SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 17 June 2009 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 3 June 2009 |
JUDGE: | Byrne SJA |
ORDER: |
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CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – PLEADING – Application to strike out counterclaim – whether counterclaim discloses reasonable cause of action – whether defendant should be afforded opportunity to replead counterclaim in current form |
COUNSEL: | Mr W Sofronoff QC and Mr D G Clothier for the plaintiff Mr J A Griffin QC and Mr R J Clutterbuck for the defendant |
SOLICITORS: | Russell and Company for the plaintiff Mylne Lawyers for the defendant |
[1] In essence, the defendant’s counter-claim alleges that it paid money to the plaintiff “in the mistaken belief that …”, and then the allegedly erroneous facts are pleaded.
[2] The plaintiff seeks to have the counter-claim struck out.
[3] Last September, an earlier version of the counter-claim was impugned. In his reasons for striking that pleading out, with leave to re-plead, the Chief Justice said:
“The defendant seeks to mount a case of reliance…to the effect that it made the payments in question ‘in reliance upon being charged by the plaintiff’, presumably because of an implied representation that the amounts claimed were payable. It also mounts a case of ‘mistaken belief’ that the amounts were due…
The natural persons who, on behalf of the defendant corporation did so rely, or hold that belief, should be particularized… The plaintiff sought such particulars and they were denied, on the basis that the defendant so relied ‘as a corporate entity’. But the individuals involved should have been named, to enable the plaintiff to meet the claim…
The counter-claim is presently inadequate in that it fails … to identify the natural persons who mistakenly made the payments… .”
[4] The Chief Justice expressed the opinion that the counter-claim was then so deficient that it would not “be satisfactory for the defendant to amend the existing counter-claim or provide particulars”. His Honour said that the defendant “should in effect start again…I apprehend that to be done properly, the re-pleading could take a substantial period of time…”.
[5] On 22 October, Mackenzie J ordered that the defendant file and serve an amended counter-claim by 17 November which:
“… specifies the natural person or persons who’s (sic) state of mind was the state of mind of the Defendant for the purposes of any alleged reliance, mistake or other allegation of state of mind of the Defendant”.
[6] The present counter-claim was delivered on 17 November. It identifies members of a committee of the defendant who are alleged to have laboured under the pertinent mistakes.
[7] But the pleading does not identify the person(s) who functioned as the defendant’s guiding mind in authorising the payments that are said to have been made by mistake.
[8] The plaintiff sought particulars to identify the persons who made the payments under the allegedly mistaken beliefs. That information was refused: a decision sought to be justified (see defendant’s solicitor’s letter of 3 February 2009) on the footing that “the payments were made by the [defendant], not by any individual or individuals…”. The reasons of the Chief Justice and Mackenzie J’s order were interpreted to require identification only of person(s) who entertained a mistaken belief, as distinct from the person(s) who made the payment while labouring under the mistakes, with the defendant’s solicitor contending that “the [defendant] made the payments, and the issue is as to who, on behalf of the [defendant] made the mistake alleged.” That stance was also taken at the hearing.
[9] A possible explanation for the reluctance to name those who authorised the payments is that those who were mistaken did not make the payments, and those who authorised the payments may have supposed that the alleged overpayments were not due, but paid them nonetheless, or else, when paying, have been indifferent to whether there was a legal liability to do so: see, generally, K Mason, J W Carter & G J Tolhurst, Restitution Law in Australia, 2nd Ed (2008) [416], [422]. At least that is what seemed to emerge as a distinct possibility from the evidence and, more importantly for present purposes, from yet another amendment to the counter-claim that was proposed during the hearing.
[10] Relevantly, the further amendments now advanced are to this effect: that if the persons who, on behalf of the defendant, laboured under the relevant mistakes had known the truth, they would have acted to prevent the payments being made by those others who actually caused them to be made.
[11] That new case is not pleaded in the alternative. So it assumes, it seems, that those who authorised the payments were not relevantly mistaken or else that any misapprehension on their part was not a cause of the payments.
[12] Nothing was cited to suggest that the new case is fairly arguable: not a case or commentary from anywhere; and that the proposition was advanced does not make it so.
[13] Assuming, as the proposal did, that leave is required to amend the pleadings to raise the new case, the discretion should be exercised against permitting amendments that are not shown to propound a fairly arguable case.
[14] What, then, should be done?
[15] Neither the amended pleading nor the particulars so far furnished identify the natural persons who authorised the payments, despite the Chief Justice having indicated that that should be done and Mackenzie J having ordered it. Nor does the current pleading clearly allege that those who paid were influenced by a mistake to do so. Those considerations, taken with the nine months that have elapsed since the Chief Justice struck out the counter-claim, suggest that affording the defendant yet another chance to plead (and properly particularise) a sensible case may well be pointless and only productive of more delay and expense.
[16] However, the mistakes alleged concern legal liabilities to pay money. So perhaps those who made (or authorised) the payments shared the mistake. And if the payment was made because of the mistake, there may be a right to recover. Moreover, the defendant’s solicitors have sworn an affidavit which indicates that the defendant can identify at least many of those who authorised the relevant payments.
[17] The non-compliance with Mackenzie J’s order and the unsatisfactory state of the pleading and particulars require the material paragraphs of the counter-claim to be struck out. But the defendant should be afforded a (probably final) opportunity to attempt to plead appropriately, but on terms, as to which I shall hear the parties. These might include that there be delivered with the proposed counter-claim: (i) proper particulars; (ii) a letter from the defendant’s solicitor certifying that those who settle the new pleading, after proper enquiry into the facts and the law, have formed the opinion (if they do) that the newly pleaded case has reasonable prospects of success; and (iii) references to the cases, commentaries and any statutory provisions to show that the new pleading advances a case that has reasonable prospects of success.
