FEDERAL COURT OF AUSTRALIA ESTOPPEL - Anshun estoppel - whether applicants estopped from bringing action -applicants were respondents in prior proceeding - applicants did not file cross claim against a third party in prior proceeding - applicants subsequently filed fresh action against third party - - whether a non-party in a prior proceeding may rely on Anshun estoppel in subsequent proceeding. TRADE PRACTICES - limitation of actions - running of time - separate and distinct act of reliance. PRACTICE AND PROCEDURE - strike out application - relevant test Federal Court Act 1976 (Cth), s 22 Trade Practices Act 1975 (Cth), s 82(2) Limitation of Actions Act 1958 (Vict), s 5 Fair Trading Act 1985 (Vict), s 37(2) Port of Melbourne v Anshun Pty Ltd (1981) 147 CLR 589, applied Dey v Victorian Railways Commissioners (1949) CLR 78, applied General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, applied Webster v Lampard (1993) 177 CLR 598, applied Henderson v Henderson (1843) 3 Hare 100 at 115 ; 67 ER 313, followed Rahme v Commonwealth Bank of Australia (Court of Appeal (NSW), 20 December 1991, unreported), followed Bryant v Commonwealth Bank (1995) 57 FCR 287, applied C. (A Minor) v Hackney LBC, [1996] 1 WLR 789, followed Westpoint Corporation Pty Ltd v Coles Supermarket Australia Pty Ltd (1996) FCR 584, referred to Rogers v The Queen (1994) 181 CLR 251, discussed Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, applied FOODCO GROUP PTY LTD (ACN 007 145 057) and ROBERT KENNETH NELSON v NORTHGAN PTY LTD (ACN 004 604 406) and STUART JOHN MACRAE marshall J melbourne 21 May 1998 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 332 OF 1997 BETWEEN: FOODCO GROUP PTY LTD (ACN 007 145 057) First Applicant ROBERT KENNETH NELSON Second Applicant AND: NORTHGAN PTY LTD (ACN 004 604 406) First Respondent STUART JOHN MACRAE Second Respondent JUDGE(S): MARSHALL J DATE OF ORDER: 21 May 1998 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Paragraph 15(c) of the Statement of Claim be struck out. 2. The respondents' Notice of Motion be otherwise dismissed. 3. The respondents pay the applicants' costs of the Notice of Motion. 4. The matter be adjourned for directions on 22 June 1998 at 10:15 am. 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 VG 332 1997 BETWEEN: FOODCO GROUP PTY LTD (ACN 007 145 057) First Applicant ROBERT KENNETH NELSON Second Applicant AND: NORTHGAN PTY LTD (ACN 004 604 406) First Respondent STUART JOHN MACRAE Second Respondent JUDGE(S): MARSHALL J DATE: 21 May 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT On 3 July 1997 the applicants made application to the Court seeking a declaration that the respondents have contravened s 52 of the Trade Practices Act 1975 (Cth) ("TP Act")and s 11 of the Fair Trading Act 1985 (Vict) ("FT Act") arising from conduct alleged to be misleading or deceptive ("the substantive proceeding"). The applicants sought damages and an indemnity from the respondents in relation to damages, interest and also costs payable by the applicants in a separate proceeding VG 433/92. On 13 August 1997 the respondents filed a motion seeking to permanently stay or dismiss the substantive proceeding. The grounds upon which the stay or dismissal is sought are three-fold, namely, that the principle explained in Port of Melbourne v Anshun Pty Ltd (1981) 147 CLR 589 estops the applicants from bringing the claims; the applicants' claims constitute an abuse of process; and the applicants' claims are statute barred. On the hearing of the motion, Mr Bick, of counsel, appeared for the respondents and Mr Davis, of counsel, appeared for the applicants. THE FACTUAL BACKGROUND In 1990 the second applicant Mr Robert Kenneth Nelson ("Nelson") was a director and controller of the first applicant. The first applicant was then known as Nescor Industries Group Pty Ltd but subsequently changed its name to Foodco Group Pty Ltd. For ease of reference I will refer to the first applicant as "Nescor/Foodco". The business conducted by Nescor/Foodco was the franchising of "Muffin Break" food outlets in Australia. From 1983 to April 1994 the first respondent Northgan Pty Ltd ("Northgan") was the owner of Northland Shopping Centre. Northgan is a member of the Gandel Group of companies. The second respondent Mr Stuart John MacRae was at all relevant times the responsible executive in the Gandel Group for the leasing of tenancies at the Northland Shopping Centre. In mid-1990 Nescor/Foodco leased a premise ("the Northland premise") from Northgan, at the Northland Shopping Centre, with a view to establishing a Muffin Break franchise. The leasing of the Northland premises by Nescor/Foodco was preceded by dealings between Mr Nelson and Mr Macrae. Nescor/Foodco subsequently granted a Muffin Break franchise at the Northland Shopping Centre to a company named Miba Pty Ltd ("Miba"). Mr and Mrs Vittouris were directors and shareholders of Miba. The granting of the Muffin Break franchise by Nescor/ Foodco to Miba was preceded by dealings between Nelson and Mr and Mrs Vittouris. The dealings between Mr Nelson for Nescor/ Foodco and Mr and Mrs Vittouris for Miba gave rise to proceeding VG 433/92 before this Court ("the Miba proceeding"). The existence of the Miba proceeding is central to the Anshun estoppel and abuse of process issues before the Court in the present matter. In the Miba proceeding, Mr and Mrs Vittouris and Miba sought damages from Foodco/Nescor and Mr Nelson alleging misleading and deceptive conduct, negligent misstatement and breach of contract. Significantly, neither Mr Macrae or Northgan was a party to the Miba proceeding. On 17 September 1996 judgment in the Miba proceeding was given by Merkel J on the issue of liability. See Miba Pty Ltd & Ors v Necscor Industries Group Pty Ltd & Anor (Merkel J, unreported, 17 September 1996). Merkel J made the following findings: · Nescor/Foodco and Mr Nelson engaged in misleading and deceptive conduct in delivering to Miba and the Vittouris' a letter, dated 3 July 1990, in which it was stated that "the average Food Court operator in Northland achieves sales in the order of $10 000/week." · The reality was that the average outlet figure of weekly sales approximated between $ 7000 and $7500 · Miba and the Vittouris' acted in reliance upon the statements contained in the letter of 3 July 1990 and were induced by those statements to enter into the Muffin Break franchise arrangement with Nescor/Foodco at Northland. · Miba's Muffin Break franchise generated between $3000 and $8000 in weekly sales In his judgment Merkel J made findings in relation to the conduct of Mr Macrae. Merkel J found that Mr Nelson's understanding, that the average Northland food court operator generated weekly sales of $ 10000, was "initially derived from Macrae", Mr Macrae having previously made this representation to Mr Nelson. His Honour said as follows at p 25: "Macrae's statement to Nelson as to the $10,000.00 weekly sales was seriously misleading. The reality was otherwise. Sales figures varied from time to time and there was a degree of flexibility involved in determining which outlets takings were to be taken into account in determining the takings of an "average" operator in the food court. However, these difficulties were not the problem. In order to induce Nelson to take a lease, Macrae simply discarded several of the lower takings outlets but no higher takings outlet. He also treated as one outlet a Chinese restaurant, which was not in the food court and its takeaway outlet which was in the food court, on the spurious and irrelevant ground that they each had a common kitchen. He gave no indication to Nelson that he made those adjustments in arriving at his figure of $10,000.00. As a consequence of his blatant misuse of figures Macrae produced an "average" outlet figure of weekly sales of $10,000.00 whereas the reality should have approximated between $7,000.00 and $7,500.00 and on any view less than $8,000.00. The $2,000.00 to $3,000.00 difference between fact and fiction was significant - it was likely to be the difference between a profitable and a struggling outlet. If the projections were reduced by $2,000.00 - $3,000.00 the lowest end of $5,000.00 was very borderline at best and in all likelihood would have confronted the Vittouris' with a real risk of incurring losses. Macrae's conduct seriously misled both Nelson and the Vittouris'." Merkel J gave further reasons for judgment in the Miba proceeding on 20 February 1997. See Miba Pty Ltd & Ors v Nescor Industries Group Pty Ltd & Anor (Merkel J, unreported, 20 February 1997). In those further reasons Merkel J dealt with three issues which had been the subject of additional written submissions. One of those issues was whether Miba and the Vittouris' were precluded from succeeding by their failure to plead the misleading conduct in their statement of claim in the terms found by Merkel J in his earlier reasons of 17 September 1996. Merkel J held that Miba and the Vittouris' were not precluded from succeeding by this issue. The judgment of Merkel J was upheld on appeal. See Nescor Industries Group Pty Ltd v Miba Pty Ltd (1998) 150 ALR 633. THE TEST FOR DISMISSAL OR STAY OF APPLICATION During the course of submissions I requested counsel to address me on the test which the Court should apply to determine the application. Both counsel agreed that although not expressly stated, the notice of motion was in effect brought pursuant to Order 20 rule 2 of the Federal Court Rules, which provides as follows: "(2) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding - (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of process of the Court, the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding. In Dey v Victorian Railways Commissioners (1949) CLR 78 at 91, Dixon J (as he then was), said as follows of the test to be applied where a court is called upon to determine applications such as those envisaged by Order 20 rule 2: "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." The above passage was approved by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 - 130 and more recently by Mason CJ, Deane J and Dawson J in their joint judgment in Webster v Lampard (1993) 177 CLR 598 at 602. So it is well settled that a court must exercise "exceptional caution" when determining an application for summary dismissal. See General Steel at 129 and Webster at 602. Neither counsel sought to persuade me otherwise. ANSHUN ESTOPPEL POINT The High Court's decision in Port of Melbourne Authority v Anshun has given impetus to an estoppel commonly referred to as Anshun estoppel or extended estoppel. In Anshun, Gibbs CJ, Mason and Aickin JJ approved Wigram VC's classic exposition of the extended estoppel principle in Henderson v Henderson (1843) 3 Hare 100 at 115 ; 67 ER 313 at 319. The principle was expressed by Wigram VC as follows: "... where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject matter of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." The issue which arises in the application of the Anshun principle in the present matter, is whether the principle is confined to inter partes litigation, or whether it can also be relied upon by persons who were not parties to the previous litigation. In the present matter, Northgan and Mr Macrae seek to rely upon Anshun, to estop the present proceedings brought by Mr Nelson and Foodco/Nescor. Counsel for Northgan and Mr Macrae, Mr Bick, submitted that the present claim made by Foodco/Nescor and Mr Nelson against his clients, arose directly out of the same subject matter as was litigated before Merkel J. He also submitted that if the present claim was to ever be made it should have been litigated by way of cross-claim in the proceeding before Merkel J. Mr Bick pointed to the provision in the Federal Court Rules allowing cross claims against third parties. He further contended that the present proceeding gave rise to the prospect of a judgment which would conflict with that given by Merkel J in the previous proceeding. In my view, the law, as it currently stands, does not allow Anshun estoppel to apply to a non-party. The various judicial formulations of Anshun estoppel are replete with references to the "same parties". Indeed, Wigram VC's expression of the principle, seems characterised by that limitation. In Rahme v Commonwealth Bank of Australia (Court of Appeal (NSW), 20 December 1991, unreported), Priestly JA, with whom Meagher JA and Hope A-JA agreed, distilled from Anshun three propositions. These propositions are as follows: "... 1, that Wigram VC's extended principle as stated in Henderson is accepted as good law by the Hight Court; 2, that that principle applies, inter alia, to ... a proceeding in which a party is asserting a cause of action which could have been raised, but was not, in a previous proceeding in which the same party was asserting a different cause of action based on substantially the same facts against the same party as the second proceeding is being brought; and 3, that the extended principle of Henderson will be applied to the second proceeding when it was unreasonable for the party asserting the cause of action in that second proceeding to refrain from raising it in the earlier proceeding against the same opponent party." (emphasis added) The above passage was cited with approval by a Full Court of this Court in Bryant v Commonwealth Bank (1995) 57 FCR 287, 297. In C. (A Minor) v Hackney LBC, [1996] 1 WLR 789 the Court of Appeal considered the application of an extended estoppel to prevent a non-party in a previous proceeding bringing a subsequent proceeding against a party in the previous proceeding. In that matter, Simon Brown LJ, with whom Butler-Sloss and Saville LJJ agreed, held that an extended estoppel based on Henderson would not, where the previous and subsequent proceedings were based on the same facts, bar a person who was a non-party in a previous proceeding from bringing the subsequent proceeding against a person who was a party in the previous proceeding. In his reasons for judgment, Simon Brown LJ at 794 pointed to the fact that Wigram VC had "expressly referred to 'the same parties' ". Having considered that the law as it currently stands does not support the application of an Anshun estoppel to the circumstances of non-parties, the Court must consider whether the principle should be so extended. Broadly speaking, Anshun estoppel has its basis in three considerations of public policy. The first is the maxim nemo debet bis vexari pro eadem causa which translates as 'no man ought to be vexed twice for the same cause'. See Westpoint Corporation Pty Ltd v Coles Supermarket Australia Pty Ltd (1996) FCR 584, 593. The application for summary dismissal presently before the Court raises no such consideration. Neither Northgan or Mr Macrae were a party to the proceeding before Merkel J. Indeed, as Mr Davis pointed out, there is a substantial gulf between the proposition that 'no man ought to be vexed twice for the same cause' and the notion that some men ought never to be vexed for a cause. The second public policy consideration is the maxim interest reipublicae sit finis litium which translates as 'it concerns the State that there be an end to litigation'. See Westpoint Corporation at 593. This consideration is reflected in s 22 of the Federal Court Act 1976 (Cth). It was central to the Full Court's application of the Anshun principle in Bryant at 139. Multiplicity of proceedings is undesirable. During the conduct of litigation, parties and their legal advisers should be cognisant of this fact. The prospect of costs being awarded against a party or solicitor personally, in the circumstances of multiple proceedings, should focus their minds on this issue. However, I am not convinced that applying an Anshun estoppel in the present proceeding, would give effect to the public policy of minimising litigation. As Mr Davis submitted, it may have the opposite effect. Enabling a non-party in a previous proceeding to estop a subsequent proceeding may have the consequence that parties to litigation will feel compelled to join third parties against whom litigation may otherwise not have been contemplated, for fear that they may be permanently denied their rights against those third parties. Proliferation of litigation as distinct from minimisation is a possible result. Consequently, I am not persuaded that the public policy consideration of ending litigation, would be given effect to by allowing non-parties to rely on Anshun estoppel. The third relevant public policy consideration is the undesirability of having conflicting judgments on the record. In Anshun, Gibbs CJ, Mason J and Aickin J said at 603 as follows: "It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment." Mr Bick submitted that any final judgment in the present matter raised the possibility of conflict with the judgment of Merkel J in respect of the "accuracy of Macrae's statement" that an average Northland food court operator achieves sales in the order of $ 10 000. He further submitted that the possibility of conflict exists in respect of the following additional matters: "(a) Whether or not and the extent to which Nelson verified, accepted and adopted Macrae's figure as his own. (b) Whether or not the sum awarded by Merkel, J. was the true loss and damage sustained by the applicants in that case and therefore the true loss and damage sustained by Nescor and Nelson. (c) Reliance by Nescor and Nelson subsequently [by Miba Pty Ltd and Mr and Mrs Vittouris] on Macrae's figure (d) The veracity and credibility of Macrae, Nelson and the Vittouris'. (e) What in fact caused [Miba Pty Ltd and Mr and Mrs Vittouris] to enter into the franchise agreement." In my view, it is not clear that if there is any divergence in respect of the above matters, it would not constitute any more than a conflict of fact. This is not sufficient for the Court to hold that an Anshun estoppel should apply, especially on the application of a Dey and General Steel test. In Anshun it was clear that judgment sought by the Port of Melbourne Authority in the second proceeding was inconsistent with the judgment in the first proceeding. In the first proceeding, the judgment gave Anshun the right to recover by way of contribution, from the Port of Melbourne Authority, some 90 per cent of the damages and costs, while the Port of Melbourne Authority was given the right to recover, by way of contribution, 10 per cent of the damages and costs from Anshun. In the second proceeding, the Port of Melbourne Authority sought to recover 100 per cent of damages and costs from Anshun by way of a contractual indemnity. The Port of Melbourne Authority was thus seeking, in the second proceeding, the declaration of rights in respect of the same transaction which were in direct conflict with the rights declared by the Court in the first proceeding. In the present matter, it is not clear that such a conflict will arise. In the Miba proceeding, rights were declared in respect of a particular transaction between, on one side, Miba and the Vittouris' and on the other side, Foodco/Nescor and Mr Nelson. In the present proceeding, Foodco/Nescor and Mr Nelson seek the declaration of certain rights against Northgan and Mr Macrae. It is not apparent that any declaration of rights in a proceeding between, on the one side, Miba and the Vittouris' and on the other side Foodco/Nescor and Mr Nelson, could conflict with a judgment declaring rights between, on the one side Foodco/Nescor and Mr Nelson and, on the other side, Northgan and Mr Macrae. Consequently, I am not convinced that an Anshun estoppel against the applicants, arises in the present matter. Certainly, it is at least arguable that no Anshun estoppel arises. See Dey, General Steel and Webster. ABUSE OF PROCESS POINT Mr Bick submitted, in alternative to reliance on Anshun estoppel, that the proceeding constituted an abuse of process. He relied on the Rogers v The Queen (1994) 181 CLR 251 in support of this submission. In Rogers, the accused had been tried in 1989 on four counts of armed robbery . The prosecution sought to rely on admissions made in certain records of interview. On a voir dire hearing the trial judge rejected the tender of the records on the ground of voluntariness. The accused was subsequently acquitted on two of the four counts. In 1992 the accused was tried on a further eight counts of armed robbery. In the 1992 trial, the prosecution sought to rely on one of the records of interview which had been ruled inadmissible in the 1989 trial. The High Court held that the tender of the record of interview in the 1992 trial was an abuse of process, as it constituted a direct challenge to the 1989 determination. In Rogers, central to the reasoning of the majority's holding on the abuse of process, was the need to avoid the "scandal of conflicting decisions". See Rogers at 280. For the reasons that I have given above in rejecting the extension of an Anshun estoppel on the ground of conflicting judgments, I am not prepared to hold that the present proceeding constitutes an abuse of process. I am even less prepared to do so having regard to the high test established for the striking out of an application based on principles established in Dey and General Steel. LIMITATION OF ACTIONS POINT Mr Bick submitted that the applicant's application is out of time. He submitted that Nescor/ Foodco and Mr Nelson's causes of action in tort accrued more than six years prior to the issue of the proceedings and are barred by s 5 of the Limitation of Actions Act 1958 (Vict) and further that the causes of action under the TP Act and FT Act accrued more than three years prior to the issue of the present proceeding and consequently are barred by s 82(2) of the TP Act and s 37(2) of the FT Act. The loss or damage sought by Nescor/Foodco and Mr Nelson are set out in paragraph 15 of the statement of claim which relevantly provides as follows: "15 As a result of the matters aforesaid the Applicants have suffered loss and damage. Particulars (a) On 20 February 1997, Merkel J. pronounced judgment in favour of the Vittouris' and their company Miba Pty Ltd against the Applicants in proceeding no VG 433/92 for the sum of $225, 000 plus interest and costs. (b) Legal and incidental costs involved in defending no. VG 433/92 (c) Rent and outgoings including the holding deposit in an amount of $ 4, 271.46 (d) ..." Mr Bick submitted that the pleadings in the statement of claim are such that the first loss and damage which Nescor/Foodco and Mr Nelson seek to recover, is the payment of a holding deposit of $4271 enclosed in a letter dated 31 May 1990 whereby, as the pleadings identify, Nescor/Foodco and Mr Nelson accepted an offer from Northgan and Mr Macrae for a food court lease at Northland. That acceptance, in the letter of 31 May 1990, is pleaded to have been induced by a negligent and false statement by Mr Macrae and Northgan to the effect that the average food court operator at Northland achieved sales in the order of $ 10 000 per week. Mr Bick referred to the fact that this proceeding was commenced on 3 July 1997, which is more than six years after 31 May 1990, the later date when loss or damage could be first said to have flowed Consequently, he submitted that the proceeding is time barred. Mr Davis conceded that reliance on the $10 000 representation resulted in loss or damage in 1990 when Foodco/Nescor entered into the lease. Given this concession, I am prepared to strike out paragraph 15 (c) of the statement of claim. However, Mr Davis argued that there was a separate and distinct act of reliance, when Foodco/Nescor passed on the representation to Miba and Vittouris'. Further, he submitted that there was no loss or damage flowing from the separate reliance on the representation, until Merkel J gave judgment on 20 February 1997 in favour of Miba and the Vittouris' in the Miba proceeding. If this submission regarding a separate reliance giving rise to loss or damage on 20 February 1997 was upheld, the claims made in respect of the TP Act, FT Act and in tort would be well within time. In my view, Mr Davis' submission regarding separate reliance is arguable. It is arguable in respect of the claims brought under the TP Act and FT Act and further, it is arguable in respect of the claim brought in tort, especially having regard to the elements of an action in misrepresentation. It is inappropriate therefore to strike out the application as being statute barred given the approach which Dey and General Steel dictate that the Court take to the matter. The loss claimed in paragraph 15(b), namely the legal and incidental costs incurred in defending the Miba proceeding is a contentious issue. An obvious question arises about the impact of this aspect of the claimed loss on the limitation point. If the act of passing on the representation to Miba and the Vittouris' could be characterised as a separate and distinct act of reliance, could not Nescor/Foodco and Mr Nelson's loss or damage be said to first flow from that reliance when legal and incidental costs were incurred in defending the Miba proceeding which was filed in 1992 ? Although the claim in tort would not be barred if loss or damage was first said to flow in 1992 (a six year limitation period applying to such actions under the Limitation of Actions Act 1958 (Vict)), the claims under s 52 of the TP Act and s 11 of the FT Act would be considerably out of time. Mr Davis conceded that his submission on the limitation point was largely directed to the loss or damage sought in paragraph 15(a) of the statement of claim, rather than the legal and incidental costs in defending the Miba proceeding. However, he submitted that the onus was on Mr Bick to establish when those legal and incidental costs had been incurred, a task which Mr Bick understandably had not embarked upon. Mr Davis referred the Court to Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 where Mason CJ, Dawson J, Gaudron J and McHugh J said at 533: "We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of case. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question." The above passage is also apposite to the present matter. There was no evidence filed in support of the strike out application as to when legal and incidental costs in the Miba proceeding were incurred by Foodco/Nescor and Mr Nelson. This is explicable in the context where there has yet been no discovery between the parties. To paraphrase the relevant passage in Wardley cited above , at this interlocutory stage in the proceeding, insufficient is known by the Court of the damage or loss sustained, especially in respect of the legal and incidental costs, to confidently determine whether, the limitation period applies. My conclusion in this regard, combined with my previous finding of an arguable case in respect of a separate and distinct act of reliance by Nescor/Foodco and Mr Nelson by the passing on of the $10 000 representation to Miba and the Vittouris', does not give me sufficient grounds, on the application of Dey and General Steel, to strike out the claims on limitations grounds, other than as to paragraph 15(c) of the statement of claim. . ORDERS The appropriate order in the circumstances is as follows: 1. Paragraph 15(c) of the Statement of Claim be struck out. 2. The respondents' Notice of Motion be otherwise dismissed. 3. The respondents pay the applicants' costs of the Notice of Motion. 4. The matter be adjourned for directions on 22 June 1998 at 10:15am. The parties are encouraged to give consideration to the filing of consent orders for the further conduct of the matter under O35 r10, to obviate the necessity to attend Court on 22 June 1998, if possible. I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall Associate: Dated: 21 May 1998 Counsel for the Applicant: Mr J Davis Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: Mr P J Bick Solicitor for the Respondent: Arnold Bloch Leibler Date of Hearing: 11 March 1998, 8 - 9 April 1998 Date of Judgment: 21 May 1998