Striking Out Pleadings – “There goes I but for ….”

On the general principles relating to the striking out of pleadings, Cooper J recently said In Sentinel Income Pty Ltd v Santrev Pty Ltd & Ors [2023] QSC 165 (28 July 2023) (at [8] – [9]):

Striking out pleadings – general principles

[8] There was no real dispute as to the principles which apply on a strike out application in circumstances such as these. In determining the application, I have had regard to those principles, as summarised by Bowskill J (as the Chief Justice then was) in Equititrust v Tucker (No 2)[4]and by Bond J (as his Honour then was) in Lee v Abedian.[5]

[9] The authorities cited in those summaries of the relevant principles establish that the power to strike out is to be used sparingly and only in a clear case where the court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.[6] That power cannot be exercised once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it.[7] Nevertheless, those authorities recognise that the exercise of the power should not be limited to cases where argument is unnecessary to demonstrate the failure to disclose a reasonable cause of action. Argument of an extensive kind may be necessary to demonstrate that the pleaded claim is untenable.[8] Whether the power should be exercised in such a case remains a matter of discretion. Considerations that may weigh in favour of exercising the discretion to strike out include that striking out will avoid the need for a trial or will substantially reduce the burden of preparing for trial or the burden of the trial itself.[9] Conversely, considerations that may weigh against exercising the discretion include the prospect that an appeal from the decision to strike out will fracture the proceeding and detract from its expeditious determination.[10]

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[4] [2019] QSC 248, [6]-[16].

[5] [2016] QSC 92; [2017] 1 Qd R 549, 599-60 [38]-[41].

[6] General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125, 129-130.

[7] Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91.

[8] General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125, 130. See also the discussion in which a claim involving a difficult question of law might be summarily terminated using the power to give summary judgement: Bolton Properties Pty Ltd v JK Investments (Australia) Pty Ltd [2009] QCA 135; [2009] 2 Qd R 202, 210 [26]; Mirvac Queensland Pty Ltd v Horne [2009] QSC 269, [20]-[23].

[9] Williams & Humbert v W & H Trade Marks (Jersey) Ltd [1986] AC 368, 435-436 cited in Caffrey v AAI Limited & Anor [2017] QSC 339 and in Equititrust v Tucker (No 2) [2019] QSC 248, [16].

[10] Caffrey v AAI Limited & Anor [2017] QSC 339.

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It is apt, and for ease of reference, the above mentioned extracts from the decisions in Equititrust Limited v Tucker and Lee v Abedian are as follows.

In Equititrust Limited v Tucker & Ors (No 2) [2019] QSC 248 (4 October 2019), Bowskill J (as the Chief Justice then was) said (at [6] – [16]):

[6] The starting point is rule 5 of the Uniform Civil Procedure Rules 1999 (Qld), which provides:

“(1) The purpose of the rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.”[3]

[7] I keep that steadily in mind in determining these applications, as rule 5(2) requires the court to do. The parties (and their lawyers) are also obliged to act consistently with rule 5. I am not certain that has been the case, to date.

[8] In relation to the strike out applications, the applicants rely upon r 171 UCPR, which confers a discretion on the court to strike out all or part of the statement of claim if it, relevantly, discloses no reasonable cause of action; has a tendency to prejudice or delay the fair trial of the proceeding; or is otherwise an abuse of the process of the court.

[9] Where the effect of the invocation of the power would be to summarily dismiss a party’s claim, or part of it, the court is to adopt a cautious approach and the discretion should only be exercised in the clearest case.[4] As Mackenzie J said in Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 at [6] this “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”.

[10] The focus of such an application is the pleading itself.[5] As such, the court ordinarily assumes the factual allegations made by the plaintiff can be established;[6] particularly where the application is brought at an early stage.[7] Although, the court is not limited to receiving evidence about the pleading (r 171(3)). Nevertheless, the apparent improbability of impugned allegations of fact does not justify the exercise of the power to strike out a pleading, because “to enter upon the question of their truth or falsehood would be trying the action prematurely”.[8]

[11] While the court may determine a difficult question of law on such an application,[9] the power to strike out a sufficiently pleaded statement of claim cannot be exercised “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it”.[10]

[12] A voluminous amount of affidavit material was filed in support of the applications, including multiple affidavits of Mr Tucker deposing to various factual matters, addressing allegations in the statement of claim. It is apparent many of those matters are controversial, and that there will be issues of credibility in the eventual trial. I have not determined these applications on the basis of findings by reference to the affidavit material. It would be inappropriate to do so.

[13] Where the application to strike out is on the basis of deficiency in the pleading, which may be remedied by re-pleading, the particularly cautious approach warranted in cases of summary dismissal does not apply.[11] A pleading may be deficient, and liable to be struck out (for example on the ground that it has a tendency to prejudice or delay the fair trial of the proceeding) because it fails to fulfil the function of a pleading, which is to identify the issues which require the court’s attention and determination, provide a structure for the proceeding by providing the framework for disclosure and admissibility of evidence at trial, and to ensure a fair trial by giving the other parties fair notice of the case they must meet.[12] The function of a pleading is discharged “when the case is presented with reasonable clearness”.[13] Conversely, a pleading will be deficient if it is “ambiguous, vague or too general”, such that the other party does not know what is alleged against them.[14]

[14] A pleading must contain a statement of all the material facts (that is, the facts necessary for the purpose of formulating a complete cause of action) relied upon (r 149(1)(b)). Particulars are not meant to be used to fill material gaps in a pleading. They serve a different purpose, which is “to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet”; although in practice the distinction may be difficult to discern.[15]

[15] Importantly, though, “pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation”.[16] As the Full Court of the Federal Court (Greenwood, McKerracher and Reeves JJ) observed in Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], for these reasons “the courts do not, at least in the current era, take an unduly technical or restrictive approach to pleadings”. As their Honours also observed, contemporary approaches to case management are in part responsible for this change.[17] They refer in this regard to the observations of Martin CJ in Barclay Mowlem Construction Limited v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]–[8], where his Honour said:

“4. It is, I think, important when approaching an issue of that kind to bring to mind the contemporary purposes of pleadings. The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.

5. In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions.

6. Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and appraising the parties to the proceedings of the case that has to be met.

7. In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and appraising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.

8. Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the Court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.”[18]

[16] Martin CJ’s observation in [8] reflects the observation made many years earlier, by Lord Templeman in Williams & Humbert v W & H Trade Marks (Jersey) Ltd [1986] 1 AC 368 at 435-436 that:

“My Lords, if an application to strike out involves a prolonged and serious argument the judge should, as a general rule, decline to proceed with the argument unless he not only harbours doubts about the soundness of the pleading but, in addition, is satisfied that striking out will obviate the necessity for a trial or will substantially reduce the burden of preparing for trial or the burden of the trial itself.”

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[3] Emphasis added.

[4] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-130; Agar v Hyde [2001] HCA 41; (2000) 201 CLR 552 at [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 at [46]; Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24]. See also Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [24]– [26].

[5] Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211; (2013) 95 ACSR 583 at [67]– [69] per Jackson J.

[6] See Kordamentha Pty Ltd v LM Investment Management Ltd & Anor [2016] QSC 183 at [25] per Applegarth J, referring to Young Investments Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 293 ALR 537 at [6].

[7] See X (Minors) v Bedfordshire County Council [1995] UKHL 9; [1995] 2 AC 633 at 740.

[8] Remmington v Scoles [1897] 2 Ch 1 at 7, referred to recently in Renshaw v New South Wales Lotteries Corporation Pty Ltd [2018] NSWSC 1954 at [144].

[9] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-130; Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507 at 514-515.

[10] Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91.

[11] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [24]– [26].

[12] Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; (2010) 189 FCR 356 at [49]– [51] per Keane CJ (as his Honour then was), Lander and Buchanan JJ; Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-287.

[13] Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293 per Dawson J, referring to Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490 at 517.

[14] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [27].

[15] Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713.

[16] Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], referring to Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293.

[17] Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13]; referring to Barclay Mowlem Construction Limited v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]–[8] (a decision of Martin CJ).

[18] See also Sherrin Hire Pty Ltd v Sherrin Rentals Pty Ltd [2015] FCA 1107 at [44] per Edelman J; Hillig v Darkinjung Pty Ltd [2007] NSWSC 683 at [35]– [36] per White J; Verner v Giannoros [2016] NSWSC 242 a [2]-[5] and [24]-[28] also per White J; and RNB Equities Pty Ltd v Credit Suisse Investment Services (Australia) Limited (No 2) [2019] FCA 1385 at [15]– [16] per Anderson J.

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In Lee v Abedian & Ors [2017] 1 Qd R 549; [2016] QSC 92 (28 April 2016) , Bond J (as his Honour then was) said at [38] – [41]:

[38] All of the applicant defendants accept, as they must, that the power to strike out is to be used sparingly and only in clear cases: General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125 at 129 to 130. The power cannot be exercised “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it”: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J.

[39] However, they submit, and I agree, that the Court will not shrink from striking out a pleading which is defective because it does not disclose a reasonable cause of action, has a tendency to prejudice or delay a fair trial, contains allegations which are unnecessary[2], scandalous, vexatious or embarrassing[3], or which is otherwise an abuse of the processes of the Court[4].

[40] In dealing with the application by the fourth defendants, I am also conscious of the fact that in Agar v Hyde [2001] HCA 41; (2000) 201 CLR 552 at [64], Gaudron, McHugh, Gummow and Hayne JJ stated (footnotes omitted):

It may be difficult for a court to say from the pleadings that a claim by a plaintiff that the defendant is liable in negligence is bound to fail because it is not arguable that the defendant owed the plaintiff a duty of care. Such cases do arise. In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, this Court held that the statement of claim did not disclose a cause of action in negligence against the defendant auditors. In Mutual Life & Citizens’ Assurance Co Ltd v Evatt, the Privy Council held that the declaration in that case was demurrable because it did not describe a relationship which imposed upon the defendants a duty of care in giving advice to the plaintiff. However, as Barwick CJ observed in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd:

“[In] fact pleading as it was introduced in the judicature system, there is no necessity to assert or identify a legal category of action or suit which the facts asserted may illustrate, involve or demonstrate and on which the particular relief claimed is based or to which it is relevant.”

The result is that frequently the conventional form of pleading in an action of negligence will not reveal the alleged duty with sufficient clarity for a court considering an application for summary termination of the proceeding to be sure that all of the possible nuances of the plaintiff’s case are revealed by the pleading. Further, and no less importantly, any finding about duty of care will often depend upon the evidence which is given at trial. Questions of reliance or knowledge of risk are two obvious examples of the kinds of question in which the evidence given at trial may take on considerable importance in determining whether a defendant owed the plaintiff a duty of care.

[41] I note also that in New South Wales v Spearpoint [2009] NSWCA 233, Allsop ACJ (with whom Beazley JA agreed) observed (at [26]) that:

It is often, though not always, inappropriate to dismiss summarily a claim [alleging a novel duty of care] on the pleadings, at least [where the parties] stand at an early stage in litigation.

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[2] A v Ipec Australia Ltd [1973] VicRp 4; [1973] VR 39 at 43 per Menhennitt J; Callide Power Management Pty Ltd v Callide Coalfields (Sales) Pty Ltd [2014] QSC 205 at [27] to [30] per Jackson J.

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The decision in Sentinel Income Pty Ltd v Santrev Pty Ltd & Ors [2023] QSC 165 can be found here.