IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G381 of 1994 ) GENERAL DIVISION ) BETWEEN: ALLSTATE LIFE INSURANCE CO. & OTHERS Applicant AND AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED & OTHERS Respondent CORAM: Beaumont J. DATE: 21 March 1995 REASONS FOR JUDGMENT (No. 7) (On application to amend statement of claim) An application has been made on behalf of the applicants to further amend their statement of claim. The document, which I have marked "1" for identification for this purpose, is entitled "Second Further Amended Statement of Claim". It appears already that several areas of contention arise in respect of substantial parts of the proposed pleading, but the present matter before the Court is whether an allegation of tortious interference with contractual relations made against one respondent, Sumitomo International Finance Australia, should be allowed. This question has been argued as a discrete issue. The provision in question is paragraph 155C of the proposed pleading. That paragraph which appears at pp.63-66 of MFI "1" is annexed to these reasons. In my earlier reasons for judgment dated 10 February 1995 (No. 5), given in connection with an earlier application for leave to amend the statement of claim, I outlined my understanding of the general principles in this area, albeit in the context of a pleading in a form and in substance different from para 155C. However, notwithstanding those differences, the basic requirements that I there described, in particular at pp. 3 - 4 of those reasons, are applicable in the present case. One point of departure may however be noted at the outset; that is, it is contended on behalf of the applicants that the present proposal to add para.155C to the statement of claim should, by reason of other allegations made in MFI "1", be viewed in a dual aspect, that is to say, the allegations in para.155C are said to constitute the tort, not only under the law of New South Wales, but under the law of New York. The argument before me today has been limited to the law of New South Wales and I propose to deal with the present question on that limited footing only. It will be seen that in sub-para. (1) of 155C, it is alleged that Sumitomo knew that Linter Textiles was a party to the indenture and that the indenture contained the prohibition there mentioned; and that, in sub-para. (2), it is said that Sumitomo induced Linter Textiles to breach that contractual obligation. However, in sub-para. (3), it is said that Sumitomo induced Linter Textiles to engage in that conduct with knowledge, reckless indifference or wilful blindness; or alternatively, with indifference as to whether it would result in a breach of the contractual obligations; also, by sub-para. (4), it is alleged that, between the dates there specified, Sumitomo induced Linter Textiles to breach its contractual obligations in the manner there contended for. In my previous reasons, I endeavoured to make it clear that under the law of New South Wales there are two essential ingredients involved in the tort: first, it must be shown that there was an intention to induce a breach of contract; secondly, it must be shown that the conduct was carried out with knowledge of its consequences. It is true, as I mentioned in my earlier reasons, that how intention and knowledge are established are necessarily adjectival or evidentiary issues which must depend upon the particular circumstances of the case. In particular, it may be appropriate for a court to infer the requisite intention or the requisite knowledge, or both, from the surrounding circumstances which are established. But, however those ingredients are established, as a matter of the pleading of the cause of action they must, if the applicants are to succeed at the trial, be made out. In my opinion sub-para. (3) and (4) of para 155C are defective by reason of their failure to allege those two ingredients of intention and knowledge. For those reasons, those sub-paragraphs should not be permitted to be pleaded. Since sub-paras. (1) and (2) are essential, but nonetheless, in the nature of introductory or prefatory averments, and are not free-standing allegations, it must follow, in my view, that I should refuse to allow the amendment sought in para 155C as a whole to be made, so far as the law of New South Wales is relied on in this claim. I so order. I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment of his Honour Mr Justice Beaumont. Associate: Date: 21 March 1955 Counsel for the applicant: Mr W Muddle Mr D Stack Solicitor for the applicant: Sly & Weigall Counsel for the tenth respondent:Mr J Stevenson Solicitor for the tenth respondent: Middletons Moore & Bevins