Consideration
17 Before turning to the particular paragraphs of the statement of claim of which complaint is made, I make three general observations.
18 First, although the correspondence between the solicitors referred to whether or not further and better particulars should be given, I have addressed this interlocutory application by reference to r 16.02(1)(d) of the Federal Court Rules 2011 (Cth), that is, whether the pleading states the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved. In my opinion the interlocutory application was not concerned with the provision of particulars but with whether or not the necessary material facts had been pleaded. Counsel for the applicants accepted that he did not need further time or further opportunity to make submissions on the basis so identified.
19 Secondly, although it is not a defect to plead a conclusion, it is not sufficient simply to plead a conclusion drawn from unstated facts. A pleading is defective if it asserts a conclusion to be drawn from facts not stated.
20 Thirdly, contrary to the submissions on behalf of the applicants, it is not an answer to a pleading that is defective for failing to state the material facts on which a party relies that: "it is difficult to understand how the Respondents could not know those matters". The purpose of the pleading is to state the material facts on which the applicants rely to establish their case against the respondents.
21 In light of those principles, I turn to the statement of claim. So that my conclusions may be better understood, I have set out the paragraphs of the statement of claim immediately before I consider them. This is not, of course, a substitute for reading the statement of claim as a whole and for considering the individual paragraphs against the whole, which I have done.
22 I find that the following paragraphs fail to state the material facts and should be struck out, with leave to replead.
29. The fit out, branding and presentation of the Premises is the same, or substantially the same, as the fit out, branding and presentation of the salons operated by Blow Bar Co.
23 Paragraph 29 fails to state the material facts as to the fit out, branding and presentation of the two premises referred to, that is, the fit out, branding and presentation of the premises at shop 8, 100 Barangaroo Avenue, Barangaroo and the salons operated by Blow Bar Co. The paragraph needs to state the material facts as to what is the fit out, what is the branding and what is the presentation in respect of the premises referred to.
30. The services being offered to customers by Blown Lux are the same, or substantially the same, as those services offered to customers by Blow Bar Co.
24 Paragraph 30 fails to state the material facts as to the services being offered. The claimed services need to be stated, as do the claimed services offered to customers by Blown Lux and the claimed services offered to customers by Blow Bar Co.
31. The fit out, branding and presentation of the salons operated by Blow Bar Co is an original artistic work within the meaning of the Copyright Act 1968 (the Artistic Work).
25 Paragraph 31 fails to state the material facts relied on for the contention that "the fit out, branding and presentation of the salons operated by Blow Bar Co" is an artistic work as defined in s 10 of the Copyright Act 1968 (Cth). This deficiency carries through to paragraph 33 of the pleading which states no more than that: "By reason of the matters pleaded above, copyright subsists in the Artistic Work…".
34. The Artistic Work was created by Leigh for and on behalf of Blow Bar Co.
26 Paragraph 34 fails to state the material facts by which it is alleged that the "Artistic Work" was (a) created by Leigh and (b) for and on behalf of Blow Bar Co.
36. The fit out, branding and presentation of Blown Lux is a substantial reproduction of the Artistic Work.
27 Paragraph 36 fails to state the material facts by which it is alleged that the fit out, branding and presentation of Blown Lux, referred to in [28] of the statement of claim as a business, is a substantial reproduction of the pleaded Artistic Work.
38. By reason of the infringement set out in the previous paragraph, Blow Bar Co has suffered loss and damage and will, unless such acts and conduct are restrained, continue to suffer loss and damage.
28 Paragraph 38 fails to state the material facts relied on by way of causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated.
40. Further, the infringement was committed deliberately by TNCD, well knowing Blow Bar Co's rights, with the intention of appropriating for its own use and benefit the property of Blow Bar Co.
29 Paragraph 40 fails to state the material facts relied on for the claim that the infringement was committed deliberately by the third respondent. The actors need to be stated, as does their state of knowledge or state of mind. The same goes for the third respondent's intention.
42. The Literary Work sets out in print or writing the fit out, branding and presentation of the salons operated by Blow Bar Co, as well as the services offered by Blow Bar Co.
30 Paragraph 42 fails to state the material facts within the pleaded booklet: see [14] above.
45. The Literary Work was created by Leigh for and on behalf of Blow Bar Co.
31 Paragraph 45 fails to state the material facts by which it is alleged that the "Literary Work" was (a) created by Leigh and (b) for and on behalf of Blow Bar Co.
47. The fit out, branding and presentation of Blown Lux and the services offered by Blown Lux is a substantial reproduction or adaption of the Literary Work.
32 Paragraph 47 fails to state, as a form of expression, how (a) the pleaded fit out, branding and presentation of Blown Lux, referred to in [28] of the statement of claim as a business, and (b) the services offered by Blown Lux, is a substantial reproduction or adaptation of the pleaded Literary Work.
49. By reason of the infringement set out in the previous paragraph, Blow Bar Co, has suffered loss and damage and will, unless such acts and conduct are restrained, continue to suffer loss and damage.
33 Paragraph 49 fails to state the material facts relied on by way of causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated: see [28] above.
51. Further, the infringement was committed deliberately by TNCD, well knowing Blow Bar Co's rights, with the intention of appropriating for its own use and benefit the property of Blow Bar Co.
34 Paragraph 51 fails to state the material facts relied on for the claim that the infringement was committed deliberately by the third respondent. The actors need to be stated, as does their state of mind or state of knowledge. The same goes for the third respondent's intention: see [29] above.
52. The fit out, branding and presentation of the salons operated by Blow Bar Co, in conjunction with the services supplied to customers by Blow Bar Co, are recognised by customers as exclusively and distinctively indicating and associated with Blow Bar Co and the business of Blow Bar Co, and no other.
35 Paragraph 52 has the same deficiencies as paragraph 29 which I have found, at [23] above, to be deficient. There are also no material facts stated in relation to the claimed recognition by customers of the basis of the exclusive and distinctive indications and associations with Blow Bar Co and the business of Blow Bar Co, and no other.
53. By reason of matters pleaded above at paragraphs 26 to 30, since about (sic) on or about 13 February 2017 to the date of the issue of this Statement of Claim, TNCD has, without the licence or authority of Blow Bar Co, been engaged in the business of supplying, and advertising, promoting and offering for supply, services similar to the services supplied by Blow Bar Co from the Premises.
36 Paragraph 53 is a central paragraph insofar as it provides the basis for the later paragraphs 59-63. It in turn relies on paragraphs 29-30 which I have concluded are deficient. Paragraph 53 also fails to state the material facts as to the pleaded similarity between the services supplied by the third respondent and the services supplied by Blow Bar Co. The respondents' services need to be stated, the services supplied by Blow Bar Co from the premises need to be stated and the claimed similarity needs to be stated. There may also be a misidentification of the premises from which Blow Bar Co supplies the pleaded services.
55. McGann has caused TNCD to engage in the conduct pleaded in paragraphs 53 and 54 above and is a joint tortfeasor with it for the tort of passing off.
37 Paragraph 55 fails to state the material facts as to causation by McGann and by virtue of which he is said to be a joint tortfeasor.
56. The conduct pleaded in paragraphs 54 and 55 above is likely to injure and has injured the business, reputation and goodwill of Blow Bar Co.
38 Paragraph 56 has the same deficiencies as paragraphs 38 and 49, that is, the material facts that are said to give rise to the claimed injury need to be stated: see [28] above.
57. Blow Bar Co has suffered and is continuing to suffer loss and damage by reason of the wrongful acts and conduct of TNCD and McGann pleaded in paragraphs 54 and 55 above and will, unless such acts and conduct are restrained, continue to suffer loss and damage.
39 Paragraph 57 fails to state the facts said to make the causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated: see [28] above.
40 Once paragraph 53 is remedied, any defects in paragraph 59 would also be remedied.
60. The conduct pleaded in paragraph 53 above was misleading or deceptive or likely to mislead or deceive within the meaning of section 18 of The Australian Consumer Law.
61. …
62. The conduct described in paragraph 53 above constituted a false or misleading misrepresentation by TNCD that its services had a sponsorship or approval from Blow Bar Co that they did not have in contravention of subsection 29(1)(g) of The Australian Consumer Law.
63. The conduct described in paragraph 53 above constituted a false or misleading misrepresentation by TNCD that its services had a sponsorship or approval from Blow Bar Co or an affiliation with Blow Bar Co that they did not have in contravention of subsection 29(1)(h) of The Australian Consumer Law.
41 Paragraphs 60, 62 and 63 fail to state the material facts by reference to which it is said, respectively, that the conduct was misleading or deceptive or likely to mislead or deceive or constituted a false or misleading representation.
64. At all material times, McGann:
a. aided, abetted, counsel or procured;
b. induced; and/or
c. directly or indirectly, was knowingly concerned in, or party to:
the contraventions of The Australian Consumer Law by TNCD pleaded in paragraphs 60, 62 and 63 above.
42 Paragraph 64 fails to state the material facts by which it is pleaded that the first respondent aided, abetted, counselled or procure or induced or was knowingly concerned in or party to the contraventions by the third respondent. Once paragraph 64 is remedied then paragraph 65 may stand.
66. Blow Bar Co has suffered and is continuing to suffer loss and damage by reason of the contraventions of The Australian Consumer Law pleaded in paragraphs 60, 62 and 63 above and will, unless such contraventions are restrained, continue to suffer loss and damage.
43 Paragraph 66 fails to state the material facts said to make the causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated: see [28] above.
68. By reason of the matters pleaded at paragraphs 6 to 30, TNCD:
a. has engaged in conduct that is unconscionable, within the meaning of the unwritten law from time to time, in contravention of section 20 of The Australian Consumer Law; or
b. has engaged in conduct that is, in all the circumstances, unconscionable, in contravention of section 21 of The Australian Consumer Law.
44 Paragraph 68 fails to state the material facts by reference to which it is pleaded that the conduct is unconscionable.
69. At all material times, McGann:
a. aided, abetted, counsel (sic) or procured;
b. induced; and/or
c. directly or indirectly, was knowingly concerned in, or party to:
the contraventions of The Australian Consumer Law by TNCD pleaded in paragraph 68 above.
45 Paragraph 69 has the same defects as paragraph 64. Once paragraph 69 is remedied paragraph 70 may stand.
71. Blow Bar Co has suffered and is continuing to suffer loss and damage by reason of the contraventions of The Australian Consumer Law pleaded in paragraph 68 above and will, unless such contraventions are restrained, continue to suffer loss and damage.
46 Paragraph 71 fails to state the material facts said to make the causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated: see [28] above.
74. Some or all of the information referred to in the preceding paragraph was confidential information within the meaning of clause 1 of the Confidentiality Agreement (the Confidential Information).
47 Paragraph 74 fails to state the material facts relied on in the bundle of documents produced on 13 February 2018 and said to be the confidential information within the meaning of cl 1 of the Confidentiality Agreement.
76. In breach of clause 2.1 of the Confidentiality Agreement, McGann has used, and is continuing to use, the Confidential Information for purposes other than that pleaded in the preceding paragraph.
48 Paragraph 76 fails to state the material facts relied on for the claim that the first respondent has (a) used the claimed confidential information and (b) used the claimed confidential information for the purposes there pleaded.
80. In breach of clause 4.1 of the Confidentiality Agreement, McGann has provided the Confidential Information to TNCD for the purposes of operating Blown Lux.
49 Paragraph 80 fails to identify the confidential information said to have been provided by the first respondent to the third respondent.
83. In breach of clause T of the Shareholders Agreement, the McGann Family Trust has disclosed, divulged or otherwise placed at the disposal of TNCD the Confidential Information.
50 Paragraph 83 fails to state the material facts for the claim that the pleaded confidential information was disclosed, developed or otherwise placed at the disposal of the third respondent.
85. At the time of entering into the Shareholders Agreement, it was the agreement or common intention of the Company, the Dole Family Trust and the McGann Family Trust that it be an express term of the Shareholders Agreement that the McGann Family Trust invest a minimum of $550,000 in the Company, being:
a. $350,000 for 45% of the issued share capital in the Company;
b. a loan of $200,000 for the rental bond for the Premises and the fit out of the Barangaroo Blow Bar, which loan would be repaid upon payment by Lendlease of the fit out contribution; and
c. a loan for any further funds required to complete the fit out of the Barangaroo Blow Bar and enable it to commence trading, which loan would be repaid after the Barangaroo Blow Bar commenced trading and in priority to the payment of any dividends.
51 Paragraph 85 fails to state the material facts relied on for the pleaded common intention.
90. By reason of the breach of the Shareholder Agreement by the McGann Family Trust pleaded in paragraph 89 above, the Dole Family Trust suffered loss and damage.
52 Paragraph 90 fails to state the material facts making the causal link, that is, the material facts that are said to give rise to the claimed loss and damage need to be stated: see [28] above. Further, the paragraph fails to state the material facts which identify, if it be the case, the obligation said to be owed by the second respondent to the second applicant.
91. From about July 2016 onwards the Dole Family Trust and the McGann Family Trust proceeded on the common assumption that the McGann Family Trust invest a minimum of $550,000 in the Company, being:
a. $350,000 for 45% of the issued share capital in the Company;
b. a loan of $200,000 for the rental bond for the Premises and the fit out of the Barangaroo Blow Bar, which loan would be repaid upon payment by Lendlease of the fit out contribution; and
c. a loan for any further funds required to complete the fit out of the Barangaroo Blow Bar and enable it to commence trading, which loan would be repaid after the Barangaroo Blow Bar commenced trading and in priority to the payment of any dividends.
53 Paragraph 91 fails to state the material facts relied on for the claim that the named entities, the Dole Family Trust and the McGann Family Trust, proceeded on the pleaded common assumption.
92. The Dole Family Trust and the McGann Family Trust knew or intended that each other would act on the basis of the common assumption pleaded in paragraph 91 above.
54 Paragraph 92 fails to state the material facts relied on for the claim of knowledge or intention.
95. Prior to the Company being incorporated, or alternatively prior to the execution of the Shareholders Agreement by the Dole Family Trust, or both, the McGann Family Trust represented to the Dole Family Trust that the McGann Family Trust would invest a minimum of $550,000 in the Company, being:
a. $350,000 for 45% of the issued share capital in the Company;
b. a loan of $200,000 for the rental bond for the Premises and the fit out of the Barangaroo Blow Bar, which loan would be repaid upon payment by Lendlease of the fit out contribution; and
c. a loan for any further funds required to complete the fit out of the Barangaroo Blow Bar and enable it to commence trading, which loan would be repaid after the Barangaroo Blow Bar commenced trading and in priority to the payment of any dividends.
55 Paragraph 95 fails to state the material facts relied on for the representation said to be made by the McGann Family Trust.