' x JUDGVENT No. 718.1 NOT FOR DISTRIBUTION CATCHWORDS Practice and Procedure ~ Motion to strike out statement of upon the ground that as the claim for damages is out of actions by statute raises a defence determined as a preliminary issue misrepresentation not statute barred. Trade Practices Act 1974 No. G93 of 1986 M. & M. claim it discloses no reasonable cause of action time - the limitation of to a claim which may be - claims in fraud and RUMBELOW ENTERPRISES PTY LTD and BALDWIN ENTERPRISES PTY LTD v. REYNELLA SEAFOODS PTY LTD (In Liquidation) and RON SELIG and RENATE SELIG and VICKI ALANA GARVIE FORSTER, J. ADELAIDE 23 DECEMBER 1987 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No. G93 of 1986 eee BETWEEN: M. & M. RUMBELOW ENTERPRISES PTY LTD and BALDWIN ENTERPRISES PTY LTD Applicants - and - REYNELLA SEAFOODS PTY LTD (In Liquidation) and RON SELIG and RENATE SELIG and VICKI ALANA GARVIE ~~" Respondents MINUTE OF ORDER JUDGE MAKING ORDER WHERE MADE DATE OF ORDER THE COURT ORDERS THAT: 3 FORSTER J. ADELAIDE 23 DECEMBER, 1987 1. The application is dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY No. G93 of 1986 eee ew GENERAL DIVISION BETWEEN: M. & M. RUMBELOW ENTERPRISES PTY LTD and BALDWIN ENTERPRISES PTY LTD Applicants - and - REYNELLA SEAFOODS PTY LTD (In Liquidation) and RON SELIG and RENATE SELIG and VICKI ALANA GARVIE Respondents REASONS FOR JUDGMENT CORAM: Forster J : a It is pleaded by the applicants that pursuant to a contract dated 25 July 1983 they agreed to purchase from the first respondent a business known as "Brooklyn Seafoods" ("the business") and that by a further contract dated 3 September 1983 they purchased the goodwill of the business from the first respondent and that by a further contract also dated 3 September 1983 they agreed to purchase the plant and equipment of the business from one Stefan Selig. The statement of claim is not entirely clear but it appears that settlement of all these 2. contracts took place on 23 September 1983. The applicants started these proceedings on 19 December 1986 in which they claim, put shortly, that they were induced to enter into the contracts by misleading and deceptive conduct by the first respondent in which the second, third and fourth respondents were persons involved. The misleading and deceptive conduct alleged consists of statements of one sort and another concerning the performance and profitability of the business. Claims are also made sounding in fraud and misrepresentation based upon the same conduct which is said to constitute misleading and deceptive conduct and thus a breach of s.52 of the Trade Practices Act 1974 ("the TPA"). Damages are claimed generally. It is fair to say that the statement of claim is primarily under s.52 of the TPA and that as so often happens' the allegations of fraud and misrepresentation are thrown in to make a sort of ambit claim. The first respondent, which the heading records is in liquidation, has not entered an appearance. The second respondent was eventually served by substituted service and has not entered an appearance. The third respondent has entered an appearance and filed a defence. The fourth respondent was added to the proceedings by order of 24 June 1987 and has entered an appearance and filed a defence. No reply has been filed or served by the applicant to the defences of the third and fourth respondents. A notice of motion has been filed by the solicitors on 3. the record for the third respondent said on its face to be a notice of motion by "the abovenamed respondents" to move the court for a number of orders. When the notice of motion was called on before me the order sought was that the statement of claim be struck out pursuant to 0.11 1.16 upon the ground that "it discloses no reasonable cause of action" upon the footing that the claim for damages for a breach of s.52 of the TPA is out of time as the proceedings were commenced more than three years after the applicants' cause of action accrued (see s.82(2) of the TPA). It is conceded by the third respondent that the claims in fraud and misrepresentation are not statute barred and this is no doubt correct so that, whatever the vices of the claim under s.52 of the TPA, the claims in fraud and misrepresentation are unobjectionable. I should mention that the issue of the claim under s.52 being statute barred is raised in the defence of the third respondent. Counsel appeared for the third respondent and also for the applicants on the hearing of the notice of motion but neither of them referred me to the case of Geary Nominees Pty Ltd v. Pargas Nominees Pty Ltd & Ors (1986) 8 ATPR 47,898 in which Toohey J. said as follows on p.47,902 : - "In Ronex Properties Ltd v. John Laing Construction utd (1983) Q.B. 398, Donaldson L.J. said at p.404 : 'Authority apart, I would have thought it was absurd to contend that a writ ... could be = struck out as disclosing no cause of action merely because the defendant may have a defence under the Limitation Acts. ... it is trite law that the English Limitation Acts bar the remedy and not the right, and furthermore that they do not even have this effect unless and until pleaded. Even when 4. pleaded, they are subject to various exceptions, such as acknowledgement of a debt or concealed fraud, which can be raised by way of reply.' His Lordship continued at p.405: 'Where it is thought to be clear that there is a defence under the Limitation Act, the defendant can either plead that defence and seek the trial of a preliminary issue or, in avery clear case, he can seek to strike out the claim on the ground that it is frivolous, vexatious and an abuse of the process of the court and support his application with evidence. But in no circumstances can he seek to strike out on the ground that no cause of action is disclosed.' Although Donaldson L.J. was dealing with 0.18 r.19 of the English Rules of the Supreme Court which confer power to strike out a pleading or the endorsement of a writ on certain grounds, the rule is close enough in language and operation for his Lordship's remarks to apply to the Federal Court Rules. I am not suggesting that acknowledgement of debt or concealed fraud is an available defence in answer to a limitation plea under subsec. 82(2) for that question did not arise. But the terms of any defence cannot be known until it is filed. Until a reply (if any) is filed, it also cannot be known whether the applicant merely joins issue with the particular respondents on their defence or whether it raises new matters by way of answer." I accept with great respect what was said by his Honour and by Donaldson L.J. In my view the applicants should file a reply and raise whatever matters they may wish to in answer to the claim that their action is in part, statute barred. The next step should be an application for the hearing of a preliminary issue if the third respondent wishes to pursue the matter at this stage. In any event because of the presence of the claims in fraud and misrepresentation it would not be appropriate to strike out the statement of claim in its entirety. 5. The present application is dismissed with costs. Counsel for the applicants Solicitors for the applicants Counsel for the third respondent Solicitors for the respondents Dates of hearing I certify that this and the .4 preceding pages are a true copy of the Reasons for Judgment of Mr Justice Forster. associate: Mechall Crcon Dated: 23 "Weamoer 1\TS4. : Mr S. Haarsma Haarsmas Mr C.J. Pearce W.A.G. Morris, Pearce & Associates : 11, 25 November, 1987