Pleadings: causation and strike out applications

William John Fletcher and Katherine Elizabeth Barnet as liquidators of Octaviar Administration Pty Ltd (in liquidation) & Anor v Fortress Credit Corporation (Australia) II Pty Limited & Ors [2013] QSC 104

Boddice J

 

Relevant principles

 

[24] The power to strike out a pleading, either pursuant to r 171 of the Uniform Civil Procedure Rules, or in the inherent jurisdiction of the court, is to be exercised sparingly and only in rare cases.1

[25] In considering applications to strike out a pleading it is relevant to have regard to the purpose of a pleading, which is to ensure the parties know the case they have to meet.2 A plaintiff’s obligation to plead a case properly and sufficiently includes an obligation to plead causation.

[26] The obligation in respect of causation was summarised by Chesterman J (as his Honour then was) in Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd3:

“[15] The parties are agreed upon the relevant principles. In any cause of action in respect of which causation is an essential element it is necessary to plead the material facts which are said to give rise to the causal connection. In particular it is necessary to plead the facts which lead to a reasonable inference that the acts complained of (here the relevant non- disclosure) and the alleged later event (here the making of the dragline agreement) stand to each other in the relation of cause and effect.  Douglas J put it this way in LBS Holdings Pty Ltd v The Body Corporate for Condor Community Title Scheme 13200 & Ors [2004] QSC 229 (at para [3]):„… The principle relied on is that facts must be set out which lead to a reasonable inference that the acts complained of and the loss claimed stand to each other in the relation of cause and effect and that the plaintiff must plead the necessary facts showing that causal link …”

His Honour referred to Dow Hager Lawrance v Lord Norreys & Ors (1890) 15 App Cas 210 at 221 and Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd & Ors (1987) 14 FCR 215 at 221-222. In the first of those cases Lord Watson had said:

“There must be a probable, if not necessary, connection between the fraud averred and the injurious consequences which the plaintiff attributes to it; and if that connection is not sufficiently apparent from the particulars stated, it cannot be supplied by general averments. Facts and circumstances must in that case be set forth, and in every genuine claim are capable of being stated, leading to a reasonable inference that the fraud and injuries complained of stood to each other in the relation of cause and effect.”

[27] Those obligations include an obligation to plead material facts to make out the fulfilment of any statutory cause of action.4 In cases of breach of fiduciary duty, the obligation includes pleading material facts to demonstrate that the claimed loss was suffered by reason of the breaches of fiduciary duty.5

[28] The obligation to plead so as to properly apprise the defendant of the case to be met also requires that the pleading contains sufficient clarity to identify the link between the material facts and the causes of action alleged, and the allegations of knowledge.6

1                  Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-129.

2                  See, generally, Thiess Pty Ltd v FFE Minerals Australia Pty Ltd [2007] QSC 2009 at [38].

3                 [2004] QSC 457 at [15].

4                  McKellar v Container Terminals Management Services Limited 165 ALR 409 at 419 [26]

5                  Southern Cross at [20], [22].

6                  Virgtel Limited v Zabusky [2008] QSC 213 at [16].

 

Brisbane Barrister – David Cormack

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