Lecture Hours 10 - 13
Pleadings
PLEADINGS
What are they?
 Documents delivered between parties to litigation in which they set out the material facts they intend to allege at the
hearing.
 Definition found in Supreme Court Act 1995 s241.
“Pleading includes any petition or summons and includes the statement in writing of the claim or demand of any plaintiff and
of the defence thereto and of the answer of the plaintiff to any set-off or counterclaim of a defendant”
Purpose of pleadings
1
Give notice to the other side of case to be met at trial and hence assist in pre-trial fairness.

Bank Commerciale SA (en liquidation) v Akhil Holdings Ltd
Facts:

In 1978 the plaintiff sued the def. bank and two other parties in the Supreme Court of NSW.

bank alleged the other def. had caused the bank to transfer from its ownership certain shares in a mining company which were
held by it in trust for the plaintiff.

Each def. filed a defence pleading that the action was statute barred.

Pl. did not reply to the bank’s defence, but in its reply to the defences of the other parties, it alleged that is action was one in
respect of a fraudulent breach of trust by the bank.

A copy of that reply was served on the bank’s solicitors.

The bank did not appear at trial.

Trial judge gave judgment for def. s. On Appeal, Court found that the bank was a party to the fraudulent breach. Bank appealed to
High Court.
Held:
Appeal allowed. A case is only committed to be decided upon the basis that’s different in the pleadings if the parties agree to what has
been alleged and Courts permit that departure.
2
Assist in determining evidence, and limiting discovery and interrogatories
3
Provide a record of issues raised. The parties can be met by pleas of res judicata or issue estoppel if they seek
to re-litigate them.
 Res judicata – estoppel : prevents a party from re-litigating the same matter.
 Issue estoppel arises if a particular issue has been determined between the parties through an earlier issue.
They way to determine that is by examination of the pleadings in the earlier proceedings.
4
May assist to determine the appropriate manner of trial.
Procedural Requirements – Rule of Form
Rule 146(1) : the pleading must state:
 number of the proceeding
 description of pleading e.g. claim
 filing date
 signature of solicitor of party filing
 consecutively numbered on each page
 divided into paragraphs, and if necessary, subparagraphs, with separate allegations;
 If settled by counsel – state counsel’s name
Notice
Rule 146(2) - Pleadings other than reply must have notice under Rule 164 informing that party about time for serving
pleadings in response under Rule 164
Filing and Service
Rule 147 – all pleadings need to be both filed and served (new rule).
The Content of Pleadings
Fundamental Rule of Pleading – Rule 149
R149(1) – Each pleading must:-1-
Lecture Hours 10 - 13
(a)
(b)
(c)
(d)
(e)
Pleadings
be as brief as the nature of the case permits; and
contain a statement of all the material facts on which the party relies but not the evidence by which the facts are
to be proved; and
state specifically any matter that if not stated specifically may take another party by surprise; and
subject to Rule 156, state specifically any relief the party claims; and
if a claim or defence under an Act is relied on – identify the specific provision under the Act. (Statutory Provision).
“MATERIAL FACTS”
The facts essential to establish a cause of action.
Example:
Do not say:
“In the course of a conversation over lunch on 5 May 1999, the Plaintiff advised the def. that he was sick of paying a
fortune for imported parts for his 1993 Porsche and that he was going to “quit it” for only $16,000. The def. agreed that
this was a good price, and the parties made arrangements for the delivery of possession of the vehicle to the def. on 10
May 1999.”
Use:“On or about 5 May 1999 the Plaintiff orally agreed to buy and the def. agreed to sell for $16,000 a 1993 Porsche motor
vehicle.”
***Don’t include evidence***
Philipps v Philipps

The def. s were in possession of Picton Castle and were in receipt of its profits. The plaintiff claimed entitlement on the basis of
ancestry with minimal details provided and also claimed that:
“Under and by virtue of certain deeds, assurances, wills, and documents in the possession and control of the def. s, the plaintiff is entitled to
possession of the said premises and hereditaments claimed herein in the plaintiff’s writs as such heir male, heir-at-law, and residuary
devisee, or as being the person entitled to the baronetcy now held by the plaintiff”.

The def. challenged the sufficiency of the statement of claim. The challenge was unsuccessful at trial but successful on appeal as the
pleading did not meet requirements.
STATUTORY PROVISION
Hunt Contracting Co v Roebuck Resources NL
Conclusion of Law - Rule 149(2)
r.149(2): In a pleading a party may plead a conclusion of law or raise a point of law if the party also pleads the material
facts in support of the conclusion or point.
Rationale:
It is for the court to determine what the effect of the law is on the facts as you pleaded them.
Creedon v Measey Investments Pty Ltd
 The pleading becomes more intelligible if the legal consequence for which the pleader contends is also pleaded.
 It has been established even prior to the Rules that you could do that provided you fully pleaded the material facts in
support of the particular conclusion of law;
see also – Re Vandervell’s Trusts (No 2)
Example:
On or about 6 April 1999 the def.
(a)
sold the plaintiff’s watch to Jenny Johnson;
(b)
delivered the watch to Jenny Johnson;
(c)
thereby converted it.
Rule 150 – Matters to be specifically pleaded
Matters to be specifically pleaded:
1. breach of contract or trust
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2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
Pleadings
every type of damage claimed including, but not limited to, special and exemplary damages
defence under the Limitations of Actions Act 1974
duress
estoppel
fraud
illegality
interest
malice or ill will
misrepresentation
motive, intention or other condition of mind, including knowledge or notice
negligence or contributory negligence
payment
performance
part performance
release
undue influence
voluntary assumption of risk
waiver
want of capacity
testator did not know and approve the contents of a will
that a will was not properly made
wilful default
Damages
If the claim is for a debt or liquidated damages only the plaintiff must state the following details in the statement of claim:
(1) particulars of the debt/liquidate demand
(2) if interest is claimed – particulars of rule 159
etc…
Miscellaneous Rules of Pleading
Spoken words and documents – Rule 152
Unless precise words are material, a pleading may state the effect of spoken words or a document as briefly as possible
without setting out all of the spoken words or document.

Document  it is not sufficient simply to refer to the document without making clear its alleged effect; Bloeman
v Atkinson.
Conditions precedent – Rule 153
An allegation of the performance or occurrence of a condition precedent necessary for the case of party is implied in the
party’s pleading.
Presumptions – Rule 151
A party is not required to plead a fact if the law presumes the fact in the party’s favour, or the burden of proof does not lie
with that party.
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Lecture Hours 10 - 13
Pleadings
Usual Pleadings
1
Statement of Claim
2
Defence
3
Counterclaim
4
Reply
5
Answer (if there is a counterclaim)
Statement of Claim
Procedural Requirements
 Form 16 – approved form
 Statement of Claim must be attached to the claim - Rule 22
 Therefore, no prescribed time for a service of a statement of claim
1. Introductory Statements
Need to work through introductory statements – e.g. relationship of parties to each other.
2. Substantive Allegations
Must disclose a cause of action. Must establish essential elements and must be found in the pleading. Consider e.g.
 negligence – duty of care, breach, damage not too remote; McCauley v Hamilton Island Enterprises Pty Ltd
 contract – offer, acceptance, consideration, intention to create legal relations;
 defamation – by imputation defamatory to plaintiff, must be published, damage, must be referrable to the
plaintiff – specific reference to the plaintiff or by a circumstance from which some members of the public would
assume the plaintiff was being referred to; Ron Hodgson (Trading) Pty Ltd v Belvedere Motors (Hurstville
 nuisance – private nuisance – occupation of land and unreasonable interference with that occupation, damage.
Set out substantive allegations in as near as chronological sequence as possible.
Other Notes:
1. Do not try to anticipate a defence eg. that a def. is estopped from relying on a denial.
2. can request a jury in a statement of claim; Rule 472 –
Defence
PROCEDURAL REQUIREMENTS
 A notice of an intention to defend (other than a conditional notice of an intention to defend r144) must have the
defence attached to it see r 139;
 The effect is that it must be filed within 28 days of the service of the statement of claim; r137 .
 Form 17 for defence.
SUBSTANTIVE REQUIREMENTS:
R150(4)
In a defence or a pleading after a defence, a party must specifically plead thata)
the party alleges makes a claim or defence of the opposite party not maintainable; or
b)
shows a transaction is void or voidable; or not specifically pleaded might take the opposite party by surprise or
c)
if not specifically pleaded might take the opposite party by surprise; or,
d)
raises a question of fact not arising out of a previous pleading.
Permitted pleas
r. 165 (1): a party may plead an admission, denials, non-admissions
Alternative Arguments:
 ie. inconsistent allegations
 are allowed as long as it is clear they are pleaded in the alternative r. 154(1) (use separate paragraphs etc)
 however, a party can’t make an allegation or a new claim in a pleading if that is inconsistent with an allegation in
another pleading of that party unless the previous pleading is amended; r154(2)
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Lecture Hours 10 - 13
Pleadings
1. Notice to Admit Facts of Documents- r 189
 The first party may serve notice to admit facts and documents (r 189(1))
 Party served with notice is to respond with notice of dispute within 14 days - otherwise party is taken to admit facts or
authenticity of documents specified in the notice (r 189(2))
 Admission so made can only be withdrawn with leave of the court (r 189(3))
 Costs sanction r. 189(4): if the party disputes a fact or document, and afterwards the fact of document is proved the
party ust pay the costs of proof, unless court otherwise orders.
2. Denial r. 166
Requirements of Denials
 Rule 166(4): a party’s denial of fact must be accompanied by a “direct explanation” for the party’s belief that the
allegation is untrue
 If there is no requisite direct explanation, then in default, the party is taken to have admitted the allegation r. 166(5)
 A denial contained in the same paragraph as other denials is sufficient if it is a specific denial of the allegation in
response to which it is pleaded.
The Negative Pregnant
 Def needs to take special care when pleading to negative proposition: See Johnson v Sewell 8.5.13C; Pinson v Lloyds
& National Provincial Foreign Bank Ltd [1941] 2 KB 72.
 Therefore, must particularise the affirmative allegation.

Johnson v Sewell
Pl. was e’ee of the dept of Harbours and Marines and he sued for negligence in respect of injuries which he sustained while
working on a ship in dock. In part of his statement of claim, he alleged that he was leaving the ship by a particular ladder that was
“the only available means of egress from the said ship provided by the def for the Pl.” The Def. denied that allegation. The Judge
noted that the denial was actually pregnant with a positive allegation, that there were other means of egress available and said
that the details of the other means should be particularised in the pleading.
Costs sanction
Rule 167 - Where an allegation is denied or not admitted that ought to have been admitted costs may be awarded
against party so pleading.
3. Non-admissions - Rule 166
r 166(3) Party may plead non-admission only if
 the party has made inquiries to find out whether the allegation is true or untrue;
 the inquiries for an allegation are reasonable having regard for the time limited for filing and serving the defence
or other pleading in which the denial or non-admission of the allegation is contained; and
 the party remains uncertain as to the truth or falsity of the allegation.
Requirements of Non-Admissions
 Rule 166(4): a party’s non-admission of an allegation of fact must be accompanied by a “direct explanation” for the
party’s belief that the allegation cannot be admitted.
 If there is no requisite direct explanation, then in default, the party is taken to have admitted the allegation : r 166(5)
 Continuing obligation on party pleading non-admission to make further inquiries that might become reasonable and
to amend the pleading if appropriate: r 166(6)
Effect on the Calling of Evidence
Party pleading a non-admission may not give or call evidence in relation to a fact not admitted, unless also relates to
another part of the party’s pleading: r 165(2)
Costs sanction
Rule 167 - Where an allegation is denied or not admitted that ought to have been admitted costs may be awarded
against party so pleading.
4. No Denial or Non-admission
If an allegation of fact made by a party in a pleading is not denied or stated to be not admitted then the general principle
is that the allegation is taken to be admitted by that opposite party r. 166.
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Lecture Hours 10 - 13
Pleadings
Set-Off – Rule 173
 The defendant may rely on set-off as a defence to all or party of the claim made by the plaintiff;
 This is the case whether or not the set off is also included as a counterclaim
 it does not have to be of an ascertained amount.
Counterclaim
Division 2 Part V of Chapter 6, see rr 175- 185
 same requirements for a statement of claim
 it must disclose a cause of action + the necessary material facts for each element of the cause of action.
PROCEDURAL REQUIREMENTS
 It is plead in same document as defence, called a “Defence and Counterclaim”, r.179
 Form 18; r.179
 The time for service of a counterclaim is also governed by r.137 as any counterclaim must be included in the same
document and served within the same time as the defence.
SUBSTANTIVE REQUIREMENTS
What matters can it involve?
 between only plaintiff and def. : no limit imposed
 But note r 182; reserves a discretion to the court to exclude a counterclaim from the proceedings in which it is made
AND give directions which the court thinks is appropriate in relation to that counter claim.
COUNTERCLAIM AGAINST ADDITIONAL PARTIES;
Can the defendant claim against the third party?
1. Plaintiff must already be a party to the counterclaim and
2. (a) the def. alleges that the other person is liable with the pl. for the subject matter of the counterclaim
(b) The def. claims relief against them that is related to or connected with the subject matter of the original
action.
r.178 and Supreme Court Act 1995, s244(3)
Watins v Plancorp No.6 P/L. 8.6.4C: see case fact at end.
Procedural Requirements:
The defendant must both make the counterclaim, and serve the defence and counterclaim and the plaintiff’s statement
of claim on the person within the time allowed for service on a plaintiff. See rr. 137 and 139 and 179.
Miscellanous notes:
 note : it is still subject to r.182
 If the plaintiff is not a party to the counterclaim, use third party proceeding in r192.
 Must comply with r 149 (statements in pleadings) because the rule applies to counterclaims.
Under rule 178(3) a person not a party to the original proceeding who is included as a defendant to a counterclaim
becomes a party to the proceeding on being served with the defence and counterclaim.
Reply; Reply and Answer to Counterclaim
Generally
 Plaintiff may reply to defence BUT a reply only necessary if the defence has raised a new allegation of fact which
requires some response more than a mere denial.
Davy v The New Moreton Mills

Pl was using a tool in the course of employment by the def. when it splintered and injured his eye.

claimed negligence in the def’s failure to provide safe tools.

The Def.’s case was that if the tool was unsafe, the Def. was nevertheless not negligent because it purchased
the tool from a reputable manufacturer.

This is essentially an allegation contained in the Def which is beyond mere denial. There is a new allegation that the Pl might
well want to respond to
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Lecture Hours 10 - 13
Pleadings
Johnson v Sewell
If the Def properly responded – eg. there were other means of egress from the ship. Perhaps the Pl may want to respond to the
allegation, outlining why these other means were not appropriate etc.)
Miscellaneous Notes:
 Plaintiff must answer any counterclaim, if the Pl. doesn’t, the def. may get judgment on that in the same way the Pl.
can get it on a claim.

Reply should only be used to meet the defence + it can’t allege anything inconsistent with the statement of claim; or
the statement of claim must be amended; See Herbert v Vaughan
Procedural Requirements
 Answer to Counterclaim: usually to be filed and served within 14 days of the delivery the counterclaim. This is
qualified in the situation where the def. to the counterclaim is not a party to the original proceedings – the period is
28 days after the counterclaim is served r. 164

Any reply must be filed and served within 14 days after the day of the service of the defence or answer to
counterclaim r. 154(2)

Both are subject to a contrary order of the Court.

Rule 180 provides that a defendant to a counterclaim may plead to a counterclaim by serving an answer to
counterclaim under the rules. However there is no requirement of form.
Compared to a Set-off
 A set off is a defence whereas a counterclaim is an independent cause of action;
 therefore, if plaintiff discontinues, the set-off falls with the discontinuance ( r 183) BUT a counterclaim remains on
foot and continues to trial.
 r 173(2) – if set-off exceeds plaintiff’s claim the court may give judgment for the balance, or grant other relief (c/f old
position).
 Because counterclaim is an independent action, judgment is pronounced on the claim and judgment on the
counterclaim; if counterclaim is greater than the claim, and both succeed THEN the overall judgment will be for the
Def. for the balance, see r184.
Check the last two points.
Particulars
Purpose: to help narrow and clarify the issues and so ensure that the other party know the case.
Pleadings allege the material facts; and, they are to be brief as the nature of the case allows see r149.
General Requirements:
r 157: must include particulars necessary to:
 define the issues for, and prevent surprise at, trial;
 enable opposite party to plead; and
 support a matter specifically pleaded under r 150.
See R v Associated Northern Collieries [8.7.4C] AND ALSO Bailey v Federal Commissioner of Taxation [8.7.5C]
 the functions of particulars is exactly the same as the general function of pleadings
 consistent with this function is that one must provide particulars of any allegation that is so broad that it might leave
the other party in doubt as to what it is one is going to prove in relation to that particular allegation.
 (See the text – running account for the supply of goods; money owing on a mortgage; that would have to provide
appropriate particulars in relation to a claim of that nature)
Example: Running Account for the Supply of Goods:
Not a good pleading:
1. The plaintiff sold and delivered certain quantities of gravel sand and cement to the def. at the def. ’s request.
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Lecture Hours 10 - 13
Pleadings
2. There remains due and owing to the def. the sum of $260,835.
Instead:
1. The Pl sold and delivered certain quantities of sand and gravel and cement to the def. at the def’s request as
follows – particulars of dates, invoice number, item of charge, price – may be ten pages long; nevertheless it may
be required for such an action.
2. Then “Def has made the following payments”
3. Then “There remains due and owing to the Pl the sum of ….”
Compare: pleading and particulars
Illustrations/discussion of the distinction:
 Bruce v Odhams Press Ltd
 Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd
Compare: particulars and evidence
Doonan v Beecham
The Pl was injured when struck by a motor vehicle driven by the Def.
negligence –






The Statement of Claim set out a number of particulars of
driving under an excessive speed under the circumstances;
failing to keep any or any proper, lookout;
driving on the wrong portion of the roadway;
failing to observe the plaintiff on the roadway;
failing to slow down or stop when danger arose;
failing to apply the brakes at all or in time to avoid the collision.
HELD – TJ: it could not be inferred on the evidence that the accident was due to any one of those particulars set out in the
statement of claim. And based on that conclusion, directed the jury to find for the Def.
HELD - Appeal: by majority of the full Court of the Sup Crt of Victoria and the High Court (Unanimously): that this was the wrong
approach.
Provided that it could be established, or at least reasonably inferred, from all of the evidence that was available within the
pleadings and particulars, that the accident was due to the negligence of the Def. then it was permissible to find for the Pl.
Point: If you particularise a whole lot of things; all you have to do in the evidence that is admissible within those
particulars is persuade the court that the def. is negligent, you don’t have to point to one of those particular issues of
negligence that the Court is satisfied on balance is established.


Mummery v Irvings Pty Ltd
Katsilis v Broken Hill Co Ltd
Damages
Particulars of damages to be pleaded - r 155
 Nature and amount of the damages claimed must be pleaded (r 155(1)).
 If general damages claimed – must plead the nature of the loss or damage, exact circumstances in which loss or
damage suffered, basis of estimation (155(2)).
 If practicable - each type of general damages and state the nature of damages claimed for each type (r 155(3)).
 General Requirement: Must specifically plead any matter in relation to assessment which may otherwise surprise the
opposing party (r 155(4)) .
Particulars of damage - r 158
 If claim for damages includes money that the party has paid or liable to pay – the pleading must provide particulars
of that money or liability.
 Must provide particulars of all matters relied on in support of claim for exemplary damages.
But note: Rule 156 – the court remains entitled to grant general relief, or to grant relief other than that specified in the
pleadings, irrespective of whether general or other relief is expressly claimed in the pleadings.
Meredith v Palmcam Pty Ltd
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Lecture Hours 10 - 13
Pleadings
Compliance with the rule to specifically plead damages including special damages is mandatory.
It was not satisfied by pleading in the statement of claim that “full particulars of the plaintiff’s special damages will be provided
prior to trial of this action” and that “full particulars of the plaintiff’s damages claim will be provided in her statement of loss and
damage pursuant to Rules 155 and 547(3)”.
Statement of particulars necessary for compliance should appear as allegation in the body of the statement of claim and not only
in the prayer for relief.
Interest
Particulars to be pleaded of claim for interest - r 159
 Amount or amounts on which interest is claimed
 interest rate or rates claimed (unless as per practice direction)
 day or days from which interest is claimed
 method of calculation
Exception: interest requirements do not apply to proceedings for damages for personal injury or death.
How do you give particulars?
1. r.160 – in pleadingsOR if inconvenient then in separate documents which is monitored in and filed with the pleading.
2. Further particulars can be exchanged by correspondence. – must be filed (r.160(3))
Procedure when particulars are inadequate
1. Usually request further and better particulars (must specify what better particulars you want)
2. If no satisfactory response, can make application to court under r.161 for an appropriate order. (Making application
does NOT extend the time for a defence or any other pleading.)
3. if a party does not comply with an order the court may make any further order, including a judgement, that is
considers appropriate r. 163.
Challenges and Objections to Pleadings
Rule 171 – Striking Out Proceedings
r.171 – gives court power to set aside all or part of a pleading which:
 discloses no reasonable cause of action (settlement of claim) or defence;
 has a tendancy to prejudice or delay fair trial;
 or otherwise an abuse of the process of the court eg. is unncessary, frivolous, vexatious etc
This power can be exercised at any stage of a proceeding.
Court can order that the cost of the proceeding be paid by a party on an INDEMNITY basis. (Higher than usual)
r. 171(3) – makes it clear that in making a determination under this rule the court is NOT limited to receiving evidence
about the pleading. Thus can look behind the pleading to substantive rules and allegations. (Changes to common law
position.)
Striking out Particulars
r 162. – gives court power at any stage of a proceeding to set aside any PARTICULAR that is unnecessary, vexatious,
prejudice or delay proceedings etc. (Therefore similar to r 171 – But specific to each individual particular within a
pleading.)
General Principles:
For general principles as to whether court will summarily determine a proceeding:
General Steel Industries v Commissioner for Railways.
Summary:
1. jurisdiction to summarily terminate an action is to be sparingly employed.
2. Not to be used except in a clear case where the lack of a cause of action is clearly demonstrated.
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Lecture Hours 10 - 13
Pleadings
3. The exercise of the jurisdiction shouldn’t be reserved for those unnecessary to evoke the futility of the claim.
Argument, even if extensive, might be necessary to demonstrate that the case the plainitiff is so clear untenable, that
it could not possibly succeed.
(Also see Inglis v Commonwealth Bank of Australia)
Ground: Frivolous or vexatious
“Frivolous”:
Chaffer v Goldsmith

Court struck out an action which was bought against a member of parliament on the basis that the member refused to present a
petition.
“Vexatious” : encompasses plaintiffs who keep bringing proceedings against a party where they may have bought related
proceedings and have framed them in different ways.
Ground: Unnecessary or Scandalous
“Unnecessary” – where plaintiff pleaded a whole lot of material NOT related to the material facts essential to establish
material cause of action.
“Scandalous” – where it includes indecent or offensive material.
Brooking v Mandslay

Plaintiff in the statement of claim made allegations of dishonest conduct against the def. . But in reply clearly stated that
he sought no relief on the basis of the allegation of dishonesty. The allegations were struck out as being scandalous.
Admissions (r. 189) – “Notice to Admit”
The Rules:
r.189(1) – party to a proceeding may by notice served on another party ask the other party to admit, for the proceeding
only, the facts and documents specified in the notice.
r. 189(2) – “if party who is served with the notice doesn’t respond by serving a notice disputing the fact or authenticity of
the document within 14 days – that party is taken to ADMIT the fact or authenticity of the document set out in the notice.
(for the proceeding only)
Withdrawing Admission:
 A party who is taken to have made an admission in this way can only withdraw the admission with the leave of the
court. (r. 189(3))
Cost Sanction
 Cost sanction (r.189(4)) – to dissuade Parties from serving notice of dispute unnecessarily.
 If the disputed fact is proven in the proceeding then the party must pay the costs if that proof. (UNLESS the court
makes a contrary order)
Time Limits:
No time re serving of “Notice to Admit” before a proceedings (are now being served quite early.)
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Lecture Hours 10 - 13
Pleadings
Watkins v Plancorp No. 6
In Watkins v Plancorp No 6 Pty Ltd [1983] 2 Qd R 501 the
 defendant company had local authority approval to construct a building on land which it owned.
 approval would lapse unless the building work was commenced before 6 January 1982.
 defendant contracted to sell the land to Watkins Partnerships. The contract was to be settled on or before
28 February 1982.
 On the same date as that contract another agreement was made between Watkins Partnerships, the
defendant and the plaintiff building company. That agreement required the plaintiff to undertake enough
building works to maintain the approval. The defendant agreed to pay for the works within 14 days of
delivery of an invoice but the invoice was not to be delivered until after 28 February (when the contract of
sale of the land was to be settled). Once the purchase of the land by Watkins Partnerships was completed,
it was to accept full liability to the plaintiff, and the defendant was to be relieved of that liability. The land
sale was not completed on the due date and had still not occurred when, in May 1982 the plaintiff delivered
to the defendant an invoice for $200,000 for work done under the deed. That sum had not been paid and
the plaintiff issued proceedings against the defendant for that amount. The time for settlement under the
contract of sale had been extended but by then had arrived.
 After the action had been allocated dates for trial the defendant applied to deliver a counterclaim against the
plaintiff to which it proposed to join Watkins Partnerships as co-defendants.
 The defendant was successful in obtaining the leave sought. In the course of his judgment, McPherson
J stated (at 504-506):
There is not a great deal of authority on the precise meaning and effect of the restriction introduced
by s 4(3) in the case of a counterclaim against a non-party:
but it is clear that the relation or connection which is required must exist between the
"subject" of the original action and the "relief" claimed against the plaintiff and the nonparty: SF Edge Limited v Weigel (1907) 97 LT 447, 450. Such relief may, however, be claimed
against those persons in the alternative, as where the defendant seeks to meet a claim against him
for the price of goods sold and delivered to a carrier by raising a counterclaim against the plaintiff
seller and the carrier based upon the condition of the goods on arrival; and alleging against the
plaintiff breach of a term as to the sufficiency of the packaging of the goods, and against the carrier
that he mishandled the goods in transit: see Smith v Buskell [1919] 2 KB 362; and see also DG
Madin Ltd v Turner [1964] SASR 64. The clearest explanation of the function and extent of the
power under rules of this kind of permitting joinder of persons who are not original parties to the
action is to be found in Warner v Twining (1876) 24 WR 536, where Sir George Jessel is reported
as having said that the only purpose for which a person was brought before the court as a codefendant was to bind him by the action, and preclude him from saying that it had not been
properly defended.
In the present case the problem is to discern the "subject" of the original action between the
Builders and the Proprietor, and to see wither the "relief" envisaged by the latter in its
counterclaim is related to or connected with it as required by the subsection. As to
Application: subject of the action seems to me to be, not the land on which the building work has
been carried out, but either the work contract under which it was performed, or the "contract
sum" of $200,000.00 arising therefrom, or both. It is somewhat more difficult here to identify the
"relief" that is likely to be the subject of the projected counterclaim against the Builder as plaintiff
and against Partnerships as co-defendant. That difficulty is increased because no draft
counterclaim has been furnished; and I think that in future a defendant who applied out of time to
amend by counterclaiming against a person not a party should, in all but the simplest of
cases, be required to provide on the application a copy of his proposed counterclaim: cf. the
practice that prevails in the case of an application to deliver interrogatories at a late stage: Vitale v
Ehrmann [1971] QWN 27.
For the defendant, Mr Chesterman submitted that against Partnerships the relief to be
counterclaimed by the Proprietor would be specific performance of the land contract. By itself that
might not be enough to provide the necessary relation to or connection with the subject of the
existing action, as I have expressed it to be. However, success in the counterclaim for specific
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Lecture Hours 10 - 13
Pleadings
performance would entitle the Proprietor also to a declaration against Partnerships that it was under
cl. 4 of the work contract liable to the Builder for the contract sum, which is the sum of $200,000
claimed under the same contract by the Builder as plaintiff against the Proprietor and the
guarantors as defendants in the original action. Having regard to the circumstance that cl. 4
appears to operate by way of indemnity, it is by no means impossible that the Proprietor might also
be entitled to an order against Partnerships for specific performance of that indemnity: cf. McIntosh
v Dallwood (No. 4) (1930) 30 SR (NSW) 415.
Strictly speaking, cl. 4 of the work contract serves only to impose on Partnerships full liability for the
contract sum and does not release the Proprietor from liability therefor to the Builder until payment
of the sum is in fact effected. Nevertheless, it is clear that specific performance of the land contract
will result in its completion, which will in turn transfer liability for the contract sum from the
defendant Proprietor to Partnerships, and it is that contract sum which is the subject of the claim in
the original action by the Builder. From this it follows that the relief claimable by the Proprietor
against partnerships is related to or connected with the subject of the original action by the Builder
against the Proprietor. Indeed it is probably enough to say that both of them arise from the same
contract.
It is however, fundamental to s 4(3) of the Judicature Act that no counterclaim is maintainable
against a non-party unless the plaintiff is also a party to it or unless the relief sought is claimed
against the plaintiff as well as against the non-party: see Warner v Twining, supra; Harrison v
Gamble (1877) 6 Ch D 748. In this regard, Mr Chesterman submitted that the prospective
counterclaim would also seek a declaration against the Builder as plaintiff that, upon completion of
the land contract, Partnerships was bound to satisfy the liability of the Proprietor in respect of the
contract sum. It is not to be supposed that in every case the ability of the defendant to frame a
claim as one for a declaration against the plaintiff will justify a counterclaim of the kind here in
question; nor will the right so to counterclaim ordinarily arise simply because, as between the
plaintiff and another, the latter has agreed to undertake a liability due by the defendant to the
plaintiff. However, as Mr Chesterman points out, the Builder is itself a party to the work contract,
and, as such, it agreed to cll. 3 and 4 imposing the arrangement for transfer to and discharge by
partnership of liability for the contract sum upon completion of the land contract. The matter
therefore in some respects resembles Turner v Hednesford Gas Co (1876) 3 Ex. D. 145 where, in
response to a claim by a builder for damages for wrongful termination of a building contract, the
proprietor was permitted to counterclaim against the plaintiff for breach of the same contract as well
as against a surety under a money bond for due completion of the work. Both cases appear to
satisfy the criterion propounded by Jessel M.R. in saying that the purpose of the relevant provisions
is to bind the co-defendant to the result of the original action between plaintiff and defendant, so as
to preclude the co-defendant from subsequently re-litigating the issues resolved by that action.
My conclusion is that the proposed counterclaim satisfies the essential requirement of s 4(3), and
that the defendant would have been entitled to raise that counterclaim in its defence to the action.
Though permitting the delivery of the amended defence and counterclaim and adjourning the trial McPherson J
ordered the defendant to pay both the costs thrown away by the adjournment and the costs of the application
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