would permit recovery of the security, and Cliffs Asia's failure to compensate Westonia for the matters pleaded in the statement of claim.

49 In relation to the office unit contract debt which is admitted, Westonia has had to litigate to recover that debt.

50 As to whether Westonia could just as easily have been a defendant in relation to the remainder of its claims, I have already discussed the reliance by Cliffs Asia upon a possible counterclaim for $385,028 as a reason why the undertaking proffered by Westonia is insufficient. This discretionary factor has often been approached by asking if the counterclaim is 'merely defensive'. But there is no statutory prescription which requires the question to be framed in precisely this way. In Public Transport Ticketing Corporation v Integrated Transit Solutions Ltd,[64] Einstein J said that the Court could look at the reality of the case. One aspect of this 'reality' is that the foreshadowed counterclaim by Cliffs Asia is only a fraction of the amount claimed by Westonia, which weighs against the characterisation of Cliffs Asia's counterclaim as offensive in nature.

51 This matter is put beyond doubt by an undertaking offered by counsel for Cliffs Asia that Cliffs Asia would not proceed with the matters which are the subject of its counterclaim if the proceedings were stayed as a result of a failure to meet any order for security for costs.

(vii) The security held by Cliffs Asia which could satisfy an order for costs in its favour

52 Westonia says that it has paid approximately $440,000 in security[65] and submits that its entitlement to approximately $40,000 for overpayment of GST on the security is 'undeniable'.[66] Nevertheless, it appears that it is denied by Cliffs Asia. Westonia did not put the relevant provisions of the contract relating to the basis for retention of the security into evidence. However, it is common ground that absent any asserted basis for Cliffs Asia to retain the $440,000 of security then that entire amount is potentially available to meet any order for costs in favour of Cliffs Asia.[67]

53 Cliffs Asia has foreshadowed a counterclaim or set off for $300,000 based on liability for delay by Westonia, as well as $85,028 for the cost of accommodation to which it claims a right to payment from Westonia.

54 Cliffs Asia says that it is entitled to claim $6,000 liquidated damages under cl 4.4 of the Form of Agreement for every day of delay by Westonia, up to $300,000 (Item 11 of the Form of Agreement). It says that it is entitled to seek payment from Westonia by way of liquidated damages and that it will rely upon this right to offset any amount of the security found to be owing to Westonia.

55 Cliffs Asia also says that Westonia used Cliffs Asia accommodation from the date of completion of the contract, 20 August 2011 until 3 November 2012. Cliffs Asia asserts that the contract provided that this cost was to be borne by Westonia and for this reason the contract payments should have been reduced by $85,028. Hence it says that it is permitted to have recourse to the security amounts for its overpayment.

56 If Cliffs Asia's asserted claims were all entirely successful, and if it were entitled to set off the entire $385,028 against the $440,000 security which it admits holding, then there would still be only $55,000 available to it from which it could have recourse to satisfy any costs order.

57 In light of the common basis of this application that the costs up to a mediation would be approximately $35,000 to $40,000 the availability of this amount is a very significant matter. On the facts at present, and put at the very highest, Cliffs Asia has only a claim for $385,028 of the $440,000 which it holds. Further, as I have explained, Cliffs Asia's proposed (but not pleaded) counterclaim is outlined only in broad form in correspondence. Its strength is impossible to assess.

58 Although the security held by Cliffs Asia is currently sufficient to satisfy up to $55,000 of any costs order made in its favour, it is also relevant, as counsel for Cliffs Asia pointed out, that Cliffs Asia is entitled to have recourse to the security it holds for any other claims which might arise. The contract had also provided for the security to be 'topped up' within five business days of it being drawn down.[68]

Conclusion: Security for costs is not currently appropriate

59 At this stage in the litigation, a consideration of all of the relevant factors does not favour the grant of an award of security for costs for the period up to and including a mediation estimated at around $35,000 to $40,000. The two significant matters which outweigh the considerations to the contrary are as follows.

60 First is the admitted liability of Cliffs Asia in relation to the office unit contract which Westonia has had to litigate to recover ($33,958.72).

61 Secondly, there is the availability of $440,000 which Westonia has paid to Cliffs Asia and which Cliffs Asia retains. Cliffs Asia might be able to establish a counterclaim which it could satisfy by recourse to the security. But the strength of any counterclaim is currently impossible to assess and, at its highest, the counterclaim would still leave $55,000 of the security remaining, assuming that no further basis emerges upon which Cliffs Asia could assert entitlement to the security.

62 The application for security for costs is refused. I will hear from the parties concerning appropriate orders and programming of this matter to a mediation.

[1] FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd [2000] WASCA 69; (2000) 22 WAR 241, 247 [20] (Pidgeon & Owen JJ).

[2] Livingspring Pty Ltd v Kliger Partners [2008] VSCA 93; (2008) 20 VR 377, 382 [15] (Maxwell P & Buchanan JA).

[4] Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 [69] (Kenneth Martin J).

[5] Affidavit of Mr Walter Geier sworn 29 December 2012 [17].

[6] Affidavit of Mr Walter Geier sworn 29 December 2012 [17]; Affidavit of Mr Martin Dodge sworn 16 November 2012, [16.1], [16.6].

[7] Affidavit of Mr Martin Dodge sworn 16 November 2012, MRD3.

[8] Affidavit of Mr Martin Dodge sworn 16 November 2012, MRD3. See sch 1 s 260 s 265 of the Taxation Administration Act 1953 (Cth).

[9] Affidavit of Mr Walter Geier sworn 29 December 2012 [16.3].

[10] Affidavit of Mr Slattery sworn 21 February 2013, GMS 14.

[11] In relation to the comparable provision in the Rules of the Supreme Court 1971 (WA) see Mann v Dabelstein [2006] WASCA 176 [16] (McLure JA); Joseph v Joseph [2007] WASCA 27 [6] (Buss JA).

[12] Sugarloaf Hill Nominees Pty Ltd v Rewards Projects Ltd [2011] WASC 19 [31] (Corboy J). See also Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301, 304 (Street CJ).

[13] BBC Nominees (WA) Pty Ltd v Yangebup Developments Pty Ltd [2008] WASC 81 [20] (Beech J); CareyHazell v Getz Brothers & Co (Aust) Pty Ltd [2004] FCA 1334 [28] (French J); Sugarloaf Hill Nominees Pty Ltd v Rewards Projects Ltd [2011] WASC 19 [36] (Corboy J); Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 [71] [74] (Kenneth Martin J); Soia v Bennett [2012] WASCA 231 [16] (Newnes JA).

[14] Sugarloaf Hill Nominees Pty Ltd v Rewards Projects Ltd [2011] WASC 19 [34(f)] (Corboy J).

[15] Substituted statement of claim [6].

[16] Substituted statement of claim [17].

[17] Substituted statement of claim [18].

[18] Substituted statement of claim [21].

[19] Substituted statement of claim [20].

[20] Substituted statement of claim [33].

[21] Substituted statement of claim [36].

[22] Schedule 2 of the Competitioon and Consumer Act 2010 (Cth).

[23] Substituted statement of claim [34] [35].

[24] Substituted statement of claim [19.1].

[25] Substituted statement of claim [19.2].

[26] Substituted statement of claim [22].

[29] Affidavit of Mr Dodge sworn 16 November 2012 [4] [6].

[30] Substituted statement of claim [39].

[31] Affidavit of Mr Graeme Slattery sworn 1 February 2013, GMS 5.

[32] Affidavit of Mr Dodge sworn 16 November 2012 [7].

[33] Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306, 317 (Malcolm CJ; Pidgeon & Steytler JJ agreeing).

[34] Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306, 318 (Malcolm CJ; Pidgeon & Steytler JJ).

[35] Jaddcal Pty Ltd v Minson [No 2] [2011] WASC 138 [15] (Le Miere J).

[36] Jaddcal Pty Ltd v Minson [No 2] [2011] WASC 138 [15] (Le Miere J).

[37] Pioneer Park Pty Ltd (In Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344 [56].

[38] See Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1992) 57 SASR 180, 186 (King CJ) and Irwin Alsop Services v Mercantile Mutual Insurance Co Ltd [1986] VicRp 6; [1986] VR 61, 65 (Ormiston J), referred to by McClellan CJ at CL in Jazabas Pty Ltd v Haddad [2007] NSWCA 291 [76].

[39] Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1989) 8 ACLC 29, 32 33.

[40] Affidavit of Mr Walter Geier sworn 29 December 2012, WG 9, pages 27, 32.

[41] Prime Forme Cutting Pty Ltd v Baltica General Insurance Co (1990) 8 ACLC 29, 32 33.

[42] Silverstone Holdings Pty Ltd v American Home Assurance Co [2003] WASC 139 [47]; Rickard v Bonacci [2000] NSWSC 1124 [27] (Rolfe J).

[43] Pearson v Naydler (1977) 1 WLR 899, 906 (Megarry VC); BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857, 860 (Anderson J; Kennedy & Ipp JJ agreeing).

[44] Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306, 315 (Malcolm CJ; Pidgeon & Steytler JJ agreeing).

[45] BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857, 861 (Anderson J; Kennedy & Ipp JJ agreeing).

[46] Nui Ann Williams (As Administratrix of the Estate of Robert Rua Tainui Karetai (dec)) v Purvis [2006] WASC 34 [42] (Newnes M); BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857, (Anderson J; Kennedy & Ipp JJ agreeing); Bell Wholesale Co Pty Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1, 3 (the Court); Newtrend Pty Ltd v Oceanic Life Ltd [1990] WAR 1, 3 (Master Staples).

[47] BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857, 861 (Anderson J; Kennedy & Ipp JJ agreeing).

[48] Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306, 317 318 (Malcolm CJ; Pidgeon & Steytler JJ agreeing).

[49] Affidavit of Mr Walter Geier sworn 29 December 2012, WHG 5.

[50] Affidavit of Mr Slattery, sworn 1 February 2013, GMS 7.

[51] Gentry Bros Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 8 ACSR 405, 415 (Cooper J).

[52] See the discussion in Prynew Pty Ltd v Nemeth [2010] NSWCA 94 [32] [47] (Beazley JA).

[53] Intercraft Cabinets Pty Ltd v Sampas Pty Ltd (1997) 18 WAR 306, 316 (Malcolm CJ; Pidgeon & Steytler JJ agreeing). See also Epping Plaza Fresh Fruit and Vegetables Pty Ltd v Bevendale Pty Ltd [1999] VSCA 43; [1999] 2 VR 191, 198 [23] (Winneke P & Phillips J).

[54] BBC Nominees (WA) Pty Ltd v Yangebup Developments Pty Ltd [2008] WASC 81 [35] (Beech J).

[55] Harpur v Ariadne Australia Ltd [1984] 2 Qd R 523, 532 533.

[56] Plaintiff's submissions [9]; Defendant's submissions [19].

[57] Melunu Pty Ltd v Claron Constructions Pty Ltd [2004] NSWSC 1064 [31] (Brownie AJ).

[58] Dalma Formwork Pty Limited v Concrete Constructions Group Ltd [1998] NSWSC 472.

[59] Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in Liq) (1979) 4 ACLR 492, 498 (Mitchell J, Legoe J & King CJ agreeing).

[60] Classic Ceramic Importers Pty Ltd v Ceramic Antiga SA (1994) 13 ACSR 263, 267 (Young J).

[61] Classic Ceramic Importers Pty Ltd v Ceramic Antiga SA (1994) 13 ACSR 263, 267 (Young J).

[62] Public Transport Ticketing Corporation v Integrated Transit Solutions Ltd [2009] NSWSC 54 [45] (Einstein J).

[64] Public Transport Ticketing Corporation v Integrated Transit Solutions Ltd [2009] NSWSC 54 [42].

[65] Affidavit of Mr Walter Geier sworn 29 December 2012 [9].

[68] Affidavit of Mr Martin Dodge sworn 16 November 2012, MRD 1, cl 13.4.