Platinum United II Pty Ltd v Secured Mortgage Management Limited (in liq)
[2010] QSC 455
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Appeal Determined (QCA)
- Platinum United II Pty Ltd v Secured Mortgage Management Limited (in liq)[2010] QSC 455
- Add to List
Platinum United II Pty Ltd v Secured Mortgage Management Limited (in liq)[2010] QSC 455
Platinum United II Pty Ltd v Secured Mortgage Management Limited (in liq)[2010] QSC 455
SUPREME COURT OF QUEENSLAND
CITATION: | Platinum United II Pty Ltd & Anor v Secured Mortgage Management Limited (in liq) [2010] QSC 455 |
PARTIES: | PLATINUM UNITED II PTY LTD ACN 108 421 334 PLATINUM UNITED PTY LTD ACN 103 365 215 v |
FILE NO/S: | SC No 10072 of 2008 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 06 December 2010 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 29 November 2010 and 2 December 2010 |
JUDGE: | Chief Justice |
ORDER: | Order that those parts of the third further amended statement of claim identified in paras (a) to (d) in para [4] of my reasons for judgment be struck out, and order that the applicants pay the respondent SMML’s costs, to be assessed on the standard basis. |
CATCHWORDS: | CIVIL PROCEDURE – PLEADINGS AND AMENDMENT – CHALLENGING PLEADINGS – STRIKING OUT PARTS OF PLEADINGS – where respondent, SMML, applies for orders under Rule 171 Uniform Civil Procedure Rules 1999 (Qld) striking out certain aspects of the applicants’ third further amended statement of claim or alternatively, summary judgment in respect of the claims under rule 293 – where the applicants’ claims derive from a commercial loan facility agreement between SMML and the first applicant for the funding of a commercial development, involving paying out an existing secured loan and contributing to the cost of further development – where respondent challenges the applicants’ claim for breach of various express and implied terms and implied warranties of the commercial loan facility agreement alleged in the third further amended statement of claim – where the respondent challenges the applicants’ claim for breach of various sections of the Australian Securities and Investments Commission Act 2001 (Cth), or alternatively s 51AB and s 52 of the Trade Practices Act 1974 (Cth) alleged in the third further amended statement of claim – whether aspects of the applicants’ third further amended statement of claim be struck out Australian Securities and Investments Commission Act 2001 (Cth), s 12CC, s 12DA, s 12DB, s 12DI(1), s 12DI(3), s 12DF Trade Practices Act 1974 (Cth), s 51AB, s 52 Uniform Civil Procedure Rules 1999 (Qld), r 171, r 293 Aevum Ltd v National Exchange Pty Ltd [2004] FCA 1781, cited Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41, applied Bank of Western Austrlia Ltd v Luo [2010] NSWSC 733, applied Begbie v State Bank of NSW Ltd (1994) ATPR 41-288, cited General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69, applied Leerdam & Anor v Noori & Ors [2009] NSWCA 90, applied Murphy & Anor v Zamonex Pty Ltd & Ors (1993) 31 NSWLR 439, cited St George Bank Ltd v Wright & Ors [2009] QSC 337, applied Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69, applied Troupakis v Adams [1999] FCA 609, cited |
COUNSEL: | T Matthews, with E J Williams for the applicants (in the proceeding) R M Derrington SC, with S R Cooper for the respondent (in the proceeding) |
SOLICITORS: | Conroy & Associates for the applicants McInnes Wilson Lawyers for the respondent |
CHIEF JUSTICE:
- The respondent (SMML) applies for orders under Rule 171 Uniform Civil Procedure Rules striking out certain aspects of the applicants’ third further amended statement of claim (or summary judgment in respect of the claims under Rule 293).
- The applicants’ claims derive from a “commercial loan facility agreement” between SMML and the first applicant (PU) dated 21 May 2007, for the funding of a commercial development, involving paying out an existing secured loan and contributing to the cost of further development.
- It is convenient to take the following analysis of the relevant pleaded terms of the agreement from the outline of submissions prepared by Counsel for SMML:
“(a)By clause 2.1 the Lender agrees to make the Cash Advance and the Borrower agrees to accept the Cash Advance (or so much of it as is drawn down from time to time). Importantly, the clause is expressed to be, ‘[s]ubject to the terms and conditions of this agreement’.
(b)Clauses 2.2 and 2.3 identify that the proceeds of the facility will only be used for two purposes:
- assisting with the refinancing of the existing loan facility;
- thereafter, to provide at the discretion of the Lender progressive funding against the cost of the construction of the unit development;
(c)Clause 2.2 has a dual operation. First, it creates an obligation to assist with the refinancing of the existing loan (which occurred and in respect of which there is no complaint). Second, it gives to SMML the discretion to provide progressive funding as it determines to do so. The existence of this discretion is reinforced by cl 2.5.1. The words of cll 2.2 and 2.5.1 are clear in providing to SMML the discretion to determine whether or not to make any further advances beyond the initial advance. The clauses do not provide that SMML has an obligation to make the further payments unless it exercises its discretion not to pay. The exercising of the discretion in favour of making a further payment is a necessary condition before it can be said that the borrower has any entitlement to be paid:
- clause 2.2 states that the purpose of the loan is to assist in the refinancing of the existing facility ‘and thereafter to provide, at the discretion of the Lender, progressive funding against the cost of construction of a twelve storey 10 unit residential development…”
- clause 2.5.1 states that the ‘balance of the Cash Advance will be made available at the Lender’s absolute discretion to be drawn down progressively by the Borrower.’
(d)Clause 2.4 provides that the loan will be ‘drawn in one lump sum’ but that it will be made available by the Borrower progressively.
(e)Clause 2.5.1 is important as it provides that the balance of the Cash Advance (which is defined to mean that part of the Cash Advance that is not paid to refinance the existing debt) will be made available ‘at the Lender’s absolute discretion to be drawn down progressively by the Borrower’. The clause also provides that a drawdown ‘may only be permitted’ if a certificate by the requisite consulting engineer, quantity surveyor or valuer has been issued. Further the clause permits the lender to provide only so much drawdown that the lender in its sole discretion deems sufficient to enable the balance of the cash advance to complete the works. Hence, the clause operates to give to the Lender the discretion as to whether it will provide funds and, if so, how much and when.
(f)Clause 2.5.4 provides for the existence of a ‘Cash Retention’ fund. The Borrower agrees by that clause that the Lender is entitled to retain $2,658,040.32 from the Cash Advance for any purpose relevant to the Cash Advance including the payment or pre-payment of interest instalments and administration fees.
(g)By clause 3.4 the Borrower was required to repay the loan 14 months from the date of the first drawdown. In the present case the repayment date was 21 July 2008.
(h)Clause 5.2.1 provided for the calculation and payment of interest. In particular, clause 5.2.1(f) provides that even though the loan is drawn down progressively against the value of construction the interest payable is on the full amount of the cash advance as if it had been drawn in one lump sum. The clause further provides, ‘The Lender will, however, allow a credit against such interest for the equivalent of the amount payable on a Deposit Account in respect of any undrawn portion of the Cash Advance by a Trading Bank nominated by the Lender (National Australia Bank) for an ‘on call’ account. The credit will be account (sic) for on a monthly in arrears basis.’
(i)By clause 7, headed ‘Conditions Precedent’, certain conditions precedent to the performance of obligations of the Lender were identified. Those conditions precedent were to the performance of the obligations at the commencement of the loan and as the facility progressed. Clause 7 provided:
‘The obligations of the Lender under this Agreement (including without limiting the generality of the forgoing, the obligation of the Lender to make the Cash Advance or any part thereof from time to time) are subject to the following conditions precedent. …
(d)that the Lender shall have amassed sufficient funds from its investors to make the Cash Advance’.
(j)The Cash Advance is defined by clause 1.1 to mean, ‘$20,224,000.00 together with any interest, costs and fees which are from time to time capitalised in respect of the Facility’.
(k)By clause 9 the borrower agreed to provide various documents to the lender during the course of the loan. In particular, the borrower agreed to provide sales reports in the following manner, ‘the Borrower will provide to the Lender by the last day of each consecutive calendar month a detailed written report of sales effected and proposed marketing initiatives of the development and contact details of the marketing agent’.”
- The claims and parts of the pleading challenged by SMML are as follows:
“(a)the Applicants’ claim for breach of:
(i)the express terms of the Commercial Loan Facility Agreement (the Agreement) alleged in sub-paragraphs 15(a)-(h) and (j) of the Third Amended Statement of Claim;
(ii)the implied terms of the Agreement alleged in sub-paragraphs 15(a)-(h) and (j) of the Third Amended Statement of Claim;
(iii)the implied warranties alleged in sub-paragraphs 15(a)-(h) and (j) of the Third Amended Statement of Claim;
(b)the Applicants’ claim for breach of:
(i)s 12CC of the Australian Securities and Investments Commission Act, or alternatively s 51AB of the Trade Practices Act, alleged in paragraph 17 of the Third Amended Statement of Claim”;
(ii)s 12DI(1) of the Australian Securities and Investments Commission Act alleged in paragraph 17A of the Third Amended Statement of Claim;
(iii)s 12DI(3) of the Australian Securities and Investments Commission Act alleged in paragraph 17B of the Third Amended Statement of Claim;
(c)the Applicants’ claim for breach of ss 12DB and 12DF of the Australian Securities and Investments Commission Act, alleged in sub-paragraphs 16(a) and 16(b) of the Third Amended Statement of Claim;
(d)the Applicants’ claim for breach of ss 12DA, 12DB, 12DF of the Australian Securities and Investments Commission Act, or alternatively s 52 of the Trade Practices Act, alleged in sub-paragraphs 16(c) and 16(d) of the Third Amended Statement of Claim.”
- These are the breaches alleged against SMML in para 15:
“(a)failed to provide construction finance under the CFA; and
(b)at no time had amassed the entire Cash Advance;
(c)defaulted in making progress payments from number 13 onwards without reason or explanation;
(d)defaulted by making progress payments numbered 11 and 12 in instalments;
(e)failed to exercise any discretion under the CFA properly or at all.
(f)gave no notice of delay concerns;
(g)gave no did not account monthly in arrears for the credit provided for in Clause 5.2.1(f) of the CFA and did not provide monthly statements to the first applicant; monthly account to the first applicant;
(h)failed to set aside the Interest Retention and Construction Retention into an interest bearing bank account;
(i)failed to offset against interest repayments and in fact interest repayments were made late and in turn more interest was charged;
(j)failed to record interest on the Cash Retention.”
- I deal with these in turn.
Para 15(a)
- The alleged breach is SMML’s failure to pay any progress claim after claim number 12. The allegation cannot be sustained as a matter of law (Leerdam & Anor v Noori & Ors [2009] NSWCA 90 para 75), because it fell within SMML’s absolute discretion whether or not to make such payments. See cll 2.2 and 2.5.1.
- See also Questband Pty Ltd v Macquarie Bank Ltd [2009] QCA 266 para 66, Murphy & Anor v Zamonex Pty Ltd & Ors (1993) 31 NSWLR 439, 451-3 and Troupakis v Adams [1999] FCA 609 paras 7-9, as to the unfettered discretion of a party in the position of SMML, under such a provision, to proceed as it sees fit.
- At an earlier hearing, Daubney J said there were “issues to be tried in respect of the exercise of that discretion (if, indeed that is what occurred)”. His Honour was hearing an application for an injunction to restrain SMML from exercising its power of sale in relation to securities given to support the loan. At that early stage (5 November 2008), pleadings had not been delivered, there was a focus on alleged pre-contractual representations, and His Honour was not referred to the authorities on the construction of provisions according absolute discretions in circumstances like these.
- I do not accept the submission of Mr Matthews for the applicants that cl 2.5.1 had no operation in relation to the “cash advance” because it was drawn “in one lump sum” on the date of the agreement (cl 2.4). That ignores the purpose of the provision of the Facility (cl 2.2) – refinancing the existing loan, then making progressive funding thereafter from “the balance of the cash advance” (cl 2.5.1).
- This is a case where, plainly, SMML declined to make further advances, having been accorded the discretion to take that course. In failing to make the further advances, SMML did not breach the agreement. This position is sufficiently clear (General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 130, Agar v Hyde (2000) 201 CLR 552, 575-6) to warrant striking out the relevant parts of the pleading on this summary basis.
- Mention should be made of para 58(b) of the reply, which alleges:
“... by reason of the respondent not relying upon the alleged or any discretion at the time of its failure and/or refusal to make further draw downs and failing to advise the plaintiff of such reliance, the respondent is estopped and precluded from the assertion that it did exercise the alleged or any discretion to refuse to make further draw downs pursuant to the CFA”.
This contention cannot succeed. In the first place, it focuses on the time of refusal to pay progress claim 13 and beyond. That occurred well after the execution of the agreement: if PU then relied on some representation or other there was nothing it could have done in reliance upon it. Further, no detrimental reliance is pleaded, as would be essential for the due pleading of an estoppel.
Para 15(b)
- The alleged breach is that SMML failed to amass the entire cash advance. But it was under no obligation to do so. The only arguably relevant provision of the agreement is cl 7(d), but it operated only to render SMML’s obligations subject to a condition precedent that it “shall have amassed sufficient funds…to make the cash advance”. The provision did not oblige SMML to do that.
- Such a requirement would in any event run contrary to the provisions allowing for the progressive drawdown of the cash advance (cll 2.1, 2.2, 2.5, 5.2.1(f)). The obligation for which Mr Matthews contended did not arise because of the draw down provision in cl 2.4.
Para 15(c)
- This alleged breach is SMML’s failure to make progress payments “without reason or explanation”.
- There is nothing in the agreement mandating the provision of any such explanation.
Para 15(d)
- This alleged breach concerns the circumstance that claims 11 and 12 were paid in instalments.
- Again, there is nothing in the agreement which obliged SMML to respond to a progress claim by making only one payment.
Para 15(e)
- This alleged breach is of failure to exercise the contractual discretion properly.
- This is met by the points made at the outset, in relation to para 15(a).
Para 15(f)
- This alleged breach concerns “failure to give notice of delay concerns”. This claim cannot succeed because the term set out in para 4(k) of the pleading would not be implied into the agreement. None of the criteria for implying the term could be satisfied.
- The alleged term to be implied is:
“in the event the respondent had any concerns regarding any delay in the progress of construction of the development which it perceived, asserted or intended to rely upon, despite there being no obligation on the first applicant to complete the same by any particular date, it would give reasonable notice of such concerns to the first applicant.”
- In particular, the agreement can operate efficaciously without it, its inclusion does not “go without saying”, it is not capable of clear expression, and it would conflict with SMML’s absolute discretion to make further payments.
Para 15(g)
- The alleged breach concerns SMML’s failure to account monthly in arrears for credit provided for by cl 5.2.1(f), and not providing monthly statements to PU.
- There is nothing in the agreement obliging SMML to provide such statements. Insofar as the applicants rely on oral statements about the provision of monthly statements, one of the conversations preceded the agreement and four came after it, but the agreement says nothing about this and the terms of the agreement are definitive.
- The allegation SMML failed to account for the credit is negated by Ms Stanley’s affidavit filed 28 September 2010 and should be characterized as frivolous or vexatious.
Para 15(h)
- This alleged breach is failure to place the interest retention and construction retention into interest bearing bank accounts.
- There is no provision of the agreement obliging SMML to do that.
Para 15(j)
- The breach alleged is of “failure to record interest on the cash retention”.
- Again, there is nothing in the identified clauses of the agreement, cl 2.6 and cl 5.2.1(f), which obliged SMML to do so.
Alleged loss and damage
- The pleading alleges that, as a result of the breaches of the agreement, PU has suffered the loss and damage identified in paragraph 19 of the pleading, which includes the following:
- PU asserts it suffered the loss of the fees it paid on the entry into the loan with SMML because it paid those fees “on the footing that the entire cash advance had been drawn down”;
- a claim is made by PU that as a result of the alleged breaches it was required to enter into a second building contract at higher prices;
- PU asserts that it suffered losses in obtaining alternative finance which required the payment of a success fee and interest at a higher rate; and
- PU asserts that it has suffered a loss of interest from sales of units which it allegedly would have made.
- The substance of the relief claimed is an amount of damages and an entitlement to set off the amount owing against SMML’s claim for repayment of the amounts owed to it under the agreement.
- The consequential loss and damages are put forward on the basis that had PU known SMML would commit the breaches alleged above, PU would have entered into another loan agreement. That is problematic in suggesting the measure of damages in tort, not contract.
Alleged breach of warranties implied by the ASIC Act
- The applicants allege that the previously mentioned breaches also breached implied terms that the service would be rendered with due care and skill and would be reasonably fit for the purpose.
- The former additional duty does not enlarge the scope of the agreed obligations and merely required that they be performed carefully – that is, as required by the agreement (Bank of Western Australia Ltd v Luo [2010] NSWSC 733, paras 70-78).
- If the applicants were really seeking to raise a claim in negligence, they have not properly mounted it.
- As to fitness for purpose, the relevant purpose is that identified in cl 2.2 of the agreement, which confirms the existence of SMML’s discretion.
- I note that the applicants were advised, pre-contract, to seek professional advice, and that they were commercially experienced (see the credit submission from Balmain Commercial Mortgages Ltd of 23 November 2006). It was not reasonable for them to rely on SMML as to the terms of a suitable facility, so that s 12ED(2) excluded an implied term as to fitness for purpose. I adopt an approach similar to that taken by P McMurdo J in St George Bank Ltd v Wright & Ors [2009] QSC 337, para 56.
Alleged breach of s 12CC ASIC Act
- Mr Matthews, for the applicants, conceded this claim is untenable.
Section 51AB Trade Practices Act
- PU’s reliance on this provision is misconceived because of sub-s (5), which limits its operation to the provision of goods or services of a kind ordinarily acquired for personal, domestic or household use. This was a substantial commercial development. Compare Begbie v State Bank of NSW Ltd (1994) ATPR 41-288 at 41, 898. Mr Matthews conceded this claim is untenable.
Section 12DI ASIC Act
- This claim again ignores SMML’s absolute discretion in the making of progressive payments. The “financial services” being those identified in the agreement, SMML did not breach s 12DI by exercising its contractual right.
Section 12DB and 12DF ASIC Act
- Section 12DB provides that a person must not, in connection with the supply of financial services make false representations of specific types, namely:
“(a)falsely represent that services are of a particular standard, quality, value or grade; or
(b)falsely represent that a particular person has agreed to acquire services; or
(c)represent that services have sponsorship, approval, performance characteristics, uses or benefits they do not have; or
(d)represent that the person has a sponsorship, approval or affiliation it does not have; or
(e)make a false or misleading representation with respect to the price of services; or
(f)make a false or misleading representation concerning the need for any services; or
(g) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.”
- The pleading alleges as follows:
“11.Prior to entering into the CFA, the respondent represented to the first applicant that:-
(a)the respondent not only had the capacity to fully fund the development, but it would have the full facility funds amassed as a condition precedent to the facility coming into effect (‘the first representation’); and
(b)the use of the words ‘absolute discretion’ in clause 2.5.1 of the draft CFA should not be a matter of concern to the first applicant because the respondent would pay on the fully drawn facility upon certification of works as they progressed by the nominated quantity surveyor for the development (‘the second representation’); and
(c)because of its own delays the CFA repayment date would be extended (‘the third representation’); and
(d)the draft CFA would be amended as agreed by its solicitors in their letter dated 12 March 2007 (‘the fourth representation’).
- At the time of making the first, second, third and fourth representations, the respondent did not have reasonable grounds, as that term is used in s 12BB of the ASIC Act, for making the representations.”
- The statutory contravention is then pleaded in para 16:
“16.Further or alternatively:-
(a)the first representation was misleading and deceptive conduct contrary to s 12DA of the ASIC Act and, further or alternatively s 12DB of the ASIC Act, and further or alternatively is s 12DF of the ASIC Act, and alternatively, if the CFA was not a financial service as that term is defined in the ASIC Act, to s 52 of the TPA in that the respondent:-
(i)at no material time have the financial capacity to fully fund the development; and
(ii)had not amassed the Cash Advance prior to entry into the CFA; and
(iii)falsely certified, by its solicitors, that all conditions precedent including that pursuant to clause 7(d) of the CFA had been fulfilled; and
(b)the second representation was misleading and deceptive conduct contrary to s 12DA of the ASIC Act and, further or alternatively, 12DB of the ASIC Act, and further or alternatively s 12DF of the ASIC Act and alternatively, if the CFA was not a financial service as it is defined in the ASIC Act, to s 52 of the TPA in that without reason or explanation the respondent did not pay subsequent to progress claim number 12, progress claims upon presentation of the nominated quantity surveyor’s certification; and
(c)the third representation was misleading and deceptive conduct contrary to s 12DA of the ASIC Act and, further or alternatively, 12DB of the ASIC Act, and further or alternatively s 12DF of the ASIC Act and alternatively, if the CFA was not a financial service as it is defined in the ASIC Act to s 52 of the TPA in that without reason or explanation the respondent did not extend the CFA repayment date; and
(d)the fourth representation was misleading and deceptive conduct contrary to s 12DA of the ASIC Act and, further or alternatively s 12DB of the ASIC Act, and further or alternatively s 12DF of the ASIC Act, and alternatively, if the CFA was not a financial service as it is defined in the ASIC Act to s 52 of the TPA in that the CFA was never so amended.”
- None of the representations alleged in para 11 and pleaded as the basis for the alleged contravention of s 12DB in each of paras 16(a) to (d) could be characterized as one of the specific types of false representation prohibited by the section.
- There is, further, no attempt in the pleading to marry each alleged representation to any of the seven types of representation specified in the section, rendering the pleading embarrassing.
- As to section 12DF, there is nothing in the conduct of SMML liable to “mislead the public”: its dealing was with PU. (Compare Aevum Ltd v National Exchange Pty Ltd [2004] FCA 1781, para 89.)
- The pleading, again, makes no attempt to ally the alleged representations with the terms of the statutory prohibition.
Section 12DA ASIC Act and s 52 Trade Practices Act
- This concerns the misleading and deceptive conduct allegation.
- As has been seen, para 11 of the pleading alleges four representations made before the execution of the agreement. I accept Mr Derrington’s following submission in relation to the third and fourth, that the alleged losses cannot be causally related to those representations (cf. Travel Compensation Fund v Tambree (2005) 224 CLR 627, 640):
“143.The third representation is said to be that SMML said that it would extend the loan beyond its 14 month term. In attempting to connect the claimed losses to the alleged representations, PU asserts, inter alia, that if the representation had not been made it would have entered into another loan where the initial fees charged would not have been charged, where the lender would have continued paying the progress claims so there did not have to be any refinancing such that PU would not have incurred any additional construction costs or delay costs, would not have incurred additional interest payments, would have been able to complete the units and sold them thereby earning interest on sales and not incurred the additional fees to the new lender.
- As can be seen, the claimed losses have nothing to do with any consequence of the representation that the loan would be extended. The losses are not related to the alleged representation save to the extent it is said that if the representation was not made PU would have entered into an alternative loan agreement. In this respect the claim is based purely on the application of the ‘but for’ test. That is not a satisfactory causal nexus for the maker of the alleged representation to be liable for the losses claimed. If it were the case that there was an alternative loan available to PU which it would have taken up which loan would have permitted the extension of the term of the loan at the insistence of PU and that PU had sustained loss in the present matter because SMML did not extend the loan, it may be possible for those losses to be recovered. However, that is not the case here, nor does PU plead such a case.
- Similar arguments apply to the losses allegedly flowing from the fourth representation being the allegation that SMML indicated, by its solicitors, that it would amend the Agreement. Indeed, there is even less of a connection between the fourth representation and the claimed losses. No claimed loss or damage is causally connected to the representation that the deed containing the Agreement would be amended.
- The fact that SMML did not extend the repayment date or did not amend the Agreement in the manner allegedly agreed by its solicitors did not lead to any of the claimed losses. In those circumstances, PU’s allegations of misleading and deceptive conduct based on the third and fourth representations fail to disclose a reasonable cause of action.”
Conclusion
- Because there is some scope for re-pleading, a striking out order is appropriate rather than summary judgment.
- There will be an order that those parts of the third further amended statement of claim identified in paras (a) to (d) in para [4] above be struck out, and an order that the applicants pay the respondent SMML’s costs, to be assessed on the standard basis.