Court of Appeal (WA)|1999-08-20|Before: Anderson J, Pidgeon J, Parker J

Briggs v Curtis Quick & Associates [1999] WASCA 139 (20 August 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BRIGGS -v- CURTIS QUICK & ASSOCIATES [1999] WASCA 139

Practice and procedure - Pleadings - Statement of claim - Amendments - Whether amendments should be allowed - Principles

Curtis Quick & Associates v Briggs, unreported; SCt of WA; Library No 970598; 10 November 1997

Curtis Quick & Associates v Briggs, unreported; SCt of WA; Library No 990129; 16 March 1999

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566

Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323

Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1996-1997) 189 CLR 146

1 PIDGEON J: I agree with the reasons to be published by Anderson J and with the orders proposed.

2 ANDERSON J: This is an application for leave to appeal against a decision of Master Sanderson granting the plaintiff respondent leave to reamend its statement of claim.

3 The action was begun by writ issued out of the District Court on 8 December 1992. The action was removed to the Supreme Court in 1994.

4 For present purposes, the facts which are contended for by the plaintiff can be taken to be as follows.

5 In May 1995, one Quick had a proposal for the construction of a videotape manufacturing plant in Perth. He needed capital and reached an agreement with the defendant Briggs, the terms of which were that he would disclose details of the development proposal to Briggs to enable Briggs to participate in and finance the development. It was a term of the agreement that Briggs would not disclose any of the details of the proposed development. In breach of the agreement, Briggs disclosed details of the proposed development to one Connell, who then used the information to develop a videotape manufacturing plant at O'Connor. This led to the plaintiff (for whom Mr Quick had been acting) making claims against Briggs. These claims were compromised by an agreement between the plaintiff and Briggs made on 23 February 1987. Pursuant to that agreement, Briggs became obliged to pay the plaintiff $290,000 and he has not paid it.

6 It is that cause of action which is sought to be pleaded. In order to understand the issues in this appeal, it is necessary to examine the evolution of the statement of claim. An application to amend the statement of claim by substituting a fresh statement of claim came before Master Sanderson on 31 October 1997 and on 10 November 1997 he gave leave to amend in terms of the minute that was filed. In the form approved by the Master on 10 November 1997, the relevant paragraphs were as follows:

"6. Thereafter, in breach of the agreement referred to in paragraph 4 above, the Defendant:-

(a) disclosed or allowed disclosure of the details of the proposed venture to third persons;

(b) copied material details relating to the proposed venture;

(c) directly used, or allowed use to be made, of the confidential details of the venture to construct a commercial video tape manufacturing plant in the suburb of O'Connor near Fremantle;

(d) disclosing or providing copies of the confidential details of the proposed venture to one Lawrence Robert Connell (now deceased) or Oakhill Pty Ltd or Rothwells Ltd (now in liquidation) or their servants or agents;

(e) permitting the said Lawrence Robert Connell and/or Oakhill Pty Ltd and/or Rothwells Ltd, by their servants or agents, to use the confidential details of the proposed venture to acquire plant and equipment and technology from Elders-Pica Pte Ltd in Singapore;

(f) permitting Lawrence Robert Connell and/or Rothwells Ltd to acquire business premises at O'Connor and thereafter installing in them the plant, and engaging some of the personnel who had been identified in the confidential proposal as suitable to carry out the establishment and operation of the plant.

7. The Defendant was directly concerned in the wrongful exploitation of the confidential details of the plaintiff's venture in that:

(a) on or about 19 July 1985 he caused Burletta Nominees Pty Ltd, a company in which he then had a substantial shareholding, to obtain an option to purchase the plant referred to in paragraph 3 above from Elders-Pica Pte Ltd in Singapore for the sum of US$1,000,000;

(b) he caused or procured Burletta Nominees Pty Ltd to grant to Oakhill Pty Ltd an option for the latter company to acquire 50% of the issued share capital, or otherwise obtain a 50% controlling interest, of Burletta Nominees Pty Ltd;

(d) with the knowledge and consent of the Defendant on 16 September 1985 Lawrence Robert Connell caused Oakhill Pty Ltd to exercise its option to acquire 50% of the issued share capital of Burletta Nominees Pty Ltd and at the same time, or shortly thereafter, again with the knowledge and consent of the Defendant a placement of 50% of the issued share capital of Burletta Pty Ltd was made to Oakhill Pty Ltd;

(e) the Defendant and Connell, then caused or procured Burletta Nominees Pty Ltd to exercise its option for the purchase of the plant from Elders-Pica Pte Ltd on or about 18 September 1985 and thereupon paid to the vendor of that plant the sum of US$750,000. The balance of the purchase price of $250,000 was provided to Burletta Pty Ltd by a loan from L R Connell & Partners of which the said Lawrence Robert Connell was one of the two partners;

(f) the interest of the Defendant in the shareholding of Burletta Nominees Pty Ltd was held indirectly by Capital Resources Pty Ltd then controlled by the Defendant.

8. On or about 10 October 1986 the Defendant caused Capital Resources Pty Ltd to transfer its shareholding in Burletta Nominees Pty Ltd to Oakhill Pty Ltd for a consideration in money or money's worth of $1,450,000 in the following manner:-

(a) Oakhill Pty Ltd forgiving, and discharging Capital Resources Pty Ltd from, a debt then due and owing by Capital Resources Pty Ltd to Rothwells Ltd in the amount of $1,250,000 or thereabouts;

(b) Oakhill Pty Ltd causing or procuring L R Connell & Partners to transfer and deliver to the Defendant an Aston Marton Lagonda motor vehicle then worth $200,000 or thereabouts.

9. The foregoing actions of the Defendant referred to in paragraphs 6 to 8 above rendered the Defendant liable in damages to the Plaintiff for breach of the contract referred to in paragraph 4 above and/or liable in damages or liable to make compensation to the Plaintiff for the misuse and exploitation of the confidential details of the venture.

10. Throughout 1985 and 1986 the Plaintiff orally demanded from the Defendant, on divers occasions, compensation or damages for the Defendant's said breaches of contract and/or misuse of confidential information.

11. On or about 23 February 1987 the Defendant orally offered to the said Alan Brian Curtis Quick to settle and compromise all or any claims which the Plaintiff had been and was then still asserting against the Defendant in respect of the alleged breach of contract and misuse of the confidential information. The Defendant offered to pay to the Plaintiff 20% of all the moneys which the Defendant received in respect of the sale, transfer or exploitation of the confidential details of the venture, whether directly or indirectly from any or all of the said Lawrence Robert Connell, Rothwells Ltd, Burletta Nominees Pty Ltd or Oakhill Pty Ltd. The Defendant also demanded that if agreement to settle or compromise the claims on these terms was reached, the Plaintiff should agree to take no further action against the Defendant or any of the persons who had established or developed the video tape manufacturing plant with the use of the confidential details of the venture. For the Plaintiff the said Alan Brian Curtis Quick orally accepted this offer and the accompanying demand on 23 February 1987 at the Defendant's office at about 3.00pm that day. The amount payable by the Defendant to the Plaintiff pursuant to this agreement is the sum of:-

which thereupon became immediately due and payable.

12. Ever since 23 February 1987 the Defendant has failed or neglected to pay the money owing or any part of it."

7 The defendant appealed from the Master's order and the appeal was dismissed by the Full Court (Owen and Parker JJ) on 13 March 1998. Notwithstanding that it dismissed the appeal, the Full Court expressed concern about some aspects of the pleading. At page 13 of their joint judgment (Briggs v Curtis Quick & Associates, unreported; FCt SCt of WA; Library No 980141; 13 March 1998) the Full Court said:

"We have already expressed some concern at the way in which parts of the pleading have been drafted. It is perhaps unfortunate that these matters were not clarified and remedied at the time when leave was being sought. It will have to be done. We think that the most expeditious way of advancing this action towards trial is for us to dismiss the appeal but to indicate that in our view paras 7, 8 and 11 require amendment and that the applicant is entitled to particulars."

8 The effect of the dismissal of the appeal was that the Master's order that the statement of claim be amended in terms of the minute remained operative, with the result that the plaintiff was entitled to go to trial on that statement of claim. However, no doubt in response to the Full Court's expressions of concern, the plaintiff brought a summons for leave to reamend the statement of claim. The summons was contested and heard on 30 November 1998 before Master Sanderson. He ultimately disposed of it on 11 March 1999, after one or two adjournments. The Master gave leave to amend. It is that decision which is now sought to be appealed from.

9 The amendments add particulars to par 7(a), correct the name of Burletta Nominees Pty Ltd in par 7(b), add particulars to par 7(f), reform par 8(a) and reform par 11. The amended pleading must be set out. I do so hereunder.

"7. The Defendant was directly concerned in the wrongful exploitation of the confidential details of the Plaintiff's venture in that:

(a) on or about 19 July 1985 he caused Burletta Nominees Pty Ltd; a company in which he then had a substantial shareholding, to obtain an option to purchase the plant referred to in paragraph 3 above from Elders-Pica Pte Ltd in Singapore for the sum of US$1,000,000;

(i) the Defendant, through Capital Resources Pty Ltd, had a substantial shareholding in Burletta Nominees Pty Ltd on or about 19 July 1985 in that he and/or Capital Resources Pty Ltd held two-thirds of the issued share capital of Burletta Nominees Pty Ltd and one Graeme Nind then held the remaining one/third of the shares issued;

(ii) Further, the Defendant's substantial shareholding in Burletta Nominees Pty Ltd on or about 19 July 1985 is to be inferred from the fact that the Defendant applied on behalf of Burletta Nominees Pty Ltd to Rothwells Limited on 11 September 1985 for $1,750,000 to be applied, in part, for the purchase of a video tape making machine situated in Singapore which constituted part or all of the equipment referred to in sub-paragraph 6(e) above;

(f) the interest of the Defendant in the shareholding of Burletta Nominees Pty Ltd was held indirectly by Capital Resources Pty Ltd then controlled by the Defendant.

The Defendant controlled Capital Resources Pty Ltd in that:

(i) the Defendant was the public officer of Capital Resources Pty Ltd for the purposes of the Income Tax Assessment Act (1936) for the financial years ending 30 June 1985 to 1986 inclusive;

(ii) the Defendant and his wife Robyn Yvonne Briggs were the sole directors of the company for the financial year ending 30 June 1986;

(iii) the Defendant's wife, Robyn Yvonne Briggs, held seven shares in the capital of the company which was the entire issued share capital;

(iv) the directions and decisions of the Defendant were at all material times accepted and acted upon as the directions and decisions of the company.

(a) Oakhill Pty Ltd forgive, and discharging causing or procuring Rothwells Limited to forgive and discharge Capital Resources Pty Ltd from, a debt then due and owing by Capital Resources Pty Ltd to Rothwells Ltd in the amount of $1,250,000 or thereabouts;

(b) at some unknown date thereafter, possibly 26 March 1987, Rothwells Limited recorded in its books of account that the debt due to it by Capital Resources Pty Ltd in the amount of $1,250,000 or thereabouts had been paid as a result of the transfer of the shares in Burletta Nominees Pty Ltd previously held by Capital Resources Ltd to Oakhill Pty Ltd.

(c) Oakhill Pty Ltd causing or procuring L.R. Connell & Partners to transfer and deliver to the Defendant an Aston Marton Lagonda motor vehicle then worth $200,000 or thereabouts.

11. On or about 23 February 1987 the Defendant orally offered to the said Alan Brian Curtis Quick to settle and compromise all or any claims which the Plaintiff had been and was then still asserting against the Defendant in respect of the alleged breach of contract and misuse of the confidential information. The Defendant offered to pay to the Plaintiff 20% of all the moneys which the Defendant received, whether directly or indirectly through Capital Resources Pty Ltd or via any other person or entity in which the Defendant had a commercial interest, in respect of the sale, transfer or exploitation of the confidential details of the venture, whether directly or indirectly from any or all of the said Lawrence Robert Connell, Rothwells Ltd, Burletta Nominees Pty Ltd or Oakhill Pty Ltd. The Defendant also demanded that if agreement to settle or compromise the claims on these terms was reached, the Plaintiff should agree to take no further action against the Defendant or any of the persons who had established or developed the video tape manufacturing plant with the use of the confidential details of the venture. For the Plaintiff the said Alan Brian Curtis Quick orally accepted this offer and the accompanying demand on 23 February 1987 at the Defendant's office at about 3.00pm that day. The amount payable by the Defendant to the Plaintiff pursuant to this agreement is the sum of:-

which thereupon became immediately due and payable.

12. Ever since 23 February 1987 the Defendant has failed or neglected to pay the money owing or any part of it."

10 It is the underlined parts which the Master allowed as amendments on 11 March 1999 and it is his decision to do so which is the subject of the present appeal.

11 In my opinion, the particulars in par 7(a)(i) are not particulars of the plea in par 7(a). The plea is that the defendant, that is Mr Briggs, had a substantial shareholding in Burletta Nominees Pty Ltd. To stand as particulars of that plea, the purported particulars should be confined to the plea, as, for example, by particularising what was the shareholding held by the defendant. Instead, the particulars introduce new material to the effect that the shares were held by Capital Resources Pty Ltd. This is immediately followed by an inconsistent, and therefore embarrassing, plea to the effect that the shares were held by either the defendant or Capital Resources Pty Ltd. It is impossible to know whether it is contended that the defendant held a substantial shareholding in Burletta Nominees Pty Ltd or whether Capital Resources Pty Ltd held a substantial shareholding in Burletta Nominees Pty Ltd or whether the substantial shareholding alleged is the aggregate holding of the defendant and Capital Resources Pty Ltd. If the latter, then the particulars contradict the plea.

12 In my opinion, the particulars pleaded in par 7(a)(i) are plainly embarrassing and ought not to have been allowed.

13 As to particular 7(a)(ii), it contains a non sequitur. It purports to particularise the plea in par 7(a) that the defendant had a substantial shareholding in Burletta Nominees Pty Ltd by pleading that the fact is to be inferred from the defendant's conduct in making an application to Rothwells Ltd for a loan of $1,750,000 on behalf of Burletta Nominees Pty Ltd. The implication is that only a substantial shareholder in a company could or would make an application for a loan on behalf of the company. In truth, of course, any duly authorised agent of a company might do so.

14 The other problem with this particular is that it would appear to be a plea of mere evidence. The material fact pleaded against the defendant is that he held a substantial shareholding in Burletta Nominees Pty Ltd. A plea of conduct on his part which may be consistent with that cannot possibly be a plea of a particular. It can only be a plea of evidence. With certain exceptions, none of which would seem to be relevant in this case, a pleading may not contain evidence by which a fact is to be proved: O 20 r 8(1). In my opinion, the particulars pleaded in par 7(a)(ii) ought not to have been allowed.

15 The particulars to par 7(f) purport to be particulars of the plea that the defendant "controlled" Capital Resources Pty Ltd. In my opinion, particular (i) which pleads that the defendant was the public officer of the company for the purposes of the Income Tax Assessment Act in 1985 and 1986 cannot constitute a particular of "control". The implication is that public officers appointed for the purposes of that Act are persons who control the company_._ That cannot be right.

16 Particular (ii) is, in my opinion, capable of amounting to a particular of control on the part of the defendant, as is particular (iii). Whilst I think the days are long gone when it could be said to follow in point of fact that because a man's wife holds all the shares in a company the man controls the company, it cannot be said that the plea is bad in point of pleading.

17 The plea in par (iv) is awkward, to say the least. However, it is obviously intended to be a plea that the defendant exercised de facto control of the company, in that the defendant was a person in accordance with whose directions or instructions the directors of the company were accustomed to act within the meaning of s 60(1)(b) of the Corporations Law.

18 In my opinion, it was within a proper exercise of the Master's discretion to allow particulars (ii), (iii) and (iv). However, I do not consider that particular (i) ought to have been allowed.

19 As to the amendment to par 8(a), there is no direct complaint about this amendment and I am not persuaded the Master was wrong to allow it.

20 As to par 8(b), the plea that Rothwells recorded in its books of account that Capital Resources had repaid its debt to Rothwells by transfer of Burletta Nominees' shares to Oakhill is not a plea of any material fact. It is mere evidence from which, it would seem, an inference is sought to be drawn. The material fact is that payment was made and received. Proof of the fact may be given by proof of entries in books of account. Those entries are not themselves material facts. Putting that another way, if payment was made, it would not matter one jot whether receipt of the payment was or was not recorded in the books of account of the payee. That fact would be, as I have said, mere evidence. Therefore, it is not a permissible plea and ought not to have been allowed.

21 As to the amendment to par 11, the amended sentence is, in my opinion, plainly embarrassing. The sentence now is:

"The Defendant offered to pay to the Plaintiff 20% of all the moneys which the Defendant received, whether directly or indirectly through Capital Resources Pty Ltd or via any other person or entity in which the Defendant had a commercial interest ... "

22 The trouble with it is that it is not clear whether the new (underlined) part is an express term of the agreement or is to be implied and if the latter, it is not said how the implication arises. It is trite that a contract should be pleaded with particulars showing whether it is in writing or verbal or to be implied or partly one and partly the other: Turquand v Fearon (1879) 48 LJQB 703 at 704; Bullen & Leake and Jacobs Precedents of Pleadings 12th edition at 56. The author of that text tells us that:

"In actions founded on contract, the pleader should always state with full particulars the material facts relating to the contract, namely, the parties to the contract, its date and how it was made, whether orally or in writing or under seal or how otherwise. If the contract was made orally, particulars should be given of the date when, and the persons between whom the contract was made ... If any terms of the contract are alleged to be implied, particulars should be given of the facts and matters relied on as giving rise to the alleged implied terms."

23 The other possibility left open on the pleadings is that the underlined words were neither expressed at the time the contract was formed nor are to be implied, but are to be held to be a term of the contract upon a proper construction of the contract as a whole.

24 These pleading deficiencies create very real problems in this case because the defendant has already requested the usual particulars of the agreement and the plaintiff has answered them in a manner which shows that, in the conversation between the parties at which the agreement is said to have been made, there was no reference at all to the matter of indirect receipt. According to the particulars which have been delivered by the plaintiff, nothing was said during the relevant conversation between the parties to the effect that the defendant would pay to the plaintiff 20 per cent of moneys "received .. indirectly through Capital Resources Pty Ltd or via any other person or entity ... etc."

25 Whilst it might be said that matters such as whether terms of a contract are express or to be implied or are to be derived by application of the rules of construction are matters for particulars, if particulars have already been given and have not been withdrawn, it is not, with respect, a correct exercise of discretion to allow an amendment to the pleadings which is inconsistent with the particulars. The reason for this is that, if an amendment is allowed which is inconsistent with the particulars which have been delivered, the particulars are rendered bad by the amendment. The Court will not usually allow an amendment which produces such a result. At the very least, the party seeking the amendment would be required to withdraw the particulars as a condition of the grant of leave to amend.

26 In my opinion, the amendment to par 11 ought not to have been allowed unless accompanied by the usual particulars or, at the very least, unless accompanied by an amendment to the particulars already delivered.

27 I would grant leave to appeal and allow the appeal in part.

28 PARKER J: For the reasons given by Anderson J, with which I respectfully agree, I would grant leave to appeal and allow the appeal in part.

Briggs v Curtis Quick & Associates [1999] WASCA 139

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Judgment (85 paragraphs)

Briggs v Curtis Quick & Associates [1999] WASCA 139 (20 August 1999)

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Cases Cited (2)