Re Burgundy Royale Investments Pty Limited; the Esplanade Pty Limited; Kota Nominees Pty Limited and Goldengloss Properties Limited v Jennings Construction Limited [1988] FCA 229 (7 July 1988)

FEDERAL COURT OF AUSTRALIA

Re: BURGUNDY ROYALE INVESTMENTS PTY LIMITED; THE ESPLANADE PTY LIMITED; KOTA
NOMINEES PTY LIMITED and GOLDENGLOSS PROPERTIES LIMITED
And: JENNINGS CONSTRUCTION LIMITED
No. VG414 of 1987
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Sweeney J.(1)

CATCHWORDS

Practice and Procedure - pleadings - application for summary dismissal of proceedings - application for striking out.

Federal Court Rules Order 11 Rule 23, Order 20 Rule 2, Order 11 Rule 16.

Trade Practices Act 1974 (Cth.) s.47(6), s.59(2) and s.87.

Dey v. Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62

General Steel Industries Inc. v. Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Global Sportsman Pty. Ltd. v. Mirror Newspapers Pty. Ltd. [1984] FCA 180; (1984) 2 FCR 82

HEARING

MELBOURNE
7:7:1988

Counsel for the applicants: Mr. T. Bathurst Q.C. Mr. D. Conti

Solicitor for the applicants: Clayton Utz

Counsel for the respondent: Mr. M. Tobias Q.C., Mr. B. Walker

Solicitor for the respondent: Freehill, Hollingdale and Page as agents for Morris, Fletcher and Cross.

ORDER

Paras 22, 23, 47 and 51 and the word "untrue" in para 51b, be struck out, in each case with leave to replead. Leave is also granted to replead para 31b, so that it will be consistent with para 51 as repleaded.

Note: Settlement and entry of orders is dealt with in Order 36

DECISION

The respondent moves the Court for orders that the proceedings by the applicants be dismissed summarily pursuant to Order 11 Rule 23 and Order 20 Rule 2, or that the whole of the Amended Application and the Further Amended Statement of Claim be struck out pursuant to Order 11 Rule 16, and for an order for costs.

2. The principles governing the consideration of a motion such as this are well known.

3. In Dey v.Victorian Railway Commissioners [1949] HCA 1; (1949) 78 CLR 62, Dixon J. said at 91:

"A case must be very clear indeed to justify the

summary intervention of the court to prevent a
plaintiff submitting his case for determination in
the appointed manner by the court with or without a
jury. The fact that a transaction is intricate may
not disentitle the court to examine a cause of
action alleged to grow out of it for the purpose of
seeing whether the proceeding amounts to an abuse
of process or is vexatious. But once it appears
that there is a real question to be determined
whether of fact or law and that the rights of the
parties depend upon it, then it is not competent
for the court to dismiss the action as frivolous
and vexatious and an abuse of process.".

4. In General Steel Industries Inc. v. Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, Barwick C.J. said at 129:

"It is sufficient for me to say that these cases
uniformly adhere to the view that the plaintiff
ought not to be denied access to the customary
tribunal which deals with actions of the kind he
brings, unless his lack of a cause of action - if
that be the ground on which the court is invited,
as in this case, to exercise its powers of summary
dismissal - is clearly demonstrated. The test to
be applied has been variously expressed; 'so
obviously untenable that it cannot possibly
succeed'; 'manifestly groundless'; 'so manifestly
faulty that it does not admit of argument';
'discloses a case which the court is satisfied
cannot succeed'; 'under no possibility can there be
a good cause of action'; 'be manifest that to allow
them', (the pleadings) 'to stand would involve
useless expense'.

At times the test has been put as high as saying
that the case must be so plain and obvious that the
court can say at once that the statement of claim,
even if proved, cannot succeed; or 'so manifest on
the view of the pleadings, merely reading through
them, that it is a case that does not admit of
reasonable argument'; 'so to speak apparent at a
glance'.

As I have said, some of these expressions occur in
cases in which the inherent jurisdiction was
invoked and others in cases founded on statutory
rules of court but although the material available
to the court in either type of case may be
different the need for exceptional caution in
exercising the power whether it be inherent or
under statutory rules is the same.".

5. At p.130, Barwick C.J. described the relevant test as being whether the plaintiff's case: "... is so clearly untenable that it cannot possibly succeed".

6. The material parts of the Amended Application, dated 8 April 1988 read as follows:

"On the grounds appearing in the accompanying Amended
Statement of Claim.

1. The First Applicant claims:

(a) an Order pursuant to Section 87 of the
Trade Practices Act 1974 declaring the
whole of the Agreement between it and the
Respondent dated 17 November 1984 ('the
Agreement") void ab initio;

(b) alternatively to (a) a declaration that
on the grounds appearing in paragraphs 43
to 45 (inclusive) of the accompanying
Amended Statement of Claim it is entitled
to avoid the Agreement; and

(c) an Order that the Respondent account to
the First Applicant for the sum of $5.5m
paid pursuant to the Agreement together
with interest thereon.

2. The First to Fourth Applicants claim:

(a) damages;

(b) interest on such damages;

(c) costs; and

(d) such further or other relief as the Court
deems fit.".

7. In the Further Amended Statement of Claim dated 30 May 1988 the applicants allege, amongst other things, that:

"6. On or about 9 April 1981 the First Applicant
entered into an agreement with the Northern
Territory of Australia and the Northern
Territory Development Corporation relating to
the construction and operation of a complex
comprising a theatre and performing space
(together called 'the Performing Arts Centre')
convention centre, international hotel,
concourse, public gallery and car park ('the
Hotel Complex'), the total complex being
described as The Darwin Centre. The said
Centre was to be constructed on the land
comprised in Lot 5335 Town of Darwin being the
whole of the land comprised in Crown Lease
Term No. 115 ('the land').

7. On 17 November 1982 the Northern Territory of
Australia leased the land to the First
Applicant for the purpose of construction of
The Darwin Centre.

8. In about July 1982 the First Applicant called
for tenders for the construction of The Darwin
Centre.

9. The tender documents provided:

(a) for the basis of payment to the
successful tenderer to be by way of lump
sum subject to adjustment for rise and
fall in cost; and

(b) the contract entered into pursuant to the
acceptance of any tender and all work
performed thereunder would be performed
in accordance with General Conditions of
Contract NPWC Edition 3 (1981) as varied
or modified by the tender documents.

PARTICULARS

The provisions were contained in the tender
documents issued by the First Applicant in
July 1982. These documents comprised the form
of tender, General Conditions of Contract NPWC
Edition 3 (1981) (including annexures and
variations thereto), the conditions of
tendering, the Schedule of Rates and Schedule
of Prices.

10. On or about 30 September 1982 the Respondent
submitted a lump sum tender for The Darwin
Centre in the sum of $32,800,000 subject to
the terms and conditions contained in the
tender form, the Respondent's letter to the
First Applicant of 30 September 1982 and the
attachments thereto.

PARTICULARS

Letter from the Respondent to the First
Applicant dated 30 September 1982 together
with attachments thereto.

11. On 17 November 1982 the First Applicant
accepted the tender of the Respondent subject
to the variations contained in its letter of
acceptance and the attachments thereto.

PARTICULARS

Letter dated 17 November 1982 from the First
Applicant to the Respondent and attachments
thereto.

12. On 18 November 1982 the Respondent accepted
the variations contained in the First
Applicant's letter of 17 November 1982 and
subsequently entered into possession of the
site.

PARTICULARS

On 18 November 1982 the Respondent
countersigned and delivered to the First
Applicant a copy of the letter of 17 November
1982. The Respondent entered into possession
of the site on or about 22 November 1982.

13. In the premises the Applicants say and the
fact is that on 18 November 1982 the
Respondent agreed with the First Applicant to
construct The Darwin Centre on the terms and
conditions contained in the Applicants' letter
of 17 November 1982 the documents incorporated
by reference therein and the attachments
thereto.

14. It was a term and conditon of the agreement
that practical completion of the Centre would
take place within 101 weeks from 17 November
1982, that is by the 16 November 1984.

PARTICULARS

Annexure C to the letter of 17 November 1982
from the First Applicant to the Respondent.
15. It was a further term and condition of the
agreement that in the event that practical
completion did not take place by 16 November
1984 the Respondent would pay to the First
Applicant by way of liquidated damages the sum
of $158,550 per week.

PARTICULARS

Annexure C to the letter of 17 November 1982.

16. It was a further term and condition of the
agreement that the Respondent would within 14
days of being requested to do so sign a formal
instrument of agreement.".

The respondent no longer presses an attack upon any of these paragraphs.

8. The Further Amended Statement of Claim continued as follows (the underlined portions being the sum of all the amendments made from time to time to the Statement of Claim):

"17.It was a further term and condition of the
agreement that if the Respondent failed to
sign the aforesaid formal instrument of
agreement within the time specified, the First
Applicant was entitled to suspend payment
under the agreement.

PARTICULARS

Clauses 6 & 44 of NPWC Edition 3 (1981).

17A.On or about 18 August 1983 the agreement was
varied to provide for the payment of interest
on unpaid progress payments at a rate of 15%.

PARTICULARS

The variation was oral and was made at a
meeting between Mr. Clark on behalf of the
First Applicant and Mr. Lambert on behalf of
the Respondent.".

9. The respondent's attack upon paragraph 17A is that it is superfluous, because no claim for relief depends upon it. It was rightly conceded that this attack was "a minor matter" and I do not propose to base any order upon it.

10. Paragraph 18(a), as it had been pleaded in the Amended Statement of Claim, read as follows:

"(a) that the Darwin Centre could be constructed
for a price in the vicinity of $36,000,000 adjusted
in accordance with the terms of the contract.".

In this form the Respondent challenged it on a number of grounds, which ceased to be relevant when the allegation was amended to read:

"(a) That if awarded the Tender it would construct
the Darwin Centre for a price in the vicinity of
$36,000,000.".

11. Paragraph 18A, added by the Further Amended Statement of Claim reads:

"18A. The representation referred to in paragraph
18(a) was:

(i) Express and made orally by the Respondent
by its servant or agent Mr. Satchell at a
meeting between him and Mr. V. Keneally
and Mr. Pascoe on behalf of the
Applicants on 4 October 1982.

(ii)Implied from

(a) The tender documents:

(b) The letter dated 4 October 1982 from
the Respondent to the First
Applicant:

(c) A statement by Mr. Satchell that a
further lump sum offer would be made
if the Respondent was granted the
contract. This statement was made
at a meeting on 11 October 1982.".

12. Counsel have agreed that the pleading of an express oral representation in paragraph 18A(i) is not open to attack, but the respondent maintained its challenge to sub-paragraph (ii).

13. Counsel for the applicant expressly disavowed any application to add the express representation contained in paragraph 18A(i) to the grounds of the implication set out in sub-paragraph (ii).

14. The tender documents set out the basis upon which interested parties were invited to tender. The letter dated 4 October 1982 read:

"As an alternative to our Tender for the above on
the 30th September, 1982, we offer our firm lump
sum price of $36,000,000-00 (Thirty Six Million
Dollars).

Rise and Fall to apply only to those nominated
suppliers and/or Sub-Contractors as approved by
yourselves.

For any further information, please direct all
enquiries to Myself.".

The letter was signed by Mr. Satchell.

15. The respondent contended that the statement in the letter "rise and fall to apply only to those nominated suppliers and/or Sub-Contractors as approved by yourselves" is in its terms inconsistent with a representation that the respondent would construct the Darwin Centre for a price in the vicinity of $36,000,000. The number of suppliers or sub-contractors to whose work rise and fall would apply was, it was said, left to the determination of the applicant. The statement said to have been made by Mr. Satchell one week later than the date of the letter that "a further lump sum offer would be made if the Respondent was granted the contract" did not, the Respondent submitted, lend any support to the suggested implication.

16. These submissions of the respondent are not without force, but it is arguable that at the trial a close study of the tender documents and a full knowledge of the circumstances surrounding the letter and the statement by Mr. Satchell may give rise to the implication pleaded. The facts relied upon to support it will be before the trial judge in any event. I would not strike out para 18A(ii).

17. Paragraph 18(b) and 18B read as follows:

"18(b) Between 30 September 1982 and 17 November
1982 the Respondent represented to the Applicants

(b) That the Respondent had formed a bona fide
opinion on reasonable grounds and after
application of due care and skill that it
could construct The Darwin Centre for the
price set out in its tender adjusted in
accordance with the contract annexed to the
tender documents.".

"18B.The representations referred to in paragraph 18(b)
were implied from:

(i) The tender documents:

(ii) The letter of 4 October 1982 from the
Respondent to the First Applicant.

(iii)From the statement by Mr. Satchell at a
meeting on 11 October 1982 that in preparing
the lump sum offer of 4 October 1982 the
Respondent had assessed the risk.".

18. Paragraph 18(b) had included, in the Amended Statement of Claim, the words "that the Darwin Centre could be constructed", which have now been replaced by the words "that it (the respondent) could construct the Darwin Centre". This amendment overcomes the objections to the earlier form of words which were encapsulated in the rhetorical question "constructed by whom?".

19. As paragraph 18B now stands, it relies upon the statement alleged in sub-para (iii), and the documents described in sub-paras (i) and (ii). In my opinion, one would not be justified in striking out paras 18(b) and 18B. It will be for later decision whether the alleged statement is established by evidence, and if so, the precise form in which it is found to have been made, and the inferences which should be drawn from it.

20. Paras 18(c) and 18C now read as follows:

"18(c) That the Respondent was able to complete the
contract in accordance with its terms within a
period of two years.".

"18C. The representation referred to in paragraph
18(c) was:

(i) Express and made by the Respondent by its
servant and agent Mr. Phillips to Mr. Keneally
and Mr. Pascoe on 26 October 1982.

(ii) Implied from the tender documents.".

21. The respondent complains that the relationship between sub-paragraphs (i) and (ii) remains obscure, as to whether they are alternative or cumulative. In the absence of the word "or", I would construe them as being cumulative. I see no reason to strike out the allegation in sub-paragraph (i) of the express representation.

22. It is not easy at the present stage of these proceedings to see how the representation referred to in paragraph 18(c) could be implied from the tender documents, but for reasons similar to those expressed in relation to para 18A(ii), I would not strike out para 18C(ii).

23. Paragraph 22 now reads:

"22.The representations pleaded in paragraph 18
were made in trade and commerce and were
untrue, misleading and deceptive and were made
without any or any adequate foundation in
that:

(a) The Darwin Centre was not constructed by
the Respondent for the sum of $36m but
the Respondent has sought to claim as the
cost of construction the sum of
approximately $73m.

(b) The Respondent was not able to complete
the project within two years but rather
did not complete it until 2 May 1986.".

24. The respondent submitted that paras 18 and 22 were not based upon a comparison of like with like. For all that appeared in the pleading, it submitted, there may have been such differences between the original 1982 project and the work as finally completed as to make it impossible to treat the difference between the "price in the vicinity of $36,000,000" (para 18(a)) and the sum of $73,000,000 which "the respondent has sought to claim as the cost of construction" (para 22(a)) as leading to the conclusion that the representations alleged in para 18 were, as claimed in para 22, "untrue misleading and deceptive and were made without any or any adequate foundation".

25. A similar attack was made upon the pleading in paras 18(c) of a representation that the respondent "was able to complete the contract in accordance with its terms within a period of two years" and the allegation in para 22(b) that "the respondent was not able to complete the project within two years but rather did not complete it until 2 May 1986" (para 22(b)).

26. In my opinion, these criticisms are well founded. I would strike out para 22(a), and, for similar reasons, para 22(b) and 23 which seeks to rely upon the matters pleaded in para 22 to found the allegation that the representations referred to in para 18 were made "with reckless indifference to their accuracy".

27. My impression is that the applicants desire to make the allegation that there was in fact a sufficient resemblance between the work required under the original contract and the work as finally completed to found the allegations in paras 22 and 23. I think that they should have an opportunity to replead paragraphs 22 and 23 and I give them leave to do so.

28. If para 23 is repleaded I would see no harm in the applicants putting the respondent on notice that "further and better particulars will be given after discovery and interrogatories".

29. It is to be observed that para 22(a) speaks of "the sum of $36m", whereas para 18(a) refers to "a price in the vicinity of $36,000,00.".

30. To be consistent with para 18, para 22 should have used the words "in the vicinity of $36,000,000".

31. In para 18(c) there is alleged a representation that "the Respondent was able to complete the contract in accordance with its terms within a period of two years". In para 22(b) it is alleged that "the Respondent was not able to complete the project within two years but rather did not complete it until 2 May 1986", which involves substituting the phrase "the project" for the phrase "the contract in accordance with its terms". When para 22 is repleaded, consideration will no doubt be given to those discrepancies.

32. In paras 25-28 the applicants seek to allege a cause of action under s.59(2) of the Trade Practices Act 1974, ("the Act") which provides as follows:

"59(1) ...

(2) Where a corporation, in trade or commerce,
invites, whether by advertisement or otherwise,
persons to engage or participate, or to offer or
apply to engage or participate, in a business
activity requiring the performance by the persons
concerned of work, or the investment of moneys by
the persons concerned and the performance by them
of work associated with the investment, the
corporation shall not make, with respect to the
profitability or risk or any other material aspect
of the business activity, a representation that is
false or misleading in a material particular.".

33. Para 25 reads as follows:

"25. The submission by the respondent of the tender
referred to in paragraph 10 of the Further Amended
Statement of Claim constituted an invitation by the
Respondent to the First Applicant in trade and
commerce to engage in or participate in a business
activity, namely the construction of the Darwin
Centre, requiring the investment of monies by the
First Applicant and the performance of work by the
First Applicant associated with the investment.

PARTICULARS OF WORK TO BE PERFORMED

(i) The appointment of the superintendent;

(ii) The provision of certain information (Clause
8.3 of the Standard Conditions of Contract);

(iii) The nomination of sub-contractors (Clause
10.1 of the Standard Conditions);

(iv) The supply of materials (Clause 17 of the
Standard Conditions).".

34. The respondent's criticism of the paragraph was that the tender cannot be an invitation to the firstnamed applicant to engage in or participate in a business activity. Nor did it require the investment of money and the performance of work by it associated with any "investment". The particularized examples of "work" did not, it was submitted, arguably amount to work within the meaning of s.59(2).

35. It may be doubted whether s.59(2) was specifically drafted to cover a situation such as that alleged in the present case. However, it appears to me to be arguable that its language is effective to do so, and I do not think it appropriate to strike out paragraphs 25-28.

In paras 30, 31 and 31A the applicants alleged:

"30. Further and in addition to paragraphs 5 to 29
hereof the Applicants say that on or about 24
July 1984 Westpac Banking Corporation
('Westpac') made an offer to advance to the
First Applicant the sum of $23,500,000 (the
Offer) to enable construction of the Centre to
be completed.

31. After Westpac made the Offer, Westpac
purported to vary the Offer and in particular
to make the grant of the loan conditional on
the First Applicant continuing to obtain from
the Respondent building services in relation
to The Darwin Centre.

PARTICULARS

Telex dated 29 October 1984 from Westpac to
the Applicants' solicitors, Messrs. Clark and
Partners.

31A. At all times between 29 October 1984 and 17
November 1984, Westpac made the said grant of
loan conditional upon the First Applicant
continuing to obtain such building services.".

36. When these three paragraphs are read together, there is, in my opinion, no justification for striking out para 31A.

37. Paragraph 38 reads as follows:

"The conduct of the Westpac Banking Corporation in
seeking to impose the condition referred to in
paragraphs 31 and 31A was in contravention of
S.47(6) of the Trade Practices Act 1974.".

38. Section 47(6) is in the following terms:

"(6) A corporation also engages in the practice of
exclusive dealing if the corporation -

(a) supplies, or offers to supply, goods or
services;

(b) supplies, or offers to supply, goods or
services at a particular price; or

(c) gives or allows, or offers to give or allow, a
discount, allowance, rebate or credit in
relation to the supply or proposed supply of
goods or services by the corporation,

on the condition that the person to whom the
corporation supplies or offers or proposes to
supply the goods or services or, if that person is
a body corporate, a body corporate related to that
body corporate will acquire goods or services of a
particular kind or description directly or
indirectly from another person.".

39. The respondent challenged para 38 on the ground that the firstnamed applicant had already acquired the respondent's building services before Westpac's alleged imposition of a condition. Having para 31A especially in mind, I do not consider this criticism to be valid. Likewise, I would not strike out para 39 which reads as follows:

"By reason of its conduct referred to in paragraphs
32, 33, 34, 35 and 36 the Respondent aided,
abetted, counselled or procured or induced the
contravention by Westpac Banking Corporation of
S.47(6) of Trade Practices Act 1984.".

40. In paras 46, 46B, 47, and 47A the applicants alleged:

"46. Further and in the alternative to paragraphs
30 and 45 the Applicants say on or about 15
November 1984 the Respondent represented to
the Applicants:

(a) that The Darwin Centre could be
constructed for a total cost of $45
million;

(b) that the construction of the Hotel
complex in The Darwin Centre would be
completed so as to allow formal opening
of the Hotel by 15 August 1985;

(c) that the practical completion date of the
Darwin Centre would take place by 5
November 1985.

46B.Acting upon and in reliance upon the
representations and induced thereby, the First
Applicant entered into the agreement referred
to in paragraph 34 hereof.

47. The representations pleaded in paragraph 46
were misleading, deceptive and untrue and were
made without any or any adequate foundation in
that:

(a) The actual total construction cost of the
Darwin Centre was not $45 million, but
the Respondent now claims $73 million in
respect thereof.

(b) The Respondent was not able to complete
the Hotel Complex so as to allow formal
opening of the Hotel Complex by 15 August
1985 and in fact the Hotel Complex was
not completed until March 1986.

(c) Practical completion did not occur by 5
November 1985 and in fact did not occur
until 2 May 1986.

47A.Additionally or alternatively to paragraph 47
the Applicants say:

(a) That by reason of the matters pleaded in
paragraph 47, and

(b) That by reason of the fact that the
Respondent had been in possession of the
site since the end of 1982 and was aware
of the cost and time required to complete
the Darwin Centre.

the said representations were made with
reckless indifference to their accuracy.".

41. The respondent challenged the words in para 47 "and were made without any or any adequate foundation of fact". In my opinion, the applicants are entitled to plead the allegation in these terms, which are based upon the words of the Full Court in Global Sportsman Pty. Ltd. v. Mirror Newspapers Pty. Ltd. [1984] FCA 180; (1984) 2 FCR 82 at p 88:

"The non-fulfilment of a promise when the time for
performance arrives does not of itself establish
that the promisor did not intend to perform it when
it was made or that the promisor's intention lacked
any, or any adequate, foundation.".

42. The respondent also contended that a discrepancy between prediction and outcome can never amount to such a case as that pleaded in para 47. In my opinion, the reasons which justify striking out para 22 justify a similar conclusion in relation to paras 47 and 47A. If the pleading were amended to allege a sufficient resemblance between the project in November 1984 and the work as finally completed this would become a question of fact, inference and opinion appropriate to be decided at the trial in the light of all the evidence. Accordingly, I would give leave to replead paras 47 and 47A.

43. In para 51 the applicants allege:

"51 Further and in the alternative to paragraphs
30 to 50, the Applicants say that on or about
14, 15 and 16 November 1984 the Respondent
represented to Westpac that it was entitled to
make a claim against the First Applicant for
extra costs incurred as a result of delays and
for legal costs and other costs associated
with the construction of the Darwin Centre,
namely:

(a) The sum of $200,000 for legal costs in
respect of proceedings between the First
Applicant and the Respondent.

(b) The sum of $300,000 purportedly being a
variation arising out of the introduction
in the Northern Territory of a 38 hour
week.

(c) The sum of $1.2m. such sum asserted by
Mr. Woods to be a productivity loss.

(d) The sum of $350,000 being a prospective
loss that Mr. Woods asserted the
Respondent would incur for delays due to
rain.".

44. The respondent criticises the allegation that it "represented to Westpac that it was entitled to make a claim against the First Applicant for extra costs" and submits that it should be expressed so as to convey an entitlement to succeed in such a claim. This criticism appears to be well founded and I would strike out para 51, with leave to replead.

45. In para 51B the applicants allege:

"51B.The representation pleaded in paragraph 51 was
made in trade and commerce and was untrue,
misleading and deceptive in that:

(a) Part of the claim referred to comprised
the sum of $200,000 for legal costs in
respect of proceedings between the First
Applicant and the Respondent for which
the Respondent was not entitled to make a
claim under the contract or otherwise.

(b) Part of the claim referred to comprised
the sum of $300,000 purportedly being a
variation arising out of the introduction
in the Northern Territory of a 38 hour
week, for which the Respondent was not
entitled to make a claim under the
contract or otherwise.

(c) Part of the claim referred to comprised
the sum of $1.2m., such sum purportedly
being a productivity loss, for which the
Respondent was not entitled to make a
claim under the contract or otherwise.

(d) Part of the claim referred to comprised
the sum of $350,000, purportedly being a
prospective loss that the Respondent
would incur for delay due to rain, for
which the Respondent was not entitled to
make a claim under the contract or
otherwise.".

46. Paragraph 51B, as it stands, is open to the criticism that it is not sufficient to allege that the representation was untrue, but the applicant must allege that it was untrue to the knowledge of the respondent at the time it was said to have been made. I would strike out the word "untrue" but give leave to the applicants to replead to allege untruth to the knowledge of the respondent at that time. As leave has been granted to replead paragraph 51, I would also give leave to replead para 51B so that the allegations of breach may be pleaded consistently with the repleaded paragraph 51.

47. To summarise, I would strike out paras 22, 23, 47 and 51 and the word "untrue" in para 51B,in each case with leave to replead. I would also grant leave to replead para 31B, so that it will be consistent with para 51 as repleaded.

48. For the convenience of the Court and the parties I direct that the applicants file and serve a Further Amended Statement of Claim, which may be headed "Further Amended Statement of Claim of July 1988". It would be helpful if, in addition to the underlining in the present Further Amended Statement of Claim, any words introduced after the delivery of these reasons be underlined in red.

49. After counsel have had an opportunity to read these reasons, I will hear them on the costs of the motion and the form of directions, including the question of the exchange of expert reports.