FEDERAL COURT OF AUSTRALIA Revian v Dasford Holdings Pty Ltd [2002] FCA 676 PRACTICE AND PROCEDURE - pleadings - representative action - shopping centre tenants - alleged representations inducing entry into shopping centre leases - misleading or deceptive conduct - fraud - negligent misstatement - statements of a promissory or predictive character - application of s 51A of Trade Practices Act- pleading of many non- material facts - inappropriate pleading of s 51A and implied representations as to statements relating to the future - failure to adequately falsify pleaded misrepresentations - failure to plead material facts supporting fraud and negligent misstatement - unconscionable conduct plea - reliance upon misrepresentations and subsequent conduct - voluminous statement of claim - sufficiently flawed that statement of claim as a whole should be struck out - leave to amend. Trade Practices Act 1974 (Cth) Revian v Dasford Holdings Pty Ltd [2001] FCA 777 cited KANDI LEE REVIAN (FOR AND ON BEHALF OF HERSELF AND AS JOINT TRUSTEE FOR THE GKDK TRUST AND AS A REPRESENTATIVE OF THE GROUP MEMBERS REFERRED TO IN THE APPLICATION) v DASFORD HOLDINGS PTY LTD and ORS W 101 of 2001 FRENCH J 28 MAY 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 101 of 2001 BETWEEN: KANDI LEE REVIAN (FOR AND ON BEHALF OF HERSELF AND AS JOINT TRUSTEE FOR THE GKDK TRUST AND AS A REPRESENTATIVE OF THE GROUP MEMBERS REFERRED TO IN THE APPLICATION) APPLICANT AND: KANDI LEE REVIAN AND GRANT WILLIAM THOMPSON AS TRUSTEES FOR THE GKDK TRUST CEASED TRADING AS LEADING EDGE VIDEO CLARKSON (SHOP 17) AND: FIRST GROUP MEMBER RICHARD DAWSON FIELDS AND MARY ANNE FIELDS AND ELSIE NOMINEES PTY LTD TRADING AS CLARKSON MINI MART (SHOP 10) SECOND GROUP MEMBER FREDERICK FRANCIS TREBLE CEASED TRADING AS FRED'S HARDWARE (SHOP 1) THIRD GROUP MEMBER SHAUN NICHOLAS AND ANASTASHIA MARGARITA NICHOLAS AND DEBBIE PTY LTD CEASED TRADING AS CLARKSON INDIAN AND CHINESE CUISINE (SHOP 3C) FOURTH GROUP MEMBER PAREE BUCHANAN CEASED TRADING AS SPICY THAI (SHOP 3B) FIFTH GROUP MEMBER PATRICK HINKSMAN AND ROBYN JEANETTE HINKSMAN CEASED TRADING AS THE BEST DRESSED IN SECONDS (SHOP 2) SIXTH GROUP MEMBER HAYDEE MARTINEZ AND ROBERTO MARTINEZ CEASED TRADING AS NACHOS AND PASTA (SHOP 3A) SEVENTH GROUP MEMBER PAUL FREDERICK HOUSTON AND LINDA ANN HOUSTON TRADING AS CLARKSON FISH SUPPLY (SHOP 11) EIGHTH GROUP MEMBER DASFORD HOLDINGS PTY LTD (ACN 051 224 438) FIRST RESPONDENT PENMAN HOLDINGS PTY LTD (ACN 009 203 105) SECOND RESPONDENT THURSTON JOHN PETER SAULSMAN THIRD RESPONDENT KEVIN ARTHUR POWNALL FOURTH RESPONDENT BRIAN JOSEPH BOWLER FIFTH RESPONDENT JUDGE: FRENCH J DATE OF ORDER: 28 MAY 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: On the Applicant's motion filed 1 August 2001: 1. As to paragraph 1, the motion that the applicant's amended statement of claim do stand as the statement of claim herein be dismissed and the statement of claim filed 9 April 2001 be struck out. 2. The applicant have leave to file a substituted application and statement of claim. 3. The applicant pay the respondents' costs of the motion. 4. The motion be otherwise adjourned to the next directions hearing. On the Fourth and Fifth Respondents' Motion filed 6 August 2001: 1. The motion is dismissed in so far as it seeks orders striking out the proceedings. 2. The question of security for costs stands for decision. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 101 of 2001 BETWEEN: KANDI LEE REVIAN (FOR AND ON BEHALF OF HERSELF AND AS JOINT TRUSTEE FOR THE GKDK TRUST AND AS A REPRESENTATIVE OF THE GROUP MEMBERS REFERRED TO IN THE APPLICATION) APPLICANT AND: KANDI LEE REVIAN AND GRANT WILLIAM THOMPSON AS TRUSTEES FOR THE GKDK TRUST CEASED TRADING AS LEADING EDGE VIDEO CLARKSON (SHOP 17) AND: FIRST GROUP MEMBER RICHARD DAWSON FIELDS AND MARY ANNE FIELDS AND ELSIE NOMINEES PTY LTD TRADING AS CLARKSON MINI MART (SHOP 10) SECOND GROUP MEMBER FREDERICK FRANCIS TREBLE CEASED TRADING AS FRED'S HARDWARE (SHOP 1) THIRD GROUP MEMBER SHAUN NICHOLAS AND ANASTASHIA MARGARITA NICHOLAS AND DEBBIE PTY LTD CEASED TRADING AS CLARKSON INDIAN AND CHINESE CUISINE (SHOP 3C) FOURTH GROUP MEMBER PAREE BUCHANAN CEASED TRADING AS SPICY THAI (SHOP 3B) FIFTH GROUP MEMBER PATRICK HINKSMAN AND ROBYN JEANETTE HINKSMAN CEASED TRADING AS THE BEST DRESSED IN SECONDS (SHOP 2) SIXTH GROUP MEMBER HAYDEE MARTINEZ AND ROBERTO MARTINEZ CEASED TRADING AS NACHOS AND PASTA (SHOP 3A) SEVENTH GROUP MEMBER PAUL FREDERICK HOUSTON AND LINDA ANN HOUSTON TRADING AS CLARKSON FISH SUPPLY (SHOP 11) EIGHTH GROUP MEMBER DASFORD HOLDINGS PTY LTD (ACN 051 224 438) FIRST RESPONDENT PENMAN HOLDINGS PTY LTD (ACN 009 203 105) SECOND RESPONDENT THURSTON JOHN PETER SAULSMAN THIRD RESPONDENT KEVIN ARTHUR POWNALL FOURTH RESPONDENT BRIAN JOSEPH BOWLER FIFTH RESPONDENT JUDGE: FRENCH J DATE: 28 MAY 2002 PLACE: PERTH REASONS FOR JUDGMENT ON PROPOSED AMENDED STATEMENT OF CLAIM Introduction 1 Between February 1998 and December 1998, Kandi Lee Revian and Grant William Thompson operated a video hire business known as Leading Edge Video Clarkson. The business was operated at premises in the Clarkson Neighbourhood Shopping Centre at the corner of Renshaw Boulevard and Ainsbury Parade, Clarkson. Revian and Thompson operated their business as trustees of the GKDK Trust. They also operated another business in Beechboro under the name Leading Edge Video Beechboro. 2 On 6 April 2001, Revian commenced representative proceedings in this Court on behalf of herself and Thompson and seven other tenants of the shopping centre. The action was brought against Dasford Holdings Pty Ltd ("Dasford"), owner of the shopping centre and against Penman Holdings Pty Ltd ("Penman") carrying on a real estate agency under the name Perth Residential Investments. Penman was said to have been employed at all material times as Dasford's leasing agent for the shopping centre. Also joined as respondents were Thurston Saulsman, a director of Dasford and Penman, Kevin Pownall who was a director of Dasford from 11 March 1991 to 28 January 2000 and Brian Bowler who was said to have been a director of Dasford from 11 March 1991 until 28 April 1999 and its secretary from 11 March 1991 until 16 March 2001. Each of the group members complains of misleading or deceptive conduct, negligent misstatement and deceit on the part of or attributable to Dasford and Penman inducing them to enter into leases for shops at the shopping centre. The directors are said to be accessorially involved. Certain of the respondents now submit that a proposed amended statement of claim does not disclose a reasonable cause of action and is defective in various respects, many of which would apply also to the statement of claim originally filed in the proceedings. This judgment concerns the applicant's motion to amend their statement of claim and incidentally raises the viability of the original statement of claim as it presently stands. Procedural History 3 The proceedings have been through some vicissitudes and delays not least because Ms Revian and the applicants she represents have, until recently, been without the benefit of legal representation. 4 On 24 April 2001, the applicant filed a motion seeking leave to file a substituted application and interlocutory relief to prevent the issue of notices of default or of termination of the shopping centre leases of the second and eighth group members. On 3 May, following certain undertakings given to the Court on behalf of Dasford and Mr Saulsman, Nicholson J adjourned the motion to a special appointment on 22 May 2001. On 17 May 2001, Dasford, Penman and Mr Saulsman filed a motion seeking to set aside the originating process. This was on the basis of non-compliance with the rules in relation to identification of the name of the person who prepared the pleading. 5 On 22 May 2001, Nicholson J made orders that the applicant file and serve an affidavit setting out the names and addresses of all persons arguably in the group irrespective of whether they opted in or out. He also required the respondents to file and serve the forms of orders they would seek in support of their motion to set aside the application. The motions which had been filed were reserved for judgment. The application for interim relief was adjourned to the next directions hearing. Following the filing of written submissions pursuant to directions given by Nicholson J on 30 May 2001, his Honour refused the respondents' motion of 17 May 2001 seeking to set aside the application and allowed so much of the applicant's motion as sought leave to substitute a new application. His Honour published reasons for that decision - Revian v Dasford Holdings Pty Ltd [2001] FCA 777. 6 A substituted application was filed on 6 July 2001 pursuant to the order of Nicholson J given on 27 June 2001. Twelve days later, on 18 July 2001, a "Reamended Application" was filed purportedly pursuant to the order of Nicholson J. At the same time an amended statement of claim again purportedly pursuant to that order was filed. On 1 August the applicant filed a motion seeking orders, inter alia, that the amended application and amended statement of claim do stand as the applicant's application and statement of claim. On 8 August, I made orders that the motion filed on 1 August 2001 be set down for hearing on 12 September 2001 and gave directions for the filing of submissions in relation to the strike out of the statement of claim. In the event those submissions were filed as attacks on the viability of the proposed amended statement of claim. On 6 September, Messrs Pownall and Bowler, who had previously been represented by solicitors, gave notice that they would thereafter be acting in person. Subsequently an administrator was appointed to both Dasford and Penman. Following the appointment of the administrator there were successive adjournments of the directions hearings over several months. 7 On 4 February 2002, orders were made adjourning the directions hearing to 4 April 2002 and directing the filing of any motion by the applicant for leave to proceed against Dasford and Penman and for the filing of affidavits and for any motions for security for costs. The question, outstanding in the motion of 1 August 2001, whether the statement of claim could be amended in accordance with the minute filed on 18 July 2001 and whether the original statement of claim could stand was to be heard at the adjourned directions hearing. Directions were also made for the filing of submissions. 8 In the event, the applicant engaged solicitors from 17 April 2002 and the directions hearing which had been relisted from 4 April 2002 to 19 April was adjourned to 23 April 2002. Argument on the proposed amended statement of claim proceeded on 23 April and was reserved for judgment until today. The motions for security for costs and for the joinder of a ninth group member were adjourned until today. 9 Against that background, which sets out some of the history of the matter, it is now necessary to consider the applicant's proposed amended statement of claim filed on 18 July 2001. The Proposed Amended Statement of Claim 10 The proposed amended statement of claim begins by reciting the identity of the various respondents, the ownership of the shopping centre land by Dasford and Penman's role as its leasing agent, as well as the offices of Messrs. Saulsman, Pownall and Bowler as directors (paras 1 to 16). 11 The pleading then turns to the purchase of the shopping centre by Dasford and its pre-existing zoning for a medical centre development (pars 17-18), the history of an application for zoning approval for shopping centre purposes and the obtaining of that approval (pars 19-22). None of these matters in pars 17 to 22 appears to bear any relevance to any cause of action. 12 Dasford's application for mortgage finance from Blackburne and Dixon Pty Ltd in or during 1996 is pleaded. There follow a number of paragraphs relating to that application and representations said to have been made by Dasford to Blackburne and Dixon and which were said to be false (pars 23-28). Counsel for the applicant conceded that these matters are not to be pursued. They do not in any event disclose any cause of action against any of the respondents. There are then further paragraphs concerning the development of the shopping centre project including the strata titling of retail premises, the construction of the shopping centre, the engagement of Penman to lease tenancies on behalf of Dasford and Penman's engagement in the management of the shopping centre on behalf of Dasford initially under the name Perth Residential Investments and thereafter Realty Executives Joondalup. It is then said that on a date unknown, Penman was replaced as managing agent of the shopping centre by Ron Farris Real Estate Pty Ltd (pars 29-33). None of these matters, apart from Dasford's engagement of Penman to arrange leases in the shopping centre on its behalf, have any bearing on the causes of action later pleaded. The pleading of Penman's status as leasing agent is already set up in par 9. 13 Paragraph 34 of the amended statement of claim pleads that at all times material to the action the contraventions of the Trade Practices Act 1974 (Cth) by Dasford involved a contravention by Saulsman and/or Pownall and/or Bowler. Extensive particulars of this accessorial involvement are then set out. Some of the particulars concern the creation of a Development Schedule for the purposes of leasing tenancies at the shopping centre, the possibility of having a newsagency tenancy and a pharmacy in the shopping centre, representations to Blackburne and Dixon as to the asset positions of the directors and various other matters. The paragraph anticipates accessorial involvement in contraventions that either await identification or arise out of representations to Blackburne and Dixon which are not pressed as giving rise to any cause of action in respect of which relief is claimed. In my opinion, the paragraph is embarrassing in that it raises, albeit via particulars, false issues and otherwise seeks to make a global allegation of accessorial involvement in whatever contraventions may be pleaded thereafter. In my opinion, none of the respondents should be expected to plead to an allegation in that general form. The same is true of par 35 which makes a similar assertion in relation to the accessorial involvement of Saulsman in contraventions alleged against Penman. On the basis that they disclose no reasonable cause of action and/or are embarrassing, I would not allow pars 17 to 35 inclusive of the proposed amended statement of claim to stand. 14 The statement of claim then deals with allegations of causes of action asserted by each of the group members against the respondents. The pleading of these causes of action in respect of each of the group members takes common form although there are some differences. I will deal in detail with the pleadings relating to the First Group Members, Revian and Thompson. 15 The pleading relating to the claims of Revian and Thompson occupies pars 36 to 88 inclusive of the proposed amended statement of claim. It recites the identity of Ms Revian and Mr Thompson, the nature and name of their business and that they operated out of shop 17 at the shopping centre under a written Deed of Lease dated 26 June 1998 (pars 36-38). They commenced trading in or during February 1998 and traded until December of that year when their business ceased operating and they abandoned the leased premises. This was said to be the result of ongoing and unsustainable business losses which also affected another video business they operated at Beechboro (par 39). They say that they were induced into entering their lease at the shopping centre by misleading or deceptive conduct, or conduct that was likely to mislead or deceive in contravention of s 52 of the Trade Practices Act (par 40). 16 The relevant conduct is then pleaded. Wright, an employee of Penman, is said to have met with Thompson in July 1997 and to have represented to him and to Revian that various of the shops were already leased, that there were offers to lease tenancies in particular stores and that a chemist would relocate to the shopping centre (pars 43 to 48). The representations are particularised as partly oral and partly in writing. In so far as they relate to future matters it is said that Revian and Thompson rely on s 51A of the Trade Practices Act (par 48 particular D). Complaint is made of these paragraphs that they do not contain material facts. Some elements of these paragraphs are strictly unnecessary but it could be said that others are sufficiently proximate to the representations alleged that they should not be regarded as failing to disclose a reasonable cause of action. I accept, however, the complaint about particular D in par 48 that it fails to identify which representations are said to relate to future matters. It is necessary for the applicant to commit herself to identifying precisely which representations she says attract the application of s 51A. Particular E sets up an implied representation that representations as to future matters could be relied upon. In my opinion this goes nowhere as an implied representation. It does little more than restate the primary representation. There is also a complaint that there is no particularisation of the date upon which the representations were made. It appears, however, from the pleading that it was in or about July 1997. More precise identification of the date could be obtained by a suitable request for particulars. 17 Paragraph 49 sets out particulars of falsity. The only facts alleged which falsify any of the representations in par 48 are those in par 49 particulars A, B and C. These particulars falsify representations that shops 12 and 16 were already leased and that 13 was precommitted. The asserted representation that a chemist would relocate to the shopping centre is not relevantly falsified by the statement that no chemist had ever relocated to the shopping centre. There must be some implied representation such as a representation that there were reasonable grounds for making the statement which is falsified by the absence of such grounds. The proof thereof may be aided by the application of s 51A. Having regard to the relationship between pars 48 and 49, the only parts of par 48 that can stand are 48(c), (d) and (e). The only particulars of falsity that could stand would be A, B and C of par 49. 18 Paragraphs 48(a), (b), (f) and (g) and particulars D and E of paragraph 48 could not stand. Paragraphs D and E of the particulars of falsity in paragraph 49 could not stand. 19 It is then said that Thompson told Wright that he and Revian would require retail outlets that would trade outside of normal business hours (par 50). Wright is said to have represented that the chemist that would relocate to the shopping centre would be open outside normal business hours as would a proposed medical centre (par 51). Particulars of these representations are given which include reliance on s 51A and an implied representation as to the reliability of statements about future matters. Neither of these particulars is sustainable. Falsifying facts are alleged in par 52, the only viable part of which is par 52 and the first part of particular A which alleges that no chemist at the time intended relocating to the shopping centre. Representations of a promissory or predictive nature are not falsified by the failure of the promise to be honoured or the prediction to come true. Only par 51(a) together with particulars A and par 52 with particular A could stand. 20 Further representations are then alleged by Wright to Thompson to the effect that the shopping centre was almost fully leased (pars 53-54). The inappropriate invocation is made again of s 51A. So too is the assertion that in so far as the representation related to a future matter, it contained an implied representation that it could be relied upon and was not a mere statement of opinion. The falsifying fact is said to be that the shopping centre was not almost fully leased (par 55). On this basis pars 53, 54 and its particular A and par 55 could stand. 21 Then it is said that as a result of the representations made by Wright, Thompson and Revian signed an offer to lease subject to obtaining finance (par 56). Their application for finance was rejected (pars 57-58). These paragraphs do not appear to go anywhere in terms of the cause of action. The ultimate entry by Thompson and Revian into the lease of shop 17, which is pleaded at par 69, is not connected by any other pleading to either the issue of finance or the offer to lease referred to in par 56. Paragraphs 56, 57 and 58 therefore cannot stand. 22 Further representations are pleaded. In late 1997, Wright is again said to have represented to Revian and Thompson that the shopping centre was almost fully leased (par 59). This is falsified by the statement that the shopping centre was not almost fully leased (par 60). There is a further representation pleaded that the shopping centre would be open during November 1997 (par 62). This is said to be falsified by the statement that the shopping centre was not open in November 1997 (par 63). It does not however do anything other than to indicate a promissory or predictive statement which was not fulfilled. That of itself does not give rise to misleading or deceptive conduct or misrepresentation without some pleaded implication. Paragraphs 61, 62 and 63 cannot stand. Nor can 64 which asserts baldly without reference to anything else that Thompson and Revian set out about purchasing stock and other equipment. 23 There is a representation said to have been made during October 1997 that the shopping centre would definitely be ready by November 1997. This is said to be falsified by the fact that it was not opened in November 1997. The paragraphs therefore connected with these representations cannot stand as they do not properly disclose a cause of action. This deals with pars 65 through to 68 inclusive. 24 Paragraph 69 asserts that as a consequence of misleading and deceptive conduct or conduct that was likely to mislead or deceive as set out in pars 48, 51, 54, 59, 62 and 67, Revian and Thompson were induced into entering a lease as trustees for the GKDK Trust with Dasford in respect of shop 17 and were induced into fitting out shop 17 and trading therefrom and that subsequently they suffered loss and damage. Damages are claimed under various heads, which it is not necessary to set out here. Then it is said that Dasford and/or Penman's conduct in making the various representations was in trade or commerce and was misleading or deceptive (par 70). The shopping centre was eventually only opened on Easter Saturday, 11 April 1998. It is pointed out by counsel for Saulsman that in par 38 it was asserted that Thompson and Revian operated the video store under a written Deed of Lease dated 26 June 1998. That is to say, as at the date they entered into the lease they were aware of the delay in the opening of the shopping centre. This does raise a question of causation. It may be that some other form of commitment had been made prior to the formal signing of the lease. It may be that they entered upon the premises and started trading on the understanding that a lease was to be signed and that in due course a lease was signed. However, as the submissions indicate, pars 38, 69 and 71 cannot stand together. Paragraph 72 alleges that Thompson and Revian actually commenced trading on 6 February 1998 in the partially completed shopping centre, but by then it was said they had been "deprived of the lucrative trading months of December 1997 and January 1998". It does not appear what cause of action this deprivation relates to. It cannot be based on misleading or deceptive conduct given that, on the pleaded facts, they would have been aware of the position of the shopping centre at that time. Trading conditions at the shopping centre were said to be "deplorable" (par 73). A rent free period expired in June 1998 (par 74). Neither of these paragraphs seems to have any relationship to any cause of action. Then it is said that in or about the second or third week of December, Thompson and Revian were obliged to abandon the leased premises as their business was losing $4,000 to $4,500 on an average week. 25 It is alleged that a number of the original tenants of the shopping centre all ceased trading within months of its opening (par 76). A replacement video hire business established in shop 17 by Dasford also ceased trading. These and other allegations pleaded in pars 76 through to 79 inclusive do not appear to disclose facts material to any cause of action and cannot stand. 26 A claim for "fraudulent and/or negligent misrepresentation" is set up and under that head it is simply stated, in par 81 of the amended statement of claim: "The First Group Member repeats the representations pleaded at paragraphs 48, 51, 54, 59, 62 and 67 above." It is plain that these paragraphs will not by themselves support claims of fraud or negligent misrepresentation. 27 There is a number of paragraphs (82 to 88) said to relate to Penman's negligence and breach of duty of care arising from its oral and written representations. The various representations already referred to pleaded in pars 48, 51, 54, 59, 62 and 67 are said to have been made by Penman negligently, and alternatively, knowingly or recklessly without caring whether they were true or not in order to induce Thompson and Revian or other potential tenants of the shopping centre to become tenants. This was said to have been done in circumstances where, had Thompson or Revian or any other prudent tenant known of the true state of the leasing of the shopping centre, Dasford would have been unable to obtain tenants and, alternatively, they would have been able to negotiate vastly superior terms in their leases. So a duty of care is set up and it is asserted that the representations were made without reasonable cause or knowing them to be false or recklessly not caring whether they were true or false. Here there is combined with the negligence plea an unparticularised allegation of deceit. 28 It is not necessary to traverse the detail of the pleadings made in respect of the other group members in what is a massive statement of claim indicated by the paragraph numbers allocated to those group members as follows: Second Group Member pars 89 to 163 Third Group Member pars 164 to 217 Fourth Group Member pars 218 to 271 Fifth Group Member pars 272 to 320 Sixth Group Member pars 321 to 365 Seventh Group Member pars 366 to 414 Eighth Group Member pars 415 to 446 Proposed Ninth Group Member pars 447 to 510 The essential model of the pleading for each is similar although there are individual differences. Thereafter there is a plea of a breach of s 51AC of the Trade Practices Act, it being asserted that the respondents have engaged in conduct in trade or commence that is in all the circumstances unconscionable with regard to the supply of services to the group members. So it is said that the respondents negotiated rental values for tenancies based upon the existence of key tenants such as a newsagency and a pharmacy and a high overall occupation rate for the shopping centre. They proceeded to insist on payment of the full amount of rental said to have been negotiated pursuant to material representations with regard to the rate of occupancy and the retail tenant mix of the shopping centre (par 515). In insisting upon payment of the full rental in spite of the misrepresentations and deplorable trading conditions, the respondents are said to have engaged in conduct in relation to the supply of services in trade or commerce that was in all the circumstances unconscionable. They have also engaged in such conduct by instituting action in the Local Court against various of the group members to pursue recovery against them under the leases and in refusing various requests for rent relief (pars 517 and 518). Other elements of unconscionable conduct are also pleaded which takes the number of paragraphs in the amended statement of claim to 524. 29 The model of the pleadings for each of the group members is similar to that adopted with respect to the First Group Members which I have dealt with in some detail. The deficiencies are similar. There is considerable pleading of facts which are simply not material. There is global reliance upon the application of s 51A without identifying the representations to which it applies. Representations as to future matters are said to imply representations that they can be relied upon. What that means and how it can be falsified is elusive. There is a logical discontinuity at least in respect of the First Group Members between the time of the representations, the alleged inducement and the date they entered into their lease. Such discontinuities have been identified in relation to other group members. Some statements as to future matters are falsified by reference to their non-occurrence without any proper pleading as to how that gives rise to a cause of action in misleading or deceptive conduct, fraud or negligent misstatement. 30 The plea as to unconscionable conduct in effect incorporates by reference the representation or conduct relied upon in support of the claims of misleading or deceptive conduct, fraud and negligent misstatement. Conclusion 31 It seems reasonably likely that viable causes of action will be disclosed in a properly pleaded statement of claim. The flaws in the proposed amended statement of claim are so pervasive however that it is pointless to engage in a blue pencil exercise with respect to what can stand and what cannot leaving the respondents to plead to its tattered remnants. In my opinion the amended statement of claim should not be allowed to stand as the statement of claim, the previous statement of claim, which has a similar structure, should be struck out and there should be leave to file a substituted statement of claim. Strike Out Motion by the Fourth and Fifth Respondents 32 Messrs Pownall and Bowler filed a motion on 6 March 2002 seeking an order that the Court strike out the applicant's action against them and, alternatively, that it strike out the entire action. In the alternative an order was sought that the Court require the applicant to provide security for costs. 33 The grounds upon which the strike out order in relation to the proceedings against the fourth and fifth respondents was sought concerned the sufficiency of the pleadings against them. I am not prepared at this stage to go further than already indicated. That is to say that the statement of claim as it stands will be struck out and the proposed amended statement of claim will not be permitted to stand in its place. The applicant will be permitted the further opportunity, now that legal representation is available, to properly formulate the Group's claims. 34 In so far as the motion sought to strike out the entire action, it was based on three grounds: (a) insufficient group members with valid claims for a class action; (b) the action was brought outside the Trade Practices Act limitation period; (c) it is an abuse of the Court process. 35 The first ground really relates to the deficiencies in the pleading and in particular the want of causal connection between the losses claimed by various of the group members and the causes of action which they plead. These matters have already been identified in relation to the statement of claim generally. They are complaints which support the striking out of the statement of claim but not the entire proceedings. 36 As to the second ground, in the ordinary course, time limitation questions are not to be determined on the pleadings. They can depend on issues of fact surrounding the time at which loss crystallises. I therefore would not propose to strike out the action on the basis that it is out of time. 37 The third ground alleged abuse of Court process largely because of the futility of the proceedings against the fourth and fifth respondents, they being impecunious. That is not a basis for treating the proceedings as an abuse of process nor would they be struck out on that basis. The motion of the fourth and fifth respondents, so far as it concerns the strike out of the action will be dismissed. It stands in relation to the question of security for costs which has yet to be determined. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French J. Associate: Dated: 28 May 2002 Counsel for the Applicant: Mr SG Leslie Solicitor for the Applicant: Wilson & Atkinson Counsel for the First and Second Respondents: No Appearance Counsel for the Third Respondent: Mr DM Meagher Solicitor for the Respondent: Meagher & Co Mr KA Pownall appeared on his own behalf. Mr BJ Bowler appeared on his own behalf. Date of Hearing: 23 April 2002 Date of Judgment: 28 May 2002