Case: Smith v Barron [2004] FCA 1596 ; (2004) 139 FCR 566
Outcome: considered
11, rule 18 was relied upon by the ACCC. In that regard, my attention was helpfully drawn to the reference to that rule by French J (as his Honour then was) in Smith v Barron [2004] FCA 1596 ; (2004) 139 FCR 566 at 575-576 as part of his Honour's rationale for striking out a defence which consisted mostly of bare denials including a bare denial in respect of a particular paragraph of a statement of claim which made detailed factual allegations as to events in a particular period by reference to which it was alleged that there were reasonable grounds for suspecting that a company was either insolvent or would become insolvent by reason of incurring those debts. His Honour contrasted these bare denials with an affidavit read before him in which, on information and belief sourced from the company's directors, it was attested that they had reasonable grounds to expect and did expect that the company would be able to pay its debts at these times and with the requirement, found in the certificate in Form 15B which must accompany a pleading and derived from O 11 r 1B, that, inter alia, a legal practitioner certify that there existed a reasonable basis for the denial of allegations. His Honour also drew attention to particular matters alleged in the statement of claim that had not really been disputed by the director concerned in his public examination. Against this background, it becomes apparent why his Honour reached the conclusion that the defence filed was really just a "holding defence" rather than an attempt in good faith to plead to the statement of claim. This case is different. In its prescription that a defence ought not to be pleaded in an evasive way, O 11 r 18 emphasises a principle of pleading practice which is a subset of the more general requirements, found in O 11 r 16(b) and r 16(c) respectively, that a pleading must not have a tendency to cause prejudice, embarrassment or delay to a proceeding or constitute an abuse of process. In the face of a statement of claim noteworthy for its temporal imprecision, it is not, for example, evasive, to admit, as this defence does (para 3.1), that " for a period of time prior to June 2008 [Mr Day] was a managing director of [Craftmatic] ". Nor is it necessarily evasive to admit that one was but "a", rather than "the" managing director. One of the rules with respect to corporations, replaceable by virtue of s 135 of the Corporations Act 2001 (Cth), is that found in s 201J of that Act, which provides, " The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit " (emphasis added) . Further, even if Craftmatic did have but one managing director at any given time, the difficulty with this statement of claim is in ascertaining what is that given time. Mr Day's obligation is to respond to the allegation made, not to speculate by making an admission as to a period of office-holding which may be irrelevant to the contraventions alleged. There is no doubt that O 11 r 18 is directed to the end of requiring a party responding to a pleading to identify what truly are the issues of fact which remain controversial in the proceeding. Other rules directed to that end are, in their application to a defence, O 11 r 1B and r 16, already mentioned, and O 11 r 13 and r 17.