Mason Corporation Pty Ltd v Saunderson & Ors [2025] QSC 320

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - STRIKING OUT - GENERALLY - where the first defendant applies to strike out all or part of the plaintiff's statement of claim - where the plaintiff has filed and served six versions of the statement of claim - where the causes of action pleaded appear to be breaches of the plaintiff's employment contract, breaches of the equitable duty of confidence, breaches of officers' duties under the Corporations Act 2001 (Cth) and breaches of section 18 of the Australian Consumer Law - where the plaintiff submits the strike out application is misconceived because the majority of the impugned paragraphs have been pleaded to - where the plaintiff submits the strike out application is misconceived because it is too late in the proceeding - where the first defendant has nine complaints - where the first complaint is that paragraphs 6 to 37 of the statement of claim plead background narrative not material facts - where the second complaint is that the confidential information referred to in the statement of claim is not specifically identified - where the third complaint is that particulars of the alleged diverted business have not been provided - where the fourth complaint is that no direct causal link between the alleged impugned conduct and the plaintiff's alleged loss and damage - where the fifth complaint is that the elements of the cause of action for misuse of confidential information are not properly pleaded in respect of paragraphs 173 to 180 - where the sixth complaint is that the plaintiff does not properly plead its passing off case - where the seventh complaint is that the alleged conduct said to be dishonest and fraudulent design of the first defendant is not specified - where the eight complaint is that the pleadings regarding accessorial liability do not provide the material facts - where the ninth complaint concerns is that the alleged damage arising out of some sales confirmation and stock order is not properly pleaded - whether the statement of claim should be struck out in full or in part

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ADMISSIONS - WITHDRAWAL - where the first defendant seeks leave to withdraw some admissions - where leave is opposed in relation to three paragraphs of the defence - where the court has broad discretion to grant of leave to withdraw an admission - where the court's objective is to facilitate the just and expeditious resolution of the real issues in the proceedings at a minimum of expense - where the first defendant seeks leave to withdraw its admission in relation to paragraph 12(i) because it says the plaintiff's corresponding allegation is not sufficiently clear - where the first defendant seeks leave to withdraw its admission in paragraph 32 because it says the plaintiff's corresponding allegation is an arguably wrong conclusion of law - where the first defendant seeks leave to withdraw its admission in paragraph 144 because it says the plaintiff's corresponding pleading lacks clarity - whether the first defendant should have leave to withdraw its admissions

Competition and Consumer Act 2010 (Cth), sch 2, s 18

Corporations Act 2001 (Cth) s 182 and 183(1)

Uniform Civil Procedure Rules 1999 (Qld), r 149(1), 150

Earthtec Pty Ltd v Livingstone Shire Council (2023) QSC 22, cited

Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731, cited

Ridgeway International Ltd v McCullum [1998] NSWSC 151, applied

Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7) [2019] QSC 241, cited

S Russell for the second, third and fourth defendants

Cooper Grace Ward for the second, third and fourth defendants

• [1] There are two applications before the court.
• [2] First, the first defendant, Mr Saunderson, applies to strike out all or part of the plaintiff's statement of claim. The plaintiff, Mason Corporation Pty Ltd trading as Wear Parts Australia ('WPA'), has filed and served six versions of the statement of claim. The relevant version for present purposes is the fourth further amended statement of claim.[1]
• [3] The application was first heard on 15 May 2025.[2] During the course of that hearing WPA opted to replead. That re-pleading is the fourth further amended statement of claim. The second, third and fourth defendants made no submission and adopted a neutral stance to the application.
• [4] Second, there is a further application by the first defendant to withdraw admissions.
• [5] The strike out application will be considered first.

• [6] Mr Saunderson was employed by WPA from September 2013 until February 2020. On his resignation from WPA, Mr Saunderson was employed by the second defendant, Elite Attachment Australia Pty Ltd ('Elite').[3]
• [7] WPA supplies ground engaging tools ('GET') for large machinery.
• [8] WPA contends that Mr Saunderson improperly used its confidential information to contact WPA's customers, dealers and suppliers and he diverted business to Elite and to the fourth defendant, 2Tools Pty Ltd ('2Tools'). The causes of action pleaded appear to be breaches of the contract of employment, breaches of the equitable duty of confidence, breaches of officers' duties under s 182(1) and 183(1) of the Corporations Act 2001 (Cth) ('Corporations Act') and contraventions of s 18 of the Australian Consumer Law ('ACL').[4] The first of those causes of action does not seem to be pursued in the 12 paragraphs of the prayer for relief.
• [9] The relevant principles are not in dispute. A party's pleading must state, with sufficient clarity, the case that must be met and define the issues for resolution.[5] The requirements of rule 149(1) of the Uniform Civil Procedure Rules 1999 (Qld) ('') ensure procedural fairness. On the other hand, any pleading which is difficult to follow, objectively ambiguous, or creates difficulty for the opposite party in so far as the pleading contains inconsistencies, is liable to be struck out. That is because it can be said to have a tendency to prejudice or delay the fair trial of the proceeding. However, the court's discretion to strike out pleadings should only be exercised in clear cases.

(a) For breach of confidence:

(i) the contract of employment and the relevant express term (here, clause 16);[10]

(ii) Mr Saunderson's acquisition of the confidential information which meets the contractual description and has the necessary quality of confidence;

(iii) Mr Saunderson's acquisition of that confidential information in the course of his employment and in circumstances importing an obligation of confidence;

(iv) Mr Saunderson's unauthorised use of that confidential information to the detriment of WPA;

(b) For a passing off or misleading and deceptive conduct claim:

(i) the subsistence of some reputation or goodwill on the part of WPA;

(ii) the deceptive conduct on the part of Mr Saunderson; and

(iii) the damage to WPA as a result of that conduct.[11]

Whether the Strike Out Application is Misconceived?

• [14] WPA submits that Mr Saunderson's application to strike out its statement of claim is misconceived because the majority of the impugned paragraphs have been pleaded to by Mr Saunderson.
• [15] I reject that submission. No authority establishes that, by pleading to the challenged paragraphs, the defendant cures the plaintiff's pleading of its defects. As explained, the court should strike out a pleading that has the tendency to prejudice or delay the fair trial of a proceeding, or a pleading which fails to fulfil its function to identify the real issues. That should happen whether or not the opposite party has chosen to or has been required to respond.[12]
• [16] WPA points out that many of the allegations the subject of Mr Saunderson's first category of objections, that is paragraphs 6 to 37 of the statement of claim, are admitted. In fact, it is true that some of these background paragraphs are admitted. Some are denied and not admitted, some are the subject of detailed pleas.
• [17] However, if the problem with a pleading is that it is unnecessarily prolix or raises false issues - that problem remains even if there is a response. It may be relevant that the opposite party has been able to craft a response if the attack on the pleading is that it is, for example, unintelligible. But there is no principle to the effect that a bad pleading is remedied by a response.
• [18] The plaintiff also contends that this case is well advanced and that it is too late for the first defendant to complain about the statement of claim. Delay will often be a relevant consideration on an interlocutory application such as a strike-out application. However, the identification of the real issues in the pleading is of cardinal importance for the parties' trial preparation and for the trial judge.[13]
• [19] The delay here does not prevent the court from considering the criticisms of the pleading on their merits. Indeed, at least a part of the delay to date can be attributed to the statement of claim and the changes made to that document.

• [20] Mr Saunderson complains that paragraphs 6 to 37 of the statement of claim plead background narrative rather than material facts.
• [21] WPA contends that these paragraphs plead material facts.
• [22] The pleading, regrettably, is in the narrative style. It describes, in excruciating detail, WPA's business, products and production process; WPA's quality assurance ('QA') process; WPA's dealer network; Mr Saunderson's employment contract, his role and responsibilities; the array of information Mr Saunderson had access to; Mr Saunderson's promotion to the position of Global Sales Manager in June 2018; Mr Saunderson's salary, motor vehicle allowance and private health care package.[14] It is a disappointingly broad sweep of allegations. To adopt the words of Jackson J in Mio Art Pty Ltd v Macequest Pty Ltd[15] an analyst of the pleading is left swimming in a sea of evidentiary facts while trying to identify the material facts for each cause of action.
• [23] Many of the allegations can be said to have a relevance to Mr Saunderson's employment or to WPA's business. But that hardly makes them material facts.
• [24] WPA contends that paragraphs 6 to 37 are relevant to Mr Saunderson's conduct:

(a) pleaded in paragraph 112 regarding his breach of clause 16 of his employment contract, in that they are relevant to why the conduct pleaded in paragraph 112 involved a misuse of confidential information;

(b) pleaded in paragraphs 113 and 114 regarding breach of the fiduciary duty he owed to WPA when he used the confidential information of WPA to promote his new role to existing customers, suppliers and dealers of WPA to gain an advantage for himself, 2Tools and Elite. In that, they are relevant to why the conduct pleaded in 113 and 114 was a breach of fiduciary duty;

(c) pleaded in paragraph 115 regarding Mr Saunderson contravention of s 183(1)(a) of the Corporations Act because he improperly used information he obtained because he had been an employee of WPA, to gain an advantage for himself 2Tools and Elite. In that, they are relevant as to why the conduct pleaded in paragraph 115 contravened s 183(l);

(d) pleaded in paragraphs 185 to 193 regarding Mr Saunderson passing off, misleading and deceptive conduct, and contraventions of the Corporations Act, in that they are relevant to the unique nature of the WPAs GET products;

(e) in relation to his contact with WPA's Chinese Supplier:

(i) pleaded in paragraphs 225 to 227 regarding his role in introducing Mr Hughes and Abel Xu for the purposes of Elite exploring the opportunity of using Mr Xu's group of companies to supply Elite with GET products manufactured using WPA's tooling and Unique Development Process. In that they are relevant to why, in organising a meeting between Mr Xu and Mr Hughes while employed by WPA, Mr Saunderson breached his contract of employment and his fiduciary duty; and

(ii) Mr Saunderson's breach of contract, breach of his fiduciary duties and contravention of of the pleaded in paragraphs 228 to 231, on the same basis as (i) above.

• [25] Paragraphs 112 to 115 are simply pleas that, by reason of previously pleaded conduct, Mr Saunderson breached clause 16 of his employment contract, misused confidential information and breached his fiduciary duty, and breached s 183(1) of the Corporations Act. Paragraphs 185 to 193 set out WPA's passing off and misleading and deceptive conduct case. Paragraphs 225 to 227 address a separate case that in late 2019, before his resignation, Mr Saunderson breached his employment contract by arranging a meeting between WPA's supplier and Mr Hughes and Elite (with whom Mr Saunderson proposed to go into business).
• [26] And so WPA says that "paragraphs 6 to 37 are relevant to Mr Saunderson's conduct"[17] [emphasis added] pleaded in various other paragraphs of the pleading. But that seems to be little more than saying that this background is relevant to the several different causes of action.[18] It is difficult to work out why or how they are relevant, or to which cause of action they are relevant. WPA's QA processes, for example, might or might not be relevant to one or other of the causes of action. The pleading does not make any of this clear.
• [27] In any event, what really seems to be said is that paragraphs 6 to 37 are background facts that have some unstated connection to the various causes of action. However, a pleading should not be a ragbag collection of allegations of fact that have a vague or unstated connection to the pleaded causes of action. Rule 149(1)(b) of the UCPR requires that the pleading contain a statement of all the material facts on which the party relies but not the evidence by which the facts are to be proved.
• [28] WPA contends that paragraphs 6 to 37 contain material facts.[19] But that is done in a formulaic way. For example, WPA says that paragraphs 10 to 16 "". But the allegations are not tied to any element of a pleaded cause of action. In reality WPA's argument is that the facts pleaded may have some relevance to other facts pleaded. That is beside the point. The background paragraphs do not appear to be material facts which address the elements of any of the causes of action. And, if they do address any of the elements, that is not clear.

• [29] Counsel for WPA argues that the amended paragraph 190 of the statement of claim makes paragraphs 6 to 37 relevant. Paragraph 190 is as follows (with the recent amendments underlined):

"The effect of communicating the documents pleaded at paragraph 189 containing the information pleaded at paragraphs 186 and 187 constitute the making of false misrepresentations because it was likely to lead the customer and dealers to believe that the products previously provided by WPA, were now being offered by, or provided by Mr Saunderson, 2Tools and Elite, when such products were not subjected to the entire QA process pleaded in paragraphs 29 to 32 in that the process at paragraph 31(c) and d and 32 would not have occurred."

• [30] The evident intention of paragraph 190 is to plead a misrepresentation. That is one of the five elements of passing off.[20] The basis of the alleged representation is that the infringer is the author or owner of the intellectual property in question.[21] Thus, the idea is that Mr Saunderson was representing that he was selling WPA products:

(a) to Mr Xu, by Mr Saunderson's email on 17 March 2020 using identical product numbers and product descriptors to those of WPA; and

(b) to the recipients of 12 separate emails to which Mr Saunderson attached the 2Tools price list.[22]

• [31] Conventionally, the passing off case would be pleaded by alleging that WPA has acquired a substantial reputation in and by the use of its name or 'get-up', and that the products being sold by Mr Saunderson are using that name or 'get-up' so as to misrepresent that what Mr Saunderson was selling were WPA's products.[23] In short, the idea is that the defendant exploits the plaintiff's goodwill.
• [32] Instead, WPA has chosen to set out all of 13 emails verbatim. On any view that is the evidence. Then WPA alleges that, by the email to Mr Xu and the 12 emails attaching the pricelist, Mr Saunderson was passing off 2Tools products as if they were WPA's products. That tends to obscure what is likely to be the real issue.[24] Namely, whether there was anything distinctive in product numbers or product descriptions, and whether the use of those product numbers or product descriptions, or the use of some of them, conveyed to customers that the particular products being marketed by Mr Saunderson and Elite were WPA products.
• [33] But the present problem is that WPA seeks to justify the pleading of paragraphs 6 to 37 because those facts are said to be a foundation for this misrepresentation allegation. As it was originally pleaded, the misrepresentation did not rely on any of the background in paragraphs 6 to 37. To meet the legitimate criticism that paragraphs 6 to 37 serve no purpose, WPA has added the words underlined above. That rather odd addition to paragraph 190 asserts that the products being offered by Mr Saunderson and 2Tools were not WPA products and would not have undergone WPA's QA processes.
• [34] This addition is plainly designed to make the background in paragraphs 6 to 37 relevant. That exercise of redrafting paragraph 190 so that it refers to the background is a flawed and pointless exercise. It is an exercise merely devoted to achieving some sort of connection between the pleaded background and the material fact pleaded in paragraph 190. The exercise does not convert the background in paragraphs 6 to 37 into material facts. Instead, the cross-reference merely adds another potential false issue. The QA processes carried out on either suite of products (WPA or 2Tools) has no apparent relevance and does not appear to comprise a material fact. The material fact is whether Mr Saunderson misrepresented his products as WPA's products and was therefore unfairly taking advantage of WPA's goodwill. The fact that WPA's products were superior, or bore some particular feature or attribute, does not matter - at least for this cause of action.

• [35] WPA's counsel also pointed to amended paragraph 239 as making paragraphs 6 to 37 relevant. That paragraph of the statement of claim is as follows (with the amendments underlined):

"The products ordered, pleaded at paragraphs 237 and 238, were manufactured using tooling owned and designed by WPA, as pleaded in paragraphs 6 to 9 and 17 to 27, to gain an advantage for Mr Saunderson, 2Tools and Elite."

• [36] The problem here is similar. It appears that the element being pleaded here is that Mr Saunderson's conduct was calculated to injure the business or goodwill of another trader - WPA - or to gain an advantage.[25] But the means by which WPA's products are manufactured have no relevance to the elements of that cause of action. This is nothing more than incorporating the background so as to create a factual connection.
• [37] Counsel for Mr Saunderson explained that WPA does not allege that Mr Saunderson, Elite or 2Tools manufactured the products being offered using any of WPA's tooling or manufacturing processes. That is right and makes this part of the plea irrelevant and raises the prospect of a false issue concerning manufacturing. This issue of manufacturing or tooling is discussed in more detail below.

• [38] Counsel for WPA then pointed to paragraphs 209 to 220, 220A and 220B of the statement of claim. There are three relevant claims here. The first is contained in paragraphs 209 to 220 of the statement of claim and plead the following narrative:

(a) For seven years of his employment with WPA, Mr Saunderson was assigned and used his WPA email address to send and receive emails.

(b) The information contained in Mr Saunderson's email account was confidential information for the purposes of clause 16 of his employment contract[26] because it included:

(i) intellectual property;

(ii) marketing and business plans;

(iii) customer and supplier lists; and

(iv) other information concerning WPA's, business, finance, transactions or affairs within the WPA.

(c) However, when Mr Saunderson left his employment with WPA in February 2020 it was discovered that his WPA account contained only 19 'sent' emails (all in his last month), his 'trash' folder contained no emails, and his 'drafts' folder contained no drafts created after June 2018.

(d) Because of that discovery, prior to finishing his employment, Mr Saunderson must have deleted WPA's confidential information from his WPA email account.

(e) Mr Saunderson was not authorised to delete that confidential information.

(f) Mr Saunderson thereby breached the obligations in clause 8 of his employment contract to:

(i) serve WPA diligently to the best of his ability; and

(ii) act at all times in the best interests of WPA.

(a) On 30 January 2020, shortly before he left his employment with WPA, Mr Saunderson used his WPA email account to preview and/or download approximately 46 email attachments which included purchase orders.

(b) When Mr Saunderson previewed and/or downloaded those attachments a 'Mail Downloads' folder which contained the files previewed and/or downloaded, was created for each attachment.

(c) The information contained in the attachments was confidential information for the purposes of clause 16 of his employment because it included information concerning WPA's business, finance, transactions or affairs within the WPA.

(d) Prior to leaving WPA, Mr Saunderson deleted all of the files contained in the 46 'Mail Downloads' folders.

(e) By reason of that conduct, Mr Saunderson breached the obligations in clause 8 of his employment contract to:

(i) serve WPA diligently to the best of his ability; and

(ii) act at all times in the best interests of WPA.

• [40] When the present applications were before the court in May 2025, counsel for Mr Saunderson complained that the deletion and email attachments claims did not go anywhere because no declaratory or other relief was sought in relation to those claims. And they appeared to serve no purpose other than to prejudice the defendants, particularly Mr Saunderson.
• [41] WPA's lawyers responded by adding paragraphs 220A and 220B in the most recent version of the statement of claim. These two paragraphs comprise the third claim:

"220A. By reason of Mr Saunderson breaching his Employment Contract pleaded in paragraphs 215 and 220 herein, WPA was caused to engage Information Technology specialist, KordaMentha. to recover the data deleted by Mr Saunderson as pleaded in paragraphs 213 and 219.

220B. By reason of those matters pleaded in paragraph 220A the loss suffered by WPA was the cost of engaging KordaMentha, namely $6327.75 (inclusive of GST)."

• [42] That third claim is designed to answer the criticism that the first and second claims went nowhere. Damages are now claimed. However, some criticisms made on behalf of Mr Saunderson remain 'live'. For Mr Saunderson it is argued that:

"The new paragraphs claim an amount of loss for obtaining a report from KordaMentha regarding the "deleted emails" and "deleted mail downloads", but the argument remains baseless.

The plaintiff is unable to identify the content of the alleged deleted information and, therefore, has no basis to allege a deletion of confidential information. To assert that there was deleted information and it was confidential without identifying the information or how it in fact related to our client's duties pursuant to clause 8 of his employment contract serves nothing but to prejudice our client.

The complaint proceeds on the basis set out above (i.e. the alleged confidential information referred to is not specifically identified and is vague and ambiguous)."

• [43] There are really two problems. One problem is that both the first and second claims seem to go to some effort to portray the deleted information as confidential information. But that appears to be a false issue. Whether or not the information was confidential seems to have no bearing on any relevant cause of action. Clause 16 of the employment contract prohibits Mr Saunderson from utilising the confidential information himself and prevents him from disclosing confidential information to any person. But Mr Saunderson is not said to have done either of those things. At least here, the contention is that the confidential information possessed by Mr Saunderson has remained confidential. Certainly, there is no allegation of the use of or the publication of the confidential information to third parties.
• [44] Instead, Mr Saunderson is said to have deleted the information. But no pleaded term of the contract prevents Mr Saunderson from doing that. WPA's pleading attempts to resolve that difficulty by alleging that the breached the obligations in clause 8 of his employment contract to:

(a) serve WPA diligently to the best of his ability; and

(b) act at all times in the best interests of WPA.

• [45] That is problematic. The pleading does not explain how or why the deletion of the information comprises a lack of diligence, why it comprises a failure to act in WPA's best interests, or why it might otherwise have been a breach of Mr Saunderson's contract of employment. Probably much depends on what information was deleted.
• [46] This leads to the second and related problem. As counsel for Mr Saunderson points out, WPA does not properly identify what information was deleted. For the first claim the allegation is that Mr Saunderson must have deleted WPA's 'confidential information' from his WPA email account, but the confidential information is not specified. The only clue given is that the information in Mr Saunderson email account "included" information generically described as intellectual property, marketing and business plans, customer and supplier lists and other information concerning WPA's business, finance, transactions or affairs within WPA. That is not much of a clue as to what was deleted because it merely identifies the broad description of some categories of documents that may have been in the wider pool of documents in his WPA email account.
• [47] For the second claim, the clues as to what was deleted are similarly unhelpful. The documents previewed and/or downloaded included purchase orders. The deletions included confidential information for the purposes of clause 16 of his employment because it included information concerning WPA's business, finances, transactions or affairs within WPA. Such a wide category could include virtually anything.
• [48] As explained, the confidentiality or otherwise of the documents does not appear to be relevant, let alone a material fact. And the generic description of the information said to be "included" in what was deleted are so broad that they are likely to embrace any business document.
• [49] As to the third claim, the concept is that WPA were put to the expense of retaining KordaMentha to recover deleted data.[27] However, it is unclear what information was recovered by KordaMentha. If the plaintiff identified what was recovered, that could illustrate what it was that was deleted, or at least some of what was deleted.

• [51] Paragraph 225 and 226 have also been amended to incorporate some cross-references to the background in paragraphs 6 to 37.
• [52] The element pleaded here is Mr Saunderson's alleged breach of his employment contract by contacting a potential supplier, Mr Xu, and arranging a meeting with Mr Hughes of Elite whilst Mr Saunderson was still employed by WPA. In other words, the allegation is that, whilst he was employed by WPA, Mr Saunderson was working for his future employer.
• [53] However, the cross-referencing to a number of background paragraphs does not add anything other than description. Paragraph 226 is in these terms (with the amendments underlined):

"The purpose of the meeting pleaded at paragraph 225 was to introduce Mr Hughes to Mr Xu so that Elite could explore the opportunity of using Mr Xu's group of companies to supply Elite with Wear parts and GET products manufactured using WPA's tooling pleaded at paragraphs 14, 22-27 and 33 and WPA's production process pleaded at paragraphs 6 to 9, 17 to 2l and 28 to 3lb."

• [54] Thus, the description added identifies the features of WPA's tooling and production, but in the context of an allegation that Mr Saunderson was exploring a supplying opportunity for his future employer. WPA's tooling and manufacturing process is not a material fact or part of the material facts. As counsel for Mr Saunderson points out, there is no allegation that the products were ordered to be manufactured using WPA tooling or designs.

• [55] Counsel for WPA argues that paragraphs 112 to 115[28] make the background in paragraphs 6 to 37 relevant.
• [56] Paragraphs 112 to 115 follow on from the allegations in the following paragraphs:

(a) paragraph 61 - before he left WPA, Mr Saunderson sent two emails to his personal email address containing customer, supplier, dealer and WPA employee contact details without WPA's consent;

(b) paragraph 84 - after he left WPA, again without WPA's consent, Mr Saunderson emailed Mr Maher, Mr McGregor, Mr Holland and Mr Upton (customers of WPA), utilising the contact information that he had forwarded to his personal email and soliciting product orders ;

(c) paragraph 98 - also after he left WPA, Mr Saunderson, again without consent, sent another email to Mr Maher, again utilising the contact information that he had forwarded to his personal email and soliciting product orders;

(d) paragraph 111 - Mr Saunderson then sent a broadcast email to 54 email addresses that he had forwarded to his personal email. The email gave the recipients of the emails his new contact details at Elite and solicited business;

(e) paragraph 105 to 107N - Mr Saunderson then dealt with suppliers (Ningbo and Cherry Ma) effecting purchases from suppliers.

• [57] However, the intention of paragraphs 112 to 115 is merely to plead the legal consequences of the conduct that has been pleaded earlier in the statement of claim. And so, paragraph 112 pleads that the conduct was a breach of clause 16 of the employment contract. Paragraph 113 pleads a misuse of confidential information. Paragraph 114 pleads a breach of fiduciary duty. Paragraph 114A pleads an engagement in a "dishonest and fraudulent design". Paragraph 115 pleads that the conduct was a contravention of s 183(l)(a) of the Corporations Act. And paragraph 113A is directed at establishing that Mr Saunderson's conduct caused damage in the sense of increasing purchases for Mr Saunderson, Elite and 2Tools with a commensurate decrease in WPA's sales.
• [58] In short, nothing in paragraphs 112 to 115 makes the background in paragraphs 6 to 37 relevant, let alone shows that they are material facts.

• [59] Paragraphs 221 to 224 starts in a way that is not promising. The heading to the section of the pleading is "Post-employment discovery of relationship between Mr Hughes and Mr Saunderson and Mr Saunderson's Business". On any view that heading is a signpost that what follows is evidence. As explained, rule 149(1) expressly requires that a pleading not include evidence. WPA's discovery of contact between Mr Saunderson and Mr Hughes does not qualify as a material fact.
• [60] Paragraph 221 alleges that, during the course of his employment Mr Saunderson received and exchanged six emails with Mr Hughes of Elite between 24 August 2016 until at least 19 September 2019. As originally drafted, paragraph 222 then quoted those six emails verbatim. The latest version of the pleading deletes five of those emails and leaves an email of 13 September 2019, the text of which is quoted verbatim.
• [61] The email appears to be a stream of consciousness, running over nearly a page.[29] It includes comments such as "you have so many kids [.] what are they going to do when they grow up" and "providing we don't go stupid with fast cars and slow women it works out fine" and "...look at the total wankers you have worked for in the past......seriously". It is difficult to see how those comments, and the other parts of the stream of consciousness in the email, are relevant let alone comprise a material fact.
• [62] Paragraph 223 does not supply the answer. Paragraph 223 pleads that Mr Hughes knew that Mr Saunderson worked for WPA in a senior sales role by reason of those matters at paragraph 222. The relevance of what Mr Hughes knew of Mr Saunderson's role is elusive. It is hard to see that it is a material fact relating to any claim against either Mr Saunderson or Mr Hughes.
• [63] Paragraph 224 then pleads this:

"By reason of those matters pleaded at paragraph 222.f) [i.e. the 13 September 2019 email], Mr Hughes was exploring business opportunities with Mr Saunderson to compete with WPA in selling GET products and Wear parts while Mr Saunderson was employed by WPA."

• [64] That does not make sense. The rambling email was from Mr Saunderson to Mr Hughes. It can hardly be a component of a claim that it was Mr Hughes who was exploring business opportunities with Mr Saunderson.
• [65] If there is a point to the verbatim plea of the email in paragraph 222, it is not explained or clear. It is difficult to decipher the torrent in the email, but one possible interpretation is that Mr Saunderson was inviting Mr Hughes to 'jump ship', go out on his own and use WPA's facilities.[30]
• [66] In any event, WPA contends that the reference in paragraph 224 to Mr Hughes exploring business opportunities to compete with WPA in selling GET products and Wear parts creates a link back to the background in paragraphs 6 to 37. Later paragraphs also link back to the email and paragraph 224. But mere links ignores the problem that the pleading does not plead the material facts.

• [67] The complaint here is that the alleged confidential information referred to in the statement of claim is not specifically identified and is vague and ambiguous. And, the complaint is that the paragraphs do not identify the information that is said to not be generally available to the public.
• [68] As explained above, the elements of a claim for misuse of confidential information includes an identification of the confidential information. That is required because the claimant must establish, amongst other elements, that:

(a) Mr Saunderson's acquisition of the confidential information meets the contractual description of confidential information and has the necessary quality of confidence;

(b) Mr Saunderson's acquisition of that confidential information in the course of his employment and in circumstances importing an obligation of confidence;

(c) Mr Saunderson's unauthorised use of that confidential information to the detriment of WPA.

• [69] As the authors of Halsbury's explain, there has been an increasing reluctance to grant relief where specific information is not identified on the basis that it is unrealistic to assert that all of the information received by an employee during employment, or relating to a business transaction or a commercial relationship is 'confidential'.[31] A defendant is entitled to require clear particulars of the confidential information which the plaintiff alleges has been misused. In cases where it is alleged that the defendant has misused certain confidential information, the precise confidential information said to be taken, and precisely how it is said to have been misused, must be pleaded.[32] The information alleged to be confidential must be specific in the sense that it is clear and identifiable as confidential.[33]
• [70] Despite all of that, the statement of claim does not attempt to identify the confidential information said to have been gained by Mr Saunderson - other than the contact details he emailed to his private email account. Instead, what is attempted is a vague generic identification of the confidential information. Paragraphs 46 and 47 plead the confidential information in this way:

"46. The information that Mr Saunderson had access to pleaded at paragraphs 41 and 43 42 to 44 was WPA confidential information for the purposes of clause 16 of the Employment Contract and because it included information which is not generally available to the public:

1. trade secrets;
2. intellectual property;
3. marketing and business plans;
4. customer and supplier lists;
5. and any other information concerning WPA's, business, finance, transactions or affairs within the WPA.

1. Further or alternatively to those matters pleaded at paragraph 45 46, the information was confidential information because:
   1. it was known to only a limited number of people within the WPA's organisation;
   2. WPA took pains not to disclose it to outsiders, particularly competitors; and
   3. it was "valuable commercial information", its value being referable to the time and trouble that had gone into building it up, including the network of customers, suppliers and dealers and identifying those who were reliable."[34]

• [71] Thus, paragraph 46 performs two functions. It specifies that the confidential information, whatever it is, is not generally available to the public. And the paragraph broadly describes the information as including trade secrets etcetera, without actually saying what the confidential information is. This is nothing more than a reciting of the categories specified in clause 16 of the employment agreement. No trade secrets are identified. No intellectual property is identified. And no marketing or business plans are identified. If the confidential information falls within categories d. or e. of paragraph 46, then the pleading does not descend to identify what that confidential information is.
• [72] Paragraph 47, a further or alternative plea, again describes why the information was confidential but without actually saying what the information is.
• [73] A further vice in the drafting of these paragraphs is that the information is said to include certain characteristics or types of information. The use of the word "include" and "including" makes the plea open-ended and means that the defendant is required to speculate about what else might be 'included'. In any event, as drafted, the paragraph does not identify the confidential information but instead describes it as including trade secrets, or intellectual property, or marketing or business plans, or customer and supplier lists, or other information concerning WPA's business, finance, transactions or affairs.
• [74] Paragraphs 53 and 54 of the statement of claim then largely repeat the content of paragraphs 46 and 47.
• [75] It is true that the employment agreement defines confidential information in a broad way. But that does not relieve WPA from the obligation to properly identify the information which it says was imparted to Mr Saunderson and which he then misused. It is difficult to see how a trial can proceed without that proper identification.
• [76] WPA relies on paragraphs 238, 239, 241, 243, 244, 248A, 248B and 249. However, none of those paragraphs precisely identify the confidential information imparted and misused. Paragraph 243 comes closest to providing appropriate detail because it refers to Mr Saunderson acquiring knowledge of the particular product to order and knowledge of tooling in the course of his employment with WPA. But, if that is alleged to be the confidential information, it makes paragraphs 46, 47, 53 and 54 redundant. And there is considerable reason for doubt that an employee's knowledge of products and production is simply expertise and knowledge gained in the course of his employment rather than confidential information.

"I would think that, as with customer lists, an employee, even a senior employee is entitled after his employment has ended to use the general knowledge in his mind about levels of prices and costs, even though that knowledge would have been treated as confidential and not communicated, except within the organisation, during the employment; he would not however be entitled to remove or deliberately memorise rate schedules or other records, or documents such as standard calculation sheets for preparing quotes. The observations of Harvey CJ in Eq. in Ormonoid Roofing & Asphalts Limited v. Bitumenoids Limited & Ors [1930] NSWStRp 88; (1930) 31 SRNSW 347 at 354 to 356 are applicable to costing information. See too the observations of McLelland J in Riteway Express Pty Ltd v. Clayton & Ors (1987) 10 NSWLR 238 at 239G to 240E on the boundary between information which an ex-employee may use and information which he may not. The boundary is not easy to see, and an employer who is seeking to restrain an ex-employee's conduct must establish the facts relating to his confidential information in sufficient detail to enable the court to see that there was confidential information of a kind which went beyond the range of the employee's skill, judgment and general knowledge of the industry, and also to see that the employee is making use of information of that kind."[36]

• [78] That decision, amongst others, illustrates the controversy that is likely in this area. But the vagueness of the pleading does not expose the issue for resolution.
• [79] I accept the submission on behalf of Mr Saunderson that no effort has been made to clarify the intended scope and meaning of 'confidential information'. This is in the context where Mr Saunderson contends that WPA's product codes and descriptions are not and could not possibly be confidential information. The problem here is that the lack of precision in the pleading means the real issues about confidentiality are not properly exposed.

Complaint 3: Particulars of Diverted Business

• [80] WPA alleges that the advantage received by the defendants was "increased purchases" from them and commensurately "decreased purchases" from the plaintiff.[37] Mr Saunderson has requested particulars of the alleged diverted business. WPA says that the particulars have been provided and points to item 16 in a schedule attached to Ms Vicca's first affidavit.[38] That item is as follows:

"The advantage that Mr Saunderson, Elite and 2Tools received was business from WPA's customers, dealers and suppliers (as outlined in the schedule of the TFASC) who Mr Saunderson solicited.

Invoices from Elite and 2Tools (the latter of which Mr Saunderson is a 50% shareholder) provided during disclosure (to which Mr Saunderson has access) reflect increasing sales from customer and dealers listed in the Schedule of the TFASC after Mr Saunderson left his employment with WPA. This is otherwise a matter for evidence."

• [81] It is difficult to see why the particulars have not been provided. In so far as WPA says that they lost business, that should be specified in particulars. Similarly, the business said to have been gained by one or other of Mr Saunderson, Elite and 2Tools should be specified in particulars. It is not a proper response to say that Mr Saunderson has knowledge of the particulars or has a means of acquiring knowledge of the particulars. First, as is pointed out by counsel for Mr Saunderson and is not disputed, the other defendants have disclosed more than 3000 documents which may or may not have the relevant information within that vast array of documents. Second, knowledge of the facts has never been a ground for refusing particulars.[39] As a matter of procedural fairness, Mr Saunderson is entitled to know the outline of the case that WPA prosecutes against him, irrespective of the state of Mr Saunderson's knowledge or his capacity to trawl through invoices produced by other parties.
• [82] Nor is this a matter for evidence at trial. WPA's case about the business it lost may relate to customers, dealers or suppliers. There may be 1, 10 or 1000 lost transactions. The position is similar for the transactions said to have been gained by one or other of Mr Saunderson, Elite and 2Tools. Mr Saunderson is entitled to know the case he will have to meet at trial.

• [83] Counsel for Mr Saunderson complains that there is no direct and unambiguous identification of the material facts relied on to establish the causal link between the alleged impugned conduct and WPA's alleged loss and damage. Reliance is placed on the reasons of Bond J in Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 7).[40]
• [84] The complaint is that the statement of claim merely alleges in a conclusionary way that "But for Mr Saunderson's conduct ... WPA would have continued to sell GET products to the customers and dealers particularised".[41]
• [85] I do not think the criticism is a valid one. Causation in this case is not particularly complex or difficult. What is involved is an examination of the connection between the alleged wrong and the outcome.[42] Here, assuming the accuracy of the facts pleaded, there is an obvious link between the conduct of Mr Saunderson in using confidential information (assuming that is pleaded and established) and WPA's loss of custom (assuming the specific transactions are identified).
• [86] Causation is always a question of fact.[43] WPA is entitled to identify the specific transactions it has lost, and the defendants have gained, just as Mr Saunderson is entitled to deny causation in any of those specific instances.

• [87] Mr Saunderson seeks for paragraphs 173 to 180 to be struck out. Those paragraphs concern an email from Mr Saunderson to Mr Klaus McGhie.
• [88] The statement of claim pleads that on 29 April 2020, that is after he had left WPA, Mr Saunderson sent an email to Mr Klaus McGhie of Mitech Air & Allied Services. Mitech is alleged to be a dealer for WPA. Mr McGhie's contact details are not among the contact details that Mr Saunderson is alleged to have sent to his personal email account before he left WPA. Instead, the statement of claim alleges that Mr McGhie's contact information was confidential information for the purposes of clause 16 of Mr Saunderson's employment contract.[44]
• [89] Clause 16 of the employment contract does not define confidential information. The clause provides that confidential information "includes all trade secrets, intellectual property, marketing and business plans, customer and supplier lists and any other information concerning the organisation, business, finance, transactions or affairs of [WPA] or any related company". It is hard to see how Mr McGhie's contact details fall within that addition to the ordinary meaning of the expression confidential information. Certainly, the contact details of one of WPA's dealers does not qualify as a customer or supplier list.
• [90] Counsel for WPA contends simply that the contact details for Mr McGhee were confidential and that is specifically pleaded. In my view it is insufficient for WPA to simply assert that Mr McGhie's contact details are confidential.[45] As explained, the elements of the cause of action for misuse of confidential information require more than simply that assertion.
• [91] In short, WPA's case concerning the misuse of this alleged confidential information is elusive. The case should be explicit.

• [92] I have already discussed paragraph 190 of the statement of claim. Here counsel for Mr Saunderson raises a broader but related complaint:

"The passing off allegations in paragraphs [188] to [193] of the SOC are embarrassing and should be struck out. The allegation is that the '2Tools price lists' contained the Plaintiff's product numbers and descriptors (SOC [189]). This is said to have been misleading or deceptive because 'it was likely to lead the customer and dealers to believe that the products previously provided by the plaintiff, were now being offered by, or provided by Mr Saunderson, 2Tools and Elite': SOC [190], [192]."

• [93] Conventionally, the plaintiff in a passing off case would plead that:

(a) the plaintiff's products (specifically identified) and the substantial reputation in and by the use of its name or 'get-up' in connection with those products;

(b) the defendant's conduct in using the same name or 'get-up' for products not connected with the plaintiff's products;

(c) by the defendant's use of the name or 'get-up', the defendant has represented that:

(i) the products provided by the defendant are, in truth, the plaintiff's products or are otherwise associated with the plaintiff or the plaintiff's business; and/or

(ii) the defendant's business is carried on with the authority of, or is connected to in the course of trade, or affiliated with the plaintiff or the plaintiff's business.

(d) neither the defendant, its products or its business have the approval of the plaintiff, nor are they affiliated with the plaintiff or the plaintiff's business;

(e) by reason of those matters the defendant, in the course of trade and in connection with the supply of its products, has represented, and is continuing to represent, that the defendant's products have the sponsorship or approval of the plaintiff or the plaintiff's business;

(f) neither the defendant nor its products have:

(i) the plaintiff's sponsorship;

(ii) the plaintiff's approval; and/or

(iii) any affiliation with the plaintiff or the plaintiff's business;

(g) the defendant threatens and intends and will, unless restrained by the court, continue to engage in that wrongful conduct;

(h) The defendant has made profits by that wrongful conduct and will, unless restrained by this court, continue to do so;

(i) The plaintiff has sustained loss and damage by reason of the passing off by the defendant and will, unless the defendant is restrained, continue to suffer loss and damage.[46]

• [94] It is not easy to see how the passing off case pleaded by WPA follows that pattern or even pleads the elements of the cause of action.[47] One central problem is that the pleading assumes a connection between the WPA product numbers and product descriptors and WPA's products. What really seems to be alleged is that, by using some product numbers and product descriptors (which need to be precisely identified) Mr Saunderson, 2Tools and Elite has represented that their products are, in truth, the WPA's products or are otherwise associated with WPA.
• [95] Despite Mr Saunderson's submissions to the contrary, it is certainly possible that the product numbers and product descriptors used by WPA may be distinctive and the subject of a reputation in the market. A reputation may attach to a product number or descriptor in the same way as the name 'Big Mac' is a name used by McDonalds for their hamburgers.[48] But WPA does not allege a substantial reputation in and by the use of its product codes or product descriptions. That means that this issue is obscured rather than exposed by the pleading.
• [96] WPA's statement of claim does not precisely identify the offending conduct. WPA does say that WPA's product numbers and product codes were used in the stock order, and in the 2Tools price list, but there is no identification of the specific product numbers and product codes used, and apparently distinctive or with a reputation.
• [97] Oddly, WPA's pleading then reverts to a misleading or deceptive conduct claim by pleading that customers and dealers were likely to be misled.
• [98] WPA submits that the allegation of passing off is "pellucidly clear, products are being held out as being the same as those offered by WPA when they have not been the subject of WPA's QA process". I do not accept that submission. Which products? What are the particular products with a distinctive reputation in the market by reason of their product numbers or codes? What products have the defendants been selling as WPA's products? None of those questions are addressed by the lengthy pleading.
• [99] The pleading is insufficient and fails to both inform the defendants and the court of the passing off case that WPA wishes to prosecute. The pleading has the disadvantage that it obscures rather than exposes the real issues.

• [100] The next complaint about the pleading has four separate instances in the pleading.[49] It is sufficient to consider the first of those instances:

"113. By reason of those matters pleaded at paragraphs 62 to 81, 92 to 96, 105 to 107N and 108 to 109, Mr Saunderson-used the confidential information of WPA to promote his new role to existing customers, suppliers and dealers of WPA to gain an advantage for himself, 2Tools and Elite.

113A. The advantage that Mr Saunderson. Elite and 2Tools gained pleaded in paragraph 113 herein was increased purchases from WPA's customers. dealers and suppliers, the identity of which are particularised in the schedule of this pleading, who Mr Saunderson solicited, in circumstances where those customers. dealers and suppliers decreased their purchases with WPA.

1. By reason of those matters pleaded paragraph 113 and 113A, Mr Saunderson breached the fiduciary duty he owed to WPA by utilising confidential information he obtained in the course of his employment with WPA to gain an advantage for himself, 2Tools or Elite.

114A. By reason of Mr Saunderson's conduct pleaded in paragraph 114, Mr Saunderson was engaging in dishonest and fraudulent design. as Mr Saunderson's conduct and/or behaviour in utilising the confidential information of WPA was contrary to the normally accepted standards of honest conduct of a senior employee."

• [101] Mr Saunderson's complaint focuses on paragraph 114 and its equivalents later in the pleading:

"[These paragraphs] do not identify the specific conduct that is said to have been substandard or what it is about that conduct that makes it substandard. Our client is left to guess at what alleged conduct by Mr Saunderson is said to be a dishonest and fraudulent design, and how that conduct qualifies as a transgression of ordinary standards of honest behaviour so as to qualify as a dishonest and fraudulent design."

• [102] If anything, that complaint is rather modest. The plea alleges that certain conduct fell below 'normally accepted standards of honest conduct' without specifying, first, the precise conduct the subject of the complaint or, second, what that standard of conduct required.
• [103] As to the first aspect, it is difficult to precisely identify the conduct. The cross-referencing disappears to the horizon. Paragraph 14A refers to the conduct in paragraphs 113 and 113A. Those two paragraph cross-refer to paragraphs 62 to 81, 92 to 96, 105 and 107N and 108 to 109 - a total of 43 paragraphs. Bearing in mind that what is alleged is dishonest and fraudulent design, it is impossible to see what it is that comprises the dishonest and fraudulent design.
• [104] WPA alleges that the paragraphs, presumably including the cross-referenced paragraphs, "plainly allege the nature of the impugned conduct, it is obvious on their face". I do not agree. The multiple cross-referencing is inconsistent with that contention. The trial judge, and the other parties ought not be required to rummage through 43 paragraphs in order to discover the specific conduct said to be dishonest. And I do not accept the idea that WPA, in alleging dishonest and fraudulent design, can simply assert "the nature" of the impugned conduct. Some specifics are required where allegations of dishonesty are concerned.
• [105] As to the second aspect, identification of the standard of conduct is required. Even in a negligence case, a pleading is required to identify what reasonable care is required.
• [106] The criticism is a legitimate criticism.

• [107] Complaint 8 addresses the pleading of accessorial liability.[50] An illustration of the problem is provided by paragraphs 208 and 208A1 of the statement of claim:
  1. Elite contravened s 183(l)(a) of the CA [Corporations Act], pursuant to s 183(2) of the CA because it was involved in Mr Saunderson's contraventions of s 183(l)(a) as pleaded at paragraphs 115 and 183, and 202 because Elite was a party to the contraventions in accordance with s 79(c) of the CA because Mr Saunderson was representing Elite, using an email account provided by Elite for the purposes of his employment with Elite.

208A1. Further, or in the alternative to those matters pleaded in paragraph 208, Elite contravened s 183(1)(a) of the CA, pursuant to s 183(2) of the CA, because it was involved in Mr Saunderson's contraventions of s 183(1)(a) as pleaded at paragraphs 115 and 183 because:

1. Elite was a party to the contraventions in accordance with s 79(c) of the CA because Elite, through Mr Hughes, was knowingly concerned in the contraventions namely:
   1. Elite. through Mr Hughes, was an intentional participant in Mr Saunderson's contraventions: and
   2. Mr Hughes had knowledge that Mr Saunderson improperly used information he obtained because he had been an employee of WPA.[51]

• [108] Paragraphs 208D, 236b, 254A and 259 follow a similar pattern to paragraph 208A1.
• [109] Here WPA relies on accessorial liability in s 79 of the Corporations Act which provides as follows:

"A person is involved in a contravention if, and only if, the person:

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced, whether by threats or promises or otherwise, the contravention; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention."

• [110] Four principles of accessorial liability can be stated.[52]
• [111] First, in order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention.[53]
• [112] Second, in order to have the requisite intention, the person must have knowledge of the essential matters which go to make up the events, whether or not the person knows that those matters amount to a crime or a contravention.[54]
• [113] Third, actual, rather than imputed, knowledge is required.[55]
• [114] Fourth, in section 79(c) which is relied on by WPA here, the notion of being "knowingly concerned" in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which "implicates or involves him or her" in the contravention so that there be a "practical connection between" the person and the contravention.[56]
• [115] There are problems with paragraph 208, which is plainly intended as a stand-alone plea.[57] One significant problem is that it seeks to engage s 79(c) without identifying the act or conduct that implicates Elite in Mr Saunderson's alleged contravention. The claim that Mr Saunderson was representing Elite, using an email account provided by Elite for the purposes of his employment with Elite does not assist WPA. Every employee of WPA, even those who merely passed Mr Saunderson in the corridor, can be regarded as representing their employer and each will have been assigned a WPA email address. Those two things do not, without more, establish a practical connection between Elite and the contravention.
• [116] And, WPA have not pleaded any knowledge of the essential matters which go to make up the contravention.

(a) Elite was involved in Mr Saunderson's contraventions;

(b) that was because Elite was a party to the contraventions;

(c) that was because Elite, through Mr Hughes, was knowingly concerned in the contraventions;

(d) that was because Elite. through Mr Hughes, was an intentional participant in Mr Saunderson's contraventions; and

(e) Mr Hughes had knowledge that Mr Saunderson improperly used information he obtained because he had been an employee of WPA.

• [118] Repetition of the words of the legislation does not comprise a pleading of the material facts. The one material fact that is pleaded is that Mr Hughes had knowledge that Mr Saunderson improperly used information he obtained whilst employed by WPA. But Mr Hughes' knowledge of the essential matters which go to make up the contravention are not identified.
• [119] WPA argues that:

(a) first, rules 150 (1)(k) and (2) of the UCPR have been satisfied as knowledge has been pleaded;

(b) second, these paragraphs make no allegation against Mr Saunderson and are not the subject of objection by the other defendants;

• [120] As to the first point, as explained, more is required than a simple assertion that the accessory had knowledge. Both the principles discussed above, and rule 150(1)(k) and (2) of the UCPR, require a specific plea of knowledge.
• [121] As to the second point, it is true that Mr Saunderson has no direct interest in the case mounted against the other defendants. But Mr Saunderson's submissions are right that he has a legitimate interest in the veracity of a pleading that others have participated in his fraudulent conduct. The other defendants supported that view. And, from the point of view of the trial judge, a superficial plea like this has the potential to disrupt the efficient running of the trial.

• [122] Paragraphs 107 and 241 plead damage arising from a sales confirmation and stock order placed by Elite (with the amendments underlined):

"107. The products that were contained in the sales confirmation arrived in Australia on 23 June 2020 and were delivered to the port of Melbourne and received by Elite on behalf of 2Tools.

1. On, or about 23 June 2020, a shipment of approximate 5-7 tonnes of product listed in the sales confirmation pleaded at paragraph 240 arrived in Melbourne and were delivered to Elite on behalf of 2Tools."

• [123] Counsel for Mr Saunderson complains that the statement of claim does not allege that any of that stock was sold and, therefore, does not disclose any action for the alleged loss and damage. However, the real problem is that it is difficult to work out the basis for the damage claim. The pleading seems to concentrate on the stock landing at the port of Melbourne. If the transit of the goods is relevant, that relevance is not explained.
• [124] Looking at the context of paragraph 107 and 241, it appears that the draftsperson is concerned to plead the evidence that establishes the transaction involving the ordering of goods from suppliers in China and the arrival of those goods into Australia. But how that evidence translates to damage is unclear.
• [125] The context to paragraph 241 adds a further element of mystery in that there is an allegation that the products ordered were manufactured in China using tooling owned and designed by WPA. As will be discussed below, there is problem understanding this plea given that it is not claimed that Mr Saunderson had any role in the manufacturing of the parts that were subsequently ordered and received.
• [126] The result is confusion.
• [127] WPA's response to the criticisms is that these paragraphs have been pleaded to by Elite, 2Tools and Mr Hughes. As explained, the fact that a defendant has chosen to plead to paragraphs in the statement of claim, or has been compelled to plead, does not solve the problems with the pleading.

• [128] There are three paragraphs of the defence where leave to withdraw the admissions are opposed. They are:

(a) paragraph 12(i), which responds to paragraph 8 of the statement of claim;

(b) paragraph 32, which responds to paragraph 41 of the statement of claim; and

(c) paragraph 144, which responds to paragraph 241 of the statement of claim.

• [129] As both counsel explained, the court has broad discretion to grant leave to withdraw an admission.[58] The factors relevant to the exercise of the discretion whether to grant leave are:

(a) how and why the admission came to be made;

(b) the evidence surrounding the issues the subject of the admission;

(c) whether there is likely to be a real dispute about the evidence;

(d) any delay in making the application for leave to withdraw the admission;

(e) prejudice to the other party.[59]

• [130] Of course, that list of relevant factors is not intended to be exhaustive. The discretion is a wide one, with the objective to facilitate the just and expeditious resolution of the real issues in the proceedings at a minimum of expense.[60]

• [131] The allegations in paragraphs 6, 7 and 8 of the statement of claim are as follows:

"6. WPA Wear parts and GET products, are and were at all material times based upon products and parts that are made by Original Equipment Manufacturers (OEM).

1. WPA reverse engineers parts and products that were originally produced by OEM, to develop either a direct copy of the part or product, or a modified/improved version.
2. It is through the reverse engineering process pleaded at paragraphs 6 and 7 that a part or product becomes one that is unique to WPA."

• [132] It is difficult to understand how these allegations form the basis for the subsequent claims. It is not directly alleged that Mr Saunderson took with him, to his new employers, details of WPA's special manufacturing process - which apparently involved copying and improving OEM's products. In fact, what WPA alleges is that Mr Saunderson had some knowledge of the tooling involved in the manufacturing process and that he acquired knowledge of what particular products to order. That is said to be confidential information but why it is confidential is not explained. Knowledge of what products to order and knowledge of the 'tooling' involved in the manufacturing process would seem to be in the category of 'general knowledge' discussed by Bryson J in Ridgeway International Ltd v McCullum.[61] An employer cannot enjoin an employee from leaving with some expertise and some knowledge of the industry.
• [133] Paragraphs 243 and 244 plead that, in the course of his employment, Mr Saunderson acquired knowledge of the particular WPA products to order, and knowledge of tooling. But that does not clearly identify the information said to be confidential. Knowledge of the products that can be ordered sounds a lot like expertise that an employee would necessarily acquire to do their job. Knowledge of 'tooling' merely seems to describe an area of knowledge - that is a manufacturing process. Knowledge, expertise and information acquired within employment is not necessarily confidential information.
• [134] The failure of the pleading to address the elements of the cause of action means that there may well be real issues as to the proper identification of the confidential information, and whether Mr Saunderson acquired that information in circumstances importing a duty of confidence, and whether that information is truly confidential. If those are real issues, then they are obscured by the statement of claim.
• [135] Even assuming that Mr Saunderson possessed confidential information, it is difficult to identify the alleged exploitation of that confidential information. It is not claimed that Mr Saunderson had any role in the manufacturing of the parts that were subsequently ordered and received. The allegations in this part of the pleading appear to turn on paragraph 239:

"239. The products ordered, pleaded at paragraphs 237 and 448, were manufactured using tooling owned and designed by WPA, as pleaded in paragraphs 6 to 9 and 17 to 27, to gain an advantage for Mr Saunderson, 2Tools and Elite."

• [136] The pleading is not clear, but the idea seems to be that merely by ordering certain products from the same suppliers who manufacture products for WPA, Mr Saunderson was breaching confidence. Again, if there is an issue about whether Mr Saunderson breached his duty of confidence by ordering specific products, that issue is not properly exposed by the present statement of claim.
• [137] Mr Saunderson has admitted paragraph 8. He seeks leave to withdraw that admission. Leave is opposed on the ground that paragraph 8 has been in the same terms since the original statement of claim and that paragraph 8 was admitted in the defence filed in May 2024. Further, WPA says that there is no persuasive evidence before the Court regarding the circumstances of the admission, to justify its withdrawal.
• [138] It is true that the admission has stood for some time and there is no direct explanation of how paragraph 8 came to be admitted. Equally there is no allegation of prejudice.
• [139] The real problem is that paragraph 8 is part of a pleading that is unclear and needs to be re-drafted. For that reason, leave should be given for WPA to re-plead and for Mr Saunderson to withdraw that admission and also replead.

• [140] Paragraph 41 of the statement of claim is as follows:

"In addition to the written terms of the Employment Contract pleaded at paragraph 35 40, by reason of his employment with WPA, it was a term implied by law that Mr Saunderson owed WPA a duty of fidelity and good faith which required the Mr Saunderson to not engage in Conduct:

1. that was incompatible with the fulfilment of Mr Saunderson's duty as an employee;
2. involved an opposition, or conflict between Mr Saunderson's interest and his duty to WPA;
3. impeded Mr Saunderson's faithful performance of his obligations, or was destructive of the necessary confidence between WPA and Mr Saunderson."

• [141] In response, Mr Saunderson has admitted that that it was a term implied by law that Mr Saunderson owed WPA a duty of fidelity but has otherwise denied paragraph 41. Further paragraph 31A explains the denial in this way:

(a) Mr Saunderson's duties were expressly stated in the written terms of the employment contract, particularly in clause 8;

(b) clause 28 of that agreement provided that the terms and conditions contained in the document constituted the entire agreement;

(c) in the premises, the written agreement left no room for the implication of the term as alleged by the plaintiff.

• [142] Again, there is no satisfactory explanation as to how and why the admission came to be made. There is also no claim of any prejudice. Instead, WPA submits that the law is such that an employee to render faithful and loyal service to the employer, and to avoid conduct incompatible with a continuing relationship of confidence.[62] Thus, WPA contends that the conclusion of law it has pleaded is correct. And for that reason, leave to withdraw the admission should not be given.
• [143] A plea of a conclusion of law is a non-essential part of a pleading. Rule 149(2) of the UCPR expressly provides that a party may plead a conclusion of law or raise a point of law if the party also pleads the material facts in support of the conclusion or point. A plea of a conclusion of law may be desirable to ensure that a pleading achieves the fundamental purposes of defining the issues appropriately and communicating to the opposite party the case it has to meet. It may also be useful to plead a conclusion of law to have a pleading make more narrative sense. And, it may be especially useful if the point of law is obscure or debatable or the pleader wants to make absolutely sure that the opponent cannot claim surprise at trial.[63]
• [144] Here, the court should be reluctant to permit Mr Saunderson to withdraw his admission of what seems on its face to be an admission of a relatively basic proposition, namely that it was a term implied by law that Mr Saunderson owed WPA a duty of fidelity. However, the duty alleged is not specific, is not tied to the facts, and does even appear to be limited to the duration of his employment. And, the admission is rather qualified with express reliance placed on the express terms of the contract of employment.
• [145] The legal proposition that an employee owes his employee a duty of fidelity - at least during the course of that employment - is not likely to be the real issue. Both parties agree that the contract of employment governs their relationship. Not even the content of that duty is likely to be in contest. The real issues are likely to involve whether Mr Saunderson acquired confidential information and whether he misused that confidential information.

• [147] Paragraph 241 of the statement of claim (also discussed above in relation to Complaint 9) alleges that:

"On, or about 23 June 2020, a shipment of approximate 5 - 7 tonnes of product listed in the sales confirmation pleaded at paragraph 240 arrived in Melbourne and were delivered to Elite on behalf of 2Tools."

• [148] Mr Saunderson admitted that paragraph in paragraph 144 of his defence. His admission was of the previous version - that is, the part of the paragraph without the underlining. Mr Saunderson's counsel explains that:

"This allegation was pleaded to when the defendants were jointly represented by previous solicitors. Mr Saunderson cannot offer an explanation for how this allegation came to be initially admitted, however he seeks to correct that because he has no knowledge of the alleged stock delivery."

• [149] Whilst WPA does not allege any prejudice, WPA submits that:

(a) paragraph 241 of the statement of claim is in the same terms as the version filed on 4 January 2021;

(b) in circumstances where Mr Saunderson's defence was filed on 31 May 2024 by his current legal representatives, there is no persuasive evidence before the court regarding the circumstances of the admission, or to justify its withdrawal.

• [150] The lack of clarity in the pleading is a good reason for allowing the withdrawal of this admission. And, if the arrival of the shipment into Melbourne is a material fact, Mr Saunderson's response ought not be constrained by a lack of leave to withdraw his mistaken admission.

• [151] The problems with the present statement of claim are not minor and cannot be remedied by particulars or by simple amendments. The document should be re-drafted so that it complies with the pleading rules, particularly rule 149(1)(a) and (b) of the UCPR.
• [152] The statement of claim should be struck out with leave to amend.
• [153] Mr Saunderson should have leave to withdraw the admissions in paragraphs 36, 46 (and 1), 118A (and 1), 12(i), 32, 43(i), 45(ii) and 144 (and 1) of the defence.
• [154] I will hear the parties on costs.

[1] Leave was given to file that version of the pleading during the hearing on 25 September 2025. The latest amendments in that version were made to accommodate Mr Saunderson's complaints about the third further amended statement of claim. Mr Saunderson is not satisfied that the most recent amendments solve the problems.

[2] This hearing was conducted on the basis of the previous version of the statement of claim.

[3] The second, third and fourth defendants made no submissions and adopted a neutral stance to the application.

[4] Competition and Consumer Act 2010 (Cth), sch 2 ('Australian Consumer Law'); These four causes of action are referred to in the plaintiff's submissions at [7]. There is also a claim of passing off or misleading or deceptive conduct.

[5] Equititrust Ltd v Tucker [2019] QSC 51 at [14].

[6] Robert Bax & Associates v Cavenham Pty Ltd [2011] QCA 53 at [16].

[7] Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 at [6].

[8] Mr Sanderson's signature block, with his contact details, is repeated 16 times through the pleading. The pleaded emails show that Mr Saunderson mostly signs off his emails 'Talk soon' or 'Speak soon'.

[9] Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211 at [61].

[10] The other terms of the contract do not seem to be relevant, although they seem to be pleaded rather extensively.

[11] See the discussion of the elements of a passing off case in Halsbury's Laws of Australia, LexisNexis (online version) at [240]-[4510].

[12] Time limits apply to defences. The defendant may be forced to respond, as best it can, because of the pressure of time limits.

[13] See Earthtec Pty Ltd v Livingstone Shire Council (2023) QSC 22 at [36].

[14] For present purposes I have selected the topics covered in paragraphs 6 to 56.

[15] [2013] QSC 211 at [60].

[16] This is a paraphrased version of WPA's submissions at [39].

[18] Here the causes of action seem to be breach of clause 16 of the employment contract, misuse of confidential information, breach of fiduciary duty, breach of s 183(1) and passing off or misleading and deceptive conduct.

[19] See paragraphs [34] to [38] of WPA's submissions.

[20] Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742. This puts aside, for the moment, misleading or deceptive conduct which will naturally cover similar ground.

[21] Court Forms, Precedents & Pleadings Qld, Lexis+ at [36,065].

[22] The emails identified are those in paragraphs 117 to 176 of the statement of claim, namely Mr Saunders's email to Mr Maher of 23 April 2020, Mr McGregor of 23 April 2020, 'Floss' at Cavan Cutting Edges of 28 April 2020, Mr Upton of 28 April 2020, two representatives of Tiger Buckets of 28 April 2020, Mr Holland of 28 April 2020, Mr Guard and 'Tiffany' at Slek Marketing of 28 April 2020, Mr Klein of 28 April 2020, Mr Jusba of 29 April 2020, Mr Carney of 29 April 2020, 'Floss' at Cavan Cutting Edges of 29 April 2020, and Mr McGhie of 29 April 2020.

[23] See, for example, Court Forms, Precedents & Pleadings Qld, Lexis+ at [360.105]. This plea of passing off is discussed below in relation to Complaint 6.

[24] As will be explained in relation to Complaint 6.

[25] Again, see the elements discussed in Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731 at 742 and in Court Forms, Precedents & Pleadings Qld, Lexis+ at [36,065].

[26] As will be explained the reference to clause 16 is odd. That clause prohibits Mr Saunderson from utilising or disclosing to any person, directly or indirectly, any confidential information.

[27] The pleading is unclear as to whether KordaMentha's efforts at recovery were successful or not. The plea is that KordaMentha were engaged to recover.

[28] This includes new paragraphs 113A and 114A.

[29] The email appears to have been sent at 00:15:31 which may explain its rambling.

[30] See, for example, the comment: "We have 6 factories now so you can store anything in any of our factories and we wouldn't charge you if you want to have a serious go". See also the reference to 'seed money'.

[31] Halsbury's Laws of Australia, LexisNexis, at [240]-[690].

[33] Ezystay Systems Pty Ltd v Link 2 Pty Ltd [2015] NSWSC 1105 at [126] citing Amway Corporation v Eurway International Ltd [1974] RPC 82 at 86 and O'Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310 at 327-328.

[34] The changes in the most recent version are indicated by underlining and crossing out.

[35] This part of the pleading is discussed below.

[36] Ridgeway International Ltd v McCullum [1998] NSWSC 151.

[37] See paragraphs [113A], [181A] and [248A] of the statement of claim.

[39] Palmos v Georgeson [1961] Qd R 186.

[40] [2019] QSC 241 at [17].

[41] This refers to paragraphs [115C], [183B], [190A] and [192A] of the statement of claim.

[42] See the discussion of causation by Edelman J in Lewis v Australian Capital Territory [2020] HCA 26; (2020) 271 CLR 192 at [151]- [152].

[43] Chappel v Hart (1998) 195 CLR 232.

[44] See paragraph 178 of the statement of claim. The statement of claim quotes Mr Saunderson's email to Mr McGhie in pointless detail.

[45] Mr McGhie's contact details may in fact be confidential. Or his details may be easily accessible on the internet.

[46] This is an adapted version of the sample pleading in Court Forms, Precedents & Pleadings Qld, Lexis+ at [360.105]. It does not include a claim of misleading or deceptive conduct which is merged in the text version_._

[47] See the five elements discussed above.

[48] McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd [1980] FCA 159; (1980) 33 ALR 394.

[49] The four paragraphs the subject of this complaint are paragraphs 114A, 182A, 230A and 248B.

[50] The first defendant seeks that paragraphs [208], [208A1], [208C], [208D], [236], [254], [254A], [258] and [259] of the statement of claim be struck out.

[51] The changes are indicated by underlining and crossing-out.

[52] These principles were explained by White J in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176] - [178] which were cited with approval by Flick and Reeves JJ in Fair Work Ombudsman v Hu [2019] FCAFC 133 at [15].

[53] Yorke v Lucas (1984) 158 CLR 661 at 667; see also Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [176].

[54] Yorke v Lucas (1984) 158 CLR 661 at 667. It is not necessary that the accessory should appreciate that the conduct in question is unlawful or a contravention: Rafferty v Madgwicks [2012] FCAFC 37; (2012) 287 ALR 437.

[55] Giorgianni v R [1985] HCA 29; (1985) 156 CLR 473 at 506-7; Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [177].

[56] Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324] - [325].

[57] See the reference in paragraph 208A1 to "Further, or in the alternative to those matters pleaded in paragraph 208".

[58] See UCPR rule 188; Fang v Yao [2025] QSC 46 at [20].

[59] Hanson Construction Materials Pty Ltd v Davey [2010] QCA 246 at [10] (referring to the judgment of Wilson J below). See also Green v Pearson [2014] QCA 110 at [34].

[60] UCPR rule 5(1).

[62] WPA's counsel cites Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 370, 372, and 391 and Neil, Chin and Parkin, The Modern Contract of Employment (Lawbook 3rd ed, 2023) at [6.086].

[63] Civil Procedure Queensland (service) Lexis+ Australia at [r 149.25].