Supreme Court New South Wales Medium Neutral Citation: Sidgreaves v State of New South Wales (No 2) [2021] NSWSC 934 Hearing dates: 27 July 2021 Date of orders: 30 July 2021 Decision date: 30 July 2021 Jurisdiction: Common Law Before: Davies J Decision: 1. The proposed further amended consolidated statement of claim filed 7 December 2020 is struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) 2. The defendant is given leave to file a further amended statement of claim. Catchwords: CIVIL PROCEDURE – pleadings – form and content of pleadings – strike-out application for amended statement of claim pursuant to UCPR r 14.28 – prior iteration of statement of claim struck out pursuant to r 14.28 – where failure to plead claim of vicarious liability – where failure to plead claim for pure economic loss - where plaintiffs wish to make claims beyond what appears in statement of claim – where plaintiffs must amend pleading – statement of claim struck out – plaintiff given leave to re-plead NEGLIGENCE – vicarious liability – persons in service of Crown – where plaintiff submitted that State of NSW vicariously liable for acts and omissions of Chief Commissioner of State Revenue and the Independent Liquor and Gaming Authority – where no pleading of material facts to show how State is vicariously liable NEGLIGENCE – duty of care – pure economic loss –necessity to plead facts regarding assumed responsibility of alleged tortfeasor and vulnerability of plaintiffs Legislation Cited: Annual Reports (Departments) Act 1985 (NSW) Annual Reports (Statutory Bodies) Act 1984 (NSW) Civil Procedure Act 2005 (NSW) ss 56, 57, 58 Crown Proceedings Act 1988 (NSW) s 5 Gaming and Liquor Administration Act 2007 (NSW) s 6 Liquor Act 2007 (NSW) ss 3, 45, 60 Gaming Machine Tax Act 2001 (NSW) s 7 State Records Act 1998 (NSW) s 10, 22 Taxation Administration Act 1996 (NSW) s 62 Uniform Civil Procedure Rules 2005 (NSW) r 14.28 Cases Cited: Anthony John Sidgreaves v R; AJS Hotel Management Pty Ltd v R [2016] NSWDC 81 Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36 CJD Equipment v A&C Constructions [2009] NSWSC 1362 Constantinidis v Kehagiadis (No 2) [2011] NSWSC 1226 NAKF v Minister for Immigration and Multicultural Indigenous Affairs (2003) 130 FCR 210; [2003] FCA 730 Papacostas v Chief Commissioner of State Revenue [2006] NSWADT 57 Ryan v Ann Street Holdings Pty Ltd (2006) QCA 217 Sidgreaves v State of New South Wales [2020] NSWSC 1460 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16 Texts Cited: Nil Category: Procedural rulings Parties: Anthony Sidgreaves (First Plaintiff) A.J. Holdings NSW Pty Ltd (Second Plaintiff) State of New South Wales (First Defendant) Chief Commissioner of State Revenue (Second Defendant) Independent Liquor & Gaming Authority (Third Defendant) Representation: Counsel: Anthony Sidgreaves (Plaintiffs) A Gerard (Defendants) Solicitors: Self-represented (Plaintiffs) Crown Solicitor's Office (Defendants) File Number(s): 2018/31750 Publication restriction: Nil Judgment 1. The first plaintiff held the liquor licence for premises called Tommy's Tavern ("the tavern") in Lismore from 2005 until 2016. He was the director of a company called AJS Hotel Management Pty Ltd which owned the business of the tavern. The land on which the tavern stood was owned by A.J. Holdings NSW Pty Ltd (the second plaintiff), a company of which the plaintiff was the sole director, and another company, Cumedo Pty Ltd, of which the plaintiff was one of two directors. 2. The plaintiffs have brought proceedings against the State of New South Wales ("the State"), the Chief Commissioner of State Revenue ("the Chief Commissioner") and the Independent Liquor & Gaming Authority ("ILGA"), claiming damages on the basis of acts and omissions on the part of the three defendants concerning his liquor licence in 2012 and 2013. Those entities are respectively, the first, second and third defendants. In general terms, the first plaintiff claims that his ability to sell the tavern in 2013 was effectively prevented by the defendants because they wrongfully claimed that he was liable for the payment of gaming tax for the final quarter of 2011. In those circumstances, ILGA refused to transfer the liquor licence to the purchaser, and the sale could not proceed. 3. The present proceedings have as their genesis proceedings commenced in the District Court on 30 January 2018 by the plaintiffs and proceedings commenced in this Court on 29 March 2018 by the plaintiffs. In 2019 the District Court proceedings were removed into this Court and consolidated with the existing proceedings in this Court. That resulted in an amended consolidated statement of claim filed on 10 May 2019 which was amended on 10 July 2019. That amended consolidated statement of claim was struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) by Ierace J in Sidgreaves v State of New South Wales [2020] NSWSC 1460 ("Sidgreaves No 1"). Leave was given to the plaintiffs to serve a proposed further amended statement of claim. The proposed further amended consolidated statement of claim was filed on 7 December 2020 ("the December 2020 statement of claim") 4. By a notice of motion filed 7 April 2021 the defendants seek to strike out the December 2020 statement of claim, alternatively, they seek orders that particulars be provided to identify paragraphs of that statement of claim in answer to a request for particulars served 18 December 2020. 5. The plaintiffs were legally represented until their solicitors filed a Notice of Intention of Ceasing to Act on 1 March 2021. The solicitors thereafter ceased to act. The first plaintiff appeared for himself, and was given leave to appear for the second plaintiff at the hearing of the notice of motion. I shall refer to the first plaintiff as Mr Sidgreaves. For present purposes, there is no need to distinguish between the two plaintiffs. 6. At the conclusion of the hearing of the notice of motion, when Mr Sidgreaves indicated that he did not seek to rely on the December 2020 statement of claim but wished to file a further amended statement of claim, I struck out the December 2020 statement of claim, and stood the proceedings over for a fortnight to give him the opportunity to retain new lawyers, as he said that he intended to do. Regardless of the statement by Mr Sidgreaves that he no longer wished to rely on the December 2020 statement of claim, I would in any event have struck out the pleading, for the reasons which now follow. 7. The factual background and the history of the proceedings are set out in Sidgreaves No 1, and will not be repeated here. The December 2020 statement of claim 1. To understand the issues raised with respect to the December 2020 statement of claim it is necessary to set it out in full. It pleads: 1. The Second Plaintiff is a corporation and entitled to sue in its own name. 2. At all material times the Second Plaintiff was the joint registered proprietor of the land known as 75 Molesworth Street, Lismore ("the Property"). 3. At all material times liquor licence no. LIQ114540 ("the Liquor Licence") was associated with the premises from which operated a business known as Tommy's Tavern in Lismore ("Tommy's Tavern"). 4. At no material time up to and including 31 December 2011 or early January 2012 did either of the Plaintiffs operate Tommy's Tavern. 5. From and about early 2012 and thereafter, the First and/or Second Plaintiffs or an entity or entities associated with the First and/or Second Plaintiffs operated the business known as Tommy's Tavern in Lismore. 6. At all material times the First Defendant and/or the Second Defendant was entitled to collect tax ("gaming tax") pursuant to the provisions of the Gaming Machine Tax Act 2001. 7. At all material times in 2012 and 2013 the Third Defendant or alternatively the First Defendant was, by operation of the Liquor Act 2007 ("the Act"), the body with authority to approve the grant or transfer of liquor licences to persons in New South Wales. 8. From and about early 2012, and thereafter until late 2013, the First and Second Plaintiffs made application to one or both of the First and Third Defendants to have a liquor licence transferred or granted to one or other or both of the Plaintiffs and/or to other entities in respect of Tommy's Tavern pursuant to the provisions of the the Act. 9. In considering whether to authorise the transfer or grant of a liquor licence to either or both of the Plaintiffs or to any other person or entity between 2012 and 2013 the First Defendant, or alternatively the Third Defendant, was under a duty to the Plaintiffs: (i) not to act in bad faith or for an improper purpose; (ii) to determine whether to grant or transfer a licence having regard to relevant matters only, being those matters specified in section 45 of the Act; (iii) not to have regard to matters other than those specified in section 45 of the Act; (iv) not to have regard to matters irrelevant to the objects of the Act as specified in section 3 of the Act. Particulars of Duty of Care The duty of care owed to the First Plaintiff and to the Second Plaintiff arose from the following facts: (a) that the First Defendant and/or the Third Defendant were aware that the right of any person, including the First Plaintiff and the Second Plaintiff, to trade lawfully as the operator of licensed premises and to sell and supply liquor for profit, depended upon the person being the holder of a liquor licence; (b) that the First Defendant and/or the Third Defendant had a policy of not authorising the transfer of liquor licences when there remained a liability for the payment of gaming tax in respect of licensed premises; (c) the implementation of the said policy by the Third Defendant may have deleterious effects upon the Plaintiffs; (d) that the Third Defendant assumed responsibility for the consequences of the said policy including any inability by the Plaintiffs to sell the business of Tommy's Tavern and/or the premises from which Tommy's Tavern operated; (e) that the Plaintiffs were vulnerable in so far as there were no steps which they could take, or could reasonably take, to protect themselves from the implementation of the policy by the Third Defendant. 10. From about early 2012 and at various times thereafter up to and including 2013, the First Defendant and/or the Second Defendant represented to the Third Defendant that the Plaintiffs and a company associated with the Plaintiffs known as Cumedo Pty Ltd were liable to pay gaming tax in respect of the operation of Tommy's Tavern up to and including 31 December 2011 or early January 2012 in circumstances where none of the First Plaintiff, the Second Plaintiff or Cumedo Pty Ltd was so liable and where, at all material times, the First Plaintiff, the Second Plaintiff and Cumedo Pty Ltd disputed that they were so liable to pay the said gaming tax. Particulars of representations known to the Plaintiffs Email communications between Eric Blazek of the Office of State Revenue and Peter Wicks of the Third Defendant dated 2 February 2012. 11. The representations were made negligently and in bad faith or for an improper purpose in circumstances where the First Defendant and/or the Second Defendant were under a duty of care to the First Plaintiff and to the Second Plaintiff: (i) not to advise the Third Defendant of any alleged liability in the First Plaintiff, the Second Plaintiff or Cumedo Pty Ltd as pleaded in paragraph 10 hereof; alternatively (ii) not to communicate any such advice to the Third Defendant if such advice was, or may be, incorrect or deceptive or misleading. Particulars of Duty of Care The duty of care owed to the First Plaintiff and to the Second Plaintiff arose from the following facts: (i) that the First Defendant and/or the Second Defendant were aware that the right of any person, including the First Plaintiff and the Second Plaintiff, to trade lawfully as the operator of licensed premises and to sell and supply liquor for profit, depended upon the person being the holder of a liquor licence; (ii) that the First Defendant and/or the Second Defendant were aware that the Third Defendant had a policy of not authorising the transfer of liquor licences when there remained a liability for the payment of gaming tax in respect of licensed premises; (iii) that the implementation of the said policy by the Third Defendant may have deleterious effects upon the Plaintiffs; (iv) that in making the representations pleaded the First Defendant and/or the Second Defendant assumed responsibility for the likely consequences flowing from the representations, in particular in respect of any representation which was false, including any inability by the Plaintiffs to sell the business of Tommy's Tavern and/or the premises from which Tommy's Tavern operated; (v) that the Plaintiffs were vulnerable in so far as there were no steps which they could take, or could reasonably take, to protect themselves from the consequences of the representations and the implementation of the policy by the Third Defendant. Particulars of Bad Faith or Improper Purpose (i) The representations were made for the improper purpose of putting pressure upon the Plaintiffs to make payment of the claimed gaming tax. (ii) It formed no part, or no necessary or reasonable part, of the functions of the First Defendant and/or the Second Defendant to inform the Third Defendant of claimed outstanding liabilities for gaming tax, in particular in circumstances where: (a) such claimed outstanding liabilities were in dispute; and (b) the Third Defendant had authority to determine whether a liquor licence might be granted or transferred. Particulars of Negligence The representations were made negligently in that: (i) none of the First Plaintiff, the Second Plaintiff and/or Cumedo Pty Ltd was at law liable for the payment of the claimed gaming tax; and/or (ii) the First and/or the Second Defendants had no sufficient basis for holding the view that the First Plaintiff, the Second Plaintiff and/or Cumedo Pty Ltd was at law liable for the payment of the claimed gaming tax; (iii) further, it formed no part, or no necessary or reasonable part, of the functions of the First Defendant and/or the Second Defendant to inform the Third Defendant of claimed outstanding liabilities for gaming tax, when: (a) such claimed outstanding liabilities were in dispute; and (b) the Third Defendant had authority to determine whether a liquor licence might be granted or transferred. 12. By or about no later than August 2012 the First and/or the Second and/or the Third Defendants were aware, or ought to have been aware: (i) that the said representations were incorrect, or alternatively misleading or deceptive; and (ii) that none of the Plaintiffs nor Cumedo Pty Ltd was liable for the said gaming tax; or alternatively (iii) that none of the Plaintiffs nor Cumedo Pty Ltd was likely to be liable for the said gaming tax; or in the further alternative (iv) that the Plaintiffs and Cumedo Pty Ltd may not be liable, for the said gaming tax. Particulars The Defendants, and each of them, were apprised of the facts: (a) that none of the Plaintiffs and/or Cumedo Pty Ltd had been the holder of the said liquor licence as at 31 December 2011; (b) that the law was that, unless a person or entity was the holder of the said liquor licence as at 31 December 2011, that person or entity was not primarily liable for the payment of gaming tax. 13. Between about early 2012 and thereafter until late 2013 either or both of the First and Third Defendants neglected, failed and/or refused to approve the transfer of, or grant to one or other or both of the Plaintiffs or to any other person or entity, a liquor licence as alleged in respect of Tommy's Tavern. 14. In so neglecting, failing and/or refusing to grant to one or other or both of the Plaintiffs a liquor licence as alleged in respect of Tommy's Tavern or authorise a transfer of such license, the First and/or Third Defendants acted in bad faith. Particulars of Bad Faith (i) The actions of the First and/or Third Defendants were directed to putting Improper pressure on the Plaintiffs to make payment of the claimed gaming tax. (ii) The Plaintiffs repeat the particulars to paragraph 12 hereinabove. 15. Further, in neglecting, failing and/or refusing to grant or authorise the transfer of such licence by regard to disputed gaming tax, the First Defendant and/or the Third Defendant had regard to matters irrelevant to the objects of the Act. 16. In so doing the First and/or the Third Defendants breached their duties to the Plaintiffs as specified in paragraph 9 above. 17. At all material times in and after August 2012 the First and/or the Second and Third Defendants were aware, or ought to have been aware, that the said gaming tax was not the responsibility of the Plaintiffs and Cumedo Pty Ltd, or was not likely to be the responsibility of the Plaintiffs and Cumedo Pty Ltd, or that the Plaintiffs and Cumedo Pty Ltd may not be liable for payment of the said gaming tax. 18. Notwithstanding the matters alleged in paragraph 17, the First Defendant and/or the Second Defendant continued to represent to the Third Defendant that the Plaintiffs and Cumedo Pty Ltd were liable to pay gaming tax in respect of the operation of Tommy's Tavern for the period up to and including 31 December 2011 or early January 2012. 19. In the alternative to paragraph 18, the First Defendant and/or the Second Defendant were under a duty to the Plaintiffs to correct their misrepresentations to the Third Defendant. Particulars The Plaintiffs repeats the particulars pleaded in paragraph 12 above. 20. In breach of the duty pleaded in paragraph 19 hereof, the First Defendant and/or the Second Defendant did not inform the Third Defendant: (i) that the said representations were incorrect, or misleading or deceptive, or were likely to mislead or deceive the Third Defendant; and (ii) that none of the Plaintiffs nor Cumedo Pty Ltd was liable, or alternatively was likely to be liable, or alternatively that each of the Plaintiffs and Cumedo Pty Ltd may not be liable, for the said gaming tax. 21. In the alternative to the above, the Third Defendant was aware, or ought to have been aware, by no later than August 2012 that the said representations made to it were not correct and was, by reason of that knowledge, under a duty to not implement the policy hereinbefore referred to. Particulars of Knowledge The Plaintiffs repeat the particulars to paragraph 12 hereinabove. Particulars of Duty The Plaintiffs repeat the particulars to paragraph 9 hereinabove. 22. In the alternative to paragraph 13 hereof, in or after January 2012 the Third Defendant authorised the transfer of the liquor licence in respect of Tommy's Tavern to the First Plaintiff but otherwise neglected, failed and/or refused to approve the further transfer of, or grant to, any other person or entity a liquor licence as alleged in respect of Tommy's Tavern and the Plaintiffs otherwise repeat paragraphs 14 to 21 above. 23. In or about mid-2013 the Plaintiffs were attempting to negotiate a sale of the business of Tommy's Tavern and a lease of the premises (of which the Second Plaintiff was a part owner) at a price of approximately $2,500,000 which sale required the transfer of the Liquor Licence. 24. The availability of a liquor licence in respect of Tommy's Tavern for transfer to the purchaser of the business and the lessee of the premises (being one and the same person) was a critical feature of the proposed sale. 25. By reason of the matters set out hereinabove and in particular by reason of the representations pleaded in paragraph 10, the Third Defendant would not in about mid- 2013 or thereafter during 2013, authorise the transfer of the Liquor Licence to any person, including to the proposed purchaser of the business of Tommy's Tavern. Particulars (i) Between mid-2013 and about November 2013 the Plaintiffs made representations regarding, and sought approval for, the transfer of the Liquor Licence; (ii) The Third Defendant declined to give proper consideration to the transfer of the Liquor Licence; (iii) The Third Defendant declined to transfer the Liquor Licence 26. In consequence of the Third Defendant's refusal or failure to authorise the transfer of the Liquor Licence as pleaded in paragraph 22 the Plaintiffs were unable to conclude the sale and lease pleaded in paragraph 23 hereof 27. By reason of the above matters the Defendants have caused the Plaintiffs to suffer loss and damage. Particulars of Loss The Third Defendant's failure to authorise the grant or transfer of a liquor licence to the Plaintiffs or to some other person or entity caused the Plaintiffs to be unable to effect the said sale of the business of Tommy's Tavern and the lease of the premises. Submissions 1. Mr Gerard of counsel for the defendants relied particularly on three matters to justify the striking out of the statement of claim. The first concerned the position of the first defendant, the State, which was variously pleaded to be responsible, in the alternative to the second and third defendants, for various acts and omissions, and was said by Mr Sidgreaves to be vicariously liable for the second and third defendants. 2. The second matter arose from correspondence from Mr Sidgreaves in response to a request for particulars forwarded on behalf of the defendants on 18 December 2020. A first response was received to that request on 15 March 2021, and a subsequent response, after the filing of the notice of motion, was provided on 21 June 2021. It is apparent from both of those documents that what the plaintiffs seek to claim against the defendants is far broader than the present claim contained in the December 2020 statement of claim. It includes such matters as malicious prosecution, conspiracy and fraud. Further, the response of 21 June 2021 particularised damages extending far beyond the loss of the sale of the tavern pleaded in the December 2020 statement of claim. 3. Thirdly, the principal claim made in the December 2020 statement of claim was negligence, wherein it was asserted that the plaintiffs had suffered pure economic loss. The defendants submitted that the authorities established that there had to be clear pleading of material facts concerning the assumed responsibility of the defendants and the vulnerability of the plaintiffs. Reliance was placed particularly on what was said in CJD Equipment v A&C Constructions [2009] NSWSC 1362 at [245]. The defendants submitted that these matters were not pleaded as material facts, and that their attempts to obtain clarification about that claim in the request for particulars had not been fruitful. 4. Mr Sidgreaves submitted that the first defendant was vicariously liable for the second and third defendants' acts and omissions by reason of the provisions of the Annual Reports (Departments) Act 1985 (NSW) and, seemingly, the Annual Reports (Statutory Bodies) Act 1984 (NSW) (together the "Annual Reports Acts"). He submitted that the first-mentioned Act (and I inferred that he also meant the second-mentioned Act) required the statutory body to submit its report to the appropriate minister. In that way, he submitted the State was vicariously liable. He relied on s 10 of the State Records Act 1998 (NSW) to submit that the requirement of that section gave rise to a vicarious liability of the State. Mr Sidgreaves also drew attention to s 22 of the State Records Act, but he did not explain the relevance of that section to the issue of vicarious liability. Finally, he relied on the decision of the Queensland Court of Appeal in Ryan v Ann Street Holdings Pty Ltd [2006] QCA 217. 5. Mr Sidgreaves had difficulty in addressing in relation to the other two issues raised by the defendants. His focus was on the substantive issues in the matter and not on what had to be pleaded in a statement of claim. That difficulty was understandable, given that pleading of causes of action frequently involve questions of law and knowledge of legal procedure and pleading. Mr Sidgreaves was also in the position of effectively having to defend a pleading that had been prepared by his then legal advisors. Determination 1. Following the service of the December 2020 statement of claim, the Crown Solicitor's Office sought particulars in relation to the first and third issues now raised by Mr Gerard at the hearing of the notice of motion. The letter relevantly said: I now seek the further and better particulars of the PFACSC as follows. 1. As to paragraphs 26-27 please provide full particulars of the loss and damages claimed. I note that my review of your client's responses to similar requests for particulars to date indicate that the plaintiffs stated that they would particularise their loss as soon as particulars were "ascertained" or once "expert evidence" obtained (letter of 14 July 2018,14 September 2018). Having regard to the passage of time since these letters, please provide full particulars of any loss or damage claimed. 2. In respect of pleadings related to the "First Defendant" the State of NSW, it is noted that there is no allegation of vicarious liability, or any reference to parts of the Crown Proceedings Act 1988 which might explain why and how the First Defendant Is a proper Defendant to the proceedings. Further, the subject of the references to "First Defendant" is not clear, some paragraphs of the Statement of Claim refer to the "First Defendant" in the alternative to the Third Defendant, while some paragraphs refer to the "First Defendant" as an alternative entity to the Third Defendant. Please: (i) With respect, to each paragraph where the "First Defendant" is referred to, particularise the government agency, Minister or otherwise that is referred to, clarify the basis on which liability is alleged against the State of NSW generally. 3. As to the pleadings of assumed responsibility, which are included in the PFACSC as particulars 9(d), 11(iv) and cross-referenced in paragraphs 16 and 21: a) Please clarify whether these particulars should be read and treated by the Court as pleadings, having regard to the need to plead (rather than merely particularise) assumption of responsibility (Judgement at [78]; CJD Equipment v A&C Constructions [2009] NSWSC 1362 at [245]). b) Please confirm whether these pleadings and particulars are the limit of the plaintiff's pleadings as to assumption of responsibility and the alleged duty to avoid pure economic loss. c) To the extent that these particulars are pleadings, please particularise who assumed responsibility in the manner alleged, how they did so, and the date on which it is alleged that the Defendants assumed responsibility. 4. As to the pleadings of vulnerability, which are included in the PFACSC as particulars 9(e), 11(v) and cross-referenced in paragraphs 16 and 21: d) Please clarify whether these particulars should be read and treated by the Court as pleadings, having regard to the need to plead (rather than merely particularise) assumption of responsibility (Judgement at [78]; CJD Equipment v A&C Constructions [2009] NSWSC 1362 at [245]). e) Please confirm whether these pleadings and particulars are the limit of the plaintiff's pleadings as to vulnerability and the alleged duty to avoid pure economic loss. 1. The first response to this letter was a letter from Mr Sidgreaves of 15 March 2021. In answer to the request for particulars of the loss and damage, Mr Sidgreaves said that the full loss and damages claimed would be the subject of written and verbal submissions at any final hearing, because it was not possible to stipulate the amount of the loss without leading evidence. He said, however, that it would include the loss of sale and being forced to operate the business for four years against his will. He said it would also need to include the costs associated "with what can be shown as a malicious prosecution of the plaintiffs from 2012 onwards". That appeared to be a reference to a prosecution for breaches of the Liquor Act 2007 (NSW) which were heard in the Local Court, and ultimately went on appeal to the District Court: Anthony John Sidgreaves v R; AJS Hotel Management Pty Ltd v R [2016] NSWDC 81. 2. In the letter of 15 March 2021, Mr Sidgreaves also made reference to an employee of the third defendant, Mr Peter Wicks, who he said swore an affidavit on 17 February 2017 identifying the holder of the liquor licence for the tavern in December 2011. He asserted that Mr Wicks confirmed that the holder of the licence at that time was neither of the plaintiffs, and that the licensee was Mr Parrott, to whom the tavern had been sold in 2011. Mr Sidgreaves then asserted in his letter that Mr Wicks committed perjury, resulting in the misleading of the Attorney-General and this Court. The letter said that that matter concerning Mr Wicks needed to be before this Court. 3. On about 21 June 2021, Mr Sidgreaves sent a second response to the request for particulars dated 18 December 2020. That letter annexed two documents which were said to constitute the particulars of the claim being made. The first of those documents consisted of 49 paragraphs explaining the case the plaintiffs wanted to make. Amongst other things, the letter identified a notice of determination of 3 December 2012 in relation to gaming tax as being a false instrument. It also claimed that there were other fraudulent documents on the One Gov record which did not align with records said to have been supplied to this Court by the third defendant. What was set out in this letter suggested a conspiracy between the second and third defendants to prevent the plaintiffs being in the position where they could sell the tavern and transfer the licence to the purchaser. It asserted that another employee of the third defendant, being the manager of licensing, swore a false affidavit and committed perjury on 2 March 2017 before NCAT. 4. It should be mentioned, at this point, that Mr Sidgreaves had issued subpoenas to Mr Wicks, and to Mr Andrew Bowman, an employee of the second defendant, for the purpose, it would seem, of questioning them to suggest impropriety, presumably in relation to the matters mentioned. I refused leave for Mr Sidgreaves to call upon the subpoenas. The motion was concerned with the form of the pleading only. It was not concerned with establishing the truth of any of the plaintiffs' allegations. 5. The second document annexed to the letter contained 21 paragraphs detailing the damages sought to be claimed in the proceedings. Only the last of those paragraphs referred to the loss of sale of the business which paragraphs 26 and 27 of the December 2020 statement of claim alleged was the cause of the damage suffered by the plaintiffs. The other losses in the document included legal costs and associated matters relating to all of the proceedings concerned with the claim by the second defendant for the gaming tax, and a litigated claim by the plaintiffs for a refund of tax paid. 6. Paragraphs 4 and 5 of the letter purported to answer paragraphs 3 and 4 of the request for particulars concerning the pleading of assumed responsibility and vulnerability. Those paragraphs provided: 4) At paragraph 3 of your correspondence, you refer to a judgement of; CJD Equipment v A & C Constructions [2009] NSWSC162 at [245]. It is noted that this matter was put before the Equity Division of the Court, not the Common Law Division. It is not relevant in any way to these proceedings, as this case referred to a dispute between several entities which did not include the operations of a liquor licence, this is the central issue in the claim. It is submitted that there is no liability, assumed or otherwise, held by either of the Plaintiffs in this matter. Taken from S.19 (6) of the Gaming Machines Act 2001 states, "A person is not to be considered as having a financial interest in a hotel licence by reason only of being the owner of the hotel." 5) At paragraph 4 of your correspondence, as to the pleadings of vulnerability, which are cross referenced at paragraphs 16 and 21 of the PFACSC, documents will be produced by the Plaintiff to prove that the matter should have never progressed past the date of 31 August 2012 as there was a binding decision ignored by the Chief Commissioner for State Revenue (CCSR) resulting from a decision, ironically made on the 4th of May 2012 in the administration of Gaming Machine Tax Liability made against the second Plaintiff. This will also be the subject of further verbal submissions and the tendering of exhibits. 1. The material in these two letters of 15 March 2021 and 21 June 2021 from Mr Sidgreaves highlights the three matters raised by the defendants as to the adequacy of the December 2020 statement of claim. Vicarious liability 1. Throughout the December 2020 statement of claim, the plaintiffs plead that the second or third defendants, alternatively the first defendant, did things or owed a duty or made representations. There is no pleading of material facts to show how the first defendant is vicariously liable. Indeed, the pleading is to the effect that the first defendant is a tortfeasor, rather than an entity that is vicariously liable for the second and/or third defendants. There is no reference to s 5 of the Crown Proceedings Act 1988 (NSW). 2. It is not easy to understand, in any event, how the first defendant is vicariously liable for the second and third defendants. 3. Section 5 of the Crown Proceedings Act provides: 5 Crown may be sued (1) Any person, having or deeming himself, herself or itself to have any just claim or demand whatever against the Crown (not being a claim or demand against a statutory corporation representing the Crown) may bring civil proceedings against the Crown under the title "State of New South Wales" in any competent court. (2) Civil proceedings against the Crown shall be commenced in the same way, and the proceedings and rights of the parties in the case shall as nearly as possible be the same, and judgment and costs shall follow or may be awarded on either side, and shall bear interest, as in an ordinary case between subject and subject. 1. Section 6 of the Gaming and Liquor Administration Act 2007 (NSW) provides: 6 Constitution of Authority (1) There is constituted by this Act a corporation with the corporate name of the Independent Liquor and Gaming Authority. (2) The Authority is a NSW Government agency. (3) The Authority is, in the exercise of its functions, subject to the control and direction of the Minister, except in relation to the following - (a) the contents of any advice, report or recommendation given to the Minister, (b) decisions in relation to - (i) the granting, suspension or cancellation of a gaming or liquor licence, or (ii) the imposition, variation or revocation of conditions of a gaming or liquor licence, or (iii) the taking of disciplinary action under the gaming and liquor legislation. (4) Subsection (3)(b) is subject to any provision to the contrary in the gaming and liquor legislation. 1. Sections 45(1) and 60(1) of the Liquor Act 2007 (NSW) designate the third defendant as the body responsible for granting and transferring, respectively, a liquor licence. In that way, s 6(3)(b) of the Gaming and Liquor Administration Act makes clear that in those matters, ILGA is not subject tot eh control or direction of the minister. 2. Section 5 of the Crown Proceedings Act excludes a claim against the Crown where the claim is one against a statutory corporation representing the Crown. The third defendant is constituted a corporation by the Gaming and Liquor Administration Act. 3. In those circumstances, where the third defendant is a statutory corporation, and it is not subject to the control of the Minister for decisions in relation to the grant of a licence, it is difficult to see how the first defendant can be vicariously liable for the third defendant. It is also difficult to understand how the pleading against the first defendant as a tortfeasor itself can be maintained in relation to the matters pleaded. 4. Section 62 of the Taxation Administration Act 1996 (NSW) provides: 62 Legal proceedings in Chief Commissioner's name (1) Legal proceedings may be taken by or against the Chief Commissioner in the name "Chief Commissioner of State Revenue". (2) A person who takes legal proceedings in the name of the Chief Commissioner is taken to be authorised to take those proceedings, in the absence of evidence to the contrary. 1. Further, the fact that s 62 of the Taxation Administration Act enables legal proceedings to be taken against the Chief Commissioner points against there being a vicarious liability for his acts and omissions by the State of NSW. 2. Unless, on any further iteration of the statement of claim, there is a proper and maintainable pleading that the first defendant is either a tortfeasor (as is currently alleged) or is vicariously liable for the Chief Commissioner and ILGA, the first defendant ought to be dismissed from the proceedings. 3. Although in submissions Mr Sidgreaves asserts that the provisions of the Annual Reports Acts bring about the position that the first defendant is vicariously liable for the Chief Commissioner and ILGA, the plaintiffs do not plead that the first defendant is vicariously liable by reason of the obligation of ILGA (or the Chief Commissioner, for that matter) to lodge an annual report with the responsible minister. Nor is any basis shown for the submission that the requirement to lodge an annual report brings about a vicarious liability in the first defendant for what ILGA and the Chief Commissioner do, particularly in the face of the statutory provisions to which I have referred. 4. The reliance by the plaintiffs on the decision in Ryan is misplaced. That was a case involving the issue of whether an employer was liable for the criminal acts of an employee. Nothing said in that case is of assistance in determining the issues arising from the claim for vicarious liability of the first defendant for the second and third defendants. 5. This issue involves so many paragraphs of the December 2020 statement of claim that it alone justifies an order to strike it out. Claim for economic loss 1. In Sidgreaves (No 1) the defendants had drawn the Court's attention to what was said by the High Court in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36, and what had been said by McDougall J in CJD Equipment concerning pleading in economic loss claims. 2. In relation to that issue, Ierace J said at [78]: The plaintiffs admitted that they do contend economic loss and that they had not pleaded the material facts on which they rely, or identifying the assumption of responsibility by the defendants and their reliance and vulnerability. However, the plaintiffs countered that, in the circumstances of this case, it was arguably not appropriate to do so. I regard this explanation as unsatisfactory. The defendants are entitled to know the case against them, and as the ACSOC is presently drafted, in terms of economic loss being a basis of claim, the pleadings insufficiently inform the defendants of material facts on which the claim is based. 1. In the December 2020 statement of claim, paragraph 9 pleaded that the first defendant, or alternatively the third defendant, was under a duty to the plaintiffs not to act in bad faith or for an improper purpose, to determine whether to grant or transfer the licence, only to have regard to matters specified in s 45 of the Liquor Act, and not to have regard to matters irrelevant to the objects of the Act in s 3. Particulars were then provided asserting that the duty of care arose from a number of facts. Two of those facts were that the third defendant assumed responsibility for the consequences of its policy of not authorising the transfer of liquor licences where there was an outstanding liability for gaming tax, and that the plaintiffs were vulnerable insofar as there were no steps that they could reasonably take to protect themselves from the implementation of the policy. 2. Paragraph 11 pleaded that representations were made concerning the liability of the plaintiffs to pay the gaming tax. The pleading asserted that the representations were made negligently and in bad faith or for an improper purpose. The particulars were again said to be particulars of the duty of care, and repeated those particulars about the second defendant assuming responsibility, and the vulnerability of the plaintiffs. 3. In CJD Equipment, McDougall J, in reference to an article cited by counsel that was critical of the High Court's decision in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; [2004] HCA 16, said at [245]: There is however one point emerging out of the article that I do think is significant. The authors comment – in my view, correctly – that it is for a plaintiff, alleging a duty of care to avoid economic loss, to plead, particularise and prove vulnerability: specifically, why, in the circumstances of the particular case, it could not protect itself against the consequences of negligence on the part of the defendant. CJD's further amended list statement alleged the duties of care, but did not plead or particularise material facts going to vulnerability. 1. In a similar way, the plaintiffs have not pleaded the material facts going to vulnerability; nor have they pleaded facts concerning the assumption of liability as identified by French CJ in Brookfield at [22]. 2. The plaintiffs' submission that CDG is not relevant because it was a case in the Equity Division of the Court must be rejected. It is clear that McDougall J was concerned with the same sort of issue as has arisen in the present case. 3. The request for particulars served on 18 December 2020 took an entirely reasonable approach to the pleading in this regard. It simply asked the plaintiffs to clarify if the particulars should be read and treated by the court as pleadings, having regard to the need to plead, rather than merely particularise, assumption of responsibility and vulnerability. It may be observed from the plaintiffs' response on 21 June 2021 in paragraphs 4 and 5 (at [20] above), that the matter was not answered at all. 4. The pleading of negligence in the December 2020 statement of claim is entirely unsatisfactory in a number of respects. Matters of bad faith, improper purpose and irrelevant considerations are matters related to administrative law review of decisions. These matters are irrelevant in terms of a duty of care or a breach of a duty of care: NAKF v Minister for Immigration and Multicultural Indigenous Affairs (2003) 130 FCR 210; [2003] FCA 730 at [24]. 5. The defendants submitted, however, that no particular point is taken about those matters. The defendants also submitted that they were taking no point about issues of assumed responsibility and vulnerability being found in particulars rather than pleading. However, where the pleading is being struck out with leave to re-plead, I consider that the issue should be properly pleaded. 6. The plaintiffs' negligence claim has considerable difficulties because of what must be established if a duty of care is to be demonstrated for pure economic loss. In substance, the plaintiffs' case appears to be (at least so far as negligence is concerned) that the effect of the decision of NCAT on 11 August 2014 to uphold the plaintiff's appeal means that the second and/or third defendants were negligent in the approach they took to the transfer of the liquor licence because of their wrong view (as demonstrated by the Appeal Panel's decision) about s 7 of the Gaming Machine Tax Act 2001 (NSW). They seemingly rely, in that regard, on the decision of the Administrative Decisions Tribunal in Papacostas v Chief Commissioner of State Revenue [2006] NSWADT 57. That decision, however, did not raise the issue of what "due" meant in s 7(4) of that Act; rather, the judicial member assumed that the relevant date was the last date of the quarter. The case concerned apportionment in the relevant instalment quarter. 7. Be that as it may, the High Court in Brookfield reaffirmed what had been said in Woolcock Street Investments. The joint judgment of Crennan, Bell and Keane JJ in Brookfield said: [127] In Woolcock Street Investments [at [22]], Gleeson CJ, Gummow, Hayne and Heydon JJ accepted that the general rule of the common law is that damages for economic loss which is not consequential upon damage to person or property are not recoverable in negligence even if the loss is foreseeable. Their Honours said: "In Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad', the Court held that there were circumstances in which damages for economic loss were recoverable. In Caltex Oil, cases for recovery of economic loss were seen as being exceptions to a general rule, said to have been established in Cattle v Stockton Waterworks, that even if the loss was foreseeable, damages are not recoverable for economic loss which was not consequential upon injury to person or property." [128] In Woolcock Street Investments, the plurality noted that the exception to the general rule for negligent misstatement recognised in cases such as Mutual Life & Citizens' Assurance Co Ltd v Evatt and Shaddock & Associates Pty Ltd v Parramatta City Council [No 1] depends on proof of an assumption of responsibility by the defendant and known reliance on the defendant by the plaintiff. [129] In Woolcock Street Investments, Bryan v Maloney was explained as an example of a decision based on "notions of assumption of responsibility and known reliance." The plurality said that Bryan v Maloney: "depended upon considerations of assumption of responsibility, reliance, and proximity. Most importantly, [the principles that were engaged] depended upon equating the responsibilities which the builder owed to the first owner with those owed to a subsequent owner." [130] Further in this regard, the plurality in Woolcock Street Investments noted that in decisions such as Perre v Apand Pty Ltd, Hill v Van Erp and Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, the concept of vulnerability could be invoked as the rationale explaining the exceptions to the general rule. Vulnerability, in this field of discourse, is concerned not only with the reasonable foreseeability of loss if reasonable care is not taken by the defendant, but also, and importantly, with the inability of the plaintiff to take steps to protect itself from the risk of the loss. Their Honours held that the concept of vulnerability did not afford a basis for holding the defendant liable in that case because the facts of the case did: "not show that the appellant could not have protected itself against the economic loss it alleges it has suffered. It is agreed that no warranty of freedom from defect was included in the contract by which the appellant bought the land, and that there was no assignment to the appellant of any rights which the vendor may have had against third parties in respect of any claim for defects in the building. Those facts describe what did happen. They say nothing about what could have been done to cast on the respondents the burden of the economic consequences of any negligence by the respondents." [131] To similar effect McHugh J said: "The first owners and subsequent purchasers of commercial premises are usually sophisticated and often wealthy investors who are advised by competent solicitors, accountants, architects, engineers and valuers. In the absence of evidence, this Court must assume that the first owner of commercial premises is able to bargain for contractual remedies against the builder. It must also assume that a subsequent purchaser is able to bargain for contractual warranties from the vendor of such premises." 1. It is, therefore, necessary, as McDougall J had said in CDG, for there to be proper pleading of material facts concerning assumption of responsibility and, for that matter, known reliance on the defendant by the plaintiffs with the concept of vulnerability. 2. The reason it is important for the factual basis for those matters to be pleaded, is so that the defendants can respond to them in any defence. It can then be seen if there is an issue with regard to those matters. Particulars cannot be pleaded to. It does not seem to me that proper attention has been paid by the plaintiffs to what Ierace J said in that regard in Sidgreaves (No 1) at [78]. 3. The real difficulty for the plaintiffs is bringing their negligence claim within the principles articulated in Woolcock and Brookfield, where the complaint concerns a statutory authority's interpretation of a statute it has to administer. Concepts of assumption of responsibility, reliance and vulnerability are not concepts easily assimilated to the statutory context. Nevertheless, if that is the case the plaintiffs bring, it must be properly pleaded in accordance with those principles. Expansion of the case 1. Strictly speaking, an application to strike out a pleading pursuant to r 14.28 UCPR concerns itself with what is set out in that document. The concerns raised by the defendants under this heading are not related to what the plaintiffs have pleaded, but to what they have not pleaded. The concerns are said to arise from the fact that in two responses to a request for particulars of the pleading, the plaintiffs appear to take the view that they are entitled to run a case well outside the bounds of the pleading itself. In that way, the defendants say it is legitimate to raise that matter on the present application. 2. For two reasons, I agree with that submission. First, the plaintiffs are no longer represented by lawyers, and do not have the understanding a lawyer would or should have about principles which require a party to identify in a pleading the basis of the case they seek to prosecute. It is apparent that the plaintiffs wish to make claims well beyond what appear in the December 2020 statement of claim, and I agree with the defendants' concerns that the responses given to the request for particulars suggest that the plaintiffs consider that they have an entitlement to do so within the bounds of the existing pleading. 3. Secondly, as I noted earlier, Mr Sidgreaves informed me at the end of the hearing, that he does not wish to rely on the December 2020 statement of claim, but wishes to maintain claims based on what is set out in his two responses to the request for particulars. Effectively, therefore, the plaintiffs are seeking leave to file an amended statement of claim, regardless of the defects which the defendants point to, and which I have found, in the existing pleading. 4. In all the circumstances, the plaintiffs should not be precluded from broadening the basis of their claim, particularly when the proceedings have not evolved beyond the filing of the statement of claim. That means, necessarily, that they will not be proceeding on the existing pleading, but for the reasons I have given, they must amend so much of the existing pleading that they wish to pursue. In saying that, it must be said that it is very unsatisfactory that proceedings which commenced in this Court on 29 March 2018 are still at the stage where the plaintiffs are formulating their causes of action. That is the more unsatisfactory when, until March 2021 the plaintiffs appear to have had lawyers acting for them. 5. Although the defendants say that this is the seventh iteration of the statement of claim, that does not entirely take account of the fact that the claims commenced in a bifurcated manner in both the District Court and this Court. That said, the December 2020 statement of claim is the fourth attempt in this Court to put forward a proper pleading. The plaintiffs now seek to put forward a fifth iteration. 6. In those circumstances, the plaintiffs need to have regard to the provisions of ss 56, 57 and 58 of the Civil Procedure Act 2005 (NSW). A party cannot expect to be allowed to amend a pleading time and again. That is the more so, when it appears that matters identified in previous judgments have been ignored. An example of this concerns the claim in relation to the transfer of the licence from Mr Parrott to Mr Sidgreaves in 2012. In Sidgreaves No 1, Ierace J said at [67]: The plaintiffs acknowledged that they may have an issue in denying that the first licence transfer, which was to the first plaintiff, did not eventuate, and in any event clarified that only the failure of the second transfer application, made on 23 September 2013, allegedly resulted in an economic loss. 1. When I drew Mr Sidgreaves' attention to this passage, he accepted that the concession was correct. If that is so, the claim with regard to the 2012 transfer should not have been pleaded in the December 2020 statement of claim. I am not being critical of Mr Sidgreaves in relation to the form of the pleading, because it was prepared by the lawyers then acting for him. It is clear, however, that those lawyers who prepared this pleading have not had proper regard to what was said in Sidgreaves No 1. That is a matter relevant to the issue of leave to re-plead. 2. A point may be reached where no further leave will be given to amend: see, for example, Constantinidis v Kehagiadis (No 2) [2011] NSWSC 1226 at [16]. In the present case, what was said by Ierace J in Sidgreaves No 1 at [67], [78] and [79] is relevant to that consideration. However, particularly because Mr Sidgreaves appeared for himself but has indicated he will instruct new lawyers, I consider that he should be given one last opportunity to plead the claims he wishes to bring against the appropriate defendants. Directions will be made on the adjourned date to advance that process. Conclusion 1. For these reasons I ordered that the December 2020 statement of claim be struck out pursuant to r 14.28 UCPR. The plaintiff will be given leave to re-plead. The issue of costs is reserved to the adjourned date. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 July 2021