The pleaded per quod claim
28The per quod claim brought by the Fourth and Fifth Plaintiffs is pleaded in this way:
[82] Proton supplies chemical specialty products and systems to the industrial laundry, food processing, food service, health care, hospitality and general industry sectors. Deluxe is a company which holds and develops property and provides finance to the companies owned by the second and third plaintiffs including Proton.
[83] The second and third plaintiffs are, and at all times since 28 June 1993 have been, the sole directors and shareholders of Proton.
[84] The second and third plaintiffs are, and at all times since 2 December 1986 have been, the sole directors of Deluxe. The third plaintiff is the owner of all but two shares in Deluxe, the remaining shares being held by the second plaintiff and by Joseph Chaina.
[85] At all times from 28 June 1993 to date, the second and third plaintiffs have been key employees of Proton and Deluxe, with their personal skills and services being essential to the companies' business success.
Particulars
The second plaintiff was the production and marketing manager of Proton and Deluxe, and was responsible for research and development, production, and sales.
The third plaintiff was the finance and administration manager of Proton and Deluxe and was responsible for all of its accounts, paperwork and payments, budgets and forecasts.
[86] By reason of the injuries to the second and third plaintiffs, Proton and Deluxe have lost the benefit of their services as principals, directors and managers of their businesses and have suffered loss per quod servitium amisit.
Particulars of Loss
Proton has suffered a general decline in business and profits and a reduction in future projected income, as a result of the inability of the second and third plaintiffs to devote their time and personal skills to the business, causing the loss of several customers.
Deluxe has suffered a decline in income as a result of the inability of the second and third plaintiff's to devote their time and personal skills to the business, and has had to sell assets as a result.
At the time of the injury, Proton had plans to launch several new liquid and powder variants of detergent concentrates with active enzyme. Because of the injuries to the second plaintiff, Proton has been unable to further develop or market the products.
Because of the injury to the second plaintiff, Proton has not expanded sales of its "Victory" detergent, launched in early 1999.
Prior to October 1999, Proton had completed the development of micro-enzymes technology products, to enhance laundry performance and reduce environmental impacts. Proton and Deluxe have been unable to further research and market this product due to the ill-health of the second plaintiff.
In 1999, Proton had developed a guest amenities range (shampoo, conditioner, gel) for hotels, intending to market it through its subsidiary, Jean-Pierre Cosmetics Pty Ltd. The products have never been marketed, because of the second plaintiff's inability to focus on marketing.
Prior to the injuries, Proton purchased premises at Lithgow to establish a research and development and training centre, and to lease out part for redevelopment. The site has not been used or redeveloped due to the inability of the second and third plaintiffs to oversee the project.
By reason of the third plaintiff's ill-health, Proton has incurred extra bookkeeping expenses.
29The matter was expanded upon in the Statement of Particulars filed on 24 September 2012 where the following appeared:
[36] Many of the responsibilities performed by the Second Plaintiff were only able to be performed by the Second Plaintiff.
Particulars
In his position as the Production and Marketing Manager of Proton and Deluxe, the Second Plaintiff was responsible for research and development, formulating new products, as well as the on-site maintenance of products and equipment formulated and designed by the Second Plaintiff.
The Second Plaintiff was also responsible for sales and had direct contact with Proton's clients to help problem-solve technical issues and design tailored products to suit clients' general and specific needs.
The Second Plaintiff's intimate knowledge of the products and equipment, as well as his scientific expertise and experience, was a key reason that clients provided their business to Proton.
[37] In or around June 1993, a fire destroyed Deluxe's manufacturing plant at Enfield ("the Fire"). The damage caused by the Fire resulted in a reduction in Deluxe's business.
Particulars
The fire destroyed the plant and manufacturing equipment, the research facility, trading stock, business records (including client lists and financial documentation, and intellectual property including documentation), formulations and specifications of the raw materials used at that time.
As a result of the damage caused by the Fire, Deluxe was not able to maintain some contracts and as a result these customers took their business elsewhere.
[38] Following the Fire, the Second and Third Plaintiffs proposed to relaunch their business in order to recapture and then improve on the market share that Deluxe had held prior to the Fire.
Particulars
The existing industrial products were reformulated in preparation for a re-launch into the industrial market ("the Industrial Re-launch") and a number of new product formulas were created by the Plaintiffs in preparation for a launch into the domestic market ("the Domestic Launch").
Proton was created as an entity to facilitate the Industrial Re-launch and the Domestic Launch, with Deluxe moving to its current role as a holding company and finance provider.
The following product lines were already being sold by Proton as at October 1999:
1. Challenger Range - targeting industrial laundry clients;
2. Classic Range - targeting commercial housekeeping and kitchen clients; and
3. Quantum Range - targeting food processing clients.
The following product lines were to be incorporated into Proton's Industrial Re-launch:
1. Vision Range - targeting housekeeping departments of hotels, hospitals, nursing homes and similar institutions;
2. Spectrum Range - a range of kitchen products targeting hotels, hospitals, restaurants and function centre kitchens;
3. Quantum Range - which was separated into six further categories; Quantum Food Processing, Quantum Dairy, Quantum Abattoir, Quantum Poultry, Quantum Brewery and Quantum Metal Treatment;
4. Orbital Range - floor care products;
5. Challenger Range - targeting large industrial and commercial laundry operations;
6. Challenger Plus Range - which incorporated enzyme technology and targeted large industrial and commercial laundry operations;
7. Victory One Shot - targeting motels and small industrial and commercial laundries; and
8. A guest amenities range for hotels.
The following product lines were to be incorporated by Proton in the Domestic Launch:
1. Powder Laundry Detergents;
2. Liquid Laundry Detergents;
3. Automatic Dishwashing;
4. Hand Dishwashing;
5. General Household Cleaners;
6 Toiletries, cosmetic and personal products; and
7. Shampoos and Conditioners.
Copies of the formulas developed by the Second Plaintiff have been provided to the Defendants.
[39] By reason of the injuries sustained by the Second and Third Plaintiffs resulting from the death of Nathan Chaina, Proton and Deluxe have been deprived of the services of the Second and Third Plaintiffs resulting in Proton and Deluxe suffering loss and damage per quod servitium amisit.
Particulars
Following the death of Nathan Chaina, the Second Plaintiff has suffered from, and continues to suffer from the injuries and disabilities as outlined in paragraph 4.
As outlined in paragraphs 35 and 36, the Second Plaintiff was responsible for a number of key roles within Proton and Deluxe and due to the injuries sustained by the Second Plaintiff following the death of Nathan Chaina, the Second Plaintiff has been unable to work in these roles.
Following the death of Nathan Chaina, the Third Plaintiff has suffered from, and continues to suffer from the injuries and disabilities as outlined in paragraph 9.
As outlined in paragraph 35, the Third Plaintiff was responsible for a number of key roles within Proton and Deluxe and, due to the difficulties sustained by the Third Plaintiff following the death of Nathan Chaina, the Third Plaintiff has been unable to work in these roles.
[40] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton was unable to proceed with the Industrial Re-launch or the Domestic Launch.
Particulars
As particularised in paragraphs 35 and 36, the Second and Third Plaintiffs had key roles in Proton that they were unable to maintain as a result of the injuries they have sustained.
The product lines particularised at paragraph 38 contained a variety of new technologies which had been formulated personally by the Second Plaintiff and was previously known only to him. Proton was therefore not able to proceed with the further development of the product lines identified at paragraph 38 without the input of the Second Plaintiff.
By reason of the injuries sustained by the Second Plaintiff outlined at paragraph 4, Proton has not been able to expand sales of its established "Victory" detergent line, launched in early 1999.
In 1999, Proton had developed a guest amenities range for hotels, which were intended to be marketed through its subsidiary, Jean-Pierre Cosmetics Pty Ltd. The products have never been launched because of the injuries suffered by the Second Plaintiff.
Particulars of Damages owed to the Fourth Plaintiff
Loss of Profits
[41] By reason of the Defendants' breach of the duly of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of profits.
Particulars
As particularised in paragraphs 35 and 36, the Second and Third Plaintiffs had key roles in Proton that they were unable to maintain as a result of the injuries they have sustained.
The loss of the Second and Third Plaintiffs' services has resulted in a substantial decline in Proton's existing business that was in operation as of 1999.
Accordingly, Proton claims loss of profits relating to the existing business from 1999 to 30 June 2011 as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, and totalling not less than $3,180,484.
Furthermore, Proton claims interest on the loss of profits in the amount of $3,725,087 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012.
Loss of Chance for the Industrial Re-launch
[42] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of chance in relation to the inability to proceed with the Industrial Re-launch.
Particulars
As particularised at paragraph 40, Proton was unable to proceed with the Industrial Re-launch.
Accordingly, Proton claims the loss of chance as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, totalling not less than $19,639,031 for the Industrial Re-launch.
Furthermore, Proton claims interest on the loss of chance in the amount of $23,001,879 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012. Loss of Chance for the Domestic Launch.
[43] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered from loss of chance in respect of its inability to proceed with the Domestic Launch.
Particulars
As particularised at paragraph 40, Proton was unable to proceed with the Domestic Launch.
Accordingly, Proton claims the loss of chance as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, totalling not less than $30,882,873 for the Domestic Launch.
Furthermore, Proton claims interest on the loss of chance in the amount of $36,171,037 as calculated in the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012.
Costs of hiring substitute employees
[44] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered loss resulting from hiring substitute employees in an attempt to mitigate damage to Proton.
Particulars
By reason of the Second Plaintiffs injuries, Proton has incurred the following extra expenses in attempting to retain employees of a similar level of skill and expertise to the Second Plaintiff:
1. John Childs $11,736.15
2. David Redfern $22,303.88
3. Kane Childs $3,384.45 Total $37,424.48
Costs of book-keeping and consultancy expenses
[45] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Proton has suffered costs associated with additional book keeping and consultancy services in an attempt to mitigate damage to Proton.
Particulars
By reason of the Third Plaintiffs injuries, Proton has incurred extra consultancy expenses from the following consultants:
1. Dr S W Li $6,732
2. Dr Arpad Phillips $4,140
3. Ross Griffith $170,277.90
4. Media Focus Global (Nigel Dique) $60,937.10
5. Ray Palmer $205,760
6. Hugh Grimm $5,253.50
7. Milward Doran $147,453.84
8. Alex Roudenko $243,700
Total $844,254.34
By reason of the Third Plaintiffs injuries, Proton has incurred extra book-keeping expenses from Ms Lilly Sukkar, totalling not less than $503,118.01.
Particulars of Damage to the Fifth Plaintiff
[46] By reason of the Defendants' breach of the duty of care owed to the Second and Third Plaintiffs, Deluxe has suffered from loss of profits.
Particulars
As particularised in paragraphs 35 and 36 of this Statement, the Second and Third Plaintiffs had key roles in Proton and Deluxe that they were unable to maintain as a result of the injuries they have sustained.
The loss of the Second and Third Plaintiffs' services to Proton and Deluxe has resulted in the property located at 19 Broadhurst Rd Ingleburn, which was held by Deluxe, having to be sold. The premature sale of this property has resulted in a loss of profits to Deluxe.
Accordingly, Deluxe claims loss of profits as calculated by the expert report of Pitcher Partners, Chartered Accountants, dated 31 August 2012, and totalling not less than $350,000.