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- Yates v Bluestone Servicing Pty Ltd[2024] QDC 129
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Yates v Bluestone Servicing Pty Ltd[2024] QDC 129
Yates v Bluestone Servicing Pty Ltd[2024] QDC 129
DISTRICT COURT OF QUEENSLAND
CITATION: | Yates and Anor v Bluestone Servicing Pty Ltd and Anor [2024] QDC 129 |
PARTIES: | Beth Alania Yates and Peter Lindsay Yates (Plaintiffs/Respondents) v Bluestone Servicing Pty Ltd ACN 122 698 328 (First Defendant/Applicant) and Permanent Custodians Limited ACN 001 426 384 (Second Defendant/Applicant) |
FILE NO: | D80 of 2023 |
DIVISION: | Civil |
PROCEEDING: | Interlocutory application |
ORIGINATING COURT: | Maroochydore District Court |
DELIVERED ON: | 22 August 2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 19 July 2024 |
JUDGE: | Byrne KC DCJ |
ORDERS: |
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CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – STRIKING OUT – where the plaintiffs commenced proceedings for damages for breach of contract, breach of duty and breach of statute against both defendants – where an amended statement of claim and amended defence were filed – where the defendants contend that the plaintiffs failed to properly plead all material facts and particulars resulting in vague and ambiguous pleadings and, in one instance, where the allegation is vexatious – where the defendants filed an application to strike out specific paragraphs of the amended statement of claim, or alternatively, seek an order for the delivery of further and better particulars – where the plaintiffs resist both applications – whether the specified pleaded paragraphs of the amended statement of claim should be struck out. |
LEGISLATION: | Uniform Civil Procedure Rules 1999 (Qld) rr. 5, 149(1), 155, 158, 161, 171, 444, 445. |
CASES: | Brightman & Ors v Royal Pines Projects Pty Ltd [2024] QSC 149. Equititrust Limited v Tucker (No. 2) [2019] QSC 248. Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241. Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15. Virgtel Limited v Zabusky [2008] QSC 213. |
COUNSEL: | Mr J. Lee for the plaintiffs/respondents. Ms D. Worrell for the Defendants/Applicants. |
SOLICITORS: | Seraphus Solicitors for the plaintiffs/respondents. Piper Alderman for the defendants/applicants. |
Background and issues
- [1]The plaintiffs commenced proceedings for damages based in breach of contract, breach of duty (negligence) and breach of statute against both defendants. An amended Statement of Claim (“ASOC”) was filed on 28 February 2024 and an amended Defence (“AD”) was filed on behalf of both defendants on 26 March 2024.
- [2]After an exchange of correspondence pursuant to rr. 444 and 445 of the UCPR, the defendants filed an application to strike out specific paragraphs of the ASOC pursuant to r. 171 of the UCPR, namely paragraphs 2(c), 2(d), 36, 37, 38, 40, 41, 44, 46 and 47, or alternatively, pursuant to r. 161 of the UCPR, seeking an order for the delivery of further and better particulars of those paragraphs. The plaintiffs resist both applications.
- [3]The function of the pleadings is well-known. Some, of many, authorities on the topic are Equititrust Limited v Tucker (No. 2) [2019] QSC 248, [6] and Virgtel Limited v Zabusky [2008] QSC 213, [7]-[11]. Further, the observations of Bowskill J (as her Honour then was) in Equititrust Limited v Tucker (No. 2) at [13] are helpful in the resolution of the present application.
- [4]The issue for determination in this application, in respect of each impugned paragraph, is whether it meets the requirements and functions of pleading the plaintiffs’ case and, if not, what order is appropriate. That enquiry requires the application of a common-sense qualitative assessment of the pleadings both individually and in the context of the whole of the ASOC, in light of their essential function, present-day case management processes and the fundamental principles set out in r. 5 – Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15, [13]; Virgtel Limited v Zabusky at [14]-[16]. A relevant, but not conclusive, consideration in deciding the sufficiency of the pleading is to see if it was considered sufficiently certain and unambiguous such that the other party responded in definite terms.
The submissions
- [5]The defendants argue that in each instance, except paragraph 47, the pleading is not sufficiently linked to a pleaded material fact or that the pleading is ambiguous or unclear so that the defendants do not have the capacity to properly understand the case being brought against them, which in either case has a tendency to prejudice or delay the fair trial of the proceeding; r. 171(b) of the UCPR. In respect of paragraph 47, it is said that the claim for aggravated and exemplary damages is vexatious; r. 171(d) of the UCPR. They rely on the contents of the r. 444 letter.
- [6]The plaintiffs deny any inadequacy in the impugned pleadings. Primarily they rely on the content of the r. 445 letter that was sent to the defendants’ solicitors.
- [7]I accept their submission that an impugned pleading can always be drafted in another, and perhaps better way, and that the focus on the application must be the sufficiency of the pleading, not whether it could be better drafted with the benefit of hindsight. I also accept that on occasions the pleading will be affected by the stage which the proceeding has reached, which affects the extent of discovery that has been achieved.
- [8]I also accept that there can be a fine line between giving particulars of the case which a party proposes to make and disclosing the evidence by which that case is to be proved. The latter cannot be pleaded – r. 149(1)(b) of the UCPR.
- [9]The plaintiffs also made a secondary submission. It was to the effect that any inadequacy in the pleadings, if any, is technical only. Consideration is being given to joining a third party as a defendant to the proceeding, and it is submitted that it is clear that liability for the losses suffered lies at the feet of the defendants, the third party or both. In those circumstances, it is better to progress to mediation, as the plaintiffs have been seeking, rather than delaying by requiring a repleading of some paragraphs of the ASOC on the basis of a technical inadequacy.
- [10]The defendants deny improperly resisting mediation. They contend that they want to know, with precision, the case against them before entering into mediation.
Paragraphs 2(c) and 2(d).
- [11]The ASOC alleges at paragraph 2(c) that the first defendant was an agent or servant of the second defendant acting within the scope of its authority and, at paragraph 2(d), that it was an intermediary for the purposes of the National Consumer Credit Protection Act 2009 (Cth).
- [12]Here, the defendants denied the allegations, rather than pleading a non-admission, but then, as part of the denial, assert the paragraphs are vague, general and embarrassing and are liable to be struck out, and also assert that the paragraphs are unsupported by any facts and particulars.
- [13]The defendants’ submission is that the plaintiffs have failed to plead the material facts in support of the claims. The plaintiffs’ response is that they are statements of fact in themselves.
- [14]I accept the plaintiffs’ submission. Although the status of being an agent or a servant at paragraph 2(c) is a legal conclusion as to the nature of the relationship, it is also a statement of fact in the ASOC which is relevant to other pleadings.
- [15]To require better particularisation would be to require the pleading of evidence. For example, the plaintiffs have since disclosed to the defendants a “Mortgage Service Agreement” between the defendants (and another) which, the plaintiffs assert, establishes the pleaded relationship. That is, evidence has been disclosed to support the factual allegation. The application must be refused in this respect.
- [16]Similarly, I accept that, in respect of paragraph 2(d), the allegation is the material fact that is alleged. The ultimate issue will be whether the evidence proves the allegation of act. The application cannot succeed on that point either.
Paragraphs 36 and 37.
- [17]These paragraphs are found under the heading “Contract Breach”. Both pleadings were apparently considered sufficiently clear and unambiguous to permit the defendants to deny the allegations in the AD, without qualification, for the reasons particularised therein.
- [18]The plaintiffs, at paragraph 36, plead that both defendants are in breach of contract for failing to give them a payout figure and, at paragraph 37, causation of four factual outcomes.
- [19]Paragraph 36 alleges that the provision of a payout figure is required by “the terms of the Loan Agreement” but fails to explain why both defendants are said to have breached the contract, when the factual allegations are that contact seeking a payout figure was made only with the first defendant. It is not sufficient to contend, as was submitted in oral submissions, that there is obviously a vicarious liability. If that is the assertion, it must be pleaded. The pleading needs to differentiate between differing forms of liability for each defendant, if that is the case to be pleaded, notwithstanding the pleaded relationship at paragraph 2(c).
- [20]Further, there is no particularisation of where in the Loan Agreement that obligation is said to arise. That should be pleaded specifically. If it is said to have been established earlier in the pleadings, that should be referenced. The defendants should not have to guess or assume what is being alleged against them.
- [21]Paragraph 37 commences with the words “As a result of the Bluestone breach by its failure to provide a payout amount ...”. It then lists four factual outcomes that are said to be the consequence of the breach. Those consequences are later pleaded (at paragraph 46, which I will consider in due course) to have resulted in loss.
- [22]It is unclear what the term “Bluestone breach” means. It is not earlier defined in the ASOC. If it is intended to refer to a failure by the first defendant to provide the payout figure, it is contradicted by paragraph 36 which alleges both defendants failed to do so. If it is meant to allege both defendants failed to provide the payout figure, consistently with paragraph 36, it does not expressly do so. If it is intended to have some other meaning, it is unexplained. It is undoubtedly an inadvertent oversight in the drafting, but it is crucial to understanding this allegation in the ASOC.
- [23]Accordingly, I accept the defendants’ assertion in their r. 444 letter that the pleading fails to provide a “direct and unambiguous identification of the material facts relied on to establish the causal link” between the conduct and the loss alleged – Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241, [17]. Further, although it was not a complaint directly raised in the r. 444 letter, the meaning of the paragraph is unable to be determined and should be struck out.
- [24]Material recently disclosed by the plaintiffs reveals that the plaintiffs received an offer from the sellers to extend the settlement date by 13 days, on condition of an increased purchase price. How this offer, not taken up by the plaintiffs, affects the allegation of causation, and indeed the quantum of loss alleged, is not explained in the ASOC. This is a matter that will inevitably be raised in evidence, and it can be assumed it was always known to the plaintiffs. It directly affects the current pleadings, at least at paragraph 37(a), (b) and (d) (and hence the identical pleadings in paragraphs 41 and 44), and likely much more broadly across the ASOC.
- [25]In my view, it should be pleaded and explained so that the defendant can respond, and so that the parties’ positions are exposed in the pleadings. The plaintiffs, in effect, deny such a responsibility. Ultimately, it is a matter for them whether they do plead it and, regardless of the approach taken by them, whether the defendants further amend the AD in light of that disclosed material or otherwise use it.
- [26]Other complaints about these paragraphs need not be considered given those conclusions. Both will be struck out with leave to re-plead, notwithstanding the failure of the defendants to complain about the deficiencies in the AD.
Paragraphs 38, 40 and 41.
- [27]These paragraphs are found under the heading “Negligence”. In each instance the defendants pleaded a non-admission on the basis of vagueness, generality and embarrassment, and that the allegations are unclear, as well as a denial of causation.
- [28]Paragraph 38 pleads, in explicit reliance on paragraphs 1 – 37, that “there was a relationship of proximity” between the parties such that “a duty of care arose for each defendant to conduct their relationship with the plaintiffs with the exercise of reasonable care and skill”. In my view, the passages just quoted, even when read in the context of the whole ASOC, are too vague to allow the defendants to know with sufficient precision what is alleged against them.
- [29]The meaning of the allegation in the second quoted passage is influenced by the meaning of the first, but it is then clarified in paragraph 39, which is not included in the complaints the subject of the present application. The defendants are entitled to understand with precision the nature of the relationship alleged to assess if the duties stated in paragraphs 38 and 39 in fact arise out of it. If, as was submitted orally, the pleading of a relationship of proximity reflects a relationship consistent with some later observations in Brightman & Ors v Royal Pines Projects Pty Ltd [2024] QSC 149, then the nature of such a nuanced relationship should be clearly pleaded. It is not, and paragraph 38 will be struck out with leave to replead.
- [30]Paragraph 40 alleges that both defendants breached the duty pleaded in paragraph 39. It asserts that the breach is in light of factual allegations pleaded in specified earlier paragraphs of the ASOC, none of which are the subject of complaint in this application.
- [31]Those earlier paragraphs are concerned only with the first defendant, yet paragraph 40 alleges a breach by both defendants. It is therefore unclear, and unpleaded, how it is said the second defendant breached the asserted duty. It may be, as was submitted in oral submissions, that the nature of the relationship at paragraph 2(c) is central to understanding the case against the defendants, but that merely reinforces the need to properly plead the basis of liability. Paragraph 40 will be struck out with leave to replead.
- [32]Paragraph 41 alleges the same four factual outcomes as those pleaded at paragraph 37, but this time under the negligence aspect of the Claim, “as a result of” the breach of duty pleaded at paragraph 40. The main complaint by the defendants is the use of the compendious term “as a result of” the breach. However, in this instance that breach is narrowly defined at paragraph 40 (leaving aside the issue of properly pleading the bases of differing liability), namely that the defendants "failed to be ready for the settlement of the” relevant property. Although it may well have been differently drafted, I do not consider it is vague or ambiguous in the relevant sense. Neither are further or better particulars required.
Paragraph 44.
- [33]This paragraph alleges the same four factual outcomes as those pleaded at paragraph 37, but this time under the "breach of statute” aspect of the Claim, and “as a result of” the breaches of statute pleaded at paragraph 43. The defendants in their AD pleaded a denial, albeit with a complaint included as to vagueness.
- [34]There is no complaint about the pleading of any other paragraph under this aspect of the Claim. It too refers back to a narrowly defined breach, at paragraph 43. Again, I am not satisfied that it is relevantly vague or ambiguous, nor that further or better particulars are required.
Paragraph 46.
- [35]This paragraph pleads the causation of loss with, as is customary, various amounts claimed for different expenditures or liabilities. The defendants pleaded an unqualified denial on the basis of earlier pleaded denials in the AD.
- [36]The plaintiffs’ have indicated an intention to file a further amended statement of claim in relation to the quantum claimed, at least in relation to the estimate of rental expenses and by additionally claiming an asserted loss of value of a property they had to quit.
- [37]The defendants correctly assert that r. 155 has not been complied with. The same could be said of r. 158. I need not consider whether this could be better remedied by an order for further and better particulars. Given other pleadings are to be struck out with leave to replead and where the plaintiffs intend to amend this paragraph anyway, it should be struck out with leave to replead.
- [38]However, I see nothing wrong with the provision of an estimate at this stage of the proceedings for “Legal Fees” and for “Rental Expenses”, though there should be an explanation of what the legal fees relate to and why they are ongoing, at least in a broad sense, and why the premises rented were selected, for example as opposed to some other at a lower cost. The substantiation of those costs or liabilities remains the subject of an ongoing obligation of disclosure, in any event.
- [39]I also note there are minor errors in the earlier paragraphs of the ASOC referred to in this paragraph. They are of little moment and would not be mentioned but for the fact that the allegations will be repleaded.
Paragraph 47.
- [40]This paragraph claims aggravated and exemplary damages due to “the conduct of the defendants”. The defendants pleaded an unqualified denial, referring to the matters earlier pleaded in the AD.
- [41]The defendants now complain that the pleading does not deal with the different tests to be applied to each of these kinds of damages and that it does not particularise which aspect of the conduct attaches to which of those claims. The plaintiffs, in their r. 445 letter, explain that the plaintiffs assert that the conduct of the defendants was of such a magnitude to justify the award of ordinary damages as well as aggravated or exemplary damages.
- [42]The paragraph is not so unclear as to have prompted the pleading of a non-admission by the defendants. While it could have, with the benefit of hindsight, been better and more clearly pleaded, it is sufficiently clear, especially with the benefit of the explanation in the r. 445 letter. Whether that is in fact the case will depend on the evidence adduced. It is not sufficient to argue, as the defendants did, that Counsel had never seen this style of damages awarded for this sort of conduct previously. It is certainly not sufficient to assert that it was pleaded to inflate the overall quantum claimed. That too will depend on the evidence, and if established may be sounded in the costs ordered after trial. I am unpersuaded that it should be struck out or that further and better particulars are required.
The fate of the plaintiffs’ secondary submission.
- [43]As earlier noted, the plaintiffs contend that the present application should be dismissed as an exercise of discretion, essentially because it is a delaying tactic and hence in breach of r. 5. Counsel however also, properly, conceded that the weight to be given to that submission depended on the impact of any inadequacy in the impugned pleadings.
- [44]The issues identified at paragraphs 36, 37, 38 and 40 of the ASOC are so central to understanding the overall case against the defendants that they preclude the acceptance of the plaintiffs’ secondary submission. The pleading of paragraph 46 is clearly flawed and must be corrected. That is, none of those deficits in the pleading are merely technical inadequacies, as was submitted.
- [45]On those issues where the plaintiffs succeeded on the primary argument, it is unnecessary to consider the secondary argument.