NAIAMA PASTORAL CO PTY LTD v ELDERS FINANCE AND INVESTMENT CO LIMITED
Judges:von Doussa J
Court:
Federal Court
von Doussa J
The respondent Elders Finance and Investment Co. Limited (``ELFIC'') on notice of motion seeks an order that this action be dismissed pursuant to O. 20 r. 2 of the Federal Court Rules on the ground that the cause of action alleged is misconceived and that the action must inevitably fail. There is no dispute between the parties as to the principles to be applied in determining a strike out application of this kind. They are set out in the judgment of the High Court in
General Steel Industries Inc. v Commr for Railways (NSW) & Ors (1964) 112 CLR 125 at 129-130 per Barwick CJ. Before proceedings will be struck out it must be clearly demonstrated that the applicant's case is so obviously untenable that it
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cannot possibly succeed, and ``great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal''.By the amended statement of claim the applicant pleads that under three relevant agreements in writing dated 25 February 1985, 25 March 1986 and 28 June 1988 (``the agreements'') the applicant borrowed various sums of money from the respondent; that the agreements related to foreign currency loans; that it was a term of the agreements that the applicant ``should pay withholding tax on the loan transactions''; that the applicant made payments of withholding tax mistakenly believing that it was legally obliged to do so; that contrary to the requirements of the agreements and the applicant's belief there was no such obligation as the covenants or stipulations to that effect in the agreements were void; and that in these circumstances the amount of the withholding tax is repayable to the applicant by the respondent together with compound interest.
The applicant relies on s. 261 of the Income Tax Assessment Act 1936 (``the Act'') and the decision of the High Court of Australia in
David Securities Pty Ltd & Ors v Commonwealth Bank of Australia 92 ATC 4658; (1992) 175 CLR 353. Section 261 relevantly provides:
``261(1) A covenant or stipulation in a mortgage, which has or purports to have the purpose or effect of imposing on the mortgagor the obligation of paying income tax on the interest to be paid under the mortgage-
- (a) if the mortgage was entered into on or before 13 September 1915 - shall not be valid to impose on the mortgagor the obligation of paying income tax to any greater amount than the amount (if any) which would have been payable by the mortgagor if his taxable income consisted solely of a sum equivalent to the amount of interest to be paid under the mortgage without taking into account any income tax payable on that interest; and
- (b) if the mortgage was entered into after that date - shall be absolutely void.
(2) A covenant or stipulation in a mortgage, whether entered into before or after the commencement of this subsection, which has or purports to have the purpose or effect of including in or adding to the interest payable, in any specified circumstances, by the mortgagor, any amount in respect of income tax payable by the mortgagee upon the interest to be paid under the mortgage, shall be void to the extent only to which it has or purports to have that purpose or effect.
...
(4) Any provision in a mortgage by or under which it is provided that any income tax payable by the mortgagee, or any portion thereof, shall or may be taken into account for the purpose of fixing, measuring, or calculating the rate of interest payable under the mortgage or any reduction or alteration of that rate shall, to the extent to which it provides for income tax to be so taken into account (but not otherwise), be void, whether the provision be in the form of a covenant or agreement to pay interest, or a proviso or a stipulation for an alternative, substituted, or reduced rate of interest in lieu of a higher rate payable by the mortgagor pursuant to any such covenant or agreement, or otherwise.
(5) For the purposes of this section, `mortgage' includes any charge, lien or encumbrance to secure the repayment of money, an any collateral or supplementary agreement, whether in writing or otherwise, and whether or not it be one whereby the terms of any mortgage are varied or supplemented, or the due date for the payment of money secured by mortgage is altered, or an extension of time for payment is granted.''
The history of s. 261 is briefly reviewed by Davies J in
International Currency Trading Corporation Pty Ltd & Ors v Deutsche Bank AG 94 ATC 4475. It is a section designed to protect mortgagors by avoiding arrangements which alter the incidence of tax as between mortgagors and mortgagees. In David Securities it was held that a ``collateral agreement'' in s. 261(5) was one which was ``related to'' or even ``in addition to'' another rather than one that was subordinate to or of lesser importance than the other. In the present case it is accepted by
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the respondent for the purpose of the notice of motion that the agreements pleaded were ``mortgages''. The loans to the applicant were secured by registered mortgages over real estate and debenture charges granted by the applicant and other companies (although no reference is made to these securities in the pleadings), and the agreements were collateral thereto.In David Securities it was also held that a payer is prima facie entitled to recover moneys paid under a mistake if it appears that the moneys were paid in the mistaken belief by the payer that the payer was under a legal obligation to pay them or that the payee was legally entitled to payment. The Court held that in the application of this principle the law of Australia did not draw a distinction between a mistake of fact and a mistake of law.
For the purpose of better understanding the applicant's case and a schedule of payments attached to the amended statement of claim, the Court received from counsel for the applicant a letter dated 13 August 1991 from the respondent to the applicant. It appears from the schedule of payments and the letter that during the period of the agreements the applicant paid moneys to the respondent which included sums described as ``withholding tax''. It is these sums which are the subject of the action. Critical to the success of the applicant's claim would be a finding that these sums were paid pursuant to an obligation rendered void by a provision of s. 261.
The amended statement of claim pleads that s. 261(2) is the relevant provision which had this effect, but in argument counsel concentrated on s. 261(1). In submissions in support of the notice of motion counsel for the respondent posed as the question for decision: Do any of the agreements impose upon the applicant (as borrower) the obligation of paying income tax on the interest which the applicant is required to pay to the respondent under the agreements?
So formulated the question follows in part the wording of s. 261(1), but it does not give recognition to the scope of the subsection to render void a covenant or stipulation which purports to have the purpose of imposing on the mortgagor the obligation of paying income tax on the interest which the mortgagor is required to pay under the mortgage, as well as a covenant or stipulation which actually has that effect. For practical purposes the wider enquiry may not lead to a different result in this case, but the full scope of the subsection must be recognised.
Under s. 261(2) if that is the subsection relied on, the question would be posed differently: Do any of the agreements contain a covenant or stipulation which has or purports to have the purpose or effect of including in or adding to the interest payable by the applicant (as borrower) any amount in respect of income tax payable by the applicant upon interest to be paid under the agreements?
Withholding tax is imposed by s. 128B(5) of the Act upon a non-resident who derives income in the form of interest paid to the non- resident by a person to whom s. 128B(5) applies. The rate of withholding tax on interest income is fixed by legislation at a rate of 10% by the Income Tax (Dividends, Interest and Royalties Withholding Tax) 1974 formerly Income Tax (Dividends and Interest Withholding Tax) Act 1974. By s. 128A(4) ``income tax'' includes withholding tax for the purpose of s. 261. The person liable to pay the withholding tax imposed under the Act by s. 128B(5) is the non-resident who derives the interest income.
The allegations in the amended statement of claim that withholding tax was payable ``on the loan transactions'', and that the ``agreements attracted the obligation to pay withholding tax'' inaccurately state the operation of s. 128B(5). Withholding tax is imposed not on a transaction or an agreement, but on a non-resident who derives the relevant income.
The respondent contends that under the agreements the lender or ``mortgagee'' who derived the interest was not a non-resident but an Australian resident namely ELFIC. Section 128B(5) therefore had no application, and no obligation by ELFIC existed to pay withholding tax on interest paid under the agreements. Whilst ELFIC would incur an obligation to pay income tax on its net income from its operations in the normal course, no attempt is made in any of the agreements to shift or otherwise effect the imposition of that tax.
In a written summary of argument the applicant sought to raise a doubt, sufficient to justify allowing the proceedings to go forward to trial, whether ELFIC was at all material times an Australian resident. It was submitted that the Court should not accept that ELFIC was a resident simply because the agreements gave
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an address for the company within Australia. By s. 6 of the Act a company is a ``resident'' if it is incorporated in Australia, and a ``non- resident'' means a person who is not a resident of Australia. Documents filed by the applicant in response to an order to give further and better particulars of its claim, include letters sent by ELFIC to the applicants. Those letters, and that of 13 August 1991 to which reference has earlier been made, state that the company was incorporated in South Australia. These are business records of ELFIC, and records on which the applicant relies. It would be quite unrealistic in the absence of anything to suggest otherwise, to hold that there exists a doubt about the resident status of ELFIC. Counsel for the applicant made oral submissions on the footing that ELFIC was at all material times a resident of Australia. In my opinion the notice of motion should be decided on the same basis.That ELFIC has at all material times been a resident of Australia immediately distinguishes the present case from the facts in Davids Secuities. There the lender was treated as a non- resident so that the provisions of s. 128B(5) imposed a liability to pay withholding tax upon the lender who derived the interest income: see Davids Securities at p. 362.
The agreements, though not in identical terms, each provide for ELFIC to lend to the applicant the full amount of a loan facility quantified in Australian dollars or the foreign currency equivalent, and provided for the borrower to draw down the loan in foreign currencies nominated by it. The advances made under the agreements were in a combination of Deutschmarks, Yen, Swiss Francs and Australian dollars. But under the agreements, whatever the currency of the advances, the lender was ELFIC carrying on its business in Australia as a resident in Australia. Interest paid under the agreements and derived by ELFIC was not interest paid to a person to whom s. 128B applied, and withholding tax was not imposed upon that interest income by s. 128B(5).
It follows as a logical conclusion that no covenant or stipulation in any of the agreements could have had the effect of transferring the incidence of withholding tax imposed by s. 128B(5) on ELFIC to the applicant. But as already recounted, the applicant paid to ELFIC under the agreement moneys described as ``withholding tax''. It is necessary to consider each of the agreements to understand how this came about.
The 1985 Agreement
Under this agreement the facility was drawn down in several currencies besides Australian dollars. The clauses relied upon by the applicant read:
``12. Interest
The Borrower shall pay interest to Elders Finance on such amount of the Facility as shall from time to time have been drawn down and remain unpaid in accordance with the following formula:
- (a) For Australian dollar loans the rate of interest will be set at 4% per annum above the Australian Merchant Bankers Association (AMBA) 90, 120 or 180 day Bill rate (as applicable) (adjusted upwards to the nearest 0.05% per annum) as determined on the date of each drawdown.
- (b) For foreign currency loans the rate of interest will be set at 4.25% above the higher of Elders Finance's actual cost of funds or the LIBOR OR SIBOR rate at the option of Elders Finance (adjusted upwards to the nearest 0.05% per annum) for 90, 120 or 180 days (as applicable) on the date of each loan.
...
14. Stamp Duty and Other Costs
Any stamp duty, Financial Institutions duty, Federal duty, legal, valuation fees, interest withholding tax and other costs and expenses incurred by Elders Finance in connection with the preparation, stamping, administration and enforcement of the Facility or the transactions to which it relates or the security thereunder will be borne by the Borrower and will be payable upon demand.''
Clause 12 provides formulae for calculating interest payable to ELFIC which vary according to whether the loan is in Australian dollars or a foreign currency. The notion of ``the actual cost of funds'' is introduced in cl. 12(b). This component of the formula provides the explanation for the payments of ``withholding tax'' which were made by the applicant during the period of the agreement. The schedule to the amended statement of claim, and the letter of 13 August 1991 to which reference has been made,
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disclose that in the case of loans in foreign currencies ELFIC by separate arrangement borrowed foreign currencies from a range of overseas, non-resident, lending institutions. The outgoings or costs incurred by ELFIC in borrowing the foreign currencies included so it would appear an amount equal to the withholding tax imposed by s. 128B(5) upon the interest paid to the overseas lending institutions by ELFIC. The terms of the agreements or arrangements under which ELFIC borrowed from overseas lenders are not known, nor is it necessary to explore that question. Those terms, and any application which s. 261 may have had in relation to those terms (and it should not be assumed that the section had any application), are matters between ELFIC and the overseas lending institutions. They are not matters which can attract the operation of s. 261(1) or s. 261(2) to avoid a covenant or stipulation in the agreement between the applicant and ELFIC.Subsections 261(1) and 261(2) would operate in respect of any covenant or stipulation in the agreement which purported to have the purpose or effect of obliging the applicant to pay withholding tax which, by operation of the Act, was imposed on ELFIC. Clause 12 does not purport to do that. Whether cl. 14 purports to do so gives rise to a question of interpretation. The applicant relies on those words of cl. 14 which provide ``Any... interest withholding tax... incurred by Elders Finance... will be borne by the Borrower''. If the word ``incurred'' means imposed by force of the Act as a primary liability to pay the tax, then it is arguable that cl. 14 ``purports to have the purpose... of imposing on the mortgagor the obligation of paying income tax on the interest to be paid under the mortgage'' to the extent that withholding tax might be imposed on ELFIC.
That narrow interpretation of ``incurred'' in my view cannot be sustained. The clause is intended to place the burden of all costs and expenses on the applicant, including the various duties and fees expressly mentioned. Not all of these expenses are of the kind that would be imposed by force of statute. The word ``incurred'' in context is used broadly to mean any costs or expenses run into by ELFIC. It is used to describe the practical impact on ELFIC of having to meet costs and expenses in connection with all those aspects of the transaction mentioned in cl. 14. In the context that ELFIC was an Australian resident and therefore not a person who would derive interest income which would attract withholding tax under s. 128B the reference to ``interest withholding tax'' must be a reference not to interest withholding tax imposed on ELFIC by s. 128B, but to withholding tax imposed on non-resident entities who were lenders of foreign currency to ELFIC, and where the cost to ELFIC of borrowing those funds included compensation for the withholding tax. In this way ELFIC ``incurred'', that is ran into and was required to meet, interest withholding tax. So interpreted, cl. 14 would appear to have the purpose of imposing on the applicant not the obligation of paying income tax on the interest payable under the mortgage, or of income tax payable by ELFIC upon that interest, but the obligation of refunding ELFIC an amount equal to tax otherwise imposed on a third party in respect of interest payable between parties to a different transaction.
In this event s. 261(1) and 261(2) would have no application. But even if this interpretation of cl. 14 is incorrect, so that a provision in s. 261 renders cl. 14 void to the extent that it purports to shift the burden of any withholding tax that might be imposed under s. 128B, that conclusion does not assist the applicant's claim to recover the payments the subject of the proceedings. The ``withholding tax'' sought to be recovered is not tax that was imposed on ELFIC, and is not income tax on interest that was derived by ELFIC. On the contrary it was part of the actual cost of funds that in any event would fall under cl. 12.
The submissions of counsel for the applicant did not refer to s. 261(4) but for completeness that subsection should also be considered. That subsection applies to any provision in a mortgage which takes into account for the purpose of fixing, measuring, or calculating the rate of interest payable under the mortgage ``any income tax payable by the mortgagee''. As withholding tax was not imposed by the Act on ELFIC, this subsection can have no application.
The 1986 Agreement
In this agreement the applicant's argument rests on the following clauses in which the ``Company'' refers to the applicant:
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``D. Simulated Foreign Currency Option
Each Advance shall either be denominated in Australian Dollars (such Advance being a `Domestic Advance') or, at the option of the Company, be treated during its Term in accordance with Clause 3.2 as if denominated in a Foreign Currency (such advance being a `Foreign Advance'). Each Advance shall, notwithstanding, be made and repaid in Australian dollars.
E. Interest
E.3 Interest on each Foreign Advance properly outstanding is liable to be increased in the circumstances, manner and amount specified in Clauses 8.6 and 8.7 and also, without limitation, in an amount representing withholding tax (if any) payable with respect to interest paid or payable by Elders Finance on funds borrowed or raised by Elders Finance to enable it to make Foreign Advances, and if none, then in an amount calculated in accordance with Clause 8.7 as if such interest were to attract withholding tax.
- 8.6 If at any time by any applicable law, regulation or regulatory requirement of the Reserve Bank of Australia or (without limitation) any other government authority, monetary agency or central bank:
- (a) the Company is required to make any deduction or withholding from any sum payable by the Company under this Facility; or
- (b) Elders Finance is required to make any payment (either before or after all other liabilities of the Company under this Facility have been discharged) on account of tax (other than tax on its overall net income) or otherwise on or in relation to any amount received or receivable under this Facility;
then the sum payable by the Company in respect of which such deduction, withholding or payment is required to be made shall be increased to the extent necessary to ensure that after the making of such deduction, withholding or payment, Elders Finance receives and retains (free from any liability in respect of all such deduction, withholding or payment) a net sum equal to the sum which it would have received and so retained had no such deduction, withholding or payment been made.
- 8.7 The amount payable by the Company by way of interest on a Foreign Advance properly outstanding shall, to the extent that such amount has not been increased and is not liable to be increased pursuant to Clause 8.6 as a consequence of the application of Section 128B of the Income Tax Assessment Act, be increased on the terms and in the manner specified in Clause 8.6 as if (for the purposes of calculating the amount of such increase) such interest were income that consists of interest derived by Elders Finance to which the said Section 128B applied but to which Subsections 128B(6) and 128B(7) of the said Act did not apply.''
Clause D defines Foreign Advance. Clause E.3 directs attention first to cl. 8.6 and cl. 8.7. The circumstance described in cl. 8.6(a) did not arise as the Company (i.e. the applicant) was not required to make any deductions or withholding from any sum payable by it. Interest paid by the applicant to ELFIC was not subject to withholding tax. The circumstances described in cl. 8.6(b) did not arise either as ELFIC was not required to make any payment on account of tax (other than tax on its overall net income) in relation to any amount received or receivable under the agreement, again for the reason that interest paid by the applicant to ELFIC was not subject to withholding tax. It will be noted that cl. 8.6(b) expressly preserves the obligation of ELFIC to pay income tax on its net income which would be imposed in the ordinary course on interest income derived by it. Clause 8.6 has no operation which would attract the avoiding provisions of s. 261.
Clause 8.7 operates to increase the amount paid by the applicant to ELFIC by way of interest according to a fiction. The amount payable is increased ``as if'' interest payable by the applicant under the agreement were interest to which s. 128B applied to impose withholding tax. The same fiction is anticipated in clause E.3. Clauses E.3 and 8.7 establish a formula by which the cost to ELFIC of raising overseas currencies to make Foreign Advances are included in the calculation of interest payable by the applicant under the agreement.
As with the 1985 agreement, the interest payments thereunder, being interest payments
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derived by ELFIC and not by a non-resident, were not income to which s. 128B applied, and withholding tax was not imposed on ELFIC by s. 128B(5). The clauses in the 1986 agreement on which the applicant relies do not seek to shift an actual withholding tax obligation from ELFIC to the applicant. Section 261 has no application.The 1988 Agreement
The facility established by this agreement contemplated advances in either Australian dollars or foreign currencies. Clauses 5.01 and 5.02 imposed on the applicant as borrower the obligation to pay interest at the Prescribed Rate. The Prescribed Rate is defined to mean, where the foreign currency facility is being utilised, the FC Prescribed Rate. The FC Prescribed Rate is defined as meaning the aggregate of the Base Rate, the Withholding Margin and 4% per annum. Relevantly, Withholding Margin is defined as follows:
" `Withholding Margin' in respect of an Interest Rate Period, means a rate expressed as a rate per centum per annum calculated in accordance with the following formula:
100
WM = (FCR x -------) - FCR
100 - R
where:
WM = the Withholding Margin;
R = the rate of withholding tax
payable on interest payments
under the Income Tax
Assessment Act, 1936 (as
amended) of the Commonwealth
of Australia, at the
commencement of that Interest
Rate Period; and
FCR = either the applicable Libor Rate
or Sibor Rate for that Interest
Rate Period.''
These provisions create a formula for calculating the amount payable as interest on foreign currency borrowings but do not by their terms seek to shift the incidence of any tax actually imposed on ELFIC as lender to the applicant.
The applicant contends that it is cl. 7.02 which has the purpose or effect of shifting the incidence of taxation and which is rendered void by s. 261. By cl. 7.02 the applicant as ``Borrower agrees to pay all Taxes...'' and ``Taxes'' are defined broadly to include amongst a wide range of imposts, present and future income taxes and withholdings. The applicant contends that the definition of Taxes includes withholding tax imposed under s. 128B, and that cl. 7.02 therefore purports to have the purpose of imposing an obligation on the applicant to pay withholding tax. Even if those submissions are correct, and if it can be said that cl. 7.02 is rendered void by s. 261, at least to the extent that it purports to have the purpose of shifting the incidence of withholding tax, that does not assist the applicant. Clause 7.02 is not the Clause which requires the applicant to make the payments which it now seeks to recover. Those amounts of ``withholding tax'' were payable by the applicant to ELFIC not under cl. 7.02, but as part of the calculation of the FC Prescribed Rate. The formula by which that calculation was made does not seek to shift the incidence of taxation. It operates even where the interest payable under the agreement is not income to which s. 128B applies (as was this case).
Reference should also be made to cl. 6.04 of the 1988 agreement which deals with ``Additional Payments''. Clause 6.04(b) provides that if the Lender (ELFIC) is obliged to pay any Tax (other than Tax of the Lender upon its taxable income) in respect of any payment made under the agreement then the Borrower shall indemnify on demand the Lender against that Tax. There is room to argue whether this clause purports to have the purpose stated in s. 261(1) or 261(2) but again even if either of those subsections applied to render cl. 6.04(b) void in whole or in part that conclusion would not assist the applicant as the moneys claimed became payable as part of the FC Prescribed Rate calculation.
Other submissions by the applicant
The applicant contended that s. 261 should be construed very broadly so that it rendered void any covenant or stipulation in a mortgage that requires the borrower to pay money which has the effect of compensating for income tax, including withholding tax, which relates directly or indirectly to the borrowing. The outer limits of this interpretation of s. 261 were not stated, but it was submitted that it would at least encompass amounts calculated by reference to withholding tax imposed on interest paid by ELFIC to a non-resident lender to ELFIC which in turn were passed on to the applicant under the ``cost of funds'' clauses. I
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am unable to accept this submission which departs altogether from the words of s. 261. The provisions of s. 261 can only render void a covenant, stipulation or provision of the kind which fits the relevant statutory description. For example s. 261(1) plainly limits the application of the subsection to covenants or stipulations in a mortgage ``imposing on the mortgagor the obligation of paying income tax on the interest to be paid under the mortgage''. It is impossible to extend the meaning of this description to cover income tax on interest paid under another lending transaction to which the mortgagee is not a party.Counsel for the applicant towards the conclusion of his oral submissions suggested that the facts might not be as they are pleaded in the Amended Statement of Claim, and that on the other facts suggested the applicant could have a claim. This raised the question whether in the event that I accepted the respondent's submissions on the pleadings and agreements the proper order would be to strike out only the pleadings, not the proceedings, and to give leave to the applicant to replead.
The suggested facts were that ELFIC had borrowed the foreign currency lent to the applicant from a related company, Elders Australia Finance Ltd, and that because of the relationship between the two companies the Court should ``lift the corporate veil'' so as to treat ELFIC and Elders Australian Finance Ltd as the one entity. Implicit in this suggestion must be the further fact that Elders Australia Finance Ltd was a non-resident company to which s. 128B applied so to impose on it withholding tax in respect of interest paid by the applicant under the agreements. On the facts as suggested it was said that the Court could conclude that the withholding tax was in reality imposed on ELFIC. On enquiry as to the evidence to support these suggested facts the Court was referred again to the letter of 13 August 1991. This letter shows that Elders Australia Finance Ltd was one of many sources of foreign currency borrowed by ELFIC for its business operations - not just for the applicant's requirements. The letter suggests each of the lenders was a non-resident lending institution and that interest derived by each of the institutions from ELFIC attracted withholding tax. The letter does not throw any light on the relationship between ELFIC and Elders Australia Finance Ltd.
As this is a strike out application it is not appropriate for the Court to enquire into the sufficiency of the evidence of the suggested facts. To decide whether the applicant should be granted an opportunity to raise the different facts in amended pleadings the Court should assume the facts to be as the applicant suggests and on that basis consider whether those facts could give rise to a cause of action.
It is not easy on the information presently disclosed by the agreements and particulars to envisage how the suggested facts would lead to the conclusion that withholding tax imposed on Elders Australia Finance Ltd was in reality imposed on ELFIC, but I do not think it can be said that with other evidence that conclusion is obviously untenable. If the conclusion were established then it would be arguable that the provisions of s. 261 had application, especially s. 261(4) on the ground that the agreements contained a provision ``that any income tax payable by the mortgagee (ELFIC) or any portion thereof, shall be taken into account for the purpose of fixing, measuring or calculating the rate of interest'' payable under the agreements. However the case to be made on these grounds would be very much narrower than the case presently pleaded as it would give a cause of action only in respect of amounts equal to withholding tax imposed on Elders Australia Finance Ltd which was passed on to the applicant.
Conclusions
In my opinion the Amended Statement of Claim should be struck out as it plainly does not disclose any cause of action by the applicant against the respondent: FCR O. 11, r. 16.
However I do not think the proceedings should be dismissed without first giving the applicant leave to file a further amended statement of claim pleading a cause of action based on the suggested facts advanced by its counsel in oral argument.
THE COURT ORDERS THAT:
1. The amended statement of claim be struck out.
2. The applicant be at liberty to file and serve a further amended statement of claim within 28 days.
3. The applicant pay the respondent's costs of paragraph 1 of the notice of motion filed on 27 May 1994.
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