Case Summary – Strike Out Application and Appeal
Introduction
In the matter of Goldenwater & Ors v Chan & Ors, Potts Lawyers appeared for, and successfully assisted, the plaintiffs with opposing two applications brought by the defendants to a Supreme Court proceeding. Both applications were dismissed by Flanagan J.
The first defendant appealed Flanagan J’s decision, and the Court of Appeal heard and dismissed that appeal.
The scope of this case summary is to discuss the first application brought by the defendants, and the appeal brought by the first defendant.
The Defendants’ Strike Out Application
On 8 October 2020, Flanagan J heard two applications brought by the defendants in this matter. The first application brought by the defendants sought to strike out (i.e. remove from the plaintiffs’ Fourth Statement of Claim) certain paragraphs of the plaintiffs’ Fourth Statement of Claim.
Flanagan J summarised the defendants’ contention in relation to their strike out application as follows[1]:
The strike out application is premised on the proposition that, in order to deliver a pleading that “state[s] with sufficient clarity the case that must be met”, the plaintiffs are required to plead the precise words alleged to have been spoken in Mandarin together with the translation of those words into English, and “not merely the conclusions of fact for which [the plaintiffs] contend by way of the alleged misrepresentations”. That is, the defendants assert that when alleging fraud (specifically deceit) the plaintiffs should plead the words spoken in Mandarin with an English translation, rather than pleading in English the effect of the words spoken. The defendants submit that without a pleading of the precise words, they are unable to plead.
Flanagan J’s Judgement of the Defendants’ Strike Out Application
On 2 December 2021, Flanagan J delivered a nine-page judgement in relation to the defendants’ applications. Flanagan J ultimately dismissed both of the defendants’ applications.
In relation to the defendants’ strike out application Flanagan J stated that[2]:
…I do not accept that any of the impugned paragraphs are amenable to be struck out on the basis that the conversations are not pleaded in the original language (together with an English translation).
Flanagan J’s judgment includes a finding that:
As correctly submitted by the plaintiffs, if a party alleging fraud does not need to prove the precise words which were used during a conversation, it cannot be correct that a party alleging fraud must plead the precise words of that conversation. The plaintiffs submit that this is especially so where to do so would lead to the result that:
- a party would almost certainly be prevented from pleading fraud at all if required to plead the precise words of conversations dating back as far as 2013 (as in this case); and
- the party wishing to claim fraud would not have to prove the precise words at trial[3]
Flanagan J also found that:
In seeking to strike out the relevant paragraphs, the defendants also rely on r 171(1)(b) on the basis that the paragraphs have a tendency to prejudice or delay the fair trial of the proceeding. Rule 149(1)(c) is also relevant. It provides that each pleading must state specifically any matter that if not stated specifically may take another party by surprise.[4]
As the defendants were previously able to plead to the alleged conversations, I do not accept that the impugned paragraphs of the fourth amended statement of claim have a tendency to prejudice or delay the fair trial of the proceeding, or that the pleading fails to specifically state matters so as not to take the defendants by surprise. This conclusion is strengthened by the fact that in relation to many of the real property transactions pleaded in the fourth amended statement of claim, the defendants have pleaded a positive case in the amended defence, raising an alternative factual scenario which contradicts the premise of the plaintiffs’ case[5]
Full reasons for Flanagan J’s judgement can be accessed and viewed using this link: https://www.queenslandjudgments.com.au/caselaw/qsc/2020/358
Appeal of the Strike-Out Application
The first defendant appealed Flanagan J’s judgment in relation to the defendants’ strike out application.
On 4 May 2021, the Court of Appeal heard and delivered an ex-tempore (i.e. at the time of the hearing on 4 May 2021) four-page judgement. Sofronoff P, with whom Mullins JA and Wilson J agreed, ultimately dismissed the first defendant’s appeal.
Sofronoff P findings include, that:
The proposition that the pleading does not disclose a cause of action is untenable and can be ignored. The real question for his Honour was whether or not the form of pleading would prejudice a fair trial of the proceeding.[6]
…the rule does not require a pleader to guarantee that the opposing party will encounter nothing unexpected at the trial. Trials are full of the unexpected. The rule requires a pleading to contain all that is reasonably and fairly necessary to ensure that the opposing party is not met at the trial by an unexpected turn in the case which that party, acting in good faith and reasonably, is unable to meet because of a natural failure to prepare to meet it having regard to the content of the pleading. That is what surprise means in the context of this rule, which has, in one form or another, existed since 1873.[7]
For a very long time, this court and other appellate courts have applied the principle that particular caution should be exercised when asked to review decisions pertaining to matters of practice and procedure.[8]
…the Court of Appeal will only interfere to overturn a decision of that kind if there is shown to be an error of principle and the decision appealed from will work a substantial injustice to one of the parties.[9]
It is true that, in some cases, it is necessary for a party to plead the exact words relied upon. But that is not every case. Moreover, the time when a party or a witness giving evidence was expected and required to recite the purported actual words of conversations because of a common forensic assumption, including an assumption held by judges, that was a feasible deed to perform, is long gone.[10]
None of this part of the law of pleading is novel, and it is all set out in Flanagan J’s judgment. It would be enough in order to dispose of this appeal to observe that the appellants have not shown that Flanagan J’s reasoning involved any error of principle or that it was arguably wrong, but, plainly enough, the conclusion to which his Honour came was the only possible one open.[11]
The Court of Appeal’s full judgement can be accessed and viewed using this link: https://www.queenslandjudgments.com.au/caselaw/qca/2021/87
Conclusion
The judgements of Flanagan J and the Court of Appeal articulates the importance about the proper construction of the Uniform Civil Procedure Rules 1999 (Qld) as they pertain to pleadings, and the obligation of pleaders in circumstances where there are representations arising from conversations which are alleged to have occurred in a language other than English.
Potts Lawyers successfully assisted the plaintiffs with opposing the defendants’ strike out application, and again when that application was appealed.
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[1] Paragraph 4 of Flanagan J’s judgement delivered on 2 December 2020.
[2] Paragraph 6 of Flanagan J’s judgement delivered on 2 December 2020.
[3] Paragraph 25 of Flanagan J’s judgement delivered on 2 December 2020.
[4] Paragraph 26 of Flanagan J’s judgement delivered on 2 December 2020.
[5] Paragraph 28 of Flanagan J’s judgement delivered on 2 December 2020.
[6] Paragraph 11 of the Court of Appeal’s Judgement delivered on 4 May 2021.
[7] Paragraph 11 of the Court of Appeal’s Judgement delivered on 4 May 2021.
[8] Paragraph 15 of the Court of Appeal’s Judgement delivered on 4 May 2021.
[9] Paragraph 15 of the Court of Appeal’s Judgement delivered on 4 May 2021.
[10] Paragraph 16 of the Court of Appeal’s Judgement delivered on 4 May 2021.
[11] Paragraph 18 of the Court of Appeal’s Judgement delivered on 4 May 2021.