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Federal Court of Australia |
Last Updated: 31 December 1998
PLEADINGS - Whether material facts pleaded - whether leave to file amended cross-claim should be granted - whether point of law should be pleaded.
Electricity (Pacific Power) Act 1950 (NSW), ss 5(1), 5(2).
Crown Proceedings Act 1988 (NSW), s 4.
Federal Court Rules, O 11, r 9, O 11, r 16(b), O 29.
BT Australia Pty Ltd v State of New South Wales (Judgment No 5) (unreported, 24 December 1997, Sackville J), cited.
BT Australia Pty Ltd v State of New South Wales (Judgment No 12) (unreported, 24 December 1997, Sackville J), cited.
BT Australia Pty Ltd v State of New South Wales (Judgment No 13) (unreported, 29 September 1998, Sackville J), cited.
Town Investments Ltd v Department of the Environment [1977] UKHL 2; [1978] AC 359, cited.
State Authorities Superannuation Board v Commissioner of State Taxation for the State of Western Australia [1996] HCA 32; (1997) 189 CLR 253, cited.
State Bank of New South Wales v Commonwealth Savings Bank of Australia [1986] HCA 62; (1986) 161 CLR 639, cited.
Bropho v State of Western Australia [1990] HCA 24; (1990) 171 CLR 1, cited.
Everett v Ribbands [1952] 2 QB 198, cited.
BT AUSTRALASIA PTY LTD v STATE OF NEW SOUTH WALES & TELSTRA
NG 572 OF 1995
JUDGMENT NO 14
SACKVILLE J
SYDNEY
23 DECEMBER 1998 IN THE FEDERAL COURT OF AUSTRALIA BETWEEN: BT AUSTRALASIA PTY LTD
APPLICANT
AND STATE OF NEW SOUTH WALES
FIRST RESPONDENT
TELSTRA CORPORATION LIMITED
SECOND RESPONDENT BETWEEN:
AND:
BETWEEN: CROSS CLAIMANT TO FIRST CROSS CLAIM
BT AUSTRALASIA PTY LIMITED
FIRST CROSS RESPONDENT TO FIRST CROSS CLAIM
BRITISH TELECOMMUNICATIONS PLC
SECOND CROSS RESPONDENT TO FIRST CROSS CLAIM
BT AUSTRALASIA PTY LIMITED
CROSS CLAIMANT TO SECOND CROSS CLAIM AND: TELSTRA CORPORATION LIMITED
CROSS RESPONDENT TO SECOND CROSS CLAIM BETWEEN: CROSS CLAIMANT TO THIRD CROSS CLAIM AND: CROSS RESPONDENT TO THIRD CROSS CLAIM BETWEEN: CROSS CLAIMANT TO FOURTH CROSS CLAIM AND: CROSS RESPONDENT TO FOURTH CROSS CLAIM BETWEEN: CROSS CLAIMANT TO FIFTH CROSS CLAIM AND: CROSS RESPONDENT TO FIFTH CROSS CLAIM BETWEEN: CROSS CLAIMANT TO SIXTH CROSS CLAIM AND: CROSS RESPONDENT TO SIXTH CROSS CLAIM BETWEEN: CROSS CLAIMANT TO SEVENTH CROSS CLAIM AND: CROSS RESPONDENT TO SEVENTH CROSS CLAIM BETWEEN: CROSS CLAIMANT TO EIGHTH CROSS CLAIM AND: CROSS RESPONDENT TO EIGHTH CROSS CLAIM JUDGE:
NEW SOUTH WALES DISTRICT REGISTRY NG 572 of 1995
STATE OF NEW SOUTH WALES
BRITISH TELECOMMUNICATIONS PLC
TELSTRA CORPORATION LIMITED
BRITISH TELECOMMUNICATIONS PLC
STATE OF NEW SOUTH WALES
STATE OF NEW SOUTH WALES
TELSTRA CORPORATION LIMITED
TELSTRA CORPORATION LIMITED
BT AUSTRALASIA PTY LIMITED
TELSTRA CORPORATION LIMITED
BRITISH TELECOMMUNICATIONS PLC
TELSTRA CORPORATION LIMITED
STATE OF NEW SOUTH WALES
SACKVILLE J PLACE: SYDNEY DATE: 23 DECEMBER 1998
THE COURT ORDERS THAT:
1. The State's motion for leave to file its proposed cross-claim be stood over until 3 February 1999.
2. The remaining motions be stood over until 3 February 1999.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 572 of 1995 |
|
BETWEEN: BT AUSTRALASIA PTY LTD APPLICANT
AND STATE OF NEW SOUTH WALES FIRST RESPONDENT
TELSTRA CORPORATION LIMITED SECOND RESPONDENT | |
|
BETWEEN:
AND:
BETWEEN: | STATE OF NEW SOUTH WALES
CROSS CLAIMANT TO FIRST CROSS CLAIM
BT AUSTRALASIA PTY LIMITED FIRST CROSS RESPONDENT TO FIRST CROSS CLAIM
BRITISH TELECOMMUNICATIONS PLC SECOND CROSS RESPONDENT TO FIRST CROSS CLAIM
BT AUSTRALASIA PTY LIMITED CROSS CLAIMANT TO SECOND CROSS CLAIM |
|
AND: |
TELSTRA CORPORATION LIMITED CROSS RESPONDENT TO SECOND CROSS CLAIM |
|
BETWEEN: | BRITISH TELECOMMUNICATIONS PLC
CROSS CLAIMANT TO THIRD CROSS CLAIM |
|
AND: | TELSTRA CORPORATION LIMITED
CROSS RESPONDENT TO THIRD CROSS CLAIM |
|
BETWEEN: | BRITISH TELECOMMUNICATIONS PLC
CROSS CLAIMANT TO FOURTH CROSS CLAIM |
|
AND: | STATE OF NEW SOUTH WALES
CROSS RESPONDENT TO FOURTH CROSS CLAIM |
|
BETWEEN: | STATE OF NEW SOUTH WALES
CROSS CLAIMANT TO FIFTH CROSS CLAIM |
|
AND: | TELSTRA CORPORATION LIMITED
CROSS RESPONDENT TO FIFTH CROSS CLAIM |
|
BETWEEN: | TELSTRA CORPORATION LIMITED
CROSS CLAIMANT TO SIXTH CROSS CLAIM |
|
AND: | BT AUSTRALASIA PTY LIMITED
CROSS RESPONDENT TO SIXTH CROSS CLAIM |
|
BETWEEN: | TELSTRA CORPORATION LIMITED
CROSS CLAIMANT TO SEVENTH CROSS CLAIM |
|
AND: | BRITISH TELECOMMUNICATIONS PLC
CROSS RESPONDENT TO SEVENTH CROSS CLAIM |
|
BETWEEN: | TELSTRA CORPORATION LIMITED
CROSS CLAIMANT TO EIGHTH CROSS CLAIM |
|
AND: | STATE OF NEW SOUTH WALES
CROSS RESPONDENT TO EIGHTH CROSS CLAIM |
|
JUDGE: | SACKVILLE J |
| PLACE: | SYDNEY |
| DATE: | 23 DECEMBER 1998 |
These reasons for judgment need to be read together with other interlocutory judgments in the proceedings. In particular, I do not repeat the background found in Judgment No 5 (BT Australasia Pty Ltd v State of New South Wales (unreported, 24 December 1997)) and Judgment No 13 (BT Australasia Pty Ltd v State of New South Wales (unreported, 29 September 1998)).
The Motions
Three motions have been heard together. Telstra and BT (which expression refers collectively to BTA and BT plc) have each filed motions seeking to dismiss or, alternatively, strike out portions of the State's cross-claim. The current version of the cross-claim, which seeks relief against BT, is entitled "Second Amended First Cross-Claim" (the "current cross-claim"). The State has also filed a motion. It seeks leave to file a Third Amended First Cross-Claim (the "proposed cross-claim"). The proposed cross-claim seeks to amend the current cross-claim in a number of important respects.
While all three motions were heard together, the parties agreed that, since the State wished to amend the current cross-claim, there was little point in addressing its alleged deficiencies. Accordingly, argument was confined to the contentions advanced by Telstra and BT, to the effect that there were defects in the proposed cross-claim and that the State should be denied leave to file the proposed cross-claim in its present form. Neither Telstra nor BT persisted with the submission that the State's cross-claim should be dismissed. The State did not persist with a contention that Telstra lacked standing to be heard in relation to the motions.
The controversy concerning the pleading in the proposed cross-claim relates to the State's claim for damages in respect of (to use a neutral phrase) the "Agencies" of the State. The pleading problems presented by the Agencies is by no means novel. For example, in Judgment No 5, although no strike out motion was then current, I expressed doubts as to the manner in which the State at that stage had pleaded its claim in relation to the Agencies.
The Proposed Cross-Claim
The proposed cross-claim employs the concepts of the "Government" and "Agencies". The opening paragraphs of the proposed cross claim are as follows:
"1. The Cross-Claimant (the "Government") is the State of New South Wales.
1A. The term "Agencies" when used herein has the meaning ascribed by the Second Amended Statement of Claim herein.
1B. The bodies in Part 1 of Schedule 1 ("Crown Agencies") are Agencies which are either emanations of the Crown in right of New South Wales or bodies that may sue in the name "State of New South Wales" under Section 4 of the Crown Proceedings Act 1988.
See Schedule 2."
"as representing itself and each and every Agency (within the meaning of clause 1.1 of the TDN Agreement) not otherwise liable to be sued in the name of the `State of New South Wales' pursuant to the Crown Proceedings Act 1988 including (without limiting the generality of the foregoing) the Agencies identified in the Schedule to this Statement of Claim."
The schedule to the statement of claim lists approximately 157 Agencies.
Schedule 1 to the proposed cross-claim, however, lists only 95 "Crown Agencies". All 95 are included in the larger number of Agencies specified in the schedule to the statement of claim. Many of the Crown Agencies do not have an independent legal existence. This is the case with Government Departments, such as the Department of School Education and the Department of State Transport. Some of the Crown Agencies, however, are statutory corporations, having a separate legal existence, For example, Pacific Power is a corporation and is, for the purposes of any Act, a statutory body representing the Crown: Electricity (Pacific Power) Act 1950 (NSW) ("Electricity Act 1988 "), s 5(1), (2).
An earlier version of the proposed cross-claim included within Schedule 1 a number of so-called "Funded Agencies". According to the State, these Agencies were not "emanations of the Crown", but merely received financial support from the State. The present version of the proposed cross-claim eliminates any reference to the Funded Agencies. This has narrowed further the scope of the argument concerning the pleadings.
Schedule 2 to the proposed cross-claim sets out the "Particulars of Crown Status". Schedule 2 specifies the statutory provisions relied on by the State to establish that each Agency is (as is alleged in par 1B) an emanation of the Crown in right of New South Wales or a body that may sue in the name `State of New South Wales' under s 4 of the Crown Proceedings Act (NSW) ("Crown Proceedings Act 1995 "). In the case of Pacific Power, for example, the particulars are as follows:
"Electricity Legislation Amendment Act (NSW), s 5; CPA [that is, Crown Proceedings Act 1988 ], s 4".
(It should be noted that the reference to s 5 of the 1995 Act appears to be an error. Section 3 and Schedule 1 of that Act amended the Electricity Commission Act 1950 (NSW), inter alia, by introducing s 5(1) and 5(2) into what is now the Electricity Act.)
The proposed cross-claim pleads documents and transactions leading up to the execution of the TDN Agreement, including false representations said to have been made by BTA. Paragraph 26A pleads that, in reliance on the representations
"the Government and BTA executed...the [TDN Agreement]...".
The cross-claim then pleads a number of terms of the TDN Agreement. Some of the pleaded terms relate to the Agencies. Thus, par 29 of the proposed cross-claim pleads as follows:
"It was a term of the TDN Agreement and BTA acknowledged that:
(a) the TDN would only be successful and profitable for BTA if it were able to market and promote effectively the TDN and the Services (herein as defined by the TDN Agreement) to the Government and if each of the Agencies utilised the Required Services as defined by the TDN Agreement;
(b) BTA would market and promote effectively the TDN and the services to Agencies.
(c) that it was necessary for BTA to ascertain and understand each Agency's telecommunications requirements and to promptly provide services required by each Agency.
...
(f) prior to connecting an Agency Site, BTA was required to enter into an Agency Service Agreement with the Agency.
(g) BTA was required to use all reasonable efforts as defined by the TDN Agreement to ensure that each Agency entered into an Agency Service Agreement."
Paragraph 42 pleads a number of implied terms of the TDN Agreement, including a term that BTA would "provide a proper and effective service to Agencies in respect of Agencies' telecommunications needs and requirements" (par 42(c)).
The cross-claim alleges that BTA breached the express and implied terms of the TDN Agreement in a number of important respects. These include a failure to market the TDN to Agencies (par 46), a failure to provide any or any adequate service to Agencies in respect of their telecommunications needs (par 48) and overcharging for certain classes of telephone calls and services (pars 49, 50).
The cross-claim pleads that each of the 95 Agencies listed in Schedule 1 (that is, the Crown Agencies) entered into an Agency Service Agreement ("ASA") on the dates specified (par 54A).
The State further alleges that BTA unlawfully repudiated the TDN Agreement on 1 August 1995 (par 79) and that, on the same date, BTA unlawfully repudiated the ASAs held with each of the Crown Agencies (par 80).
Paragraph 82 pleads that, in consequence of the unlawful repudiation of the TDN Agreement and the ASAs by BTA, the State engaged Telstra to provide certain services and incurred expenditure in procuring other replacement services and necessary equipment.
Paragraph 83 of the cross-claim draws together the allegations that BTA breached the TDN Agreement. It is alleged, inter alia, that by reason of the unlawful repudiation of the TDN Agreement and of the ASAs, BTA breached its obligations to the State under the dispute resolution provisions of the TDN Agreement (par 83(k)).
Paragraph 93 pleads that the Government has suffered damage. The identified heads of damage include the following:
"(b) Overcharging
(i) During the operation of the TDN Agreement and the Agency Service Agreements, BTA claimed and was paid by the Crown Agencies sums in excess of those properly chargeable and payable under the TDN Agreement and the Agency Services Agreements, in particular by reason of BTA more than the contractual price cap of 12% less than BCP.
...
(c) Failure to connect to CNH
(i) Losses arising from the failure of BTA to connect Crown Agencies to CNH including loss of opportunity to obtain services at a lower cost and loss of rebates from Telstra.
...
(d) Failure to connect to PN
(i) Losses arising from the failure of BTA to connect Crown Agencies to the PN including loss of the opportunity to obtain services at a lower cost.
...
(f) Loss of the benefit of the TDN Agreement for the residue of its Term
(i) In respect of Crown Agencies the Government has lost the opportunity to obtain services at a lower cost.
...
(i) Costs of connecting Crown Agencies to CNH and PN and costs of disconnecting them from the same."
Section 3 of the Crown Proceedings Act (NSW) ("Crown Proceedings Act 1995 ") defines "Crown" to mean
"the Crown in right of New South Wales, and includes:
(a) the Government of New South Wales; and
(b) a Minister of the Crown in right of New South Wales; and
(c) a statutory corporation, or other body, representing the Crown in right of New South Wales."
Section 4 provides as follows:
"The Crown may bring civil proceedings under the title `State of New South Wales' against any person in any competent court."
The State's Case Explained
Mr Douglas QC, who appeared with Mr Stack and Mr Muddle for the State, explained the case the State intended to put forward. He said that the pleadings were framed with the decision of the House of Lords in Town Investments Ltd v Department of the Environment [1977] UKHL 2; [1978] AC 359 in mind. One issue in that case was the identity of the tenant under a lease. The tenant was described in the following terms (at 378):
"...the [Secretary of State for the Environment] (hereinafter called `the lessee' which expression where the context so admits includes his successors and assigns) for and on behalf of Her Majesty...".
It was held that the tenant was the Crown, not the Secretary of State for the Environment (as the Court of Appeal had concluded). Lord Diplock, with whose speech Lords Simon and Edmund-Davies agreed, said this (at 380-381):
"My Lords, the fallacy in [the argument adopted by the Court of Appeal] is that it is not private law but public law that governs the relationships between Her Majesty acting in her political capacity, the government departments among which the work of Her Majesty's government is distributed, the ministers of the Crown in charge of the various departments and civil servants of all grades who are employed in those departments.
...
Where, as in the instant case, we are concerned with the legal nature of the exercise of executive powers of government, I believe that some of the more Athanasian-like features of the debate in your Lordships' House could have been eliminated if instead of speaking of `the Crown' we were to speak of `the government' - a term appropriate to embrace both collectively and individually all of the ministers of the Crown and parliamentary secretaries under whose direction the administrative work of government is carried on by the civil servants employed in the various government departments. It is through them that the executive powers of Her Majesty's government in the United Kingdom are exercised, sometimes in the more important administrative matters in Her Majesty's name, but most often under their official designation. Executive acts of government that are done by any of them are acts done by `the Crown' in the fictional sense in which that expression is now used in English public law.
The executive acts of government with which the instant case is concerned are the acceptance of grants from lessors who are private subjects of the Queen of leasehold interests in premises for use as government offices and the occupation of the premises by civil servants employed in the work of various government departments. The leases were executed under his official designation by the minister of the Crown in charge of the government department to which, for administrative and accounting purposes, there is entrusted the responsibility for acquiring and managing accommodation for civil servants employed in other government departments as well as that of which the minister himself is the official head. In my opinion, the tenant was the government acting through its appropriate member or, expressed in the term of art in public law, the tenant was the Crown."
Mr Douglas said that Town Investments stands for the proposition that the effect of a contract entered into by the Crown in right of a State is not to be determined by private law concepts. Where the State enters into a contract which benefits agencies which form part of the State, the State may claim damages for breach of the contract in respect of losses sustained by those agencies. This is so whether or not the agencies have a separate legal existence. Nor does the entitlement of the State to recover damages depend on whether the Executive Government has been required to provide financial support to the particular agency. As long as the agency, being part of the State (or, to use the language of Town Investments, being part of the Government), suffers loss in consequence of the breach of contract, the State may recover that loss. There is no need for the agency, if it has a separate legal existence, to be joined as a party to the proceedings.
Mr Douglas added the following comments in relation to the proposed cross-claim:
* The State does not intend to sue for breach of the ASAs. The only relevant contractual claim is one by the State for breach of the TDN Agreement.
* In the face of submissions that par 1B of the proposed cross-claim appears to imply that s 4 of the Crown Proceedings Act has a substantive effect, Mr Douglas conceded that the section is merely procedural in character. He also conceded that the reference in par 1B to s 4 of the Crown Proceedings Act, is unlikely to add anything material to the State's pleaded case.
* The only matters to be relied on in support of the State's claim that each of the Crown Agencies was part of the Government are those particularised in Schedule 2. For example, in the case of Pacific Power, the allegation that it was an "emanation of the Crown" rests entirely on s 5 of the Electricity Legislation Amendment Act (NSW) (presumably an error for s 3 of that Act) and s 4 of the Crown Proceedings Act.
* Paragraph 83(k) of the proposed cross-claim (which pleads that, by reason of its repudiation of the ASA's, BTA breached its obligations under the TDN Agreement), omits a reference to par 29 of the proposed cross-claim (which pleads a number of terms of the TDN Agreement). Mr Douglas accepted that the omission should be rectified.
The Submissions by Telstra and BT
Mr Bathurst QC, who appeared with Mr Street SC and Mr Moore for Telstra, made it clear that Telstra disputed the proposition on which much of the State's pleadings depended. He submitted that the State cannot recover damages sustained by a statutory corporation (whether or not that corporation is an "emanation of the Crown" or "part of the Crown"). Any action must be brought by the statutory corporation itself (albeit under the title "the State of New South Wales"), in reliance on a cause of action available to it. Mr Bathurst pointed out that in Town Investments, the lease was not taken in the name of a statutory corporation, but by the Secretary of the State for the Environment. Accordingly (so he submitted), the decision was simply not relevant to a claim by the State of New South Wales in respect of losses sustained by statutory corporations.
Mr Bathurst also submitted that a number of the statutory corporations included in Schedule 1 to the proposed cross-claim were not "emanations of the Crown". He referred to the observations of McHugh and Gummow JJ in State Authorities Superannuation Board v Commissioner of State Taxation for the State of Western Australia [1996] HCA 32; (1997) 189 CLR 253, concerning s 4(2) of the Public Authorities (Financial Arrangements) Act 1987 (NSW). That sub-section, which is in similar terms to s 5(2) of the Electricity Act, provided that the State Authorities Superannuation Board
"is, for the purposes of any Act, a statutory body representing the Crown".
Their Honours observed (at 280) that the effect of s 4(2)
"was not to render the [Board] the representative of the Crown for all purposes, still less to deem it to be the Crown".
According to Mr Bathurst, it followed that New South Wales legislation in similar form did not have the effect of making the relevant statutory corporation part of the Crown in right of New South Wales.
Having made these points, Mr Bathurst conceded that it was not appropriate to attempt to resolve the substantive questions in the context of the motions presently before the Court. He accordingly limited Telstra's argument to what he said were pleading deficiencies in the proposed cross-claim. Mr Lindsay SC for BT adopted Telstra's approach.
Mr Bathurst identified a number of what he said were pleading deficiencies in the proposed cross-claim. These are as follows:
(i) Paragraph 1B is embarrassing because it includes a reference to s 4 of the Crown Proceedings Act 1903 which Mr Douglas conceded is unnecessary. Further, the reference to "emanations of the Crown" is unclear, at least without a clear statement of the legal principle on which the State intends to rely to support its case.
(ii) The cross-claim should plead the material facts on which the State relies to show that each of the Crown Agencies is part of the State, thereby (on the State's case) entitling it to claim damages in respect of losses sustained by the Crown Agencies.
(iii) The proposed cross-claim should plead the material facts by which it is said that the BTA's alleged repudiation of the ASAs constituted a breach of the TDN Agreement.
(iv) Similarly, the State should plead the material facts by which it is said that the overcharging of the Crown Agencies constituted a breach of the TDN Agreement.
(v) The proposed cross-claim should specify which losses allegedly flowed to the State by reason of the breaches of the TDN Agreement.
Reasoning
In Judgment No 12 (BT Australasia Pty Ltd v State of New South Wales, unreported, 7 September 1998), I set out the general principles relating to the functions of pleadings. I do not repeat those comments.
In my opinion, leave to file the proposed cross-claim should be refused until the issues identified by Mr Bathurst have been addressed. In substance, I agree with his criticisms of the proposed cross-claims. I shall address briefly each of the points.
First, the reference in par 1B of the proposed cross-claim to s 4 of the Crown Proceedings Act, in my opinion, has a tendency to cause embarrassment or delay in the proceedings (Federal Court Rules ("FCR"), O 11, r 16(b)). Without the benefit of Mr Douglas' explanation, given in the course of oral argument, par 1B is open to the interpretation that it asserts that s 4 is more than a procedural provision. In argument, Mr Douglas disavowed that construction of par 1B. He also conceded that the reference to s 4 of the Crown Proceedings Act adds nothing to the State's claim, given that s 4 is merely a procedural provision. The reference to s 4 should therefore be removed from par 1B.
Secondly, while I do not think I need to express a final view on the matter, I have reservations about whether the expression "emanations of the Crown", as used in par 1B, adequately reflects the case the State wishes to make. As I followed Mr Douglas' explanation, it is central to the State's case to establish that each of the Crown Agencies, including the statutory corporations, was part of the State Government at the relevant times. This proposition of law underpins the State's entitlement to sue for losses sustained by the Crown Agencies in consequence of BTA's breach of the TDN Agreement.
The authorities sometimes use the expression "emanation" of the Crown: see, for example, State Bank of New South Wales v Commonwealth Savings Bank of Australia [1986] HCA 62; (1986) 161 CLR 639, at 644-645. However, they ordinarily do so in the context of determining whether an entity is a "State, or any person suing on behalf of a State" or "the Commonwealth, or any person suing on behalf of the Commonwealth", for the purposes of s 38(c) and (d) of the Judiciary Act (Cth) or s 75(iii) of the Constitution. The issue may also arise in other contexts, for example in connection with the question of whether the Crown is bound by a statute: cf P W Hogg, Liability of the Crown (2nd ed, 1989), Ch 10; Bropho v State of Western Australia [1990] HCA 24; (1990) 171 CLR 1. But whether use of the expression "emanations of the Crown" elucidates rather than obscures the case the State wishes to make is doubtful.
Thirdly, I think that the proposed cross-claim should specify the key proposition of law upon which the State relies in order to claim damages for breach of the TDN Agreement in respect of losses sustained by statutory corporations. The usual principle is that a party may, by its pleading, raise any point of law: FCR, O 11, r 9. However, in my view, it is very difficult to follow how the State intends to put its case, unless the key proposition of law on which it relies is formulated carefully in the pleading. A failure to formulate that key proposition seems to me to be likely to delay the proceedings, since it will create uncertainty and, perhaps, confusion. Moreover, if the point of law is pleaded, it will assist in determining whether a question of law can be identified for separate determination, in accordance with FCR, O 29: see Everett v Ribbands [1952] 2 QB 198, at 206, per Romer LJ. Any reasonable course that might shorten the expected length of the hearing in this case (said by senior counsel to be at least one year) should be given the most careful consideration.
Fourthly, in my opinion, it is imperative that the particulars supporting the allegation that each Crown Agency is an emanation of the Crown (or however the association with the Crown is ultimately pleaded) are full and complete. I appreciate that Mr Douglas said that Schedule 2 to the proposed cross-claim contains full and complete particulars of the relevant allegations. If this is the case, well and good. However, I must confess that I have some doubts as to whether the allegations are fully particularised. In particular, I would find it a little surprising if the statutory provisions referred to in the particulars constitute the only provisions on which the State relies to establish that each of the Crown Agencies having a separate legal existence is an "emanation of the Crown". If the State intends to rely on other statutory provisions, they should be identified.
Fifthly, I think there is force in the criticism that the proposed cross-claim does not plead clearly the material facts supporting the allegation that BTA's repudiation of the ASAs and its overcharging under the ASAs constituted breaches of the TDN Agreement. It is true that par 83(k) of the proposed cross-claim alleges that, by reason of the alleged repudiation of the ASAs, BTA breached certain of its obligations in the TDN Agreement. However, Mr Douglas conceded that par 83(k) should include a reference to par 29 of the TDN Agreement, although he did not say which sub-paragraphs of par 29 were relevant. More importantly, the present form of the pleading makes the following matters difficult to follow:
* why the State says that the letters of 1 August 1995, sent by BTA to the Crown Agencies, amounted to an unlawful repudiation of the ASAs;
* in precisely what respect the State says that BTA's unlawful repudiation of the ASAs constituted a breach by it of the TDN Agreement; and
* how overcharging of Crown Agencies under the ASAs constituted (if it did) a breach of the TDN Agreement, entitling the State to recover damages for losses sustained by each of the Crown Agencies in consequence of the overcharging.
Sixthly, it follows from what I have said that par 93(b) (which claims damages arising from alleged overcharging by BTA) should be linked specifically to BTA's alleged breaches of the TDN Agreement.
In my view, the first, third, fifth and sixth of the matters to which I have referred should be addressed and rectified before leave is granted to the State to file the proposed cross claims. I draw the other matters to the attention of the State for its consideration.
I should add that the State should be prepared, at a very early stage, to particularise fully the damages claimed in par 93 of the proposed cross-claim. Paragraph 93, in substance, merely identifies heads of damages claimed by the State. I have not been taken through the affidavits and reports so far filed on behalf of the State; it may be that they explain in detail the nature and extent of the damages claimed and also address the relationship between each head of damage referred to in par 93 and the case pleaded against BTA. In any event, given that this case is now well into its fourth year, detailed particulars of the State's damages claim would seem to be a matter requiring urgent attention.
Conclusion
The appropriate course is to stand over the State's motion for leave to file the proposed cross-claim, until 3 February 1999. This will give the State the opportunity to address the matters raised in the judgment and, if so advised, to prepare an amended version of the proposed cross-claim. I shall also stand over the other motions until that date. If leave is given to file the proposed cross-claim, I shall then make orders disposing of the other motions. It will be necessary, either on 3 February 1999 or a later date, to deal with any costs issues arising from the motions.
|
I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice
Sackville. |
Associate:
Dated: 23 December 1998
|
Counsel for the Applicant: | Mr G A Palmer QC with Mr G C Lindsay SC and Mr R Margo |
| Solicitor for the Applicant: | Middletons Moore & Bevins. |
| Counsel for the First Respondent | Mr F M Douglas QC with Mr W G Muddle and Mr D R Stack |
| Solicitor for the First Respondent | Crown Solicitors Office |
|
Counsel for the Second Respondent: |
Mr T Bathurst QC with Mr A W Street SC and Mr C A Moore |
| Solicitor for the Second Respondent: |
Blake Dawson Waldron. |
| Date of Hearing: | 17 December 1998. |
| Date of Judgment: | 23 December 1998 |
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