Plaintiff v Defendants

PRACTICE AND PROCEDURE - Application to join the proceeding - Rule 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) - Application to intervene in the proceeding - Whether or not the rights or liabilities of the proposed party are directly affected - Giving effect to the overarching purpose of the Civil Procedure Act 2010 (Vic) - Imposing conditions on joinder.

PRACTICE AND PROCEDURE - Application for costs of complying with subpoenas - Rule 42.11 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) - Rule 63.20.1 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) - Whether or not a subpoenaed person is entitled to costs of complying with a subpoena in circumstances where the subpoenaed person seeks to join the proceeding - Whether or not the costs claimed are reasonable - Whether or not costs ought to be taxed immediately.

For 528 Main Street Mordialloc Pty Ltd and Aus Finance Group Pty Ltd

1 This ruling relates to two court proceedings, Stuart v Mordialloc Sporting Club Inc ('Stuart proceeding') and John Barr Investments Pty Ltd v Mordialloc Sporting Club Incorporated ('appeal proceeding').

2 In the Stuart proceeding, there are presently five applications as follows:

(a) an application by the plaintiff, Mr Stuart, for leave to file a third further amended statement of claim;

(b) an application by the plaintiff to join 528 Main Street Mordialloc Pty Ltd ('528 Main') as trustee for the 528 Main Street Mordialloc Unit Trust ('528 Main Trust'), Aus Finance Group Pty Ltd ('AFG'), Frank Durso, Christopher Broad, David Mazzeo, Toby Pope and John Barr Investments Pty Ltd ('JBI') as the eighth, ninth, tenth, eleventh, twelfth, thirteenth and fourteenth defendants, respectively;

(c) an application by the second to fifth defendants filed on 14 August 2019 to strike out certain paragraphs of the plaintiff's amended statement of claim dated 17 June 2019; and

(d) two applications, one by the sixth defendant and one by the seventh defendant, filed on 13 August 2019 and on 17 September 2019, respectively, to strike out the plaintiff's amended statement of claim dated 17 June 2019.

3 In the appeal proceeding, there are two applications before me as follows:

(a) an application by 528 Main to be added as the second respondent, or alternatively, for leave to intervene; and

(b) an application by 528 Main and AFG for costs of and incidental to their compliance with the subpoenas served by the appellant.

4 The plaintiff in the Stuart proceeding is Raymond Stuart. He is an ordinary member of Mordialloc Sporting Club Inc ('the club'). He was also a director of the club from 24 November 2013 until 2 December 2016.

5 The club is an association incorporated pursuant to the Associations Incorporation Reform Act 2012 (Vic) ('the Act'). The club is a tenant of the property in Mordialloc ('the property'), which is the subject of the proceedings. The club is the first defendant in the Stuart proceeding and the respondent in the appeal proceeding.

6 The landlord of the property is John Barr Investments Pty Ltd ('JBI'), who is the proposed fourteenth defendant in the Stuart proceeding and the appellant in the appeal proceeding.

7 Lance Draper is the second defendant in the Stuart proceeding and he was a director of the club from at least 29 July 2009. He was the chair of the club from 14 September 2015 and resigned as chairman on 31 August 2018.

8 Trevor Warren is the third defendant in the Stuart proceeding and was a director of the club from at least 29 July 2009. He was not re-elected as a director on 22 March 2019.

9 Andrew Wise is the fourth defendant in the Stuart proceeding and was a director of the club from 24 July 2013. He was not re-elected as a director on 22 March 2019.

10 Julian Knipe is the fifth defendant in the Stuart proceeding and was a director of the club from 29 November 2015. He was not re-elected as a director on 22 March 2019.

11 Kevin Said is the sixth defendant in the Stuart proceeding. He is a director and chief investment officer of Aus Finance Group ('AFG'), who is the proposed ninth defendant in the Stuart proceeding. Mr Said gave financial and credit advice to the club through AFG. Mr Said is also a director of 528 Main Street Mordialloc Pty Ltd ('528 Main') as trustee for the 528 Main Street Mordialloc Unit Trust ('528 Main Trust'). Mr Said is alleged to be a purported director of the club by casual vacancy from 6 December 2016 and is alleged to have resigned as a director of the club on 8 July 2019.

12 Nick Mazzeo ('Mazzeo') is the seventh defendant in the Stuart proceeding and is a legal practitioner. He is a partner of the law firm, Lennon Mazzeo Lawyers, who provided legal advice to the club. He is alleged to be a purported director of the club by casual vacancy from 6 December 2016 and is alleged to have resigned as a director of the club on 1 March 2019.

13 528 Main is the proposed eighth defendant in the Stuart proceeding and is a corporate trustee of the 528 Main Trust. Its directors are Mr Said and Mr Durso. 528 Main is alleged to have wished to purchase the property from the club by causing the club to exercise an option to purchase. 528 Main seeks to be joined as a second respondent to the appeal proceeding, or, alternatively, to be an intervener.

14 AFG is the proposed ninth defendant in the Stuart proceeding and is a corporation. Its directors are Mr Said and Mr Durso. AFG was engaged by the club to provide services, including financial services to develop a strategy for the possible purchase of the club of the property.

15 Both 528 Main and AFG were subpoenaed in the appeal proceeding and seek their costs of complying with the subpoenas from JBI.

16 Frank Durso is the proposed tenth defendant in the Stuart proceeding, and he is a director of AFG from 11 March 2014 and a director of 528 Main from 22 August 2016. He is alleged to have provided financial and credit advice to the club through AFG.

17 Chris Broad is the proposed eleventh defendant in the Stuart proceeding and is a director and member of Paudimar, which is a company that has shares in 528 Main. He is alleged to be an associate of Messrs Said, Durso, Mazzeo, Warren and David Mazzeo.

18 David Mazzeo is the proposed twelfth defendant in the Stuart proceeding, who is the brother of the seventh defendant in the Stuart proceeding. He is a lawyer who provided legal advice to AFG and 528 Main in a firm named Pointon Partners Lawyers, relating to the purported acquisition of the property by the club from JBI under the lease.

19 Tony Pope is the proposed thirteenth defendant in the Stuart proceeding, and he provided development advice to the club. He is a director and shareholder in Alpha 14, which provided development advice to the club.

20 On 3 September 2018, the plaintiff commenced this proceeding against the first defendant, Mordialloc Sporting Club Inc ('the club'), by writ and statement of claim ('V1').

21 The plaintiff is a member of the club which is an association incorporated pursuant to the Associations Incorporation Reform Act 2012 (Vic) ('the Act'). The plaintiff is also a former director of the club.

22 On 5 June 2019, the plaintiff filed an application for leave to join Messrs Lance Draper, Trevor Warren, Andrew Wise, Julian Knipe, Kevin Said and Nick Mazzeo ('Mazzeo') as defendants, and for leave to amend his statement of claim as set out in exhibit RJA-8 ('V2') to the affidavit sworn by Mr Richard Ashley on 4 June 2019.

23 On the same day, Derham AsJ made orders by consent granting the plaintiff leave to join the individuals identified in paragraph 22 hereof as defendants to the proceeding, and for the plaintiff to file and serve V2.

24 On 7 June 2019, Derham AsJ made orders by consent that effectively granted leave for the plaintiff to file and serve an amended writ and statement of claim that may be different to V2.

25 On 17 June 2019, the plaintiff filed an amended writ and an amended statement of claim ('ASOC'), which was different to V2 ('V3').

26 On 29 July 2019, the plaintiff applied by email to the Court and by an affidavit of Mr Ashley sworn on 29 July 2019 to add 528 Main, AFG, Frank Durso, Chris Broad, David Mazzeo and Toby Pope as defendants to the proceeding, and to file and serve a further amended statement of claim dated 30 July 2019, being exhibit RJA-2 ('V4') to the affidavit of Mr Ashley sworn on 29 July 2019.

27 On 13 August 2019, the sixth defendant filed an application to strike out the plaintiff's ASOC.

28 On 14 August 2019, the second to fifth defendants filed an application to strike out certain paragraphs of the plaintiff's ASOC.

29 On 17 September 2019, the seventh defendant filed an application to strike out the plaintiff's ASOC.

30 On 20 September 2019, the plaintiff filed an application to join the parties referred to in paragraph 26 hereof as the eighth to thirteenth defendants, and to file a further amended statement of claim dated 19 September 2019, being exhibit RJA-16 ('V5') to the affidavit of Mr Ashley sworn on 20 September 2019. The plaintiff also sought to join JBI as the second plaintiff in this proceeding. JBI is the landlord of the property in Mordialloc ('property') that is a subject of this proceeding. JBI, as the proposed second plaintiff, contributed to V5.

31 On 18 November 2019, the plaintiff served a proposed second further amended statement of claim dated 18 November 2019 ('V6'), which was sought to be relied upon at the hearing on 19 November 2019 in lieu of V5. V6 is exhibit RJA-1 to the affidavit of Mr Ashley sworn on 18 November 2019. JBI also contributed to V6 as the proposed second plaintiff.

32 At the hearing on 19 November 2019 before myself, I did not grant the plaintiff leave to file V6 of the statement of claim and I ordered the plaintiff to provide a proposed third further amended statement of claim. At that hearing, I indicated that JBI ought to be joined as a defendant rather than as a second plaintiff.

33 On 19 December 2019, the plaintiff provided to the defendants a proposed third further amended statement of claim ('V7').

34 On 24 February 2020, the plaintiff provided the final version of the proposed third further amended statement of claim dated 18 December 2019 ('proposed FASOC') ('V8'), in which the plaintiff sought to join JBI as the fourteenth defendant. The plaintiff seeks to file the proposed FASOC.

35 The plaintiff's application to file the proposed FASOC was heard primarily on 13 March 2020 and 25 March 2020.

36 Given the nature of the applications currently before me, I will only deal with the plaintiff's application for leave to file the proposed FASOC in this ruling. The second to seventh defendants oppose this application. Given that the first defendant and the proposed fourteenth defendant do not oppose the plaintiff's application, I will not include their submissions in detail other than when they add to the other parties' submissions in a relevant way.

The plaintiff's application for leave to file the proposed third further amended statement of claim

37 The proposed FASOC is 128 pages long, inclusive of 10 schedules (Schedules A to J).

38 The proposed FASOC seeks to add seven parties as the eighth to fourteenth defendants: 528 Main, AFG, Frank Durso, Christopher Broad, David Mazzeo, Toby Pope and JBI.

39 In summary, the plaintiff seeks to set aside agreements referred to by the plaintiff as the 'Impugned Agreements' and to restrain the performance of the Impugned Agreements. The plaintiff seeks damages or statutory compensation on behalf of the club. Further, the plaintiff seeks orders as a consequence of oppressive conduct by the club. The orders sought by the plaintiff are pursuant to ss 35, 36, 67 and 68 of the Act.

40 Agreements referred to in the proposed FASOC include:

(a) the lease between the club and JBI ('lease'), in which the club leased the property from JBI and which included an option to purchase the property;

(b) the 'AFG Engagement' between the club and AFG, whereby AFG would provide services to the club to conduct due diligence about the possibility of the club purchasing the property pursuant to the option to purchase;

(c) the 'Said Confidentiality Agreement', which is a confidentiality undertaking given by the sixth defendant, Mr Kevin Said, on behalf of himself and AFG to the club to keep documents of the club confidential;

(d) the 'Confidential Acquisition Partnership', which is an agreement between the club and the sixth and seventh defendants on behalf of themselves and/or AFG and the unitholders of the 528 Main Trust, whereby AFG, or its nominee, 528 Main, would purchase the property when the club exercised the option to purchase;

(e) the 'Deed of Understanding' between AFG or its nominee and the club, which was to contain the terms of the Confidential Acquisition Partnership, and which was executed by the club and 528 Main on 22 December 2016; and

(f) the 'Impugned Agreements', which include the Deed of Understanding and through which the club purported to on-sell the property to 528 Main.

41 The relevant statutory provisions of the Associations Incorporation Reform Act 2012 (Vic) are set out as follows:

An incorporated association must not, otherwise than as provided by this Act-

(a) exercise any power that its rules prohibit the association from exercising; or

(b) exercise any power contrary to any restriction on the exercise of that power contained in its rules; or

(c) do any act that is outside the scope of the purposes of the association.

(1) No act of an incorporated association (including the entering into of an agreement by the association) and no conveyance or transfer of property to or by an incorporated association is invalid by reason only of the fact that-

(a) the association was without the capacity or power to do the act or execute or take the conveyance or transfer; or

(b) doing the act, or executing or taking the conveyance or transfer, was prohibited under section 34.

(2) No act performed by a person for or on behalf of an incorporated association (including the entering into of an agreement on behalf of the association) is invalid by reason only of the fact that the act was prohibited under section 34.

(3) Any lack of capacity or power or any prohibition referred to in subsection (1) or (2) may be asserted or relied on only in-

(a) proceedings against an incorporated association by a member of the association or the Registrar to restrain the association from doing any act or executing or taking a conveyance or transfer of property; or

(b) proceedings by an incorporated association or by a member of the association against the present or former secretary or former public officer of the association; or

(c) an application by a member of an incorporated association or the Registrar to wind up the association; or

(d) an application by the Registrar to appoint a person as the statutory manager of an incorporated association.

1. Unauthorised act, conveyance or transfer performed pursuant to contract

(1) This section applies if an unauthorised act, conveyance or transfer by an incorporated association-

(a) is sought to be restrained in proceedings referred to in section 35(3)(a); and

(b) is being, or is to be, performed or made pursuant to a contract to which the association is a party.

(2) The court in which the proceedings are brought may take action referred to in subsection (3) if-

(a) all parties to the contract are parties to the proceedings; and

(b) the court considers it just and equitable to take the action.

(3) If subsection (2) applies, the court may-

(a) set aside and restrain the performance of the contract; and

(b) allow to the association or to the other parties to the contract (as the case requires) compensation for the loss or damage sustained by either that may result from the setting aside and restraining of the contract.

(4) For the purposes of subsection (3)(b), any anticipated profits to be derived from the performance of the contract must not be awarded by the court as a loss or damage sustained.

(1) An incorporated association, a member of an incorporated association or the Registrar may apply to the Magistrates' Court for an order under subsection (2).

(2) The Magistrates' Court may make an order-

(a) giving directions for the performance and observance of the rules of an incorporated association by a person who is under an obligation to perform or observe those rules; or

(b) restraining an incorporated association from doing an act that is outside the scope of its purposes; or

(c) declaring and enforcing the rights or obligations of-

(i) members of an incorporated association between themselves; or

(ii) an incorporated association and any of its members between themselves.

(3) An order may be made under subsection (2) whether or not a right of a proprietary nature is involved and whether or not the applicant has an interest in the property of the incorporated association.

(4) The Magistrates' Court may refuse to make an order on the application or may make an order for costs against a party, whether successful or not, if it is of opinion that-

(a) the issue raised in the application is trivial; or

(b) it was unreasonable to make the application having regard to any one or more of the following-

(i) the importance of the issue;

(ii) the nature of the incorporated association;

(iii) the availability of any other method of resolving the issue;

(iv) the costs involved;

(v) the lapse of time;

(vi) acquiescence;

(vii) any other relevant circumstance; or

(c) the unreasonable or improper conduct of a party has been responsible for the making of the application, or has added to the cost of the proceedings.

(1) A member or former member of an incorporated association may apply to the Magistrates' Court for an order under this section on the ground that the association has engaged, or proposes to engage, in oppressive conduct.

(2) Unless the Magistrates' Court grants leave to apply at a later date, an application under subsection (1) by a former member must be made within 6 months after the person ceases to be a member of the association.

(3) The Magistrates' Court may only grant leave under subsection (2) if the Magistrates' Court is satisfied that there is sufficient public interest to do so.

(4) On hearing the application, the Magistrates' Court may, if satisfied that the incorporated association has engaged, or proposes to engage, in oppressive conduct, make one or more of the following orders-

(a) an order for regulating the conduct of the association's affairs in the future;

(b) an order directing the association to institute, prosecute, defend or discontinue specified proceedings, or authorising a member of the association to do so on behalf of the association;

(c) an order restraining a person from engaging in specified conduct or from doing a specified act or thing;

(d) an order requiring a person to do a specified act or thing;

(e) an order for the alteration of the rules of the association;

(f) an order that a former member be reinstated as a member of the association;

(g) an order terminating a person's membership of the association;

(h) subject to subsection (5), any other order that is, in the opinion of the Court, necessary to remedy any default or resolve any dispute.

(5) The Magistrates' Court must not make an order that an incorporated association be wound up.

(6) For the purposes of this section-

(a) oppressive conduct, in relation to an incorporated association, includes conduct that is-

(i) unfairly prejudicial to, or unfairly discriminatory against, a member of the incorporated association (including in the member's capacity as a member of the committee); or

(ii) contrary to the interests of the members of the incorporated association as a whole; and

(b) a reference to engaging in conduct includes a reference to refusing or failing to take action.

(1) An office holder or former office holder of an incorporated association must not make improper use of information acquired by virtue of holding that office-

(a) to gain an advantage for himself or herself or any other person; or

(b) to cause detriment to the association.

...

(2) An office holder of an incorporated association must not make improper use of that office-

(a) to gain an advantage for himself or herself or any other person; or

(b) to cause detriment to the association.

...

84 Duty of care and diligence

(1) An office holder of an incorporated association must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would if that person -

(a) were an office holder of the association in the circumstances applying at the time of the exercise of the power or the discharge of the duty; and

(b) occupied the office held by, and had the same responsibilities within the association as, the office holder.

(1) An office holder of an incorporated association must exercise his or her powers and discharge his or her duties-

(a) in good faith in the best interests of the association; and

(b) for a proper purpose.

42 The Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') sets out rules with respect to pleadings. With respect to the content of pleadings, r 13.02(1) states:

(a) contain in a summary form a statement of all the material facts on which the party relies, but not the evidence by which those facts are to be proved;

(b) where any claim, defence or answer of the party arises by or under any Act, identify the specific provision relied on; and

(c) state specifically any relief or remedy claimed.

43 It is essential that a pleading contains all the material facts relied upon by the party. In Environinvest Ltd (recs and mgrs apptd) (in liq) v Pescott (No 2) ('Environinvest v Pescott'),[1] Ferguson J (as her Honour then was) said:

There are two reasons why material facts must be pleaded. First, such a pleading enables a party's opponent and the Court to know what the case is that is to be met. Secondly, it discloses whether the party has a claim or defence (whichever may be the case) which is known to law.[2]

44 Further, a pleading must 'contain the necessary particulars of any fact or matter pleaded'.[3]

45 The Court can grant leave for a party to amend their pleadings pursuant to s 36.04(1)(b) of the Rules. Rule 36.04 sets out:

(1) A party may amend any pleading served by that party-

(a) once before the close of pleadings; or

(b) at any time by leave of the Court or with the consent of all other parties.

46 Rule 36.01(1) of the Rules sets out the purpose for which the Court may grant leave for a party to amend any document as follows:

(a) determining the real question in controversy between the parties to any proceeding; or

(b) correcting any defect or error in any proceeding; or

(c) avoiding multiplicity of proceedings-

the Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.

47 An application for leave to file a further amended statement of claim is subject to the Court's discretion. In Environinvest v Pescott,[4] Ferguson J observed that:

The Court has a discretion as to whether to allow a pleading to be amended. Where there is no prejudice, amendments are generally allowed. The discretion to allow a proposed amendment is unlikely to be exercised if the proposed amended pleading would be liable to be struck out. A pleading will be struck out if it has no reasonable prospect of success.

On a strike out application or where leave to amend is opposed, it is usually assumed that the matters pleaded can be proven. If the case pleaded is arguable, commonly that is all that is required to permit the amended pleading to be filed. Its ultimate success or failure is a matter for determination at trial. However, as noted above, in these proceedings, Judd J was of the opinion that leave to replead should only be granted if the Court is satisfied that there is a sound basis to support the claims. Having regard to the history of the matter (there having been unsuccessful attempts at pleading claims previously) that seems to me to be the appropriate basis upon which the Court ought to proceed. Having said that, sight ought not be lost of the fact that this is a pleading application. Bearing that in mind, in my view it is sufficient if the plaintiffs have adequate documentary and other material to show that there is a proper basis for an arguable claim. They ought not to be required to produce evidence of the type that would be necessary to establish the claims at trial.[5]

48 In Mandie v Memart Nominees Pty Ltd ('Mandie v Memart'),[6] the Court of Appeal held that the proper test in determining whether or not to grant leave to amend a pleading is whether or not the claims have a real prospect of success, which is derived from s 63(1) of the Civil Procedure Act 2010 (Vic).[7] The Court of Appeal noted that this 'no real prospect of success' test has been explained in different ways by various authorities, including that the pleading is not fanciful or futile and that it is arguable.[8]

49 Accordingly, I do not find that there is any real difference between the language used by Ferguson J in Environinvest v Prescott with respect to 'no reasonable prospect of success' and the language used by the Court of Appeal in Mandie v Memart with respect to 'no real prospect of success'. In either test, a pleading is sufficient if it is arguable.

50 Further, the whole or any part of a pleading may be struck out where the pleading or any part of the pleading:

(a) does not disclose a cause of action or defence;

(b) is scandalous, frivolous or vexatious;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court ...[9]

51 In Hoh v Frosthollow Pty Ltd,[10] Derham AsJ discussed the meaning of 'scandalous', 'frivolous or vexatious' and 'prejudice, embarrass or delay' as follows:

(a) Scandalous: Allegations made in a pleading for the purpose only of abusing or injuring the opposite party and allegations which are indecent or offensive are scandalous within the meaning of the rule, and liable to be struck out ...

(b) Frivolous or vexatious: These words in combination have traditionally been used to describe a wide variety of circumstances in which a claim is found to be groundless, or lacking a legal basis or merit

(c) Prejudice, embarrass or delay: In general, a pleading or indorsement is embarrassing when it places the opposite party in the position that he or she does not know what is alleged against him or her ... Thus, a pleading which is unintelligible ... or is vague or ambiguous ... or is too general ... is embarrassing.[11]

52 The relevant principles of a pleading was summarised by Dixon J in Wheelahan v City of Casey (No 12):[12]

Casey contended that three recent decisions of this court, SMEC Australia Pty Ltd & Anor v McConnell Dowell Constructors (Aust) Pty Ltd & Ors (No 2),[13] Environinvest Ltd v Pescott & Ors; Environinvest Ltd v Blackburne Pty Ltd & Ors,[14] and Clarke & Ors v Great Southern Finance Pty Ltd & Ors[15] identify the relevant principles that govern its application. Frankston took no issue in written or oral submissions with Casey's contention as to the applicable principles. Relevantly:

(a) Order 13 of the Rules set out the relevant requirements of a sufficient pleading, while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;

(b) the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;[16]

(c) the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence).[17] The expression 'material facts' is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;[18]

(d) as a corollary, the pleading must be presented in an intelligible form - it must not be vague or ambiguous or inconsistent.[19] Thus a pleading is 'embarrassing' within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;

(e) the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;[20]

(f) pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);[21]

(g) a pleading which contains unnecessary or irrelevant allegations may be embarrassing - for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;[22]

(h) it is not sufficient to simply plead a conclusion from unstated facts.[23] In this instance, the pleading is embarrassing;

(i) every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));

(j) the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);[24]

(k) particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement - namely, to fill in the picture of the plaintiff's cause of action (or defendant's defence) with information sufficiently detailed to put the other party on guard as to the case that must be met.[25] An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;[26]

(l) a pleading should not be so prolix that the opposite party is unable to ascertain with precision the causes of action and the material facts that are alleged against it;[27]

(m) extensive cross-referencing of facts in a pleading may render parts of the pleading unintelligible;[28]

(n) in an application under r 23.02, the court will only look at the pleading itself and the documents referred to in the pleading;[29]

(o) the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown;[30] and

(p) if the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.[31]

53 Further, it is permissible to plead conclusions of law provided that the material facts are properly set out.[32]

54 From the submissions of the parties, I take it that there are three main issues that need to be addressed, which are:

(a) whether the plaintiff has standing to make the claims set out in the proposed FASOC;

(b) whether the plaintiff has standing to claim for loss or damage suffered by the club; and

(c) whether the pleadings in the proposed FASOC are otherwise embarrassing.

55 The plaintiff contends that he has standing to bring this proceeding under ss 35, 36, 67 and 68 of the Act. The plaintiff contends that he seeks to set aside and restrain performance of relevant contracts under ss 35 and 36 of the Act. The plaintiff also seeks orders pursuant to s 67 of the Act, and seeks to claim oppressive conduct by the club under s 68 of the Act.

56 There is no dispute that the plaintiff, as a member of the club, has standing to bring an action to set aside and restrain the performance of the Impugned Agreements where the claim relates to the club's lack of power pursuant to ss 34 to 36 of the Act.[33] The plaintiff must show that it is just and equitable to set aside and restrain performance of the Impugned Agreements.[34]

57 There is also no dispute that the plaintiff, as a member of the club, has standing to claim that the club has engaged in oppressive conduct pursuant to s 68 of the Act and has standing to seek orders under s 67 of the Act.[35]

58 Before dealing with the objections to the proposed FASOC, it is convenient to set out what is oppressive conduct. Section 68(6)(a) of the Act defines oppressive conduct as follows:

oppressive conduct, in relation to an incorporated association, includes conduct that is-

(i) unfairly prejudicial to, or unfairly discriminatory against, a member of the incorporated association (including in the member's capacity as a member of the committee); or

(ii) contrary to the interests of the members of the incorporated association as a whole ...

59 In Moala v Free Wesleyan Church of Tonga in Australia (Victoria) Inc (No 4),[36] Ginnane J referred to oppressive conduct in corporations law with respect to oppressive conduct under s 68 of the Act in obiter.[37] In light of the lack of authority with respect to oppressive conduct under s 68 of the Act, I find that reference can be made to oppressive conduct in corporations law.

60 In s 232 of the Corporations Act 2001 (Cth) ('Corporations Act'), oppressive conduct is referred to as where:

(a) the conduct of a company's affairs; or

(b) an actual or proposed act or omission by or on behalf of a company; or

(c) a resolution, or a proposed resolution, of members or a class of members of a company;

is either

(d) contrary to the interests of the members as a whole; or

(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.

...

61 In Exton v Extons Pty Ltd,[38] Sifris J discussed what constitutes conduct that is 'contrary to the interests of members as a whole' and conduct that is oppressive to, unfairly prejudicial to or unfairly discriminatory against a member in the context of the Corporations Act.

62 With respect to conduct that is 'contrary to the interest of members as a whole', after a review of relevant authorities, Sifris J said:

From a review of the authorities the better view is that s 232(d) is separate and distinct from s 232(e) and that a breach may not necessarily involve commercial unfairness. The Court is required to examine all of the relevant facts and circumstances in order to determine whether the conduct under scrutiny is in the best interests of the company as a whole, apart from its members. In this context breaches of duty (whether statutory or fiduciary) by directors and officers may well be conduct that is not in the best interests of the company as a whole. Whether breaches of duty in a small family type company, where there is an overwhelming identity of interest between shareholders and directors, fall within the sections is a related matter. There is authority, as referred to above, to the effect that where there is consent or ratification of such conduct, it may, in context and in the circumstances, not be contrary to the interests of members as a whole or indeed unfair.[39]

63 After reviewing authorities with respect to conduct that is oppressive to, unfairly prejudicial to or unfairly discriminatory against a member, Sifris J said:

From a review of the more relevant authorities, the critical issue is commercial unfairness, judged objectively. It usually results in some harm or prejudice by such conduct that is not reasonably or commercially justifiable. Of course all of the facts and circumstances and context needs to be examined in order to determine whether such conduct alleged is oppressive. Further, upon such examination conduct that may appear unfair may be fully justified. It goes without saying that the authorities referred to below deal with a range of different factual considerations and relationships. Each case must depend on its own facts and circumstances.[40]

64 The second to fifth defendants contend that the plaintiff does not have standing under the Act to allege breach of director's duties owed to the club and its members. The second to fifth defendants contend that the allegations of director's duties have no bearing on the matters under s 36 of the Act because ss 34 to 36 are concerned with acts prohibited by the club's rules. Accordingly, they contend that leave should not be granted to file the proposed FASOC in respect of the following paragraphs that contain allegations of breaches of directors' duties: paragraphs 52, 61, 63, 83, 84, 92, 107, 108, 111, 112, 116, 139 and 144(d) of the proposed FASOC.

65 Similarly, the seventh defendant contends that, with respect to paragraph 83 of the proposed FASOC, the plaintiff has no standing to pursue breaches of ss 83 to 85 of the Act on behalf of the club,[41] and that the plaintiff ought to plead a Foss v Harbottle principle claim for claims other than those under s 36. Sections 83 to 85 of the Act relate to duties of an office holder of an incorporated association. In my view, given the change in office holders of the club, it is unlikely that the club, if so advised, would not institute a proceeding for breaches of director's duties.

66 The plaintiff contends that the Foss v Harbottle principle is not relevant and that he only seeks to make claims under ss 35, 36, 67 and 68 of the Act. The plaintiff contends that he is not seeking to pursue breaches of ss 83 to 85, and counsel for the plaintiff concedes that the plaintiff has no capacity to separately sue for breach of director's duties. However, the plaintiff contends that those paragraphs relating to director's duties are necessary prerequisites for the relief sought under ss 35 and 36 of the Act and are relevant to the oppressive conduct and relief sought under ss 67 and 68. The plaintiff contends that they provide necessary background to the oppression claim and to how the relevant directors ran the club not for the benefit of members but for the benefit of the commercial interests of at least the sixth and seventh defendants. Therefore, the plaintiff contends that the paragraphs are relevant and ought to stay.

67 As it is arguable that the conduct of directors can be relevant to the conduct of the club, I am satisfied that the allegations with respect to director's duties can be part of the plaintiff's claim for oppression claim and for setting aside the Impugned Agreements.[42] The paragraphs of the proposed FASOC stated in paragraph 64 hereof can be maintained in respect of claims of director's duties. However, the plaintiff must replead the references to director's duties and the alleged breaches so that it is clear that the allegations are part of the claim for oppressive conduct by the club or part of the claim for setting aside the Impugned Agreements. The plaintiff must also plead out the specific duties and breach relied upon in each paragraph. The plaintiff cannot claim against the directors themselves for breach of duties to the club.

68 I emphasise that all allegations made by the plaintiff in the proposed FASOC must relate back to the claim for setting aside the Impugned Agreements or to the claim for oppression.

69 The sixth defendant contends that the plaintiff does not have standing to complain about the AFG Engagement in paragraph 29 of the proposed FASOC, which relates to duties owed to the club by AFG and its servants and agents, being Messrs Said, Durso, Pope and Mazzeo. The seventh defendant also contends that paragraph 29 makes an allegation against the seventh defendant with respect to oppression; however, the seventh defendant was not part of the club at the time. Further, the seventh defendant contends that this paragraph is about persons entering into a fiduciary relationship with the club rather than about oppression. However, I find that the main issue with paragraph 29 is its relevance when the plaintiff's claims are with respect to oppression and setting aside the Impugned Agreements. Given that the oppression claim is against the club and must be in relation to conduct engaged in by the club,[43] I cannot see how duties alleged to be owed to the club by parties external to the club can be part of the oppression claim. The plaintiff does not allege that the club acted oppressively as a result of a breach of duties by AFG. Further, paragraph 29 of the proposed FASOC is not referred to directly or explicitly as part of the plaintiff's claim to set aside the Impugned Agreements in paragraphs 88 to 89A of the proposed FASOC. Accordingly, the allegations of duties owed by AFG and its servants and agents in paragraph 29 are irrelevant to the plaintiff's claims and must not be pleaded. Any reference to paragraph 29 in other paragraphs of the proposed FASOC must also be removed.

70 I note that with respect to paragraph 29 of the proposed FASOC, the sixth defendant also contends that the allegations in the sub-paragraphs are wide‑ranging and that the defendants would have to try to connect them to wide‑ranging particulars. Given that it is unclear which statutory provisions in the particulars refer to which duties in the sub-paragraphs, I find that paragraph 29 would also need to be repleaded for this reason.

71 The plaintiff sought statutory compensation on behalf of the club for loss and damage pursuant to s 36 of the Act in paragraph 145 of the proposed FASOC. Paragraph 144 of the proposed FASOC alleged the loss and damage suffered by the club.

72 However, the second to fifth defendants contend that the plaintiff, as a member, does not have standing to claim damages on behalf of the club under the Act. They contend that there are no express provisions conferring standing, and that standing cannot be implied because there is a contrary intention in the Act founded on s 36(2)(a). They contend that because s 36(2)(a) requires all parties to the contract to be parties to the proceeding, the Act intends that the association or other parties to the contract have a say on the application, including any relief to be granted and any damages to be awarded pursuant to s 36(3)(b). Therefore, the association will be before the Court and ought to be the one to make the claim for damages, not a member.

73 The sixth defendant supports the second to fifth defendants' submission. The sixth defendant further contends in the alternative that if the plaintiff can bring a claim for damages on behalf of the club, pursuant to ss 35(3)(a) and 36(1)(a), a claim for damages can only be with respect to a lack of power.

74 The seventh defendant contends that the plaintiff does not have standing to claim for damages pursuant to s 36 of the Act because such compensation is only available for loss or damage that were sustained as a result of the setting aside or restraining of the contract. However, in paragraphs 144 and 145 of the proposed FASOC, loss or damage claimed is not a result of the agreements being set aside, and there is no such pleading. Further, in the prayer for relief against all defendants except the club, the plaintiff claims damages for loss suffered by entering into the impugned agreements, which is not provided for by s 36.

75 On the other hand, the first defendant contends that it is a matter for the Court to consider compensation after the contract is set aside. The first defendant contends that s 35(3)(a) of the Act provides that a member can bring an action to set aside agreements, and contends that this cause of action is only available to a member, and is not available to the club. Therefore, the member can seek compensation under the Act as a result of the setting aside of a contract as a consequence. JBI adopts the first defendant's submissions, having regard to ss 35 and 36 of the Act.

76 The plaintiff contends that ss 35 and 36 of the Act contain express words with respect to damages and that they make clear that he has standing to claim damages on behalf of the club. The plaintiff contends that s 36 makes it clear that a member must make the application to set aside the relevant contracts even though the compensation is for the association. However, counsel for the plaintiff accepts that the loss or damage must be as a result of the setting side or restraining of the performance of the contract. The plaintiff also contends that the loss or damage, as claimed in paragraph 144 of the proposed FASOC, includes the costs of the club in defending this proceeding because the club has had to incur costs to be involved in these proceedings and to disentangle itself from the impugned agreements if the agreements are set aside. Therefore, the plaintiff contends that those costs fall within ss 35 and 36 and that those costs ought to be reimbursed once the Impugned Agreements are set aside.

77 Further, the plaintiff contends that working out the heads of damages is a matter for trial and not a pleadings summons and that the plaintiff's application to file the proposed FASOC ought not to be refused on the basis of damages that are sought. The plaintiff contends that if further particulars are sought, they can be requested.

If subsection (2) applies, the court may-

(a) set aside and restrain the performance of the contract; and

(b) allow to the association or to the other parties to the contract (as the case requires) compensation for the loss or damage sustained by either that may result from the setting aside and restraining of the contract.

79 I agree with the plaintiff's submission that the plaintiff has standing to claim compensation on behalf of the club for loss or damage sustained as a result of the setting aside and restraining of the Impugned Agreements pursuant to s 36 of the Act. While the club is required to be a party to the proceeding for the Impugned Agreements to be set aside pursuant to s 36(2)(a), s 36 of the Act applies to unauthorised acts, conveyances or transfers by an incorporated association that are 'sought to be restrained in proceedings referred to in section 35(3)(a)'.[44] Section 35(3)(a) of the Act refers to 'proceedings against an incorporated association by a member of the association or the Registrar', and not to proceedings by the incorporated association. Accordingly, I am satisfied that it is reasonably arguable that the plaintiff can claim compensation on behalf of the club for loss or damage sustained as a result of the setting aside and restraining of the Impugned Agreements pursuant to s 36(3)(b) of the Act. However, the claim must relate to the loss or damage as a result of the setting aside and restraining of the Impugned Agreements, and cannot include loss or damage that results from entering into the Impugned Agreements.

80 Given that the plaintiff has not clearly set out the loss or damage as a result of the setting aside and restraining of the contracts in paragraphs 144 and 145 of the proposed FASOC, those paragraphs must be repleaded.

81 Further, the prayer for relief claimed against all defendants except for the club must be reframed as the plaintiff cannot claim for damages or statutory compensation on behalf of the club pursuant to s 36 of the Act for loss suffered as a result of entering into the Impugned Agreements. The plaintiff can only claim for compensation as a result of loss or damage sustained as a result of the setting aside and restraining of the Impugned Agreements pursuant to s 36 of the Act. For the same reason, paragraph B of the prayer for relief sought against Mr Said in the proposed FASOC must also be reframed to only specify loss suffered as a result of the setting aside and restraining of the Impugned Agreements.

82 I note that in paragraph A of the prayer for relief sought against Mr Said in the proposed FASOC, the plaintiff claims damages for loss suffered by Mr Said's breach of the Said Confidentiality Agreement. Given that it is not clear whether Mr Said's breach of the Said Confidentiality Agreement is part of either the oppression claim or claim to set aside the Impugned Agreements, as discussed in paragraph 109 hereof, paragraph A of this prayer for relief must be excised.

83 Further, I took it that the plaintiff contends that s 67 of the Act entitles the plaintiff to claim damages on behalf of the club as s 67(2)(c) allows the plaintiff to make an order against anyone, including the sixth and seventh defendants, if oppression is established. However, s 67(2)(c) only refers to an order 'declaring and enforcing the rights or obligations' of members between themselves or of an association and any of its members between themselves in the context of enforcing rules of the association. Section 67(2)(c) does not refer to an order for damages. Therefore, s 67(2)(c) would not give standing to the plaintiff to claim damages on behalf of the club with respect to oppression. Regardless, the plaintiff has not relied upon s 67(2)(c) to claim damages on behalf of the club in the proposed FASOC.

84 For reasons that I will set out below, I find that the proposed FASOC is embarrassing and that it must be repleaded.

85 I note that the plaintiff often responded to objections by the second to seventh defendants' submissions to the proposed FASOC by contending that the defendants can request further particulars if they are not satisfied with the particulars or that the defendants' submissions are more appropriate as defences rather than objections to a pleadings summons. Given the history of this proceeding, I determine that the plaintiff is required to properly formulate the proposed FASOC before leave will be given to permit the claim to go forward.

86 The sixth defendant, Mr Said, contends that the proposed FASOC employs a scattergun approach and is a 'snowstorm'.[45] The sixth defendant contends that the pleading ought to be concise and ought to articulate the plaintiff's two claims of lack of power and oppression. Further, both the sixth defendant and seventh defendant contend that many paragraphs of the proposed FASOC lack detail and contain irrelevant claims.

87 The sixth defendant contends that the use of schedules at paragraphs 16, 17, 28, 47, 111, 113 and 114 is impermissible. The sixth defendant contends that it is unclear whether the defendants will be required to attach schedules to their defences responding to allegations in the schedules. I took it that the sixth defendant contends that the schedules either contain material facts that are more appropriately placed in the pleading itself to enable the defendants to plead in response, or contain allegations that ought to be placed in a witness statement or affidavit.

88 With respect to the use of schedules, the plaintiff contends that I had ruled on this issue on 19 November 2018 in which I held that the plaintiff is entitled to plead as he chooses. Further, the plaintiff contends that each schedule is tied to a specific paragraph of the proposed FASOC and supporting documents have been provided to all parties, and therefore it is disingenuous of the defendants to contend that they do not understand the claim based upon documents the defendants had prepared.

89 References to schedules in the proposed FASOC are as follows:

(a) Schedule A provides the schedule of the parties in the proposed FASOC, and this schedule is not in dispute;

(b) paragraph 16 refers to Schedule B, which summarises principal terms of the lease;

(c) paragraph 17 refers to Schedule C, which summarises relevant rules of the club;

(d) paragraph 22 refers to Schedule D, which provides further particulars of the negotiations for a new lease; however, I note that the sixth defendant does not raise an issue with respect to this schedule in both written and oral submissions;

(e) paragraph 28 refers to Schedule E, which sets out the terms and conditions of the AFG Engagement;

(f) paragraph 47 refers to Schedule F, which sets out details of facts of the performance under the Confidential Acquisition Partnership;

(g) paragraph 96 refers to Schedule G, which sets out further particulars with respect to actions relating to the building notice;

(h) paragraph 111 refers to Schedule H, which sets out further particulars of allegations against Mr Said;

(i) paragraph 113 refers to Schedule I, which sets out further particulars of allegations against Mr Mazzeo; and

(j) paragraph 114 refers to Schedule J, which sets out further particulars of the non-disclosure of the on-sale agreement and other breaches of the lease in the VCAT proceedings; however, I note that Schedule J refers to paragraph 121 instead of paragraph 114 of the proposed FASOC.

90 The use of schedules in a statement of claim is not of itself impermissible. In Vanmarc Holdings Pty Ltd v P W Jess & Associates Pty Ltd,[46] a schedule was used to provide particulars, and this was not disputed. I find that the use of Schedules C to D and F to J to set out particulars is permissible but not desirable.

91 In the proposed FASOC, Schedules B and E plead material facts. In Isabet Ltd v Worldgroup Consulting Pty Ltd (No 2),[47] there was no issue as to whether the material facts appeared in the pleading or in a schedule in circumstances in which the material facts consisted of complex technical information.[48] As Schedules B and E of the proposed FASOC plead many terms of the lease and AFG Engagement, respectively, I find that there is no issue with the plaintiff's use of schedules in these respects. In my view, there is no real utility in requiring the plaintiff to copy and paste the schedules into the pleading, and the defendants can choose how they wish to respond in their respective defences. However, I do not encourage the use of schedules by the plaintiff given that there has been a propensity to mix facts and particulars.

92 However, the issue with Schedule E is that plaintiff does not specify which terms are written or oral. While reference was made to paragraph 27 of the proposed FASOC, it is too vague and requires the defendants to work out which terms are written and which are oral. Accordingly, Schedule E must be reformulated.

93 I note that the sixth defendant contends that there are particulars in the schedules that are not particularised. The sixth defendant refers to sub-paragraphs (h) and (j) of Schedule F. I find that sub-paragraph (h) does not provide appropriate particulars as to how Mr Draper is alleged to have determined to proceed with the Confidential Acquisition Partnership. Further, sub-paragraph (j) does not provide detail as to when the discussions occurred. I emphasise that adequate particulars with sufficient details must be provided to 'put the other party on guard as to the case that must be met'.[49]

94 The sixth defendant contends that the plaintiff had allegations which are not compatible with each other. The sixth defendant contends that in paragraphs 52(e) and (f), 82 to 84, 111, 112, 135, 137 and 138 of the proposed FASOC, the plaintiff alleges that the sixth and seventh defendants were de facto directors. However, in paragraphs 7(c), 8(f), 67 and 68 of the proposed FASOC, the plaintiff alleges that the sixth and seventh defendants were not directors of the club as they were not validly appointed.

95 The plaintiff contends that the allegations of director's duties and the position of de facto directors are sustainable together and are not inconsistent. The plaintiff contends that even though a person is not named a director and not properly appointed, he could still be liable as though he were a director. The plaintiff contends that no claim is made against the sixth defendant personally in this proceeding other than as a party to the agreements that are sought to be impugned. The plaintiff submits that the actions of the defendants undertaken as directors or de facto directors of the club with respect to breaches of duties are background for the oppression claim. The plaintiff contends that the conduct needs to be set out as it is relevant to the issues in dispute.

96 I am not satisfied that it is conflicting to allege that the sixth and seventh defendants are not validly appointed directors but are de facto directors. The plaintiff's allegation that the sixth and seventh defendants are de facto directors follow from his allegation that they are not validly appointed as directors. Therefore, while they may owe director's duties as de facto directors, they are not validly appointed directors for quorum purposes.

97 In Australian Securities and Investments Commission v King,[50] in the context of the definition of an 'officer of a corporation' set out in the Corporations Act 2001 (Cth), the High Court held that the definition includes an individual who does not formally hold that position but who acts in that capacity. Kiefel CJ, Gageler and Keane JJ referred to Grimaldi v Chameleon Mining NL (No 2)[51] and Corporate Affairs Commission v Drysdale,[52] in which the latter case concerned the definition of a 'director'. Their Honours observed that:

In Grimaldi, the Full Court of the Federal Court discussed para (b) of the definition of 'officer' in s 9 of the Act in the light of the High Court's decision in Corporate Affairs Commission v Drysdale. The High Court had concluded that de facto directors were directors for the purposes of s 5 of the Companies Act 1961 (NSW). In this regard, the Full Court in Grimaldi observed:

In reaching this conclusion, it is apparent that the concept of an office was integral to the judges reasoning. A de facto director was a person who did not have, or no longer had, lawful authority so to do, but who nonetheless occupied the office of director and discharged the duties attaching to that office.

As the Full Court in Grimaldi observed, the High Court in Drysdale rejected an argument that an individual who did not hold office as a lawfully appointed director could not be prosecuted for breach of duties imposed by the Companies Act upon a 'director'. The High Court held that a person who acted as a director of a company was subject to the duties so imposed. In Drysdale, Mason J drew a distinction between holding an office and occupying an office; the latter refers to an individual who conducts himself or herself in the affairs of a corporation by exercising powers proper to an office even though he or she is not the lawful holder of that office. In Drysdale, the powers actually exercised were proper to a director of the corporation. Hence, the conclusion that the respondent was a 'director'.[53]

98 Accordingly, a de facto director would be liable for a breach of duties notwithstanding that they were not validly appointed. I therefore find that the allegation that the sixth and seventh defendants were de facto directors is not incompatible with the allegation that the sixth and seventh defendants were not validly appointed.

99 The seventh defendant contends that the pleading is ambiguous as to whether the directors other than the sixth and seventh defendants were validly appointed. The seventh defendant contends that paragraphs 48 and 52 of the proposed FASOC allege that they were validly appointed, but paragraph 70 of the proposed FASOC alleges that they were not. The plaintiff contends that this matter was not raised by the second to fifth defendants so it is inappropriate for the seventh defendant to raise it on a pleadings application. Given that a statement of claim needs to be clear not only for the defendants but also for the Court,[54] I cannot accept the plaintiff's submission.

100 Paragraph 48 of the proposed FASOC alleges that the board of directors of the club included Messrs Draper, Warren, Wise and Knipe for the year ended 30 June 2016 and part of the year ended 30 June 2017, and paragraph 52 alleges that they were elected directors from 30 November 2016. However, paragraphs 70 and 71 allege that they were not registered with the Victorian Commission for Gambling and Liquor Regulation ('VCGLR') until 23 December 2016 or approved by the VCGLR until 15 February 2017 and accordingly were not eligible to be directors until 15 February 2017 under the club's rules. I am satisfied that it is arguable that registration with, or approval by, the VCGLR is not required for a person to be validly appointed as a director. Under r 3.11.4.5 of the club's rules, as summarised in Schedule C of the proposed FASOC, if nominees do not exceed the number of vacancies, the nominated candidates are declared as elected at the Annual General Meeting. There is no mention of the requirement to gain prior approval from the VCGLR. While it will be a contravention of s 10.4A.7(1) of the Gambling Regulation Act 2003 (Vic) if no prior approval of the VCGLR is obtained, it may not render the appointment of the director invalid. I am therefore not satisfied that there is ambiguity in these allegations of the plaintiff. However, I note that in paragraph 71, the plaintiff alleges that the second to seventh defendants could not be directors until 15 February 2017 under the rules of the club, but no specific rule was particularised. The plaintiff must do so. Further, the plaintiff has not tied the allegations with respect to the approval of the VCGLR into his claims for setting aside the Impugned Agreements or of oppression.

Seventh defendant's conflict of interest as a solicitor

101 Claims against the seventh defendant with respect to his conflict of interest as a solicitor are referred to in paragraphs 30, 46 and 113 of the proposed FASOC. However, the seventh defendant contends that this alleged conflict of interest does not lead to any relief sought. The plaintiff contends that these paragraphs are part of the factual matrix that supports the plaintiff's claim for declaratory relief in that the seventh defendant has breached his duty as a director of the club. However, the plaintiff has not sought that declaratory relief in the proposed FASOC and had removed such declaratory relief from previous versions of the statement of claim. Such declaratory relief sought for breach of director's duties is not maintainable in light of the concession by counsel for the plaintiff that the plaintiff cannot separately sue for breach of director's duties.

102 Further, I note that the allegations against the seventh defendant in his capacity as a solicitor are irrelevant when it is his capacity as a de facto director of the club that is relevant. Therefore, paragraphs 30, 46 and 113 must be repleaded to the extent that the allegations relate to the seventh defendant's capacity as a solicitor. The reference in paragraph 114 of the proposed FASOC to the seventh defendant in his capacity as a solicitor must be excised.

103 In paragraph 9(c) of the proposed FASOC, the plaintiff alleges in their written submissions that the seventh defendant had issued units in the 528 Main Trust. However, the seventh defendant contends that he was not a unit holder in the trust. The plaintiff contends that he has asked for the register of the unit holders of the 528 Main Trust to be provided and that the seventh defendant's denial of being a unit holder confirms the necessity of that register being provided. If this is still an issue between the parties, given that the pleadings must have a proper basis on the factual and legal material available to the plaintiff at the time of making the claim,[55] the plaintiff cannot make allegations that are mere speculation. Paragraph 9(c) must be excised.

104 Paragraph 18 of the proposed FASOC relates to the legal advice obtained by the club with respect to the option to purchase. The seventh defendant contends that it is unclear how the allegation is relevant. The plaintiff contends that the paragraph is relevant background to the plaintiff's claims of oppression and of setting aside the Impugned Agreements, and that it relates to material facts which go to the seventh defendant's breaches of the Act, with reference to paragraph 91 of the proposed FASOC.

105 I find that the paragraph is relevant background to the plaintiff's claim for oppression and of setting aside the Impugned Agreements because it provides context to the allegation that the club unlawfully purported to on-sell the property. The purported on-sale is alleged to be contrary to the advice received.

106 Paragraphs 31 to 33 of the proposed FASOC fall under the heading 'Mazzeo legal duties as a solicitor' and refers to advice obtained from Mr Heale with respect to cl 46N of the lease. The seventh defendant contends that this allegation appears to be that Mr Heale's legal advice was obtained but was not followed. The seventh defendant contends that it is not relevant and questioned whether the parties are expected to argue about the correctness of the advice. The plaintiff contends that these allegations are relevant to the plaintiff's claims of oppression and of setting aside the Impugned Agreements, and are material facts with respect to breaches of the Act by the seventh defendant, with reference to paragraph 91 of the proposed FASOC.

107 Like with paragraph 18 of the proposed FASOC, I find that paragraphs 31 to 33 provide context to the plaintiff's claims of oppression and of setting aside the Impugned Agreements because they relate to the club's purported on-sale of the property. Therefore, the paragraphs are relevant.

108 The sixth defendant contends that paragraphs 35 to 38 of the proposed FASOC are unclear as to whether the pleadings with respect to the Said Confidentiality Agreement can be framed as to support the oppression claim. The sixth defendant contends that the plaintiff does not specify the parties to the agreement or that he was a party to the agreement. However, I note that it does not matter whether the plaintiff is a party to the agreement, but that it is whether the club is a party. The sixth defendant contends that an oppression claim can only be brought against the incorporated association, not a director, and that s 68(4)(c) would not apply because it would not make sense for the Court to make an order restraining Mr Said's conduct when the oppression claim is against the club. If the club wants to allege that Mr Said breached the Said Confidentiality Agreement, it would have standing to bring the claim. However, the plaintiff contends that this allegation is relevant background to his claim of setting aside the Impugned Agreements and to his claim for damages or statutory compensation under s 36 of the Act.

109 I find that the parties to the Said Confidentiality Agreement are specified in paragraph 35 given that the plaintiff alleges that 'Said on behalf of himself and AFG gave a confidentiality undertaking to [the club]'. The parties alleged are therefore Mr Said and the club. However, I do not find it clear as to whether the Said Confidentiality Agreement and the alleged breaches are part of the plaintiff's claim to set aside the Impugned Agreements or his claim of oppression against the club. The allegations of breach in paragraph 38 are allegations against the sixth defendant. The allegations do not refer to setting aside the Impugned Agreements or claiming oppression by the club. Therefore, paragraphs 35 to 38 must be excised.

110 The sixth defendant contends that paragraph 41 of the proposed FASOC is embarrassing because it is unclear who the reference to 'potential investors' were and in whose capacity Messrs Draper, Warren and Wise acted, which is reinforced by paragraph 139 of the proposed FASOC. However, this submission cannot be accepted. The plaintiff has specified in paragraph 41 that the potential investors are the unit holders of the 528 Main Trust and that Messrs Draper, Warren and Wise acted on behalf of the club. Further, in paragraph 139, the allegation that Messrs Draper, Warren and Wise acted in breach of the rules and the Act does not necessarily contradict the allegation in paragraph 41 that they acted on behalf of the club. It can be their act on behalf of the club which is alleged to be a breach.[56]

111 The sixth defendant also contends that the particulars of the alleged oral component of the Confidential Acquisition Partnership in paragraph 41 of the proposed FASOC are inadequate as it did not specify when Mr Wise made the recommendation, how and to whom. I accept this submission and find that such particulars are required to enable the defendants to understand the case that must be met.

112 Further, the sixth defendant contends that the plaintiff ought to specify that the Confidential Acquisition Partnership is a partnership rather than an 'agreement, arrangement or understanding' as pleaded in paragraph 41 of the proposed FASOC. While the plaintiff contends that the sixth defendant himself had described the arrangement as a partnership, for clarity, I find that the words 'agreement, arrangement or understanding' can simply be excised from paragraph 41.

113 With respect to paragraph 43 of the proposed FASOC regarding the additional express terms of the Confidential Acquisition Partnership, the sixth defendant contends that particulars are required for sub-paragraphs (a) to (d) and (f). I accept this submission given that the plaintiff has not specified whether each term is written or oral, particularly as the particulars in paragraph 41 of the proposed FASOC state that the Confidential Acquisition Partnership was partly written, partly oral and partly to be implied. Paragraph 43 must be repleaded.

114 In paragraph 45 of the proposed FASOC, the plaintiff alleges that the sixth and seventh defendants caused a feasibility study to be undertaken for the development of the property and sought advice as to the development for their own benefit and for the benefit of the investors in the 528 Main Trust. The seventh defendant contends that the relevance of this allegation is unclear and leads nowhere. The plaintiff contends that this allegation is relevant to establishing the circumstances of oppression or the entry into the Impugned Agreements.

115 I am not satisfied that paragraph 45 relates to the plaintiff's claim of oppression or of setting aside the Impugned Agreements. The allegation is not claimed to be with respect to the conduct of the club for the claim of oppression, and it is unclear as to how it is relevant to setting aside the Impugned Agreements. Paragraph 45 must be excised. Further, while the paragraph is referenced in paragraphs 137 and 138 of the proposed FASOC with respect to the sixth defendant's and seventh defendant's breaches, respectively, as discussed in paragraph 184 hereof, it is unclear how the alleged breaches relate to oppression by the club.

116 The sixth defendant contends that paragraph 52 of the proposed FASOC with respect to director's duties is embarrassing because it is vague and it is not the defendants' obligation to try to connect the particulars to each of the sub-paragraphs. The seventh defendant also contends that the pleadings in paragraph 52 are unclear as to why individual directors owed a duty to the club to ensure that it complies with a legislation. As it is important for the defendants to be able to meet the case against them, particulars must be provided for each subparagraph and there must be reference to the specific duty and alleged breach. Paragraph 52 must be repleaded.

117 Further, paragraph 52 of the proposed FASOC alleges that Messrs Said and Mazzeo are de facto directors of the club at sub-paragraphs (e) and (f). However, this is conclusionary and no material facts have been pleaded to support the allegations. Therefore, the plaintiff has to plead the material facts for this allegation.

118 Further, I refer to the observation set out in paragraph 67 hereof. Unless the plaintiff ties the duties owed and the breach thereof as referred to in paragraphs 135 to 139 of the proposed FASOC into the alleged oppressive conduct, the listing of the duties owed serves no utility at all.

119 Paragraphs 63 to 66 of the proposed FASOC relate to the allegations with respect to the forced resignation of directors, in which directors resigned as a result of being informed that they had to execute personal guarantees for the exercise of the option to purchase. I took it that both the sixth and seventh defendants contend that there was no pleaded basis for the allegation that the forced resignations were a contrivance to denude the board in paragraph 65 and therefore the allegation was scandalous and baseless. Further, the seventh defendant contends that this allegation was only under the particulars in paragraphs 65 and was not pleaded. The sixth and seventh defendants contend that paragraphs 74, 79 and 80 of the proposed FASOC repeat the allegations in paragraphs 63 to 66.

120 The plaintiff contends that the allegation is supported by the material and that this is a factual dispute between the parties which ought to be dealt with in a trial rather than in a pleading summons. The plaintiff contends that while cl 46 of the lease makes it clear that it is JBI who will be making a demand for a guarantee, JBI had not asked for that requirement to be met. Therefore, demanding the remaining directors to resign was an artificial mean to remove people from the board and was oppressive conduct.

121 Although I am satisfied that the plaintiff's claim that the forced resignations were an artifice is arguable having regard to cl 46(I) of the lease and the email from Mr Draper to Mr Stuart on 1 December 2016, for the reason set out in paragraph 122 hereof, I do not find that the allegation in the particulars that the artifice was contrived by Messrs Said and Mazzeo to denude the board is arguable.

122 The seventh defendant contends that allegations in paragraph 65 of the proposed FASOC ought to be made against the club, not against the seventh defendant, and that the reference to the seventh defendant in the particulars is unnecessary because he was not a part of the club at the time. It is not in dispute that the allegations with respect to the forced resignations are part of the oppression claim, which can only be brought against the club. The plaintiff contends that whilst the seventh defendant was not a member or director of the club at the relevant time, he was providing legal services to the club. I find that the conduct of the seventh defendant can only be part of the claim for oppression where such conduct is done on behalf of the club. Where the conduct is alleged to have occurred prior to the seventh defendant becoming a de facto director of the club, I do not find that such allegations can be part of the oppression claim against the club. Accordingly, the allegation in the particulars that the forced resignations were an artifice contrived by Mr Mazzeo to denude the board must be excised. The same is true with respect to Mr Said. The alleged forced resignations occurred on 30 November 2016, but Messrs Said and Mazzeo were alleged to have become de facto directors on 6 December 2016.

123 Further, the sixth defendant contends that paragraphs 63 and 66 of the proposed FASOC were inadequate as they did not specify all the relevant members of the board and did not specify when the directors resigned, respectively.

124 With respect to paragraph 63, the plaintiff referred to 'some members of the Board of Directors of [the club], and in particular Draper, Warren, Wise and Knipe'. Although the plaintiff had included Messrs Draper, Warren, Wise and Knipe, the plaintiff had broadly referred to 'some members' of the board. I find that allegations be must clear against whom the allegations are made to enable the defendants to meet the case. The reference to 'some members' is too vague. The plaintiff cannot refer to the members of the board generally, but must only specify the relevant members against whom the allegation is made. Therefore, the plaintiff must replead this allegation.

125 With respect to paragraph 66, the plaintiff contends that the dates of resignation are specified in paragraph 48 of the proposed FASOC and ought not to be referred to twice. In circumstances where the proposed FASOC is lengthy and where the addition of the dates is easy and would assist the defendants instead of requiring them to cross-reference to an earlier part of the proposed FASOC, the plaintiff ought to include the relevant dates of resignation in paragraph 66. Further, I note that in paragraph 66, the plaintiff referred back to paragraph 47 rather than paragraph 48.

126 Paragraphs 72 to 78 of the proposed FASOC relate to misleading and deceptive conduct. The seventh defendant contends that it appears that there are two elements to the plaintiff's misleading and deceptive claim, which are, firstly, the alleged failure to advise members that finance would be provided by a subsidiary of AFG and not AFG itself, and, secondly, the seventh defendant's alleged contrivance to denude the board of the club to have himself and the sixth defendant appointed.

127 With respect to the first element, the seventh defendant contends that the allegation does not lead anywhere because, for example, it does not allege that a different decision would have been made by the board members. I agree that the allegation does not lead anywhere as the plaintiff has not tied the allegation in paragraphs 72 and 73 of the proposed FASOC to his claim to set aside the Impugned Agreements or his oppression claim. Accordingly, these paragraphs must be repleaded.

128 With respect to the second element of the misleading and deceptive conduct allegations, the seventh defendant contends that the allegations do not make sense and are a repeat of the allegations in paragraph 65 of the proposed FASOC. I accept this submission with respect to paragraph 74 as it alleges that Mr Mazzeo had contrived to denude the board of directors, which repeats the allegations in paragraph 65 of the proposed FASOC. The allegation against the seventh defendant relates to conduct that was done prior to his becoming a de facto director of the club. Therefore, paragraph 74 must be excised. For the same reason, paragraph 75 must be excised.

129 With respect to the allegations in paragraphs 76 to 77, while I understand that the allegation is that Messrs Said and Mazzeo were aware of the failed attempt to appoint them as directors and that they did not disclose the matter, I am not satisfied that the plaintiff has adequately tied this allegation into his claims of setting aside the Impugned Agreements or of oppressive conduct. Hence, these paragraphs must be repleaded.

130 Paragraph 78 of the proposed FASOC alleges that the directors were induced to resign by reference to paragraphs 72 to 77 of the proposed FASOC and this allegation was made against the second and seventh defendants. The seventh defendant contends that paragraphs 72 and 73 do not raise any allegations against him and the allegations in paragraphs 76 and 77 postdate the date by which the directors resigned and therefore cannot have induced the resignation. I accept these submissions. The plaintiff must therefore replead paragraph 78 such that allegations are made against each defendant separately, having regard to my findings in paragraphs 127 to 129 hereof that paragraphs 72 to 77 of the proposed FASOC must be repleaded.

131 The seventh defendant contends that paragraphs 79 to 81 of the proposed FASOC relating to guarantee representations are problematic as they refer back to earlier propositions that have been identified as problematic, including the contrivance to denude. Further, the sixth defendant contends that paragraphs 79 and 80 repeat the allegations in paragraphs 63 to 66 of the proposed FASOC.

132 I find that although paragraphs 79 to 81 are couched in terms of representation, they are simply repetitions of paragraphs 63 to 66. They simply allege that the plaintiff resigned because he was informed that all directors of the club were expected to provide a guarantee for the purchase of the property. Further, paragraphs 79 to 81 have not been tied to the plaintiff's claims for oppression or of setting aside the Impugned Agreements. Hence, paragraphs 79 to 81 must be excised.

133 Paragraphs 82 and 83 of the proposed FASOC are under the heading 'Conflict of interests' and relate to the Deed of Understanding. The plaintiff contends that Messrs Draper, Warren, Wise and Knipe had no right to enter into the Deed of Understanding on behalf of the club and that by entering into the Deed of Understanding, they breached their director's duties.

134 The sixth defendant contends that, in paragraph 82, the plaintiff ought to clarify who entered into the Deed of Understanding and who are the parties. Further, although paragraph 82 claims that there was no right to enter into the Deed of Understanding, the seventh defendant contends that the basis of such a claim is not clear. I find that paragraph 82 is clear as to whom are the parties to the Deed of Understanding as paragraph 82 stated 'Deed of Understanding ... between MSC [the club] and 528 Main Street'; hence, they are the parties. Although the paragraph then states the Deed of Understanding was 'entered into by the then remaining members of the Board of Directors of MSC, alternatively the Executive of MSC, alternatively Draper, Warren, Wise, Knipe, Said and Mazzeo on behalf of MSC', I do not find that this is confusing. I find that the alternatives stated are the different capacities of Messrs Draper, Warren, Wise, Knipe, Said and Mazzeo on behalf of the club. Therefore, the plaintiff does not need to clarify this. However, the plaintiff does not set out why the parties had no right to enter into the Deed of Understanding. Paragraph 82 must be repleaded.

135 With respect to paragraph 83 of the proposed FASOC, the sixth defendant contends that the individuals named did not enter into the Deed of Understanding and that the plaintiff ought to plead the alleged breaches properly with particulars. The seventh defendant contends that the plaintiff claims that there has been a breach by the directors under the Act and the club's rules; however, the reason for the claims are unclear. I find that the allegations in paragraph 83 need to be pleaded properly with particulars for each alleged breach. However, with respect to the allegations against Messrs Draper, Warren, Wise and Knipe, I took it that counsel for the plaintiff conceded in oral submissions that the plaintiff does not know what benefit they had obtained by entering into the Deed of Understanding. While counsel for the plaintiff contends that there is a suspicion that Mr Draper received a benefit if he was a member of the trust, I find that the allegations against Messrs Draper, Warren, Wise and Knipe in paragraph 83 are mere speculation and that their names must be excised. I stress that allegations in the pleading must have a proper basis.[57] Further, the plaintiff must relate the allegations back to the claim for setting aside the Impugned Agreements or to the oppression claim given that the plaintiff cannot claim breach of director's duties on its own.

136 The sixth defendant contends that the alleged breaches in paragraph 84 of the proposed FASOC ought to be pleaded out properly with particulars. The seventh defendant essentially made the same submission. I accept this submission because the plaintiff has not particularised how each allegation in each sub-paragraph constitutes a breach and what was specifically breached. For example, in paragraph 84(a), it is difficult to conclude that an intention to join the board would constitute a breach of duty. Further, the plaintiff has not related the allegations back to the claim for setting aside the Impugned Agreements or to the oppression claim. Therefore, the plaintiff must replead this paragraph appropriately.

137 Paragraph 85 of the proposed FASOC allege that the failure to disclose the existence of the Confidential Acquisition Partnership and the matters in paragraph 84 constituted a breach of the lease. The seventh defendant contends that paragraph 85 of the proposed FASOC is plainly wrong as the failure to disclose cannot be a breach of the lease. The seventh defendant contends that the allegations in paragraph 84 are not actions of the club. I do not find it arguable that all the conduct alleged are breaches of the lease by the club given that the conduct referred to include conduct by the sixth and seventh defendants that was alleged in paragraph 84 of the proposed FASOC. Again, the plaintiff has not related the allegations back to the claim for setting aside the Impugned Agreements or to the oppression claim. Therefore, the plaintiff must replead paragraph 85.

138 Paragraphs 86 and 87 of the proposed FASOC refer to the Deed of Understanding. The seventh defendant contends there is no allegation in paragraph 86 that he entered into the agreement. The seventh defendant contends that the pleading is embarrassing because it is unclear what point is made by repeating the pleadings in paragraphs 82 and 83 of the proposed FASOC and it is unclear how the act of the club in entering into the Deed of Understanding is alleged to be the seventh defendant's act.

139 Paragraph 86 of the proposed FASOC alleges that the Deed of Understanding was executed by Messrs Draper and Warren for the club. In paragraph 87, the plaintiff alleges that despite not having a validly constituted board of directors and prior to exercising its rights under the option to purchase, Messrs Draper, Warren, Wise, Knipe, Said and Mazzeo on behalf of the club purported to sell the property when they had no right to do so. In paragraph 82 of the proposed FASOC, the plaintiff alleges that the Deed of Understanding was entered into by Messrs Draper, Warren, Wise, Knipe, Said and Mazzeo on behalf of the club when they had no right to do so.

140 I find that the allegations in paragraphs 87 and 82 are similar and it is unclear as to why the allegations are repeated and separated. Further, I find that paragraph 86 has not been pleaded consistently with paragraph 87 and also with paragraphs 82 and 83 with respect to who entered into or executed the Deed of Understanding. Accordingly, paragraphs 86 and 87 must be repleaded.

141 I also note that the plaintiff also made allegations using the word 'apparently' in paragraph 87 of the proposed FASOC and its particulars. However, the plaintiff cannot make such uncertain allegations.

142 Paragraphs 88 to 92 of the proposed FASOC relate to the Impugned Agreements. The seventh defendant contends that introductory words in paragraph 88, which was '[b]y reason of the Confidential Acquisition Partnership ...', are confusing and irrelevant, particularly as paragraph 89(a) alleges that the terms of the Impugned Agreements are materially different from the Confidential Acquisition Partnership. However, I do not find that the introductory words are confusing or irrelevant. They simply mean that the Impugned Agreements were entered into as a consequence of the Confidential Acquisition Partnership and the performance under that partnership.

143 With respect to paragraph 89(a) of the proposed FASOC, the sixth defendant contends that despite alleging that the terms of the Impugned Agreements are materially different to the Confidential Acquisition Partnership, the plaintiff has not specified which terms are materially different. The sixth defendant also contends that the terms were not specified for each sub-paragraph in paragraph 89. The seventh defendant contends that the plaintiff has not specified what the differences are between the Impugned Agreements and Confidential Acquisition Partnership.

144 With respect to paragraph 89 of the proposed FASOC, I find that the plaintiff has set out the terms of the Impugned Agreements in the particulars, but have done so for the paragraph generally instead of for each sub-paragraph. In a proceeding with complex facts such as this, the plaintiff ought to clearly set out the particulars for each sub‑paragraph individually rather than for a whole paragraph generally. This will enable the defendants to properly meet, and understand, the case against them. Paragraph 89 must be repleaded accordingly.

145 Further, the sixth defendant contends that the defendants must attempt to connect the allegations in the sub-paragraphs with other sub-paragraphs in paragraph 89 of the proposed FASOC. I find that the allegations in the sub-paragraphs, (a) to (d) and (i) to (vii), ought to be set out more clearly to ensure that sub-paragraphs (i) to (vii) support the relevant sub-paragraphs (a) to (d). This will enable the defendants to be aware of the full extent of each allegation so that they can meet the case properly instead of attempting to work out which sub-paragraph is relevant to that allegation.

146 With respect to paragraph 90 of the proposed FASOC, the sixth defendant contends that the plaintiff did not specify the terms of the Impugned Agreements and Confidential Acquisition Partnership that were unlawful and that the defendants would need to work it out themselves. The sixth defendant contends that the particulars in paragraph 90 refer to 13 paragraphs of allegations that are impermissibly rolled up. I agree with these submissions. The plaintiff has not provided sufficient particulars to support his allegations that the Impugned Agreements and Confidential Acquisition Partnership are unlawful or a breach of the Act. Further, while it is not impermissible to refer to other paragraphs in the proposed FASOC, the reference to 13 other paragraphs and a schedule in the proposed FASOC makes it difficult for the defendants to navigate the pleading and understand the case they need to meet, particularly as the paragraphs and schedule are referred to generally rather than to specific allegations.[58] Therefore, the plaintiff must replead this paragraph. The sixth defendant contends that paragraphs 91 and 92 of the proposed FASOC have the same deficiencies as in paragraph 90. For the same reasons, I agree with this submission and paragraphs 91 and 92 must be repleaded.

147 In paragraph 90, the plaintiff also alleged that Messrs Said, Durso and Mazzeo gained an advantage for themselves or their associates in misusing the confidential information; however, the alleged advantage gained was not set out in the proposed FASOC. Therefore, the advantage alleged by the plaintiff ought to be set out properly so that the defendants can meet the case.

148 Further, the seventh defendant essentially contends that it is unclear what Confidential Information the seventh defendant is alleged to have misused in paragraph 90 and how he misused the Confidential Information. 'Confidential Information' is defined in paragraph 36(a) of the proposed FASOC as 'a thumb drive of relevant [club] documents on 22 July 2016'. While counsel for the plaintiff has conceded that the plaintiff does not know what the Confidential Information specifically is, he contends that it is sufficiently clear and that this description of the Confidential Information was provided both by the sixth defendant and the club in their exchange. I am not satisfied that the description of 'Confidential Information' is clear enough in the proposed FASOC. While the Said Confidentiality Agreement is alleged to be the basis of the meaning of Confidential Information in paragraph 36(a) of the proposed FASOC, the agreement does not refer to a thumb drive. The definition in the agreement has a non-exhaustive definition which includes information relating to the club including information regarding financial records and trading position. The thumb drive was only referred to in an accompanying email. Accordingly, the definition of 'Confidential Information' in paragraph 36(a) of the proposed FASOC must be repleaded. Further, there is an inconsistency with respect to how the plaintiff alleges that the seventh defendant acquired the Confidential Information. In paragraph 38 of the proposed FASOC, the plaintiff alleged that Said had disclosed the information to the seventh defendant; however, in paragraph 90, the plaintiff alleged that he acquired the information by virtue of purporting to be a director of the club.

149 In paragraph 91 of the proposed FASOC, the plaintiff alleged that Messrs Draper, Warren, Wise, Knipe, Said and Mazzeo had not exercised their powers and discharged their duties with the requisite degree of care and diligence. However, in the particulars, the plaintiff only refers generally to other paragraphs of the proposed FASOC and does not specify the particular conduct of each of the defendants that are alleged to be breaches. Further, each paragraph referred to in the particulars does not refer to all defendants. For example, the reference to paragraph 30 is only with respect to Mr Mazzeo. By bundling the particulars for all defendants together, this makes it difficult for each of the defendants to understand the case against them. Accordingly, the plaintiff must properly set out the case against each defendant. The same is true for paragraph 92 of the proposed FASOC.

150 Paragraph 93 of the proposed FASOC is with respect to a claim of security interest in the club's gaming machines and other items of personal property lodged by 528 Main ('PPSR claim'). The sixth defendant contends that the club may bring a claim under s 271 of the Personal Property Securities Act 2009 (Cth) ('PPSA'), but the plaintiff cannot do so under s 36 of the Act as that provision must be with respect to a lack of power. Accordingly, the sixth defendant contends that the plaintiff cannot claim damages nor statutory compensation for the wrongful lodgement of the PPSR claim in paragraphs C and D of the prayer for relief against 528 Main and AFG.

151 However, the plaintiff contends that the PPSR claim is based on the Impugned Agreements which create an interest in the club's property in favour of 528 Main; therefore, if the Impugned Agreements are set aside, there is no basis for the PPSR claim. The plaintiff contends that the damages caused by the wrongful lodgement of the PPSR claim flow directly from the setting aside of the Impugned Agreements. Accordingly, the plaintiff contends that he has standing under s 36 of the Act and that he will be seeking those damages on behalf of the club.

152 I find that the plaintiff does not adequately set out this allegation with respect to the PPSR claim in paragraph 93 of the proposed FASOC as it only says that 528 Main had 'no right to do so [claim a security interest in the club's property]'. Therefore, the plaintiff must set out this claim properly. If this claim is properly set out, then the plaintiff may seek compensation on behalf of the club pursuant to s 36 of the Act with respect to the PPSR claim as a result of setting aside the Impugned Agreements. However, this must also be properly set out in paragraphs C and D of the prayer for relief against 528 Main and AFG.

153 The seventh defendant contends that the allegations with respect to the building notice referred to in paragraphs 94 to 101 of the proposed FASOC are a collateral attack on the consent orders made at VCAT and contends that they are not relevant to the claim of setting aside the Impugned Agreements under the Act, which, in paragraph 89A, refers to earlier paragraphs of the proposed FASOC. The seventh defendant also contends that the allegation regarding the building notice remained from when JBI was intended to be added as the second plaintiff and that the plaintiff has no standing to bring the allegation. Further to paragraph 154 hereof, I find that it is not clear how the allegations in paragraphs 94 to 101 are relevant to the plaintiff's claim of setting aside the Impugned Agreements as the allegations with respect to the building notice were not referred to in paragraphs 88 to 89A of the proposed FASOC in relation to setting aside the Impugned Agreements. Nor are they referred to in paragraphs 134 to 136 of the proposed FASOC. Paragraphs 94 to 101 must be excised.

154 Further, in paragraph 96 of the proposed FASOC, the plaintiff alleges that the building works carried out on the property and the non-compliance with a building notice breached the lease. However, the plaintiff contends that he does not rely on them as a breach of the lease but that they are part of the factual matrix whereby the club engaged in oppressive conduct. The plaintiff contends that the directors were advised that a breach of the building notice amounted to a breach of the lease and that the directors hid the building works from JBI because they were advised that they could not exercise the option if the lease was breached. The plaintiff contends that the second to seventh defendants have run the club in such a way that allowed the club to breach its lease, which led to the club being in a position where it was unable to validly exercise the option, and therefore oppressed the members' interests. The plaintiff also contends that this is relevant to the question as to whether the transaction was entered into for the best interests of the club and for a proper purpose. However, in my view, it is not apparent from the proposed FASOC as to how a breach of the building notice relates to a conflict of interest and oppressive conduct. If the plaintiff intends that it is part of the oppressive claim, he must plead the allegations and material facts properly.

155 Paragraph 102 of the proposed FASOC alleges that the second to seventh defendants purported to exercise the option on behalf of the club when they knew or ought to have known they had no right to do so. Paragraph 103 alleges that the second to seventh defendants were aware that they were not approved by the VCGLR to be a director of the club at the date of the purported exercise of the option to purchase. The seventh defendant contends that it appears that the plaintiff is alleging that the exercise of the option was wrongful because the directors were not approved by the VCGLR. The seventh defendant contends that even if a director is required to be approved by the VCGLR, it does not render the exercise of the option ineffective. The plaintiff contends that this is a matter for defence. In my view, I am unable to determine whether this allegation is arguable because the plaintiff has not set out the consequences of not being approved by the VCGLR. Further, I note that the plaintiff must make clear the relevance of paragraphs 102 and 103 to the plaintiff's claims of setting aside the Impugned Agreements or of oppression. Paragraphs 102 and 103 of the proposed FASOC must therefore be repleaded.

156 Paragraph 104 of the proposed FASOC provides a non-exhaustive list of alleged breaches of the lease between the club and JBI. The sixth defendant contends that the list ought to be exhaustive and comprehensive by use of the phrase 'were as follows', rather than using the non-exhaustive word 'included'. The sixth defendant contends that, in any event, for sub-paragraphs (a) to (h), the plaintiff ought to specify which clauses of the lease were breached and give particulars. Further, subparagraph (a) relies upon the lack of a validly appointed board. It is difficult to garner from the FASOC how the lack would be a breach of the lease. I agree with the submissions of the sixth defendant because the pleadings must be sufficient to enable the defendants to meet the case. Therefore, the sixth defendant must specify all the breaches, which terms of the lease were breached and the particulars. This will also affect paragraph 105 of the proposed FASOC as paragraph 105 refers back to paragraph 104.

157 The sixth defendant contends that the allegation of the tort of inducement of the club to breach the lease in paragraph 105 of the proposed FASOC has not been properly pleaded out and that such a claim can only be brought by JBI, who is the other party to the lease. The seventh defendant also contends that the elements for the tort of inducing breaches were not pleaded. The sixth defendant contends that this claim was in the previous version of the pleading to which JBI contributed as the proposed second plaintiff, but that it is no longer sought. However, the plaintiff contends that the breach of the lease issues in paragraph 104 and 105 of the proposed FASOC are relevant as they are part of the background of the conduct by the directors and de facto directors and are tied in with paragraph 134 relating to oppressive conduct. The plaintiff contends that he is not making a claim for inducement to breach the lease but that it is only part of the factual matrix in the claim that the club engaged in oppressive conduct. The plaintiff contends that this is made clear by paragraph 134 of the proposed FASOC. While paragraph 134 of the proposed FASOC alleges that the allegation in paragraph 105 is oppressive conduct, it does not specify how it is oppressive conduct. Further, as the oppression claim is against the club, I do not find that it is arguable as part of the oppression claim to allege that the club had been induced by the other defendants to breach the lease. It is the conduct of the club that is relevant, not the conduct of the other defendants.[59] Therefore, paragraph 105 must be repleaded to make it clear how the conduct of the other defendants referred to in the paragraph was oppressive.

158 Paragraph 106 of the proposed FASOC alleges that Messrs Draper, Warren, Wise, Knipe, Said and Mazzeo breached s 83 of the Act by purporting to exercise the option to purchase. The sixth defendant contends that the paragraph is too vague and ought to specify what the breach of s 83 was, what advantage, what information and what associates received an advantage. I agree with this submission. The plaintiff does not specify what advantage Messrs Said and Mazzeo gained for themselves and their associates; nor does it specify whether Messrs Draper, Warren, Wise and Knipe had gained an advantage for themselves or their associates despite being mentioned in the paragraph. Accordingly, the plaintiff must specify the specific advantage gained by each defendant and their associates.

159 Purporting to exercise the option when 'they had no right to do so' is a conclusion and it cannot be determined from the paragraph what is relied upon to form that conclusion. Such a pleading is offensive.

160 Further, in paragraph 106, the plaintiff alleges that Mr Said and Mazzeo 'appear to have made improper use of information ...' As the question is whether or not Mr Said and Mazzeo have made improper use of the information, the words 'appear to' in that paragraph are not required and is to be excised. Counsel for the plaintiff had conceded this.

161 The sixth defendant contends that paragraph 107 of the proposed FASOC is too vague and that its particulars are inadequate. The sixth defendant contends that sub-paragraph 2 of the particulars with respect to the intention to sell the property at an undervalue was baseless. The sixth defendant contends that these defects are repeated in paragraph 108 of the proposed FASOC. For both paragraphs 107 and 108, I find that further particulars are required in respect of the sale of the property at an undervalue. This is so that the defendants can understand the case against them. Further, an exhaustive list in the particulars must be provided rather than the use of the word 'include'. In some ways, the sale at undervalue is the major complaint by the plaintiff. However, apart from alleging a range of values in paragraphs 89(d)(iii) and (iv) of the proposed FASOC, there is scant detail to support the allegation. I emphasise that the defendants are entitled to know the case against them to enable the proper pleading of a defence. Further, the sale at undervalue ought to be pleaded rather than just forming part of the particulars so that the defendants can meet the allegation. Paragraphs 107 and 108 must be repleaded.

162 The seventh defendant contends that paragraphs 112 and 113 of the proposed FASOC are irrelevant. Paragraphs 112 and 113 relate to the allegations that the seventh defendant breached his duties to the club due to his material conflict of interest as a director. Although conduct of the seventh defendant can be relevant to the plaintiff's claim of oppressive conduct by the club where the conduct of the seventh defendant is performed on behalf of the club, the plaintiff does not relate the allegations in paragraphs 112 and 113 back to the plaintiff's claim of oppression. Nor does the plaintiff relate the paragraphs to the plaintiff's claim of setting aside the Impugned Agreements. Therefore, paragraphs 112 and 113 must be repleaded.

163 The second to fifth defendants contend that the issue with respect to non-disclosure of documents and breaches of the lease, including to VCAT, referred to in paragraph 114 of the proposed FASOC, ought to be dealt with in the appeal proceeding. They contend that it would be an abuse for the issue to be dealt with twice in two different proceedings and that there is a risk of inconsistent findings.[60] Further, they contend that while the allegations are connected to the oppressive conduct claim by paragraph 134(k) in the proposed FASOC, the claim has not been properly pleaded out. However, JBI contends that the Stuart proceeding and the appeal proceeding are interlinked because the appeal proceeding is about non-disclosure in VCAT. Both the plaintiff and JBI contend that the proceedings would be heard by the same judge. JBI contends that Derham AsJ said in a hearing in December 2018 that the proceedings would be tried sequentially before the same judge. The conduct of the hearing would be a matter for the hearing judge.

164 While proceedings which constitute an abuse of process cannot be exhaustively categorised,[61] such proceedings include those which were 'instituted for an improper purpose',[62] 'seriously and unfairly burdensome, prejudicial or damaging'[63] or 'productive of serious and unjustified trouble and harassment'.[64]

165 In determining whether it is an abuse of process for one issue to be dealt with twice in two different proceedings the following principles summarised by Robson AJA in Kermani v Westpac Banking Corporation[65] are relevant:[66]

(8) The rationale underlying the principle against double jeopardy, in that an individual should not be vexed twice for the same cause, is a factor properly to be taken into account in the weighing exercise: Walton v Gardiner.[67]

(9) It is prima facie vexatious to bring two extant civil actions where one will lie: Moore v Inglis;[68] Thirteenth Corp Pty Ltd v State.[69]

(10) This prima facie rule applies whether or not the two proceedings are in separate courts or one: Branir Pty Ltd v Wallco Pastoral Co Pty Ltd.[70]

(11) The prima facie rule applies where the issues overlap or significantly overlap or there is a similarity of subject matters of the proceedings.

(12) The fact that the parties may not be identical, or the relief different, does not necessarily disentitle relief under this principle: Moore v Inglis.[71]

(13) In considering whether the rule should apply, the court should consider whether there was no reasonable justification for the second proceeding based on legitimate considerations of convenience, cost or the like: Thirteenth Corporation Pty Ltd v State.[72]

(14) The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice. Regard may be had to:

(a) the importance of the issue in and to the earlier proceeding, including whether it is an evidentiary or ultimate issue;

(b) the opportunity available and taken to fully litigate the issue;

(c) the terms and finality of the finding as to the issue;

(d) the identity between the relevant issues in the two proceedings;

(e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceeding;

(f) the extent of the oppression and unfairness to the other party if the issue was re-litigated and the impact of the re-litigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and

(g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process: Rippon v Chilcotin Pty Ltd.[73]

166 In Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd ('Break Fast v Gravity Ventures'),[74] Judd J held that it was an abuse of process for the Court to determine almost identical claims in two proceedings. In that case, the plaintiffs in both proceedings were under the effective control of one person, and the decision to commence the second proceeding was decided by the co-defendant of the defendant in the first proceeding and they instructed the same solicitors. Further, the purpose of the second proceeding was to facilitate recovery of money in the first proceeding. For these reasons and due to the risk of inconsistent judgments between the two proceedings, Judd J held that the second proceeding was an abuse of process and would bring the administration of justice into dispute if it was allowed to continue.[75]

167 In the appeal proceeding, the relevant issue is whether the club was obliged to disclose the on-sale agreement and other breaches of the lease to JBI prior to the making of the VCAT consent orders. With respect to the Stuart proceeding and the appeal proceeding, while the club is the defendant in both proceedings, the plaintiffs in each proceeding are different (Mr Stuart in Stuart proceeding and JBI in the appeal proceeding) and the cause of action and relief sought differs. However, the allegation with respect to non-disclosure at VCAT was first raised in V5 of the statement of claim in this proceeding when JBI was the proposed second plaintiff and JBI had contributed to the drafting. Although JBI is now the proposed fourteenth defendant in this proceeding, this allegation remains in the proposed FASOC.

168 In Break Fast v Gravity Ventures, Judd J rejected the plaintiff's submission that it is not an abuse of process and that it can never be an abuse of process if 'two independent parties who have their own cause of action ... bring a claim based on the same set of facts against the defendant'.[76] His Honour held that the submission was 'inconsistent with the authorities'.[77] Judd J also rejected the submission that the possibility of inconsistent judgments could only arise if the claims that had been determined were re-litigated in the other proceeding. Further, his Honour rejected the submission that an undertaking not to pursue the overlapping claims was a solution. Judd J held that such submissions could not be accepted because the abuse of process 'lies in the commencement and prosecution of [that] proceeding'.[78]

169 In paragraph 114 of the proposed FASOC, the plaintiff alleges that the club and Mr Mazzeo, in his capacity as the solicitor for the club, failed, neglected or refused to disclose or discover the Confidential Acquisition Partnership, the undisclosed breaches of the lease and any of the Impugned Agreements to JBI, VCAT or Stuart. I find that the issues raised in paragraph 114 substantially overlap with the issues raised in the appeal proceeding with respect to the club's non-disclosure of the on‑sale agreement and breaches of the lease to JBI or VCAT. Although JBI contends that the issues in this proceeding and the Stuart proceeding are interlinked, I find that there is no reasonable justification for ventilating these issues both in this proceeding and the appeal proceeding, particularly when the particulars of paragraph 114 refer to the notice of appeal and supporting affidavits in the appeal proceeding. The notice of appeal is filed by JBI, who is the appellant in the appeal proceeding but a proposed defendant in this proceeding. It would be odd should the plaintiff in this proceeding rely upon one of its defendants' documents and ventilate the issues raised by that defendant. Therefore, it is an abuse of process for the same issues to be ventilated in this proceeding.

170 Further, I agree with the second to fifth defendants' submission that paragraphs 114 and 134(k) of the proposed FASOC do not adequately set out how the non-disclosure issues constitute oppressive conduct. The plaintiff only alleges that the conduct is oppressive, and does not specify how. Accordingly, these paragraphs must be repleaded.

171 Paragraph 116 of the proposed FASOC relates to the rejection and non-disclosure of an offer of a new lease. The seventh defendant contends that the allegations in paragraph 116 were not properly pleaded with a basis because the plaintiff does not specify why the defendants could not reject the offer or why the offer had to be disclosed to the members of the club. Further, the seventh defendant contends that the plaintiff did not specify how the defendants preferred their own interests or other's interests in contravention of their duties. I agree with the seventh defendant's submissions that the plaintiff's allegations in paragraph 116 must be properly pleaded with particulars to enable the defendants to meet the case. Further, the paragraph contains a conclusion without support.

172 In paragraphs 117 to 119 of the proposed FASOC, the plaintiff alleges that he sought a copy of the Deed of Understanding and that the Deed of Understanding was only provided after this proceeding was issued. The seventh defendant contends that it is unclear how these allegations are relevant. The plaintiff contends that they necessary to establish the circumstances in which the claim of oppression is made and the circumstances of entry into the Impugned Agreements. I agree with the seventh defendant's submission. The plaintiff has not tied these allegations into his claims of oppression or of setting aside the Impugned Agreements. Therefore, these paragraphs must be excised.

173 Paragraphs 120 to 133 of the proposed FASOC relates to the Members' Information Night and the Special General Meeting. The seventh defendant contends that the Members' Information Night and Special General Meeting occurred almost two years after the Impugned Agreements were entered into and that it would be inconceivable to have the agreements set aside for oppression based on those events. The seventh defendant also questions how these events are part of the plaintiff's claim for statutory compensation. However, the plaintiff contends that they can impact upon the plaintiff's claim under s 36 to set aside the Impugned Agreements and upon the plaintiff's claim for oppressive conduct. The plaintiff contends that the allegations make it clear that the club was conducted not for the benefit of members but for the benefit of commercial interests of at least the sixth and seventh defendants. The plaintiff referred to the allegations regarding the Members' Information Night and Special General Meeting as oppressive conduct in paragraphs 134(m) and (n) of the proposed FASOC. In these circumstances, I find that it is arguable that the Members' Information Night and Special General Meeting can form part of the factual matrix for the plaintiff's claims of oppressive conduct given the allegations of non-disclosure at the Members' Information Night and of incorrect voting at the Special General Meeting. Accordingly, the pleadings can remain if properly pleaded.

174 Paragraphs 120 to 125 of the proposed FASOC refers to the Members' Information Night. The sixth defendant contends that paragraphs 122 to 125 of the proposed FASOC go nowhere because the allegations of misleading and deceptive conduct go nowhere. The sixth defendant contends that while the plaintiff alleges that the defendants owed a statutory duty not to engage in misleading and deceptive conduct in paragraph 29(e) of the proposed FASOC, there's no allegation that they had contravened any particular section of any particular legislation. The sixth defendant contends that if they are relevant to oppression, they should be cast in terms of alleged oppression and not misleading and deceptive conduct. However, in paragraphs 122 to 125, the plaintiff does not refer to misleading and deceptive conduct. The plaintiff simply refers to representations. I do not find that this is inappropriate given that the allegations are not pursued as a separate cause of action but as part of the oppression claim.

175 The sixth defendant contends that the allegations in paragraph 122 of the proposed FASOC are not specific enough and that the plaintiff ought to specify who said what and who made the power point presentation in sub-paragraph (b). The sixth defendant also contends that particulars are required for sub-paragraph (c), in which the plaintiff alleged that Mr Chris Rae, a director at the time, appeared to be acting under direction of Messrs Warren, Wise, Knipe, Said and Mazzeo. Although the exact words of a conversation are not required to be pleaded unless those words are themselves material,[79] I find that the allegations in paragraph 122 are too vague, in circumstances where the information alleged to be provided are alleged to be representations in paragraph 123. The plaintiff has not set out the specific information which are alleged to be representations and by whom the representations were made. I also find that in sub-paragraph (b), the plaintiff must specify whom Messrs Warren, Wise, Knipe, Said and Mazzeo allowed to make a power point presentation and how. In sub-paragraph (c), the plaintiff alleged that Mr Rae 'appeared to be acting under the direction of Messrs Warren, Wise, Knipe, Said and Mazzeo'. However, the use of 'appeared' is inappropriate in a pleading as allegations must be certain. Further, the plaintiff must properly set out the allegation that Mr Rae acted under the direction of Messrs Warren, Wise, Knipe, Said and Mazzeo in sub-paragraph (c). Hence, paragraph 122 must be repleaded.

176 The sixth defendant contends that paragraphs 122 and 124 of the proposed FASOC are not pleaded in a way in which it could be understood as to which representations were false and why. The sixth defendant contends that they ought to be pleaded in a conventional way that will list the representations and then the false representations. The sixth defendant contends that there is no real connection between paragraphs 122(a) to (d) and 124(a) to (c). In my view, although paragraph 124 alleges that Members' Information Night Representations were untrue, the sub‑paragraphs do not relate to how those representations were untrue. Rather sub‑paragraphs (a) and (b) relate to non-disclosure of information, which are different allegations. Further, sub‑paragraph (c) alleges that AFG and Messrs Said and Mazzeo were not acting in the best interests of the club but were only interested in making a profit for themselves and 528 Main. I do not find that sub‑paragraph (c) of paragraph 124 is relevant to the allegation that the representations were untrue. Therefore, paragraph 124 must be repleaded.

177 With respect to paragraph 129 of the proposed FASOC, which relates to conduct at the Special General Meeting, the sixth defendant contends that paragraph 129 does not make a lot of sense and should be pleaded in a way that is more clear. While I understand the general allegation in paragraph 129, I find that it is not pleaded in a precise manner but in a disjointed manner and structure. Accordingly, this paragraph must be repleaded.

178 The sixth defendant contends that paragraph 131 of the proposed FASOC is embarrassing and not necessary as it makes the same point about representations. However, as paragraph 131 alleges that the conduct in paragraph 129 amounted to a representation, I consider that it is necessary and can remain in the pleading. I also note that the plaintiff incorrectly referred to paragraphs 139 and 140 of the proposed FASOC in paragraph 131 when the correct paragraphs relating to conduct at the Special General Meeting are paragraphs 129 and 130. Paragraph 131 must be repleaded.

179 Paragraph 134 of the proposed FASOC alleges that various conduct are oppressive conduct and refers to other paragraphs in the proposed FASOC. The seventh defendant contends that the plaintiff's oppression claim can only be brought against the club; however, in paragraph 134, the plaintiff's pleadings with respect to the oppression claim make unnecessary allegations against the seventh defendant because the allegations ought to be directed to the club and its behaviour, not the seventh defendant's behaviour. The seventh defendant contends that the oppression claim is so vague and ill-focused that he cannot understand what he needs to respond to and that certain allegations occurred when he was not a member nor a director of the club at the relevant time. Further, the seventh defendant contends that the plaintiff claims that conduct listed in paragraph 134 are oppressive and therefore void, invalid and of no effect; however, a number of the conduct, such as the lack of transparency listed in sub-paragraph (b), cannot be void, invalid and of no effect.

180 JBI contends that the matters pleaded in paragraph 134 and in the paragraphs referred to in that paragraph are arguably oppressive conduct. JBI contends that arguability is the test for an application for leave to amend and that the Court is not required to assess the evidence. JBI contends that the material demonstrates that there is an arguable case.

181 In my view, paragraph 134 only alleges that certain conduct is oppressive conduct; however, it does not adequately set out those allegations and there are no material facts that support the allegations that the conduct is oppressive. As contended by the seventh defendant, the claim for oppression is against the club and allegations of oppressive conduct must be directed against the club.[80] This must be made clear in the pleading. Accordingly, I find that paragraph 134 must be repleaded.

182 The seventh defendant contends that paragraph 135 of the proposed FASOC, with respect to breaches by the club, is incomprehensible and does not set out the circumstances, paragraphs and specific allegations against the seventh defendant clearly. The seventh defendant also contends that a breach of the lease does not give rise to relief in the plaintiff under the Act. The plaintiff contends that it is clear that the allegations in paragraph 135 relate to the club and not the seventh defendant. I agree with the plaintiff's submission that the allegations in paragraph 135 relate to the club, and not the other defendants because the paragraph refers to breaches of the club, including through the conduct of the second to seventh defendants. However, I find that paragraph 135 does not plead out how the statutory provisions or the terms of the lease were contravened or breached and by which particular conduct, but that it bundled all the conduct together to claim that there was contravention or breach. Paragraph 135 must be repleaded. Further, the plaintiff does not tie the breaches of the lease to oppressive conduct in paragraph 134. The plaintiff alleges that the oppressive conduct was a breach of the lease and that the breach of the lease is a factor upon which the Impugned Agreements ought to be set aside by virtue of paragraphs 135 and 136 of the proposed FASOC. However, the plaintiff has not set out why the Impugned Agreements ought to be set aside due to a breach of the lease.

183 Paragraphs 137 to 140 of the proposed FASOC relate to breaches of Messrs Said, Mazzeo, Draper, Warren, Wise, Knipe and AFG and paragraphs 137 to 140 refer back to many previous paragraphs in the proposed FASOC. The sixth defendant contends that it is unreasonable to expect for the defendants to plead to such paragraphs. With respect to paragraph 137, the sixth defendant would need to go through 96 paragraphs of allegations and connect parts to the sub-paragraphs at paragraph 137. The sixth defendant contends that they ought to be pleaded in the conventional way of setting out the breaches with particulars. The seventh defendant makes the same submission with respect to paragraph 138 of the proposed FASOC. While it is not impermissible to refer to other paragraphs in the proposed FASOC, in paragraphs 137 and 138, the plaintiff has not made it clear which paragraphs, and which allegations thereof, relate to which breaches in the sub-paragraphs. Accordingly, these paragraphs are confusing and need to be repleaded.

184 Further, the plaintiff contends that paragraph 137 of the proposed FASOC with respect to the breaches by the sixth defendant is part of the oppression claim. However, I am not satisfied that paragraph 137 sets out clearly that it is part of the oppression claim. All that paragraph 137 does is list out the allegations of breach by the sixth defendant without reference to oppression. I took it that the plaintiff contends that paragraph 144 of the proposed FASOC makes it more clear that the breaches are part of the oppression claim; however, I am not satisfied that it does. Paragraph 144 refers to allegations of loss and damage suffered by the club rather than oppression. While paragraph 134 of the proposed FASOC lists instances of oppressive conduct, it does not refer to paragraph 137 or breaches by the sixth defendant. Accordingly, how the allegations against the sixth defendant are part of the oppression claim must be pleaded properly to enable him to meet the case, particularly as allegations of oppression must be made against the club, and not the other defendants. The same is true for paragraph 138 of the proposed FASOC with respect to the allegations against the seventh defendant and for paragraph 139 with respect to the allegations against the second to fifth defendants.

185 With respect to paragraph 139 of the proposed FASOC, the allegations are made against all of Messrs Draper, Warren, Wise and Knipe together rather than separately even though certain paragraphs referred to in paragraph 139 do not refer to all those defendants. Hence, the plaintiff must replead the allegations against Messrs Draper, Warren, Wise and Knipe such that the allegations are pleaded appropriately against each defendant to enable the defendants to meet the case.

186 I previously referred to the relevance of the AFG duties. The breaches referred to in paragraph 140 of the proposed FASOC cannot be relied upon by the plaintiff. This paragraph must be excised.

187 Paragraph 141 of the proposed FASOC relates to the undisclosed breaches of the lease. The sixth defendant contends that paragraph 141 is defective because it refers back to 119 paragraphs of allegations to claim breach and requires the defendants to try to connect the alleged breaches of stated clauses of the lease to each sub-paragraph, which is unfair and unreasonable. I agree with this submission. The plaintiff has not specified which paragraphs of the proposed FASOC relate to which breach of the lease and how the lease was breached. Further, the reference to all of paragraphs 22 to 140 of the proposed FASOC includes narrative paragraphs, such as paragraph 48 relating to changes to the board of the club, and this has not been justified. Paragraph 141 must be repleaded.

188 The seventh defendant contends that the plaintiff has no standing with respect to the claims of undisclosed breaches of the lease at paragraph 141 of the proposed FASOC. As the plaintiff contends that he only seeks to make the claims of setting aside the Impugned Agreement and of oppression in this proceeding, in my view, the plaintiff is not seeking to make a separate claim of breach of the lease. However, the plaintiff has not adequately tied these allegations to his claims of setting aside the Impugned Agreements or of oppression.

189 Paragraph 143(a) of the proposed FASOC alleges parties who are necessary defendants to the proceeding. The sixth defendant contends that paragraph 143(a) is wrong because it refers to JBI; however, JBI is not a party to the relevant agreements and there is no pleaded claim against JBI. The plaintiff contends that JBI is a necessary party under s 36 because it is a relevant party to some of the Impugned Agreements. For JBI to be joined as a necessary party under s 36 of the Act, the plaintiff must make it clear in the pleading which agreement includes JBI as a party. In paragraph 143(a), the plaintiff refers to the Deed of Understanding, Supplementary Deed, Second Supplementary Deed, an undated Loan Agreement and an undated General Security Agreement. However, JBI is not a party to any of those agreements. Further, I note that while the paragraph 143(a) refers to an undated Loan Agreement and undated General Security Agreement, in paragraph 88 of the proposed FASOC, those documents are not undated but the Fourth Supplementary Deed and Reimbursement Deed are undated. The plaintiff must replead paragraph 143(a).

190 I have found that paragraph 144 must be repleaded as the compensation claimable pursuant to s 36 of the Act arises from setting aside the Impugned Agreements and not otherwise.[81] Notwithstanding that determination, the sixth defendant also contends that the loss and damages as set out in paragraph 144 of the proposed FASOC is 'a bit of a nightmare' as it requires the defendants to go through 26 paragraphs of allegations, which themselves refer back to other allegations. While the sixth defendant contends that the conventional way is to plead out the breaches, causation, 'counterfactual' and damages in connection with each individual breach, there is no reason as to why damages cannot be sought for all breaches combined. I do not need to deal with that submission.

191 More generally, the proposed FASOC contains numerous paragraphs that refer to other paragraphs, often multiple paragraphs, of the pleadings. However, I find that there are many occasions where the incorrect paragraphs have been referenced, or where the paragraphs referenced do not support the particular allegation. I emphasise that it is incumbent upon the plaintiff to ensure that when other paragraphs are referenced, such paragraphs must be referenced appropriately.

192 Further, where the factual matrix is complex, such as in this proceeding, the plaintiff must be careful in the use of cross-references such that they do not render the pleadings unintelligible or place an impermissible burden on the defendants and the Court in navigating the pleading and in understanding the case alleged. In such circumstances, it is vital that the pleadings are set out in a coherent manner to enable the defendants to understand the case they need to meet and to enable the issues to be defined for determination.

193 Overall, I find that the proposed FASOC contains many features that are problematic. The proposed FASOC is embarrassing for the following reasons:

(a) the proposed FASOC contains allegations that are not properly set out to support the plaintiff's claims of setting aside the Impugned Agreements or of oppressive conduct by the club;

(b) the proposed FASOC contains allegations that are irrelevant to the claims by the plaintiff;

(c) the proposed FASOC contains allegations that have not been sufficiently particularised;

(d) the proposed FASOC is so lengthy and complicated with many paragraphs containing unspecific references to other paragraphs in the pleadings, making it difficult to navigate, understand and discern the allegations and claims made, particular where such references are incorrect or do not support the particular allegation; and

(e) that all of the above do not enable the defendants to properly meet the case against them.

194 In Hazell-Wright v 32 Domain Pty Ltd ('Hazell-Wright v 32 Domain'),[82] the Court of Appeal said as follows:

The proposed amended defence and counterclaim comprises 28 closely-typed pages. It clearly contains allegations which are evidence or, at best, particulars. On the other hand, it fails to plead material facts which are necessary elements of the alleged estoppels and abuse of process - or only refers to those essential elements in particulars. On the crucial issues, there is wholesale cross-referencing to earlier 'pleadings' in a manner which requires the reader to make a list of the facts which are said to give rise to each of the estoppels and the abuse of process.

Although there are only six main paragraphs in the proposed pleading, paragraph [2] contains 21 sub-paragraphs (some with particulars), including particulars referring generally to affidavits of Mr Wright in the Family Court - without specifying which paragraphs or the effect of the evidence contained in them - and paragraph [3] contains 40 sub-paragraphs, some with like particulars.

The critical estoppel allegations are contained in paragraph [4(d)], which alleges that all of the estoppels arise by reason of the applicant and her children residing in the apartment during the relevant period and by reason of the 30 sub-paragraphs above. The particulars to paragraph [4(d)] comprise three pages of single-space typing - apparently designed to take the place of pleading the material facts supporting each essential element of the three estoppels. In these circumstances, we agree with the primary judge that paragraph [4(d)] of the proposed amended defence is embarrassing. We note further that a pleading in that form is likely to cause real difficulty at trial. It is no answer to say that, at trial, the trial judge is likely to order a statement of issues be agreed between the parties or settled by the court.[83]

195 For the reasons set out in the summary set out in paragraph 193 hereof, the proposed FASOC is not capable of remediation and is embarrassing and is likely to cause real difficulty at trial as noted by the Court of Appeal in Hazell-Wright v 32 Domain.

196 The plaintiff has standing to claim under ss 35, 36, 67 and 68 of the Act, including a claim for compensation on behalf of the club for loss and damage suffered as a result of setting aside the relevant contract under s 36. The plaintiff can also allege breach of director's duties as part of his claim for oppressive conduct by the club, including with respect to the sixth and seventh defendants as de facto directors who have not been validly appointed.

197 However, as I have set out, I find that the proposed FASOC is embarrassing and I will not grant leave for the plaintiff to file the proposed FASOC.

198 On 12 November 2020, Kennedy J ordered that the plaintiff provide security for costs in this proceeding. The security was not paid as required with the ensuing result being that this proceeding is stayed. But for orders made by Kennedy J on 12 November 2020, I would have ordered that the plaintiff is to provide a proposed fourth further amended statement of claim. Given that the proposed FASOC contains numerous problematic features that relate to a large part of the pleadings and which are intertwined with the rest of the pleadings, the proposed fourth further amended statement of claim would have been required to be completely redrafted, having regard to my findings in this ruling.

199 But for the orders made by Kennedy J on 12 November 2020, the joinder application and the applications to strike out the amended statement of claim filed on 17 June 2019, or part thereof, would have been adjourned until after the proposed fourth further amended statement of claim has been provided.

200 The plaintiff pay the costs of the application seeking leave to file the proposed FASOC, including costs of the hearing on 19 November 2019 insofar as the hearing relate to seeking leave to file the proposed further amended statement of claim, on a standard basis. Otherwise the costs of the summonses, including the costs referred to in paragraph 5 of the orders made on 19 November 2019, are reserved.

John Barr Investments Pty Ltd v Mordialloc Sporting Club Incorporated

201 In the appeal proceeding, John Barr Investments Pty Ltd ('JBI'), the appellant, seeks an extension of time to apply for leave to appeal orders made by consent in VCAT on 18 December 2017, and JBI seeks leave to appeal those same orders. This proceeding is made pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act'), and the notice of appeal was filed on 7 September 2018. The grounds of appeal are now articulated in the second further amended notice of appeal filed on 1 October 2019 pursuant to the orders made by Derham AsJ on 26 September 2019. The respondent in the appeal proceeding is Mordialloc Sporting Club Incorporated ('club').

202 On 17 October 2019, 528 Main Street Mordialloc Pty Ltd ('528 Main') and Aus Finance Group Pty Ltd ('AFG') filed an application seeking from JBI the costs of and incidental to their compliance with the subpoenas issued at the request of JBI to 528 Main on 6 December 2018 and to AFG on 4 February 2019, fixed in the sum of $70,679.25, pursuant to r 42.11 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules').

203 On 28 November 2019, 528 Main as trustee for the 528 Main Street Mordialloc Unit Trust ('Main Street Trust') filed an application for it to be added as the second respondent in this proceeding pursuant to r 9.06(b) of the Rules. Alternatively, 528 Main seeks leave to intervene in this proceeding.

204 In this ruling, I will deal with the joinder application before the costs application.

205 528 Main seeks to be joined as a second respondent, or alternatively, seeks leave to intervene. 528 Main's application is supported by an affidavit of Mr Kevin Said sworn on 28 November 2019.

206 JBI and the club oppose 528 Main's joinder application.

207 This application was first heard on 10 December 2019 before me. At the hearing, I ordered 528 Main to file and serve points of claim setting out its interest claimed in this proceeding and I ordered JBI and the club to file and serve points of defence in response. The joinder application was adjourned to 24 February 2020, when it was subsequently heard before me.

208 JBI is the registered owner of the Mordialloc property ('property'), the property which is the subject of this proceeding. The club is the tenant of the property pursuant to a lease until 9 April 2017, and thereafter pursuant to an overholding. Under the lease, the club had an option to purchase the property pursuant to cl 46.

209 On 16 January 2017, the club's then solicitors, BSP Lawyers ('BSP'), gave a Notice of Exercise of Option to Purchase dated that day to JBI's solicitor, Ms Elizabeth Edwards. On 31 January 2017, Mr David Barr, of the appellant, received a second Notice of Exercise of Option to Purchase dated that day from BSP.

210 Prior to the provision of the notices of exercise of option to purchase to JBI and its solicitor, on or about 22 December 2016, the club entered into a deed with 528 Main ('On-Sale Deed'). Under the On-Sale Deed, the club would exercise its option to purchase the property from JBI and the club would on-sell the property to 528 Main, unless JBI agreed to sell the property directly to 528 Main. 528 Main would then lease the property to the club. I note that in the Stuart proceeding the On-Sale Deed was generally referred to as the Deed of Understanding.

211 Between about 13 January 2017 and about 19 December 2018, the club and 528 Main entered into further agreements ('Related Agreements'), including a Reimbursement Deed dated 19 December 2018. I took it that the On-Sale Deed and the Related Agreements are referred to as the 'On-Sale Agreement'. However, I note that there is no consistency in the terms used.

212 On 12 April 2017, the club commenced a proceeding against JBI in VCAT, seeking a declaration that it had validly exercised the option. On 18 December 2017, VCAT made orders by consent that the club had validly exercised the option. These orders are the subject of this proceeding.

213 On 7 December 2018, the club commenced another proceeding in VCAT against JBI ('second VCAT proceeding'). The club sought a mandatory injunction requiring JBI to provide a contract of sale in accordance with cl 46 of the lease. On 19 August 2019, VCAT ordered that the proceeding is struck out with a right to apply for reinstatement because there was no response to the administrative mention on 2 August 2019.

214 On 22 March 2019, at an annual general meeting of the club, there was a change in the composition of the club's board of directors and Mr Braden Williams was elected as chairman of the club.

215 528 Main filed its points of claim on 3 February 2020, which set out as follows:

Since about 22 March 2019, as a result of the change in the board of the Club, the Club has:

(a) provided no opposition to the Landlord [JBI] in this proceeding;

(b) aligned itself with the Landlord; and

(c) failed to comply with its obligations to 528 Main under the On-Sale Deed and the Related Agreements.

...

Given that Braden Williams remains as Chairman of the Club, it is likely that:

(a) the Club will continue to provide no opposition to the Landlord in this proceeding;

(b) the Club will continue to align itself with the Landlord; and

(c) the Club will continue to fail to comply with its obligations to 528 Main under the On-Sale Deed and the Related Agreements.

...

528 Main has a direct interest in this proceeding because, if the Landlord's application/appeal succeeds:

(a) 528 Main may lose the ability to purchase the Property pursuant to the On-Sale Deed; and

(b) 528 Main may suffer significant losses.

528 Main is:

(a) a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; and/or

(b) a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;

pursuant to rule 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2015.

The orders sought by the Landlord in this proceeding would directly affect the rights or liabilities of 528 Main.

528 Main should be added as a party to this proceeding because it is a party to the On-Sale Deed and the Related Agreements (that the Landlord is seeking to impugn) and its interests are liable to be affected by this proceeding.

In the alternative, 528 Main seeks leave to intervene.

...

Leave to intervene should be granted because:

(a) 528 Main's interests would be affected directly by a decision in this proceeding;

(b) the parties to this proceeding may not present fully the submissions on a particular issue, being submissions which the Court should have to assist it to reach a correct determination;

(c) 528 Main's contribution will be useful and different from the contribution of the parties, and the intervention will not unreasonably interfere with the conduct of the proceeding; and

(d) 528 Main would provide an appropriate contradictor to the position of the Landlord and the Club.

528 Main intends to take the position, and maintain the submissions, previously relied on by the Club in Submissions dated 18 October 2018 and 5 February 2019 (attached to these Points of Claim). (emphasis in original)

216 JBI contends that the issues in this proceeding are confined to what occurred between JBI and the club. JBI contends that 528 Main did not participate in the VCAT proceeding but relied upon the club at that stage. JBI contends that VCAT consent orders were made based on a premise that there were no material documents that should have been discovered but that had not been discovered.

217 However, JBI contends that there was material non-disclosure of key documents at VCAT and contends that this is not disputed by 528 Main. JBI contends that Mr Thomas Read, a solicitor of BSP who were the solicitors for the club at VCAT, deposed in an affidavit sworn on 13 March 2019 that he 'formed the view that the Club should discover the On-Sale Deed, together with any further discovery, after the Landlord amended its Points of Defence and Counterclaim'.

218 JBI contends that 528 Main's interest does not relate to discoverability or disclosure in VCAT and that 528 Main is not interested in questions of non-disclosure. Instead, JBI contends that 528 Main's interest relates to its contractual interest under the On‑Sale Deed and Reimbursement Deed which is predicated upon the exercise of the option to purchase.

219 The gravamen of JBI's submissions is that 528 Main's interest ought to be ventilated and first determined in the Stuart proceeding for the following reasons:

(a) the Stuart proceeding seeks to set aside a number of agreements ('Impugned Agreements'), which include the On-Sale Deed and Reimbursement Deed;

(b) accordingly, the validity of the On-Sale Deed ought to be determined in the Stuart proceeding; and

(c) the validity of the exercise of the option to purchase is also an issue in the Stuart proceeding and will be determined in that proceeding.

220 JBI contends that after the issues are determined in the Stuart proceeding, then the outcome of this proceeding must follow the determination of the Stuart proceeding.

221 JBI contends that 528 Main ought to join the Stuart proceeding but that 528 Main opposes that joinder and instead seeks to join this proceeding. JBI contends that this is because, under the Reimbursement Deed, the club pays for its own costs and disbursements in the Stuart proceeding, but, in this proceeding, 528 Main pays for the costs and disbursements of the club. JBI contends that, now, 528 Main has claimed a breach of the Reimbursement Deed against the club.

222 JBI contends that the Reimbursement Deed gives 528 Main an entitlement to direct the club about what it should submit in the proceeding and how. If 528 Main is concerned that there is a breach of the Reimbursement Deed and that the club is not representing 528 Main's interest, JBI contends that 528 Main ought to bring an action against the club in a separate proceeding or in the Stuart proceeding. JBI contends that it cannot be said that 528 Main did not know about the Stuart proceeding, given that that is what the Reimbursement Deed was about.

223 528 Main claims that as a result of the change in the board of the club, the club has not provided opposition to JBI in this proceeding but has aligned itself with JBI and failed to comply with its obligations to 528 Main under the On-Sale Deed and Related Agreements. JBI contends that these claims are issues between 528 Main and the club and are not relevant for the determination of the appeal. JBI contends that these matters can also be properly articulated in a separate proceeding or in the Stuart proceeding.

224 Although 528 Main contends that the club has provided no opposition to JBI in this proceeding in its points of claim, JBI contends that this proceeding was effectively on hold until the legal issues are determined in the Stuart proceeding.

225 Further, JBI contends that 528 Main does not have a direct interest in this proceeding. JBI contends that 528 Main does not have a lawful right to purchase the property pursuant to the On-Sale Deed and that it does not have a permit to develop the property for its own purposes. JBI also contends that 528 Main does not have a claim against JBI and that 528 Main does not have a proprietary interest, but only a potential contractual interest against the club pursuant to the Impugned Agreements.

226 JBI contends that 528 Main's interest under the On-Sale Deed is predicated upon the exercise of the option to purchase. Therefore, JBI contends that 528 Main's claim can only come through the club and the option to purchase and that there is no direct interest. If the exercise of the option by the club is not valid, then 528 Main gets nothing. JBI contends that 528 Main's interest is not direct, but is contingent or consequential or incidental.

227 JBI also contends that 528 Main is not a necessary or proper party to this proceeding because it took no direct part in the proceeding at VCAT. Given that the appeal proceeding focuses on non-disclosure, I do not necessarily accept that the appeal must be limited to the original parties. Whether or not parties will be added to the appeal will depend on the usual principles.

228 JBI contends that the utility of the On-Sale Agreement is questionable where monies paid by 528 Main to the club as security have been repaid by 15 February 2017, before litigation and 528 Main's attempt to be joined. JBI contends that while the amount had again been paid by AFG on 15 January 2018, it was also repaid. JBI contends that the club gets nothing but the enforceability of the agreement is the supposed direct interest.

229 In 528 Main's points of claim, 528 Main contends that from around 22 December 2016 to 22 March 2019, the club and 528 Main worked together to achieve the transfer of property to 528 Main pursuant to the terms of the On-Sale Deed and Related Agreements. JBI questions why 528 Main is only bringing an application now when it had occurred since 22 December 2016. JBI contends that 528 Main seeks to expand the hearing of the administrative review into circumstances that are not appropriate, efficient or effective for the resolution of these matters.

230 JBI contends that 528 Main's application to join this proceeding or become an intervener is incongruous. JBI contends that 528 Main had the opportunity to become a party at the VCAT hearing, but had elected not to do so. Neither did 528 Main apply to join at the previous directions of the Court or when appearing as a subpoenaed party. Further, 528 did not seek JBI's consent to the joinder prior to the filing of the application by summons. JBI contends that 528 Main claimed that there was a material change at the annual general meeting on 22 March 2019; however, this application was not brought until late October 2019. Prior to 528 Main filing the points of claim, JBI contended that it suffered prejudice due to the late application because no interest was specified and no issue was articulated.

231 JBI contends that the question of costs is relevant to applications for joinder under r 9.06 of the Rules.[84] JBI contends that leave should not be granted to 528 Main to join this proceeding without securing a position in relation to costs. JBI contends that the assets of 528 Main is only a right of indemnity over trust assets and there is no document to establish that 528 Main has traded. JBI contends that the development has stagnated because there is no basis to apply for a permit without the consent of the registered proprietor, who has no contractual or other interest with 528 Main.

232 Further, JBI contends that 528 Main should not be an intervener in this proceeding because it has no lawful interest that will be affected by the proceeding and contends that the appropriate contradictor for this proceeding is the club. JBI also relies upon its submissions for joinder as a party.

233 JBI also contends that the joinder application is confined to 528 Main and not the other parties in the On-Sale Deed or Related Agreements such as AFG.

234 The club contends that 528 Main's interest is only an indirect interest which is a right to claim damages against the club. The club contends that 528 Main has not set out how the interest is direct rather than indirect or consequential. Further, the club contends that 528 Main's claimed interest only arises from the On-Sale Deed and no other documents are referred to.

Within 2 Business Days of the Developer paying all of the Security Amount required under clause 12.1(b) and this Deed ceasing to be conditional upon the Developer [528 Main] not terminating this Deed under clause 3.4, the Club shall exercise the Option to Purchase. However, if the Club is not required by this clause to exercise the Option to Purchase by 2:00 pm on 22 December 2016, the Club may delay the exercise of the Option to Purchase until 4 January 2017.

At the same time as the Club exercises the Option to Purchase (and subject to clause 4.2, 6, 7.2 and 10):

(a) the Club shall propose a price for the Freehold [property] to the Landlord [JBI] which shall be $7,130,000.00 (being an amount equal to the minimum price that the Determining Valuer is permitted to determine under clause 46H of the Current Lease) as referred to in clause 4.2;

(b) the Club shall use its best endeavours to negotiate the price and terms and conditions for the sale of the Freehold from the Landlord to the Club in accordance with the parameters set out in clauses 7.3 and 7.4 and the Club must not make any offer or accept any counter-offer without first obtaining the Developer's approval regarding the proposed price and terms and conditions for the sale of the Freehold; and

(c) the Developer shall use is [sic] best endeavours to assist the Club in the negotiations for the First Contract.

...

7.3 Price under First Contract

The Club will use its reasonable endeavours to negotiate a price as low as reasonably possible under the First Contract.

If the Landlord does not permit the nomination of another person to complete the purchase of the Freehold under the First Contract, then the Club shall on-sell the Freehold to the Developer (or its nominee) on the basis that the settlement of the on-sale of the Freehold is to occur simultaneously with the settlement of the sale of the Freehold under the First Contract.

(a) The terms and conditions of the Sub-Sale Contract shall be substantially the same as those of the First Contract save that:

...

(v) if the Landlord fails to perform its obligations under the First Contract, then the Club shall use its reasonable endeavours to require the Landlord to perform its obligations and complete the sale of the Freehold to the Club in accordance with the sale contract (including having the Club compel the specific performance of the sale contract) rather than allowing the Club to terminate the sale contract due to the default of the Landlord or accept the wrongful repudiation of the sale contract by the Landlord;

(vi) it shall not be a default by the Club if it is unable to perform (or delayed in performing) any of its obligations under the Sub-Sale Contract if the inability to or delay in performing the obligation is due either:

(I) to a default by the Landlord in performing its obligations under the First Contract; or

(II) to a cause (other than a default by the Club under the First Contract) which results in the Landlord or the Club being unable to perform or delayed in performing that party's obligations under the First Contract;

236 With respect to the On-Sale Deed, the club contends that there is a three step process that needs to occur for the property to pass to 528 Main as follows:

(a) firstly, that the option to purchase needs to be exercised pursuant to cl 4.1 of the On-Sale Deed;

(b) secondly, the club has obligations to negotiate and use its best or reasonable endeavours to achieve the lowest price possible to enter into an agreement with JBI ('first contract') pursuant to cls 7.1 and 7.3 of the On-Sale Deed; and

(c) thirdly, that the club and 528 Main enter into an agreement ('sub-sale contract') to on-sell the property and the agreement is to be in substantially the same terms as the first contract pursuant to cls 8.1 and 8.2 of the On-Sale Deed.

237 The club contends that there is no dispute that the club has exercised the option to purchase and had completed the first step; however, the issue in this proceeding is whether the exercise of the option was valid.

238 Further, the club contends that the second step has not occurred, and that the third step depends on the second step. The club contends that the obligation to on-sell, which is claimed in 528 Main's points of claim to give rise to its interests, is conditional upon the club entering into the first contract because without it, the terms of the contract with 528 Main are unknown. In cl 8.2(a)(v) of the On-Sale Deed, the club has an obligation to use reasonable endeavours to require JBI to perform its obligations under the first contract. In cl 8.2(a)(vi) of the On-Sale Deed, it is not a default by the club if it is unable to perform any of its obligations under the sub-sale contract if the inability or delay is due to either a default by JBI in performing its obligations under the first contract or due to a cause which results in JBI or the club being unable to perform its obligations under the first contract. Accordingly, the club contends that the obligations of the club under cls 8.1 and 8.2 cannot be performed until the first and second steps are taken.

239 The club contends that the obligation for the club to on-sell has not arisen and may never arise if the first contract is not entered into. The club contends that even if the first contract is entered into, the obligation to on-sell may not arise if the circumstances in cl 8.2(a)(vi) occur. The club contends that 528 Main's interest is a contingent contractual interest that only gives rise to a right to damages for breach of contract. The club contends that that interest is indirect because it is a right which will exist and be enforceable regardless of the outcome of the appeal.

240 The club contends that 528 Main's interest is fundamentally different to the interest in the cases referred to. The club contends that in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd ('John Alexander's Clubs v White City'),[85] the mortgagee, who was the party who should have been joined, had an equitable interest in the land. However, the club contends that 528 Main's position is materially different because it has a right to damages where the obligation is to perform a deed and which is qualified and has not arisen.

241 Further, the club contends that the club and 528 Main have expressly agreed that the club would have the right to conduct the appeal proceeding; therefore, the joinder application is inconsistent with that agreement. The club refers to the Reimbursement Deed and relevant clauses include:

...

(d) The Club agrees that, so long as the Developer [528 Main] continues to reimburse the Reimbursable Costs to the Club and the total of the Reimbursable Costs do not exceed the Limit, the Club will not abandon, resolve, settle, compromise, in part or in whole, the Landlord Dispute [which includes the dispute regarding the validity of the club's exercise of the option to purchase] without the prior consultant with the Developer and without the written:

(i) consent from the Developer (which consent shall not be unreasonably withheld); or

(ii) advice of the Senior Counsel for the Club that the Club does not have a reasonable prospect of success in relation to that part or parts of the Landlord Dispute which the Club wishes to abandon, resolve, settle or compromise.

(e) The Club acknowledges and agrees that the Lawyers and Counsel are to be instructed by the Club in all matters relating to the Landlord Dispute and that, subject to clause 4(d), the Club has the right to direct, conduct and conclude by way of settlement the Landlord Dispute.

...

In the event that:

...

(c) there is a change to the composition of the Board of the Club (unless the Developer accepts such change will not hinder the Club's Enforcement Efforts),

then the Developer shall have no obligation to reimburse the Club for any further legal costs, expenses or disbursements which are incurred by the Club after the occurrence of such event.

242 The club contends that in cl 4(e) of the Reimbursement Deed, 528 Main agreed that the club has the right to 'direct, conduct and conclude' this proceeding, subject to the qualification in cl 4(d). Clause 4(d) of the Reimbursement Deed states that the club has an obligation to consult with 528 Main where 528 Main continues to reimburse the reimbursable costs to the club.

243 However, the club contends that, since May 2019, 528 Main is no longer continuing to reimburse the club. The club contends that cl 6(c) of the Reimbursement Deed expressly contemplates a change in the composition of the board of the club and that if it occurs, 528 Main would have no obligation to reimburse the club for any further legal costs.

244 The club contends that, therefore, cl 4(e) is now unconditional because it is no longer qualified by cl 4(d).

245 The club contends that if 528 Main is joined, whether as a party or an intervener, it will have the right to call evidence, make submissions and cross-examine to pursue its interests in disregard of the interests of the club. The club contends that this is completely inconsistent with what was agreed in cl 4(e) of the Reimbursement Deed.

246 The club contends that the Reimbursement Deed sets out the rights and obligations of both the club and 528 Main because it requires 528 Main to provide funding in exchange for the club to meet its obligations.

247 Further, the club contends that the Stuart proceeding is an adequate vehicle to resolve any issues 528 Main wishes to raise because:

(a) a significant portion of the facts which JBI wishes to agitate with respect to grounds on which the option was ineffectively exercised are raised in the Stuart proceeding, which include failing to ensure there was a duly constituted board of directors and purporting to appoint two directors under the casual vacancy provisions;

(b) it is reasonably certain that the Stuart proceeding will be heard together with this proceeding; and

(c) it is reasonably certain that factual findings will be made in the Stuart proceeding, which would impact on this proceeding.

248 The club contends that the contractual relationship between the club and 528 Main through the On-Sale Deed and the Reimbursement Deed provides adequate protection for 528 Main's interests. The club contends that any alleged breach of the On-Sale Deed or Reimbursement Deed, which gives rise to a claim for damages, can be brought in the Stuart proceeding or a separate proceeding. The club contends that the same can be said for any allegations against the club with respect to alleged inadequacies or shortcomings in the way that the club has defended this proceeding. The club contends that it is inappropriate for 528 Main to ventilate such issues in this proceeding.

249 The club contends that it does not oppose the Stuart proceeding from being heard and determined together with this proceeding.

250 Further, the club contends that there is no utility in permitting 528 Main to become a party or in granting it leave to intervene because it wishes to raise the same points that can be raised by the club. From paragraph 23 of 528 Main's points of claim, 528 Main attach and adopt two submissions that were filed by the club earlier in this proceeding. The club contends that 528 Main has not identified any intention to make a contribution that is different to what has been advanced by the club. The club contends that if 528 Main is going to make a contribution to the conduct of the appeal, it ought to be separate and different to the ones made by the club. The club contends that if both the club and 528 Main make the same contribution, counsel for each party may want to conduct the case differently, which will put counsel for the club in a difficult position when the submissions are ought to be made by the club.

251 The club contends that 528 Main ought to wait and see what points are actually made in this proceeding and that if it has a separate and different interest, then it can make an application to make submissions at that point in time. The club contends that 528 Main will be in the Stuart proceeding and counsel for 528 Main will be aware of the factual matters raised in that proceeding.

252 528 Main contends that it should be joined as a party because the orders sought by JBI would directly affect the rights or liabilities of 528 Main.[86]

253 528 Main contends that the club is in the position where it can get specific performance for the exercise of the option, and that the club had entered into a contract with 528 Main to on-sell the property to 528 Main or nominate 528 Main as the purchaser, subject to the consent of JBI.

254 528 Main contends that it has a direct interest in this proceeding because if JBI is successful in the appeal, 528 Main may lose the ability to purchase the property pursuant to the On-Sale Deed and may suffer significant losses. 528 Main contends that it has an interest in upholding the benefit of their contract with the club, which can only be upheld if the option to purchase is valid, as declared by the VCAT consent orders. Further, 528 Main contends that JBI expressly and impliedly disputes the efficacy and enforceability of the On-Sale Deed and Related Agreements in the second further notice of appeal.

255 528 Main contends that a contractual interest is sufficient and that a proprietary interest is not needed under r 9.06(b) of the Rules for joinder or for intervention. In John Alexander's Clubs v White City,[87] the High Court held that the contractual interest entitled the party to be joined to the proceeding, which sought to impugn the source of the party's rights. Further, in Botsman v Bolitho (No 1) ('Botsman v Bolitho'),[88] the litigation funder was joined to the appeal because their interests, in recovery of commission and costs, would be affected by that appeal.

256 528 Main contends that its joinder to the Stuart proceeding would not be sufficient to protect its interests. 528 Main contends that unless it is joined as a party, it will not be able to prevent a resolution between the parties of the appeal proceeding, whereby they agree between themselves that the proprietary interest will not be passed to the club and therefore cannot pass to 528 Main. 528 Main contends that the club seems to not be prosecuting the interests for which it contracted 528 Main, which is the option to purchase and obtaining the contract of sale from JBI and enforcing them.

257 With respect to cls 4(d) and (e) of the Reimbursement Deed, 528 Main contends that while it pays the club to conduct the proceeding and while the club does it without giving up any claims, the club has the benefit of running the proceeding on its own behalf itself. 528 Main contends that it does not seek to conduct the proceeding on the club's behalf, but that it seeks to be a party to look after its own interests. 528 Main contends that that is not the club's case.

258 528 Main contends that as a result of the change in the board of the club on 22 March 2019, the club has aligned itself with JBI and has provided no opposition to JBI in this proceeding. 528 Main contends that the club has failed to comply with its obligations to 528 Main under the On-Sale Deed and Related Agreements. 528 Main contends that before the board changed, the club issued the second proceeding in VCAT for specific performance of the provision of a contract of sale from JBI; however, the proceeding was struck out with a right to reinstatement because the club did not prosecute the proceeding. 528 Main contends that at the hearing on 30 April 2019 in this proceeding, the club abandoned its objections to the subpoenas served by JBI in this proceeding without consulting 528 Main, notwithstanding the terms of the Reimbursement Deed.

259 528 Main contends that these conduct by the club of non-opposition to JBI, alignment with JBI and failure to comply with its obligations to 528 Main under the On-Sale Deed and Related Agreements would likely continue given that Mr Braden Williams remains as chairman of the club. 528 Main contends that the club would not defend this appeal such that the contractual rights under the On‑Sale Agreement are at risk of collusion between JBI and the club to defeat those interests.

260 528 Main contends that its interest is not contingent and that there was a first contract under the On-Sale Deed. 528 Main contends that the striking out of the second VCAT proceeding with respect to the application for a mandatory injunction against the landlord to sign and deliver a contract of sale to the club indicated that the terms of that contract were finalised. Further, 528 Main contends that, from the recitals on the Reimbursement Deed, the valuation of the price which was to be included in the first contract had been determined by a valuer. Therefore, the price and contract were certain because the club itself had sought to enforce it against JBI. I note that this submission is not necessarily consistent with the submission that the club did not prosecute the option to purchase and the obtaining of the contract of sale from JBI.

261 Further, 528 Main contends that it has an interest in raising general issues about the appeal under s 148 of the VCAT Act.

262 With respect to the issues in this proceeding, 528 Main seeks to raise the issues that are annexed to its points of claim. These issues are set out in two submissions of the club dated 18 October 2018 and 5 February 2019. Both submissions relate to JBI's application to extend time for leave to appeal and relate to JBI's application for leave to appeal.

263 Counsel for JBI contends that 528 Main does not dispute that there had been non-disclosure of the On-Sale Agreement in VCAT. However, 528 Main contends that it does dispute the non-disclosure because 528 Main contends that the On-Sale Agreement was not relevant and was not required to be disclosed. In his affidavit sworn on 13 March 2019, Mr Thomas Read deposed that:

Following events at the compulsory conference that I cannot disclose because they are subject to without prejudice privilege or legal professional privilege, I formed the view that the On-Sale Deed was relevant to the issue of whether the club was ready, willing and able to perform its lease with the Landlord [JBI]. I formed the view that the Club should discover the On-Sale Deed, together with any further discovery, after the Landlord amended its Points of Defence and Counterclaim.

264 As JBI did not amend its points of defence and counterclaim, 528 Main contends that the On-Sale Deed was not discoverable.

265 Counsel for JBI also contends that there is no permit for the property and therefore 528 Main does not have a direct interest in this proceeding. However, 528 Main contends that if 528 Main is entitled to the on-sale of the property, it is irrelevant as to whether or not it has a permit. I agree with this submission of 528 Main. There is no reason why a permit cannot be sought subsequently.

At any stage of a proceeding the Court may order that-

...

(b) any of the following persons be added as a party-

(i) a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; or

(ii) a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;

267 In r 1.13(1) of the Rules, a 'question' is defined as:

any question, issue or matter for determination by the Court, whether of fact or law or of fact and law, raised by the pleadings or otherwise at any stage of a proceeding by the Court, by any party or by any person not a party who has a sufficient interest ...

268 Rule 9.06(b) of the Rules is essentially in the same terms as its earlier form in the General Rules of Procedure in Civil Proceedings 1986 (Vic). In Tatterson v Wirtanen,[89] Gillard J stated that:

There is a substantial difference between para(b)(i) and subpara(ii). The first part of the paragraph is limited in its application. An applicant has to establish the additional party ought to have been joined as a party or whose presence is necessary to ensure that all questions are effectually and completely determined and adjudicated upon. The limitations on its application were discussed and recognised by the House of Lords in Vandevell's Trustees Ltd v White [1971] AC 912.

To overcome these limitations r9.06(b)(ii) was introduced into this State in 1986. It followed a similar rule in England which was introduced after Vandevell's case. See O15 r6(2)(b)(ii) of the English Rules.

In my opinion the scope of the rule has been substantially broadened by the addition of para(b)(ii).[90]

269 Although 528 Main is not a party to the proceeding at VCAT, I do not find that this will preclude 528 Main from joining this proceeding if it can be joined as a party under r 9.06(b) of the Rules.

270 I also note that the parties and 528 Main did not specify which submissions relate to joinder under r 9.06(b)(i) and which relate to joinder r 9.06(b)(ii) of the Rules. Accordingly, it falls to me to determine the relevant submissions in my analysis.

271 Rule 9.06(b)(i) of the Rules relates to 'the permissive joinder of parties at the Court's discretion'.[91] The previous iterations of this rule are, in substance, the same as the current rule.

272 In Boral Resources (Vic) Pty Ltd v Robak Engineering and Construction Pty Ltd,[92] Chernov JA discussed the object of r 9.06(b)(i) by reference to a decision of the Privy Council:

The object of subpara (i) was analysed by the Privy Council in Pegang Mining Co Ltd v Choong Sam (No 1) (1969) 2 PCC 593; [1969] 2 MLJ 52. Lord Diplock, speaking for the Privy Council, recognised, at 602, that a principal object of the rule was to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity to be heard. His Lordship said that one way of expressing the test to be applied in determining if a person should be added as defendant under subpara (i), was to ask:

Will the [other person's] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?

This test appears to have found favour with the Full Court of the Federal Court of Australia in News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410 at 524-5 in the context of the relevant Federal Court rule which is equivalent to the rule in subpara (i) ...[93]

273 In News Ltd v Australian Rugby Football League Ltd ('News v Australian Rugby'),[94] the Federal Court determined the principles relating to O 6 r 8 of the Federal Court Rules 1979 (Cth) ('FCR'), which is equivalent to r 9.06(b)(i) of the Rules. The Federal Court said:

In relation to a rule based on the precursor to FCR O 6, r 8, Lord Diplock, delivering the opinion of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] UKPC 16; [1969] 2 MLJ 52, said this (at 55-56):

The cases illustrate the great variety of circumstances in which it may be sought to join an additional party to an existing action. In their Lordships' view one of the principal objects of the rule is to enable the court to prevent injustice being done to a person whose rights will be affected by its judgment by proceeding to adjudicate upon the matter in dispute in the action without his being given an opportunity of being heard. To achieve this object calls for a flexibility of approach which makes it undesirable in the present case, in which the facts are unique, to attempt to lay down any general proposition which could be applicable to all cases.

It has been sometimes said as in Moser v Marsden [1892] UKLawRpCh 25; [1892] 1 Ch 487 and in Farbenindustrie AG Agreement [1944] Ch 41 that a party may be added if his legal interests will be affected by the judgment in the action but not if his commercial interests only would be affected. While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between 'legal' and 'commercial' interests helpful. A better way of expressing the test is: will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?

An order which directly affects a third person's rights against or liabilities to a party should not be made unless the person is also joined as a party. If made, the order will be set aside. Order 6, r 7 is not directed to that type of situation, but to cases where there is a curable defect, for example the misnaming of a party.

...

There are some classes of case where the ascertainment of the necessary parties who 'ought to have been joined' is not difficult. Where the orders sought establish or recognise a proprietary or security interest in land, chattels or a monetary fund, all persons who have or claim an interest in the subject matter are necessary parties. This is because an order in favour of the claimant will, to a corresponding extent, be detrimental to all others who have or claim an interest. Grovenor v Permanent Trustee Co of New South Wales Ltd is an example of this class of case. Where the subject matter of the proceedings is not of this kind, the ascertainment of necessary parties who ought to have been joined may be more difficult.

In our opinion, the question should be decided according to the test proposed by Lord Diplock. The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 at 322, per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential.

Where, before trial, a question arises whether a necessary party has been joined, attention should be directed to the orders sought in the proceedings. It is the effect of the orders upon the third party that must be determined. The test is not whether the conduct of the third party is raised in the pleadings between the existing parties, or whether the third party is a party to a contract, the meaning or effect of which is pleaded as a matter relevant to the ascertainment of the rights between those parties. Where the question arises after final orders have been made in the proceedings, the inquiry must be directed to the orders actually made, or which, on appeal it is contended should be made: cf Associated Grocers Co-operative Ltd v Hubbard Properties Pty Ltd (1986) 42 SASR 321 at 341.[95]

274 In John Alexander's Clubs v White City,[96] the High Court approved and applied the principles set out in News v Australian Rugby.[97] Hence, to be joined under r 9.06(b)(i), the outcome of the appeal must directly affect the rights or liabilities of 528 Main.

275 In this proceeding, JBI seeks leave to extend time for leave to appeal the VCAT consent orders and also seeks leave to appeal. The main issues raised by JBI in the second further amended notice of appeal are:

(a) whether the club was in breach of the lease at the time it purported to exercise the option to purchase;

(b) if the club was in breach of the lease, whether the club was entitled to exercise the option to purchase;

(c) whether actions taken by the club from 2 December 2016 to 19 March 2019, including the entry into the On-Sale Deed and Related Agreements, are void, invalid or of no effect due to the insufficient number of duly elected directors;

(d) whether the club was obliged to disclose the On-Sale Deed, Related Agreements and other breaches to JBI prior to the making of the VCAT consent orders;

(e) if the club was obliged to make such disclosure, whether VCAT erred in making the declaration contained in the VCAT consent orders;

(f) whether the VCAT consent orders ought to be set aside; and

(g) whether time for commencing the appeal ought to be extended.

276 I note that although JBI contends that the issue of whether the club did not have a sufficiently constituted board of directors relates to the overarching issue of non-disclosure at VCAT, I find that these issues raised in the second further amended notice of appeal do not relate to the issue of non-disclosure at VCAT but instead relate to the merits of the exercise of the option to purchase.

277 The orders sought by JBI in this proceeding include:

(a) that JBI has leave to appeal the VCAT consent orders and to extend the time for commencing the appeal;

(b) that the VCAT consent orders are vacated and set aside;

(c) a declaration as a preliminary determination that the option to purchase the property was not validly exercised, including by reason of the club's entry into the On-Sale Deed and Related Agreements; and

(d) that the subject matter of the VCAT application, including whether the exercise of the option to purchase was valid, is heard and determined by the Court or remitted to VCAT.

278 JBI had submitted that as 528 Main was not a party to the VCAT proceeding, it ought not to be joined at this stage. JBI contends that the consequence of delay in seeking joinder is that JBI will suffer prejudice. In Chickabo Pty Ltd v Zphere Pty Ltd (No 2),[98] Sifris J said:

A non‐party has no duty to seek to be joined, and they do not need to explain why it is that they have not sought this. In this regard, the non‐party's knowledge or notice of the proceeding is entirely irrelevant. The plaintiff must properly constitute their suit, and it is at their peril to not do so. This was the case in JACS, where the affected non‐party knew of the proceeding, but simply thought that it would fail.

A person who is directly affected by such orders in a proceeding, to which that person was not a party is entitled to have it set aside and to a new trial. While the order is not a nullity, that person is entitled to have the order set aside, as of right, rather than needing to seek the favourable exercise of a discretion from the court. This position does not depend either on the person being a party or on the rules of court, 'it depends on matters of right affecting non‐parties which rest on general law principles of natural justice.'[99]

279 Even if the question of prejudice may be relevant to joinder, JBI has not demonstrated any particular prejudice or any prejudice which cannot be ameliorated by the eventual appropriate order as to costs.

280 528 Main contends that it ought to be joined as a party or that its presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon. 528 Main contends that it has a direct interest because:

if the Landlord's [JBI's] application/appeal succeeds:

(a) 528 Main may lose the ability to purchase the Property pursuant to the On-Sale Deed; and

(b) 528 Main may suffer significant losses.

281 Further, 528 Main claims that it ought to be added as a party because it is 'a party to the On-Sale Deed and the Related Agreements (that the Landlord [JBI] is seeking to impugn) and its interests are liable to be affected by this proceeding'.

282 Accordingly, I find that 528 Main claims it has two interests in this proceeding:

(a) the right to purchase the property pursuant to the On-Sale Deed; and

(b) its interests pursuant to the On-Sale Deed and Related Agreements.

283 Pursuant to the On-Sale Deed, the club is to exercise the option to purchase and on-sell the property to 528 Main. I accept the club's submission that there are three steps which are required to be performed in succession for the on-sale of the property. However, I will slightly modify the three steps to as follows:

(a) firstly, that the option to purchase needs to be exercised;

(b) secondly, that a first contract must be entered into by JBI and the club; and

(c) thirdly, that the club and 528 Main must enter into a sub-sale contract to on-sell the property, which is to be in substantially the same terms as the first contract.

284 The exercise of the option to purchase pursuant to cl 4.1 of the On-Sale Deed is required for the on-sale to occur given that the title of the property may only be transferred to the club if the club purchases the property. The exercise of the option is the first step for that. The second step would therefore be the entry into the first contract by JBI and the club, whereby JBI is to sell the property to the club. The entering into the sub-sale contract by the club and 528 Main can only occur after the second step has occurred. This is emphasised by the requirement that the terms and conditions of the sub-sale contract shall be substantially the same as those in the first contract pursuant to cl 8.2 of the On-Sale Deed. Further, the definition of the sub-sale contract in the On-Sale Deed states that the sub-sale contract 'must include a special condition that the settlement of the sale and purchase of the Premises [property] must be conditional upon settlement of the First Contract'. For the first contract to be referenced in the sub-sale contract, the first contract must be entered into prior to the sub-sale contract.

285 Accordingly, pursuant to the On-Sale Deed, 528 Main's interest is a contractual right to purchase the property, which is contingent upon the occurrence of all three steps. In my view, although 528 Main has an interest in the validity of the club's exercise of the option to purchase, such interest cannot be direct in circumstances where the validity of the exercise of the option does not immediately give rise to 528 Main's right to purchase the property from the club. Instead, 528 Main's right only arises after the entry into the first contract by the club and JBI, and then upon entry into the sub-sale contract by 528 Main and the club. Even if the first contract has been entered into by the club and JBI, of which no evidence has been adduced, 528 Main did not contend that itself and the club had entered into the sub-sale contract.

286 528 Main does not have a right to the purchase of the property because all three steps had not occurred. Even if the VCAT consent orders are set aside and the validity of the exercise of the option to purchase is re-determined, as sought by JBI, 528 Main still does not have a right to the purchase of the property. Hence, I am not satisfied that the outcome of this proceeding will directly affect 528 Main's interest, rights or liabilities. Any effect upon 528 Main's interest or rights against the club is merely consequential.

287 In Chickabo v Zphere,[100] Sifris J held that the relevant persons, the Added Defendants, were not directly affected by the proceeding at the relevant point in time because they had 'no pre‐existing rights, interest, claim or entitlement to any part of the subject property identified by the dispute'.[101] His Honour held that:

The findings relating to the existence, scope and breach of fiduciary duties and breaches of the Partnership Deed and Partnership Act related to and affected the rights and obligations of the Graco Defendants and the Partners. The only parties with a proprietary claim to the proceeds of the Investment and the Additional Payment, remaining in the hands of the Graco Defendants, are the Partners as found and referred to in the Reasons. The Added Defendants do not have a proprietary claim to proceeds remaining in the hands of the Graco Defendants, and therefore, their legal rights were not directly affected. There are, of course, consequences arising out of the Reasons, and particularly in relation to subsequent dispositions of property from the Graco Defendants to the Added Defendants. The ultimate recipients (the Added Defendants) were plainly affected, but only in a general sense, as the Reasons would permit the Partnership to trace the proceeds into their hands. Those issues, however, remain to be determined. Unlike the Graco Defendants, and the non‐parties in the authorities referred to above, who were directly affected, the Added Defendants had no pre‐existing rights, interest, claim or entitlement to any part of the subject property identified by the dispute, which here was the property remaining in the hands of the Graco Defendants. Either Graco and his associated entities were entitled to retain that property or they were not. If not, the only other interested parties were the Partners. Had it been found that neither Graco nor Zphere breached their duties, the Added Defendants could not maintain their claim that they were directly affected by the Reasons. The same could be said, had or were I to find that proprietary relief was or is inappropriate, with the consequence that the Partnership is only entitled to an account of profits against the Graco Defendants personally. No one's rights, other than those of the Partnership and Graco Defendants, were relevantly affected and no one else had a right to make any claim. The rights, such as they may be, of the Added Defendants, were not to the proceeds in their hands but derived and depended entirely on Graco and his associated entities' right to retain such proceeds. To this extent they no doubt had a keen interest. But it was an indirect interest. They were not in a position to make any claim to the proceeds in the Principal Proceeding.[102]

288 I do not find that 528 Main had a pre-existing right to purchase the property. Further, as was the right of the Added Defendants in Chickabo v Zphere, 528 Main's right is not to the property itself, but is entirely dependent on the club's right to purchase the property. Such an interest is indirect.

289 I find that 528 Main's interest is different to that of the mortgagee in John Alexander's Clubs v White City.[103] In that case, the mortgagee had an equitable interest in the land. The mortgagee had sought to join the proceeding but its joinder application was dismissed by the New South Wales Court of Appeal. In the substantive proceeding, the Court of Appeal ordered that the second respondent held a constructive trust over the land in favour of the appellant, and ordered the transfer of the land subject to the trust from the second respondent to the appellant.[104] On appeal, the High Court held that the mortgagee ought to have been joined to the proceeding as the orders of the Court of Appeal directly affected the mortgagee.[105] The High Court held that:

The relief claimed and granted - a constructive trust and a transfer of the land subject to the trust to the Club so as to make the interest transferred indefeasible on registration - directly affects the interests of any other person, like Walker Corporation [the mortgagee], claiming an interest in the land, because orders in the Club's favour would, to a corresponding extent, be detrimental to those other persons.[106]

290 The mortgagee in John Alexander's Clubs v White City therefore had a different interest to 528 Main. The mortgagee in that proceeding had an equitable interest in the land, which was directly affected by the orders of constructive trust and transfer of land. In this proceeding, 528 Main merely had a contractual right to purchase the land, which was dependent on the occurrence of the three steps pursuant to the On-Sale Deed. 528 Main's right to purchase the property is not directly affected by the orders sought in this proceeding.

291 Further, in the context of an application to be an intervener, in Levy v Victoria,[107] Brennan CJ said that:

a non-party whose interests would be affected directly by a decision in the proceeding - that is, one who would be bound by the decision albeit not a party - must be entitled to intervene to protect the interest liable to be affected.[108]

292 While 528 Main will be bound by the decision in this proceeding, I find that 528 Main must be directly bound by such a decision for its interest to be direct. This will be consistent with the principles set out in paragraphs 272 to 274 hereof. Given that 528 Main does not have a pre-existing right to the purchase of the property, 528 Main will not be directly bound by the decision made in this proceeding.

528 Main's interest pursuant to the On-Sale Deed and Related Agreements

293 However, 528 Main's second interest with respect to its general rights and liabilities under the On-Sale Deed and Related Agreements will be affected directly. In its second further amended notice of appeal, JBI does not only question the validity of the exercise of the option to purchase, but does so in relation to the On-Sale Deed and Related Agreements. JBI alleges that the On-Sale Deed and Related Agreements were a breach of the lease and were required to be disclosed at VCAT, and contends that the club's entry into the On-Sale Deed and Related Agreements were void, invalid and of no effect. 528 Main contends that it ought to be a party to this proceeding because it is a party to the On-Sale Deed and Related Agreements and therefore its interests are liable to be affected.

294 Although JBI does not seek to set aside the On-Sale Deed and Related Agreements in the orders sought, the questions that JBI raise in its second further amended notice of appeal and any subsequent findings will directly affect 528 Main's rights and liabilities under the On-Sale Deed and Related Agreements. Further, even though the questions of whether the On-Sale Deed and Related Agreements constituted a breach of the lease by the club or whether they were required to be disclosed at VCAT would not of themselves directly affect 528 Main's rights and liabilities, the question as to whether the club's entry into the On-Sale Deed and Related Agreements was void, invalid and of no effect would. It would bring into question the validity of those agreements and hence any rights and liabilities 528 Main has pursuant to those agreements.

295 In Botsman v Bolitho,[109] the funder was joined to the proceeding after trial when the question of joinder was raised on the basis that the main issues of the application related to the 'reasonableness of the commission to be paid to the funder out of the settlement and ... the construction of the settlement deed to which the funder was a party'.[110] The Court of Appeal held that the funder ought to have been a party at the commencement of the application for leave to appeal given that its interests were clearly liable to be affected.[111] In this proceeding, questions were raised with respect to the On-Sale Deed and Related Agreements, to which 528 Main is a party. As the validity of the club's entry into the On-Sale Deed and Related Agreements is in issue, any findings would directly affect those agreements and rights and liabilities pursuant to those agreements, including any claims by 528 Main for damages for breach.[112] 528 Main would therefore be directly bound by such findings. Accordingly, 528 Main ought to be joined so that it is given the opportunity to be heard with respect to whether the club's entry into the On-Sale Deed and Related Agreements is void, invalid and of no effect.

296 Although the validity of the On-Sale Deed and Related Agreements will likely be determined in the Stuart proceeding, the issue is also relevant in this proceeding. While I accept that this proceeding is likely to be heard at the same time as, or after, the Stuart proceeding and that determinations in the Stuart proceeding may impact upon this proceeding and 528 Main's interest, in circumstances where the pleadings have not been finalised in the Stuart proceeding, I do not find that it precludes the joinder of 528 Main in this proceeding at the present time. However, I note the observations with respect to the abuse of process set out in paragraph 169 hereof.

297 JBI contends that 528 Main opposes joinder in the Stuart proceeding but seeks to join this proceeding. However, the joinder application in the Stuart proceeding has not yet been heard given that the leave to file the proposed third further amended statement of claim was refused. Regardless, if 528 Main is a necessary party to the Stuart proceeding, the Court is able to join 528 Main despite any opposition by it.[113] This does not preclude the Court from presently joining 528 Main in this proceeding.

298 The club contends that 528 Main should not be joined as a party in this proceeding because it has agreed that the club has the right to 'direct, conduct and conclude' this proceeding pursuant to cl 4(e) the Reimbursement Deed. However, cl 4(e) is an acknowledgement and agreement by the club and does not impose an obligation upon 528 Main. Clause 4(e) states that '[t]he Club acknowledges and agrees that ...' Clause 4(e) does not state that 'the Developer [528 Main] acknowledges and agrees that ...' Therefore, I do not find that the Reimbursement Deed prevents 528 Main from joining this proceeding.

299 Further, although cl 4(d) of the Reimbursement Deed imposes an obligation to consult with 528 Main prior to abandoning, resolving, settling or compromising any part of this proceeding while 528 Main continues to reimburse the costs of the club, on the club's submissions, 528 Main is no longer reimbursing the costs of the club. As such, 528 Main no longer has the right to be consulted prior to the club making those decisions. Given that such decisions will affect 528 Main's interests, 528 Main ought to be joined as a party to enable it to adequately protect its own interests.

300 The club contends that the On-Sale Deed and the Reimbursement Deed provide 528 Main with adequate protection of its interest and that any alleged breach can give rise to a claim for damages, which can be brought in the Stuart proceeding or a separate proceeding. 528 Main can no longer rely upon the Reimbursement Deed for consultation by the club given that it is no longer reimbursing costs of the club in this proceeding. Hence, its interests are not adequately protected by the Reimbursement Deed. Further, given that the validity of the On-Sale Deed may be affected by this proceeding and the Stuart proceeding, the On-Sale Deed cannot provide adequate protection while these proceedings are on foot.

301 If 528 Main is joined to the appeal proceeding, 528 Main will not be limited to making submissions only with respect to the club's entry into the On-Sale Deed and Related Agreements. 528 Main is entitled to make submissions with respect to JBI's substantive case. In Chickabo v Zphere,[114] Sifris J said:[115]

Where that non‐party is a necessary party because they are directly affected, they are not restricted to disputing the particular claims against them. The non‐party is entitled to claim, if it wished, that the plaintiff's substantive case is insufficiently strong to succeed at all. The non‐party is entitled to call evidence against that substantive case, and even if it did not wish to do that, it is entitled to be heard on the weaknesses in the substantive case.[116] As the High Court said in JACS [John's Alexander's Clubs v White City]:[117]

[116] ... the field for contention was not subsequent litigation of what is described as disputed priority between the Club and Walker Corporation; rather, the issue should have been whether that dispute was to be created in the first place by the decision, in the absence of Walker Corporation, to declare Poplar a constructive trustee for the Club.

302 Hence, 528 Main is entitled to make submissions with respect to whether an extension of time ought to be granted to JBI for leave to appeal and whether leave to appeal ought to be granted to JBI, as 528 Main seeks to do.

303 The club contends that there will be no utility in joining 528 Main in this proceeding given that it seeks to make submissions that are already open to the club and have been made by the club previously. 528 Main contends that the club will no longer make those submissions because, since the change in composition of the club's board of directors and the election of Mr Braden Williams as chairman, the club has not opposed JBI in this proceeding, has aligned itself with JBI and has failed to comply with its obligations to 528 Main under the On-Sale Deed and the Related Agreements. 528 Main contends in the particulars of its points of claim that, inter alia:

(a) at the hearing on 30 April 2019 for the club's objections to JBI's subpoenas, the club abandoned its objections and waived privilege over the documents sought, which was contrary to the advice of the club's then solicitors;

(b) on 19 August 2019, the second VCAT proceeding was struck out with a right to apply for reinstatement due to the club's failure to prosecute the proceeding;

(c) on 10 October 2019, the club filed and served an affidavit sworn by Mr Braden Williams on 6 September 2019 in which he deposed that the club is likely to have claims against 528 Main; and

(d) at the hearing on 10 December 2019, the club opposed 528 Main's joinder application.

304 JBI contends that this proceeding has effectively remained on hold until the legal issues are determined in the Stuart proceeding, and the club contends that 528 Main ought to wait and see what submissions the club makes before it can make its submissions.

305 I am persuaded by 528 Main's submissions such that I find that there may be non-opposition to JBI by the club and that the club's interests may be aligned with JBI's interests. This is particularly so in circumstances where both JBI and the club have vigorously opposed 528 Main's application for joinder.

306 However, I must give effect to the overarching purpose of the Civil Procedure Act 2010 (Vic) ('CPA') in exercising any powers of the Court.[118] The overarching purpose of the CPA and the rules of the Court with respect to civil proceedings is to 'facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'.[119] Given that the submissions that 528 Main seeks to make in this proceeding are the same submissions that have been advanced by the club and in circumstances where the club has not filed further submissions with respect to the issues raised in the second further amended notice of appeal since the submissions dated 5 February 2019, I cannot allow joinder without imposing conditions.

307 In order to give effect to the overarching purpose of the CPA, I will impose a condition for joinder to the effect that 528 Main is to only make the proposed submissions if they are different to the submissions that will ultimately be advanced by the club in this proceeding.[120]

308 Further, given that 528 Main's interest in this proceeding derives from the On-Sale Deed and Related Agreements and that such agreements are sought to be set aside in the Stuart proceeding, I will impose a condition on joinder in this proceeding such that 528 Main can only join if the On-Sale Deed and Related Agreements are not set aside in the Stuart proceeding.

309 JBI contends that 528 Main can only join this proceeding and make submissions once a position is secured with respect to costs. JBI contends that the assets of 528 Main only comprises of a right of indemnity over trust assets and that there is no document to establish that 528 Main has traded. JBI refers to Bauer Media Pty Ltd v Wilson ('Bauer Media v Wilson')[121] as authority for the proposition that the question of costs is relevant to applications for joinder under r 9.06 of the Rules. In Bauer Media v Wilson, with respect to leave for intervention, the Court of Appeal said:[122]

The principles upon which a court may grant leave to intervene are not in dispute. The governing principles may be briefly summarised as follows:

...

(4) A grant of leave may be limited, and subject to such conditions as to costs or otherwise as will do justice as between the parties.[123]

310 Although Bauer Media v Wilson is with respect to leave for intervention, I find that a costs condition may also be imposed for joinder. In the New South Wales case of Re Estate of Zbrozek,[124] Rein J held that that the parties seeking to be joined as defendants could be viewed as cross claimants in that case, and in the circumstances, security of costs ought to be ordered as a condition for joinder.

311 An order for security for costs is governed by r 62.02 of the Rules, and any order is to be made against a plaintiff. A plaintiff in O 62 of the Rules includes 'any person who makes a claim in a proceeding'.[125] In this proceeding, 528 Main seeks to be joined as the second respondent. 528 Main seeks to defend the claims made by JBI in the second further amended notice of appeal rather than to make claims against JBI. Accordingly, in my view, 528 Main cannot be viewed as a plaintiff in this proceeding, as defined in r 62.01, and the condition of a security of costs is not appropriate for this joinder.

312 Hence, I find that 528 Main can be joined to this proceeding as a second respondent under r 9.06(b)(i) of the Rules with the following conditions:

(a) 528 Main can only make submissions if they are different to the ones ultimately advanced by the club; and

(b) the On-Sale Deed and Related Agreements are not set aside in the Stuart proceeding.

313 Given my conclusion, I do not need to turn to the questions of joinder under r 9.06(b)(ii) of the Rules or leave for intervention. However, I will briefly discuss the issues for completion.

314 In Tatterson v Wirtanen,[126] Gillard J set out the elements required to be established for joinder under r 9.06(b)(ii) as follows:

(i) that there are two entities namely the person to be added as a party and a party to the proceedings;

(ii) between the two entities there may exist a question arising out of or relating to or connected with any claim in the proceeding;

(iii) it is just and convenient to determine that question between the proposed party and the other party as well as between the parties to the proceeding.[127]

315 However, Gillard J emphasises that the Court retains a discretion in making an order under r 9.06(b)(ii) even if the elements are established.[128]

316 In this joinder application, the questions may arise between 528 Main and JBI or between 528 Main and the club.

317 However, 528 Main only seeks to raise the matters that are contained in two previous written submissions of the club, dated 18 October 2018 and 5 February 2019, with respect to JBI's applications to extend time for leave to appeal and for leave to appeal. These matters relate to the VCAT consent orders to which JBI and the club are relevant parties and therefore are questions between JBI and the club. 528 Main does not seek to raise any other question with respect to itself and JBI or with respect to itself and the club. Accordingly, I do not find that 528 Main raises any questions between itself and either of JBI or the club. The second element of joinder under r 9.06(b)(ii) of the Rules is not satisfied.

318 Therefore, 528 Main cannot be joined to this proceeding under r 9.06(b)(ii).

319 In the alternative, 528 Main seeks leave to intervene in this proceeding.

320 In Bauer Media v Wilson,[129] the Court of Appeal summarised the principles for an application for leave to intervene as follows:[130]

The principles upon which a court may grant leave to intervene are not in dispute. The governing principles may be briefly summarised as follows:

(1) A non-party whose interests would be affected directly by a decision in a proceeding is entitled to intervene to protect the interest liable to be affected.[131]

(2) Where the legal interests of a person may be affected by the operation of precedent or by the doctrine of stare decisis, a court may grant leave to intervene if the interest is sufficiently substantial.[132]

(3) Where a person having the necessary legal interest to apply for leave to intervene can show that the parties to the particular proceeding may not present fully the submissions on a particular issue, being submissions which the Court should have to assist it to reach a correct determination, the Court may exercise its jurisdiction by granting leave to intervene.[133]

(4) A grant of leave may be limited, and subject to such conditions as to costs or otherwise as will do justice as between the parties.[134]

(5) A non-party must satisfy the Court that its contribution, as an intervener, will be useful and different from the contribution of the parties, and that the intervention will not unreasonably interfere with the conduct of the proceeding.[135]

321 With respect to indirect interests, in Levy v Victoria,[136] Brennan CJ said that:

Jurisdiction to grant leave to intervene to persons whose legal interests are likely to be substantially affected by a judgment exists in order to avoid a judicial affection of such a person's legal interests without that person being given an opportunity to be heard.

Nevertheless, an indirect affection of legal interests enlivens no absolute right to intervene. The assumption is that the Court will determine the law correctly, so that the indirect affection of an applicant's legal interest is simply the inevitable consequence of the exercise by this Court of its jurisdiction as the final Court in the Australian hierarchy. On that assumption, no undue prejudice is suffered by a person whose interests will be affected by the decision. The exercise of this Court's jurisdiction to determine controversies between parties is not, and could not be, conditioned on allowing intervention by all those whose interests are susceptible to affection by the Court's judgments. Such a condition would virtually paralyse the exercise of that jurisdiction. The principles of natural justice which control the exercise of curial power must take account of the nature of the jurisdiction to be exercised.[137]

322 Brennan CJ held that an example of a legal interest that will be substantially affected by an outcome of a proceeding is that of a party to pending litigation.[138]

323 Rule 64.10 of the Rules also enables a person who was not a party to the initial proceeding to apply for leave to intervene. However, I have not discussed the application of that rule as it is limited to appeals to the Court of Appeal.

324 If I had not joined 528 Main to this proceeding pursuant to r 9.06(b) of the Rules, for the reasons set out in paragraphs 293 to 308 hereof, I would have granted 528 Main leave to intervene in this proceeding subject to the following two conditions:

(a) 528 Main can only make submissions if they are different to the ones ultimately advanced by the club; and

(b) the On-Sale Deed and Related Agreements are not set aside in the Stuart proceeding.

325 I will order that 528 Main is joined to this proceeding as a second respondent under r 9.06(b)(i) of the Rules with the following conditions:

(a) 528 Main can only make submissions if they are different to the ones ultimately advanced by the club; and

(b) the On-Sale Deed and Related Agreements are not set aside in the Stuart proceeding.

326 Although 528 Main is successful in their joinder application, I decline to make costs orders at this time. I reserve the question of costs to the hearing judge as the hearing judge will be in the best position to determine if 528 Main is able to make submissions and the effect of what ensues from the Stuart proceeding.

327 On 17 October 2019, 528 Main and AFG filed an application seeking from JBI the costs of and incidental to their compliance with the subpoenas issued at the request of JBI to 528 Main on 6 December 2018 and to AFG on 4 February 2019, fixed in the sum of $70,679.25, pursuant to r 42.11 of the Rules.

328 JBI opposes 528 Main's and AFG's costs application.

329 On 6 December 2018, a subpoena was issued to 528 Main at the request of JBI. The subpoena was for the following documents:

1. Documents relating to the deed of on-sale agreement for the land situated at [Mordialloc] and the premises otherwise known as 'Mordy HQ' between the Mordialloc Sporting Club Incorporated and 528 Main Street Mordialloc Pty Ltd from on or about January 2015 to present. We require documents including, but not limited to, the following:
   1. Documents pertaining to any transaction or agreement entered into by the Mordialloc Sporting Club Incorporated or its officers with 528 Main Street Mordialloc Pty Ltd or its officers relating to the on-sale agreement for the land situated at [Mordialloc] including any personal Director guarantees (if any) executed by the officers of the Mordialloc Sporting Club or 528 Main Street Mordialloc Pty Ltd.
   2. Documents relating to the Application for Planning Permit lodged by Tract Consultants Pty Ltd to the City of Kingston Council for the land at [Mordialloc] which are currently in the possession of 528 Main Street Mordialloc Pty Ltd.
2. Documents with any reference to the 'option to purchase' contained in Clause 46 of the Lease from John Barr Investments Pty Ltd to the Mordialloc Sporting Club Incorporated for the land at [Mordialloc].

330 On 4 February 2019, a subpoena was issued to AFG at the request of JBI. The subpoena was for the following documents:

1. Documents relating to the deed of on-sale agreement for the land situated at [Mordialloc] and the premises otherwise known as 'Mordy HQ' between the Mordialloc Sporting Club Incorporated and the company 528 Main Street Mordialloc Pty Ltd from on or about January 2015 to present. We require documents including, but not limited to, the following:
   1. Documents pertaining to any transaction or agreement entered into by the Mordialloc Sporting Club Incorporated or its officers with Aus Finance Group Pty Ltd or its officers relating to the on-sale agreement for the land situated at [Mordialloc] including any personal Director guarantees (if any) executed by the officers of the Mordialloc Sporting Club or Aus Finance Group.
   2. Documents relating to the Application for Planning Permit lodged by Tract Consultants Pty Ltd to the City of Kingston Council for the land at [Mordialloc] which are currently in the possession of Aus Finance Group Pty Ltd.
2. Documents with any reference to the 'option to purchase' contained in Clause 46 of the Lease from John Barr Investments Pty Ltd to the Mordialloc Sporting Club Incorporated for the land at [Mordialloc].

331 528 Main and AFG notified the Court of their objections with respect to the subpoenas, and the hearing for the objections was listed for 19 February 2019 before Derham AsJ.

332 At the hearing on 19 February 2019, Derham AsJ made orders to adjourn the hearing of the objections to 17 April 2019. Consent orders were subsequently made on 18 March 2019 to adjourn the hearing listed on 17 April 2019 to 30 April 2019.

333 At the hearing on 30 April 2019 ('objections hearing'), Derham AsJ made orders, including:

1. By 21 May 2019 528 Main Street Mordialloc Pty Ltd shall produce for inspection:

(a) any documents within its possession custody or power that came into existence between 1 June 2016 and 4 August 2018 relating to any transaction or agreement entered into by the respondent or its officers with 528 Main Street Mordialloc Pty Ltd or Aus Finance Group Pty Limited or their officers that relates to the on-sale agreement (and any variation) entered into for the land situated at [Mordialloc] and the premises otherwise known as 'Mordy HQ' including any personal guarantees entered into by their officers.

(b) any documents relating to the Application for Planning Permit lodged by Tract Consultants Pty Ltd currently in the possession of 528 Main Street Mordialloc Pty Ltd for the land at [Mordialloc].

1. The Appellant has liberty to apply in relation to the balance of its subpoena issued to 528 Main Street Mordialloc Pty Ltd dated 6 December 2018.

1. By 21 May 2019 Aus Finance Group Pty Ltd shall produce for inspection:

(c) any documents within its possession custody or power that came into existence between 1 June 2016 and 4 August 2018 relating to any transaction or agreement entered into by the respondent or its officers with 528 Main Street Mordialloc Pty Ltd or Aus Finance Group Pty Limited or their officers that relates to the on-sale agreement (and any variation) entered into for the land situated at [Mordialloc] and the premises otherwise known as 'Mordy HQ' including any personal guarantees entered into by their officers.

(d) any documents relating to the Application for Planning Permit lodged by Tract Consultants Pty Ltd currently in the possession of Aus Finance Group Pty Limited for the land at [Mordialloc].

1. The Appellant has liberty to apply in relation to the balance of its subpoena issued to Aus Finance Group Pty Limited dated 4 February 2019.
2. The proceeding is otherwise adjourned for further directions on 6 June 2019.
3. Costs reserved.
4. The parties have liberty to apply.

334 On 5 June 2019, Derham AsJ made orders by consent to adjourn the directions hearing listed for 6 June 2019 to 30 July 2019.

335 At the hearing on 30 July 2019, Derham AsJ adjourned the directions hearing to 26 September 2019.

336 At the hearing on 26 September 2019, Derham AsJ made orders, including:

1. By 4pm on 17 October 2019, 528 Main and AFG have leave to file and serve a summons and affidavit in support seeking the costs of and incidental to their compliance with the subpoenas issued at the request of the Appellant to 528 Main on 6 December 2018 and to AFG on 4 February 2019.

...

10. Costs reserved.

11. Liberty to apply is reserved.

337 Subsequently, on 17 October 2019, 528 Main and AFG filed an application seeking from JBI the costs of and incidental to their compliance with the subpoenas, fixed in the sum of $70,679.25. This amount is comprised of $35,648.00 in solicitors' fees and $35,031.25 in counsel's fees. Alternatively, the sum of $70,679.25 is comprised of $43,276.00 for costs relating to the preparation and appearances at the hearings for objections, and $27,403.25 for other compliance costs.

338 The first return of 528 Main's and AFG's application was on 10 December 2019 before myself. At the hearing, JBI sought an opportunity to make objections to the costs application on a line by line basis. I made the following orders with respect to the costs application:

1. The Summons filed by 528 Main and AFG on 17 October 2019 (Costs Application) is adjourned to 24 February 2020 (with an additional day on 25 February 2020 available, if necessary).
2. On or before 3 February 2020, the Appellant file and serve on 528 Main and AFG any list of objections in relation to the Costs Application.
3. On or before 17 February 2020, 528 Main and AFG file and serve on the Appellant any response to any list of objections in relation to the Costs Application.

339 On 3 February 2020, an affidavit sworn by Ms Penelope Robertson on 3 February 2020 was filed on behalf of JBI. Ms Robertson is a legal practitioner and she was engaged by the solicitors for JBI to provide an opinion as to the costs claimed by 528 Main and AFG. A copy of her report is exhibited to her affidavit ('Robertson report'). The Robertson report set out objections as to the costs claimed by 528 Main and AFG.

340 On 6 February 2020, a further affidavit sworn by Ms Robertson on 6 February 2020 was filed on behalf of JBI. A copy of a supplementary report is exhibited to that affidavit ('Robertson supplementary report'). The Robertson supplementary report set out Ms Robertson's estimated costs for the costs claimed by 528 Main and AFG. Ms Robertson estimated the total costs to be $26,267.21, which is comprised of $11,227.50 in solicitors' fees and $15,039.71 in counsel's fees.

341 On 17 February 2020, an affidavit affirmed by Ms Jennifer Young on 17 February 2020 was filed on behalf of 528 Main and AFG. Ms Young is a legal practitioner who was engaged by the solicitors for 528 Main and AFG to prepare a report in relation to the costs incurred by AFG and 528 Main in complying with the subpoenas. A copy of her report is exhibited to her affidavit ('Young report'). The Young report responds to the Robertson report and Robertson supplementary report, and it sets out the objections or assessments done by both Ms Robertson and Ms Young. Ms Young estimated the costs to be $50,752.50, which is comprised of $19,437.00 in compliance costs and $31,315.50 in objection costs.

342 In the Young report, Ms Young identified that Ms Robertson did not divide her estimated costs into compliance costs and objection costs. I note that although Ms Young stated that Ms Robertson's estimated costs is $27,939.40, in the Robertson supplementary report, Ms Robertson's estimated costs is $26,267.21.

343 The costs application was subsequently heard on 24 February 2020 before myself.

344 The relevant rules for the costs application are set out as follows:[139]

(1) The Court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena.

(2) If an order is made under paragraph (1), the Court shall fix the amount or direct that it be fixed in accordance with the Court's usual procedure in relation to costs.

(3) An amount fixed under this Rule is separate from and in addition to-

(a) any conduct money paid to the addressee;

(b) any witness expenses payable to the addressee.

...

63.20.1 Taxation of costs on interlocutory application or hearing

If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.

345 At the hearing on 24 February 2020, JBI made submissions with reference to the costs of $50,752.50 as estimated by Ms Young. JBI contends that the estimated objection costs of around $31,315.50 relate to the costs up to and including the objections hearing on 30 April 2019, and contends that the estimated compliance costs of $19,437.00 relate to costs after that day.

346 I took it that JBI makes submissions with respect to the objection costs and compliance costs separately, and also with respect to the total costs as a whole.

347 With respect to r 42.11 of the Rules, JBI contends that the role of the rule is 'to mitigate in the appropriate case the hardship of compliance which may be imposed on a person who is not concerned in the proceeding as a party'.[140] JBI contends that the rule is to identify parties who are forced to provide documents that will assist the parties in a proceeding. JBI contends that 528 Main's costs application departs from r 42.11 given that 528 Main claims an interest in the proceeding and now seeks to be a party. Although 528 Main did not seek to be a party at the time that the subpoenas were ordered to be complied with and the objections hearing was held, JBI contends that they could have applied then. JBI contends that it is of substantial prejudice for 528 Main to be considered as anyone other than a party who is interested given that the subject matter of this proceeding is the non-disclosure of the On-Sale Agreement, which 528 Main relies upon. I note that this submission by JBI contradicts its position for joinder.

348 JBI contends that 528 Main and AFG bear the onus of establishing the reasonableness of their costs claim.[141]

349 JBI contends that the amount of $70,679.25 claimed in 528 Main's and AFG's application is excessive. JBI contends that 528 Main's and AFG's own costs expert had found that the claim was excessive and that Ms Young considered that a reasonable claim would be $50,752.50. Ms Robertson considered that a reasonable claim would be less. I note that although JBI made an open offer in a letter dated 2 October 2019 to pay $5,000 in costs of complying with the subpoena, JBI has not adduced evidence as to the reasonableness of that amount. JBI submitted that I ought to follow the reasons of Riordan J in Hera Project Pty Ltd v Bisognin (No 4) ('Hera')[142] and adopt a broad-brush approach and arrive at my own estimate of time which ought to have been spent. JBI submitted that I could then place a value on the time spent. I decline to do so.

350 JBI contends that a reduction from $70,679.25 to $50,752.50 is more than a 28 per cent reduction and JBI refers to the old one-sixth rule for taxation. Although JBI accepts that the one-sixth rule does not apply, JBI contends that the one-sixth rule is a guide to an excessive claim.

351 JBI also contends that 528 Main and AFG are concerned about the club and the rights under the On-Sale Agreement and that they are actually spending excessive costs in considering and educating themselves about the issues. JBI contends that counsel had already been retained for 528 Main and AFG and that a number of the claimed items, such as attending the directions hearing and preparing and reviewing documents, are matters that counsel would already have had. JBI contends that that is the cause of the costs incurred.

352 JBI contends that the taxation matter could be sent off to the Costs Court to resolve due to the differences in opinion between Ms Young and Ms Robertson and that I could order that costs be taxed in a certain way. However, JBI contends that costs are best resolved at the conclusion of the proceeding, including because the costs likely include costs in the cause of the proceeding, and that 528 Main's and AFG's application is premature.

353 JBI also contends that there are heavy redactions and that JBI does not know what the actual documents are. Accordingly, JBI contends that the costs are better dealt with at the end of the proceeding when the issue of redaction can be more readily ventilated.

354 Ms Young stated in the Young report that r 63.20.1 of the Rules, with respect to the taxation of a costs order made on an interlocutory application, does not apply to an order for costs in relation to subpoenas because the subpoenaed parties are not a party to the litigation. However, JBI contends that Ms Young is proceeding on an incorrect assumption and that 528 Main is applying to become a party to the litigation. JBI contends that this makes the circumstances different to that of non-parties in De Simone v Legal Services Board ('De Simone'),[143] the case which was referred to by 528 Main and AFG.

355 JBI contends that under the Supreme Court Act 1986 (Vic) ('Supreme Court Act'), the definition of a 'party' includes 'every person served with notice of or attending any proceeding, whether named on the record or not'.[144] JBI contends that 528 Main and AFG have been served with notice or have attended upon the proceeding whether named on the record or not. JBI contends that 528 Main and AFG had executed the Reimbursement Deed with the club from the commencement of this proceeding. JBI contends that this issue also goes towards the issue of the excessiveness of the costs.

356 528 Main and AFG contend that JBI has adopted the Young report, has not contended that the Young report is erroneous, and has not criticised Ms Young's opinion. However, JBI contends that it does not accept everything in the Young report. JBI contends that Ms Young and Ms Robertson disagree about the question of retainer. Ms Robertson takes the view that without a costs agreement being provided, one is not in a position to assess the general retainer for compliance with advice in the proceeding as opposed to a specific retainer of compliance with the subpoena. On the other hand, Ms Young takes the view that the retainer can be obtained from the affidavit of Frank Durso.

357 JBI contends that the objection costs were reserved at the objections hearing on 30 April 2019 by Derham AsJ with the consent of counsel for JBI and counsel for 528 Main and AFG. JBI contends that 528 Main and AFG are seeking to revisit Derham AsJ's orders in the present costs application. JBI contends that it is not the appropriate time to apply for reserved costs, particularly when the documents revealed by the subpoenas ought to have been discovered before VCAT, 528 Main is seeking to be joined as a party or as an intervener and 528 Main is also interested under the rule. JBI also contends that the costs application ought to remain reserved pending the determination of the joinder application. JBI contends that the appropriate order is for costs to be reserved.

358 JBI contends that Derham AsJ had properly reserved the objection costs at the hearing on 30 April 2019, which approximate $31,315.50 as estimated by Ms Young. JBI contends that it cannot be said that 528 Main was the successful party at the hearing. JBI contends that most of their submissions as to 'irrelevance' were rejected by Derham AsJ. JBI contends that although counsel for 528 Main sought to agitate reasons why the appeal was hopeless or was a fishing expedition and would not succeed, Derham AsJ said that it would be a matter for the appeal and that JBI already had a number of fish, respectively. JBI also contends that their claimed narrowing of the scope of the subpoenas was not any significant reduction and that JBI had agreed prior to the objections hearing to confine the dates of the subpoenas from 1 July 2016 until March 2018. JBI contends that 528 Main and AFG were only 19.18 per cent successful at the objections hearing but 41.44 per cent unsuccessful, and that there were 39.38 per cent neutral outcomes. JBI contends that because 80 per cent of the objections hearing was spent on an unsuccessful application, costs should stay reserved.

359 JBI contends that JBI was the party that was largely successful at the objections hearing because Derham AsJ ordered 528 Main and AFG to comply with the critical subpoena documents, which relate to the on-sale. JBI contends that, effectively, Derham AsJ did not uphold 528 Main's objections but that Derham AsJ considered that the orders would give JBI the bulk of the documents it needed. JBI contends that if more documents were subsequently sought, JBI would have liberty to apply.

360 JBI contends that Ms Young specifically denied any expertise in being able to determine who was successful at the hearing. JBI contends that the order made by Derham AsJ to reserve costs ought not to be disturbed.

361 JBI contends that the only amount that could potentially be awarded as part of the costs application without revisiting the order made by Derham AsJ is the compliance costs. However, JBI contends that awarding those costs at this stage would be premature because 528 Main and AFG have not complied with the subpoena.

362 JBI contends that 528 Main and AFG have shown serial non-compliance, including at VCAT in relation to discovery. JBI contends that it had received subpoenaed documents from the club's former solicitors which ought to have been discovered by 528 Main or AFG pursuant to the subpoenas directed against them. These documents are set out in exhibit MVS-8 to the affidavit of Michael Scherini affirmed on 21 February 2020. JBI contends that the documents relate to the on-sale and therefore ought to have been produced by 528 Main and AFG pursuant to the orders made by Derham AsJ. JBI contends that this also applies to certain subpoenaed documents produced by Tract and the City of Kingston Council.

363 JBI contends that 528 Main and AFG have also not produced other documents, including key documents with respect to telephone calls between the club's former solicitors and Nick Mazzeo or Kevin Said on behalf of 528 Main and AFG with respect to the on-sale. Further, JBI contends that 528 Main and AFG have not produced correspondence with respect to a partnership between the club and AFG. However, JBI contends that these documents can be discovered in the Stuart proceeding.

364 JBI contends that the reasonableness of costs claimed needs to be considered in the context of r 42.12 of the Rules with respect to the failure to comply with a subpoena. JBI contends that it has sent numerous correspondence to the representatives for 528 Main and AFG with respect to the adequacy of the documents produced pursuant to the subpoena. JBI contends that 528 Main and AFG then sought to produce four tranches of documents rather than producing all the documents at the beginning, thereby causing the parties unnecessary and excessive costs in relation to complying with the subpoenas. JBI contends that neither 528 Main nor AFG have explained why the documents were produced in this manner.

365 JBI contends that 528 Main and AFG have only complied with the subpoena by providing the key transaction documents, which are not hard to find. JBI contends that 528 Main is seeking to be compensated for their solicitors and counsel considering the broader interests of their client in this proceeding rather than only with respect to the costs of complying with the subpoenas.

366 JBI contends that the questions of non-compliance with the subpoenas and of discovery at VCAT and to the Court ought to be dealt with in the Stuart proceeding when the Court grants leave to file the proposed further amended statement of claim and 528 Main and AFG are joined to that proceeding.

367 528 Main and AFG contend that JBI has agreed to not pursue further compliance of the subpoenas in open correspondence and that JBI had agreed to pay costs. However, JBI contends that it seeks to have the Stuart proceeding heard first, in which there would be obligations for discovery. JBI also contends that it never agreed to pay excessive costs.

368 Further, JBI contends that 528 Main and AFG had claimed counsel's costs relating to the directions hearing on 30 July 2019, such as preparing for the hearing and appearing at the hearing. JBI contends that 528 Main and AFG claimed costs for appearing for half a day despite it being expressly decided on that day that there would be no consideration of any matters relating to the subpoena or subpoenaed documents. JBI contends that the issue at the hearing was that the club was not represented.

369 JBI contends that the costs should be reserved and that the costs application is more appropriately dealt with at the end of this proceeding when it is known what has been discovered and what ought to have been complied with.

370 With respect to JBI's claims that 528 Main and AFG have not complied with the subpoenas, 528 Main and AFG contend that JBI had informed 528 Main and AFG through open correspondence of its solicitors on 18 November 2019 that JBI would not seek further documents from 528 Main and AFG. The solicitors for JBI wrote to the solicitors for 528 Main and AFG:

Although our client maintains all objections with your clients apparent non-compliance with the subpoenas and Orders referred to above, as well as a fanciful claim of privilege over certain documents (given the apparent position of conflict), our client will not be seeking further documents from your clients in relation to the above subpoenas and Orders as we consider that the further consideration of these issues is likely to be more appropriately ventilated by way of your clients' discovery obligations in the 'Members proceeding' [Stuart proceeding] between which our client is applying to be joined as a party.

As such, this brings finality to the ongoing dispute between our respective clients with respect to compliance with the above subpoenas in the appeal proceeding as was your clients desire at the last hearing.

371 In the same letter, the solicitors for JBI also wrote: 'As previously advised, our client agrees to pay your clients reasonable costs in complying with the subpoenas. ...'

372 528 Main and AFG contend that JBI is estopped in these circumstances because JBI had agreed that it would not seek to enforce any further compliance with the subpoenas and that it would pay 528 Main's and AFG's reasonable costs of compliance.

373 528 Main and AFG disagree with the submission of JBI that there are two issues of compliance costs and reserved costs.

374 528 Main and AFG contend that when Derham AsJ made the order on 26 September 2019 granting 528 Main and AFG leave to file and serve a summons and affidavit in support seeking costs of compliance with the subpoenas, it overrode any previous reservation. 528 Main and AFG contend that they are not precluded from making a costs application because costs were reserved at the time when Derham AsJ said that there will be liberty to apply.

375 With respect to the entitlement to the costs of complying with subpoenas, 528 Main and AFG referred to ASADA v 34 Players and One Support Person (No 2) ('ASADA'),[145] in which Croft J held:

where a person seeks to invoke the coercive powers of the court with respect to subpoenas, a person who seeks to resist that process or to comply with the process is entitled to have costs and expenses reimbursed so that they are not out of pocket as a result. As the authorities indicate, this is particularly so in circumstances where they have no interest in the relevant proceedings and, in any event, seek to assist the court with respect to the issue of or compliance with the subpoena.[146]

376 528 Main and AFG contend that the reference to persons with no interest in the proceedings by Croft J is not traversed by 528 Main now seeking to be joined to this proceeding. 528 Main and AFG contends that the costs were incurred when 528 Main was not a party, and therefore they are not costs in the cause, but are costs incurred as a non-party.

377 528 Main and AFG contend that ASADA was followed in Charan v Nationwide News Pty Ltd (No 6) ('Charan').[147] In that case, J Forrest J held that:

In my view, the submissions of Mr Charan miss the point. The determination of whether an award of costs should be made under r 42.11 does not turn upon the result of the claim for privilege and the events preceding it. Rather, as the observations of Croft J regarding the purpose of the rule make clear, it is intended to provide a means for properly compensating a party which has gone to the trouble and expense of complying with a subpoena - and where it would not adequately be covered by the provision of conduct money or witness expenses.

The application of this principle, particularly in the case of a claim for privilege, is made clear by Byrne J in Pyramid:

Where the recipient incurs costs in collating documents, copying them and seeking advice as to privilege or as to claim for restricted access or use, it is well established that such costs are recoverable.

...

Even if DET had lost the PII claim but had sufficiently arguable grounds to maintain it, then it may well have been entitled to an award of costs in its favour as the rule envisages. I repeat that, as Croft J pointed out in ASADA, the purpose of the rule is to endeavour to ensure that a party who acts reasonably in complying with a subpoena is not out of pocket.[148]

378 528 Main and AFG contend that these are the words of indemnity costs such as only those costs which are unreasonably incurred would not be allowed.

379 Further, 528 Main and AFG contend that Hera[149] set out examples of reasonable expenses as follows:

For an expense to be recoverable under r 42.11 it is necessary that it be incurred in complying with the subpoena and is reasonable. Expenses incurred in complying with a subpoena have been held to include expenses incurred in the following:

(a) Advice as to the validity of the subpoena and whether the addressee should comply with it at all or in part.

(b) Correspondence and attendances on the issuing party regarding its terms particularly with a view to narrowing or clarifying the scope of documents to be produced.

(c) Advice as to whether documents are subject to claims for privilege.

(d) Advice as to whether inspection of documents may be restricted on the basis of confidentiality including correspondence, attendances and negotiations with the issuing party as to the terms for inspection.

(e) Attendances in court on the return of the subpoena including attendances to assert that the subpoenaed documents should be protected from unrestricted access due to their confidential character and ensuring confidentiality undertakings have been properly given.[150]

380 528 Main and AFG contend that Derham AsJ made orders on 30 April 2019 that limited the scope of the subpoenas to any documents relating to any transaction or agreement related to the on-sale. 528 Main and AFG contend that it was not an order for every document relating to the on-sale, and that the fact that their objections to the subpoenas were not wholly successful does not necessarily relieve JBI from its obligation to pay their costs.

381 With respect to r 63.20.1 of the Rules, 528 Main and AFG contend that it does not apply to a non-party such as a subpoenaed party. 528 Main and AFG contend that they are not parties for the purpose of costs with respect to subpoenas. They referred to De Simone[151] and Charan.[152] 528 Main and AFG contend that the costs of attending persons who are not a party to the dispute and are not subject to the compulsory powers of the Court in relation to discovery must be paid, which are the reasonable costs incurred pursuant to r 42.11.

382 Further, 528 Main and AFG contend that the Robertson report contains multiple errors, including that:

(a) Ms Robertson purported to act under the wrong rule of the Court as she referred to r 42.04 rather than r 42.11;

(b) Ms Robertson miscites the case of Hera[153] as relating to the redaction of evidence on a costs application when the case was in relation to redaction of documents returned on a subpoena;

(c) Ms Robertson also misstates the test in Hera[154] about what is reasonable and necessary and that the relevant paragraph in Hera is paragraph 53;

(d) Ms Robertson suggests that counsel should not have been involved in claiming privilege and that there should have been no affidavits regarding privilege, but that privilege ought to have been claimed by providing the documents to the Court in a sealed envelope for the Court to make a decision;

(e) Ms Robertson did not consider the fact that the solicitors for JBI had demanded that 528 Main and AFG justify their claim for privilege by affidavit; and

(f) Ms Robertson stated that some documents that have been claimed as privileged have been produced as referred to in the appellant's costs submissions; however, 528 Main and AFG contend that the cost submissions do not say that but say that two documents were already in the possession of JBI.

383 528 Main and AFG contend that the Young report is properly reasoned and properly follows the course of events with respect to the subpoenas. 528 Main and AFG rely upon the whole of the Young report.

384 Given the reasons set out in this ruling, I do not need to consider the efficacy of each of the Young and Robertson reports.

385 To determine this costs application, there are three main issues in this proceeding as follows:

(a) firstly, whether 528 Main and AFG are entitled to the costs of complying with the subpoenas served on each of them;

(b) secondly, if 528 Main and AFG are so entitled, whether the costs claimed are reasonable; and

(c) thirdly, if costs are to be taxed, whether costs ought to be taxed immediately.

Entitlement to costs of complying with subpoenas

386 The issue of whether 528 Main and AFG is entitled to the costs of complying with the subpoenas involve the following questions:

(a) whether 528 Main and AFG can claim costs of complying with the subpoenas when 528 Main seeks to be a party to the proceeding (and has now been granted leave to join the proceeding as a second respondent); and

(b) if 528 Main and AFG can claim costs, what costs are allowed.

Whether 528 Main and AFG can claim costs of complying with the subpoenas

387 I took it that JBI contends that it ought not to pay for the costs of 528 Main and AFG in complying with the subpoenas in circumstances where 528 Main seeks to become a party to this proceeding. JBI contends that 528 Main is a party who is interested in this proceeding given that 528 Main relies upon the On-Sale Agreement, which is the subject of this proceeding. I find that this submission is not consistent with JBI's opposition to 528 Main's joinder application; however, I do not consider that this affects the joinder application when I have found that 528 Main ought to be joined as a party in this proceeding.

388 While 528 Main and AFG are seeking costs jointly and are represented by the same solicitors and counsel, only 528 Main sought to be a party.

389 Pursuant to r 42.11(1) of the Rules, the Court may order JBI to 'pay the amount of any reasonable loss or expense incurred in complying with the subpoena'.

390 As referenced by 528 Main and AFG, in ASADA,[155] Croft J said the following with respect to the application of r 42.11:

Rather, the proper question is, how are the provisions of r 42.11 to be applied having regard to the authorities to which reference has been made; authorities which indicate that where a person seeks to invoke the coercive powers of the court with respect to subpoenas, a person who seeks to resist that process or to comply with the process is entitled to have costs and expenses reimbursed so that they are not out of pocket as a result. As the authorities indicate, this is particularly so in circumstances where they have no interest in the relevant proceedings and, in any event, seek to assist the court with respect to the issue of or compliance with the subpoena.[156]

391 This passage was approved by J Forrest J in Charan.[157]

392 I agree with Croft J in ASADA that an entitlement to the costs of complying with a subpoena is open to a person who seeks to resist the subpoena or who complies with it, particularly when they have no interest in the proceeding and seek to assist the Court with respect to the subpoena.

393 JBI referred to Byrne J's discussion in Pyramid[158] of the role of the rule for costs of complying with a subpoena. Byrne J said that '[t]he role of the rule is to mitigate in the appropriate case the hardship of compliance which may be imposed on a person who is not concerned in the proceeding as a party'.[159] In Pyramid, the relevant rule was r 42.08(1) of the then Supreme Court Rules, which was a precursor to the current r 42.11 of the Rules, and it was in the following terms:

R 42.08 (1) Where a person named not being a party reasonably incurs in complying with a subpoena expense or loss substantially exceeding the amount of any conduct money given, the Court may order that the party who filed the subpoena pay to that person an amount in respect of that expense or loss.[160]

394 Although r 42.08(1) expressly required that the relevant person was not a party to the proceeding, in the current r 42.11, no such requirement is present. However, Croft J considered that r 42.11 did not apply to 'inter partes'.[161]

395 The Supreme Court Act states that a 'party' includes 'every person served with notice of or attending any proceeding, whether named on the record or not'.[162] However, in Pyramid, Byrne J said that this definition does not apply to the then r 42.08 because if the subpoenaed person is a party, '[s]uch an interpretation would deprive the rule of any utility'[163] as it would disentitle that person from claiming any loss or expense under that rule.[164] This was endorsed by Chernov JA in Victoria Legal Aid v County Court of Victoria.[165]

396 528 Main was not a party at the time the subpoena was issued, at the time the objections were heard or at the time the costs application was made. Although 528 Main could have applied to become a party at any of those times, it did not. Nor did JBI seek to join 528 Main at those times. Therefore, in my view, 528 Main is not precluded from claiming costs for complying with the subpoena.

397 The question, then, is whether an order ought to be made for the costs of complying with the subpoenas. First, I will need to address the discrepancy in what is considered objection costs and compliance costs in this application. In the Young report and in JBI's submissions, the costs of complying with the subpoenas were divided into either objection costs or compliance costs.

398 The Young report appears to rely upon the affidavit of Evan Stents sworn on 17 October 2019 with respect to the division of the costs. In the affidavit of Evan Stents, the objection costs relate to the preparation for and appearances at the hearings on 19 February 2019, 30 April 2019, 30 July 2019 and 26 September 2019, and the compliance costs relate to all other costs with respect to complying with the subpoenas and orders. In her calculations of the reasonable costs, Ms Young differentiated between the objection costs or compliance costs by bolding the font for objection costs. However, the bolded or unbolded items do not correspond exactly with the categories of the items set out in the exhibit to the affidavit of Evan Stents, and subsequently set out in the exhibit to the affidavit of Anthony Peterson affirmed on 6 December 2019.

399 On the other hand, JBI refers to the objection costs as the costs up to and including those on 30 April 2019, when the objections were heard and when Derham AsJ made orders with respect to the documents to be produced under the subpoenas. JBI refers to the costs thereafter as the compliance costs.

400 Given that 528 Main and AFG first sought to object to the subpoenas after they were served and orders were made by Derham AsJ with respect to the production of documents on 30 April 2019, I am inclined to adopt JBI's interpretation of the terms 'objection costs' and 'compliance costs'.

401 I will therefore look at each of the objection costs and compliance costs in turn.

402 With respect to the objection costs, JBI contends that those costs ought to stay reserved as ordered by Derham AsJ on 30 April 2019. However, Derham AsJ had made orders on 26 September 2019 for 528 Main and AFG to file an application for costs of their compliance with the subpoenas. Therefore, I will determine whether costs ought to be made in this application rather than simply leaving costs as reserved.

403 JBI contends that it is not the appropriate time to decide on reserved costs when 528 Main has an interest in the proceeding and seeks to be joined as a party or as an intervener. However, given that the joinder application has now been determined, I do not find that this is an obstacle in making an order with respect to the objection costs.

404 JBI also contends that 528 Main and AFG were largely unsuccessful in the objections claims and that less than 20 per cent of their objections were successful at the objections hearing.

405 In Charan,[166] a subpoena was issued at the request of the plaintiff to the Secretary to the Department of Education and Training ('DET'). DET made a public interest immunity ('PII') objection to the production of a particular document, which was heard at a hearing. DET sought to redact parts of that document. The PII claims were sustained over certain parts of the document, but not over all the parts sought. In response to the question of costs of complying with the subpoena, the plaintiff contended that each party ought to bear its own costs for DET's PII objection because both parties had some success in relation to the objection, the document was found to be a relevant document, and the plaintiff's conduct in requiring DET to establish its PII claim was reasonable. J Forrest J held that:

In my view, the submissions of Mr Charan miss the point. The determination of whether an award of costs should be made under r 42.11 does not turn upon the result of the claim for privilege and the events preceding it. Rather, as the observations of Croft J regarding the purpose of the rule make clear, it is intended to provide a means for properly compensating a party which has gone to the trouble and expense of complying with a subpoena - and where it would not adequately be covered by the provision of conduct money or witness expenses.

The application of this principle, particularly in the case of a claim for privilege, is made clear by Byrne J in Pyramid:

Where the recipient incurs costs in collating documents, copying them and seeking advice as to privilege or as to claim for restricted access or use, it is well established that such costs are recoverable.

...

Even if DET had lost the PII claim but had sufficiently arguable grounds to maintain it, then it may well have been entitled to an award of costs in its favour as the rule envisages. I repeat that, as Croft J pointed out in ASADA, the purpose of the rule is to endeavour to ensure that a party who acts reasonably in complying with a subpoena is not out of pocket.

...

I accept that in a proceeding where a PII claim was demonstrated to be untenable, then a Court may, on a discretionary basis, refuse to make a costs order under the rule. However, in this case where the PII submission has been upheld and the ambit of compliance with the subpoena determined, then there is no good reason why DET is not entitled to its costs of the subpoena including those on the PII claim.

To make it clear, I think such costs of 'compliance' include not only the taking of advice in relation to questions of privilege but also putting submissions and articulating the PII claim at the subpoena hearing. Those costs were reasonably incurred in compliance with the subpoena and fall within the ambit of the rule.

If I am wrong in my analysis of the scope of the rule, I think that there is no good reason not to exercise the costs discretion in favour of DET given that it had substantiated its claim, in the main, for PII. That in itself is sufficient to give rise to a prima facie entitlement to costs.

The end result is that DET should have the costs of complying with the subpoena, including those of making and prosecuting the PII objection, on a standard basis.[167]

406 In VICT v CFMMEU (No 2),[168] Ierodiaconou AsJ approved the principles set out by J Forrest J in Charan.[169]

407 Accordingly, it is not the result of the objection claims that is relevant in determining costs, but whether the objections were based on sufficiently arguable grounds.

408 At the objections hearing on 30 April 2019, 528 Main and AFG raised three main grounds of objections:

(a) firstly, that JBI had no case;

(b) secondly, that there was no legitimate forensic purpose for which the documents were sought pursuant to the subpoenas; and

(c) thirdly, that the issue of the subpoenas was an abuse of process or oppressive because it was too wide or fishing.

409 The first ground of objection was not a matter that could be determined at a hearing for an objection to a subpoena, as Derham AsJ said at the hearing. Accordingly, it cannot be said that this ground was sufficiently arguable.

410 With respect to the second ground of objection, although Derham AsJ found that there were two legitimate forensic purposes for which the documents were sought, the ground was ventilated at the hearing and was arguable in circumstances where Derham AsJ indicated that the purpose was not immediately clear from the then further amended notice of appeal or submissions of JBI. Further, JBI had referred to other documents that demonstrate the legitimate forensic purposes of the documents sought in the subpoenas.

411 With respect to the third ground of objection, Derham AsJ found that the scope of the subpoenas was too wide at the time of the objections hearing even with the date limitations to which parties consented, and his Honour ordered a more narrow criteria of the documents to be produced with liberty to apply for the balance of the documents originally sought in the subpoena. I am satisfied that 528 Main and AFG was successful with this ground of objection. While JBI had liberty to apply for the balance of the documents sought, the criteria for the documents to be produced according to the orders made at the hearing were nevertheless more narrow compared to the subpoenas.

412 Therefore, I find that it was reasonable to object to the subpoenas based on the second and third ground, but not the first ground. Hence, 528 Main and AFG ought to be entitled to part of the objection costs incurred on or prior to 30 April 2019. I will order that 528 Main and AFG are entitled to 75 per cent of the reasonable amount of the objection costs and not more because although the first ground was not ventilated in any great detail at the objections hearing, it was nevertheless raised.

413 In my view, the objection costs that can be expenses incurred in complying with the subpoenas pursuant to r 42.11 include:

(a) advice as to the validity of the subpoenas;[170]

(b) preparation for the hearing with respect to objections against the subpoenas, including correspondence with JBI and making outlines of submissions;[171]

(c) attending the objections hearing on 30 April 2019 and making submissions at the hearing;[172] and

(d) attending the hearing on 19 February 2019, because even though the hearing of the objections was adjourned, it was listed on that date for the first return.

414 With respect to the compliance costs, JBI contends that those costs ought to be determined at the end of the proceeding because 528 Main and AFG have not complied with the subpoenas and the extent of their non-compliance will only be known at the end of the proceeding. JBI contends that non-compliance with the subpoena is important for the reasonableness of costs because r 42.12 of the Rules states as follows:

42.12 Failure to comply with subpoena - contempt of court

(1) Failure to comply with a subpoena without lawful excuse is a contempt of court and the addressee may be dealt with accordingly.

...

415 JBI had referred to 528 Main's and AFG's non-compliance at VCAT; however, their non-compliance at VCAT is irrelevant for this costs application. It is the compliance with the subpoenas issued by this Court at the request of JBI that is relevant.

416 JBI contends that 528 Main and AFG have not complied with the subpoenas notwithstanding that documents were produced by other subpoenaed persons. However, 528 Main and AFG have produced four tranches of documents. Further, the solicitors for JBI had stated in correspondence to the solicitors for 528 Main and AFG that JBI would not be seeking further documents in relation to the subpoenas and court orders and that the dispute with respect to non-compliance with the subpoenas has come to an end.[173] Although I note that JBI maintains its objections with respect to 528 Main's and AFG's alleged non-compliance and that the solicitors for JBI considered that the issues are more appropriately ventilated in the Stuart proceeding, this does not negate the statement that further documents would not be sought from 528 Main and AFG with respect to the subpoenas and the statement that the dispute of non-compliance with the subpoenas has come to an end. Therefore, I do not find that non-compliance is an issue in the costs application in these circumstances. Nor do I need to determine the question of lawful excuse under r 42.12 of the Rules.

417 JBI contends that 528 Main and AFG are seeking to be compensated for costs incurred in determining their interest in this proceeding. However, this relates to the quantum of the costs claimed and therefore the reasonableness of the claim, rather than 528 Main's and AFG's entitlement to costs.

418 Accordingly, I am satisfied that 528 Main and AFG is entitled to a reasonable amount of the costs incurred in complying with the subpoena after 30 April 2019.

(a) advice about whether documents are subject to privilege claims;[174] and

(b) collating documents and copying them.[175]

420 528 Main and AFG also claimed costs in relation to two hearings on 30 July 2019 and 26 September 2019.

421 JBI contends that 528 Main and AFG claimed costs for appearing for half a day on 30 July 2019 even though matters relating to the subpoena were not considered and that the issue at the hearing was that the club was not represented. However, at the hearing, counsel for 528 Main and AFG appeared on 30 July 2019 to maintain 528 Main's and AFG's claims for privilege, to which JBI had not responded. Although JBI did not seek to dispute the claims for privilege at the hearing and the question of privilege was not ultimately dealt with, I do not find that it was inappropriate for 528 Main and AFG to appear on 30 July 2019 when there had been no response from JBI. Therefore, 528 Main and AFG can claim reasonable costs with respect to the hearing on 30 July 2019.

422 At the hearing on 26 September 2019, although counsel for 528 Main and AFG stated that 528 Main and AFG maintained that they had complied with the subpoenas, counsel for 528 Main and AFG did not seek to ventilate the issues of compliance with the subpoenas on that day. Instead, counsel for 528 Main and AFG sought orders to list the hearing of disputes with respect to the subpoenas on another day. However, such orders were not sought by counsel for JBI. On 26 September 2019, the main focus of the hearing was on the issue of the club's legal representation. Given that 528 Main and AFG did not seek to make submissions as to compliance with the subpoenas, in my view, the expenses incurred with respect to the hearing on 26 September 2019 is not reasonably incurred in complying with the subpoenas.

423 In summary, I find that 528 Main and AFG are entitled to 75 per cent of the reasonable objection costs incurred, and to the full amount of the reasonable compliance costs incurred after 30 April 2019.

424 As the reports prepared by Ms Young and Ms Robertson provide varying opinions as to the reasonableness of the costs claimed and as to the estimate of reasonable costs, in my view, the costs ought to be taxed.

If an order for costs is made on an interlocutory application or hearing, the party in whose favour the order is made shall not tax those costs until the proceeding in which the order is made is completed, unless the Court orders that the costs may be taxed immediately.

426 JBI contends that the definition of a 'party' includes 'every person served with notice of or attending any proceeding, whether named on the record or not'.[176] JBI contends that as 528 Main and AFG have been served with notice or have attended upon the proceeding whether named on the record or not, they are parties to the proceeding.

427 In De Simone,[177] Derham AsJ held that r 63.20.1 does not apply to a non-party.[178] This was followed by J Forrest J in Charan.[179] In Charan, a non-party includes a subpoenaed person.[180] In Charan, J Forrest J did not refer to the definition of 'party' in s 3(1) of the Supreme Court Act even though subpoenaed parties have notice of the proceeding or have attended upon the proceeding for objections to the subpoenas. Therefore, according to the rules of precedent, I am bound by the decision of J Forrest J in Charan because an appeal from my decision would be heard by a single judge pursuant to s 17(3) of the Supreme Court Act.

428 Although I have found that 528 Main ought to be joined as a party to this proceeding, 528 Main is not a party until it has been formally joined. Even though r 63.20.1 does not apply to non-parties, I find it appropriate to determine whether costs ought to be taxed immediately in this application given my finding that 528 Main ought to be joined to this proceeding.

429 In De Simone, Derham AsJ referred to Setka v Abbott (No 2)[181] in setting out circumstances in which the Court may order immediate taxation of costs. His Honour said:

In Setka v Abbott (No 2), the Court of Appeal summarised the factors that may warrant an order for immediate taxation of costs as one or more of the following:

(a) There is a prospect of considerable delay in completion of the proceedings;

(b) The issue the subject of the interlocutory order is discrete from what will finally require determination; and/or

(c) The party against whom the order was made has been guilty of unsatisfactory conduct, that is conduct that was unreasonable, reprehensible or involving a want of competence and diligence.[182]

430 In De Simone, Derham AsJ held that the costs of objecting to the inspection of documents produced pursuant to a subpoena ought to be taxed immediately in favour of the Commissioner, who was a non-party, because the issue was discrete and separate from the appeal and because it was likely that it would be some time before the appeal was finalised.[183]

431 In Charan, J Forrest J held that the costs of complying with the subpoena ought to be taxed immediately because the relevant party had no further interest in the proceeding and therefore it would not serve any useful purpose for that party to await the final determination of the proceeding.[184]

432 In this costs application, similar to the situation in De Simone, I find that the costs incurred in objecting to the subpoenas and in complying with the subpoenas are an issue that is discrete and separate to the substantive issues in this appeal proceeding and that it is likely that this proceeding will not be determined for some time. This is emphasised by the general understanding that this proceeding is to be heard at the same time as or after the determination of the Stuart proceeding in circumstances where the pleadings have not been finalised in the Stuart proceeding.

433 However, in this proceeding, as distinct from Charan and De Simone, 528 Main is and continues to be interested in this proceeding. In light of my finding that 528 Main is to be joined as a party, in my view, it is not appropriate for costs to be taxed immediately. Once 528 Main is joined as a party, 528 Main will be part of the proceeding until the end of the proceeding unless the conditions are no longer satisfied, and 528 Main may subsequently be subject to further orders as to costs. Ordinarily, the costs of a party complying with a subpoena would ultimately be borne by the unsuccessful party in the proceeding.[185] Hence, if 528 Main is unsuccessful in the proceeding, it may be required to pay JBI's costs, which would ordinarily include the costs of having the subpoenas answered.[186] This will remove the utility of immediate taxation.

434 Accordingly, I will not order that the costs of 528 Main and AFG in complying with the subpoenas are to be taxed immediately. As 528 Main and AFG jointly seek their costs in complying with the subpoenas in this application, I will not make separate orders for 528 Main and AFG.

435 528 Main and AFG are entitled to 75 per cent of their reasonable costs of complying with the subpoenas on and prior to 30 April 2019, and are entitled to their reasonable costs of complying with the subpoenas after 30 April 2019. However, such costs are to be taxed at the end of the proceeding. In the event that the conditions of joinder are no longer satisfied, I will order that there is liberty to apply.

436 Further, given that 528 Main and AFG were successful in their costs application save as to the date of taxation, they are entitled to 80 per cent of the costs of this application on a standard basis.

1. By order 2(B) of the orders made by Kennedy J on 12 November 2020, the proceeding ought to be stayed in the event that the plaintiff did not provide security as ordered.

B. The Court has been informed that security has not been provided.

1. Accordingly, it is not appropriate to make orders scheduling this proceeding for further hearing or for the provision of a proposed fourth further amended statement of claim.

D. In the event that the stay is lifted, the parties will have liberty to apply.

1. The plaintiff pay the costs of the application seeking leave to file the proposed third further amended statement of claim, including costs of the hearing on 19 November 2019 insofar as the hearing relates to seeking leave to file the proposed further amended statement of claim, on a standard basis. Otherwise the costs of the summonses, including the costs referred to in paragraph 5 of the Orders made on 19 November 2019, are reserved.
2. In the event that the stay is lifted, there be liberty to apply on reasonable notice in writing.

John Barr Investments Pty Ltd v Mordialloc Sporting Club Incorporated

1. 528 Main Street Mordialloc Pty Ltd ('528 Main') as trustee for the 528 Main Street Mordialloc Unit Trust be joined to this proceeding pursuant to r 9.06(b)(i) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) subject to the following conditions:

(a) 528 Main can only make submissions that differ to the submissions ultimately advanced by Mordialloc Sporting Club Incorporated ('the club'); and

(b) the following agreements are not set aside in the proceeding S ECI 2018 01124:

(i) the On-Sale Deed dated 22 December 2016 and entered into by the club and 528 Main; and

(ii) the Related Agreements entered into by the club and 528 Main between about 13 January 2017 and about 19 December 2018, as referred to in 528 Main's points of claim filed on 3 February 2020 in this proceeding.

1. Costs of the summons filed on 28 November 2019 are reserved.

1. 528 Main and Aus Finance Group Pty Ltd ('AFG') are entitled to 75 per cent of their reasonable costs of complying with the subpoenas on and prior to 30 April 2019, and are entitled to their reasonable costs of complying with the subpoenas after 30 April 2019. The costs are to be taxed at the end of the proceeding. The ultimate responsibility for payment of such costs be costs in the proceeding.
2. The appellant pay 80 per cent of 528 Main's and AFG's costs of the summons filed on 17 October 2019 on a standard basis.
3. If the conditions of joinder are no longer satisfied, there is liberty to apply.

1. A directions hearing is listed on a date to be fixed.

[1] [2012] VSC 151 ('Environinvest v Pescott').

[2] Ibid [4], citing Australian Wool Innovation v Newkirk [2005] FCA 290, [20]-[26].

[3] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.10(1) ('Supreme Court Rules').

[5] Ibid [5]-[6] (citations omitted).

[6] [2016] VSCA 4.

[9] Supreme Court Rules (n 3) r 23.02.

[10] [2014] VSC 77.

[11] Ibid [12] (emphasis in original) (citations omitted).

[12] [2013] VSC 316, [25] ('Wheelahan'), quoted in ibid [13] (Derham AsJ).

[13] [2011] VSC 492 (30 September 2011).

[14] [2011] VSC 325 (19 July 2011).

[15] [2010] VSC 473 (20 October 2010).

[16] The function of defining issues for trial is required from an early stage. Otherwise, discovery and other interlocutory process are likely to be misdirected: Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd & Ors [1996] FCA 1758; (1996) ATPR 41-522 per Burchett J at 42,679.

[17] A reasonable cause of action or defence is one with a real chance of success, assuming the correctness of the allegations of fact in the challenged pleading.

[18] Australian Automotive Repairers' Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568 [13], citing Bruce v Oldhams Press Ltd [1936] 1 KB 697, 712-713.

[19] In Environinvest, the pleading was struck out because it was confusing, often circular, sometimes inconsistent and contained no coherent narrative.

[22] SMEC at [28]-[31]. In SMEC, Vickery J remarked (at [5]) that good pleading calls for 'judgment and courage to shed what is unnecessary'.

[23] Trade Practices Commission v David Jones (Australia) Pty Ltd & Ors [1985] FCA 228; (1985) 7 FCR 109, 114.

[24] In Gunns Ltd & Ors v Marr [2005] VSC 251, Bongiorno J remarked (at [52]) that the paragraphs in the pleading 'contain quotations from newspapers, websites and correspondence which are inappropriate in form'.

[25] Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 per Mason CJ and Gaudron J at 286.

[27] Knorr v CSIRO & Ors (No 2) [2012] VSC 268.

[28] In Gunns, Bongiorno J noted (at [20]) that the particulars to the amended statement of claim under attack incorporated allegations of approximately 40 other paragraphs, requiring the defendants to navigate through a labyrinth of allegations. His Honour refused leave to file the amended statement of claim in the proposed form.

[29] Rule 23.04 and Day v William Hill (Park Lane) Ltd [1949] 1 KB 632.

[31] Davy v Garrett [1878] UKLawRpCh 8; (1878) 7 Ch D 473.

[32] See Supreme Court Rules (n 3) r 13.02(2)(b); Agtrack (NT) Pty Ltd v Hatfield [2003] VSCA 6; (2003) 7 VR 63, 83 [33].

[33] See, eg, Associations Incorporation Reform Act 2012 (Vic) ss 35(3)(a), 36(3)(a) ('AIR Act').

[35] See, eg, ibid ss 67(1), (2), 68(1), (4).

[36] [2020] VSC 50.

[38] [2017] VSC 14; (2017) 53 VR 520 ('Exton v Extons').

[41] Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233, 356-60 [390]-[403].

[42] Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672; Exton v Extons (n 38).

[43] AIR Act (n 33) s 68; Imam Ali Islamic Centre v Iman Ali Islamic Centre Inc [2018] VSC 413, [675] ('Imam v Iman').

[45] Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union [2020] VSC 47, [59], [125], quoting John Holland Construction & Engineering Pty Ltd v Kvaener RJ Brown Pty Ltd (1996) 8 VR 681, 693 [22] ('John Holland v Kvaener').

[46] [2000] VSC 153; (2000) 34 ACSR 222.

[47] [2003] VSC 233 (Habersberger J). See also John Holland v Kvaener (n 45) 686-7 [8].

[49] Wheelahan (n 12) [25] (Dixon J).

[50] [2020] HCA 4; (2020) 376 ALR 1 ('ASIC v King').

[51] [2012] FCAFC 6; (2012) 200 FCR 296.

[52] [1978] HCA 52; (1978) 141 CLR 236.

[53] ASIC v King (n 50) 15 [48]-[49] (emphasis in original) (citations omitted).

[54] Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2008] VSC 77, [4] (Harper J).

[55] See Civil Procedure Act 2010 (Vic) s 18(d) ('CPA').

[56] However, see paragraphs 184 and 185 hereof with respect to paragraph 139 of the proposed FASOC.

[57] See CPA (n 55) s 18(d).

[58] See, eg, Gunns Ltd v Marr [2005] VSC 251, [20] (Bongiorno J).

[60] Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd [2015] VSC 497, [120] (Judd J) ('Break Fast v Gravity Ventures').

[61] Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427, 452 [89] (Gummow ACJ, Hayne, Crennan and Bell JJ), cited in Kermani v Westpac Banking Corporation [2012] VSCA 42; (2012) 36 VR 130, 152 [94] (Robson AJA) ('Kermani v Westpac').

[62] Ridgeway v R (1995) 184 CLR 19, 74-5 (Gaudron J).

[63] Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197, 247 (Deane J).

[66] Ibid 154-5 [97], quoted in Break Fast v Gravity Ventures (n 60) [99].

[67] (1993) 177 CLR 378 at 396-8 per Mason CJ and Deane and Dawson JJ.

[68] (1976) 9 ALR 509; 50 ALJR 589.

[69] [2006] FCA 979; (2006) 232 ALR 491.

[70] [2006] NTSC 70; (2006) 18 NTLR 127.

[71] (1976) 9 ALR 509; 50 ALJR 589.

[72] [2006] FCA 979; (2006) 232 ALR 491 at 505, [41].

[73] [2001] NSWCA 142; (2001) 53 NSWLR 198 at 204, [32].

[74] Break Fast v Gravity Ventures (n 60).

[79] Supreme Court Rules (n 3) r 13.03.

[82] [2020] VSCA 129.

[83] Ibid [21]-[23] (citations omitted).

[84] Bauer Media Pty Ltd v Wilson [2018] VSCA 68, [7] ('Bauer Media v Wilson').

[85] [2010] HCA 19; (2010) 241 CLR 1 ('John Alexander's Clubs v White City').

[86] Ibid 46 [131]; Botsman v Bolitho (No 1) [2018] VSCA 278; (2018) 57 VR 68, 75-6 [25] ('Botsman v Bolitho').

[87] John Alexander's Clubs v White City (n 85).

[89] [1998] VSC 88 ('Tatterson').

[90] Ibid [27]-[29]. See also CGU Insurance Ltd v Blakeley [2016] HCA 2; (2016) 259 CLR 339, 374-5 [105] (Nettle J).

[91] Wales v Vrsecky [2015] VSC 223, [25] (McMillan J).

[92] [1999] VSCA 66; [1999] 2 VR 507 ('Boral Resources v Robak').

[94] [1996] FCA 870; (1996) 64 FCR 410 ('News v Australian Rugby').

[95] Ibid 524-5. See also Huon Aquaculture Group Ltd v Secretary, Department of Primary Industries, Parks, Water and Environment (No 2) [2018] FCA 89, [42]-[44] (Kerr J).

[96] John Alexander's Clubs v White City (n 85).

[97] Ibid 46 [131]-[132] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ). See also Chickabo Pty Ltd v Zphere Pty Ltd (No 2) [2019] VSC 580, [44], [52]-[53] ('Chickabo v Zphere').

[99] Ibid [47]-[48] (emphasis in original) (citations omitted).

[103] John Alexander's Clubs v White City (n 85).

[104] White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2009] NSWCA 114; (2009) 261 ALR 86.

[105] John Alexander's Clubs v White City (n 85) 46 [131].

[107] [1997] HCA 31; (1997) 189 CLR 579 ('Levy').

[108] Ibid 601. See also Roadshow Films Pty Ltd v iiNet Ltd [2011] HCA 54; (2011) 248 CLR 37, 38-9 [2].

[112] See also Tiao v Lai (No 2) [2010] WASCA 189, [118].

[113] See, eg, Akron Roads Pty Ltd (in liq) v Crewe Sharp [2015] VSC 34.

[116] JACS [2010] HCA 19; (2010) 266 ALR 462, 493 [134] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).

[118] Civil Procedure Act 2010 (Vic) s 8(1) ('CPA'). See also Wales v Vrsecky (n 91) [47] (McMillan J).

[119] CPA (n 118) s 7(1).

[120] See Gamogab v Akiba [2007] FCAFC 74; (2007) 159 FCR 578; E I Du Pont De Nemours & Co v Commissioner of Patents (No 5) (1989) 17 NSWLR 389.

[123] Levy [1997] HCA 31; (1997) 189 CLR 579, 603; Roadshow [2011] HCA 54; (2011) 248 CLR 37, 39 [3].

[124] [2020] NSWSC 1591.

[125] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 62.01 ('Supreme Court Rules').

[127] Ibid [30]. See also Anjin No 13 Pty Ltd v Allianz Australia Insurance Ltd [2009] VSC 371; (2009) 26 VR 148, 153 [27].

[131] Levy v Victoria [1997] HCA 31; (1997) 189 CLR 579, 601 (Brennan CJ) ('Levy'); Roadshow Films Pty Ltd v iiNet Ltd [2011] HCA 54; (2011) 248 CLR 37, 38-9 [2] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ) ('Roadshow').

[132] Levy [1997] HCA 31; (1997) 189 CLR 579, 601. See also Roadshow [2011] HCA 54; (2011) 248 CLR 37, 39 [2].

[133] Levy [1997] HCA 31; (1997) 189 CLR 579, 603; Roadshow [2011] HCA 54; (2011) 248 CLR 37, 39 [3].

[134] Levy [1997] HCA 31; (1997) 189 CLR 579, 603; Roadshow [2011] HCA 54; (2011) 248 CLR 37, 39 [3].

[135] See r 64.10(3) of the Supreme Court (General Civil Procedure) Rules 2015.

[139] Supreme Court Rules (n 125) rr 42.11, 63.20.1.

[140] ASADA v 34 Players and One Support Person (No 2) [2015] VSC 14, [18] (Croft J) ('ASADA'), quoting Pyramid Building Society (in liq) v Farrow Finance Corporation (in liq) [1995] VicRp 30; [1995] 1 VR 464, 468 (Byrne J) ('Pyramid').

[141] Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270 ('Hera').

[143] [2015] VSC 286 ('De Simone').

[144] Supreme Court Act 1986 (Vic) s 3(1) ('Supreme Court Act').

[147] [2017] VSC 331 ('Charan').

[148] Ibid [20]-[21], [23] (citations omitted).

[150] Ibid [45] (Riordan J) (citations omitted).

[151] De Simone (n 143) [30]-[33].

[162] Supreme Court Act (n 144) s 3(1).

[165] [2004] VSCA 113; (2004) 9 VR 686, 696-7 [22].

[167] Ibid [20]-[21], [23], [26]-[29] (citations omitted).

[168] [2018] VSC 467.

[171] See Levey v Bird [2020] VSC 615, [34], [39] (Clayton JR).

[172] See, eg, Charan (n 147) [27].

[174] Hera (n 141) [45]; Pyramid (n 140) 468.

[176] Supreme Court Act (n 144) s 3(1).

[181] [2013] VSCA 376, [27].

[182] De Simone (n 143) [32] (citations omitted).

[185] Deposit & Investment Co Ltd (recs apptd) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267, 290 ('Deposit v Peat'), cited in Diab Pty Ltd v Yum! Restaurants Australia Pty Ltd (No 2) [2017] FCA 54, [14]. See also Levey v Bird (n 171) [33].