New South Wales Supreme Court CITATION : Street & 7 ors v Luna Park Sydney Pty Ltd & 3 ors [2006] NSWSC 533 HEARING DATE(S) : 12 May 2006 JURISDICTION : Equity Division JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 05/12/2006 DECISION : Refuse application for an order that para 4.7 of the Fourth Amended Statement of Claim be struck out. CATCHWORDS : PROCEDURE – Pleadings – Particulars - Summary dismissal and striking out – where allegation in claim is a possible explanation of circumstances but particulars so far provided are insufficient if proved to sustain allegation – where facts relevant to allegation are known to defendants but not to plaintiff – where plaintiff will require discovery to further particularise allegation - obligation of a party to supply particulars is only to supply the best particulars that they can give – party may be required to supplement particulars after discovery. LEGISLATION CITED : Uniform Civil Procedure Rules 2005 (NSW) CASES CITED : Cyril Leonard v Securities Trust Limited [1971] 3 All ER 1313; [1972] 1 WLR 80 Marshall v The Oceanic Steam Yachting Company (1885) 1 TLR 394 Joan Street (first plaintiff) Ros Dwyer (second plaintiff) Michael Hess (third plaintiff) Glen Eight Pty Ltd (fourth plaintiff) Susan Hesse (fifth plaintiff) PARTIES : Robert Simkin (sixth plaintiff) Glen Federick Billington (seventh plaintiff) Fiona Jeanette Billington (eighth plaintiff) Luna Park Sydney Pty Ltd (first defendant) Metro Edgley Pty Ltd (second defendant) Peter Hearne (third defendant) Warwick Doughty (fourth defendant) FILE NUMBER(S) : SC 2267/05 COUNSEL : T Alexis SC & P Sibtain (plaintiffs) G Parker SC & M Baird (defendants) SOLICITORS : Wise Legal (plaintiffs) Clayton Utz Lawyers (defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J Friday 12 May 2006 2267/05 Joan Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors JUDGMENT (ex tempore) 1 HIS HONOUR: Para 4.7 of the fourth amended Statement of Claim is as follows: At all material times after 21 November, 2002, the First Defendant has acted as the agent of the Second Defendant in relation to the 2002 Consent and the location and operation of the "Ranger", the "Spider" and the other thrill rides to the north of Coney Island at Luna Park. 2 The first and second defendants move for an order that para 4.7 be struck out. The application is made on the basis that, on the particulars so far provided, the allegation which it contains does not give rise to a triable issue. 3 The Statement of Claim alleges that, since 21 November 2002, 50 percent of the shares in the first defendant Luna Park Sydney have been owned by the second defendant Metro Edgley, and 34 percent of the shares in Luna Park Sydney have been owned by Metro on George Pty Limited, an entity controlled by the third and fourth defendants. 4 Metro Edgley acquired from the Luna Park Reserve Trust certain assets, including amusement rides located at Luna Park, and entered into an agreement for lease and sublease whereby the Trust granted or agreed to grant to Metro Edgley a lease and sublease of Luna Park upon certain terms and conditions. Metro Edgley then obtained development consents for the conduct of an amusement park on the Luna Park land. 5 The relevant consents having been obtained, Luna Park Sydney is now apparently performing the functions which it was originally envisaged would be performed by Metro Edgley pursuant to that consent. In December 2002, Metro Edgley, Luna Park Sydney and the Trust entered into an amended Deed of Agreement for lease and sublease, whereby the Trust agreed to grant the lease and sublease to Luna Park Sydney in substitution for Metro Edgley. A business plan dated September 2003, apparently issued by Luna Park Sydney, describes the project structure in the following terms: The redevelopment has been carried out by Metro Edgley Pty Limited while the operation of the Park will be managed by Luna Park Sydney Pty Limited. The landlord of the site is the Luna Park Reserve Trust which manages it on behalf of the NSW State Government. 6 The same document refers to a management contract, originally between Metro Edgley and Metro on George, which it says Metro Edgley has novated to Luna Park. A brief analysis of the description of the terms of the contract indicate that it is the interest of Metro Edgley that has been novated to Luna Park, so that whereas under the original agreement Metro on George would have managed the Park for Metro Edgley, under the novated agreement Metro on George will manage the Park for Luna Park. 7 The arrangements between Metro Edgley and Luna Park Sydney, by which Luna Park Sydney became the lessee and sublessee under the Deed of Agreement of December 2002, and by which the management agreement was novated to Luna Park Sydney, are at this stage not known, at least to me. 8 That leaves open a number of possibilities. It may be that there was an arm's length sale by Metro Edgley to Luna Park Sydney of its interest; it may be that Luna Park Sydney is, in effect, the subtenant of Metro Edgley; it may be that Luna Park Sydney is the trustee for Metro Edgley; and it may be that Luna Park Sydney is the agent of Metro Edgley. On what is known at the moment, at least to me, none of those possibilities is excluded, and each is a potential explanation of the facts alleged in the Statement of Claim. 9 The defendants have asked the plaintiffs to supply particulars of the agency which they allege. The particulars provided to this point are, as Mr Parker submits, essentially no more than that Luna Park Sydney is now implementing the development pursuant to the consents originally obtained by Metro Edgley, and that Metro Edgley retains an interest in the operation of the Park as a result of its substantial shareholding in Luna Park Sydney. When asked whether the relationship of agency alleged is created by contract or otherwise, the plaintiffs have responded that the agency is a contractual one, or is created by ratification, or by ostensible or by apparent authority. 10 I think Mr Parker is right in submitting that no case of ostensible authority is sufficiently particularised at this stage. Ostensible or apparent authority depends upon the agent being held out by the principal as having the principal's authority to act on its behalf. Particulars of such an agency would require identification of some holding out by the alleged principal of the agent as its authorised agent, and there appears to be nothing alleged in the pleading or in the particulars which, if proven, would establish that. To the contrary, as I understand it, the position, so far as the material before me shows, is that Metro Edgley is not alleged to have held out Luna Park Sydney as acting on its behalf, but has rather suggested that Luna Park Sydney is acting on its own behalf. 11 As Mr Parker submits, the fact that one party implements development pursuant to a consent which has been obtained by a predecessor is not evidence of authority to act on behalf of the predecessor. Indeed, often a consent is obtained in the name not of the principal but of an agent, such as an architect or builder, and the works are then implemented by the principal. The consent having been obtained in the name of the agent, it could not be suggested in such circumstances that the true owner or principal was the agent of the architect in implementing the consent. 12 Nor do I think that the reference to ratification assists the plaintiffs, for the same reason. The act of a successor when carrying out development pursuant to a consent obtained by a predecessor does not mean that the predecessor has adopted the successor's performance of the obligations and conditions imposed by the consent on its behalf. I do not think any question of ratification really arises. 13 That leaves the initial allegation, that there is a contractual agency. The plaintiffs say that without discovery they are unable to particularise whether the contract is oral or written or both, but say that the existence of a contract conferring authority on the first defendant may be inferred from the matters to which I have referred: essentially, the relationship between Metro Edgley and Luna Park Sydney; the circumstance that Luna Park Sydney is now performing the acts and functions which originally it was envisaged that Metro Edgley might perform; and the fact that Metro Edgley was and is said to remain the owner of various of the rides in question. 14 It may well be that, at a final hearing, those facts would be insufficient of themselves to establish that Luna Park Sydney was Metro Edgley's agent; but given the potential explanations to which I have referred for the basis upon which Luna Park Sydney has succeeded to the interests of Metro Edgley in the agreement for lease and sublease and the management agreement, they at least raise an arguable possibility that the explanation is that there is a relationship of agency. 15 The obligation of a party to supply particulars of an allegation which it pleads is only to supply the best particulars that they can give. It may be that once a party has given the best particulars they can, they will be required to supplement those particulars after discovery [Marshall v The Oceanic Steam Yachting Company (1885) 1 TLR 394; Cyril Leonard v Securities Trust Limited [1971] 3 All ER 1313; [1972] 1 WLR 80; and see Ritchie's Uniform Civil Procedure Rules 2005 (NSW), [15.1.25]. 16 In this case, the relationship and dealings between the second defendant and first defendant are known to those defendants, and are not known to the plaintiff. While it is not a sufficient answer to a request for particulars merely to respond "This is in the knowledge of the defendant", nonetheless the circumstance that the facts are in the knowledge of the defendants is relevant in deciding the extent to which an allegation has to be particularised and the extent to which it is reasonable to defer the provision of further particulars until after discovery has been had. 17 Given the relationship between the first and second defendants, and the plaintiffs' obvious inability to obtain details of the transactions between them without discovery, this is a case in which, in my opinion, it is appropriate to defer the provision of further particulars of the agency until that discovery has been given. 18 Of course, if those further particulars are not provided in due course, then the defendants will have a powerful case for resisting the admission at the hearing of evidence to prove the agency on any basis other than that already particularised. 19 But for those reasons, it seems to me that the present motion to have para 4.7 struck out should fail. 20 I refuse the application for an order that para 4.7 of the fourth amended Statement of Claim be struck out. 21 I order that the first and second defendants pay the plaintiff's costs of today. 22 I extend time for all defendants to file their defences to 4pm on 15 May 2006. In so doing, I do not foreclose the possibility that the third and fourth defendants might require further time. ********** 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.