Clo Developments Pty Ltd v Sarv Pty Ltd & Ors [2013] QSC 318

SUPREME COURT OF QUEENSLAND CITATION: Clo Developments Pty Ltd v Sarv Pty Ltd & Ors [2013] QSC 318 PARTIES: CLO DEVELOPMENTS PTY LTD (ACN 131 406 347) (plaintiff) v SARV PTY LTD (ACN 071 262 934) (defendant) and DELFIN GC PTY LTD (ACN 085 207 174) (first third party) and DELFIN REALTY (QLD) PTY LTD (ACN 003 581 191) (second third party) and DELFIN LEND LEASE LTD (ACN 000 966 085) (third third party) and COLLIERS INTERNATIONAL HOLDINGS (AUSTRALIA) LTD (ACN 008 178 238) (fourth third party) and GOLD COAST CITY COUNCIL (fourth party) FILE NO/S: 8205 of 2011 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 18 November 2013 DELIVERED AT: Brisbane HEARING DATE: 8 August 2013 JUDGE: Dalton J ORDER: Inappropriate to answer separate questions COUNSEL: D Savage QC with S Fynes-Clinton for the fourth party D Kelly QC with M Hodge for the first to third third parties SOLICITORS: Gadens Lawyers for the fourth party Carter Newell Lawyers for the first to third third parties -- 1 of 5 -- 2 [1] In these proceedings the plaintiff claims that it purchased land at the Gold Coast (Lot 130 on SP 206406) from the defendant induced by the defendant‟s misrepresentations about whether or not the Gold Coast City Council would impose infrastructure charges on the development of the land. Sarv says by way of defence that its responsibility for any such representations could only be as a result of the third parties having made the representations on its behalf. Sarv sues the third parties, alleging that if any misrepresentations were made by them, they were wrongful as against Sarv. The third parties in turn join the Gold Coast City Council as a fourth party, saying that any representations they made were in accordance with representations made to them by the Council.1 [2] On 21 November 2012 Douglas J ordered that two questions be determined separately before the trial in this matter: (1) whether by the conduct alleged in the amended fourth party statement of claim, the fourth party engaged in conduct in trade or commerce within the meaning of ss 52 and 53A of the Trade Practices Act 1974 (Cth); and (2) whether by the conduct alleged in the amended fourth party statement of claim, the fourth party made any representations about the land (as defined in the amended fourth party statement of claim). [3] These questions concern the litigation between the third parties and the fourth party and they were the only parties represented before me. By the time the matter came before me the third parties had amended their statement of claim against the fourth party and I determine the matter as though the order referred to the second amended fourth party statement of claim filed on 4 February 2013. [4] As can be seen from the terms of the questions identified for early determination, there is no agreement by the parties as to the facts of the matter, and I have no fact-finding function on this application. The questions are formulated by reference to the pleading. It is not sought to strike the pleading out. Nor are the questions posed in effect raising a demurrer; that is, these questions do not assume the truth of a particular set of facts pleaded and then pose a question as a matter of law based on that assumption. Rather the questions have a hybrid nature, they invite a fact- finding exercise by reference to the pleadings, although, by agreement I had limited factual (written) material before me. [5] The first question concerns whether or not the Council‟s conduct in making representations was in trade or commerce. The allegation in the pleading is that the Council made representations when it participated in meetings and correspondence about the Council‟s attitude to the proposed development and the infrastructure charges which the Council would impose upon that development. It is alleged that the Council had a commercial interest in having the land developed – paragraph 11(d) – and it is alleged that the Council, in addition to its statutory functions participated in commercial activities – paragraph 8(g). On that basis it is said that when the Council made representations it did so in trade or commerce. The wide meaning which the Courts have attributed to those words in various cases over the years was relied upon.2 1 The fourth third party (Colliers) has taken no part in this litigation. 2 For example, Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, 602-603. -- 2 of 5 -- 3 [6] The Council says that the power to impose infrastructure charges is a statutory power of a governmental nature. Further, that the infrastructure charges when collected become part of a specific infrastructure fund and not part of general revenues. So much may be assumed, but the allegation here is not that the levying or spending of infrastructure charges is commercial, what is alleged is that the Council participated in meetings and correspondence which were in its own commercial interest and in doing so made representations about how it might exercise its power to impose infrastructure charges.3 [7] In my view the second amended fourth party statement of claim makes an allegation that the fourth party has engaged in conduct which might, at the end of the day, be found to be in trade or commerce. That is my interpretation of the pleading, not a finding of fact, and not a view as to whether or not the allegation will be established at any trial of this matter. It seems to me that it is inappropriate for me to answer the first question posed in the spirit in which it was posed – to create a determination binding between the parties – see Bass v Permanent Trustee Co Ltd [56].4 [8] The second question depends to an extent on a close consideration of the terms of the pleading between the plaintiff and the defendant, on the one hand, and between the third parties and fourth party, on the other hand, as to the land the subject of the representations in question. The statement of claim filed on behalf of the plaintiff defines Lot 130 as “the Property” – paragraph 2(b). It then makes allegations at paragraphs 12(c), 15 and 24 of what I interpret as being representations made in respect of the Property, that is in respect of Lot 130, as to the incidence of stormwater infrastructure charges, recreation and transport infrastructure charges, and infrastructure charges generally. [9] A factual complication is introduced by the fact that part only of Lot 130 is within something called Concept Plan 4A. This was a planning instrument in force at all relevant times and there will be argument at the hearing of this matter as to whether or not representations about the incidence of infrastructure charges could sensibly be made about land which did not lie within Concept Plan 4A. At present all I do is note that the pleading of representations in the plaintiff‟s statement of claim against the defendant are pleadings of representations which apply to the whole of Lot 130. [10] The second amended fourth party statement of claim begins (as is traditional) with a pleading of the fact that the plaintiff has sued the defendant and sets out the basis for that suit. At paragraph 1(a), in the course of recording the plaintiff‟s claim against the defendant, the fourth party statement of claim says that the plaintiff alleges against the defendant that an Information Memorandum published by Colliers advertised the sale of “… land owned by the defendant at Varsity Lakes („the Land‟) contained representations …”. I construe this pleading as establishing a defined term – the Land, capitalised – for the purpose of the pleading, as meaning the land owned by the defendant at Varsity Lakes – ie., Lot 130. 3 It was also contended on behalf of the third parties that because the third parties were engaged in trade and commerce and in the course of that trade and commerce interacted with the Council, the Council was, without more, engaged in trade and commerce. This was said to be based on dicta in Houghton v Arm (2006) 225 CLR 553 [34]. I do not think that dicta supports the submission and I do not think the submission is supportable at law. 4 (1999) 198 CLR 334. -- 3 of 5 -- 4 [11] The pleading then goes on to use the words land, uncapitalised, and Land, capitalised, in different places. I take it from the context in which the words are used that this is deliberate – for example, see in the substantive part of paragraph 10, “… development of land within Varsity Lakes …”. At paragraphs 10(d), 14(a), 14(d) and 14(e) there are representations pleaded as having been made by the fourth party to the third parties about “the Land” and my interpretation of the pleading is that this is deliberate, that is the pleading is that the representations were made about Lot 130. [12] There was a dispute before me as to the admissibility of some evidence of the Council‟s own belief about the applicability of Concept Plan 4A to Lot 130 (in particular minutes of the 586th meeting of the Council on 10 December 2010). I do not need to determine the objection, and I do not need to look at that evidence, because in my view it is clear that the above parts of the second amended fourth party statement of claim do literally, and deliberately, plead representations made about Lot 130. [13] It seems likely that there will have to be a hearing and a determination about whether or not such representations could sensibly be interpreted as having included land outside Concept Plan 4A, and sensibly be relied upon as meaning that. These are not matters which I can determine on this application. [14] In my view it is inappropriate to answer either of the questions posed for separate determination. I note that the history of the matter was that originally Justice Atkinson made an order setting a date by which the fourth party was to apply to strike out the pleading or put on a defence. Justice Douglas‟s order modified that so that what came on for hearing before me would, had I been inclined to answer the questions, have been a determination of merit, rather than a determination about pleadings. I can see why the fourth party would seek the latter type of determination, rather than attack a pleading which might simply result in leave to re-plead, even if successful. Nonetheless, the questions posed here do not rest on an agreed statement of facts, nor even an assumed statement of facts as a demurrer does, but would, in my view, result in a determination of the merits of part of the third parties‟ claim on a pleading. This is particularly inappropriate where the case alleged rests on misrepresentations, some written and some oral, ie., a case where hearing and assessing the whole evidence might be very relevant to the view ultimately formed. It is similar to the type of problem discussed by the High Court in Bass v Permanent Trustee Co Ltd, “The utility of demurrers is, however, heavily dependant on the pleadings containing all the relevant facts. When the parties are uncertain whether further investigation will reveal further factual material, the utility of the demurrer is diminished.” – [50]. [15] Further, the proceeding between the third parties and the fourth party is at a preliminary stage, there is no defence and there has been no disclosure. This is against a factual determination on the merits at this stage. Lastly, the factual questions raised are very similar to those raised between the plaintiff and the defendant and I do not think it would be right, having regard to the possibility of inconsistent findings, for these questions to be determined between one set of parties on their merits, and between these parties on this application. [16] My determination that it is inappropriate to answer both questions posed should not be interpreted as a criticism of the course taken by the parties to date, or of the order -- 4 of 5 -- 5 posing the questions. It is just that, as not infrequently happens, when questions for early separate determination are explored, it sometimes is revealed that the process is not as useful or efficacious as first thought. [17] I will hear the parties as to costs. -- 5 of 5 --