Lean v Tumut River Orchard Management Ltd [2003] FCA 269

Lean v Tumut River Orchard Management Ltd [2003] FCA 269

It is reasonably arguable that the applicant and group members have a claim for an equitable set-off based on misleading or deceptive conduct, and that the second respondent, as assignee, takes subject to that set-off. The proceedings should not be struck out or dismissed in their entirety; however, part of the statement of claim relating to unconscionable conduct as pleaded is embarrassing and should be struck out with leave to re-plead. The application to transfer venue to New South Wales is not granted at this stage, but may be revisited. The second respondent was properly joined.

Parties
Applicant: Graeme Trevor Lean; First Respondent: Tumut River Orchard Management Ltd (ACN 003 501 611) (Liquidator Appointed); Second Respondent: H P Mercantile Pty Limited (ACN 067 362 877); Third Respondent: RRKM Pty Ltd (ACN 008 930 532)
Jurisdiction
Australia
Judgment Date
28 March 2003
Procedural Posture
Representative Action Under Part IVA of the Federal Court of Australia Act 1976 (cth) / Interlocutory Motion (application to Strike Out, Dismiss, or Transfer)
Outcome
Paragraph 88 of the statement of claim is struck out with leave to re-plead within 28 days; application to transfer is stood over; motion otherwise dismissed; costs reserved for oral submission at next directions hearing.
Legal Topics
Strike Out Applications, Equitable Set Off, Assignment of Contractual Rights, Misleading or Deceptive Conduct, Unconscionable Conduct, Jurisdiction and Venue, Joinder of Parties
Practice and Procedure Trade Practices Equity Strike Out Applications Equitable Set Off Assignment of Contractual Rights Misleading or Deceptive Conduct Unconscionable Conduct +2 more

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Parties

Graeme Trevor Lean

Applicant

Tumut River Orchard Management Ltd (ACN 003 501 611) (Liquidator Appointed)

First Respondent

H P Mercantile Pty Limited (ACN 067 362 877)

Second Respondent

RRKM Pty Ltd (ACN 008 930 532)

Third Respondent

Procedural Posture

Representative Action Under Part IVA of the Federal Court of Australia Act 1976 (cth) / Interlocutory Motion (application to Strike Out, Dismiss, or Transfer)

Legal Issues

  1. 1 Should the application or statement of claim be struck out or dismissed as disclosing no cause of action?
  2. 2 Is it reasonably arguable that damages for misleading or deceptive conduct may give rise to an equitable set-off?
  3. 3 Does an assignee of contractual entitlements take its rights subject to such an equitable set-off?

Ratio Decidendi

It is reasonably arguable that the applicant and group members have a claim for an equitable set-off based on misleading or deceptive conduct, and that the second respondent, as assignee, takes subject to that set-off. The proceedings should not be struck out or dismissed in their entirety; however, part of the statement of claim relating to unconscionable conduct as pleaded is embarrassing and should be struck out with leave to re-plead. The application to transfer venue to New South Wales is not granted at this stage, but may be revisited. The second respondent was properly joined.

Court Disposition

Paragraph 88 of the statement of claim is struck out with leave to re-plead within 28 days; application to transfer is stood over; motion otherwise dismissed; costs reserved for oral submission at next directions hearing.

Orders

  • Paragraph 88 of the statement of claim be struck out, but the applicant have leave to re-plead his unconscionable conduct claims against the second respondent within 28 days.
  • The second respondent's motion for transfer of the proceedings to the New South Wales District Registry be stood over, with liberty to apply further at a later date.