FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - Application to strike out paragraphs of further amended statement of claim - O 11 r 16 of the Federal Court Rules - embarrassment - Pleadings - general principles - pleading a cause of action under ss 51A, 52, 53(a) and 53(aa) of the Trade Practices Act 1974 (Cth) - s 51A - whether merely evidentiary provision - onus of proof - s 52 - pleading alternative causes of action - Application for order that particulars be given - general principles governing particulars - O 12 r 1(1) of the Federal Court Rules.

Trade Practices Act 1974( Cth) -Pt V; s 51A, s 52, s 53(a), s 53(aa)

Federal Court Rules - O 11 r 16, O 12 r 1(1)

Brown & Anor v Jam Factory Pty Limited & Anor (1981) 53 FLR 340 - approved

Phoenix Court Pty Ltd & Anor v Melbourne Central Pty Ltd (Goldberg J, 22 October 1997, unreported) - approved

Cummings v Lewis & Ors (1993) 41 FCR 559 - considered/disapproved

H 1976 Nominees Pty Limited v Galli and Apex Quarries Limited (1979) 30 ALR 181 - cited

TPC v David Jones (Australia) Pty Limited & Ors (1985) 7 FCR 109 - cited

Global Sportsman Pty Limited v Mirror Newspapers Pty Limited (1984) 2 FCR 82 - approved

James & Ors v Australian and New Zealand  Banking Group Limited & Ors (1986) 64 ALR 347 - discussed

State of Western Australia v Bond Corporation Holdings Limited (1991) 13 ATPR ¶41-081 - approved

Wheeler Grace & Pierucci Pty Limited v Wright (1989) 11 ATPR ¶40-940 - applied

Bowler & Anor v Hilda Pty Limited & Ors (1998) 153 ALR 95 - approved

Famel Pty Limited & Anor v Burswood Management Limited & Ors (1989) 11 ATPR       ¶40-962 - cited

“The Law of Contract”, DW Greig and JLR Davis 1987 - cited

TRUTH ABOUT MOTORWAYS PTY LTD -v- MACQUARIE INFRASTRUCTURE INVESTMENT MANAGEMENT LTD

NG 833 of 1997

THE COURT ORDERS THAT:

1.         Paragraphs 16, 17, 19, 20, 23, 24 and 25 of the statement of claim be struck out.

2.         The applicant be granted liberty to re-plead as it may be advised.

3.         The amended statement of claim to be filed and served on or before 25 May 1998.

4.         The proceedings to be listed for further directions at 9.15am on 27 May 1998.

5.         The applicant to pay the respondent’s costs of the motion.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

This is a notice of motion brought on behalf of the respondent in these proceedings.  It seeks a variety of orders in relation to the amended statement of claim filed by the applicant on 21 April 1998.  A further amended statement of claim was filed in Court on 6 May 1998 and it is with this statement of claim that I propose to deal.  Orders are sought that portions of the document be struck out; other orders are sought that particulars be given of other portions.  I shall refer to the detail of the notice of motion later in these reasons.  It is necessary, first, to make some preliminary observations.

There have been a number of interlocutory applications in these proceedings, some of which currently remain unresolved.  In particular, the respondent’s motion for security for costs is not completed, as is, also, a motion brought by the applicant for the lifting or substantial variation of certain confidentiality orders previously made.  The proceedings, in my view, have become unnecessarily confused as a result of preliminary skirmishing taking place before the issues between the parties have been clearly defined by pleadings.  It was in the context of my experiencing concern that greater definition of the issues was needed before outstanding interlocutory matters could be properly considered, that I, as a matter of case management, gave directions to the effect that the statement of claim should be re-pleaded with a view to carefully defining the applicant’s case.

As a result, the amended statement of claim was filed.  However, no defence to it has yet been filed because the respondent has sought the orders contained in this notice of motion.  I should add that during the course of argument considerations were raised in relation to the statement of claim which, in some instances, travelled beyond the confines of the motion.  I will seek to deal with all those considerations in the remarks that follow.

The statement of claim, in its present form, is based upon sections of the Trade Practices Act 1974( Cth) (“the Act”) to be found in Pt V - Consumer Protection.  In the forefront of the statement of claim are contentions that the respondent has acted in breach of s 52 of the Act in that it has engaged in conduct, in trade or commerce, that is misleading or deceptive.  In this connection it is important to remember that, as Fox J said in Brown & Anor v Jam Factory Pty Limited & Anor (1981) 53 FLR 340 at 348:-

“Section 52(1) is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action.  It does not purport to create liability at all; rather does it establish a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law.”

It necessarily follows that when the section is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it is imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim.  This is, of course, a fundamental principle of pleading.  In this regard I cite, and state my respectful agreement with, the following passage from the judgement of Goldberg J in Phoenix Court Pty Ltd & Anor v Melbourne Central Pty Ltd (22 October 1997, unreported):-

“The statement of Mason CJ and Gaudron J as to the function of pleading in Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 bears repeating:

            ‘The function of pleadings is to state with sufficient clarity the case that must be met:  Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In Liq.) per Isaacs and Rich JJ.  In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.  The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness.’

These principles were restated more recently by Burchett J in Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR ¶41-522.  At 42,679 his Honour said:

            ‘The primary function (of a statement of claim) is to tell the defending party what the claim is that he has to meet.  That is a matter of elementary and natural justice; the claim cannot be answered until it is known.  When a sufficient defence has been filed to a sufficient statement of claim, a further function will generally have been performed - that of defining the question or questions for decision.  This definition is required, of course, from an early stage, or else discovery and other interlocutory procedures are likely to prove misdirected, wasteful and unproductive.  In order to achieve these fundamentals, a statement of claim must set out clearly, not just the bare claim that is made, but also ‘the material facts on which it is based’, including facts that, if not specifically pleaded, might take the other party by surprise:  Federal Court Rules, Order 4, r. 6; Order 11, rr. 2, 10.’”

I lay particular emphasis upon the portion of the passage cited from the judgment of Burchett J, where his Honour observed that definition of the questions for decision is required “from an early stage” in order to avoid “misdirected, wasteful and unproductive” interlocutory procedures such as discovery. 

I have had this consideration very much in mind when expressing the concerns I have regarding the lack of definition in the pleading of the applicant’s case.  Much interlocutory effort has already been expended in these proceedings on the basis, as claimed by the applicant’s counsel, that access to the documents of the respondent and other persons and organisations are necessary, at this stage, in order to demonstrate the strength of the applicant’s “case” by way of resisting the respondent’s application for security for costs.  I have decided, as I have previously indicated to the parties, that it is not my intention to dispose finally of those matters until the applicant’s “case” is finally and precisely pleaded and the issues for trial have been defined by the completion of the pleadings, including defence and, if necessary, reply. 

It is, in my view, of the utmost importance in cases based upon s 52 of the Act that this approach be adopted at the outset.  Failure to do so can produce results exemplified by Cummings v Lewis & Ors (1993) 41 FCR 559 where, on appeal, the applicant sought to amend his original pleadings to assert a cause of action based upon s 52 of the Act which had not been originally pleaded but which, it was contended, could be accommodated by the findings of fact made by the trial judge.  Experience is showing that the Court must be astute in the prevention of this type of situation by requiring, in the early stages of litigation, that claims based on s 52 be pleaded with appropriate precision and in a manner that enables the factual issues for trial to emerge with clarity.

Whilst I am dealing with the subject of pleading it is convenient to note that the rules of this Court require a pleading to contain and contain only a statement in summary of the material facts on which the party relies.  Order 12 r 1(1) directs that a party shall state in the pleading (or an associated document) “the necessary particulars of any claim, defence or other matter pleaded by him”.  It must also be remembered that it is not the function of particulars, so provided, to fill in the gaps in the pleadings and that particulars cannot be regarded as statements of material facts which can cure defects in a statement of claim (H 1976 Nominees Pty Limited v Galli and Apex Quarries Limited (1979) 30 ALR 181).  It may also be noted that it is a principle of pleading that a respondent does not plead to the particulars (TPC v David Jones (Australia) Pty Limited (1985) 7 FCR 109).  If a statement of claim puts a respondent in this position he can, in my opinion, properly claim that the relevant parts of that pleading are embarrassing.  In this regard it will be remembered that O 11 r 16 of the Federal Court Rules enables the striking out by the Court of the whole or any part of pleading that “has a tendency to cause prejudice, embarrassment or delay in the proceeding”.

In the present case, as currently pleaded in the amended statement of claim, it is apparent that reliance is placed upon the principles which are emerging in decisions of the Court relating to conduct said to be misleading or deceptive in circumstances where a respondent has made predictions as to future events.  It is necessary to make brief reference to this area of s 52 jurisprudence.  It would appear that it can now be safely asserted that a prediction made in trade or commerce can be relevantly misleading or deceptive in either of two broad ways, each of which I shall consider separately.

The first involves questions as to the state of mind of the maker of the prediction at the time of the making of the statement and also as to whether the maker had reasonable grounds for the prediction at that time.  In Global Sportsman Pty Limited v Mirror Newspapers Pty Limited (1984) 2 FCR 82 a Full Court of this Court said, in a passage which has been regularly followed and must still be regarded as representing the law:-

“The non-fulfilment of a promise when the time for performance arrives does not of itself establish that the promisor did not intend to perform it when it was made or that the promisor’s intention lacked any, or any adequate, foundation.  Similarly, that a prediction proves inaccurate does not of itself establish that the maker of the prediction did not believe that it would eventuate or that the belief lacked any, or any adequate, foundation.

... An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion.  At least if these conditions are met, an expression of opinion, however erroneous, misrepresents nothing.”

And, in James & Ors v Australia and New Zealand Banking Group Limited & Ors (1986) 64 ALR 347 at 372 Toohey J, again in a passage that has been regularly followed, provided a summary of the rules relating to predictions, in the context of s 52, as follows:-

“(1.)    A corporation may be in contravention of s 52, whatever its intention or the state of mind of those controlling it ...

(2.)      The mere fact that representations as to future conduct or events do not come to pass does not make them misleading or deceptive ...

(3.)      Nevertheless, a statement relating to the future may contain an implied statement as to present or past fact.  It may represent impliedly that the promisor has a present intention to make good the promise and it may represent impliedly that he has the means to do so ...

(4.)      A statement involving the state of mind of the maker of the statement, eg promises, predictions and opinions, ordinarily conveys the meaning that the maker of the statement had a particular state of mind when the statement was made and that there was a basis for that state of mind.  If the meaning contained in or conveyed by the statement is false in that or in any other respect, there will have been a contravention of s 52...”

Clearly, enough, these statements of principle concerned situations where a statement of a predictive nature was made in circumstances where the recipient of the statement would take from it that the maker actually held the view of the future that was being expressed; in other words, that it was a genuine prediction, and that the maker had reasonable grounds for the prediction.  Of course, such views might have been stated expressly in connection with the making of the predictive statement.  On the other hand, they might simply have been implied from the making of the prediction in circumstances which indicated it was intended to be taken seriously.

It is in the circumstances where a predictive statement carries with it the express or implied representation that the maker had reasonable grounds for making the statement and it is sought to be alleged that the making of the statement amounted relevantly to misleading conduct because the maker had no such reasonable grounds, that s 51A was introduced into the Act.  That section provides as follows:-

51A.  (1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

     (2) For the purposes of the application of sub-section (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

     (3) Sub-section (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.”

As has been held (Cummings v Lewis) this section clearly reverses the onus of proof in the situation where absence of reasonable grounds for the making of a predictive statement is in issue.  Consideration has been given in decisions of the Court as to whether an applicant seeking to rely upon s 51A should expressly plead such reliance.  In Cummings v Lewis Sheppard and Neaves JJ at 567-568 expressed the view, obiter, that the section was merely evidentiary in effect and that there was no necessity to plead reliance upon it.  However, I find myself in respectful agreement with what French J said in State of Western Australia v Bond Corporation Holdings Limited (1991) 13 ATPR ¶41-081 at 52,279, where his Honour stated:-

“In my opinion a party invoking the application of s 51A to a representation as to a future matter should make clear that it is doing so.  In that way the respondent will know that, if the representation was made, it has the burden of showing, and must plead, that it had reasonable grounds for making it.  The duty of the applicant to make clear that it invokes s 51A is discharged if it pleads that the respondent did not have reasonable grounds for making the representation and that it was thereby misleading or deceptive.  Alternatively, the applicant can plead the misrepresentation and say simply that it was misleading by virtue of s 51A.”

I do not need to take this matter further, as, in the statement of claim under consideration, the applicant indicates reliance upon s 51A in a manner which, in my view, is sufficient.

The authorities indicate that there is another approach by which a prediction can be characterised as misleading or deceptive conduct under s 52.  This approach does not involve a reading into the predictive statement of a representation that its maker believed in the prediction and had reasonable grounds for so doing.  This view was expounded by Lee J in Wheeler Grace & Pierucci Pty Limited v Wright (1989) 11 ATPR ¶40-940 at 50,251 in the following passage:-

“A positive unqualified prediction by a corporation may be misleading conduct in trade or commerce if relevant circumstances show the need for some qualification to be attached to that statement or the possibility of its non-fulfilment to be disclosed as a requirement of fair trading.  The fact that the corporation believed or had reasonable grounds for belief that the prediction would be fulfilled, would not answer the question as to whether the conduct was misleading or deceptive conduct in trade or commerce.  The misleading or deceptive conduct may be found in the failure to qualify the statement or disclose the risk of non-fulfilment and the event of non-fulfilment of a prediction or promise may be evidence that raises an inference that such a risk of non-performance existed or that qualification of the positive statement, prediction or promise was required.  Each case will depend upon its own circumstances, but the assessment of misleading or deceptive conduct is an objective test not dependent upon the proof of an intent to mislead or deceive on the part of the corporation (see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) ATPR 40-307; (1982) 149 CLR 191) and restriction of the application of sec. 52 in respect of promissory or predictive statements by a corporation to conduct of the corporation which involves a lack of belief on the part of the corporation or absence of grounds upon which the corporation could form such a belief would be inconsistent with the thrust of the section.”

This statement of principle has been accepted in some judgments of the Court; see, for example, per Heerey J in Bowler and Anor v Hilda Pty Limited & Ors (1998) 153 ALR 95 at 106-108; per French J in Famel Pty Limited & Anor v Burswood Management Limited & Ors (1989) 11 ATPR ¶40-962 at 50,509.  Some comments, however, need to be made.  In the first place this passage is not authority for the proposition (which may, perhaps, be espoused in “The Law of Contract”, DW Greig and JLR Davis 1987 at 815) that merely to make a prediction which is later unfulfilled is to engage in misleading or deceptive conduct within the meaning of s 52.  As I apprehend it, there is currently no judicial imprimatur for this extreme position which would, in any event, run counter to earlier decision of high authority, already cited.  Secondly, for it to apply, it is necessary that the prediction answer the description of being “positive” and “unqualified”.  Thirdly, it would appear that the “relevant circumstances” which would show the need for qualification must exist at the time the prediction is made.  Fourthly, it is not clear whether the “relevant circumstances” are required to have been known by the maker of the prediction, or whether, if that is not the case, they ought to have been known, or whether the mere objective fact of their existence is sufficient.  The last requirement would appear to be unreasonable; it is, however, perhaps, consistent with the thrust of the passage that “the assessment of misleading or deceptive conduct is an objective test”.  Fifthly, is “the need for some qualification” to be judged according to some objective standard, or from some objective viewpoint, or is it appropriate to assess the need from the subjective standpoint of the maker of the prediction having regard to his or her state of knowledge, at the time, of facts relevant to the assessment of the need or, perhaps, to facts discoverable by him or her on reasonable inquiry?

Notwithstanding these comments, however, it is clear that an applicant, in pleading his or her statement of claim, can rely upon any or all of the established bases for asserting a breach of s 52 in respect of predictions made in trade and commerce.  It is necessary, of course, in accordance with principles already cited, that the pleading of such alternative causes of action should be clear and capable of raising distinct factual issues for trial.

To sum up, in my view, a pleader wishing to assert that a prediction made in trade or commerce is misleading or deceptive, or likely to mislead or deceive, can assert any or all of the following:

(a)        the maker did not believe in the prediction;

(b)        the maker had no reasonable grounds for believing in the prediction;

(c)        reliance upon s 51A as to absence of reasonable grounds;

(d)        that the prediction was positive and unqualified and that circumstances, existing at the time of its making, demonstrated the need for the making of some appropriate and specified qualification or disclosure.

I accept, with respect, what Cooper J said in Bowler (at 117-118) in relation to s 51A.  His Honour said:-

“The consequence of a representor making out the requirements of reasonable grounds is to deny the benefit of the deeming provision.  Section 51A(1) and s 51A(2) do not operate to prevent an applicant for relief seeking to prove up conduct in contravention of s 52 of the Act.  However, if an applicant is not intending to rely solely on the operation of s 51A to prove up its case, then the positive case to be advanced must be specifically pleaded in order that the respondent knows the case which the applicant will seek to make out on trial.”

If a pleader asserts positively the absence of reasonable grounds for the making of the prediction, it must of course plead the relevant factual matters specifically (although not, of course, the evidence upon which the factual assertions are based).  If s 51A is also relied upon, then the respondent in its defence must deal with the applicant’s factual allegations as to absence of reasonable grounds and also, in order to counter the deeming effect of s 51A, it must assert positively the facts relied upon as establishing reasonable grounds.

THE AMENDED STATEMENT OF CLAIM

Against this general background I now turn to the applicant’s amended statement of claim and to the matters raised by the notice of motion and in discussion at the hearing.

In the first place it may be noted that this is not a case where the predictions relied upon as founding the alleged causes of action have been falsified by subsequent events.  The time for their fulfilment or non-fulfilment has not yet arrived.  It is, apparently, the applicant’s case that they will necessarily be unfulfilled.  The onus of so establishing lies on the applicant.  Also, although some such suggestion was made, earlier in argument, prior to the amendment of the statement of claim, no allegation is now sought to be made that the respondent did not genuinely believe in the asserted predictions. 

The first thirteen paragraphs of the statement of claim are not the subject of any criticism.  They contain, apparently, uncontroversial prefatory statements of fact.  In paragraph 14, there is pleaded, in extenso, a passage taken from the respondent’s prospectus which is referred to as “the Statement”. 

Paragraph 15 reads as follows:-

“In making the Statement, the Respondent, in trade and commerce, has represented that:

(i)        traffic on the Eastern Distributor would build up rapidly (‘the first representation’);

(ii)       traffic volume on the Eastern Distributor would be nearly 60,000 cars in 2006 (‘the second representation’);

(iii)      traffic volume on the Eastern Distributor would build up more slowly after 2006 (‘the third representation’).”

Apart from the general allegation made in paragraph 25 which relates to all the paragraphs, 14 to 24 inclusive, there is nothing in the statement of claim to indicate that the making of the representations thus alleged is the conduct which is relied upon as being in breach of s 52.  I assume, however, that it is.

As to the alleged conduct being relevantly misleading or deceptive, paragraph 18 states that “Each of the first second and third representations are with respect to future matters within section 51A of the Trade Practices Act 1974 (Cth) (‘the Act’)”.  It is thus clear that reliance is placed upon that section, with the result that the representations alleged will be taken to be misleading unless the respondent establishes reasonable grounds for making them.  However, it is not clear from the statement of claim whether the applicant, in asserting a breach of s 52, is also relying upon a positive allegation that the respondent had no reasonable grounds for making the predictive representations.  The only reference to the absence of reasonable grounds is to be found in the particulars to paragraph 19 of the statement of claim.  This paragraph relates only to the first and second representations.  It was conceded in argument by counsel for the applicant that it was inappropriate for the absence of reasonable grounds to be pleaded in a section relating to particulars as it was an element of a cause of action.  Counsel conceded that particular (i) to paragraph 19 should necessarily have to be struck out and the following paragraphs accordingly renumbered.  However, so far as I could ascertain he did not indicate where, if anywhere, it should find a place in the statement of claim.  I am left in doubt as to whether, at least in relation to the first and second representations, it is positively asserted that the respondent did not have reasonable grounds for making them.

This leads to another problem which I canvassed with counsel for the applicant; that is the purpose and relevance of paragraphs 16 and 17 which allege that all three representations were based on the model referred to in earlier paragraphs and that the methodology used in the model was flawed in the ways sought to be particularised in paragraph 17.  I had thought that, although not expressly stated in the pleadings, these paragraphs were, in effect, particulars intended to support a positive allegation of absence of reasonable grounds.  As I understood him, counsel for the applicant disavowed this purpose but insisted that, in effect, they constituted “his case”. 

In these circumstances, it is quite unclear whether the applicant is seeking to assert, in addition to its reliance on s 51A, a positive case of absence of reasonable grounds for the making of the alleged predictive representations.  If it be the intention so to plead, and I rather gathered it was, then this statement of claim does not effectively raise the matter.

It is to be noted that paragraphs 16 and 17 are pleaded as substantive allegations of fact and not as particulars.  I gathered from counsel’s argument that this had been done as they were intended to be allegations of fact essential to a case sought to be made along the lines appearing from the portion of the judgment of Lee J in Wright quoted above.  This case, I was told, found expression in paragraphs 20 and 24 of the statement of claim with some assistance from paragraph 25.  If this be so, the statement of claim currently fails, in my opinion, to make clear how the allegations in paragraphs 16 and 17 come within any cause of action based upon the passage from Wright.  As it stands, in my view, this part of the pleading is embarrassing.

The representations which are the subject of paragraphs 19 and 20 set are set out in paragraph 15.  It appears that paragraph 19, so far as s 52 is concerned, is intended to raise allegations of misleading conduct based upon the absence of reasonable grounds for the making of the representations.  On the other hand, paragraph 20, again so far as s 52 is concerned, is intended to raise the Wright cause of action.  It does so by using the phrase “Even assuming the Respondent had reasonable grounds for making the first and second representations at the time they were made...”.  Allowing that this cause of action does not require the assertion of the absence of reasonable and probable grounds, the paragraph, nevertheless, remains quite inadequate as a pleading of the cause of action contemplated in Wright.  The particulars referred to cannot be called in aid to eke out the defective pleading.  Indeed, it may be doubted whether the particulars, even if included in an appropriate way in the pleading itself, would sustain a cause of action of this kind.  As it is, paragraph 20 is simply embarrassing as a pleading. 

Both paragraphs 19 and 20 suffer from another defect.  As well as referring to claims under s 52 of the Act they also assert, apparently, claims under ss 53(a) and 53(aa).  Apart from using words that appear in those sections they fail completely to indicate in what fashion breaches of those sections are claimed to have occurred.  They allege no facts sufficient to bring any alleged conduct of the respondent within the ambit of those sections.  It was submitted by counsel for the applicant that the respondent could simply traverse the words “and is a false representation that services are of a particular standard, quality, value or grade, and a false representation as to the benefits of services”.  This would, of course, achieve nothing.  It would not result in the posing of essential factual issues for the decision of the Court.  Once again, the particulars, even assuming they could do so, cannot be used to eke out this defective pleading.  In its amended notice of motion the respondent seeks orders that the words to which I have just made reference be struck out in each of the paragraphs.  It also seeks an order that paragraph 20 be struck out in its entirety.  For the reasons that I have given it is necessary, in my view, that both paragraphs 19 and 20 be struck out in their entirety with leave to re-plead.

Paragraphs 21 and 22 have not been the subject of any attack.  Paragraph 23, however, is infected with the same defect in relation to the purported claims under ss 53(a) and 53(aa).  The phrase “and is a false representation that services are of a particular standard, quality, value or grade, and a false representation as to the benefits of services” is embarrassing in this paragraph as it is embarrassing in the other paragraphs.  An order is sought in the notice of motion that it be struck out.  I make that order with leave to re-plead.

Paragraph 24 relates only to the third representation.  I assume that it seeks to allege a Wright cause of action and by virtue of paragraph 25 seeks to call in aid paragraphs 16 and 17.  For reasons that I have already given I am satisfied that the pleading in this form is relevantly embarrassing and should be struck out with leave to re-plead.

In the result I have come to the conclusion that the best way to deal with the problem constituted by this statement of claim is simply to make orders striking out paragraphs 16, 17, 19, 20, 23, 24 and 25 with leave to re-plead.

As a result of these orders, the orders sought in the notice of motion relating to the supply of particulars become unnecessary.

Accordingly, I make the following orders:-

1.         Paragraphs 16, 17, 19, 20, 23, 24 and 25 of the statement of claim be struck out.

2.         The applicant be granted liberty to re-plead as it may be advised.

3.         The amended statement of claim to be filed and served on or before 25 May 1998.

4.         The proceedings to be listed for further directions at 9.15am on 27 May 1998.

5.         The applicant to pay the respondent’s costs of the motion.

Associate:

Dated:              18 May 1998