JUDGMENT No. 2227355 CATCHWORDS Practice and Procedure —- pleadings - application for summary dismissal of proceedings - application for striking out. Federal Court Rules Order 11 Rule 23, Order 20 Rule 2, Order i1 Rule 16. Trade Practices Act 1974 (Cth.) s.47(6), s.59(2) and s.87. Dey v. Victorian Railway Commissioners (1949) 78 C.L.R. 62 General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125 Global Sportsman Pty. Ltd. v. Mirror Newspapers Pty. Ltd. (1984) 2 F.C.R. 82 BURGUNDY ROYALE INVESTMENTS PTY. LIMITED AND ORS. v. JENNINGS CONSTRUCTION LIMITED. VG414 of 1987 Sweeney, J. Melbourne 7 July 1988 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 414 of 1987 GENERAL DIVISION BETWEEN: BURGUNDY ROYALE INVESTMENTS PTY. LIMITED First Applicant THE ESPLANADE PTY. LIMITED Second Applicant KOTA NOMINEES PTY. LIMITED Third Applicant GOLDENGLOSS PROPERTIES LIMITED Fourth Applicant AND JENNINGS CONSTRUCTION LIMITED Respondent THE COURT: Sweeney J. PLACES Melbourne DATE oe 7 July 1988 MINUTES OF ORDER THE COURT ORDERS THAT: Paras 22, 23, 47 and 51 and the word "untrue" in para 51b, be struck out, in each case with leave to replead. Leave is also granted to replead para 31b, so that it will be consistent with para 51 as repleaded. i) Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 414 of 1987 GENERAL DIVISION BETWEEN: BURGUNDY ROYALE INVESTMENTS PTY. LIMITED First Applicant THE ESPLANADE PTY. LIMITED Second Applicant KOTA NOMINEES PTY. LIMITED Third Applicant GOLDENGLOSS PROPERTIES LIMITED Fourth Applicant AND JENNINGS CONSTRUCTION LIMITED Respondent THE COURT: Sweeney J. PLACES : Melbourne DATE : 7 duly 1988 REASONS FOR JUDGMENT The respondent moves the Court for orders that the proceedings by the applicants be dismissed summarily pursuant to Order 11 Rule 23 and Order 20 Rule 2, or that the whole of the Amended Application and the Further Amended Statement of Claim be struck out pursuant to Order 11 Rule 16, and for an order for costs. The principles governing the consideration of a motion such as this are well known. In Dey v. Victorian Railway Commissioners (1949) 78 C.L.R. 62, Dixon J. said at 91: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But 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, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.". In General Steel Industries Inc. v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125, Barwick C.J. said at 129: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that 1t cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the court 1s satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them', [the pleadings] 'to stand would involve useless expense'. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a [w glance'. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same.". At p.130, Barwick C.J. described the relevant test as being whether the plaintiff's case: "... is so clearly untenable that it cannot possibly succeed". The material parts of the Amended Application, dated 8 April 1988 read as follows: "On the grounds appearing in the accompanying Amended Statement of Claim. 1. The First Applicant claims: (a) an Order pursuant to Section 87 of the Trade Practices Act 1974 declaring the whole of the Agreement between it and the Respondent dated 17 November 1984 ('the Agreement") void ab initio; (b) alternatively to (a) a declaration that on the grounds appearing in paragraphs 43 to 45 (inclusive) of the accompanying Amended Statement of Claim it 1s entitled to avoid the Agreement; and (c)} an Order that the Respondent account to the First Applicant for the sum of $5.5m paid pursuant to the Agreement together with interest thereon. 2. The First to Fourth Applicants claim: (a) damages; (b) interest on such damages; (c) costs; and (d) such further or other relief as the Court deems fit.". In the Further Amended Statement of Claim dated 30 May 1988 the applicants allege, amongst other things, that: "6. On or about 9 April 1981 the First Applicant entered into an agreement with the Northern Territory of Australia and the Northern Territory Development Corporation relating to the construction and operation of a complex comprising a theatre and performing space (together called 'the Performing Arts Centre') convention centre, international hotel, concourse, public gallery and car park ('the Hotel Complex'), the total complex being described as The Darwin Centre. The said Centre was to be constructed on the land comprised in Lot 5335 Town of Darwin being the whole of the land comprised in Crown Lease Term No. 115 ('the land'). 7. On 17 November 1982 the Northern Territory of Australia leased the land to the First Applicant for the purpose of construction of The Darwin Centre. 8. In about July 1982 the First Applicant called for tenders for the construction of The Darwin centre. 9. The tender documents provided: (a) for the basis of payment to the successful tenderer to be by way of lump sum subject to adjustment for rise and fall in cost; and (b) the contract entered into pursuant to the acceptance of any tender and all work performed thereunder would be performed in accordance with General Conditions of Contract NPWC Edition 3 (1981) as varied or modified by the tender documents. PARTICULARS The provisions were contained in the tender documents issued by the First Applicant in July 1982. These documents comprised the form of tender, General Conditions of Contract NPWC Edition 3 (1981) (including annexures and variations thereto), the conditions of tendering, the Schedule of Rates and Schedule of Prices. 10. On or about 30 September 1982 the Respondent submitted a lump sum tender for The Darwin 11. 12. 13. 14. 15. Jo Centre in the sum of $32,800,000 subject to the terms and conditions contained in the tender form, the Respondent's letter to the First Applicant of 30 September 1982 and the attachments thereto. PARTICULARS Letter from the Respondent to the First Applicant dated 30 September 1982 together with attachments thereto. On 17 November 1982 the First Applicant accepted the tender of the Respondent subject to the variations contained in its letter of acceptance and the attachments thereto. PARTICULARS Letter dated 17 November 1982 from the First Applicant to the Respondent and attachments thereto. On 18 November 1982 the Respondent accepted the variations contained in the First Applicant's letter of 17 November 1982 and subsequently entered into possession of the site. PARTICULARS On 18 November 1982 the Respondent countersigned and delivered to the First Applicant a copy of the letter of 17 November 1982. The Respondent entered into possession of the site on or about 22 November 1982. In the premises the Applicants say and the fact is that on 18 November 1982 the Respondent agreed with the First Applicant to construct The Darwin Centre on the terms and conditions contained in the Applicants' letter of 17 November 1982 the documents incorporated by reference therein and the attachments thereto. It was a term and conditon of the agreement that practical completion of the Centre would take place within 101 weeks from 17 November 1982, that 1s by the 16 November 1984. PARTICULARS Annexure C to the letter of 17 November 1982 from the First Applicant to the Respondent. It was a further term and condition of the agreement that in the event that practical In completion did not take place by 16 November 1984 the Respondent would pay to the First Applicant by way of liquidated damages the sum of $158,550 per week. PARTICULARS Annexure C to the letter of 17 November 1982. 16. It was a further term and condition of the agreement that the Respondent would within 14 days of being requested to do so sign a formal instrument of agreement.". The respondent no longer presses an attack upon any of these paragraphs. The Further Amended Statement of Claim continued as follows (the underlined portions being the sum of all the amendments made from time to time to the Statement of Claim): "17. It was a further term and condition of the agreement that if the Respondent failed to sign the aforesaid formal instrument of agreement within the time specified, the First Applicant was entitled to suspend payment under the agreement. PARTICULARS Clauses 6 & 44 of NPWC Edition 3 (1981). 17A. On or about 18 August 1983 the agreement was varied to provide for the payment of interest on unpaid progress payments at a rate of 15%. PARTICULARS The variation was oral and was made at a meeting between Mr. Clark on behalf of the First Applicant and Mr. Lambert on behalf of the Respondent.". The respondent's attack upon paragraph 17A is that it is superfluous, because no claim for relief depends upon it. It was in rightly conceded that this attack was "a minor matter" and I do not propose to base any order upon it. Paragraph 18(a), as it had been pleaded in the Amended Statement of Claim, read as follows: "(a) that the Darwin Centre could be constructed for a price in the vicinity of $36,000,000 adjusted in accordance with the terms of the contract.". In this form the Respondent challenged it on a number of grounds, which ceased to be relevant when the allegation was amended to read: "(a) That if awarded the Tender 1t would construct the Darwin Centre for a price in the vicinity of $36,000,000.". Paragraph 18A, added by the Further Amended Statement of Claim reads: "18A. The representation referred to in paragraph 18(a) was: (1) Express and made orally by the Respondent by its servant or agent Mr. Satchell ata meeting between him and Mr. V. Keneall and Mr. Pascoe on behalf of the Applicants on 4 October 1982. (ii) Implied from (a) The tender documents: (b) the letter dated 4 October 1982 from the Respondent to the First Applicant: (c) A statement by Mr. Satchell that a further lump sum offer would be made if the Respondent was granted the contract. This statement was made at_a meeting on 11 October 1982.". Counsel have agreed that the pleading of an express oral representation in paragraph 18A(i) is not open to attack, but the respondent maintained its challenge to sub-paragraph (1i). Counsel for the applicant expressly disavowed any application to add the express representation contained in paragraph 18A(i) to the grounds of the implication set out in sub-paragraph (ii). The tender documents set out the basis upon which interested parties were invited to tender. The letter dated 4 October 1982 read: "As an alternative to our Tender for the above on the 30th September, 1982, we offer our firm lump sum price of $36,000,000-00 (Thirty Six Million Dollars). Rise and Fall to apply only to those nominated suppliers and/or Sub-Contractors as approved by yourselves, For any further anformation, please direct all enquiries to Myself.". The letter was signed by Mr. Satchell. The respondent contended that the statement in the letter "rise and fall to apply only to those nominated suppliers and/or Sub-Contractors as approved by yourselves" is in its terms inconsistent with a representation that the respondent would construct the Darwin Centre for a price in the vicinity of $36,000,000. The number of suppliers or sub-contractors to whose work rise and fall would apply was, it was said, left to the determination of the applicant. The statement said to have been made by Mr. Satchell one week later than the date of the letter that "a further lump sum offer would be made if the Respondent was granted the contract" did not, the Respondent submitted, lend any {so support to the suggested implication. These submissions of the respondent are not without force, but it is arguable that at the trial a close study of the tender documents and a full knowledge of the circumstances surrounding the letter and the statement by Mr. Satchell may give rise to the implication pleaded. The facts relied upon to support it will be before the trial judge in any event. I would not strike out para 18A(ii). Paragraph 18(b) and 18B read as follows: "18(b) Between 30 September 1982 and 17 November 1982 the Respondent represented to the Applicants (b) That the Respondent had formed a bona fide opinion on reasonable grounds and after application of due care and skill that it could construct The Darwin Centre for the price set out in its tender adjusted in accordance with the contract annexed to the tender documents.". "18B. The representations referred to in paragraph 18(b) were implied from: (i) The tender documents: (ii) The letter of 4 October 1982 from _ the Respondent to the First Applicant. (i121) From the statement by Mr. Satchell at a meeting on 11 October 1982 that in preparing the lum sum offer of 4 October 1982 the Respondent had assessed the risk.". Paragraph 18(b) had included, in the Amended Statement of Claim, the words "that the Darwin Centre could be constructed", which have now been replaced by the words "that it (the respondent) could construct the Darwin Centre". This amendment overcomes the objections to the earlier form of words which were encapsulated in the rhetorical question "constructed by whom?". As paragraph 18B now stands, it relies upon the statement alleged in sub-para (i11), and the documents described in sub-paras (i) and (i1). In my opinion, one would not be justified in striking out paras 18(b) and 18B. It will be for later decision whether the alleged statement is established by evidence, and if so, the precise form in which it is found to have been made, and the inferences which should be drawn from 1t. Paras 18(c) and 18C now read as follows: "18(c) That the Respondent was able to complete the contract in accordance with its terms within a period of two years.". "18C. The representation referred to in paragraph 18(c) was: (i) Express and made by the Respondent by its servant and agent Mr. Phillips to Mr. Keneally and Mr. Pascoe on 26 October 1982. (ii) Implied from the tender documents.". The respondent complains that the relationship between sub-paragraphs (i) and (ii) remains obscure, as to whether they are alternative or cumulative. In the absence of the word "or", I would construe them as being cumulative. I see no reason to strike out the allegation in sub-paragraph (1) of the express representation. It 1s not easy at the present stage of these proceedings to see how the representation referred to in paragraph 18(c) could be implied from the tender documents, but for reasons similar to those expressed in relation to para 18A(ii), I would not strike out para 18C(ii). Paragraph 22 now reads: "22. The representations pleaded in paragraph 18 were made in trade and commerce and were untrue, misleading and deceptive and were made without any or any adequate foundation in that: (a) The Darwin Centre was not constructed by the Respondent for the sum of $36m but the Respondent has sought to claim as the cost of construction' the sum of approximately $73m. (b) The Respondent was not able to complete the project within two years but rather did not complete it until 2 May 1986.". The respondent submitted that paras 18 and 22 were not based upon a comparison of like with like. For all that appeared in the pleading, it submitted, there may have been such differences between the original 1982 project and the work as finally completed as to make it impossible to treat the difference between the "price in the vicinity of $36,000,000" (para 18(a)) and the sum of $73,000,000 which "the respondent has sought to claim as the cost of construction" (para 22(a)) as leading to the conclusion that the representations alleged in para 18 were, as claimed in para 22, "untrue misleading and deceptive and were made without any or any adequate foundation". A similar attack was made upon the pleading in paras 18(c) of a representation that the respondent "was able to complete the contract in accordance with its terms within a period of two years" and the allegation in para 22(b) that "the respondent was not able to complete the project within two years but rather did not complete it until 2 May 1986" (para 22(b)). In my opinion, these criticisms are well founded. I would strike out para 22(a), and, for similar reasons, para 2Z(b) and 23 which seeks to rely upon the matters pleaded in para 22 to found the allegation that the representations referred to in para 18 were made "with reckless indifference to their accuracy". My impression 1s that the applicants desire to make the allegation that there was in fact a sufficient resemblance between the work required under the original contract and the work as finally completed to found the allegations in paras 22 and 23. I think that they should have an opportunity to replead paragraphs 22 and 23 and I give them leave to do so. If para 23 is repleaded I would see no harm in the applicants putting the respondent on notice that "further and better particulars will be given after discovery and interrogatories". It 1S to be observed that para 22(a) speaks of "the sum of $36m", whereas para 18(a) refers to "a price in the vicinity of $36,000,00.". To be consistent with para 18, para 22 should have used the words "in the vicinity of $36,000,000". In para 18(c) there is alleged a representation that "the Respondent was able to complete the contract in accordance with ats terms within a period of two years". In para 22(b) it 1s alleged that "the Respondent was not able to complete the project within two years but rather did not complete 1t until 2 May 1986", which involves substituting the phrase "the project" for the phrase "the contract in accordance with its terms". When para 22 is repleaded, consideration will no doubt be given to those discrepancies. In paras 25-28 the applicants seek to allege a cause of action under s.59(2) of the Trade Practices Act 1974, ("the Act") which provides as follows: "S59(1) ...- (2) Where a corporation, in trade or commerce, invites, whether by advertisement or otherwise, persons to engage or participate, or to offer or apply to engage or participate, in a business activity requiring the performance by the persons concerned of work, or the investment of moneys by the persons concerned and the performance by them of work associated with the investment, the corporation shall not make, with respect to the profitability or risk or any other material aspect of the business activity, a representation that is false or misleading in a material particular."". Para 25 reads as follows: "25. The submission by the respondent of the tender referred to in paragraph 10 of the Further Amended Statement of Claim constituted an invitation by the Respondent to the First Applicant in trade and commerce to engage in or participate in a business activity, namely the construction of the Darwin Centre, requiring the investment of monies by the b First Applicant and the performance of wor y_ the First Applicant associated with the investment. PARTICULARS OF WORK TO BE PERFORMED (i) The appointment of the superintendent; (ii) The provision of certain information (Clause 8.3 of the Standard Conditions of Contract); (iii) The nomination of sub-contractors (Clause 10.1 of the Standard Conditions); (iv) The supply of materials (Clause 17 of the Standard Conditions).". The respondent's criticism of the paragraph was that the tender cannot be an invitation to the firstnamed applicant to engage in or participate in a business activity. Nor did it require the investment of money and the performance of work by it associated with any "investment". The particularized examples of "work" did not, 1t was submitted, arguably amount to work within the meaning of s.59(2). It may be doubted whether s.59(2) was specifically drafted to cover a situation such as that alleged in the present case. However, it appears to me to be arguable that its language is effective to do so, and I do not think it appropriate to strike out paragraphs 25-28. In paras 30, 31 and 31A the applicants alleged: "30. Further and in addition to paragraphs 5 to 29 hereof the Applicants say that on or about 24 July 1984 Westpac Banking Corporation ('Westpac') made an offer to advance to the First Applicant the sum of $23,500,000 (the Offer) to enable construction of the Centre to be completed. 31. After Westpac made the Offer, Westpac purported to vary the Offer and in particular to make the grant of the loan conditional on the First Applicant continuing to obtain from the Respondent building services in relation to The Darwin Centre. PARTICULARS Telex dated 29 October 1984 from Westpac to the Applicants' solicitors, Messrs. Clark and Partners. 31A. At all times between 29 October 1984 and 17 November 1984, Westpac made the said grant of Toan conditional upon the First Applicant continuing to obtain such building services.". When these three paragraphs are read together, there is, in my opinion, no justification for striking out para 31A. Paragraph 38 reads as follows: "The conduct of the Westpac Banking Corporation in seeking to impose the condition referred to in paragraphs 31 and 31A was in contravention of S.47(6) of the Trade Practices Act 1974.". Section 47(6) is in the following terms: "(6) A corporation also engages in the practice of exclusive dealing if the corporation - (a) supplies, or offers to supply, goods or services; (b) supplies, or offers to supply, goods or services at a particular price; or (c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation, on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person 1s a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person.". The respondent challenged para 38 on the ground that the firstnamed applicant had already acquired the respondent's building condition. this criticism to be valid. services before Westpac's alleged imposition of a Having para 31A especially in mind, I do not consider 39 which reads as follows: "By reason of its conduct referred to in paragraphs 32, 33, 34, 35 and 36 the Respondent aided, abetted, counselled or procured or induced the contravention by Westpac Banking Corporation of S.47(6) of Trade Practices Act 1984.". In paras 46, 46B, 47, and 47A the applicants alleged: "46. Further and in the alternative to paragraphs 30 and 45 the Applicants say on or about 15 November 1984 the Respondent represented to the Applicants: (a) that The Darwin Centre could be constructed for a total cost of $45 million; (b) that the construction of the Hotel complex in The Darwin Centre would be completed so as to allow formal opening of the Hotel by 15 August 1985; (c) that the practical completion date of the Darwin Centre would take place by 5 November 1985. 46B. Acting upon and in reliance upon the representations and induced thereby, the First Applicant entered into the agreement referred to in paragraph 34 hereof. 47. The representations pleaded in paragraph 46 were misleading, deceptive and untrue and were made without any or any adequate foundation in that: (a) The actual total construction cost of the Darwin Centre was not $45 million, but the Respondent now claims $73 million in respect thereof. (b) The Respondent was not able to complete the Hotel Complex so as to allow formal opening of the Hotel Complex by 15 August 1985 and in fact the Hotel Complex was not completed until March 1986. (c) Practical completion did not occur by 5 November 1985 and in fact dad not occur until 2 May 1986. Likewise, I would not strike out para 47A. Additionally or alternatively to paragraph 47 the Applicants say: (a) That by reason of the matters pleaded in patagraph 47, and (b) That by reason of the fact that the Respondent had been 1n possession of the site since the end of 1982 and was aware of the cost and time required to complete the Darwin Centre. the said representations were made wath reckless indifference to their accuracy.". The respondent challenged the words in para 47 "and were made without any or any adequate foundation of fact". In my opinion, the applicants are entitled to plead the allegation in these terms, which are based upon the words of the Full Court in Global Sportsman Pty. Ltd. v. Mirror Newspapers Pty. Ltd. (1984) 2 FCR 82 at p.88: "The non-fulfilment of a promise when the time for performance arrives does not of itself establish that the promisor did not intend to perform it when it was made or that the promisor's intention lacked any, or any adequate, foundation.". The respondent also contended that a discrepancy between prediction and outcome can never amount to such a case as that pleaded in para 47. In my opinion, the reasons which justify striking out para 22 justify a similar conclusion in relation to paras 47 and 47A. If the pleading were amended to allege a sufficient resemblance between the project in November 1984 and the work as finally completed this would become a question of fact, inference and opinion appropriate to be decided at the trial in the light of all the evidence. Accordingly, I would give leave to replead paras 47 and 47A. ° ee In para 51 the applicants allege: "51 Further and in the alternative to paragraphs 30 to 50, the Applicants say that on or about 14, 15 and 16 November 1984 the Respondent represented to Westpac that 1t was entitled to Make a Claim against the First Applicant for extra costs incurred as a result of delays and for legal costs and other costs associated with the construction of the Darwin Centre, namely: (a) The sum of $200,000 for legal costs in respect of proceedings between the First Applicant and the Respondent. (b) The sum of $300,000 purportedly being a variation arising out of the introduction in the Northern Territory of a 38 hour week. (c) fhe sum of $1.2m. such sum asserted by Mr. Woods to be a productivity loss. (d) The sum of $350,000 being a prospective loss that Mr. Woods asserted the Respondent would incur for delays due to rain.". The respondent criticises the allegation that it "represented to Westpac that it was entitled to make a claim against the First Applicant for extra costs" and submits that it should be expressed so as to convey an entitlement to succeed in such a claim. This criticism appears to be well founded and I would strike out para 51, with leave to replead. In para 51B the applicants allege: "51B.The representation pleaded in paragraph 51 was Made in trade an commerce an was untrue, misleading and deceptive in that: (a) Part of the claim referred to comprised the sum of $200,000 for legal costs in tespect of proceedings between the First Applicant an the Respondent for which the Respondent was not entitied to make a claim under the contract or otherwise. (b) Part of the claim referred to comprised y the sum of $300,000 purported eing a variation arising out of the introduction in the Northern Territory of a 38 hour week, f£0r which the Respondent was not entitled to make a stein under the contract or otherwise. (c) Part of the claim referred to comprised the sum of $1.2m., such sum purportedly being a productivity loss, for which the Respondent was not entitled to make a claim under the contract or otherwise. (d) Part of the claim referred to comprised the sum of $350,000, purportedly being a at dent prospective loss t the Respon would incur for delay due to rain, for which the Respondent was not entitled to Make a claim under the contract or otherwise. Paragraph 51B, as it stands, is open to the criticism that it is not sufficient to allege that the representation was untrue, but the applicant must allege that 1t was untrue to the knowledge of the respondent at the time it was said to have been made. I would strike out the word "untrue" but give leave to the applicants to replead to allege untruth to the knowledge of the respondent at that time. As leave has been granted to replead paragraph 51, I would also give leave to replead para 51B so that the allegations of breach may be pleaded consistently with the repleaded paragraph 51. To summarise, I would strike out paras 22, 23, 47 and 51 and the word "untrue" in para 51B,1n each case with leave to replead. I would also grant leave to replead para 31B, so that it will be consistent with para 51 as repleaded. a? For the convenience of the Court and the parties I direct that the applicants file and serve a Further Amended Statement of Claim, which may be headed "Further Amended Statement of Claim of July 1988". It would be helpful if, in addition to the underlining in the present Further Amended Statement of Claim, any words introduced after the delivery of these reasons be underlined in red. After counsel have had an opportunity to read these reasons, I will hear them on the costs of the motion and the form of directions, including the question of the exchange of expert reports. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Sweeney Dated: 7 July 1988 'Associat vt VG 414 of 1987 Counsel for the applicants: Mr. T. Bathurst Q.C. Mr. D. Conti Solicitor for the applicants: Clayton Utz Counsel for the respondent: Mr. M. Tobias Q.C. Mr. B. Walker Solicitor for the respondent: Freehill, Hollingdale and Page as agents for Morris, Fletcher and Cross. Dates of hearing: 5, 24 May 1988.