CATCHWORDS
PRACTICE & PROCEDURE - statement of claim - striking out - claim so confusing and unclear as to be embarrassing - no federal element - action transferred to Supreme Court of Queensland
COSTS - costs sought on an indemnity basis - costs to be taxed and paid forthwith
TRADE PRACTICES - limitation period - when loss or damage becomes actual - when loss or damage is reasonably ascertainable
Trade Practices Act 1974 ss.52 53A 53B 82(2)
Federal Court Rules O 62 r 3
L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd (1978) 33 FLR 170 Cons
Wardley Australia Limited & Anor v The State of Western Australia (1992) 175 CLR 514 Refd
SWF Hoists and Industrial Equipment Pty Ltd v State Government Insurance Commission (1990) ATPR ¶41-045 Refd
Karedis Enterprises Pty Limited & Anor v Antoniou & Anor (1995) ATPR ¶41-247 Refd
General Steel Industries Inc v. Commissioner for Railways (NSW) (1964) 112 CLR 125 Refd
Sam Edwin Leigh Harris v. Cigna Insurance Australia Limited and James F Dicke Snr.
No QG 78 of 1994
Kiefel J Brisbane 10 November 1995
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG 78 of 1994
BETWEEN:
SAM EDWIN LEIGH HARRIS
Applicant
AND:
CIGNA INSURANCE AUSTRALIA LIMITED
First Respondent
AND:
JAMES F. DICKE SNR.
Second Respondent
JUDGE MAKING ORDER: Kiefel J.
DATE OF ORDER: 10 November 1995
WHERE MADE: Brisbane
MINUTES OF ORDERS
THE COURT ORDERS THAT:
1. Paragraphs 17(vi), 18(ii), 22, 23 and 24 of the Statement of Claim filed on 15 September 1995 be struck out.
2. The applicant have leave to amend his Statement of Claim by adding a paragraph 18A in the terms appearing in the proposed Statement of Claim marked "B".
3. The applicant pay the first respondent's costs of the motion to strike out and of the hearing of leave to amend the Statement of Claim to be taxed on the indemnity basis and paid forthwith.
4. Upon conclusion of taxation of those costs, the matter be transferred to the Supreme Court of Queensland.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG 78 of 1994
BETWEEN:
SAM EDWIN LEIGH HARRIS
Applicant
AND:
CIGNA INSURANCE AUSTRALIA LIMITED
First Respondent
AND:
JAMES F. DICKE SNR.
Second Respondent
CORAM: Kiefel J.
DATE: 10 November 1995
PLACE: Brisbane
REASONS FOR JUDGMENT
On 1 September 1995 I ordered that the applicant file and serve an amended statement of claim by 15 September 1995 or his proceeding would stand dismissed. That order was made in the background of two previous orders granting leave to amend to deal with deficiencies in the pleading and, with respect to the last order, two defaults in supplying the amendment when ordered to do so. The amended pleading was filed on 15 September 1995 but, at the commencement of the hearing of the first respondent's motion to strike out that part of it which raised a claim based upon a contravention of s.52 Trade Practices Act 1974, the applicant sought leave to further amend and this was the subject of objection.
The action brought by the plaintiff concerns non-payment for work done by him on the construction of a seagoing vessel between 5 January 1990 and 23 November 1990. It is alleged that there was an agreement with the first respondent for remuneration of that work at the rate of $90.00 per hour and a claim is brought for failure to pay as promised and alternatively upon a quantum meruit. To what would appear a relatively simple claim are added two further claims, one apparently based upon an estoppel and another on a contravention of ss.52 and 53B Trade Practices Act 1974. Whilst it is only the trade practices claim that I am presently concerned with, some of the representations by the first respondent are also relied upon to found the estoppel and they are not then the subject of the application to strike out. Reference to them is however necessary to explain the application to delete the claims for damages under s.82 Trade Practice Act which follow.
The agreement for services above referred to is converted, in paragraph 17, to a representation of the first respondent:
"17. Further and in the alternative, the applicant says that the first respondent, by its servants and/or agents represented to him that if he performed the services referred to in paragraphs 7 and 11 herein he would be remunerated by the first respondent at the rate of 90 dollars per hour for so doing.
PARTICULARS
(a) The said representations were made on the following occasions:
(i) By Mr Stern, in or about January 1990, orally to Mr De Montfort, knowing and intending that the representation would be passed on to the applicant.
(ii) By Mr Stern, in writing, by letter to Mr De Montfort dated 17 January 1990, knowing and intending that the representation would be passed on to the applicant.
(iii) By Mr Stuart Lye, acting as agent for the first respondent, who in or about February or March 1990 said to the applicant in a conversation at Bulimba words to the following effect:
`You know what I did for you - I got you that $90 an hour from Cigna'
(iv) The first respondent represented to the applicant that it was liable to pay him the said remuneration by requiring him, through its servant or agent Mr Stuart Lye, to supply details in writing from time to time between 5 January 1990 and 23 November 1990 of the hours worked by the applicant in directing and supervising construction of the vessel for the purpose of computing the amount of the said remuneration owing to him.
(v) By Mr R G Gobits, on or about 4 June 1990, orally to Mr De Montfort, knowing and intending that the representation would be passed on to the applicant."
Paragraph 18 alleges that, in reliance "upon the said representations" the applicant acted to his detriment by performing the said services over a lengthy period of time, while remaining unremunerated. Paragraph 23, to which I shall later refer, contains a reference to the conduct (but which however would be taken to include not only this but other conduct later pleaded) as misleading and deceptive within ss.52 and 53 Trade Practices Act in these terms:
"(a) in permitting the applicant to
perform the said services for the benefit of the first respondent when it was
not
going to remunerate the applicant at the rate of $90 per hour as
represented".
Loss and damage is alleged, by paragraph 25, as being the whole of the value of the work at the agreed rate.
Even
at this point the applicant appears, in paragraph 17, to be relying on more
than a pre-contractual representation.
Further representations (and by sub-paragraph (v) one communicated
during the course of the works) are also pleaded as having been relied upon
although how action taken in consequence is said to produce the total damage
referred to in paragraph 25 is not clear, since there is nothing pleaded to
indicate, for example, that the applicant was considering another course. At best this later representation, and what
is referred to in sub-paragraphs (iii) and (iv) as representations might be
said in the absence of further explanation to be conduct which confirmed the
initial representation which induced entry into the contract for works. If one were able to pare the claim back to
the pre-contractual representation all that is said is that (paragraph 23(a))
ss.52 and 53A are contravened because the first respondent thereafter permitted
the applicant to perform the works "when
it was not going to remunerate the applicant at the rate of $90 per hour as
represented". Given other
allegations, to which I shall shortly refer, this appears to be derived from
later refusals to pay and denial of liability.
This is confirmed by the applicant pleading, not just a promise which
was never intended to be fulfilled, but a longer course of conduct as
relevant. There is no clear allegation
that, at the time of the initial representation, there was no basis for the
making of that promise or that the first respondent then had no intention of
performing it. In L. Grollo Darwin Management
Pty Ltd v. Victor Plaster Products Pty Ltd (1978) 33 FLR 170, 174-5 the
Full Court held that, whilst in certain circumstances it may be within the
range of misleading and deceptive conduct to enter into an arrangement having
no intention to observe the obligations undertaken, what is required is more
than just a general allegation. It is
not sufficient to require the respondents to speculate as to what are the
circumstances alleged to give the facts alleged the quality of being misleading
or deceptive. Here, one might have
thought that an intention not to pay was to be implied in what was first said
were it not for the following allegations which are pleaded. Putting aside the additional paragraphs
(18A-18D) sought to be introduced, paragraphs 22 and 23 put the matter as
follows:
"22. Further and in the alternative, the applicant says the representations of the first respondent particularised in paragraph 17 herein and/or the representations referred to in paragraph 20 herein were deceptive and/or misleading or likely to deceive or mislead within the meaning of s.52 of the Trade Practices Act 1975 ("the Act").
23. Further and/or in the alternative the first respondent engaged in deceptive and/or misleading conduct with (sic) the meaning of s.52 and/or s.53B of the Act:
(a) in permitting the applicant to perform the said services for the benefit of the first respondent when it was not going to remunerate the applicant at the rate of $90 per hour as represented;
(b) by silence in circumstances where it would have been expected that the first respondent would have informed the applicant that the applicant would not be paid the said remuneration;
(c) by representing to the applicant, through its agent Jody Williams, on or about 1 June 1992 that the first respondent acknowledged that it owed to the applicant a sum of money in respect to the said remuneration."
Reliance is then pleaded in paragraph 24 with respect to "to conduct particularised in paragraph 23 herein the applicant having acted to his detriment by:
(a) performing the said services over a lengthy period of time, while remaining unremunerated in respect thereto; and/or
(b) in respect to representation (c) above, forbearing to commence proceedings against the first respondent under the Trade Practices Act 1974 until 1994 despite remaining unremunerated for performing the said services."
The introduction of a denial of liability as relevant conduct does little except add to the confusion, particularly since it stands as inconsistent with the allegation of a representation in paragraph 23(c) of an acknowledgement of liability.
Further reference to an "acknowledgement" or "affirmation" is contained in the paragraphs sought to be added. They are to the effect that on 1 June 1992 the first respondent acknowledged its liability to the applicant for the sum claimed, the value of the works. Two consequences are said to flow from that, neither of which are connected to the loss claimed although the acknowledgement is clearly relied upon as part of a course of conduct. In paragraph 18C it is alleged that as a result of the acknowledgement in June the applicant withheld commencement of proceedings. In paragraph 18D however it appears that there was a clear refusal to pay one month later.
When regard is had to causation, the loss caused "by" conduct of the first respondent the later conduct appears irrelevant to the claim. But it is then not clear what the applicant wishes to say about the pre-contractual representation. One cannot infer even from the later conduct and statements referred to that what is said was the first respondent's intention or belief at the time of the initial representation, for it is variously alleged that it later affirmed its promise and it denied it, but the denial is said to have been misleading and therefore, I take it, to have been wrong. This does not clearly spell out a case of a representor who at no time held the belief in question and certainly does not allow one to infer that the belief was not held in January 1990.
The first respondent also submits that the applicant's claim is statute-barred under s.82(2) Trade Practices Act. The proceedings were commenced on 16 June 1994 and then contained a claim under s.52 Trade Practices Act, which is sought to be amended to plead the later assurances and denial of liability. The respondent submits that the proposed amendments do not assist. Whilst I have some doubt about the loss having accrued as late as is pleaded, I do not think this ground would provide a clear enough basis for striking out the claim. I say this because of the way in which the loss is pleaded. But what a consideration of these issues does show is, once again, the confusion present in the claim. The applicant seeks leave to plead an allegation, contained in previous statements of claim but omitted during the course of the various amendments, namely paragraph 18D.
"The applicant has suffered loss and damage as on 2 July 1992, the first respondent refused to pay the applicant for the work he performed".
That loss and damage becomes actual (Wardley Australia Limited & Anor v. The State of Western Australia (1992) 175 CLR 514), on a refusal to pay (the example of SWF Hoists and Industrial Equipment Pty Ltd v. State Government Insurance Commission (1990) ATPR ¶41-045, referred to by the majority in Wardley) seems clear enough. The Full Court of this Court in Karedis Enterprises Pty Limited & Anor v. Antoniou & Anor (1995) ATPR ¶41-247 at 40,814-16 and 40,818-20 has pointed out that the reasoning of the majority and of Brennan and Deane JJ. disclose that the question as to when loss arises is one of fact in each case and that the rationale behind requiring damage to be more than merely potential is that a plaintiff ought not be compelled to institute proceedings before loss is ascertained or reasonably ascertainable. The first respondent's point is that on one view of the applicant's pleading damage will have been caused upon mere entry into the contract. Since there was never an intention to pay for the works the contract is to be regarded as valueless. As I have said, the applicant's case as to what belief or intention was held by the respondent at that time is not clear. But in any event it would hardly be said that the loss or damage was ascertainable or actual until it became clear that there would be no payment made, as might be inferred from non-response to or refusal following denial. What does seem odd is that there was no refusal, express or implied, to pay or denial until 2 July 1992, about two years after the works were completed. But that is how the matter is presently pleaded.
The jurisdiction to strike out a pleading or part of it, is exercised only in a clear case: General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125, 128-9 and conscious of the fact that a plaintiff or applicant might be deprived of the opportunity of a determination on the claim: General Steel 130. The claim based upon s.52 as presently pleaded is however so confusing and unclear as to how it is said any conduct which could be described as causative was misleading or deceptive, as to be embarrassing and should be struck out. The proposed amendments, save for paragraph 18D, standing alone, worsen the position . During argument it was suggested that paragraphs 18A to 18C might be relevant to an estoppel. It seems to me however that they were pleaded only with respect to the later claim of contravention of s.52. They have no connection with the promissory estoppel raised in paragraph 21. I have considered whether to allow the plaintiff an opportunity to re-plead that matter, but leave was not sought and argument had upon it, and in any event, given the numerous opportunities thus far presented to the applicant, I think the time has come when his pleadings must close. I am of like view with respect to any further attempt to plead a claim under s.52. Too much delay has already been occasioned by the applicant's attempts to create additional causes of action. I will therefore order that paragraphs 17(vi), 18(ii), 22, 23 and 24 of the statement of claim filed on 15 September 1995 be struck out. I grant leave only to add a paragraph in terms of paragraph 18A of the proposed amended statement of claim which was handed up to me and which has been marked "B" since it was earlier pleaded and omitted by error and it is relevant to the other claims and to when loss arose. Paragraphs 17 and 18 otherwise stand as relevant to the original plea in estoppel, which it was not sought to strike out.
As discussed with Council, a result of my orders is that there is no longer any federal element in the proceedings and it is appropriate then that the remaining claims based in contract and equity be transferred to the appropriate State court. Both parties concurred that the contract was entered into in Queensland. The Supreme Court of Queensland has jurisdiction to grant the relief and for the amount claimed.
The first respondent is entitled to its costs of its motion and of the hearing of the applicant's oral application for leave to amend. Those costs are sought on an indemnity basis. Putting aside the limitation point, the applicant has been consistently reminded of the need to properly plead the trade practices claim and the Court's earlier expressed doubts about it during directions hearings appear to have fallen on deaf ears. To this may be added the time which has been lost in providing opportunities to the applicant to clarify his claim and the delays resulting from non-amendments within the times ordered. This is, I consider, an appropriate cause for the making of such an order.
The first respondent also seeks an order under O.62 r.3 that those costs be taxed and paid forthwith. There has been long delay in close of pleadings by the pursuit of an ill-considered and perhaps unnecessary claim. The first respondent submits that the Court ought discourage such conduct and this could not be achieved by making an order for costs which will not be taxed and paid until the conclusion of proceedings. I accept that it is here a proper approach to the exercise of the Court's discretion.
I have been mindful of the fact that the claim ordered to be struck out was not likely pleaded upon the insistence of the client himself. It is an unfortunate example of a common occurrence now to add claims which do not promote early resolution of a client's claim but tend to complicate and delay proceedings. The lawyers responsible for the pleading to date did not appear on this hearing. The matter of costs is one which will no doubt be the subject of discussion between the applicant and his legal representatives.
I certify that this and the preceding ten pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.
Associate
Date: 10 November 1995
Counsel for the applicant: Mr D K Smith
Solicitors for the applicant: Kilner & Black Town Agents for Hosie, McGarvey & Lord
Counsel for the first respondent: Mr J D McKenna
Solicitors for the first respondent: Gadens Ridgeway Town Agents for Herbert Geer & Rundle
Solicitors for the second respondent: Phillips Fox
Date of Hearing: 3 November 1995
Place of Hearing: Brisbane
Date of Judgment: 10 November 1995
