Smith v Australian Executor Trustees Limited;; Creighton v Australian Executor Trustees Limited [2017] NSWSC 1406

Smith v Australian Executor Trustees Limited;; Creighton v Australian Executor Trustees Limited [2017] NSWSC 1406

The application for summary dismissal was refused as the claims could not be determined so clearly untenable at this stage, particularly given the novelty of the alleged duties and issues of causation. However, paragraphs of the second cross claim relating to breach of duty, audit wrongdoing and causation of loss, and references to unspecified provisions of legislation, were struck out for failure to plead material facts with adequate particularity. Leave to amend in the proposed form was refused, but AET was given an opportunity to serve a further amended cross claim consistent with the court's reasons.

Jurisdiction
Australia
Judgment Date
16 October 2017
Procedural Posture
Representative Proceedings and Cross Claims (equity) / Interlocutory Ruling on Applications for Summary Dismissal and to Strike Out Parts of Pleadings
Outcome
Summary dismissal refused; application to strike out parts of second cross claim allowed in part; leave to amend refused in proposed form; permission to serve further proposed amended cross claim granted, with procedural directions.
Legal Topics
['summary Dismissal' 'strike Out Applications' 'pleading Requirements' 'negligence (novel Duty of Care)' 'misleading and Deceptive Conduct' 'statutory Contribution' 'auditor Liability']
['civil Procedure' 'equity' 'corporations Law'] ['summary Dismissal' 'strike Out Applications' 'pleading Requirements' 'negligence (novel Duty of Care)' 'misleading and Deceptive Conduct' 'statutory Contribution' 'auditor Liability']

Case Brief

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Procedural Posture

Representative Proceedings and Cross Claims (equity) / Interlocutory Ruling on Applications for Summary Dismissal and to Strike Out Parts of Pleadings

Legal Issues

  1. 1 ['Whether the second cross claim against PwC should be summarily dismissed or struck out due to pleading deficiencies and/or lack of reasonable cause of action;' 'Whether the pleadings disclose properly articulated causes of action in negligence, misleading or deceptive conduct, and statutory/equitable contribution;' 'Whether amendments to the second cross claim should be permitted;' 'Whether a duty of care was arguably owed by PwC as auditor to AET as trustee for debenture holders;' 'Whether the claims for breach, causation, and reliance are adequately particularised.']

Ratio Decidendi

The application for summary dismissal was refused as the claims could not be determined so clearly untenable at this stage, particularly given the novelty of the alleged duties and issues of causation. However, paragraphs of the second cross claim relating to breach of duty, audit wrongdoing and causation of loss, and references to unspecified provisions of legislation, were struck out for failure to plead material facts with adequate particularity. Leave to amend in the proposed form was refused, but AET was given an opportunity to serve a further amended cross claim consistent with the court's reasons.

Court Disposition

Summary dismissal refused; application to strike out parts of second cross claim allowed in part; leave to amend refused in proposed form; permission to serve further proposed amended cross claim granted, with procedural directions.

Orders

  • ["PwC's application for summary dismissal dismissed." "Leave to file the proposed amended second cross claim in the form annexed to the affidavit of AET's solicitor refused." 'Paragraphs of the second cross claim alleging: breach of duty of care by PwC and causation of loss; audit wrongdoing and causation of loss...