M Plus Advisers Pty Ltd v Frino [2025] ACTSC 517

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title: M Plus Advisers Pty Ltd v Frino Citation: [2025] ACTSC 517 Hearing Date: 26 August 2025 Decision Date: 24 November 2025 Before: Muller AJ Decision: See [87]

Catchwords: CIVIL PROCEDURE – PRACTICE AND PROCEDURE – Application for summary judgment in favour of defendants – whether plaintiff’s claim bound to fail – unresolved factual contentions – not open to conclude claim bound to fail – application dismissed PRACTICE AND PROCEDURE – PLEADINGS – Application to strike out statement of claim in whole – whether pleadings disclose reasonable cause of action – court must proceed on basis factual allegations will be proved – pleadings raise prospect of fiduciary breach by first defendant – application dismissed PRACTICE AND PROCEDURE – PLEADINGS – Application to strike out statement of claim in part – requirement of pleadings to give defendants notice of case to be met – where deficiencies in pleading of material facts – failure to specifically plead allegations of dishonesty and fraud – parts of pleadings struck out PRACTICE AND PROCEDURE – ADMISSIBILITY – Where statements from settlement conference and communications marked “without prejudice” contained in affidavit – whether settlement negotiations bona fide – lack of bona fides not established – privilege against disclosure in s 131 of Evidence Act applies – evidence inadmissible PRACTICE AND PROCEDURE – ADMISSIBILITY – Where hearsay evidence contained in affidavit – whether exception in s 75 of Evidence Act applies – hearing of summary judgment application is not interlocutory – s 75 does not apply – evidence inadmissible Legislation Cited: Court Procedures Rules 2006 (ACT), rr 405, 406, 407, 411, 417, 425, 1147, 1900, 1901, 1903, 1904(3)(b) Evidence Act 2011 (ACT), ss 59, 75, 131 Cases Cited: Agar v Hyde [2000] HCA 41; 201 CLR 552 Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; 265 CLR 1 Aspen Medical Pty Ltd v BA Capital Inc [2021] ACTSC 321 Attorney-General (NSW) v Wentworth (1988) 14 NSWLR 481 Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; 191 FCR 1 Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352; 236 ALR 720 Bruce v Odhams Press Ltd [1936] 1 All ER 287; 1 KB 697 Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20; 4 ACTLR 114 Carlisle v Filaria Pty Ltd [2002] ACTSC 33 CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4) [2024] ACTSC 345 Coe v Commonwealth (1979) 24 ALR 118; 53 ALJR 403 Davis v Commonwealth (1986) 61 ALR 18; 61 ALJR 32 Dey v Victorian Railways Commissioners (1949) 78 CLR 62; 23 ALJR 48 Dhillon v The Canberra Sikh Association Inc [2025] ACTSC 271 Duffy Kennedy Pty Ltd v Galileo Miranda Nominee Pty Ltd [2020] NSWCA 25; 101 NSWLR 927 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241; 71 ALJR 448 Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486 Galovac Pty Ltd v ACT [2010] ACTSC 132; 19 ACTLR 238 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gunns Ltd v Marr [2005] VSC 251 H 1976 Nominees Pty Ltd v Galli (1979) 30 ALR 181 Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; 87 NSWLR 609 King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076; 64 NSWLR 441 McColley v Commonwealth [2014] ACTCA 21 McGuirk v University of New South Wales [2009] NSWSC 1424 NRMA Insurance Ltd v AW Edwards Pty Ltd (1995) 11 BCL 200 Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25; 214 CLR 514 Rodgers v Rodgers (1964) 114 CLR 608 Scott MacRae Investments Pty Ltd v Baylily Pty Ltd [2011] NSWCA 82 Seven Network Ltd v News Ltd (No 4) [2005] FCA 244; 214 ALR 686 South Shropshire District Council v Amos [1987] 1 All ER 340 Stergiou v Citibank Savings Ltd [1998] ACTSC 134; 148 FLR 244 Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 Twining v Curtis [2009] ACTSC 106; 3 ACTLR 174 Parties: M Plus Advisers Pty Ltd (Plaintiff) Carla Frino (First Defendant) Tally HQ Pty Ltd (Second Defendant) Representation: Counsel R Markham (Plaintiff) J Nottle (Defendants) Solicitors Adero Law (Plaintiff) Kamy Saeedi Law (Defendants) File Number: SC 72 of 2025 MULLER AJ: Introduction

The dispute that is the subject of this proceeding arises out of the sale of an accountancy services practice previously operated by Papandrea Partners Pty Ltd (Papandrea Partners). The first defendant, Carla Frino, was employed by Papandrea Partners for some years prior to the sale, first as a receptionist and then later as an accountant.
On 1 July 2021, the majority shareholding in Papandrea Partners transferred from Michael Papandrea (MP) to Michael Konarzewski (MK) pursuant to a share purchase agreement (the share transfer). MK had previously operated an accountancy services business via an entity described as Jigsaw Tax and Advisory Pty Ltd (Jigsaw).
Shortly prior to the completion of the share transfer from MP to MK, the plaintiff company was incorporated with a view to it being the entity through which MK serviced the Jigsaw clients and the Papandrea Partners clients. In November 2021, the plaintiff company commenced trading under the name Prowess Partners, servicing both client bases. At about that time, all of the clients and employees of Papandrea Partners transferred to the plaintiff (or a related entity). MP and CF continued as employees of the business.
By November 2024, the relationship between MK, MP and the first defendant had broken down, and some negotiations ensued with a view to a division of the business into two shares, with one share to be managed by MP and the first defendant and the other share retained by MK. Whether those negotiations resulted in a concluded agreement, and the terms of that agreement, are at the heart of the dispute between the parties.
In or around January 2025, the first defendant and MP commenced trading from new premises. There were two email communications with clients at the time concerning the changed arrangements splitting the firm into two, dated 31 January 2025 and 26 February 2025. The existence or otherwise of an agreed list concerning the division of clients between the two businesses, created shortly after the first email was sent to the clients, is also a matter of significant contention in the proceedings. The plaintiff asserts that the division of the client list was not agreed. The plaintiff also asserts that it has suffered loss and damage as a result of the conduct of the defendants in their treatment of the former clients of Prowess Partners.
The involvement of the second defendant in the proceedings is because it is an entity established by the first defendant, and MP's wife, Geraldine Capezio (GC), as a corporate vehicle for the conduct of the new accounting services business to be operated by MP and the first defendant, with the first defendant as its sole director.
This proceeding was commenced by the plaintiff on 7 March 2025. An amended originating claim and a statement of claim was filed with leave of the court on 12 June 2025. In the application in proceeding that is now before the Court, the defendants seek the following orders:

(a) An order pursuant to r 1147 of the Court Procedures Rules 2006 (ACT) (the CPR) for summary judgment in favour of the first and second defendants;

(b) In the alternative to Order 1, an order pursuant to r 425(1)(a) and r 425(3) of the CPR that the statement of claim filed on 12 June 2025 be struck out in whole and the proceedings be stayed;

(c) Further in the alternative to Order 1, an order under r 425(1) of the CPR that the pleadings be struck out in the following respects: pars 10, 12, 16, 17, 19-30, 33- 35, 37-39, 42, 43, 47, 51, 56-62, 64, 65 and 67;

(d) An order pursuant to r 1900 of the CPR that the plaintiff pay security for the defendant’s costs of the proceedings in the amount of $80,000;

(e) An order pursuant to r 1903 of the CPR that the plaintiff pay the security by way of payment into court on or before 60 days from the date that the order is made, or the proceedings be dismissed pursuant to r 1904(3)(b) of the CPR; and

(f) Costs.

The affidavits that are read in relation to the application are:

(a) The affidavit of Erin Taylor, affirmed on 4 July 2025; and

(b) The affidavit of Carla Frino, affirmed on 7 March 2025.

In respect of the affidavit of Ms Taylor, the plaintiff takes objection to the following parts of the affidavit evidence (the objected material) in a letter from Adero Law dated 25 August 2025, on the basis that they are in the nature of “without prejudice” communications:

(a) Paragraphs 29 to 30 of the affidavit of Ms Taylor, which relate to correspondence from MK marked “without prejudice” dated 27 November 2024;

(b) Paragraphs 71 to 72 of the affidavit of Ms Taylor, which relate to correspondence from Adero Law marked “without prejudice” dated 20 March 2025;

(c) The correspondence referred to by (a) and (b) as exhibited to the affidavit of Ms Taylor; (d) Paragraphs 65 to 69 of the affidavit of Ms Taylor, which relate to the content of “without prejudice” settlement discussions between the plaintiff and the defendants on 17 March 2025; and

(e) Paragraphs 20 to 26 of a letter of Ms Taylor, dated 23 June 2025, which refers to the topics in (b) and (d), and is exhibited to the affidavit of Ms Taylor.

In addition, the plaintiff objects to pars 31 to 43 of Ms Taylor’s affidavit on the basis that the matters referred to in the paragraphs are not matters on which Ms Taylor is in a position to lead evidence on a first-hand basis or could have personally known about. The plaintiff submits the paragraphs therefore constitute inadmissible hearsay or opinion evidence.
Without accepting the propositions put by the plaintiff as to the admissibility of the relevant portions of the affidavit of Ms Taylor, counsel for the defendants agreed to proceed without placing reliance upon the portions of the affidavit identified in Adero Law’s letter as being in the nature of “without prejudice” communications. However, reliance was still sought to be placed on pars 31 to 34 of the affidavit, on the basis that the interlocutory proceeding hearsay exception under s 75 of the Evidence Act 2011 (ACT) (Evidence Act) applied.
After further submissions from each of the parties, I allowed the application to proceed on the basis that I would not have regard to the objected material for the purposes of determining the application, but that I would deal with the admissibility of the material in my reasons.

The statement of claim

The plaintiff seeks damages and equitable compensation from the defendant. As against the first defendant, it pleads:

(a) The first defendant was initially employed by Papandrea Partners in November 2011 and was subject to a written contract of employment.

(b) The first defendant’s contract contained confidentiality obligations that continued throughout the period of her employment with Papandrea Partners.

(c) In November 2021, her employment transferred to the plaintiff and the terms of her employment contract novated to the plaintiff as her employer.

(d) In her continuing employment with the plaintiff, she had access to “Confidential Information” as that term was defined in her contract of employment. (e) There was subsequently a relationship breakdown between the plaintiff and the first defendant.

(f) In the context of that breakdown, a meeting was held and an in-principle agreement was reached for the separation of the business into two parts.

(g) A final agreement was never reached as to:

(i) Which clients would remain with the plaintiff;

(ii) Which clients would be transferred to the new entity;

(iii) The terms on which the clients would be transferred; and

(iv) The discharge of a loan security imposed over the client files from Papandrea Partners.

(h) On 27 January 2025 the first defendant (and others) commenced trading in a new accounting services business.

(i) On 31 January 2025 an email was sent to clients (with the plaintiff’s knowledge and consent) advising of the upcoming split of the practice.

(j) Thereafter, the first defendant encouraged and solicited clients that were previously clients of the plaintiff to move to the new business, in circumstances where a client division list was not agreed.

(k) In the premises, the first defendant:

(i) Dishonestly breached her contractual and common law employment duties to the plaintiff; and

(ii) Dishonestly breached her fiduciary duties.

As against the second defendant, it is pleaded that the second defendant:

(a) Had actual knowledge of the fiduciary breaches;

(b) Received a benefit from those breaches; and

Application for summary judgment

Principles on summary judgment

Rule 1147 states: 1147 Summary judgment—for defendant (1) A defendant may apply to the court for summary judgment against a plaintiff at any time after filing a notice of intention to respond or defence. Note Pt 6.2 (Applications in proceedings) applies to an application under this rule. (2) The court may give judgment for the defendant against the plaintiff for the plaintiff’s claim for relief (or part of it) if satisfied— (a) that the claim (or part of it) is frivolous or vexatious; or (b) that there is a good defence to the claim (or part of it) on the merits; or (c) that the proceeding should be finally disposed of summarily or without pleadings. (3) The court may make any other order it considers appropriate. Example stay the proceeding
The principles applying to such an application are well established:

(a) The remedy is to be sparingly used and should only be exercised with the utmost caution in very clear cases: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130.

(b) Summary judgment is a discretionary remedy: Aspen Medical Pty Ltd v BA Capital Inc [2021] ACTSC 321 at [69].

(c) The party seeking summary judgment must pass a very high threshold: Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 (Financial Integrity Group) at [12].

(d) The power should be reserved for hopeless actions; mere implausibility in a claim or an improbability of success will not be sufficient: Dey v Victorian Railways Commissioners (1949) 78 CLR 62; 23 ALJR 48 (Dey) at 90-91; Seven Network Ltd v News Ltd (No 4) [2005] FCA 244; 214 ALR 686 at [14].

(e) There must be a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial: Agar v Hyde [2000] HCA 41; 201 CLR 552 at [57].

(f) The more complex and arguable the legal point, or the more debatable the factual premises on which the claim relies, the less likely it is that summary judgment will be appropriate: NRMA Insurance Ltd v AW Edwards Pty Ltd (1995) 11 BCL 200.

(g) If the pleading is ill-expressed, that alone will be insufficient to justify summary judgment – the application must be determined on the substance, not the mere form or expression, of the claim: Stergiou v Citibank Savings Ltd [1998] ACTSC 134; 148 FLR 244 at [15]; Financial Integrity Group at [15].

(h) Consideration of matters outside of the pleadings may be required, such as where the allegations are legally adequate but have no realistic chance of being proved: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352; 236 ALR 720 at [37]; Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 at 282.

(i) Issues of fact are not to be decided: Financial Integrity Group at [19].

(j) A claim may be considered frivolous or vexatious if it is, inter alia, brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise: Attorney-General (NSW) v Wentworth (1988) 14 NSWLR 481 at 491.

As Latham CJ observed in Dey at 85:

If, as a result of argument, the court reaches a clear decision which could not be altered by any evidence which could be adduced at the trial, then it is proper in the interests of both parties to dismiss the action instead of allowing the parties to incur completely useless expense.

Defendants submissions

It is the defendants’ contention that the proceedings are bound to fail. They make that submission on the basis that, firstly, the facts do not establish any relevant breach, and secondly, that any conduct complained of was conduct undertaken with the knowledge and consent of MK and, in turn, the plaintiff.
The defendants contend that consent is a complete defence to a claim for breach of fiduciary duties, relying upon the decision of the Federal Court in Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; 191 FCR 1 at [106]-[110]. That case concerned an allegation of breach of fiduciary duties by an employee of an electronics company, heard before the Federal Court. The plaintiff, being the employer, was partially successful in obtaining a permanent injunction against the defendants at trial but appealed against the trial judge’s refusal to grant equitable compensation. A key issue on appeal concerned whether the first defendant had a positive obligation to disclose the possibility of conflict between his duty to the plaintiff and his own self-interest as a result of his conduct.
Besanko J, writing the leading judgment, noted (at [105]-[107]) that there were two views in relation to disclosure. The first view is that there is no duty to disclose a conflict, but rather a defence of fully informed consent where a prima facie breach is made out. The alternate view is that there is a duty of disclosure in circumstances involving a conflict, such that the duty is not to act in conflict without the informed consent of the principal. Having considered both views, Besanko J (Finkelstein and Jacobson JJ agreeing) concluded at [108]:

It seems to me the first view is the correct one. It seems to me to be the orthodox approach because there is undoubtedly a breach when the fiduciary places himself or herself in a position of conflict. The breach is excused or perhaps does not arise if the principal consents. In other words, it is not enough that there be disclosure, there must be consent. Disclosure is part of a defence.

In the present case, the defendants submit that the claims put by the plaintiff are without merit, because the facts demonstrate that MK had initiated, known and assisted the first defendant in commencing her new entity, and was therefore aware of and consented to the first defendant’s actions. The defendants place emphasis on their submission that MK assisted the first defendant with obtaining her tax registration practitioner status, in furtherance of her commencement of the operations of the second defendant. The defendants also submit that the first defendant compiled the client list at the behest of MK, and provided it to him for the purpose of furthering the split.
The defendants say that the plaintiff’s claim is vexatious, on the basis that it is brought for a collateral purpose, namely to litigate the original July 2021 transaction under which MK purchased Papandrea Partners. In particular, the defendants note that the plaintiff previously sought and obtained orders to have MP and Vik Sundar (the legal adviser for 1 both sides of the transaction) joined as defendants to the claim. The defendants note that an affidavit made by MK dated 8 August 2025, places emphasis on the receipt of management and other fees by MP since the original transaction occurred, without apparent explanation.

Plaintiff submissions

The plaintiff submits there is a good arguable case before the court, on the basis of the first defendant’s own evidence. The plaintiff describes its principal claim as one of breach of fiduciary duties. It notes that the first defendant accepted she had been employed by the plaintiff until at least 28 February 2025, and that she was in a managerial position within the firm. It contends the first defendant solicited clients to be transferred to the second defendant before and after the end of her employment, to the detriment of the plaintiff, in breach of her contractual, common law and fiduciary duties to the plaintiff. In relation to the fiduciary duty, the plaintiff notes there is no requirement to prove that the fiduciary acted fraudulently or dishonestly in order for a breach to be made out.

1 The application to amend the claim to include MP and Mr Sundar was later dropped by the plaintiff in favour of commencing separate proceedings against them.

In any event, the plaintiff submits that the defendants appear to accept the plaintiff has an arguable case, albeit one they believe to be of “low prospects”. The plaintiff submits that for the defendants to contend otherwise would constitute a collateral attack on a previous interlocutory decision in this matter made by McWilliam J, dated 7 March 2025, in which her Honour found there was a serious question to be tried. The plaintiff concludes that the defendants’ submissions are insufficient to demonstrate a clear lack of cause of action, as the threshold requires showing more than just “mere implausibility”.
In relation to the issue of vexatiousness, the plaintiff submits the claim is clearly about pursuing the alleged loss of clients, from Papandrea Partners to the defendants for no consideration. The plaintiff accepts that it foreshadowed future claims in relation to the original sale of Papandrea Partners in 2021, but these were “secondary matters to be agitated following a mitigation of loss” in the current proceedings. The plaintiff submits that there is no pleading or proposed order which seeks to undo the transaction.

Consideration

In determining this part of the application, it is necessary for me to have reference to the evidence before me, other than the objected material, as a whole. Accepting for present purposes some difficulty with the form of pleading, the question for the court is whether the plaintiff’s claim is bound to fail. In respect of the common law duty an employee owes to their employer, the law is quite clear. It is a duty to act in the employer's best interests and a duty not to benefit themself to the detriment of the employer.
Gageler J (as his Honour then was) set out the relevant principles in Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; 265 CLR 1 at [67]-[70]. Those may be summarised as follows:

(a) The duty of a fiduciary is one of absolute and disinterested loyalty to act in the exclusive interest of another;

(b) It encompasses overlapping equitable obligations, often referred to as the “conflict rule” and the “profit rule”;

(c) The conflict rule appropriates to the employer any benefit or gain obtained or received by the fiduciary in circumstances where there is a conflict of personal interest or a possibility of such conflict;

(d) The profit rule requires the fiduciary to account for any such benefit obtained by reason of their fiduciary position; (e) The unconscionable conduct attracting equitable remedies is one that arises where the fiduciary acts in the pursuit of an interest other than the exclusive interest of the employer;

(f) The benefit gained by the fiduciary does not need to be one that also causes detriment to the employer; and

(g) The fiduciary need not have acted fraudulently or dishonestly for a breach of the obligation to arise.

Where, as in this case, the additional allegation of dishonesty is made in the pleaded claim, the question to be addressed is whether or not the employee has acted in a way that breaches ordinary standards of honest behaviour: see Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; 87 NSWLR 609 at [124].
I am not satisfied, on the basis of the material before me, that it is open to the Court to conclude that the plaintiff’s case is destined to fail. There are factual contentions relating to the timing of cessation of the first defendant’s employment relationship and the level of agreement reached concerning division of clients that are likely to be critical in the determination of the claims advanced by the plaintiff. These are factual matters which are not appropriate for me to resolve in the context of this application, that should properly be left for a court which has been presented with all of the evidence and had the opportunity for the orderly admission, exclusion, weighing and, where appropriate, testing of that evidence through cross-examination.
The defendants’ application for summary judgment must therefore fail.

Striking out the pleadings in their entirety

Principles on striking out pleadings in whole

Rule 425 of the CPR confers power on the Court to order that a pleading or part of a pleading be struck out on the basis of one of four grounds.
The rule states:

425 Pleadings—striking out (1) The court may, at any stage of a proceeding, order that a pleading or part of a pleading be struck out if the pleading— (a) discloses no reasonable cause of action or defence appropriate to the nature of the pleading; or (b) may tend to prejudice, embarrass or delay the fair trial of the proceeding; or (c) is frivolous, scandalous, unnecessary or vexatious; or (d) is otherwise an abuse of the process of the court. Note 1 The registrar may also reject a document that is filed if it does not comply with these rules (see r 6140 (Rejecting documents—noncompliance with rules etc) or if it is an abuse of the court’s process or is frivolous or vexatious (see r 6142 (Rejecting documents—abuse of process etc)). Note 2 Pt 6.2 (Applications in proceedings) applies to an application for an order under this rule. Note 3 Rule 6901 (Orders may be made on conditions) provides that the court may make an order under these rules on any conditions it considers appropriate. (2) The court may receive evidence on the hearing of an application for an order under this rule. (3) If the court makes an order under this rule, it may also make any other order it considers appropriate, including, for example— (a) if the court makes an order under subrule (1) (a)—an order staying or dismissing the proceeding or entering judgment; and (b) an order about the future conduct of the proceeding. (Emphasis added.)

The defendants invoke the first three grounds in seeking that the plaintiff’s pleadings be struck out in whole or in part.
The power under r 425 is a discretionary one and should only be sparingly applied, so as to avoid depriving a plaintiff of the opportunity to have their case tried properly: Twining v Curtis [2009] ACTSC 106; 3 ACTLR 174; General Steel at 128-129. In particular, the court must be satisfied that the pleading is defective in substance, and not merely in the manner in which the claim has been stated, such that it is clearly untenable: McColley v Commonwealth [2014] ACTCA 21 at [34]; Carlisle v Filaria Pty Ltd [2002] ACTSC 33 at [16]. An order striking out all or part of a pleading will only be made in a plain and obvious case: Davis v Commonwealth (1986) 61 ALR 18; 61 ALJR 32 at 23.
It follows that a very clear case will be required before a plaintiff will be prevented from pleading a case on the basis that no reasonable cause of action is disclosed: McGuirk v University of New South Wales [2009] NSWSC 1424 (McGuirk) at [37]. If a reasonable cause of action is disclosed, but the pleaded case is weak or has a low prospect of success, it will not warrant striking out the pleadings: Coe v Commonwealth (1979) 24 ALR 118; 53 ALJR 403 at 127. Whether a statement of claim discloses a reasonable cause of action is a question of law, to be assessed on the assumption that every fact pleaded by the plaintiff is true: McColley at [29], [31]; Galovac Pty Ltd v ACT [2010] ACTSC 132; 19 ACTLR 238 at [5]. The lack of a cause of action must be “clearly demonstrated”: General Steel at 129.
If a pleading does not allege the material facts on which it relies with certainty, such that a clear conception of the case being made is conveyed, the pleadings will be embarrassing in the legal sense: Gunns Ltd v Marr [2005] VSC 251. The circumstances in which a court may find that a pleading is embarrassing or prejudicial have been described in McGuirk at [30]:

A pleading is embarrassing where it is “unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him”: Meckiff v Simpson [1968] VR 62 at 70; Gunns Limited v Marr at [14]-[15].

As was highlighted in relation to the principles of summary judgment, pleadings may also be struck out as vexatious or frivolous if the proceedings are brought for a collateral purpose.

Defendants submissions

The defendants submit:

(a) That the plaintiff’s pleading should be struck out in whole, on the basis that it either fails to disclose a reasonable course of action under r 425(1)(a), will prejudice or embarrass the fair trial of proceedings, or is brought on a vexatious basis.

(b) In relation to the claim for breach of contract, the pleadings rely on an alleged novation of the first defendant’s employment contract from Papandrea Partners to the plaintiff but do not contain material facts as to how the contract was novated.

(c) The pleadings attempt to rely on a contractual agreement between the plaintiff and the first defendant when the pleadings themselves disclose that the employees of the plaintiff were employed by a related entity of the plaintiff, M Plus Administration, which is now in liquidation.

(d) There has been no signed alteration reflecting a novation of the first defendant’s contract from Papandrea Partners to either the plaintiff or M Plus Administration, and there is no evidence that a novation occurred.

(e) Even if the contract was novated, the obligations of confidentiality owed by the first defendant under her employment contract did not extend beyond the termination of her employment to information that formed part of her general skill and knowledge. The names and contacts of clients would be information forming part of the first defendant’s general knowledge.

(f) In relation to the claim for breach of common law duties, the form of pleadings does not accurately describe the implied common law duties and seeks to expand those duties beyond what is recognised at common law. (g) In relation to the claim for breach of the duty of fidelity and good faith, the first defendant’s separation from the plaintiff was at the instigation of the plaintiff and MK. Both encouraged the first defendant’s preparation for the conduct of a new business, including obtaining the plaintiff’s client list. MK notified all clients of the plaintiff about the planned separation before any of the pleaded breaches of duty occurred, and there is no evidence the first defendant solicited or instigated contact with the plaintiff’s clients. The first defendant was entitled to utilise the benefit of personal relationships with particular clients and to solicit clients whom the first defendant could recall without the aid of any list belonging to the plaintiff, once her employment ceased. The pleadings contain no allegation that the client list was removed by the first defendant.

(h) In relation to the claim for breach of the duty of confidentiality, the “confidential information” pleaded was “trivial” in that it referred to a client list containing the names of individuals and companies, the names of which were easily accessible from public sources of information and were therefore not confidential in nature.

(i) Even if the information was confidential in nature, MK consented to the first defendant accessing the information to facilitate the transfer of client files.

The defendants also rely on their submissions in relation to summary judgment, that the conduct complained of was done with the consent and knowledge of MK and the pleadings were therefore fundamentally flawed.
The defendants contend that the pleadings are otherwise likely to prejudice or embarrass the fair trial of proceedings. There are “wholesale failures” to plead material facts, and many paragraphs contain multiple prosecutions. The specific alleged defects relied on are set out at Annexure A to this judgment in relation to striking out pleadings in part. The defendants submit that the “fog of imprecision” in the manner in which the claim had been pleaded means it is not possible to properly sever the defective parts of the pleading, such that it is appropriate for the entire pleading to be struck out.
The defendants’ submission highlights the following paragraphs of pleadings as containing defects which, cumulatively, require the pleadings to be struck out in whole:

(a) Paragraphs 16 to 17, on the basis that the paragraphs fail to plead any material facts which would support the conclusion that the contract was novated.

(b) Paragraph 30, on the basis that the paragraph fails to plead material facts as to how and why the email communication dated 31 January 2025 was prepared and sent to all of the plaintiff’s clients. (c) Paragraphs 61 to 62, on the basis that the paragraphs refer to allegations of dishonesty and allege that there were a number of dishonest breaches as a result of “conduct” and “continuing conduct” identified in paragraphs 29 to 51, without particularising which matters contained in paragraphs 29 to 51 constitute dishonest breaches, or identifying the precise conduct being characterised as dishonest.

(d) Paragraph 63, on the basis that the paragraph fails to plead any material fact to identify that the second defendant “assisted in committing the Fiduciary Breaches”.

(e) Paragraphs 64 to 67, on the basis that the paragraphs “[bundle] together” all claims and damages in the proceedings, in a way which prevents the pleading as a whole from being effectively severed to excise any defective claims for breach of contractual, common law and equitable duties.

The defendants rely on their previous submissions on the issue of summary judgment in relation to the vexatiousness of proceedings.

Plaintiff submissions

The plaintiff relies on its previous submissions in relation to summary judgment in opposing the application to strike out the whole of pleadings.

Consideration

I am not satisfied that this is an appropriate matter in which to strike out the plaintiff’s pleading in whole. I have reached that conclusion because:

(a) Much of the defendants’ complaints are directed to a lack of evidence to support the plaintiff’s contentions, but for the purposes of this application, I must proceed on the basis that the factual allegations that are pleaded by the plaintiff will be proved; and

(b) Those factual allegations raise at least the prospect of a fiduciary breach by the first defendant, to the extent that the evidence ultimately establishes benefit to her in the form of the procuring of clients for the new business during the period when she remained an employee of the plaintiff (or a related entity).

The defendants have therefore failed to establish that the claim is untenable. Striking out the pleadings in part
It is still open to the court to consider whether to strike out part of the pleadings, where there has been a failure to plead a material fact: Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241; 71 ALJR 448.

Principles on striking out pleadings in part

Rules 406 and 407 of the CPR state:

406 Pleadings—statements in (1) Each pleading must— (a) be as brief as the nature of the case allows; and (b) contain a statement in a summary form of the material facts on which the party relies but not the evidence by which the facts are to be proved; and (c) state specifically any matter that if not stated specifically may take another party by surprise; and (d) subject to rule 419 (Pleadings—other relief), state specifically any relief the party claims; and (e) if a claim or defence under a statute is relied on—identify the specific provision of the statute. (2) A party may raise a point of law in a pleading if the party also pleads the material facts in support of the point.

407 Pleadings—matters to be specifically pleaded (1) Without limiting rule 406, the following matters must be specifically pleaded: (a) an accident the cause of which is unknown and undiscoverable; (b) breach of contract or trust; (c) breach of statutory duty; Note See r 432 (Pleadings—negligence and breach of statutory duty). (d) damages of every kind claimed, including, for example, special and exemplary damages; Note See also r 417 (Pleadings—kind of damages etc). (e) duress; (f) estoppel; (g) extinction of right or title; (h) fraud or illegality; (i) interest (including the rate of interest and method of calculation) claimed; (j) malice or ill will; (k) misrepresentation; (l) motive, intention or other condition of mind, including knowledge or notice; (m) negligence or contributory negligence; Note See r 432 (Pleadings—negligence and breach of statutory duty). (n) payment; (o) performance or part performance; (p) release; (q) statute of limitations; (r) a statute requiring that contracts be in, or evidenced by, writing (for example, statute of frauds); (s) undue influence; (t) voluntary assumption of risk; (u) waiver; (v) want of capacity, including disorder or disability of mind; (w) that a testator did not know and approve of the contents of a will; (x) that a will was not properly made; (y) wilful default; (z) anything else required by a practice note to be specifically pleaded. (2) Also, any fact from which any of the matters mentioned in subrule (1) is claimed to be an inference must be specifically pleaded. (3) In a defence or pleading after a defence, a party must specifically plead any matter that— (a) the party alleges makes a claim or defence of the opposite party not maintainable; or (b) shows a transaction is void or voidable; or (c) raises an issue of fact not arising out of a previous pleading.

Rule 406 requires pleadings to contain a statement in summary form of the material facts on which a party relies, but not the evidence by which the facts are to be proved. A party must include all of the material necessary for the purpose of formulating a complete cause of action: Bruce v Odhams Press Ltd [1936] 1 All ER 287; 1 KB 697 at 294. As was noted by Refshauge J in Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20; 4 ACTLR 114 at [28]-[30], the purpose of pleadings is not only to give each party notice of the precise case to be met, but also to apprise the court of the key issues in the context of case managing proceedings: see also Dhillon v The Canberra Sikh Association Inc [2025] ACTSC 271 at [16]. Rule 406 therefore facilitates the provision of adequate pleadings for those two purposes.
Rule 407 sets out a list of matters which must be specifically pleaded if raised by a party. Relevantly, r 407(1)(h) requires that allegations of fraud must be specifically pleaded. As noted in Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486 at [25] (French CJ, Gummow, Hayne and Kiefel JJ), this reflects “fundamental requirements for the fair trial of allegations of contravention of law”, which require the party making the allegations of fraud to plead its case clearly and distinctly: see Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25; 214 CLR 514 at [38].
Additionally, r 405 requires, where pleadings allege several matters, that each matter be put in a separate paragraph as far as convenient, and that where a plaintiff seeks relief in relation to two or more distinct claims based on different grounds, that they are stated, as far as possible, separately.
Rule 411 requires the effect of spoken words or documents referred to in pleadings to be stated, as far as is material. The rule imposes a requirement to not simply refer to spoken words or to a document, but to identify for the benefit of the opposing party how the inclusion of those words or that document is relevant for the purpose of the claim that is made.
Where damages are claimed in a pleading, r 417 requires the pleading to state each kind of damage claimed and for damages other than general damages, the amount claimed that is known to the party.

Submissions

The defendants submit that multiple paragraphs contained within the plaintiff’s pleadings are embarrassing and should be struck out for failing to comply with rr 405, 406, 407, 411 or 417. The table below lists the impugned paragraphs of pleadings alongside the specific rules they are alleged to have breached:

CPR Rule Impugned paragraphs

405 Pars 16, 17, 24, 25, 26, 28, 29, 33, 47, 56, 57, 58, 59, 60, 61, 62, 64, 65 and 67

406 Pars 16, 17, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 33, 34, 35, 37, 38, 43, 49, 51, 56, 58 and 59

407 Pars 60, 61, 62 and 63

411 Pars 10, 12, 26 and 39

417 Pars 64, 65 and 67

The plaintiff relies on its submissions in relation to summary judgment in opposing the application to strike out in part, and submits there are no defects within the pleading which fall within the scope of r 425.
The plaintiff also attests that it has sent a document providing further and better particulars of its claim to the defendants, which it submits properly and correctly deal with the issues identified by the defendants.
The parties both provided submissions in relation to each of the paragraphs impugned by the defendants. A table summarising the defendants’ complaints in relation to each paragraph and the plaintiff’s response to each complaint, was provided by the plaintiff in written submissions. This table is set out at Annexure A to this judgment.

Consideration

Paragraphs 16 and 17 are defective in accordance with r 406 in that they fail to plead material facts in respect of various aspects of the first defendant’s employment before and following the share transfer. Paragraph 17 in particular fails to plead material facts in relation to assertions the first defendant’s employment was novated from Papandrea Partners to the plaintiff.
Paragraph 22 does not plead material facts in accordance with r 406, in that it does not specify the content available in Xero which is said to constitute confidential information. Paragraphs 20 and 21 provide context in relation to par 22 but do not assist in specifying the allegation made in par 22.
Paragraph 24 does not plead material facts in accordance with r 406, in that it does not specify the circumstances in which it is said the relationship between the parties had “broken down”, the relevance of Mr Papandrea’s relationship or the designation of Mr Papandrea as a “Frino party”.
Paragraph 25 does not plead material facts in accordance with r 406, in relation to why MP and GC are described as “natural persons behind the management and shareholding of the Plaintiff”.
Paragraph 26 does not plead material facts in accordance with r 406, in that it does not disclose with sufficient particularity the terms of the in-principle agreement alleged
Paragraph 33 does not plead material facts in accordance with r 406, in that it does plead any facts in relation to the allegation the first defendant solicited the clients of the plaintiff.
Paragraph 38 does not plead material facts in accordance with r 406, in that it does not disclose the basis on which the fee base and value of the client list was determined.
Paragraph 39 does not plead the effect of the words used by the first defendant to inform MK that the client list had been created in accordance with r 411.
Paragraph 43 does not plead material facts in accordance with r 406, in that it does not provide facts in support of the pleaded conclusion that the first defendant used the client list to solicit clients from the plaintiff to the second defendant.
Paragraph 56 does not plead material facts in accordance with r 406, in that it pleads multiple conclusions in relation to the first defendant’s conduct without providing the material facts in support of those conclusions. It also does not separately plead each conclusion in accordance with r 405.
Paragraph 57 does not separately plead the existence of each duty alleged in accordance with r 405.
Paragraphs 60 to 63 plead allegations of dishonesty and fraudulent conduct on the part of the first defendant, but do not specifically plead the material facts supporting the allegations in accordance with r 407(h). To the extent that the paragraphs reference previous paragraphs of the pleadings, such as par 56, those previous paragraphs contain conclusionary statements only, not statements of material fact.

Admissibility of objected material

“Without prejudice” material

The defendants did not dispute that the communications relied upon, namely correspondence marked “without prejudice” and statements made during a settlement conference between the plaintiff and the defendants, occurred in the context of without prejudice negotiations with a view to resolution of the dispute.
In usual circumstances, such communications would be protected from disclosure pursuant to s 131 of the Evidence Act, which states:

131 Exclusion of evidence of settlement negotiations (1) Evidence must not be presented of— (a) a communication that is made between people in dispute, or between 1 or more people in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. (2) Subsection (1) does not apply if— (a) the people in dispute consent to the evidence being presented in the proceeding or, if any of the people has tendered the communication or document in evidence in another Australian or overseas proceeding, all the other people consent; or (b) the substance of the evidence has been disclosed with the express or implied consent of all the people in dispute; or (c) the substance of the evidence has been partly disclosed with the express or implied consent of the people in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been presented; or (d) the communication or document included a statement to the effect that it was not to be treated as confidential; or (e) the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or (f) the proceeding in which it is sought to present the evidence is a proceeding to enforce an agreement between the people in dispute to settle the dispute, or a proceeding in which the making of the agreement is in issue; or (g) evidence that has been presented in the proceeding, or an inference from evidence that has been presented in the proceeding, is likely to mislead the court unless evidence of the communication or document is presented to contradict or to qualify that evidence; or (h) the communication or document is relevant to deciding liability for costs; or (i) making the communication, or preparing the document, affects a right of a person; or (j) the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty; or (k) one of the people in dispute, or an employee or agent of 1 of them, knew or ought reasonably to have known that the communication was made, or the document was prepared, in furtherance of a deliberate abuse of a power. (3) For subsection (2) (j), if commission of the fraud, offence or act is a fact in issue and there are reasonable grounds for finding that— (a) the fraud, offence or act was committed; and (b) a communication was made or document was prepared in furtherance of the commission of the fraud, offence or act; the court may find that the communication was made or the document was prepared as mentioned in paragraph (b). (4) For subsection (2) (k), if— (a) the abuse of power is a fact in issue; and (b) there are reasonable grounds for finding that a communication was made or document was prepared in furtherance of the abuse of power; the court may find that the communication was made or the document was prepared as mentioned in paragraph (b). (5) In this section— (a) a reference to a dispute is a reference to a dispute of a kind in relation to which relief may be given in an Australian or overseas proceeding; and (b) a reference to an attempt to negotiate the settlement of a dispute does not include a reference to an attempt to negotiate the settlement of a criminal proceeding or an anticipated criminal proceeding; and (c) a reference to a communication made by a person in dispute includes a reference to a communication made by an employee or agent of the person; and (d) a reference to the consent of a person in dispute includes a reference to the consent of an employee or agent of the person, if the employee or agent is authorised to consent; and (e) a reference to commission of an act includes a reference to a failure to act. (6) In this section: power means a power given by or under an Australian law.

It is the defendants’ contention that s 131 is not enlivened as the discussions and correspondence did not constitute a bona fide or genuine attempt at settling the proceedings and instead were for a collateral purpose. As to the nature of the collateral purpose, the defendants submit that this was to undo the July 2021 transaction selling Papandrea Partners from MP to MK. The defendants submit that the correspondence dated 27 November 2024 is relevant to establishing whether there was consent to the first defendant’s conduct.
The plaintiff submit the defendants made no attempt to address what exception to s 131 would apply to allow inclusion of “without prejudice” communications, and that the defendants’ characterisation of the communications, as for a purpose other than a genuine attempt to settle, should fail.
I am not satisfied that the defendants have established a lack of bona fides on the part of the plaintiff in entering into the settlement negotiations. As was stated by the High Court in Rodgers v Rodgers (1964) 114 CLR 608 at 614, the protection afforded to the contents of settlement negotiations ensures that parties can “negotiate… freely and without fear that, failing agreement, what is said or done by them may later be used in evidence”: see also Duffy Kennedy Pty Ltd v Galileo Miranda Nominee Pty Ltd [2020] NSWCA 25; 101 NSWLR 927 at [170]-[173]. Once it is accepted that a communication is part of a genuine attempt to settle a dispute, it is appropriate that the whole course of the communication is protected and not just elements of the communication: South Shropshire District Council v Amos [1987] 1 All ER 340; Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [91].
In the circumstances, I would not have admitted the objected material.

Hearsay material

Section 75 of the Evidence Act states:

75 Exception—interlocutory proceedings In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who presents it also presents evidence of its source.

Evidence which would otherwise be excluded by operation of the hearsay rule under s 59 can be admitted in circumstances where the evidence is presented in an interlocutory proceeding.

Submissions

The defendants submit pars 31 to 34 are admissible under s 75, in circumstances where Ms Taylor identified the source of the information at par 3 of her affidavit, being the first defendant.
The plaintiff submits that Ms Taylor’s disclosure of the source of the information was not a complete answer to the hearsay objection. In particular, the plaintiff says that par 31 provided a set of “rolled-up legal conclusion[s]” in relation to an agreement between the parties, which was unlikely to have come from the first defendant. In a similar vein, par 33 was in the nature of a submission or legal position, rather than evidence from a source of information.
The plaintiff further submits that the affidavit did not disclose what information was given by the first defendant to Ms Taylor, and what was Ms Taylor’s own legal conclusion on the basis of that information.
On the basis that the application proceeded before me as an application for, amongst other things, summary judgment, I take the view that s 75 of the Evidence Act does not apply. That is because the effect of the summary judgment application is to place this application outside the category of an interlocutory hearing: see Scott MacRae Investments Pty Ltd v Baylily Pty Ltd [2011] NSWCA 82 at [135]. Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 at [25]; King Investment Solutions Pty Ltd v Hussain [2005] NSWSC 1076; 64 NSWLR 441 at [22]-[26]. Security for costs
Rule 1901 of the CPR provides:

1901 Security for costs—when court may make order The court may order a plaintiff to give security for costs under rule 1900 only if satisfied— (a) the plaintiff is a corporation and there is reason to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them; or (b) the plaintiff is suing for the benefit of someone else, rather than for the plaintiff’s own benefit, and there is reason to believe the plaintiff will not be able to pay the defendant’s costs if ordered to pay them; or (c) the plaintiff’s address is not stated, or is misstated, in the originating process, and there is reason to believe that the failure to state an address, or the misstatement of the address, was made with intention to deceive; or (d) the plaintiff has changed address since the start of the proceeding and there is reason to believe this was done to avoid the consequences of the proceeding; or (e) the plaintiff is ordinarily resident outside Australia; or (f) the plaintiff is, or is about to depart Australia to become, ordinarily resident outside Australia and there is reason to believe the plaintiff has insufficient fixed and permanent property in Australia available for enforcement to pay the defendant’s costs if ordered to pay them; or (g) a territory law authorises the order to be made; or Note A territory law includes these rules (see Legislation Act, s 98). (h) the justice of the case requires the order to be made.

The parties were in agreement that the threshold was met in this case. The residual issue was whether this was an appropriate matter for the exercise of the court’s discretion in favour of an order for security costs.
The relevant principles are well summarised by McWilliam J in CDLC Pty Ltd v Capital Estate Developments Pty Ltd (No 4) [2024] ACTSC 345 at [23]. I accept, for the reasons stated above, that a prima facie cause of action exists and that it is appropriate to proceed to consider the security application on the basis that the claim has reasonable prospects of success. Although the evidence before me does not enable a determination in respect of the financial status of the plaintiff company, there is sufficient material upon which to conclude that there is a real prospect of an order for security stifling the capacity of the plaintiff to further prosecute its cause of action. Primarily for that reason, I decline to make such an order. Costs of the application
The defendants have enjoyed only partial success in their application. In the circumstances I consider it appropriate to order that the costs of the application be costs in the cause.

Orders

The orders of the Court are:

(1) Paragraphs 16, 17, 22, 24-26, 33, 38-39, 43, 56-57 and 60-63 of the Statement of Claim are struck out.

(2) The plaintiff has leave to file an amended statement of claim which addresses the struck-out paragraphs within 28 days.

(3) The remainder of the application in proceeding dated 7 July 2025 is dismissed.

(4) The following material is inadmissible and excluded from evidence in this proceeding:

(a) Paragraphs 29-34, 65-69 and 71-72 of the affidavit of Erin Taylor dated 27 November 2024;

(b) The correspondence referred to by the paragraphs in Orders 4(a) as exhibited to the affidavit of Erin Taylor dated 27 November 2024; and

(c) Paragraphs 20 to 26 of the letter of Erin Taylor dated 23 June 2025, as exhibited to the affidavit of Erin Taylor dated 27 November 2024.

(5) The costs of the application in proceeding dated 7 July 2025 be costs in the cause.

I certify that the preceding eighty-seven [87] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Muller. Associate: Date: ANNEXURE A – SUBMISSIONS ON APPLICATION TO STRIKE OUT IN PART

SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 10 does not plead the documents referred to therein as required On 1 July 2021, the majority ownership of The document has been by Rule 411 Papandrea Partners was transferred to particularised and produced by Konarzewski Family Retirement Investments correspondence. Pty Ltd (ACN 611 910 206) (KFRI) as trustee for the Konarzewski Family Investment Trust, an entity controlled by Mr Michael Konarzewski, Per Rule 411, the Plaintiff need as part of a share purchase agreement between only plead the effect and Mr Konarzewski and Mr Michael Papandrea precise terms of a document (Share Purchase Agreement) so far as material. 12 does not plead the documents referred to therein as required The Judo Loan was secured against the client The document has been by Rule 411 files from Papandrea Partners and Mr particularised and produced by Konarzewski’s client base from his former correspondence. accounting practice, Jigsaw Tax and Advisory Pty Ltd (ACN 612 763 210) (Jigsaw). Per Rule 411, the Plaintiff need only plead the effect and precise terms of a document so far as material. 16 The paragraph contains a number of different propositions From in or around November 2021: The facts pleaded are already which should be divided into separate paragraphs in appropriately divided. a. the First Defendant completed work accordance with Rule 405; and services for the Plaintiff; b. the work and services completing Per Rule 406, the pleading (a) There is no material facts pleaded in support of what the work for the Plaintiff were the same, or is as brief as the nature of the and services my client provided were in relation to subclause a) substantially the same, as the work case allows, and (b) contains a as required by Rule 406; and services that the First statement in a summary form Defendant had been providing to of the material facts on which Papandrea Partners immediately the party relies but not the There is no material facts pleaded in support of what the work before the Transfer; and services my client provided were in order to ascertain the SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para allegation that they were substantially the same from firm to c. the First Defendant’s employment evidence by which the facts firm in relation to subclause b) as required by Rule 406; position, duties, hours, and are to be proved. renumeration under the Plaintiff were the same, or substantially the There is no material facts pleaded in relation to what were the same, as those under Papandrea Further particulars have been employment positions; duties, hours and remuneration in each Partners immediately before the provided by correspondence. position in relation to subclause c) as required by Rule 406; Transfer; d. wages were paid to the First Defendant through the company M There is no material facts pleaded to support the allegation that Plus Administration Pty Ltd (ACN the Administration entity referred to in subclause d) existed for 654 035 211), a related entity of the the purpose as pleaded as required by Rule 406. This is Plaintiff that only existed to pay critical in relation to the allegation that the Papandrea Partners wages to employees of the Plaintiff; employment contract was novated by conduct which obviously and then grounds (or attempts to ground) a number of the allegations of breach of contract and associated remedies; e. all outstanding leave entitlements There is no material facts pleaded as to the allegation that all were transferred to the Plaintiff. leave entitlements were transferred to the Plaintiff referred to in subclause) and required by Rule 406;

Having regard to your client’s pleading of a novation by conduct, and each component of the conduct that occurred should be dealt with separately and each component of the respective positions should be pleaded so that a comparison can occur in reference to the assessment of the allegation that the Papandrea Partners employment contract was novated as alleged. The pleading also does not address how the conduct overcomes the requirement in the Papandrea Partners employment contract that any variations be agreed to and signed in writing by the parties. 17 It contains a number of different propositions which should be In the premises of the facts pleaded at The facts pleaded are already divided into separate paragraphs in accordance with Rule 405; paragraphs [5] to [16] above: appropriately divided. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para given its reference to paragraph 16, particularly in relation to a. the First Defendant’s was under the Per Rule 406, the pleading (a) the allegations of novation, it fails to comply with Rule 406. employment of Papandrea Partners is as brief as the nature of the from November 2011 until in or case allows, and (b) contains a around November 2021 (the statement in a summary form Papandrea Partners Employment of the material facts on which Period); the party relies but not the evidence by which the facts b. during the Papandrea Partners are to be proved. Employment Period, the terms of the First Defendant’s employment was governed by the Terms Sheet Further particulars have been of the Contract; provided by correspondence. c. from in or around November 2021: i. the First Defendant’s employment was transferred to the Plaintiff; ii. the First Defendant owed employment duties to the Plaintiff; d. in or around November 2021, the Contract between the First Defendant as employee and Papandrea Partners as employer, including the Terms Sheet, was novated by the conduct of the parties to the Plaintiff as employer; and e. from in or around November 2021, the Contract, including the Terms Sheet and Contractual Obligations, continued to apply as between the First Defendant as employee and the Plaintiff as employer. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 19 there is no material facts as required by Rule 406 pleaded to As part of her employment with the Plaintiff, the Per Rule 406, the pleading (a) support the allegation that these responsibilities were First Defendant’s employment responsibilities is as brief as the nature of the responsibilities of the role performed by the First Defendant. At included, but were not limited to, the following: case allows, and (b) contains a a very basic level, the title of her position is not even pleaded statement in a summary form a. performing various accounting nor any actual detail on issues such as what the accounting of the material facts on which services for clients of the services were that she provided; the party relies but not the Plaintiff; evidence by which the facts what is meant by “day to day responsibilities” for certain client b. managing and contacting are to be proved. files, what is meant by “certain clients”. This is critical because clients of the Plaintiff, including her level of seniority or the complexity of her role is going to be holding day-to-day critical in the court’s assessment of the duties you allege should responsibilities for certain client Except where of statutory be implied into her employment contract as would be the files; and effect, position titles are often reasons she was allocated “certain clients”. meaningless without c. issuing invoices for completed understanding the duties of the jobs. position. On the Defendant’s (collectively, the Employment Services). own evidence, she was a shareholder of the Plaintiff and responsible for higher duties which gave her insights into the management and operation of the firm.

Further particulars have been provided by correspondence. 20 there is no material facts as required by Rule 406 pleaded as to In order to perform the Employment Services, Per Rule 406, the pleading (a) what the information is that is stored in Xero that may constitute the First Defendant had administrative is as brief as the nature of the confidential information to enable an assessment of the permissions within the Plaintiff’s Xero Project case allows, and (b) contains a allegation in paragraph 22. Management System (Xero), and was able to: statement in a summary form of the material facts on which a. access confidential client the party relies but not the information of the Plaintiff, evidence by which the facts including contact details and are to be proved. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para confidential commercial information; and Per Consolidated Paper b. generate client lists and reports Industries Pty Ltd v Matthews pertaining to client files. [2004] WASC 161 at [60]:

“But the duty of loyalty of an employee will be breached if the employee engages in unfair or wrongful acts detrimental to the employer's business, such as deferring fulfilment of orders in anticipation of filling them himself, or developing the capacity to copy his employers products with a view to appropriating for himself his employer's market, or recruiting the employer's staff for the new business, or taking copies of or memorising customer lists or other confidential information of the employer, or engaging in significant work to set up the business in his employer's time”

Per Digital Pulse Pty Ltd v Harris [2002] NSWSC 33 at [23]

“When the employment ceases, the employee is free to compete with the employer unless subject to a valid contractual restraint on competition. The employee may take away and utilise the benefit of SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para personal relationships built up with particular customers of the former employer and may solicit any customer whom the employee can recall without the aid of a list taken from the former employer and without deliberate memorisation of a customer list. The employee may not, however, use for his or her own benefit confidential information of the former employer, whether to solicit business from the former employer’s customers or to carry out work for such customers even if unsolicited.

In Nexgen Sydney Pty Ltd v Barakat [2022] NSWSC 312 at [350]-[352] Ward CJ referred to authorities which indicated that the compilation of contact details in a client contact or prospects list is something that has been recognised as capable of carrying with it the necessary quality of confidentiality. Her Honour found that, although much of the information considered in isolation would not be confidential, the compilation of the information gave the relevant spreadsheet the necessary quality of confidentiality. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para

Further particulars have been provided by correspondence. 21 it is unclear what the “Responsibilities” are and whether that is The First Defendant had administrative access Responsibilities was intended intended to instead be “Employment Services” as defined in 19. to Xero from the establishment of the Plaintiff to be defined as Employment Accordingly the issues with paragraph 19 infect paragraph 21. until 28 March 2025, in order to perform the Services (see paragraph 19). Responsibilities.

22 please see the comments regarding paragraph 20 as they The content available in Xero constituted Responsibilities was intended infect this paragraph. Confidential Information within the meaning of to be defined as Employment the Contract and was also confidential Services (see paragraph 19). information within the meaning of the common law.

23 given its references to paragraphs 19 to 22 suffers from the In the premises of paragraphs [19] to [22], the This is a matter of law which same issues as those paragraphs. Additionally, it is difficult to Plaintiff allowed the First Defendant access to the Plaintiff is not required to ascertain what is pleaded in relation to the position of its confidential business records and to have plead. “vulnerability”. Is this intended to plead a duty of care in favour management over client files and relationships of the plaintiff owed by the First Defendant? Or is it in reference so to place the Plaintiff in a position of to duties allegedly implied into the employment contract at vulnerability under which the Plaintiff relied on To assist the Defendants, the common law? It is totally unclear. the First Defendant not to act to its detriment. vulnerability is by reference to the fiduciary duty. 24 there is no facts pleaded in relation to what the plaintiff’s By November 2024, Mr Konarzewski’s business The Frino Parties is merely a business relationship is with Mr Papandrea or why that is relationship with the First Defendant and Mr definition referring to parties on relevant to the business relationship with the first defendant as Michael Papandrea (the Frino Parties) had Ms Frino’s side of the dispute. required by rule 406. Similarly, given there are multiple broken down. propositions in this paragraph – the existence of some sort of business relationship between Mr Papandrea and the plaintiff; To assist the Defendants, this the facts around why that has any relevance; the facts simple factual pleading regarding why Mr Papandrea is a “Frino Party” and the facts pertains to the background of SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para around why the business relationship between any and all of the later matters as to the the parties “broke down”. This is important because without Frino Parties together moving further factual detail, an inference is open that the break down to Tally HQ Pty Ltd with the may have been instigated by the first defendant when this was clients and having the benefit not the case. This is a critical fact and your client needs to of that conduct. plead it with reference to the email he sent outlining the reasons for his decision to instigate the separation. 25 contains a number of different difficulties as follows: On 28 November 2024, a special meeting was The facts pleaded are already held regarding the future of the Plaintiff’s appropriately divided. It contains multiple propositions which should be separated as business, with natural persons behind the required by rule 405; management and shareholding of the Plaintiff, It pleads no material facts as required by rule 406 as to why Mr including Mr Konarzewski, the First Defendant, Per Rule 406, the pleading (a) Papandrea and now Ms Capezio are referred to as persons Mr Papandrea and Ms Geraldine Capezio, in is as brief as the nature of the behind the management and shareholding of the plaintiff. attendance (the November Meeting). case allows, and (b) contains a Legally, having regard to the ASIC register of the shareholders, statement in a summary form that is not the case. of the material facts on which the party relies but not the evidence by which the facts are to be proved.

Further particulars have been provided by correspondence.

The Defendants are welcome to deny that the persons pleaded were not the persons behind the management and shareholding of the Plaintiff, to the extent that they have a reasonable basis to do so. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 26 It contains multiple propositions which should be separated as At the November Meeting, Mr Konarzewski, the The facts pleaded are already required by rule 405. First Defendant, Mr Papandrea and Ms Capezio appropriately divided. came to an in-principal agreement that: It pleads no material facts as required by rule 406 as to why an agreement between the plaintiff, Mr Papandrea and Ms a. M Plus Advisers would be divided into Per Rule 406, the pleading (a) Capezio is binding on the First or Second Defendant; two separate entities, with: is as brief as the nature of the It pleads no material facts as to what is meant by the pleading i. the Frino Parties to manage a new case allows, and (b) contains a that the firm would be divided into two separate entities. Does entity; and statement in a summary form that mean that it was intended that the Konarzewski entities of the material facts on which ii. Mr Konarzewski to retain control and would purchase the First Defendant’s shares? Does it mean the party relies but not the management of the Plaintiff; that the plaintiff would retain her shares in exchange for taking evidence by which the facts some client value? Does it mean the plaintiff would buy back b. the existing client base of M Plus are to be proved. the First Defendant’s shares? Advisers would be split between the two entities, subject to the following It does not plead the words said as required by rule 411. It is tentative conditions that were orally The agreement is pleaded to impossible for the Court to discern what the agreement was agreed to: have been between Mr that was reached, or if there was one at all, in principle or Konarzewski, Mr Papandrea otherwise, without a description of the actual words said and by iii. that a final list of clients transferring to and Ms Capezio and the First whom; the new entity, and the terms of such Defendant. The ‘in-principal transfers, would be further agreed to As a matter of law, the paragraph is embarrassing in that it also agreement’ is not pleaded that between Mr Konarzewski and the Frino pleads an agreement to agree which does not exist at law. it is binding. An agreement Parties; does not need to be binding to iv. that a final list of staff transferring to attract equitable relief (for the new entity would be further agreed example). to; v. that all financial obligations of the It is a matter for the clients transferring to the new entity Defendants to obtain their own would be firstly billed and paid; advice on the nature of an ‘in-vi. that work would continue through the principal agreement’ at law. process of establishing the new entity; and Per Rule 411, the effect of the agreement is pleaded, the exact words need not be SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para vii. that the appropriate client transfer pleaded as being specifically notices, statutory notices and ethical material to the effect of the client letters must be sent. agreement. (the In-Principal Agreement). 27 in so far as it references the “Frino Parties” suffers from similar Mr Konarzewski did not reach any final This is not properly brought as difficulties as paragraph 26. It is also unclear what the legal agreement with the Frino Parties as to: a complaint relevant to a strike basis is for the pleading related to the Judo loan and why that out application or particulars. d. which clients would remain with has anything to do with the first or second defendant The Defendants ought to seek the Plaintiff; their own advice on these e. which clients would be matters. transferred to the new entity; f. on the terms the clients would be transferred; or g. the discharge of the Judo Loan security over the client files. 28 It contains multiple propositions which should be separated as After the November Meeting, between Per Rule 406, the pleading (a) required by rule 405; November 2024 and February 2025, Mr is as brief as the nature of the Konarzewski and the Frino Parties attempted to case allows, and (b) contains a conduct a series of further meetings, to attempt statement in a summary form It pleads no material facts as required by rule 406 in relation to to finalise the particulars and terms of of the material facts on which the attempts to arrange meetings; whether any meetings were transferring clients and other matters relating to the party relies but not the set and re-arranged; the reasons the meetings did not occur. It the separation of the Plaintiff’s business into two evidence by which the facts clearly seeks to lead the Court to an inference that the entities, however, these meetings did not occur. are to be proved. meetings did not occur because of some default of or intention of the first and second defendant. Further particulars have been provided by correspondence.

Complaints of possible inferences of pleaded matters SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para are not relevant to a strike out application. 29 It contains multiple propositions which should be separated as On or around 27 January 2025, the Frino Per Rule 406, the pleading (a) required by rule 405; Parties, alongside various other staff members is as brief as the nature of the of the Plaintiff, began performing work out of a case allows, and (b) contains a It pleads no material facts as required by rule 406 in relation to separate office located at Unit 3, 16 Thesiger Ct statement in a summary form the relocation of the respective offices. Again, it clearly seeks to Deakin ACT 2604 (the Tally Office). of the material facts on which lead the Court to an inference that the first defendant instigated the party relies but not the the move and sought out new office premises unilaterally when evidence by which the facts that was not the case. are to be proved.

The pleading plainly sets out the summary of material facts.

Complaints of possible inferences of pleaded matters are not relevant to a strike out application. 30 does not contain the material facts in relation to the email being On 31 January 2025, Mr Konarzewski Per Rule 406, the pleading (a) sent as required by Rule 405. The facts around who prepared consented to the sending of an email to the is as brief as the nature of the the email, why Mr Konarzewski “consented” to the sending of clients of the Plaintiff advising of an upcoming case allows, and (b) contains a the email and why it was sent when it was sent are all critical to split of Prowess Partners into two smaller firms statement in a summary form your client’s case and should be properly pleaded. Further, the (the January Email): of the material facts on which pleading seeks to import the concept of the firm “splitting into the party relies but not the a. ‘M Plus Advisers’ operated by Mr two smaller firms”. The legal effect of that proposition is evidence by which the facts Konarzewski; and important in the context of your client’s claim and the actual are to be proved. position should be properly articulated. b. ‘Tally HQ’ operated by the Frino Parties. Further particulars have been provided by correspondence. SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 33 It pleads a legal conclusion in relation to the allegation that the From 31 January 2025: Per Rule 406, the pleading (a) First Defendant solicited clients of the Plaintiff; is as brief as the nature of the a. various clients of the Plaintiff began case allows, and (b) contains a It pleads no material fact that underpins the allegation that the contacting the First Defendant about statement in a summary form First Defendant solicited clients of the Plaintiff as required by the proposed split of the Plaintiff’s of the material facts on which rule 406; business; and the party relies but not the It uses the pleading of a legal conclusion to form a b. the First Defendant encouraged and evidence by which the facts conclusionary definition that does not appear to be used solicited these clients, and other are to be proved. anywhere else but is clearly used to lead the Court to conclude clients, (the Frino Contact Group) to that there is a group of clients solicited by the First defendant. move their business to the proposed new Tally HQ entity. The Plaintiff plainly pleads that “the First Defendant encouraged and solicited these clients, and other clients, (the Frino Contact Group) to move their business to the proposed new Tally HQ entity.”

The Defendants’ complaint is unclear. 34 does not properly plead the material facts as required by rule On or around 4 February 2025, the First This is not properly brought as 406. Seen in its proper context, the email referenced does not Defendant sent an email to a client of the a complaint relevant to a strike stand for the proposition that the Plaintiff seeks to assert. Plaintiff, stating that “Michael [Papandrea] and I out application or particulars. have started Tally HQ and our clients will come with us” 35 does not satisfy Rule 406(1)(c). It clearly seeks to lead the On or around 7 February 2025, the First This conduct occurred well Court to draw an inference that the First Defendant began Defendant began contacting clients from the before the employment of the using the Second Defendant’s email address without pleading email address "carla@tallyhq.com.au" and First Defendant ceased. the facts including that the Plaintiff had re-branded to M Plus, began using an email signature containing the from Prowess Partners and commenced using different email words "Tally HQ" when performing work for the benefit of the Plaintiff. Complaints of possible inferences of pleaded matters SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para branding and addresses, which were not provided to the First are not relevant to a strike out Defendant. application. It is unclear how the Defendant might be surprised of matters they have knowledge of and can plead and/or give evidence on as appropriate.

This is not properly brought as a complaint relevant to a strike out application or particulars. 37 pleads no material facts that underpin the allegation that at the At the time of the creation of the Client List, the This is not properly brought as time of creation of the list, the Plaintiff had the number of clients Plaintiff had approximately 2,754 current clients. a complaint relevant to a strike as pleaded, nor any facts that underpin the pleading that they out application or particulars. were current clients. This paragraph pleads the only possible summary of the material fact on which the Plaintiff could rely but not the evidence by which the facts are to be proved in accordance with Rule 406. 38 pleads no material facts that underpin the allegations that the The total value of the Client List clients This paragraph pleads the only “Client List” (as defined) compromised 50% of the fee base of comprised approximately 50% of the existing possible summary of the the Plaintiff or any facts that underpin how the apparent value is fee base of the Plaintiff, and was valued at material fact on which the calculated. This pleading is critical for calculating the quantum approximately $1,045,533.10 Plaintiff could rely but not the of damages sought by the Plaintiff. Accordingly, the pleading evidence by which the facts needs to articulate how the “fee base” is determined and how are to be proved in accordance the value of the Client List being 50% of the fee base is with Rule 406. determined SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 39 does not plead the words said as required by Rule 411. These Later that day, the First Defendant informed Mr The Defendants are welcome words are critical in the context of the claims made against the Konarzewski that the Client List was created to to plead the words said in a First Defendant and they should be pleaded as accurately as identify clients that would be moved to the new Defence so far as they possible. entity consider them to be material. 42 suffers from the same issue outlined in relation to paragraph 23 In the premises of paragraphs [25] to [31] and As above in response to and, given its reliance on paragraphs 25 to 31 and 36 to 41 it [36] to [41] pleaded above, the Plaintiff was paragraph 23. also suffers from the issues outlined relation to each of those placed into a position of disadvantage or paragraphs. vulnerability by these aspects of the relationship with the First Defendant and relied on the First Defendant not to act to the Plaintiff’s detriment 43 pleads a conclusion without any material facts to support how From 18 February 2025, the First Defendant This paragraph pleads the only the Court could draw that conclusion. used the Client List to solicit clients from the possible summary of the Plaintiff to the Second Defendant. material fact on which the Plaintiff could rely but not the evidence by which the facts are to be proved in accordance with Rule 406. 49 is misleading in relation to the description of the injunction. The On 7 March 2025, Justice Mc William granted This paragraph pleads a terms of the injunction speak for themselves but to the extent interlocutory injunctive relief restraining the summary of the material fact that your client seeks to reproduce the terms of the injunction, it Defendants from: on which the Plaintiff could rely should be reproduced verbatim. The manner in which it has but not the evidence by which a. soliciting, canvassing, approaching or been expressed clearly seeks to downplay the fact that the the facts are to be proved in accepting any approach from any parties negotiated and fully articulated an exception to the accordance with Rule 406. customer or supplier of the Plaintiffs injunction business that is the same as or similar to any parts of the Plaintiff's business, The orders are otherwise on except by consent of the Plaintiff, with the Court file and known to the such consent not to be unreasonably parties. withheld; b. interfering with the relationship between the Plaintiff's business and any of their SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para customers, suppliers, employees or This is not properly brought as contractors; a complaint relevant to a strike c. inducing or assisting any of the Plaintiffs out application or particulars. employees to leave their employment with the Plaintiff; and d. accessing the Plaintiffs confidential information for the purpose of personal or third-party gain; until 4:00pm on 19 March 2025. 51 pleads no facts that underpin what is meant by, or what Upon the First Defendant signing ethical letters The fact pleaded is plain on its supports the allegation that on receipt of the ethical letters, the of intent to transfer the 13 March Group on face. The Plaintiff is unable to Plaintiff is unable to retain the “benefit of the clients”. It also behalf of the Second Defendant, the Plaintiff retain a benefit of a client contains no facts or pleading that underpin what is meant by was unable to retain the benefit of the clients which moved to the Second “the benefits of the clients”. within the 13 March Group. Defendant.

This is not properly brought as a complaint relevant to a strike out application or particulars. 56 It contains multiple propositions which should be separated as After 28 March 2025, the First Defendant This paragraph pleads a required by rule 405; continued to use the confidential information of summary of the material fact the Plaintiff (including the Plaintiff’s Client List), on which the Plaintiff could rely solicit and retain clients from the Plaintiff, and but not the evidence by which It pleads a number of conclusions that the First Defendant used receive client fees for work conducted in the facts are to be proved in confidential information; solicited clients and received fees for competition with the Plaintiff accordance with Rule 406. work completed by the Plaintiff with no material facts as required by rule 406 pleaded in support of any of those conclusions. 57 contains multiple propositions as to the source of the First In the premises of paragraphs [17] and [52] The facts pleaded are already Defendant’s duties which should be separated as required by above, throughout the First Defendant’s appropriately divided. employment with M Plus Advisers over the period from November 2021 to 28 March 2025 SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para rule 405. Their separation is important because they result in (the M Plus Employment Period), the First different remedies. Defendant owed to the Plaintiff: a. duties under the Contractual Obligations (the Contractual Duties); b. duties implied at common law, including: i. a duty of loyalty, good faith, and fidelity; ii. a duty to treat confidential information as such and not to disclose or misuse it. (the Common Law Duties) c. fiduciary duties, including: iii. a duty of loyalty, good faith and fidelity; iv. a duty to act in the employer’s best interest; v. a duty not to benefit herself to the detriment of the Plaintiff; and vi. a duty to treat confidential information as such and not to disclose or misuse it. (the Fiduciary Duties) (collectively, the Employment Duties). 58 contains multiple propositions which should be separated as Further, in the premises of paragraph [42] after The facts pleaded are already required by rule 405. 28 March 2025, the First Defendant owed to the appropriately divided. Plaintiff a continuing fiduciary duty not to act to the Plaintiff’s detriment in respect of: It seeks to import a restraint into the First Defendant’s alleged This is not properly brought as duties with no pleading to underpin why that would be the case. a complaint relevant to a strike SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para It also seeks to import some duty on the First Defendant in a. the use of the Plaintiff’s confidential out application or particulars. respect of the alleged In-Principle Agreement with no fact information; The Defendants ought to seek pleaded as to why that duty would be so imported into the First their own advice on the nature b. the solicitation of the Plaintiff’s clients; Defendant’s employment duties or be in any way binding on the of fiduciary duties at law. First Defendant – for example, as a term of the In-Principle c. the retention of the Plaintiff’s clients Agreement (as defined) or some other way. and receipt of client fees in competition with the Plaintiff; To assist the Defendants, the Plaintiff draws the Defendants’ without the formalisation of a binding attention to He v Sunnya Pty agreement in relation to the terms of the In- Ltd [2025] NSWCA 78 and the Principal Agreement and the payment of Canadian Aero principle appropriate funds or giving of appropriate referred to therein (and related security, for the client files (the Continuing authorities). Fiduciary Duties). 59 It pleads multiple propositions and pleads no material facts in In the circumstances as pleaded at paragraphs The paragraph plainly pleads support of any of those propositions. Given its reference to [29] to [51] above, the First Defendant, during the material facts pleaded at paragraphs 29 to 51, it also suffers from the same issues as paragraphs [29] to [51] as the the M Plus Employment Period and without outlined in relation to those paragraphs. basis for the allegation. agreement from the Plaintiff: a. began competing with the Plaintiff’s business; b. solicited clients from the Plaintiff, including the Frino Contact Group, clients from the Client List, and the 13 March Group; and c. inappropriately used and disclosed the Plaintiff’s confidential information; for her own benefit, the benefit of Second Defendant, and to the detriment of the Plaintiff, in breach of her Employment Duties (the Conduct). SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para 60-63 Given their references to the preceding paragraphs they suffer 60. In the circumstances as pleaded at The First Defendant’s conduct the same issues as outlined in respect of those paragraphs. paragraph [56], the First Defendant continued as pleaded in paragraph 60 They contain conclusionary and circular definitions that draw to, without the agreement of the Plaintiff: falls was squarely within conclusions without properly articulating the material facts that conduct that is not bona fide a. use the Plaintiff’s confidential underpin those conclusions. and otherwise inconsistent with information; ordinary standards of honest b. solicit and retain clients from the behaviour as an employee of Paragraphs 61 and 62 use the words “dishonest” clearly with a Plaintiff; and the Plaintiff taking advantage view to pleading that the First Defendant intended to breach her of her employer to its c. receive client fees for work conducted employment contract or employment duties but there is no significant detriment. in competition with the Plaintiff; material fact pleaded that underpins the pleading of dishonesty. This does not satisfy Rule 407. for her own benefit, the benefit of Second Defendant, and to the detriment of the Plaintiff, The material facts are plainly pleaded. in breach of her Continuing Fiduciary Duties The paragraphs referred to that apparently underpin those (the Continuing Conduct). pleadings contain conclusionary definitions only – not material facts underpinning the allegations. 61. As a result of the Conduct, the First Defendant dishonestly breached her Contractual Duties and Common Law Duties (the Common Law Breaches). 62. As a result of the Conduct and the Continuing Conduct, the First Defendant dishonestly breached her Fiduciary Duties and Continuing Fiduciary Duties (the Fiduciary Breaches). 63. The Second Defendant had actual knowledge of the Fiduciary Breaches, and with that knowledge: a. received the Plaintiff’s clients, confidential information, and benefits from the Fiduciary Breaches; and SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para b. assisted in committing the Fiduciary Breaches.

64-67 all contain multiple propositions which should be separated. 1. The Common Law Breaches have caused The Plaintiff is not required to Further, they do not comply with Rule 417 in that they do not the Plaintiff to suffer loss in the following “specify what the dollar figure specify the amount of damages claimed. It is not enough to is alleged to be”. areas: attach a list of clients with a dollar figure attached to each client. That dollar figure is not your client’s loss. a. loss of earnings for all income derived by the First and Second Defendants The Defendant has identified matters that need to be from the Plaintiff’s clients or former Firstly, the pleadings do not even specify what the dollar figure addressed in lay and expert clients during the First Defendant’s is alleged to be. evidence, not pleadings. employment period with the Plaintiff; b. the goodwill value of the clients Secondly, on the assumption that dollar figure is the fees solicited and retained by the First and earned by the Plaintiff from that client, the time period that Second Defendants prior to 28 March those fees were earned needs to be specified along with some 2025; breakdown in what the actual amount of profit was to the Plaintiff. Each client would need some specificity in relation to c. loss of opportunity for the Plaintiff to pleading the terms of the agreement with the Plaintiff including retain any clients solicited and retained the length of time that client had been a client of the Plaintiff by the First and Second Defendants; and the general quantum of fees paid to the firm over the relevant time period before the Court could be in a position to d. loss of serviceability to meet the assess any actual loss. obligations under the Judo Loan. (collectively, the Common Law Harm). 2. The Fiduciary Breaches have caused the Plaintiff to suffer loss in the following areas: a. loss of earnings for all income derived by the First and Second Defendants from the Plaintiff’s clients or former SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para clients during the First Defendant’s employment period with the Plaintiff; b. loss of earnings for all income derived by the First and Second Defendants from the Plaintiff’s clients or former clients in competition with the Plaintiff after 28 March 2025; c. the goodwill value of the clients solicited and retained by the First and Second Defendants prior to 28 March 2025; d. the goodwill value of Plaintiff’s clients solicited and retained by the First and Second Defendants after 28 March 2025; e. loss of opportunity for the Plaintiff to retain any clients solicited and retained by the First and Second Defendants; f. loss of serviceability to meet the obligations under the Judo Loan. (collectively, the Equitable Harm). 3. In the premises of paragraph [63], the Second Defendant is jointly and severally liable in equity with the First Defendant for the Equitable Harm.

In the premises of paragraphs [64] to [66], the Plaintiff claims: SOC The Defendant’s Complaint Statement of Claim Paragraph Extract The Plaintiff’s Response Para a. damages for the Common Law Harm; b. further and in the alternative, equitable compensation for the Equitable Harm; and c. in the alternative, account of profits for the Equitable Harm; against the First and Second Defendants.

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