Robyn Lesley Enterprises Pty Ltd v Vehicle Identification System Pty Ltd
[1997] QDC 225
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- Robyn Lesley Enterprises Pty Ltd v Vehicle Identification System Pty Ltd[1997] QDC 225
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Robyn Lesley Enterprises Pty Ltd v Vehicle Identification System Pty Ltd[1997] QDC 225
Robyn Lesley Enterprises Pty Ltd v Vehicle Identification System Pty Ltd[1997] QDC 225
IN THE DISTRICT COURT HELD AT BRISBANE QUEENSLAND | Plaint No. 2258 of 1996 |
BETWEEN:
ROBYN LESLEY ENTERPRISES PTY LTD (ACN 060 812 777) | Plaintiff |
AND:
VEHICLE IDENTIFICATION SYSTEM PTY LTD (ACN 010 182 091) | First Defendant |
GLOBAL IMAGING SOLUTIONS PTY LTD (ACN 059 442 456) | Second Defendant |
EARL ERIC WOOLLEY | Third Defendant |
EARL ERIC WOOLLEY and SUSAN CLARE WOOLLEY | Fourth Defendants |
SAMUEL SYDNEY DOUMANY | Fifth Defendant |
REASONS FOR JUDGMENT - McGILL D.C.J.
Delivered the 20th day of June 1997
By a plaint filed on 5 July 1996 the plaintiff claimed damages of $140,000 together with interest from two companies and four individuals on the basis that the two companies had breached certain provisions of the Trade Practices Act, all defendants had breached provisions of the Fair Trading Act, all defendants were negligent, and all defendants were involved in the contraventions of the Trade Practices Act and the Fair Trading Act by the other defendants. An Entry of Appearance and Defence on behalf of the third and fourth defendants was filed on 11 April 1997. No appearance had been entered on behalf of the fifth defendant at the time when an application on behalf of that defendant came before me in chambers seeking an order that the plaint be struck out as against the fifth defendant, on the ground that it disclosed no reasonable cause of action against him, and was frivolous or vexatious. Since there was no challenge to jurisdiction or service of the plaint, I required an undertaking on behalf of the fifth defendant to enter an appearance before I would hear the application, which undertaking was given.
Approach to the application
The general approach to the discretion to strike out a pleading is that it should only be exercised where the claim or defense raised is obviously untenable: General Steel Industries Inc. v Commissioner for Railways (1964) 112 CLR 125 at 129. Matters going to the merits of the claim should not be decided in a summary way prior to trial, and this includes questions of law unless they are quite clear, or unless an order has been made under the rules for the determination in advance of the trial of a separate question of law. There is no procedure for demurrer under the District Court Rules, and the hearing of an application under Rule 109 should not be treated as the equivalent of the determination in advance of the trial of a separate question of law. Questions of law should therefore not be decided adversely to the plaintiff on the hearing of this application unless a view of the law favourable to the plaintiff is clearly wrong.
There is however one aspect of the law which does have to be decided on such an application, and is appropriately enforced by it, and that is the law in relation to sufficiency of pleading. A claim or defense which is bad in point of pleading should be struck out, but on the basis that the party delivering it should be given leave to re-plead. As to the significance of striking out a pleading with leave to re-plead on the ground that it was defective in point of pleading, see Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69 at 74 per Barwick CJ; at 97-98 per Jacobs J.
Claims made in the plaint
The plaint alleges that the first defendant was the owner and developer of a vehicle identification system, and that it carried on business by licencing the right to operate, sell and/or manage that system. The second defendant was in the same position in relation to a system of goods identification. The third and fifth defendants are alleged to have been directors, servants and agents of the first and second defendants, although the third defendant is alleged to have also been the agent of the fourth defendants (two individuals) who are alleged to have been marketing franchises which included the right to sell and operate the systems.
The plaintiff was seeking to invest in a business, and in 1993 made enquiries of the third defendant concerning the purchase and operation of a franchise for operating the systems in the Northern Territory. The plaintiff was allegedly provided with a silver coloured booklet dealing with the vehicle identification system, and it is alleged that by that booklet, a letter dated 29 April 1993, a disclosure document, an advertisement in the NT News, and an oral statement on 21 May 1993 various representations were made to the plaintiff by the first second and/or fourth defendants. It is alleged that these representations were misleading and deceptive and in breach of the Trade Practices Act and the Fair Trading Act.
It is also alleged that in July 1993 the plaintiff attended a course for the instruction of intended licensees and franchisees during which the third defendant made a number of oral representations to the plaintiff which were also misleading and deceptive. It is also alleged that during the course the third defendant introduced the plaintiff's representative to the fifth defendant, and at that time the plaintiff's representative informed the fifth defendant that the good references she had received about him was one of her reasons for being interested in the franchise and the licences for the systems. It is alleged that the fifth defendant, and the other defendants, knew or ought to have known various things as at 15 July 1993, and that each of the defendants knew or ought to have known certain other things on or about 22 April 1993. It is alleged that by reason of the fact that the defendants knew these things each of them had a duty to inform the plaintiff of the things which they knew (or ought to have known) on or about 22 April 1993, and the defendants breached that duty. It is alleged that on or about 15 July 1993 the plaintiff, relying on the various representations and being unaware of the matters which had not been disclosed, entered into a franchise agreement and a licence in respect of each of the systems, and paid the fourth defendant $75,000. A number of matters are relied on as showing that the representations were false, although they do not all falsify the representations as pleaded. It is also alleged that the fifth defendant (and the other defendants) knew or ought to have known that the first second and fourth defendants were unable within a reasonable time to supply to the plaintiff the services agreed to be supplied. It is alleged that by reason of these matters the plaintiff suffered loss being the amount of the purchase price of the franchise etc, and a further sum of $65,000 for borrowing charges, interest, travelling expenses and general damages.
It is possible that there is rather more to the claim than this; I found the plaint difficult to follow, and may have overlooked some of its aspects.
After some argument counsel for the plaintiff conceded that no allegation of contravention of any of the provisions of the Fair Trading Act could be made against the fifth defendant, and that no allegation could be made against the fifth defendant in respect of involvement in a contravention of the Fair Trading Act by any other defendant. It was also conceded that it was necessary to amend paragraph 14 in order to sustain an allegation that the matters alleged therein were known at about 15 July 1993. This left, as the only allegations made against the fifth defendant, the allegation of negligence, and the allegation that he was involved in the contravention by the first and second defendants of sections 52, 53, 58, and 59(1) and (2) of the Trade Practices Act.
After further argument, it appeared that counsel for the plaintiff was prepared to concede that the pleading of involvement in the contravention of the Trade Practices Act by the fifth defendant was not adequate, and foreshadowed an amendment to the plaint to re-plead that claim.
Pleading of the claim under the Trade Practices Act against the fifth defendant
The only allegations actually pleaded against the fifth defendant in relation to involvement in a contravention of the Trade Practices Act were the fact of the introduction of the fifth defendant to the plaintiff's representative by the third defendant, the statement alleged to have been made then to the fifth defendant, and the fact that the fifth defendant knew or ought to have known certain things. Paragraph 22 then says relevantly: “In the premises:— .........[the fifth defendant was] involved in the said contraventions of the Trade Practices Act.........by [the first and second defendants].” It was argued that this was adequate as a pleading, on the basis that an allegation of involvement in a contravention of the Trade Practices Act was to be taken as picking up the definition of “involved” in section 75B of that Act. Apart from the fact that the pleading does not even go so far as to say that the fifth defendant was involved “within the meaning of that term in the Trade Practices Act”, or “for the purposes of the Trade Practices Act”, this sounds very like an allegation that a pleading of a factual conclusion should be treated as impliedly alleging whatever material facts were necessary as a matter of law to support that conclusion.
I do not think that that is the way pleadings are supposed to work.
“The function of pleadings is to state with sufficient clarity the case that must be met..........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, incidently, to define the issues for decision.” - Bangue Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J.
The application of that approach to the proper pleading of a claim under the Trade Practices Act has been the subject of a good deal of discussion, particularly in the Federal Court. The various authorities were reviewed by Burchett J in Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd [1996] ATPR # 41 - 522 at pages 42,679 - 80:
“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. ......The material facts are all those facts necessary for the purpose of formulating a complete cause of action. .....It is not sufficient that the statement of claim simply express a conclusion drawn from facts which are not stated...., though in some circumstances to plead a conclusion may be to plead a material fact. Not only must all material facts be pleaded but they must be pleaded with a sufficient degree of specificity, having regard to the general subject matter, to convey to the opposite party the case that party has to meet. ....It must be apparent on the face of the document that the facts pleaded, if proved, would establish the cause of action relied upon.” (Authorities omitted)
His Honour also referred with approval to a statement by Neaves J in a particular case that a particular paragraph of the amended statement of claim
“Simply transcribes the language of section 46(1)(c) of the Trade Practices Act. It thus states a conclusion and not the material facts on which that conclusion is based.”
His Honour noted that in that case, and another decision he quoted of French J, the approach was taken that it must be possible to tell from the material facts pleaded what case was alleged to support the pleaded conclusion, so that it was possible to tell on the face of the pleadings whether the conclusion could be justified as a matter of law.
As I read section 75B of the Trade Practices Act it is necessary to come within its terms before a person can be “involved in the contravention” for the purposes of section 82. In Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1985) 61 ALR 504 Pincus J as he then was at page 507 said that an assertion that an identified person or persons had been involved in a contravention should be specifically pleaded, but did not say what material facts had to be set out in the pleading for this to be done adequately.
In Matheson Engineers Pty Ltd v EL Raghy (1992) 37 FCR 6 French J considered a statement of claim which attempted to plead a claim of breach of section 52 of the Trade Practices Act. It included a paragraph 12 in these terms:
“The respondents are persons involved in the contravention of section 52 of the Trade Practices Act within the provisions of section 82 of the Trade Practices Act in that at all material times the respondents have been knowingly concerned in (within the meaning of section 75B of the Trade Practices Act) the conduct herein before complained of.”
Even that form goes further than the pleading in the present case. His Honour described the statement of claim as plainly inadequate, at p.9 summarising the deficiencies of which one was in the following terms:
“The material facts constituting the conduct of the respondents by which they are said to have been involved by being knowingly concerned in the contraventions of section 52 are not disclosed.”
I would respectfully agree that the principles as to pleading which were summarised by Burchett J require that such material facts be pleaded.
It is not sufficient simply to repeat the wording of the particular provision of section 75B which is relied on, much less allege no more than the bald conclusion that the respondent was “involved in the contravention”. It is necessary to allege the material facts that the plaintiff will seek to rely on in order to support a conclusion that the respondent comes within one or more of the provisions in section 75B(1), and in that way was a person involved in the contravention. A proper pleading would be one on the basis of which one could sensibly entertain an argument of law as to whether the material facts alleged did or did not sustain a conclusion that the matter was within the terms of the Act.
Depending on the nature of the claim sought to be made, a proper pleading against an individual on the basis that that person was involved in a contravention of the Trade Practices Act need not be particularly long or complicated: See for example Precedent [660.65] in Butterworths “Court Forms, Precedents and Pleadings - Queensland” under the heading Trade Practices. Of course if the factual case sought to be made out is more complicated, the proper pleading of that case may well need to be more complicated. Since the deficiency in the present pleading means that it is quite impossible for me to know what case the plaintiff is really seeking to make against the fifth defendant, I cannot comment further on what form the proper pleading of that case should take.
The plaintiff has sought leave to replead that case, and in those circumstances I think the appropriate course is to strike out the claim against the fifth defendant under paragraph 22(d) of the plaint, but with liberty to the plaintiff to replead. It is not possible for me to determine at this stage whether this is a case where the claim sought to be made on this basis against the fifth defendant is so clearly bad in law that it is appropriate to strike out that claim without such liberty.
Claim in negligence
The plaint alleges that, on the basis of the facts alleged in paragraphs 12, 13 and 14, the fifth defendant had a duty to inform the plaintiff of the matters referred to in paragraph 14. It was argued that the duty arose because the fifth defendant was a director of the company, that he was present at the course by which franchises in the company's product was being marketed, that the plaintiff had indicated reliance on his association with the company whose product was being licenced, and that he knew or ought to have known that the plaintiff was entering into such licencing agreement at a cost of $75,000 in reliance on the accuracies of the various representations made. I suppose this can be treated as an implied pleading that the fifth defendant knew of the making of those representations, although that ought to have been made express. It is alleged that the fifth defendant knew or ought to have known things which on their face would appear to be matters which qualify rather than directly falsify representations made, although there may be a few in the latter category. It was argued that in these circumstances there was a duty to disclose the bad news as well as the good news, as it were, and that this duty was imposed on the fifth defendant even though he was not the one who was personally making any of the representations.
Although the duty was in argument characterised as duty to speak out about things which detracted from the investment, it seems to me that in order to establish an action of negligence it is necessary to show that there was a duty to take reasonable care to avoid causing financial loss to the plaintiff by the relevant defendant's act or omissions. If there was such a duty and circumstances arose where a failure to speak out would result in financial loss being suffered by the plaintiff, compliance with that duty would require the defendant to speak out, so that a failure to speak out would amount to a breach of that duty. But I do not consider that a duty to speak out arises merely because a failure to speak out will mean that the plaintiff is not deterred by the defendant from entering into a transaction which was foreseeably disadvantageous.
Reference was made to Sutherland Shire Council v Heyman (1985) 157 CLR 424. At page 461 Mason J said:
“Reliance has always been an important element in establishing the existence of a duty of care. It has been suggested that liability and negligence is largely, if not exclusively, based on the plaintiff's reliance on the defendant's taking care in circumstances where the defendant is aware or ought to be aware of that reliance. ........The concept of proximity as explained by Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” ........involves in most cases a degree of reliance.”
In that case a majority of the High Court held that the appellant was not liable in negligence to the respondents because there was no duty of care in the absence of enquiry being made to the local authority or reliance placed upon it by them. In that case there was no reliance, but it would have been important in the context of a response from the local authority. If in that case the purchasers had, before purchasing the house, asked the local authority whether the foundations were properly in order, and disclosed that they were going to rely on that information in deciding whether to purchase the house, the local authority, if it had known that the foundations were not in order (or even perhaps if they had not been inspected) was in a position where it had either to disabuse the purchasers of reliance on anything they said, or to take reasonable care to prevent them from suffering loss through making the purchase.
More recently there have been two important decisions from the High Court dealing with the boundaries of tort liability. Although neither of these dealt with circumstances directly comparable with those alleged in the present case, they are important for determining the current approach by the High Court to questions of this nature. In Bryan v Maloney (1995) 182 CLR 609 the court held by majority that a professional builder who constructs a house for the then owner of the land owes a prima facie duty to a subsequent owner to exercise reasonable care to avoid foreseeable diminution in value when a latent and previously unknown defect in footings or structures first becomes manifest (see p.617). Three of the four members of the majority, Mason CJ, Deane and Gaudron JJ said in a joint judgment at page 627
“Upon analysis, the relationship between builder and subsequent owner with respect to the particular kind of economic loss is, like that between the builder and the first owner, marked by the kind of assumption of responsibility and known reliance which is commonly present in the categories of case in which a relationship of proximity exists with respect to pure economic loss. In ordinary circumstances, the builder of a house undertakes the responsibility of erecting a structure on the basis that its footings are adequate to support it for a period during which it is likely that there will one or more subsequent owners. ........Any builder should be aware that such a subsequent owner will be likely, if inadequacy of the footings has not become manifest, to assume that the house is being competently built and that the footings are in fact adequate. ........The relationship between builder and first owner and the relationship between builder and subsequent owner.......are characterised, to a comparable extent, by assumption of responsibility on the part of the builder and likely reliance on the part of the owner.”
It is interesting to note that their Honours' coupled assumption of responsibility with known reliance as the basis of identifying a category of relationship where liability for pure economic loss will arise.
In the present case it is difficult to see that there is anything alleged by way of assumption of responsibility on the part of the fifth defendant. Such an assumption of responsibility was regarded as an essential part of that decision by Clarke JA in Woolahra Municipal Council v Sved (1996) 40 NSW LR 101, in a judgment where His Honour was otherwise critical of that decision: See p.134-139. The significance of something more than reliance was also accepted by Brennan J (as he then was) who dissented in Brian v Maloney. His Honour at page 645 noted that a builder who negligently and falsely represented to a prospective purchaser that there were no latent defects might be liable for pure economic loss suffered by the payment of an excessive price.
“In such a case, the plaintiff's loss is a consequence of the plaintiff's reliance on the defendant's representation, reliance being “a cornerstone of liability for negligent misstatement”........
Clearly Mr Bryant made no representations, expressly or impliedly to Mrs Maloney about his skill or the quality of his workmanship......Unless it be right to say that any purchaser of a house that has a latent defect is presumed to rely upon an implied representation by the builder that the house is constructed with reasonable care and skill, there is no evidence in this case of representation or reliance. For my part I would not so presume.”
His Honour was not approaching the matter on the basis that reliance alone would be sufficient; there had to be something which could be characterised as a representation by the builder, in effect an invitation to rely upon him.
More recently in Hill v Van Erp (1997) 71 ALJR 487 the High Court held that a solicitor making a Will had a duty of care to an intended beneficiary which was breached in that case when the solicitor failed to warn that the intended beneficiary would lose the benefit provided by the Will by witnessing the signature of the testatrix. In that case Brennan CJ distinguished a situation where the defendant had undertaken responsibility to exercise reasonable care, as in the case of Hedley Bryne & Co Ltd v Heller and Partners Ltd [1964] AC 465: See p.492. He said that a duty can arise in other circumstances, that is it can be imposed by law even though it is not undertaken. In that case the duty to the intended beneficiary arose because the solicitor had undertaken a contractual duty to the client to take reasonable care in relation to the preparation of the Will. There was therefore an undertaking of responsibility to the client, and what was decided by the High Court was that that carried with it responsibility to the intended beneficiary. Dawson J at page 501 said
“The requirements of an assumption of responsibility and the element of reliance to which Deane J referred [in Hawkins v Clayton] are a means by which the law seeks to avoid undesirable consequences such as indeterminate liability, the destruction of legitimate commercial competition, or the emasculation of other bodies of legal doctrine. Where there is no threat of those undesirable consequences, the assumption of responsibility by a defendant and reliance, or request, by a plaintiff may suggest policy reasons for recognising the existence of a duty of care, although they may not be determinative.”
He did however go on to comment that an assumption of responsibility was not necessarily a requirement in all cases for the existence of a duty. In the case before him he thought there was an assumption of responsibility of a kind since the solicitor accepted responsibility for carrying out the client's testamentary intentions. Toohey J agreed with Dawson J but added some comments about the value of proximity as the general conceptual determinant and the unifying theme, although acknowledging that proximity of itself does not identify with any precision a common element underlying all those cases in which liability in negligence has been held to exist.
Gaudron J at page 506 noted that one of the policy considerations relevant to the existence of a special relationship necessary to establish liability for pure economic loss was
“In a competitive world where one person's economic gain is commonly another's loss, a duty to take reasonable care to avoid causing mere economic loss to another may be inconsistent with community standards in relation to what is ordinarily legitimate in the pursuit of personal advantage.”
(Quoting from Bryan v Maloney at 618.) Her Honour took the view that a duty of care arose only if there was a relationship of proximity between the plaintiff and the defendant (p.505). McHugh J dissented; His Honour noted that there was no general duty to prevent economic loss to another. At p.519 he noted that in many cases where the courts have held that there was no duty to prevent economic loss to the plaintiff the plaintiff had actually relied on the defendant to perform a task. Gummow J approached the matter on the basis that the law of tort operated to complete and vindicate fulfillment of the contractual obligation to the client which in the present case had been breached, but in circumstances where the client had suffered no recoverable loss. At p.528 he was critical of the significance as of assumption of responsibility as a general notion to determine liability in negligence.
McHugh J at p.515 referred with approval to an article by an English academic arguing that
“The outcome of three decades of litigation is..........a complex, uncertain and anomalous pattern of decisions”.
On this basis it may be said that these two recent decisions of the High Court are consistent with the general trend of jurisprudence over that period as to the boundaries of liability in tort. They do not seem to me to contain much which provides support for the existence of a duty of care on the basis of the circumstances pleaded by the plaintiff in this case, but it is difficult to find in them any clear statement of principal, accepted by the whole or even a clear majority of the court, on the basis of which it could be said that liability in the present case clearly did not exist.
The question of whether a person associated with one party to a proposed commercial transaction owes a duty of care to the other party to the transaction in relation to what might be described as commercial hazards of the transaction has been considered in the context of statements made by an agent of a vendor in relation to a contract for the sale of a business. In Roots v Oentory Pty Ltd [1983] 2 Qd R 745 it was held that the vendor's real estate agent (a company) and its employee who was directly involved in the sale if a business were liable for damages in relation to statements made about future earnings of the business. Thomas J held that there was such a duty in relation to the giving of information about the nature of the business, although he noted that the agent could avoid liability by honestly stating the limits of his knowledge. Page 757 he said:
“Of course the ordinary purchaser knows that the agent is acting for the vendor, and that he is a salesman. In a robust society he ought to take the agent's statements with the proverbial grain of salt. But he is entitled to expect that the agent's statements will be honest and that some care will be exercised in their making. The measure of expectation would be fair and honest dealing, and if the agent departs from community standards of fair and honest dealing he cannot complain if the community (or the law) holds him accountable for the harm that he causes.
..................
In the present case the circumstances were such that Mr Cunningham should have realized he was being trusted. He knew that the Roots had no previous business experience, and that he was being relied upon. He ought to have realized that Mr and Mrs Roots intended to take business steps in reliance upon the information given. It was reasonable for the Roots to accept Mr Cunningham's statements. It was an important occasion for the plaintiffs and Mr Cunningham was well aware of this. He made these statements when he had no sufficient basis for making them, or for backing up Mr Ward's statements with the authority of his own opinion. He had no reliable basis for any opinion independently of what Mr Ward had told him. ......
He took the positive role of allaying the purchasers' fears and in adding his personal seal of approval to the representations as to present and future income. He utterly failed to disclose that the only basis for such representation was Mr Ward's own say-so...........”.
In Francis v Whatson [1994] 2 Qd R 584 the Court of Appeal confirmed a finding that there was a duty of care on the part of the vendor's agent in circumstances where the prospective purchaser, having made clear that he was concerned about title to the property to be sold (a boat), had asked the agent to check out title, and the agent had agreed to do so, and told the purchaser that he had done so.
It will be apparent that both of these cases are easily distinguishable from the present.
In National Mutual Life Association of Australiasia Ltd v Coffey and Partners Pty Ltd [1991] 2 Qd R 401 the Full Court allowed an appeal from a decision striking out a statement of claim on the ground that no reasonable cause of action was disclosed by it. In that case the defendants had been engaged by the then owner of land to investigate and determine the appropriate foundation system for use in the construction of an industrial building. It was alleged that they did this work negligently, so that the foundations were inadequate, and further that they had negligently failed to rectify the problem during construction. The then owner sold the land to the plaintiff, and the question arose as to whether the plaintiff had an action against the engineers responsible for the design of the foundations. Connolly J with whose judgment the other members of the court agreed approached the case on the basis that it depended on the existence of a duty not to cause economic loss, and referred to Sutherland Shire Council v Heyman (supra) and some other earlier decisions of the High Court on the subject. He said at page 404 that the question was whether the relationship between the engineers and the purchaser was sufficiently close. He noted that whether a duty arose was not the subject of a binding decision in Australia, but thought there were powerful reasons for believing that such a duty was owed and that succession to the ownership of the building should be regarded as creating a relationship of the necessary proximity. He thought it clear that the pleadings should not have been struck out on the basis that the necessary relationship to found the cause of action could not exist between the designing and supervising engineers and the subsequent purchaser: p.406. To some extent this is the same question that has been more recently ventilated in Brian v Maloney referred to earlier. The immediate result in that case is consistent with the proposition that such a duty was owed, but some of the factors relied on as justifying that result would serve as points of distinction.
For present purposes however I think that the importance of this decision lies in what it says about the correct approach to an application of this nature. His Honour said at page 407 that once it appeared that there was a real question to be determined whether of fact or law it was not appropriate to dismiss the action on this basis, and referred to Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91. In the present case no authority was cited to support the proposition that a duty had actually been recognized in the pleaded circumstances, but the authorities to which I have referred are not so clearly against the proposition that a duty of care exists in circumstances like these as to make it appropriate to conclude on an application such as this that it is clear that there is none. I am not persuaded that the existence of a duty of care in the circumstances relied on is, as a matter of law, not seriously arguable. It follows that the claim in negligence should not be struck out.
With regard to the question of costs, no doubt the overall intention was that the fifth defendant should if possible be extricated completely from this action, and the application has not succeeded to that extent. Nevertheless of result of the application seems to have been a concession that has substantially reduced the scope of the claim made against the fifth defendant, and in relation to one of the heads of claim that remain, the pleading was woefully inadequate. I think that it could be said of this pleading that it invited an application to strike out. In the circumstances the plaintiff should pay the defendant's costs of the application.
The formal order I make on the application is that the claims made in the plaint against the fifth defendant be struck out, but that the plaintiff have leave to file and serve, within twenty-eight days of today's date, an amended plaint pleading claims against the fifth defendant in negligence and as a person involved in a contravention by the first and second defendants of provisions of the Trade Practices Act, as it may be advised. The plaintiff is to pay the fifth defendant's costs of and incidental to the application to be taxed forthwith.