Norden Holdings Pty Ltd (Trustee) v Martens Investments Pty Ltd

...par. 7 of the statement of claim - the defendants are "passing off goods not of the plaintiff's manufacture as and for the said sweet so manufactured by the plaintiff is a charge of dishonesty in itself even though the word "fraud" is not used (see also Cropper Minerva, I think, Machines Co. v Cropper, Charlton & Co). The word "passing off" may be fairly paraphrased as pretending untruly for the purposes of trade, and this is fraud. There is no need to use the word "fraud" if other words are used to the same effect.

(footnotes omitted)

1. The submissions of the Sixth Respondent were that the effect and meaning of the word "manipulate" from the Applicant's amended concise statement in paragraph 25.3 is used in this sense, that is, it is used in a sense to allege dishonesty. Both parties engaged somewhat as to the meaning and effect of the word "manipulate" as it is used in paragraph 25.3 of the Applicant's amended concise statement. However, ultimately, the proper meaning of that word in the context of the amended concise statement is unnecessary to determine in terms of its metes and bounds as the Applicant accepted during submissions that what was being alleged included a dishonest intent or dishonesty.
2. As such, the Sixth Respondent pressed his application for the proper particularisation of paragraph 25.3. The Sixth Respondent also relied on the Full Court's decision in KTC v David [2022] FCAFC 60 at [115] to [116] in the decision of Wigney J and [418] of Jackson J, who agreed with Wigney J at [415] on this issue, where it is said:
   1. It is also relevant in this case to have regard to r 16.42 of the Rules, which provides that a party who pleads fraud, misrepresentation, unconscionable conduct, breach of trust, wilful default or undue influence, must state in the pleading particulars of the facts on which the party relies. There could be little doubt that an allegation that a person has assisted another person to breach a fiduciary duty with knowledge that the breach was a dishonest and fraudulent design falls within this rule.
   2. Putting r 16.42 to one side, it is in any event "fundamental, and long established, that if a case of fraud is to be mounted, it should be pleaded specifically and with particularity": Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [26].

...

1. I also agree with their Honours that it follows that this plea of knowledge is not maintainable. I agree with Wigney J's summary of the relevant principles, but on the plea of knowledge would emphasise the following propositions:

(1) Two important functions of pleadings and particulars are to furnish a statement of the case that is sufficiently clear to allow the other party a fair opportunity to meet it and to define the issues for decision in the litigation: Dare v Pulham (1982) 148 CLR 658 at 664.

(2) In general, and in the context of modern case management principles, the courts do not take a technical or restrictive approach to pleadings: Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], citing Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]- [8].

(3) But where fraud is pleaded, or something analogous to it such as knowing participation in a dishonest and fraudulent design, a rigorous approach will still be taken: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [170]; Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at [26]; Young Investments Group Pty Ltd v Mann [2012] FCAFC 107 at [9].

(4) Rule 16.43 of the Federal Court Rules 2011 (Cth) provides that a party who pleads a condition of mind, which includes knowledge, must state in the pleading particulars of the facts on which the party relies.

(5) Even in the absence of a rule of that kind, there are sound reasons for requiring knowledge to be particularised, at least in relation to allegations such as fraud or intentional participation in the breach of another: see Young Investments at [11].

(6) That requires particulars of the facts and circumstances from which it is said that the party knew (or ought to have known) the relevant matter. Those facts may include an admission or communication from which it must follow that the relevant party had the relevant knowledge. Or they may include facts and circumstances from which it can be inferred that the party had the knowledge: see Young Investments at [10]; Webster (Trustee) v Murray Goulburn Co-Operative Co Ltd (No 2) [2017] FCA 1260 at [6].

(emphasis in original)

1. The matter in KTC v David was progressed by way of traditional pleadings, that is, by way of a statement of claim.
2. The decision in Forrest v Australian Securities and Investment Commission (2012) 247 CLR 486; [2012] HCA 39 at [26] (French CJ, Gummow, Hayne and Kiefel JJ) is referred to by Wigney J at [116] of KTC v David. In Forrest, after discussing the difference between the pleading of a misleading or deceptive conduct case or a fraud case, that paragraph ended with the following:
   1. ...Doing so risks contravention of what, in Gould and Birbeck and Bacon v Mount Oxide Mines Limited (in liquidation), Isaacs and Rich JJ said was the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, which requires that pleadings should state with sufficient clearness the case of the party who averments they are.

1. This brings back into focus the purpose of particulars. This is especially so in a matter which is progressing by way of concise statements. I distilled the relevant principles applicable to these concise statements in Norden (No 3) at [10]:

(a) in contrast to a pleading, is to raise the key issues and key facts at the heart of the dispute and the essential relief sought from the Court (Delor Vue at [140]);

(b) allows the Court to facilitate case management of the proceedings from an early stage, and determine whether pleadings are necessary, to ensure the efficient conduct and disposition of the application (Delor Vue at [141]);

(c) allows issues to be refined, by way of interlocutory processes and other documents ordered by bespoke case management orders, as the concise statements are not a comprehensive statement of all matters to be established, but provide a fair disclosure of the nature of the case with more precise issues disclosed by those other means, in the interests of fairness (Delor Vue at [144]);

(d) is in the context of:

(i) the modern approach of Australian courts, emphasising case management and limiting tactical and technical disputation (Delor Vue at [146]);

(ii) the Court conducting proceedings in a manner consistent with the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: s 37M of the Federal Court of Australia Act 1976 (Cth) (FCA) (Delor Vue at [147]);

(iii) a duty being imposed on parties and their lawyers to assist their client to comply with their duty, in civil proceedings, to conduct proceedings consistently with the overarching purpose: FCA, s 37N (Delor Vue at [147]);

(e) is not to be treated by pleading rules "unaffected by the new context and character of the concise statement" (at [148]).

(f) may require amendment, where a claim which is central to a party's case is not included or not adequately exposed in the concise statement. Such amendment will be dealt with in accordance with established procedural law regarding late amendments to alter a case. However, where the nature of a claim is broadly disclosed, a party cannot sit passively and insist upon some curtailment of the case, based on pleading rules. That is inconsistent with the fundamental new approach to case management and the overarching purpose. Both parties have a duty to expose the real issues. Clarification (which can be achieved in different ways) of an issue may be granted where it is unfair to a party for its forensic preparation for the issue to remain stated broadly (Delor Vue at [149]);

(g) should not be expressed vaguely, imprecisely or contain extraneous matters (Delor Vue at [153]).

1. Although defined as a pleading, a concise statement is a different document and is not a pleading in the traditional sense and is certainly not subject to the same technical rules.
2. The FCR expressly provides that certain divisions do not apply to the alternative accompanying document referred to in r 8.05. A concise statement is a document which fits within that description, and therefore, certain aspects of the FCR do not apply to concise statements.
3. Division 16.4 - Particulars, by r 16.41A, expressly provides that:

This division does not apply in relation to a pleading that is an alternative accompanying document referred to in rule 8.05.

1. Even if that division did apply, it would be necessary on an application for particulars under r 16.45 to satisfy the requirements in subs (2). Those requirements are that the particulars in the pleading are inadequate (r 16.45(2)(a)) and the party seeking the order could not conduct the party's case without further particulars (r 16.45(2)(b)). As was observed by Kennett J with reference to r 16.45(2) in Australian Securities Commission and Investments Commission v Pattenden [2024] FCA 1331 at [39], these expressions should be read in the context of the overarching purpose referred to in s 37M of the Federal Court of Australia Act 1976 (Cth) and the function of pleadings as directing attention to whether the party seeking the particulars can fairly be expected to conduct the case without them.
2. The language of r 16.45(2)(b) indicates that particulars should only be ordered when they are necessary for the purpose of achieving a fair hearing. Rule 16.42 is also within Div 16.4. It has express requirements in relation to a party who pleads fraud, misrepresentation, unconscionable conduct, breach of trust, wilful default or undue influence. The FCR could have required that r 16.42 still apply to a pleading that is an alternative accompanying document, that is a concise statement. That is, r 16.41A could have provided a carve out in relation to serious matters, such as those referred to in r 16.42; however, the rules do not do so.
3. Rule 16.41A provides that the division does not apply in its entirety to a concise statement. However, the Sixth Respondent's Particulars Application is not one made expressly under the FCR. In that sense then, it is not necessary to decide whether particulars, as are required under the FCR, is the proper approach to a concise statement where an allegation includes that of dishonesty. However, it does retain some relevance to considering the way this matter has progressed by way of concise statement.
4. The purpose of a concise statement as with a pleading is "to state with sufficient clarity the case that must be met". A concise statement should still fulfil "the basic requirement of procedural fairness. That a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision". Those were passages from the decision in Banque Commerciale SA (en liquidation) Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 at 286 (Mason CJ and Gaudron J). Those principles, stated in that way, would clearly still be applicable to a concise statement.
5. The Sixth Respondent submits that due to the serious allegations being made, which include dishonesty, that the particulars that are sought are properly sought and should be made or should be given.
6. The Sixth Respondent does not make the submission that there is not an evidentiary foundation, that is, that there is not a proper basis to make the allegations in paragraph 25.3, but says it is not properly particularised as a matter of form.
7. The purpose of particulars is to:

(1) inform an opponent of the nature of the case it has to meet: Bruce v Odhams Press Limited [1936] 1 KB 697 at 712 (Greer, Slesser and Scott LJJ) and Mercedes Holdings Pty Ltd v Waters (No 3) (2011) 29 ACLC 11-018; [2011] FCA 236 (Perram J) at [62];

(2) prevent an opponent from being taken by surprise at the hearing: Queensland v Pioneer Concrete QLD Pty Ltd [1999] ATPR 41-691; [1999] FCA 499 at [12] (Drummond J);

(3) enable an opponent to know what evidence it should collect and rely on as part of the hearing: Odhams at 712;

(4) limit the generality of pleadings and restrict the scope of evidence: Kirby v Sanderson Motors Pty Ltd [2001] 54 NSWLR 135; [2002] NSWCA 44 at [20] (Mason P and Handley and Hodgson JJA) and Dye v The Commonwealth Securities Limited [2010] FCA 720 at [33] (Katzmann J).

1. In this regard and referring to the applicable principles, I also gratefully adopt the observations of Thawley J in Westpac Banking Corporation v Forum Finance Pty Limited (Freezing Order Variation No 2) [2022] FCA 1206 at [53] to [56]:

53 The Tesoriero Parties stated the relevant principles in the following way:

"A party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim ... or other matter pleaded by the party" (r 16.41(1)). A purpose of a pleading is to give the opposing party fair notice of the case to be met at trial: Betfair Pty Ltd v Racing NSW [2010] FCAFC 133; (2010) 189 FCR 356 at [50]- [51] (Keane CJ, Lander and Buchanan JJ). It is no answer to say that a party knows from documents and other sources what the case against it is: Y Primavera v T Bakos & Anor [2019] NSWSC 825 at [35]- [36] (Black J). A party is entitled to have the opposing party confined to that party's pleadings: Betfair at [50]-[51].

For allegations of fraud, misrepresentation, breach of trust and wilful default, a party "must state in the pleading particulars of the facts on which the party relies" (r 16.42). "A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies" (r 16.43(1)). In turn, a "condition of mind" includes "knowledge" and "any fraudulent intention of the party" (r 16.43(3)). "If a party pleads that another party ought to have known something, the party must give particulars of the facts and circumstances from which the other party ought to have acquired the knowledge" (r 16.43(2)).

"Even in the absence of [r 16.43], there are sound reasons for requiring knowledge to be particularised, at least in relation to allegations such as fraud or intentional participation in the breach of another ... That requires particulars of the facts and circumstances from which it is said that the party knew (or ought to have known) the relevant matter. Those facts may include an admission or communication from which it must follow that the relevant party had the relevant knowledge" or "facts and circumstances from which it can be inferred that the party had the knowledge": KTC v David [2022] FCAFC 60 at [418] (Jackson J).

54 In its submissions, Westpac added the following:

An overly technical approach to pleadings should not be taken in the modern case management era and pleadings are not an end in themselves: Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4] - [8] (Martin CJ), approved by the Full Court of the Federal Court in Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13] (Greenwood, McKerracher and Reeves JJ) and Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; (2021) 287 FCR 388 at [152] (McKerracher and Colvin JJ). The question is whether the respondents know the nature of the case they have to meet: Betfair Pty Ltd v Racing NSW [2010] FCAFC 133; (2010) 189 FCR 356 at [52] - [53] (Keane CJ, Lander and Buchanan JJ); Rush v Nationwide News Pty Ltd [2018] FCA 357; (2018) 359 ALR 473 at [44] (Wigney J).

As identified by French J in Police & Nurses Credit Society v Burgess Rawson (WA) Pty Ltd [2006] FCA 1395 at [17], it is important to maintain a sense of balance in the detail of particulars sought and ordered, and the provision of particulars should not be allowed unduly to increase the cost and delay associated with litigation, particularly in contemporary commercial litigation where affidavits are filed, as here.

1. I accept all of the statements of general principle as identified by the Tesoriero Parties and Westpac. I would add that the degree to which a "technical approach" should be taken to pleading inevitably depends on the particular case. Where serious allegations of fraud or dishonesty are concerned, a more technical approach may well be warranted than for cases where no such allegations exist.
2. Further, however, the approach which should be taken is necessarily informed by the way the litigation has been conducted by the parties, the stage at which complaints are made and any other relevant circumstances. The critical question is whether the respondent understands the case which it has to meet in sufficient detail to enable a fair trial.

1. Thawley J observed after that quoted passage that it will depend, in the circumstances of the case, the case management which has occurred, the stage of the proceedings, the particulars already given and the evidence relied on as to whether or not and to what degree to which a technical approach should be taken (at [63]-[65]).
2. As was accepted by his Honour, where more serious allegations of fraud or dishonesty are concerned, it may be appropriate to take a more technical approach. The critical question is always whether the respondent in the case has sufficient detail to enable a fair trial.
3. By paragraph 25.3, the allegation by reference to the "respondents", plural, can obviously only be an allegation against the individual respondents. This was accepted quite properly by the Sixth Respondent. At the hearing of this application, the Applicant also accepted that the phrase "other relevant factors" would necessarily be confined by the particulars given on 21 May 2025, which in turn rely on the evidence said to support the allegation.
4. References to the evidence are provided in the particulars dated 21 May 2025. In this regard, contrary to the Sixth Respondent's submission that the lengthy "WhatsApp" chat refers to a four-month period, paragraph 6(a) of the particulars dated 21 May 2025 expressly identifies a period from 14 to 27 May 2025. Further, in this paragraph are allegations of adjustment that have been made to dilute the Applicant's shares. This is in what is defined as Group Co, to give effect to what is called the "Dodge Scheme" and affect the financial circumstances of Group Co and IP Co as described in paragraph 25.3, including by reference to the paragraphs at 25.2.8 to 25.2.10 and the additional particulars provided on 21 May.
5. The adjustments and allegations regarding the adjustments are to be the subject of expert evidence. That expert evidence will inform the Sixth Respondent further in relation to those issues. It will also further inform the parties and the Court at trial. Having reviewed these paragraphs of the amended concise statement together with the particulars already given and some of the references to the evidence on behalf of the Applicant, I am not satisfied that the Sixth Respondent does not understand the case that is put against him in a way which is sufficient for a fair trial. This is, in part, because the Sixth Respondent has put on his evidence for the trial. I have referred to, briefly, the evidence of the Applicant, Mr Norden, and I expressly do so only for the purposes of considering this application for particulars. I have also had some regard to the evidence that the Sixth Respondent has filed, particularly by way of an affidavit of Ms Hanlon. I have also only had regard to Ms Hanlon's affidavit only for the purposes of considering this Particulars Application. It is not appropriate at this stage to consider that evidence in detail. That is obviously for trial.
6. It is sufficient at this stage to observe the following. The Sixth Respondent brought this Particulars Application after the initial request for particulars and answer, but also more importantly, after the Applicant filed its trial evidence by way of affidavits on 18 June 2025 and after the Sixth Respondent filed its trial affidavits, including the affidavit of Ms Hanlon, on 18 August 2025. This appears to be a detailed and extensive affidavit, which appears to be of some 415 pages, including annexures.
7. The solicitor for the Sixth Respondent in his affidavit states that it was proposed that the particulars be filed within seven days of the filing of the Sixth Respondent's evidence, and it is noted that the evidence of Ms Hanlon, (although erroneously referred to as Ms O'Hanlon), had already been filed. It is difficult to understand, when proper regard is had to the purpose and function of particulars, why particulars would be required after that party has already filed their evidence. The proper purpose of particulars (see [24] above) is to inform an opponent of the nature of the case it has to meet, to avoid being taken by surprise, to know the evidence and to restrict the scope of the evidence.
8. There was no application by the Sixth Respondent to vary the timetable for the evidence because of the lack of particulars. I have observed above that certain variations and vacations to the orders timetabling the evidence were made, but this was not on the basis that an application for particulars was to be made by the Sixth Respondent, and, as such, the evidence was unable to be filed. No application to strike out this paragraph of the Applicant's amended concise statement has been made. This would seem to be on the basis that the Sixth Respondent does accept that the allegation is maintainable on the basis of the evidence.
9. The Sixth Respondent has also not brought an application to alter the way these proceedings have been conducted, that is, to seek that the matter continue or progress by way of traditional pleadings. That is, that on receipt of the Applicant's amended concise statement, which included paragraph 25.3 and on the understanding of the seriousness of that allegation, the Sixth Respondent did not then bring an application to the Court submitting that given the serious allegation, it was no longer appropriate for this matter to progress by way of concise statement. Such an allegation, the Sixth Respondent might contend, but has not, should be such as to progress by way of traditional pleadings, so that the rules and full particulars would apply.
10. It might be possible to infer that this course was not taken because the Sixth Respondent did understand the case that was being alleged. Further support for this inference is that the Sixth Respondent has actually filed its trial affidavits. During the course of argument, counsel for the Sixth Respondent was asked whether further evidence would be required on the receipt of the particulars. The answer given was that they were unsure at this time because it was not known what the particulars would say.
11. Although that might appear to be a reasonable response in the circumstances, another reasonable response if the particulars were of a critical nature because the case being advanced was not known, might be that it would be inevitable that further evidence would be required on the receipt of the particulars.
12. The Sixth Respondent also did submit that now that the Sixth Respondent's evidence was available, the Applicant should be able to properly particularise its case, effectively submitting that the matters to be alleged would be those relying on the evidence of the Sixth Respondent. There is an inherent tension in this submission. That tension is because particulars are not a mere step along the way or a formal matter to be undertaken. They serve a particular purpose, and the purpose that they serve is to inform the opposite party of the case to be met and to allow them to prepare for trial, including by preparation of their evidence. Having the Applicant particularise its case from the Sixth Respondent's evidence would not be, in my view, of any assistance to the Sixth Respondent.
13. In my view, the case of the Applicant is fairly exposed and the Sixth Respondent has already been able to respond to it and file his evidence.
14. For all of these reasons, the approach of the Sixth Respondent in seeking these particulars is an overly formal, technical approach in circumstances where the evidence of the Sixth Respondent is already filed. The expert report, which will further inform the parties, is due on 31 October 2025. The matter is shortly going to mediation, and the parties have organised a private mediator. And then, if necessary, the matter is to commence trial on 8 December 2025.
15. In all of those circumstances, taking a further, and what appears to me to be an unnecessary step, of providing particulars is not warranted.

I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheatley.