Flory's Homes Pty Ltd v Camporeale Holdings Pty Ltd
[2017] QMC 13
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- Unreported Judgment
- Flory's Homes Pty Ltd v Camporeale Holdings Pty Ltd[2017] QMC 13
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Flory's Homes Pty Ltd v Camporeale Holdings Pty Ltd[2017] QMC 13
Flory's Homes Pty Ltd v Camporeale Holdings Pty Ltd[2017] QMC 13
MAGISTRATES COURTS OF QUEENSLAND
CITATION: | Flory’s Homes Pty Ltd v Camporeale Holdings Pty Ltd [2017] QMC 13 |
PARTIES: | Flory’s Homes Pty Ltd (Plaintiff) v Camporeale Holdings Pty Ltd (Defendant) |
FILE NO/S: | Cairns Claim 355/16 |
DIVISION: | Magistrates Court |
PROCEEDING: | Application |
ORIGINATING COURT: | Cairns |
DELIVERED ON: | 28 July 2017 |
DELIVERED AT: | Cairns |
HEARING DATE: | 18 April 2017 |
MAGISTRATE: | Pinder J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – RULES OF THE COURT – PLEADING – DEFENCE AND COUNTERCLAIM – APPLICATION TO STRIKE OUT PARAGRAPHS OF COUNTERCLAIM – Pleading discloses no reasonable course of action Uniform Civil Procedure Rules 1999 (Qld), r 171 (1)(a) Royalene Pty Ltd v The Registrar of Titles and Mistilis [2007] QSC 059 Salvatore Coco v Ord Minette Ltd [2012] QSC 324 Robert Bax and Associates v Cavenham Pty Ltd [2011] QCA 53 Butler v Crowley and Galvin Solicitors [1999] QSC 6 Mio Art Pty Ltd and Macequest Pty Ltd and Ors (No 2) [2013] QSC 271 |
COUNSEL: | NIL |
SOLICITORS: | Williams Graham and Carmen for the plaintiff Preston Law for the defendant |
- [1]The plaintiff, a business engaged in prefabricated steel construction, brings suit against the defendant claiming monies due and owing under a subcontract for construction or alternatively costs for goods and services provided in the sum of $79,406.
- [2]The Plaintiffs Application
The plaintiff applied for orders
- That paragraphs 4, 5 and 6 of the defendants counter claim be struck out
- That the defendant deliver to the plaintiff further and better particulars of its defence and counter claim.
- For a guillotine order in the event that the further and better particulars were not provided by the defendant
- That the defendant pay the plaintiffs costs of and incidental to the application on an indemnity basis.
- [3]The respondent defendant, who appeared legally represented upon the hearing of the application, indicated that only the plaintiffs strike out application (in respect of paragraphs 4, 5 and 6 of the counterclaim) was opposed and the defendant conceded that the plaintiff was entitled to orders for the delivery for further and better particulars of its defence and counterclaim as sought in the application.
- [4]Strike out Application – Defendant’s counterclaim
The applicant plaintiff seeks orders pursuant to rule 171 of the Uniform Civil Procedure Rules (UCPR) that paragraphs 4 5 and 6 of the defendant’s counterclaim be struck out.
Rule 171 of the UCPR provides:
- (1)This rule applies if a pleading or part of a pleading-
- a)Discloses no reasonable cause of action or defence; or
- b)Has a tendency to prejudice or delay the fair trial of the proceeding;
- c)Is unnecessary or scandalous;
- d)Is frivolous or vexatious; or
- e)Is otherwise an abuse of process of the court?
- (2)The court, at any stage of the proceeding, may strike out all or part of the pleading and order costs of the application to be paid by a party calculated on the indemnity basis.
- (3)On the hearing of an application under sub rule (2), the court is not limited to receiving evidence about the pleading.
- [5]The applicant plaintiff relied on the following material
- Application filed 17 March 2017
- Affidavit of JA McDiarmid filed 17 March 2017
- Affidavit JA McDiarmid filed by leave 18 April 2017
- [6]The applicant plaintiff also provided comprehensive written submissions in respect of the application.
- [7]The respondent defendant has no material and did not burden the court with any written submissions.
- [8]The defendant’s counterclaim against the plaintiff appears purports to claim
- Damages for breaches of subcontract claimed at $25,000
- Loss and damage for negligence and/or breach of subcontract - $2, 250,000.
- [9]The counterclaim is a commendably concise document, although not one at first blush that appears to have been drafted by a lawyer.
- [10]The counterclaim is contained within the defence and counterclaim of the defendant.
- [11]The defence denies allegations contained in the statement of claim at paragraphs 15, 26 and 27, 28 – 39 inclusive, 42 and 43.
- [12]Those pleadings do not appear to comply with the requirements rule 166 (4) UCPR which requires a party denying an allegation of fact to accompany it by direct explanation for the parties belief that the allegation is untrue.
By way of example paragraph 7 of the defence denies the allegations contained in paragraph 26 and 27 but doesn’t plead an explanation as to why the alleged fact is untrue.
- [13]Similarly paragraph 11 pleads a denial to paragraph 42 of the statement of claim but similarly does not provide any particularisation of an explanation as to how the defendant purports to plead that it was entitled to terminate the subcontract.
- [14]These are matters mentioned in passing in respect of the general state of the defendants pleadings and are not directly determinative of the application now before the court.
- [15]The counterclaim however purports to repeat and rely on the pleadings in the defence at paragraphs 2 3 4 5 7 8 9 10 11 and 12, without pleading any alleged cause of action by the plaintiff as against the defendant and then at paragraphs 2 3 4 5 and 6 of the counterclaim attempts to plead that the defendant has suffered loss and or damage.
- [16]In particular the offending paragraphs which the plaintiff seeks to strike out, paragraphs 4 5 and 6, do not in the preceding paragraph of the counterclaim identify any basis for any action by the defendant against the plaintiff for either negligence or breach of subcontract.
- [17]Discussion
Rule 171 has been considered on a number of occasions by the Supreme Court.
- [18]In Royalene Pty Ltd v The Registrar of Titles and Mistilis (2007) QSC 059 the court said in respect of rule 171 at paragraph 6
The focus of argument was principally on UCPR 171(1)(a) which is concerned with pleadings that disclose no reasonable cause of action or defence. UCPR 171(3) provides that on the hearing of an application to strike out part of a pleading, the court is not limited to receiving evidence about the pleading. Even to the extent that that may involve a relaxation of the approach that applied under the former rules, there is still good reason to regard the applicable principle to be that the discretion to strike out should only be exercised where the defence raised is obviously untenable. Conversely it should not be exercised except in clear cases. (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 130; Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 84 and 91). That is especially so where the case is pleaded as a circumstantial one and the inference to be drawn from evidence critical to determining liability is not common ground and the evidence is untested.
- [19]The discretion to be exercised pursuant to rule 171 was considered again by the court in Salvatore Coco v Ord Minette Ltd (2012) QSC 324 where the court said commencing at paragraph 17 as follows
[17] The application to strike out the entirety of the statement of claim calls up whether the defects, which I have just mentioned, are sufficient to warrant an order in the exercise of discretion that the whole pleading be struck out. The discretion is informed by a number of relevant principles and factors. I do not propose to essay the law for the purposes of deciding this application. However, it is an important function of pleadings that they limit the scope of and inform the issues which must be litigated at the trial so that the trial can proceed in the most efficient way. In a case of this kind, the overriding duty of a party in UCPR 5 does not lessen the importance of accurate pleadings – if anything it increases them.
[18] Secondly, the exercise of discretion under UCPR 171 varies according to which of the relevant paragraphs of that rule is in play. For example, if the court determines that a statement of claim discloses no reasonable cause of action it is determining that the facts pleaded are not capable in law of giving rise to the relief sought. Cases such as General Steel Industries Inc v Commissioner for Railways (NSW)23 show that even lengthy argument may be necessary to dispose of what is ultimately a question of law. This is not an application of that kind.
21 See Quadrant Constructions Pty Ltd (in liq) v Morgan Stanley Smith Barney Australia Pty Ltd
[2011] VSC 164 at [30] – [34]
22 Paragraph 6.11 of MET-11 to the affidavit of ME Tills sworn 26 September 2012
23 (1964) 112 CLR 125 at 130
[19] On the other hand, where the problem is one of inadequate or inaccurate pleading which has a tendency to prejudice or delay a fair trial, or the pleading contains unnecessary or scandalous allegations or frivolous or vexatious allegations, or is otherwise an abuse of the process of the court, there tends to be a more general discretion. Nevertheless, the case law recognises that a pleading may be so defective notwithstanding earnest attempts by the pleader that ―it will be an act of mercy to strike it out.24 That is so, even though it is for the party pleading to formulate its case and the court’s role is primarily to consider whether a reasonable cause of action is disclosed, and to facilitate the just and expeditious resolution of the real issues rather than to dictate to a party a rigid manner in which a case should be pleaded. In summary, the courts are slow to interfere and ordinarily act only where there is some substantial objection or some real embarrassment.
- [20]The applicant plaintiff relies on, similarly in respect of the test under rule 171, the Court of Appeal decision of Robert Bax and Associates v Cavenham Pty Ltd (2011) QCA 53 when the Court said in respect of the rule at paragraph 16
Rule 171 closely resembles the language of former O 22 r 32 Rules of the Supreme Court 1991 (Qld) which enabled a judge to strike out or amend any matter in the pleading which tended “to prejudice, embarrass, or delay, the fair trial of the action”. The word “embarrass” has not been retained. Nonetheless any pleading which is difficult to follow or objectively ambiguous or creates difficulty for the opposite party insofar as the pleading contains inconsistencies, is liable to strike out because it can be said to have a tendency to prejudice or delay the fair trial of the proceeding rather than “embarrass” the opposite party.
- [21]Those considerations of rule 171 follow the principles enunciated in the decision on which the applicant plaintiff primarily relies, the decision in Butler v Crowley and Galvin Solicitors (1999) QSC 6 where the Honourable Justice Muir said commencing at paragraph 4
[4]In my view, it would be unjust to permit a trial of action on the basis of the allegations in the statement of claim. The defendant could not hope to identify with any reasonable precision the case it is called on the meet. It would also be put in the position of having to prepare to meet innumerable allegations which are irrelevant to allegations of breach of duty and loss of damage… the duration of any trial of the action and, in consequence, its cost, would be unnecessarily increased and the prospects of due determination of relevant issues decreased. The defendant would be prejudiced by being unable to sensibly formulate an offer of settlement…”
- [22]The applicant plaintiff correctly asserts in its submissions that on any proper consideration of the counterclaim and in particular the offending paragraphs of the pleadings, paragraphs 4, 5 and 6, that the defendant has failed to plead
- a)Any factual allegation leading to a duty of care breach of trust or breach of duty causing loss or damage
- b)Any factual allegation leading to a term of the subcontract requiring the defendant to take care to avoid loss of opportunity to the defendant and any purported breach of that term and
- c)Any allegation of breaches by the plaintiff.
- [23]The offending paragraphs in the counterclaim clearly failed to disclose any reasonable cause of action and the applicant plaintiff is entitled to the relief sought, that is that those offending paragraphs be struck from the defendant’s pleadings.
- [24]Costs
The respondent defendant has conceded that the plaintiff is entitled to the relief sought in paragraphs 2 of the application filed 17 March 2017.
The defendant has conceded in those circumstances, following the usual rule that costs ought follow the event, that the applicant is entitled to its costs on the application.
- [25]The applicant plaintiff seeks its costs on an indemnity basis relying on the provisions within rule 171 that relevantly provide at paragraph 2 that
The court, at any stage of the proceedings may strike out all or part of the pleadings and order costs of the application to be paid by a party calculated on the indemnity basis.
- [26]This provision is unusual within the UCPR but does not expressly provide a basis entitling a successful party in respect of the strike out application to indemnity costs automatically.
- [27]The provision was considered in Mio Art Pty Ltd and Macequest Pty Ltd and Ors (2013) QSC 271. There Justice Jackson considered this cost provision contained within s 171 (2) and said commencing at paragraph 31 as follows
[31] The last question is whether Mio should be ordered to pay the costs of the applications to strike out and dismiss on the indemnity basis. Mio submits not, because although UCPR 171(2) provides for an order for costs on the indemnity basis ―such orders should not be made lightly and only when warranted‖ relying on a case where the discretion to order indemnity costs was said to be warranted only ―where the losing party had misconducted itself in relation to the proceeding or where the institution of the proceeding was plainly unreasonable…‖9 I do not accept that misconduct or unreasonableness in starting a proceeding constrain the exercise of the discretion to award indemnity costs under the UCPR.
9 Gunns Ltd v Marr (No 3) [2006] VSC 386 at [5]; see also PCRZ Investments Pty Ltd v National Golf Holdings Limited [2002] VSCA 24 at [36].
10 See Amos v Monsour Legal Costs Pty Ltd [2008] 1 Qd R 304; [2007] QCA 235.
[32] Again the only sure starting point is the statute, which has particular features in Queensland. Thus, UCPR 703 provides that ―[t]he court may order costs to be assessed on the indemnity basis‖ and that basis calls for the allowance of ―all costs reasonably incurred and of a reasonable amount…‖10
[33] But UCPR 171(2), under which these applications to strike out the pleading were decided, also expressly provides that the court may ―order the costs of the application to be paid by a party calculated on the indemnity basis‖.
[34] What is the effect of the specific reference in UCPR 171 to costs on the indemnity basis? There are few references in the UCPR to costs being ordered on that basis. Apart from the general power in UCPR 703, they are confined to the contexts of an application to strike out particulars (UCPR 162(2)) or to strike out a pleading (UCPR 171(2)), a successful offer to settle (UCPR 360(1) and 361(3)), provision for costs of appearances in the Magistrates Court (UCPR 691(4)) and the costs of trustees out of a fund (UCPR 704).
[35] Should the reference to costs on the indemnity basis in UCPR 171 have the effect that the Court should be more prepared to make such an order under that rule then on the disposition of other interlocutory applications? Such authority as there is does not support that view.11 The specific reference in the text to an order for costs on the indemnity basis does not detract from the fact that the grant of power is in discretionary terms – ―the court… may…order…‖
[36] The purpose of UCPR 171 is that a pleading which engages one of the grounds to strike out a pleading should not proceed to engage the obligations of the opposite party to plead in response and to proceed to trial on the infringing pleading. That purpose is informed by the objective that a claim should proceed in a timely way and that the rules are to be applied with the objective of avoiding undue delay, expense and technicality and to facilitate the just and expeditious resolution of the real issues, under UCPR 5.
[37] In my view, the interpretation which best achieves that purpose12 does not dictate that there should be a greater predisposition towards making an order for costs to be paid on the indemnity basis in the case of applications to strike out under UCPR 171 than in the case of other interlocutory applications, notwithstanding the specific reference to the indemnity basis in the text.
[38] In my view, it is not possible to discern any reason why the drafter might have considered that the discretion to order costs on the indemnity basis should be more readily exercised on a strike out application than on other interlocutory applications.
- [28]That decision is binding upon this court and confirms that rule 171(2) does not effectively confine or fetter the discretion in respect of awarding indemnity costs outside the usual cost provisions in the UCPR.
- [29]In all the circumstances the applicant plaintiff does not raise any matters which would enliven a proper consideration of costs being awarded on an indemnity basis.
- [30]The applicant plaintiff is entitled to its costs of and incidental to the application on a standard basis.
- [31]The Orders I would make are
- 1)That paragraphs 4, 5 and 6 of the defendants counterclaim be struck out
- 2)That the defendant deliver to the plaintiff further and better particulars of its defence and counterclaim within seven days
- 3)That the defendant pay the plaintiff’s costs of and incidental to the application on a standard basis.