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[2013] FCA 649
Federal Court of Australia
2013-07-04
Mr J, Besanko J
Original judgment source is linked above.
Number of paragraphs: 62
Counsel for the Applicants: Mr C Munt
Solicitor for the Applicants: Donaldson Walsh Lawyers
Counsel for the First and Second Respondents: Mr W Duddy
Solicitor for the First and Second Respondents: Duddy Shopov
Counsel for the Third, Fourth, Fifth, Sixth and Seventh Respondents: Mr J Pennell
Solicitor for the Third, Fourth, Fifth, Sixth and Seventh Respondents: Stewart-Rattray Lawyers
Counsel for the Eighth Respondent: Mr M Roder SC
Solicitor for the Eighth Respondent: Randle & Taylor
IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 331 of 2012
JUDGE: BESANKO J DATE OF ORDER: 4 July 2013 WHERE MADE: ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 331 of 2012
JUDGE: BESANKO J DATE: 4 July 2013 PLACE: ADELAIDE
Introduction 1 This is an application for particulars pursuant to r 16.45 of the Federal Court Rules 2011. That rule is in the following terms: (1) If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of the party's case, the party may apply to the Court for an order that the party who filed the pleading serve on the party: (a) particulars of the claim, defence or other matter stated in the pleading; or (b) a statement of the nature of the case relied on; or (c) if there is a claim for damages - particulars of the damages claimed. (2) An application under subrule (1) may be made only if: (a) the particulars in the pleading are inadequate; and (b) the party seeking the order could not conduct the party's case without further particulars. (3) A respondent who applies to the Court for an order under subrule (1) before filing the respondent's defence must satisfy the Court that an order is necessary or desirable to enable the respondent to plead. Note The intent of the pleading rules is that a party should include all material facts in its pleadings as initially filed so that there is no unfairness to another party by any lack of particularity. If the party has not done so, the Court may at trial refuse to allow the party to present a case that is outside the terms of their pleading. 2 The applicant for particulars is Melissa Ann Rees ("Ms Rees") and she is the eighth respondent to a proceeding in this Court. She seeks particulars of a Statement of Claim of Palram Australia Pty Ltd and Palram Industries (1990) Ltd. The submissions were made by reference to a document entitled "Third Statement of Claim" and I decide this matter by reference to that document. For case of reference, I will refer to the document as the Statement of Claim. They are the applicants in the proceeding and they oppose any orders that they be required to provide particulars. Although they are respondents to the application for particulars, I will refer to them by reference to their status in the proceeding, namely, as the applicants. 3 There are seven other respondents to the proceeding and they are Simon Andrew Rees ("Mr Rees"), Simmtec Pty Ltd ("Simmtec"), Yiwen Zhang ("Mr Zhang"), Sincerity Australia Pty Ltd ("Sincerity"), Victory Plastics Pty Ltd ("Victory Plastics"), Sanilex Australia Pty Ltd ("Sanilex") and Iain Brian Whyley ("Mr Whyley"). 4 The applicants' claims centre on, but are not wholly confined to, what is alleged to be wrongful conduct by Mr Rees during a period - 22 July 2009 and 21 May 2012 - when he was employed by the first applicant as its general manager. 5 The first 12 paragraphs of the Statement of Claim contain allegations identifying each of the parties and allegations relevant to their role in events dealt with later in the Statement of Claim. The allegations relevant to Ms Rees are as follows: 12. The eighth respondent, Melissa Rees ("Melissa Rees"): 12.1 is and was at all material times the wife of Rees; 12.2 is and has been at all times from 21 January 2009 a director of Simmtec; 12.3 is and has been at all times from 21 January 2009 a holder of 50% of the issued shares in Simmtec; 12.4 is and was at all material times an employee, consultant, representative or agent of Simmtec; 12.5 is and was at all material times directly involved in the affairs and business of Simmtec; and 12.6 is and has been at all times from or around 3 January 2012 the registered proprietor of a property situated at 14 Wilsden Street, Walkerville, South Australia ("Wilsden Street Property"). 12A Further particulars of the matters set out in paragraphs 12.4 and 12.5 above may be given after discovery has been completed. 6 Mr Rees is also alleged to have been a director of Simmtec from 21 January 2009 and to have held 50% of the issued shares in Simmtec since that date. 7 In broad terms, the allegations against Ms Rees are that she was involved in Mr Rees' wrongful acts and that she is liable as an accessory or knowing participant. The particulars she seeks relate to allegations of her involvement in Mr Rees' alleged wrongful acts. The applicants seek various personal remedies against Ms Rees. They also seek proprietary remedies in relation to a property she owns including, importantly, a property of which she is the registered proprietor at 14 Wilsden Street, Walkerville in the State of South Australia ("Wilsden Street Property").
The allegations 8 It is necessary to identify some of the general allegations in the Statement of Claim before identifying the paragraphs which are the subject of the application for particulars. 9 The first applicant is a wholly owned subsidiary of the second applicant. The second applicant is the parent company of an international group of companies operating and/or trading under the name "Palram" which, according to the applicants' Statement of Claim, "manufactures and/or supplies extruded plastic sheeting and related products for various uses, including in construction and architectural projects (both commercial and domestic), among others". The first applicant has at all material times been a seller and distributor in Australia of various products of the Palram group. 10 It is alleged that prior to 22 July 2009 Mr Rees was the general manager of Burnside Plastics Pty Ltd ("Burnside Plastics"). That company was a distributor of products of the Palram Group across Australia. On 22 July 2009 the first applicant acquired Burnside Plastics' business. It is alleged that Mr Rees was employed as the first applicant's general manager between 22 July 2009 and 21 May 2012. 11 It is alleged that Mr Rees acted in breach of various duties he owed to the first applicant in connection with the first applicant's dealings with Sincerity. It is alleged that he received commissions or payments which the Statement of Claim defines as the "Sincerity Commissions". It is alleged that Sincerity supplied products to the first applicant and that unbeknown to the first applicant the price of these products was inflated by commissions or payments made by Sincerity to Mr Rees or, at his direction, to Simmtec. Particulars of those payments made by Sincerity involve payments to Simmtec. 12 It is also alleged that Mr Rees acted in breach of various duties he owed to the first applicant in connection with the first applicant's potential dealings with other suppliers of products to it. It is alleged that without the knowledge of the first applicant he interposed Simmtec between the potential suppliers and the first applicant and the Statement of Claim defines the additional cost to the first applicant as the "Simmtec Mark-ups". 13 Other wrongful acts by Mr Rees are alleged in the Statement of Claim. However, for the purposes of the present application it is sufficient to identify the Sincerity Commissions and the Simmtec Mark-ups. 14 Before turning to the particular paragraphs in issue, and for the sake of completeness, I will identify the relief which is sought against Ms Rees. It is as follows: … 2. An accounting in respect of the Sincerity Commissions and all profits and/or benefits obtained by the first, second and/or eighth respondents in connection with the Sincerity Commissions. … 4. A declaration that the Sincerity Commissions and the profits and/or benefits referred to in paragraphs 38.2 to 38.6 of the Claim are held by the respective persons set out in those paragraphs on constructive trust for the first applicant. … 7. A declaration that the first applicant has an equitable interest in the property of which the eighth respondent is the registered proprietor, situated at 14 Wilsden Street, Walkerville, South Australia ("Wilsden Street Property") to the extent that the Sincerity Commissions and/or benefits or profits referred to in paragraph 38.3 of the Claim were used towards the purchase of the Wilsden Street Property. 8. A declaration that the first applicant has an equitable interest in any other real or personal property that was acquired by any of the respondents using the Sincerity Commissions and/or the profits or benefits set out in paragraphs 38.2 to 38.6 of the Claim. 9. A declaration that the Wilsden Street Property and any other property referred to in paragraph 8 above is held on constructive trust for the first applicant, to the extent of the payments, profits and/or benefits referred to in paragraphs 7 or 8 above. 10. A declaration that the first applicant is entitled to trace such payments, profits and/or benefits into the Wilsden Street Property and/or the other property referred to in paragraph 45.9 of the Claim, as the case may be. … 13. A declaration under section 1317E of the Corporations Act 2001 (Cth) that the respondents have contravened sections 182 and/or 183 of the Corporations Act 2001 (Cth). 14. Orders against the respondents for compensation under section 1317H of the Corporations Act 2001 (Cth) for damage suffered by the first applicant, including under section 1317H(2) with respect to all profits made by the respondents as a result of the contraventions referred to in paragraph 13 above. … 16. A declaration that the first, second and eighth respondents engaged, in trade or commerce, in unconscionable conduct in connection with: 16.1 the supply or possible supply of goods by the second respondent to the first applicant; and/or 16.2 the acquisition or possible acquisition of goods by the first applicant from the second respondent, in contravention of section 22 of Schedule 2 to the Competition and Consumer Act 2010 (Cth). ... 18. A declaration that the first, second and eighth respondents were involved, for the purposes of section 75B of the Competition and Consumer Act 2010 (Cth), in the contravention(s) of section 22 of the Competition and Consumer Act 2010 (Cth) referred to in paragraph 16 above. … 21. An order under section 87(2)(g) of the Competition and Consumer Act 2010 (Cth) directing the eighth respondent to execute such instruments in respect of the Wilsden Street Property so as vary the Memorandum of Transfer by which the Wilsden Street Property was acquired by the eighth respondent or the Certificate of Title for the Wilsden Street Property, with the effect that the Wilsden Street Property is to be held by the eighth respondent and the first applicant as tenants in common, in such shares as determined by the Court. 22. Damages at common law and under section 82 and/or 87 of the Competition and Consumer Act 2010 (Cth). 23. Equitable damages. 24. Exemplary damages. 15 The applicants seek particulars of paragraphs 12.4, 12.5, 39, 40.3, 40.4, 42.2, 42.4, 53, 58, 63 and 73 of the Statement of Claim. A common thread in Ms Rees' application is that the applicants have not provided particulars, or sufficient particulars of her knowledge or involvement in Mr Rees' alleged wrongful acts. In view of that it is convenient to deal with the particulars sought in relation to paragraphs 40.3 and 40.4 first and then to deal with the other paragraphs. 16 Paragraphs 40.3 and 40.4 are as follows: 40. Sincerity, Zhang, Simmtec and Melissa Rees were accessories to the breaches of fiduciary duty involving the conduct of Rees set out in paragraphs 17 to 20 above associated with the Sincerity Commissions, in that having regard to the matters set out in paragraphs 5.4, 5.10, 5.12, 7.1, 7.8, 7.9, 8.2, 12.1 to 12.5, 17 to 19, 70 and 70A herein: 40.3 Sincerity, Zhang, Simmtec and Melissa Rees knowingly benefited from those breaches of fiduciary duty, in the manner set out in paragraphs 38.1, 38.3, 38.4 and 38.5 above, as the case may be; and 40.4 Sincerity, Zhang, Simmtec and Melissa Rees, as the case may be, had actual or imputed actual knowledge of those breaches of fiduciary duty, in that: 40.4.1 they had actual knowledge of those breaches of fiduciary duty; 40.4.2 they wilfully shut their eyes as to the circumstances in relation to those breaches of fiduciary duty; 40.4.3 they wilfully and recklessly failed to make such inquiries as an honest and reasonable person would make in the circumstances; and/or 40.4.4 they had knowledge of circumstances which would indicate the facts giving rise to those breaches of fiduciary duty to an honest and reasonable person. 17 Paragraph 40.3 refers to paragraphs 38.1, 38.3, 38.4 and 38.5. Paragraph 38, insofar as it involves Ms Rees, provides: 38. As a result of those breaches of fiduciary duty: 38.1 Rees received or derived, or caused Simmtec to receive, the Sincerity Commissions without Palram Aust's knowledge. 38.2 Simmtec received or derived profits and/or benefits without Palram Aust's knowledge, in the form of the Simmtec Mark-ups. 38.3 Rees and/or Melissa Rees received or derived profits and/or benefits from or in respect of the commissions, profits and/or benefits referred to in paragraphs 38.1 and 38.2 above, in the form of salaries, wages, dividends and/or payments from Simmtec or Rees as the case may be, including via payments from one or more of these sources that were applied, with the knowledge, assent and assistance of Rees and Melissa Rees, towards the purchase price of the Wilsden Street Property. 18 The effect of the plea in paragraphs 40.3 and 40.4 is that Ms Rees knowingly benefited from Mr Rees' breaches of fiduciary duty in relation to the Sincerity Commissions including by applying monies towards the purchase of the Wilsden Street Property. It is alleged that she had the requisite knowledge of the breach of fiduciary duty to constitute her as an accessory to the breach (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89). The particulars of knowledge are pleaded as those contained in paragraphs 12.1 - 12.5 and paragraph 70. Paragraphs 12.1 - 12.5 are set out above (at [5]) and paragraph 70 contains an allegation that Ms Rees, among others, knew at all material times that Mr Rees was the general manager of the first applicant and that there was an employment contract between Mr Rees and the first applicant. 19 The particulars requested of paragraphs 40.3 and 40.4 (paragraphs 40.3 and 40.4 of an earlier statement of claim) are as follows: 5. In respect of paragraph 40.3 please provide particulars of the matters upon which the allegation of knowledge is based. 6. In respect of paragraph 40.4 please provide particulars of the matters on which the allegation of actual or constructive knowledge is based. 20 In correspondence the applicants provided the following response: 5-16 We have made some amendments to the paragraphs of the SOC referred to in Items 5 to 16 of your letter. No further amendments to those paragraphs are necessary to give your client fair notice of the case to be made against her at trial, nor are such particulars necessary to avoid prejudice to your client at trial. 21 Paragraphs 12.1 to 12.5 are given as particulars of paragraphs 40.3 and 40.4 and the applicants submit that the allegations in paragraph 12 are sufficient particulars. However, Ms Rees submits that the allegations in paragraph 12 are not sufficient particulars and in fact, she has sought the following particulars of paragraphs 12.4 and 12.5: 1. In respect of paragraph 12.4 please provide particulars of the allegations that our client was an employee, consultant, representative or agent of Simmtec, including: (a) The nature of the position in respect of which she was employed, or alternatively engaged as a consultant, representative or agent. (b) How it is said that that relationship with Simmtec arose. (c) The period of the alleged relationship. 2. In respect of paragraph 12.5 please provide particulars of the allegation that our client was directly involved in the affairs and business of Simmtec. 22 In correspondence the applicants responded to that request as follows: 1. The particulars sought in paragraph 1 of your letter are not necessary to give your client fair notice of the case to be made against her at trial, nor are such particulars necessary to avoid prejudice to your client at trial. Your client is a director of Simmtec and, therefore, is in a position to either admit, deny or assert different material facts in respect of paragraph 12.4 of the Statement of Claim ("SOC"). 2. We repeat paragraph 1 above.
relevant principles and their application 23 Rule 16.45 is set out above (at [1]). 24 Rule 16.41 is in the following terms: (1) A party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim, defence or other matter pleaded by the party. Note See rule 16.45. (2) Nothing in rules 16.42 to 16.45 is intended to limit subrule (1). Note 1 The object of particulars is to limit the generality of the pleadings by: (a) informing an opposing party of the nature of the case the party has to meet; and (b) preventing an opposing party being taken by surprise at the trial; and (c) enabling the opposing party to collect whatever evidence is necessary and available. Note 2 The function of particulars is not to fill a gap in a pleading by providing the material facts that the pleading must contain. Note 3 A party does not plead to the opposite party's particulars. Note 4 Particulars should, if they are necessary, be contained in the pleading but they may be separately stated if sought by the opposite party or ordered by the Court. 25 Rule 16.42 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 parties relies. 26 Rule 16.43 deals with the pleading of conditions of mind. It provides as follows: (1) A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies. (2) 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. (3) In this rule: condition of mind, for a party, means: (a) knowledge; and (b) any disorder or disability of the party's mind; and (c) any fraudulent intention of the party. 27 In Young Investments Group Pty Ltd v Mann [2012] FCAFC 107 at [55] ("Young Investments") the Full Court noted that of the five categories of knowledge that have been considered in connection with the second limb in Barnes v Addy (1874) LR 9 Ch App 244 (see Baden and others v SociÉte GÉnÉrale pour Favoriser le DÉveloppement du Commerce et de l'lndustrie en France SA [1993] 1 WLR 509 at 575 - 576, 582; [1992] 4 All ER 161 at 235, 242 - 243; Farah Constructions Pty Ltd v Say-Dee Pty Ltd at 163 - 164 [174] - [178]), the first three categories are generally taken to involve actual knowledge, as understood both at common law and in equity, whereas the latter two are generally taken as instances of constructive knowledge, as developed in equity. The first three categories are reflected in the applicants' pleas in paragraphs 40.4.1, 40.4.2 and 40.4.3 and the fourth category is reflected in the plea in paragraph 40.4.4. 28 In Young Investments the Full Court noted that prior to the introduction of the 2011 Rules a party had not been required to provide particulars of knowledge as distinct from an allegation that a party ought to have known something. The Court said ([at [9], [10] and [11]): 9. It has long been the case, in various jurisdictions, that particulars are to be provided of facts and circumstances relied upon to support a plea that something ought to have been known (see Fox v H Wood (Harrow) Ltd [1963] 2 QB 601 at 604 and Smith v Littlemore (1996) 15 WAR 289 at 300). Knowledge itself has usually been treated differently. Knowledge of, or recklessness towards falsity, by way of example, may usually be pleaded as the material fact without particularisation (see Ritter v North Side Enterprises Pty Ltd (1975) 132 CLR 301 at 304). Allegations of fraud, or the involvement of persons in statutory breaches sufficiently analogous to allegations of fraud, on the other hand, have required the provision of quite specific particulars. 10. The reason for not being required to particularise knowledge is not fully explained in the cases. It may be assumed that, on the one hand, there is the obvious difficulty of knowing what is inside another's mind. On the other hand, there may be instances where the evidence to be relied upon to establish knowledge could be identified by particulars. That evidence might be an admission or a communication, written or oral, that could only give rise to the relevant state of mind. In appropriate cases, the provision of particulars has been ordered when sought. 11. There are sound reasons for requiring knowledge to be particularised, at least in relation to the kind of allegations made in the Statement of Claim. Proving a director's actual knowledge of the essential ingredients of a contractual or tortious breach or statutory contravention is a prerequisite to the director's personal liability. For statutory breaches, it is well established that, in order to be an accessory or to be knowingly involved in a contravention, a person must have intentionally participated, having knowledge of the essential matters constituting the contravention (see Yorke v Lucas (1985) 158 CLR 661). That is not imputed or constructive knowledge but, rather, actual knowledge. It would not usually be sufficient to establish a statutory breach to show that a person said to be an accessory to such a breach wilfully shut his or her eyes to the obvious (see Giorgianni v The Queen (1985) 156 CLR 473). Actual knowledge of suspicious circumstances and failure to make enquiry may be different (see Pereira v Director of Public Prosecutions (1988) 63 ALJR 1 at 3). However, actual knowledge of suspicious circumstances is not pleaded in the Statement of Claim in the sense required for accessorial liability. 29 The Full Court also noted that directors are not personally liable for the wrongs of the company merely because of the office they hold. Something more is required (at [58]). 30 The applicants put three submissions in response to the application for particulars. They overlap, but it is convenient to deal with them separately. 31 First, the applicants submit that the allegations in paragraphs 12.1 to 12.5 are sufficient particulars of paragraphs 40.3 and 40.4. I reject that submission. There is, of course, a distinction between particulars and evidence, or as it is put in Casson DB, Dennis IH, Odgers' Principles of Pleading and Practice (Stevens & Sons, 1975) p 148, between informing an opponent what will be proved against him and informing an opponent of how those things will be proved against him. The difficulty for the applicants is that an allegation that a person is "directly involved" in the affairs and business of a company is a conclusion and in itself invites a request for particulars as indeed has happened in this case. Paragraphs 12.1, 12.2 and 12.3 can stand as particulars of paragraphs 40.3 and 40.4. Paragraph 12.4 can stand as a particular but the particulars requested should be provided. Paragraph 12.5 can only stand as a particular of paragraphs 40.3 and 40.4 if it is in turn particularised. 32 Secondly, the applicants submitted that even if their particulars are inadequate, an order should not be made because Ms Rees has not shown that she could not conduct her case without further particulars. They submit that before she is entitled to an order she must do that by reason of r 16.45(2)(b). 33 Ms Rees has filed and served a Defence. She has responded to the allegation in paragraph 12.5 by alleging that she was involved with Simmtec initially, but thereafter she had no involvement with Simmtec and did not know it was trading. She believed the company was and would remain dormant until her young children were at school. 34 On the face of it, r 16.45(2) seems to provide that an applicant for particulars must show not only that particulars in the pleading are inadequate, but also that he or she cannot conduct their case without further particulars. Rule 16.45 as a whole provides for two hurdles of a broadly similar nature i.e., a party may be prejudiced in the conduct of that party's case and the party cannot conduct his or her case without further particulars. 35 Perram J considered the effect of r 16.45(2)(b) in DP World Sydney Limited v Maritime Union of Australia (No 1) [2013] FCA 278. The pleading in that case did not comply with r 16.44 which, among other things, required a party to provide particulars of a specified type of damages. That had not been done in that case and his Honour noted that that meant the particulars were inadequate within r 16.45(2)(a) and the power in r 16.45 had been enlivened. However, r 16.45(2)(b) needed to be considered. In connection with that paragraph his Honour said (at [9]): The question then is whether the power which has been enlivened should be exercised. One of the curiosities about r 16.45 is that it has added a requirement in the form of r 16.45(2)(b) that was not previously in its predecessor O 12 r 5. It is therefore possible for a particular which has been provided to be inadequate under r 16.45(a), but nevertheless, not activate r 16.45(b). The question then is whether the respondents need to have the quantification of the matters in (b) and (d), which r 16.44 contemplates that they will have, or whether they do not. For the same reasons that I do not think that the respondents need further particulars of (a), (c) and (e) for the conduct of the quantum part of the trial, I do not think that they need the quantification of the matters in (b) and (d). The heads of loss sufficiently signal the topics which will be in dispute and provide adequate information to allow for the preparation of the defence. 36 The curiosity to which his Honour referred is somewhat magnified in this case where one of the rules relied on by Ms Rees to prove that paragraphs in the Statement of Claim are inadequate - the requirement that particulars of knowledge be provided - was introduced at the same time as r 16.45(2)(b). 37 The content of the requirement in r 16.45(2)(b) and its operation is to be assessed in the context of the particular circumstances of the case before the Court. In this case, I would not refuse particulars by reference to that rule because the inadequacy results from an appreciable departure from a specific rule i.e., r 16.43 and because the allegations with respect to which particulars are sought are serious allegations. 38 Thirdly, the applicants submit that even if the pre-conditions for an order for particulars are otherwise satisfied, nevertheless an order should not be made until discovery is complete. 39 In Millar v Harper (1888) 38 Ch D 110 Bowen LJ (at 112) said: It is good practice and good sense that where the Defendant knows the facts and the Plaintiffs do not, the Defendant should give discovery before the Plaintiffs deliver particulars. (see also Edelston v Russell (1888) 57 LT 927). 40 This approach was taken by Ambrose J in Harvey v Commonwealth Scientific and Industrial Research Organisation [2000] 2 Qd R 594. However, it is to be noted that in that case the plaintiffs alleged that they were unable to provide any further and better particulars until after the completion of discovery, inspection and interrogation. 41 By contrast, in this case the applicants assert that further particulars may be given after discovery has been completed. Furthermore, I have examined the applicants' submissions carefully. They submitted: 8. Some particulars in relation to these matters are not within the knowledge of the Applicants at the present time, having regard to the clandestine nature of the conduct of [Mr Rees]. 42 This is not a statement that further particulars cannot be provided. Nowhere have the applicants said that they cannot provide particulars. This is an important point. I am prepared to accept that the discovery the applicants now seek may result in them being able to provide further particulars. However, if they wish to rely on discovery before particulars they must at least establish that they have provided the best particulars they can. This they have not done. The applicants have clearly been on notice that this was a point Ms Rees would be making. The point was made in Ms Rees' written outline of argument and at an early stage in her counsel's oral submissions. 43 Both parties referred to the statutory statement of the overarching purpose of the civil practice and procedure provisions in s 37M of the Federal Court of Australia Act 1976 (Cth). There is no doubt that I must exercise the power to order particulars in the way that best promotes the overarching purpose (s 37M(3)). However, neither party explained precisely how reference to the overarching purpose advanced their argument. I have had regard to the overarching purpose as I must, but in the circumstances of this case, it does not provide a clear solution to the issue. On occasions long and protracted arguments about particulars will not promote the overarching purposes. On other occasions the provision of particulars early in a proceeding may facilitate a quick, inexpensive and efficient disposition of a dispute. 44 In my opinion, the applicants should provide particulars of paragraphs 40.3, 40.4 and also of paragraphs 12.4 and 12.5. I note, without expressing a firm view at this stage, that as paragraphs 12.4 and 12.5 are particulars of paragraphs 40.3 and 40.4, proper particulars of the former paragraphs may be sufficient particulars of the latter paragraphs.
other paragraphs 45 Paragraphs 42.2 and 42.4 (and paragraphs 42.1A) are as follows: 42. Simmtec and Melissa Rees were accessories to the breaches of fiduciary duty involving the conduct of Rees set out in paragraph 21 above associated with the Simmtec Mark-ups, in that having regard to the matters set out in paragraphs 5.4, 5.10, 5.12, 12.1, 12.2, 12.4, 12.5, 21, 70 and 70A herein: … 42.1A Rees directed the supplier referred to in paragraph 23.1 above, namely Symbio Australia, to Melissa Rees in relation to any questions which that supplier may have concerning the supply of the Pergola Cleaner Product to Simmtec, by email from Rees to Dale Angel of Symbio Australia sent on 25 May 2011; and 42.2 Simmtec and Melissa Rees dishonestly, improperly, knowingly and/or deliberately assisted Rees in relation to those breaches of fiduciary duty, in the case of Simmtec with knowledge of the dishonest and fraudulent design set out in paragraph 37 above; and/or … 42.4 Simmtec and Melissa Rees had actual or imputed actual knowledge of those breaches of fiduciary duty, in that: 42.4.1 they had actual knowledge of those breaches of fiduciary duty; 42.4.2 they wilfully shut their eyes as to the circumstances in relation to those breaches of fiduciary duty; 42.4.3 they wilfully and recklessly failed to make such inquiries as an honest and reasonable person would make in the circumstances; and/or 42.4.4 they had knowledge of circumstances which would indicate the facts giving rise to those breaches of fiduciary duty to an honest and reasonable person. 46 The particulars requested of paragraphs 42.2 and 42.4 are as follows: 8. In respect of paragraph 42.2 please provide particulars of the facts, matters and circumstances upon which it is asserted that our client: (a) induced Rees in relation to the alleged breach of the fiduciary duty. (b) did so dishonestly improperly or deliberately. … 10. In respect of paragraph 42.4 please provide particulars of the matters relied on to support the allegation of actual or constructive knowledge. 47 The "inducement plea" has been removed from the Statement of Claim. 48 The applicants' response to this request is set out above (at [20]). 49 I reach the same conclusion in relation to paragraphs 42.2 and 42.4 as I have in relation to paragraphs 40.3 and 40.4. There is no meaningful difference between the two groups of paragraphs other than the additional particular in paragraph 42.1A. 50 Paragraph 53 is in the following terms: 53. Simmtec, Melissa Rees, Zhang, Sincerity, Victory, Sanilex and/or Whyley, as the case may be, were involved in one or more of the contraventions set out in paragraph 51 and/or paragraph 52 above, in that they: 53.1 aided, abetted, counselled or procured the contravention(s); 53.2 induced the contravention(s); 53.3 were directly or indirectly knowingly concerned in, or party to, the contravention(s); and/or 53.4 conspired with Rees or one or more of each other to effect the contravention(s). PARTICULARS 53.5 Palram Aust repeats the matters set out in paragraphs 40 to 44A above. 53.6 Further particulars may be provided after discovery has been completed. 51 The contraventions alleged in paragraphs 51 and 52 are contraventions of ss 182 and 183 of the Corporations Act 2001 (Cth) in relation to the Sincerity Commissions and the Simmtec Mark-ups. Although other alleged wrongful acts by Mr Rees are referred to in paragraphs 51 and 52 including price collusion, diverting sales and business opportunities, confidential information, intellectual property and other information, competitive conduct and payment of illegitimate expenses, I think it may be concluded from the particulars that the involvement in relation to Ms Rees is limited to the Sincerity Commissions and the Simmtec Mark-ups. Paragraph 40 relates to the Sincerity Commissions and paragraph 42 relates to the Simmtec Mark-ups. Paragraphs 41, 43 and 44 do not contain any allegations against Ms Rees and paragraph 44A, although addressing the Wilsden Street Property, relates to the Sincerity Commission and Simmtec Mark-ups. 52 The particulars requested of paragraph 53 were full particulars of the matters relied on to support each allegation in paragraphs 53.1 to 53.4 and the response in correspondence is set out above (at [20]). 53 The particulars to paragraph 53 are paragraphs 40 and 42 and they in turn refer to paragraph 12.1 to 12.5. The same arguments arise and I resolve them in the same way. 54 Paragraph 58 is in the following terms: 58. Further or in the alternative, for the purposes of section 75B of the CCA, Rees, Simmtec and Melissa Rees were involved in the contravention(s) of section 22 set out in paragraph 56 above, in that they: 58.1 aided, abetted, counselled or procured the contravention(s) concerned; 58.2 induced the contravention(s) concerned; 58.3 were directly or indirectly knowingly concerned in, or party to, the contravention concerned; and/or 58.4 conspired with one or more of each other or with Simmtec to effect the contravention(s) concerned. PARTICULARS 58.5 Palram Aust repeats the matters set out in paragraphs 42 above. 58.6 Further particulars may be given after discovery has been completed. 55 The contravention referred to in paragraph 56 is of the unconscionable conduct provisions of the Competition and Consumer Act and relate to the Simmtec Mark-ups. The particulars are said to be those allegations in paragraph 42. Again, the same arguments arise and I resolve them in the same way. 56 Paragraph 63 is in the following terms: 63. In relation to those matters: 63.1 Rees, and Melissa Rees, as directors and/or employees, consultants, representatives or agents, of Simmtec, and/or Simmtec conspired, arranged or agreed to cause Simmtec to obtain products from an Indirect Supplier and to then supply those products to Palram Aust at a mark-up or inflated price to that which Palram Aust was able to source those products from the Indirect Supplier, with the intent of harming Palram Aust's business; 63.2 Rees, Melissa Rees and/or Simmtec carried into effect that conspiracy, arrangement or agreement by causing or allowing the matters set out in paragraphs 21.1 to 21.6 to be effected or occur; and 63.3 Palram Aust suffered loss or damage as a result, in the form of the Simmtec Mark-up, and Rees, Melissa Rees and Simmtec thereby committed the tort of conspiracy. Further particulars may be given after discovery has been completed. 57 The particulars requested of paragraph 63 were of the conspiracy and agreement and how it is said that Ms Rees carried into effect the conspiracy agreement or arrangement. The response is as set out above (at [20]). Although not framed in terms of knowledge, there is a significant overlap between this request and the request in relation to paragraphs 42.2 and 42.4. The applicants should provide the particulars. 58 Paragraph 73 is in the following terms: 73. Simmtec and/or Melissa Rees, by reason of the matters set out in paragraph 21 above in connection with the Simmtec Mark-ups and the matters referred to in paragraph 42 above: 73.1 interfered with or hindered Rees' performance of the Employment Contract, in particular in relation to the implied terms set out in paragraph 15.1 above and in the case of Simmtec the express terms set out in paragraphs 14.1 and 14.2 above, and Rees' conduct in breach of these terms as set out in paragraph 21 above; 73.2 in the case of Simmtec, it induced Rees to breach the Employment Contract, in particular in relation to the implied terms set out in paragraph 15.1 above and in the case of Simmtec the express terms set out in paragraphs 14.1 and 14.2 above, and Rees' conduct in breach of those terms as set out in paragraph 21 above; and/or 73.3 were knowingly involved in or party to, or knowingly aided, abetted or assisted Rees in relation to his breaches of the Employment Contract, in particular in relation to the breaches set out in paragraph 21 above of the implied terms set out in paragraph 15.1 above and in the case of Simmtec the express terms set out in paragraphs 14.1 and 14.2 above, and thereby committed the tort of interference with contractual relations. Further particulars may be given after discovery has been completed. 59 Ms Rees asked for proper particulars of this allegation or that it be withdrawn. The response is set out above (at [20]). Particulars should be given of this paragraph. 60 Paragraph 39 is in the following terms: Rees and Melissa Rees conspired or agreed verbally between one another to have Melissa Rees registered as the sole registered proprietor of the Wilsden Street Property in an attempt to distance Rees from the purchase of that property and in an attempt to put that property out of the reach of Palram Aust. Further particulars may be given after discovery has been completed. 61 The particulars requested of this paragraph were particulars of the alleged conspiracy and agreement. These particulars should be provided.
CONCLUSIONS 62 Ms Rees, the eighth respondent, is to bring in draft minutes of order which reflect the conclusions in these reasons. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.
Palram Australia Pty Ltd
Rees
(2007) 230 CLR 89
(1996) 15 WAR 289
(1975) 132 CLR 301
(1985) 158 CLR 661
(1985) 156 CLR 473
(1988) 63 ALJR 1