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Bli Bli # 1 Pty Ltd v Kimlin Investments Pty Ltd[2010] QCA 136

Bli Bli # 1 Pty Ltd v Kimlin Investments Pty Ltd[2010] QCA 136

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

SC No 5077 of 2007

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

DELIVERED ON:

4 June 2010

DELIVERED AT:

Brisbane

HEARING DATE:

18 May 2010

JUDGES:

Holmes and Fraser and White JJA

Separate reasons for judgment of each member of the Court, each concurring as to the orders made.

ORDERS:

1.  Allow the appeal and set aside the orders made in the Trial Division on 4 December 2009.

2.  On or before 18 June 2010 the plaintiffs are to give the best particulars they can give of the allegation in paragraph 11(f) of the fourth amended statement of claim.

3.  The defendants pay the plaintiffs’ costs of and incidental to the amended application filed on 17 August 2009, on the standard basis.

4.  The respondents pay the appellants’ costs of and incidental to this appeal, on the standard basis.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – STATEMENT OF CLAIM – where the plaintiffs appealed against the interlocutory orders of the primary judge striking out paragraphs in their fourth amended statement of claim – where the relevant paragraphs pleaded a fiduciary relationship and breaches of fiduciary duties – where the primary judge struck out the paragraphs on the basis that the pleading did not make out a viable claim for the alleged fiduciary duties – whether the claim was so obviously untenable that it should be rejected at the interlocutory stage of proceedings – whether the primary judge applied an incorrect principle and erred in striking out paragraphs of the pleading

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – STATEMENT OF CLAIM – where the primary judge struck out a paragraph of the plaintiffs fourth amended statement of claim relating to relief sought due to lack of compliance with r 155 of the Uniform Civil Procedure Rules 1999 (Qld) – where the plaintiffs argued that the paragraph should not be struck out as  it contained relevant information predominantly in the defendants’ knowledge – whether the primary judge erred in striking out the paragraph

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE RULES OF COURT – PLEADING – PARTICULARS – where the primary judge ordered the plaintiffs to give further particulars of other allegations in their fourth amended statement of claim – whether the primary judge erred by treating the defendants’ admissions as applicable only to an earlier statement of claim – whether the particulars were sufficient to define the issues so as to enable the defendants to have a fair opportunity to meet the plaintiffs’ case – whether the plaintiffs should be required to provide further particulars in order to define the issues for trial

Uniform Civil Procedure Rules 1999 (Qld), r 5(3), r 149, r 155, r 155(1), r 157, r 385(3)

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39, cited

Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214; [1977] HCA 11, cited

Bli Bli #1 Pty Ltd & Anor v Kimlin Investments Pty Ltd & Ors [2008] QSC 289 , cited

Bonitto v Fuerst Bros & Co Ltd [1944] AC 75, cited

Breen v Williams (1995) 186 CLR 71; [1996] HCA 57, cited

British Airways Pensions Trustees Ltd v Sir Robert McAlpine & Sons Ltd [1994] 72 BLR 26, cited

Chirnside v Fay [2007] 1 NZLR 433, cited

Cyril Leonard & Co v Simo Securities Trust Ltd [1972] 1 WLR 80; [1971] 3 All ER 1314, cited

Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70, cited

Edmunds-Jones Pty Ltd v Australian Women’s Hockey Association Inc [1999] NSWSC 1014, cited

Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21, cited

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 57, cited

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64, cited

In re the Will of F. B. Gilbert (Dec’d) (1946) 46 SR (NSW) 318, cited

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566, cited

Johnson v Buttress (1936) 56 CLR 113, [1936] HCA 41, cited

Keshi Pty Ltd v Firefly Press (Australia) Pty Ltd (2008) 246 ALR 166; [2008] FCA 440, cited

News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870, cited

Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455; [2000] QCA 292 , cited

Street & Ors v Luna Park Sydney Pty Ltd & Ors [2006] NSWSC 533, cited

United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49, cited

COUNSEL:

K A Barlow for the appellants

D Cooper SC, with C Wilson, for the respondents

SOLICITORS:

Tucker and Cowen for the appellants

Attwood Marshall for the respondents

[1] HOLMES JA: I agree with the reasons of Fraser JA and the orders he proposes.

[2]  FRASER JA: The plaintiffs in a proceeding in the Trial Division have appealed against orders striking out allegations in their fourth amended statement of claim dated 19 June 2009 and requiring them to give further particulars of other allegations in that pleading.  The pleaded dispute arises out of an alleged joint venture agreement to acquire and develop certain land.

Paragraphs 30 to 33 of the pleading

[3] The primary judge struck out paragraphs 30 to 33 of the fourth amended statement of claim.  Paragraph 30 pleads a fiduciary relationship between the plaintiffs, the first defendant, the second defendant, the fourth defendant (R Cook) and the fifth defendant (B Cook).  Paragraphs 31 and 32 plead that those defendants owed fiduciary duties to the first plaintiff and second plaintiff respectively not to appropriate, to the exclusion of the plaintiffs, an opportunity comprising the acquisition, development and sale for profit of (in the case of the first plaintiff) “the JV Land” and (in the case of the second plaintiff) “the Lease Land” without the relevant plaintiff’s knowledge and informed consent.  Paragraph 33 alleges as breaches of the fiduciary duties that R Cook and B Cook excluded the plaintiffs from the joint venture by incorporating the third defendant and arranging for it to acquire “Lot 4”(a parcel of land which includes the JV Land and part of the Lease Land) from the owner of that land (Cooney).

[4] The facts alleged to give rise to the fiduciary relationship are pleaded in paragraphs 10 to 25.  Paragraph 10 pleads that on or before 10 January 2005 R Cook, B Cook and one Rubin (“the Initial Co-Venturers”) made an oral agreement “(a) to enter into business together with a view to profit a joint venture to acquire and develop, and eventually sell, certain land (“the JV Land”)”; and to do so by the first defendant, controlled by R Cook, the second defendant, controlled by B Cook, and Rubin as trustee for the Rubin Family Discretionary Trust (“the Initial Co-Venturers’ Entities”).

[5] The terms of that agreement are pleaded in paragraph 11 to the following effect: (a)that the initial co-venturers (or the initial co-venturers’ entities) would each be entitled to one third of the profits of the joint venture; (b) that the initial co-venturers’ entities would each hold a one third interest in the JV Land and upon sale receive one third of proceeds; (c) that the initial co-venturers would procure the owner of the intended JV Land (Cooney) to grant to the initial co-venturers’ entities an option to purchase the JV Land; (d) that the initial co-venturers would ascertain the attitude of the local council to the development of an industrial estate on the JV Land; (e) that the initial co-venturers would obtain any town planning, building or other approvals necessary for the development of the JV Land from the Maroochy Shire Council on conditions satisfactory to the co-venturers; and “(f) that the initial Co-Venturers would cause the Initial Co-venturers’ Entities to exercise the said option to purchase the JV Land”.

[6] The pleading goes on to allege that: on about 10 January 2005 Cooney granted an option to purchase the JV Land to the initial co-venturers’ entities (“Option 1”); the initial co-venturers subsequently agreed upon further terms of the joint venture concerning the acquisition of an additional option to lease the Lease Land from Cooney (“Option 2”); Rubin subsequently assigned his interest in Option 1 for the JV Land to the first plaintiff and his interest in Option 2 for the Lease Land to the second plaintiff; after notices of that assignment had been given to the first and second defendants they agreed that the first and second plaintiffs had been substituted for Rubin “as Co-Venturers with R Cook and B Cook, or with the First Defendant and the Second Defendant, or with all of them in respect of the Joint Venture”; and in November 2005, R Cook, B Cook and the first plaintiff, or the initial co-venturers’ entities on behalf of R Cook, B Cook and the first plaintiff, sought from Cooney who granted an extension of the expiry date of Option 1 to purchase the JV Land to 10 May 2006.

[7] Paragraph 25 pleads that at a meeting on 26 April 2006, B Cook (on his own behalf as well as on behalf of the first and second defendants and R Cook), represented to Ryder on behalf of the plaintiffs that:

(b)the interests of Rubin in the Joint Venture had been that Rubin was entitled to one-third of the profits of the Joint Venture, had a one-third interest in the JV Land and the Lease Land, and upon sale of each the JV Land was entitled to receive one-third of the proceeds of the JV Land after costs (prior to the 1st Assignment and the 2nd Assignment) and was entitled to one-third of the profits derived from the Lease Land;

(c) the assignments of the interests of Rubin as Trustee in Option 1 and Option 2 to the First Plaintiff and the Second Plaintiff respectively were acknowledged;

(ca) the First Defendant, the Second Defendant, R Cook and B Cook recognised and acknowledged the Plaintiffs' respective interests in Option 1 and Option 2 and in the Joint Venture, in lieu of those of Rubin and Rubin as Trustee;

(d) the expiry date for Option 1 was approaching;

(e) both Option 1 and Option 2 wcould be exercised before 10 May 2006;

(f) the Joint Venture would proceed, as between the New Co-Venturers, and the First Plaintiff’s and Second Plaintiff’s interests would be ‘looked after’.”

[8] The breaches of the fiduciary duty pleaded in paragraph 33 include alleged telephone conversations and correspondence between the defendants’ and Cooney’s solicitors by which, before the 26 April 2006 meeting, the defendants proposed to buy Lot 4 and subsequently agreed with Cooney that the options would be terminated and the third defendant would buy Lot 4.  That alleged conduct is also an aspect of the plaintiffs’ allegation that the representations by B Cook at the 26 April meeting constituted misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth).  The plaintiffs also allege that they relied upon B Cook’s representations by taking no steps of their own to ensure that the options were exercised or otherwise to protect their interests.

Reasons of the primary judge

[9] The primary judge referred to the statement in Friend v Brooker[1] that “equity does not impose fiduciary duties between the parties to a deliberate commercial decision to adopt a corporate structure in which they would owe duties, but to the corporation and as directors”  and concluded that, whilst there might be grounds for pleading that a fiduciary relationship had arisen, the decision in Friend v Brooker militated against the manner in which the plaintiffs had pleaded the existence and scope of the duty.  His Honour ordered that paragraphs 30 to 33 be struck out on the basis that the relationship pleaded could not arise in the context of the pleading as it presently stood.  The plaintiffs were given leave to replead.

Summary of the arguments

[10]  Mr Barlow, who appeared for the plaintiffs, argued that in Friend v Brooker the parties to a venture chose to conduct it by a corporate vehicle in which the parties owed their fiduciary duties to that corporation, but the pleaded joint venture in this case was not to be carried forward by a corporate vehicle.  He contended that the question for the primary judge was whether the absence of a viable cause of action was clearly demonstrated.[2]  He analysed the pleading in detail and argued that it disclosed a viable claim for breach of fiduciary duty.

[11]  Mr Cooper SC, who led Mr Charles Wilson for the defendants, acknowledged that Friend v Brooker was not directly on point but he argued that it militated against the pleaded fiduciary duties.  He argued that the primary judge appropriately gave leave to re-plead because the pleading was struck out on the basis that it was embarrassing or prejudicial to a fair trial and that the Court should be slow to interfere with the exercise of a discretion concerning a point of practice or procedure.[3]  He also reminded the court of the Chief Justice’s statement in Ridolfi v Rigato Farms Pty Ltd[4] that, “[j]udges who at first instance, astute to the philosophy behind the UCPR, make procedural rulings which reflect that philosophy, sometimes proceeding with an appropriate robustness, should be able to proceed confident that their rulings will not on appeal be subjected to a pedantic or overly intrusive re-examination.” 

[12]  Counsel developed detailed submissions and cited many authorities in support of their competing contentions upon the question whether the pleading makes out a viable claim for the alleged fiduciary duties but there did not appear to be any disagreement about the relevant principles.  As the Full Court of the Federal Court pointed out in News Limited v Australian Rugby Football League Ltd,[5] the High Court’s decision in United Dominions Corporation Ltd v Brian Pty Ltd[6] demonstrates that undertakings described as “joint ventures” may attract fiduciary duties; but whether a particular joint venture does give rise to alleged fiduciary duties depends upon the form which that relationship takes and the content of the obligations undertaken by the parties[7] and the surrounding facts and circumstances.[8] Circumstances which suggest the possible existence of a fiduciary relationship relevantly include an undertaking or agreement by the alleged fiduciary to act for or on behalf or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense,[9] a relationship of trust and confidence,[10] and any dependency or vulnerability of that person which causes the person to rely upon the alleged fiduciary.[11]

[13]  Mr Cooper argued that no circumstances suggestive of a fiduciary duty are pleaded and, in particular, that the allegation in subparagraph 25(f) of the fourth amended statement of claim, understood in the context of earlier allegations, involves no more than an allegation that the defendants acknowledged that Rubin had effectively assigned his interest in the joint venture to the plaintiffs.  In contending that the facts pleaded make it arguable that there were circumstances suggestive of a fiduciary duty, Mr Barlow emphasised the allegation that the plaintiffs only latterly became party to the originally constituted joint venture, the allegation that the plaintiffs’ co-venturers had dealt with Cooney to secure rights to the subject matter of that venture, and the assurance alleged in paragraph 25(f) to the effect that the appellants’ co-venturers would look after the appellants’ interests.

Discussion

[14]  It should first be noted that in June 2008 Daubney J heard an application by the third defendant for orders striking out the plaintiffs’ claims to an interest in the land of which the third defendant was the registered owner.  Daubney J dismissed that application, having found that it was arguable that the third defendant was a knowing participant in a breach of fiduciary duty pleaded by the plaintiffs.[12]  That decision does not resolve the present issue because it related to an application only by the third defendant and because the central ground of the application was that the interest claimed by the plaintiffs was defeated by operation of the indefeasibility provisions in the Land Title Act 1994 (Qld). 

[15]  There is scope for technical improvement in the plaintiffs’ pleading, but as the matter was put to the primary judge, the plaintiffs’ case for a fiduciary relationship stood or fell on the facts alleged in that pleading.  Accordingly the primary judge’s order potentially affected the plaintiff’s substantive rights and the pleading should not have been struck out unless the absence of a viable cause of action for breach of fiduciary duty was clearly demonstrated.

[16]  In my respectful opinion, the ground of the primary judge’s decision that Friend v Brooker militated against the manner of the pleading cannot be sustained.  The issue at the trial of that case, which directly concerned the equitable doctrine of contribution, turned in part on the question whether there was a partnership or joint venture between the directors of a company which was distinct from the company and continued after its formation.  The trial judge made important findings: upon incorporation of the company the previous partnership between the directors ceased, as the parties intended; thereafter their relationship was as co-directors of the company and the assets and liabilities associated with the business formally conducted in partnership were the company’s; and Mr Brooker had failed to prove any agreement pursuant to which the existence of a fiduciary relationship with Mr Friend was established after the incorporation of the company of which they became directors.[13]  In that context the High Court accepted the submission that “equity does not impose fiduciary duties between the parties to a deliberate commercial decision to adopt a corporate structure in which they would owe duties, but to the corporation and as directors.”[14]  That statement has no application in this case, where the plaintiffs allege that there was a joint venture amongst the plaintiffs and some of the defendants and where the issue arises at the pleading stage.

[17]  In the way in which the matter was approached in the parties’ arguments, much depends upon the effect of the pleaded representations by the appellants’ co-venturers, and, in particular, the assurance alleged in paragraph 25(f) upon which the plaintiffs relied (so they allege in their Trade Practices Act pleading) by not taking steps to protect their own interests.  The complexion to be given to those representations might be influenced by the effect of a combination of other alleged facts and circumstances, including the term of the original joint venture agreement alleged in paragraph 11(f) that the initial co-venturers “would cause” the initial co-venturers’ entities to exercise the option to purchase the JV Land, the circumstance that the plaintiffs did not become parties to the joint venture until relatively late in the piece, the significance of the then pre-existing relationship between the initial co-venturers and Cooney under which the initial co-venturers had procured Cooney to grant to them an option to purchase the JV Land, the relative brevity of the period between the 26 April 2006 meeting when the assurance in paragraph 25(f) was allegedly made and the anticipated option exercise date of 10 May 2006, and the alleged fact that some of the defendants (but not the plaintiffs) had dealings with Cooney concerning acquisition of his land.

[18]  I am not persuaded that, when regard is had to the surrounding circumstances revealed by the evidence at trial, proof of the pleaded facts might not reveal such an undertaking by the plaintiffs’ co-venturers to act in the plaintiffs’ interests and such a corresponding dependence or vulnerability in the plaintiffs as to give rise to a relationship which included the pleaded fiduciary duties.  It is appropriate to refrain from any comment about the plaintiffs’ prospects of proving such a fiduciary relationship.  It is sufficient to express my conclusion that the claim is not so obviously untenable that it should be rejected at this interlocutory stage of the proceedings.

[19]  This appeal is not like the appeal in Ridolfi v Rigato Farms Pty Ltd,[15] in which the Chief Justice held[16] that the primary judge had apparently not acted on any wrong principle, taken into account any irrelevant or extraneous matters, failed to take account of some material consideration, or proceeded upon a misapprehension of facts.  The plaintiffs have made good their contention that the primary judge applied an incorrect principle and erred in striking out paragraphs 30 to 33 of the pleading.  That order should be set aside. 

Particulars of paragraphs 10 and 11

[20]  The primary judge ordered that the plaintiffs give further particulars of the allegations in paragraphs 10 and 11 of the fourth amended statement of claim in accordance with paragraphs 3 and 5 of the defendants’ request for particulars dated 12 July 2007.  That request for particulars sought particulars of dates, locations, modes, parties, and the subject and effect of conversations alleged in paragraphs 10 and 11. 

[21]  The primary judge did not accept the plaintiffs’ argument that the defendants had admitted paragraph 10.  His Honour observed that the admission concerned an earlier version of the statement of claim.  His Honour accepted the defendants’ complaint that the particulars were inadequate in that they did not provide information about the number of conversations, when they were, the parties to them, and the subject and effect of each conversation.  The primary judge did not regard as sufficient the plaintiffs’ response that because they were not parties to the conversations they could not give any further particulars: whilst the circumstance  that “the facts are in the knowledge of the defendants is relevant in deciding the extent to which an allegation has to be particularised and the extent to which it is reasonable to defer the provision of further particulars until after discovery has been had”,[17] the plaintiffs did not seek to defer provision of particulars until after discovery but asserted that they had provided the best particulars that they could.  The primary judge considered that the allegations in paragraphs 10 and 11 were central to the plaintiffs’ claim and the defendants were entitled to know what was said to give rise to the joint venture upon which the pleading was based.  The primary judge concluded that it was appropriate for the plaintiffs to provide proper particulars of those paragraphs and, if they could not, then the defendants could take such further action as they saw fit.

[22]  One question agitated in the parties’ submissions before the primary judge concerned the defendants’ delay in pursuing those further particulars.  The request for particulars which informed the primary judge’s order was delivered some two and a half years earlier.  The plaintiffs provided an answer to that request eight days after it was delivered, on 20 July 2007.  Those particulars narrowed the time frame of the pleaded conversation or conversations to between about December 2004 and 10 January 2005, they identified the parties to the conversations as Rubin and “the Fourth Defendant and/or the Fifth Defendant”, and they described the subject and effect of the conversation or conversations (in the case of paragraph 11 by reference to the terms pleaded in paragraphs 11(a) to (f) of the statement of claim).  In August 2007 the defendants’ solicitors took issue with some of the particulars, but they did not take issue with the particulars of paragraphs 10 and 11.  They advanced the present complaint in their letter dated 20 March 2009.  Before the primary judge it was submitted for the defendants that the application should be dismissed on the ground that it was late, unnecessary to determine the real issues, and apparently designed both to increase costs and to delay the trial of the proceeding. 

[23]  The primary judge did not refer to that submission.  Mr Barlow argued that it ought at least to have been taken into account in determining whether to make any of the orders sought.  Mr Cooper argued that although the submission was not mentioned in the reasons there was no reason to think that the primary judge did not consider it.

[24]  The question is whether the particulars were sufficient to define the issues so as to enable the defendants to have a fair opportunity to meet the plaintiffs’ case and to avoid being taken by surprise.[18]  The defendants’ delay in seeking particulars was a very relevant consideration in favour of refusing the application.  It is not easy to reconcile that delay with the defendants’ implied undertaking to the Court and to the plaintiffs under UCPR r 5(3) to proceed in an expeditious way.  The plaintiffs’ own delay is no answer.  Furthermore, although paragraphs 10 and 11 are plainly important allegations, in my respectful opinion the primary judge erred by treating the defendants’ admissions as applicable only to an earlier version of the statement of claim.  In the defence to that earlier version of the statement of claim the defendants effectively admitted all of the allegations which now appear in paragraphs 10 and 11 of the fourth amended statement of claim, other than paragraph 11(f).  I do not accept Mr Cooper’s argument that the amendments to the earlier version of paragraph 10 (shown in the current pleading quoted in paragraph 4 above) justified the defendants’ long delayed pursuit of further particulars of allegations which had been admitted.  Despite the characterisation in the first statement of claim of the joint venture as a “business together with a view to profit” that pleading did not allege that the parties were in a partnership and it alleged joint venture terms which were not materially different from those alleged in the current pleading.  In any event the defendants did not deliver or seek leave to deliver an amended defence in response to any of the subsequent amended statements of claim.  Their admissions stand as admissions of paragraphs 10 and 11 of the fourth amended statement of claim.[19]

[25]  Mr Cooper criticised the use of the expression “and/or” in the description in the further particulars of the parties to the conversation or conversations as Rubin and “the Fourth Defendant and/or the Fifth Defendant”.  We were referred to Edmunds-Jones Pty Ltd v Australian Women’s Hockey Association Inc,[20] in which Santow J noted that Viscount Simon had spoken of “the repeated use of that bastard conjunction “and/or” which has, I fear, become the Commercial Court’s contribution to basic English”.[21] Despite the inelegance of expression, the particulars plainly convey that the parties to the relevant conversations with Rubin were the fourth defendant, or the fifth defendant, or the fourth and fifth defendants. 

[26]  The defendants’ conduct in pursuing their broad request for further particulars of admitted allegations long after the delivery of particulars about which they made no complaint is just that sort of litigious pedantry which invoked Saville LJ’s observations in British Airways Pensions Trustees Ltd v Sir Robert McAlpine & Sons Ltd:[22]

“The basic purpose of pleadings is to enable the opposing party to know what case is being made in sufficient detail to enable that party properly to prepare to answer it. To my mind it seems that in recent years there has been a tendency to forget this basic purpose and to seek particularisation even when it is not really required. This is not only costly in itself, but is calculated to lead to delay and to interlocutory battles in which the parties and the court pore over endless pages of pleadings to see whether or not some particular point has or has not been raised or answered, when in truth each party knows perfectly well what case is made by the other and is able properly to prepare to deal with it. Pleadings are not a game to be played at the expense of the litigants, nor an end in themselves, but a means to the end, and that end is to give each party a fair hearing.”

[27]  Because the primary judge erred by not treating the defendants’ admissions as admissions of allegations in the current pleadings, this Court must decide whether any particulars should be ordered.  The only substantial dispute on this aspect of the pleading is that, whereas the plaintiffs allege in paragraph 11(f) that it was a term of the joint venture that the initial co-venturers would cause the initial co-venturers’ entities to exercise the option to purchase the JV Land, the defendants allege[23]  that the initial co-venturers or the initial co-venturers’ entities would not exercise any option to purchase the JV Land before they obtained town planning approval from the Council on terms and conditions that were satisfactory to them.  The resolution of that issue might have a bearing upon the plaintiffs’ claim that there was a fiduciary relationship.  In the interests of defining the issues for trial it is appropriate to require the plaintiffs to provide the best particulars they can provide of paragraph 11(f).

[28]  The plaintiffs opposed such an order.  Mr Barlow pointed out that the plaintiffs’ particulars of 20 July 2007 asserted that that they were the best particulars which the plaintiffs could give.  An affidavit by the plaintiffs’ solicitor deposed that no representative of the plaintiffs was present at the relevant conversations, that the plaintiffs had been informed in general terms of the conversations by Rubin, that the plaintiffs had no ongoing contact with Rubin, and that the plaintiffs were “unable to provide any further particulars in respect of those conversations.”  In reply the defendants filed an affidavit by Rubin in which he deposed that in late 2008 he gave a statement to the plaintiffs’ solicitor and, in the course of the interview for that statement, did not refuse to answer any questions posed to him.  The plaintiffs’ solicitor filed an affidavit in response in which he referred to a meeting in April 2008 with Mr Rubin in which, “we discussed these proceedings in general terms”.  He denied that a statement had been taken from Mr Rubin during that meeting or since.  There was no evidence that Rubin would not co-operate with a request by the plaintiffs for further information in an attempt to provide answers to the defendants’ request for particulars.  In the absence of evidence that the plaintiffs cannot obtain information from Rubin which would enable them to draft better particulars, the plaintiffs should be ordered to provide the best particulars they can of paragraph 11(f).

Paragraph 39 of the pleading

[29]  The relief claimed by the plaintiffs includes declarations that the third defendant holds one third of its interest in the JV Land, or in Lot 4, and in the Lease Land, on constructive trusts for the plaintiffs, an account of profits, equitable compensation, and damages pursuant to s 82 of the Trade Practices Act.  The facts relevant to the money claims are pleaded as follows:

“38.To date, the Third Defendant has received and retained all of the benefits (including the opportunity for the development, lease and sale of Lot 4) and profits arising from the acquisition, use for income earning activities and development of:

(a) the JV Land and that part of the Lease Land that is on Lot 4; or

(b) alternatively, Lot 4.

39.As a consequence of the conduct of the First Defendant, the Second Defendant, the Third Defendant, R Cook and B Cook pleaded in paragraphs 1 to 0 38 above, the First Plaintiff and the Second Plaintiff have each suffered loss and damage.

Particulars

The Plaintiffs have lost the opportunity to participate in, and to receive, a sum equal to one-third of the profits to be derived from the development, use for income earning activities and sale of:

(a) the JV Land and the Lease Land; or

(b) alternatively, Lot 4 and the Lease Land.

The Plaintiffs are unable to provide particulars of the loss until the Defendants provide full disclosure of the income earning activities undertaken by them using Lot 4.

[30]  The primary judge declined to strike out paragraph 38 because it was a claim which was obviously within the knowledge of the defendants and should be particularised in the light of further disclosure.  His Honour decided that paragraph 39 should be struck out, with leave to replead, because that paragraph did not comply with UCPR r 155.  I would accept Mr Barlow’s argument that the primary judge’s reasoning concerning paragraph 38 applies equally to paragraph 39.  In both cases the relevant information is predominantly within the defendants’ knowledge.  Paragraph 39 does not comply with r 155(1) because it does not state the amount of the damages claimed, but the particulars are sufficient to inform the defendants of the nature of the plaintiffs’ case on damages and how they will be quantified.

[31]  Mr Cooper properly conceded that the plaintiffs should be at liberty to give the best particulars they can and then to supplement them, if possible, after disclosure or interrogatories,[24] but he argued that the defendants had given disclosure, that no complaint about disclosure had found its way into solicitors’ correspondence, and that the primary judge’s reasons reflected a judgment that the plaintiffs were in a position to give better particulars than they had given.  That argument departs from the manner in which the defendants argued the point before the primary judge.  In a written submission at first instance the defendants contended that paragraphs 38 and 39 should be struck out for non-compliance with UCPR r 155 because “the provision of particulars will not solve the deficiencies in these paragraphs”, “a party should not plead an allegation in respect of which it has no evidence”, and the allegations are “unintelligible and not capable of being addressed by a responsive pleading designed to join issue with respect to the matter alleged”.[25]  There was no challenge before the primary judge to the statement in the plaintiffs’ solicitor’s affidavit that the plaintiffs were unable to provide any further particulars of the benefits received and profits made by the defendants from using the JV Land until such time that the defendants provided further disclosure. 

[32]  Mr Cooper frankly told the Court that he was unaware whether or not the necessary disclosure had been made.  It is desirable that any uncertainty about the completeness of disclosure be resolved as soon as practicable, by directions if necessary.  The Court was informed that the proceeding is on the supervised list, so that it may be anticipated that appropriate directions will be made once judgment is delivered in this appeal. 

Disposition and orders

[33]  The primary judge ordered the plaintiffs to pay the defendants’ costs of the application.  In the result I favour, the defendants’ application was overreaching and should have been rejected save in one relatively minor respect.  I would instead order the defendants to pay the plaintiffs’ costs of the application.  The defendants should also be ordered to pay the costs of the appeal.

[34]  In my view the appropriate orders are:

1. Allow the appeal and set aside the orders made in the Trial Division on 4 December 2009.

2. On or before 18 June 2010 the plaintiffs are to give the best particulars they can give of the allegation in paragraph 11(f) of the fourth amended statement of claim.

3. The defendants pay the plaintiffs’ costs of and incidental to the amended application filed on 17 August 2009, on the standard basis.

4. The respondents pay the appellants’ costs of and incidental to this appeal, on the standard basis. 

[35]  WHITE JA: I have had the opportunity to read the reasons of Fraser JA and agree with the reasons and orders of his Honour.

Footnotes

[1] (2009) 239 CLR 129, per French CJ, Gummow, Hayne and Bell JJ at [86], Heydon J agreeing at [92].

[2] General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 per Barwick CJ at 129-130.

[3] See Re The Will of F. B.Gilbert (deceased) (1946) 46 SR (NSW) 318 per Jordan CJ at 322-324 and Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 per Gibb CJ at 177.

[4] [2001] 2 Qd R 455 at [24].

[5] (1996) 64 FCR 410 per Lockhart, von Doussa and Sackville JJ at 531-532.

[6] United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1.

[7] United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 per Mason, Brennan and Deane JJ at 10-11 and per Dawson J at 15-16.

[8] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 102.

[9] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 72, 96-97, 102; Breen v Williams (1995) 186 CLR 71 at 107; News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 539, 541.

[10] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 69, United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 at 12, 16; Breen v Williams (1995) 186 CLR 71 at 107; Chirnside v Fay [2007] 1 NZLR 433 at [52], [80], [90], [91].

[11] Johnson v Buttress (1936) 56 CLR 113 at 134-135; Breen v Williams (1995) 186 CLR 71 at 107.

[12] Bli Bli #1 Pty Ltd & Anor v Kimlin Investments Pty Ltd & Ors [2008] QSC 289 at [49].

[13] Friend v Brooker (2009) 239 CLR 129 at [12], [23] and [24].

[14] Friend v Brooker (2009) 239 CLR 129, French CJ, Gummow, Hayne and Bell JJ at [86], Heydon J agreeing with that paragraph at [92].

[15] [2001] 2 Qd R 455.

[16] de Jersey CJ at [11].

[17] Street & Ors v Luna Park Sydney Pty Ltd & Ors [2006] NSWSC 533 per Brereton J at [16].

[18] UCPR rr 149, 157; Dare v Pulham (1982) 148 CLR 658 at 664; Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 at 221.

[19] UCPR, r 385(3).

[20] [1999] NSWSC 1014 at [211].

[21] Bonitto v Fuerst Bros & Co Ltd [1944] AC 75 at 82.

[22] [1994] 72 BLR 26 at 33-34.

[23] Defence to the amended statement of claim, para 8(c)(iv).

[24] See Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566 at 570; Street v Luna Park Sydney Pty Ltd [2006] NSWSC 533 at [15]; Keshi Pty Ltd v Firefly Press (Australia) Pty Ltd (2008) 246 ALR 166 at 31; Cyril Leonard & Co v Simo Securities Trust Ltd [1971] 3 All ER 1314 at 1322.

[25] Respondents’ outline of submissions, paragraphs 27-29.

Close

Editorial Notes

  • Published Case Name:

    Bli Bli # 1 P/L & Anor v Kimlin Investments P/L & Anor

  • Shortened Case Name:

    Bli Bli # 1 Pty Ltd v Kimlin Investments Pty Ltd

  • MNC:

    [2010] QCA 136

  • Court:

    QCA

  • Judge(s):

    Holmes JA, Fraser JA, White JA

  • Date:

    04 Jun 2010

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2009] QSC 39004 Dec 2009Martin J.
Appeal Determined (QCA)[2010] QCA 13604 Jun 2010-

Appeal Status

Appeal Determined (QCA)

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