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  4. John Kallinicos Accountants Pty Ltd v Dundrenan Pty Ltd - [2009] QDC 141

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John Kallinicos Accountants Pty Ltd v Dundrenan Pty Ltd[2009] QDC 141

John Kallinicos Accountants Pty Ltd v Dundrenan Pty Ltd[2009] QDC 141

DISTRICT COURT OF QUEENSLAND

CITATION:

John Kallinicos Accountants Pty Ltd & Anor v Dundrenan Pty Ltd & Ors [2009] QDC 141

PARTIES:

JOHN KALLINICOS ACCOUNTANTS PTY LTD

(First Plaintiff)

AND

DUDLEY GROUP HOLDINGS PTY LTD

(Second Plaintiff)

AND

DUNDRENAN PTY LTD

(First Defendant)

AND

NOEL DAVID ROACH

(Second Defendant)

AND

NOLA LILLIAN ROACH

(Third Defendant)

AND

MORRIS ARTHUR LEE

(Fourth Defendant)

AND

ROSLYN SEYMOUR LEE

(Fifth Defendant)

AND

JOHN GEORGE KALLINICOS

(Sixth Defendant by counterclaim)

AND

DUNDRENAN DEVELOPMENTS PTY LTD

(Seventh Defendant)

FILE NO/S:

BD3783/06

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

29 May 2009

DELIVERED AT:

Brisbane

HEARING DATE:

30 January 2009

JUDGE:

Irwin DCJ

ORDER:

  1. The first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, as requested in the first to fifth and seventh defendants' request for further and better particulars dated 17 January 2008, being requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51.
  2. In relation to requests Nos 22(g), 14(a), 18(a), 19, 27(a), 28(a), and 50, the first and second plaintiffs and the sixth defendant by counterclaim produce the documents requested to the solicitor for the first to fifth and seventh defendants and permit copies to be taken by that solicitor.
  3. Otherwise the application by the first to fifth and seventh defendants that the first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, is dismissed.
  4. The application by the first to fifth and seventh defendants that the second further amended statement of claim filed on 29 April 2008, be struck out under r 171 of the UCPR is dismissed.
  5. The first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 as requested in the first and second plaintiffs’ and the sixth defendant by counterclaim request for further and better particulars dated 8 July 2008, being requests Nos 7, 9, 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), 15(g), 16, 17, 18, 21, 22(j) and (k), 24(a)-(e), 25(j) and (k), 27(a)-(e), 28(j) and (k), 30(a)-(e), 31(j) and (k), 33(a)-(e), 34(j) and (k), 36(a)-(e), 38(a)-(e), 39(b)-(f), 41, 42, 43, and 44.
  6. In relation to requests Nos 15(h)(iv), 22(h), and 24(e)(ix), the first to fifth and seventh defendants produce the documents requested to the solicitor for the first and second plaintiffs and the sixth defendant by counterclaim and permit copies to be taken by that solicitor.
  7. Otherwise, the application by the first and second plaintiffs and the sixth defendant by counterclaim that the first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 and to provide copies of documents pursuant to r 222 of the UCPR be dismissed.
  8. The application by the first and second plaintiffs and the sixth defendant by counterclaim that the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out in its entirety pursuant to r 171 of the UCPR, and judgment be entered in favour of the first and second plaintiffs and sixth defendant by counterclaim in respect of the claim is dismissed.
  9. The application by the first and second plaintiffs and the sixth defendant by counterclaim that specified paragraphs of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out and the first to fifth and seventh defendants file and serve an amended defence and counterclaim is dismissed.
  10. The legal representatives for the first and second plaintiffs and the sixth defendant by counterclaim, and the first to fifth and seventh defendants make contact with my associate within seven days of the date of this order to arrange that this mater be listed for argument on:

(i) the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these orders; and

(ii) costs.

CATCHWORDS:

PROCEDURE – Particulars – requests for further and better particulars – applications to strike out pleadings

PROCEDURE – Particulars – request for further and better particulars – request for production of documents pursuant to Uniform Civil Procedure Rules 1999 r 222 – manner of compliance – whether sufficient to make the documents available for inspection at the office of the party’s solicitor and for copies to be provided upon the other party undertaking to meet reasonable copying costs – whether the party must produce the document to the other party’s solicitor and permit copies to be taken.

PROCEDURE – Mediation – whether to exercise discretion to refer dispute to mediation

Uniform Civil Procedure Rules 1999 rr 5, 150, 157, 161, 171, 222, 320, and 367

Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214

Belela Pty Ltd v. Menzies Excavation Pty Ltd [2005] 2 Qd R 230

Bloeman v Atkinson (1977) Qd R 291

Kev Leamon Earthmovers Pty Ltd v Hammond Village Pty Ltd (1998) 19 Qld Lawyer Reps 10-11

The King v Associated Northern Collieries (1910) 11 CLR 738

Sim v Wran (1984) 1 NSWLR 317

Trade Practices Commission v Total Australia (1975) 24 FLR 413

COUNSEL:

P. W. Hackett for the plaintiffs and sixth defendant by counterclaim

G. J. Handran for the first, second, third, fourth, fifth, and seventh defendants

SOLICITORS:

Londy Lawyers for the plaintiffs and sixth defendant by counterclaim

HWL Ebsworth for the first, second, third, fourth, fifth, and seventh defendants

Introduction

  1. [1]
    The plaintiffs are accountants and registered tax agents. They sue for unpaid fees asserted to be due and owing for services provided to the defendants.[1]
  1. [2]
    The claim is based on a number of alleged tax retainers with the defendants, including a partnership retainer. The bulk of the claim is for $55,834.35, which is alleged to arise from a tax audit retainer entered into as a result of an Australian Taxation Office (ATO) audit concerning the defendants.
  1. [3]
    The claim is for damages for breach of contract. Alternatively, it is based on a quantum meruit basis. There is no material difference in the quantum of the claims.
  1. [4]
    The defendants deny the claim and counterclaim for damages for breach of contract or negligence based on alleged Audit Errors which are asserted to have been identified in the ATO audit. In the alternative, it seeks compensation under the Trade Practices Act 1974 or payment under the Income Tax Assessment Act 1936.

Chronology of proceedings

  1. [5]
    The plaintiffs commenced proceedings against the first to fifth defendants on 22 December 2006.  After amendment of the statement of claim the defendants filed an amended defence and counterclaim on 19 June 2007.  The sixth defendant was added by the counterclaim.
  1. [6]
    On 16 November 2007 the plaintiffs filed a further amended statement of claim adding the seventh defendant.  The plaintiffs also filed a reply and answer on this date.  This court gave leave to add the seventh defendant on 21 April 2008.
  1. [7]
    On 17 January 2008 the defendants requested further and better particulars of the further amended statement of claim and the reply and answer.
  1. [8]
    On 29 April 2008 the plaintiffs filed a second further amended statement of claim and an amended claim.
  1. [9]
    On 15 May 2008 the plaintiffs filed further and better particulars of the further amended statement of claim and the reply and answer.
  1. [10]
    On 28 May 2008 the defendants filed the defence to the second further amended statement of claim and counterclaim.
  1. [11]
    On 9 July 2008 the plaintiffs requested further and better particulars of the defence to the second further amended statement of claim and counterclaim.  These were delivered on 8 September 2008.

Applications

Nature of the plaintiffs’ application[2]

  1. [12]
    The nature of the plaintiffs’ application which was filed on 5 November 2008 is summarised in their 13 November 2008 outline as follows:

“1. The Defence to the Second Further Amended Statement of Claim and Counterclaim (the Defence and Counterclaim) is devoid of relevant particulars to such an extent that the following relief is sought:

  1. (a)
    striking out the Defence and Counterclaim in its entirety pursuant to rule 171 UCPR.  If that is done, the plaintiffs also seek judgment, however, Your Honour may think it more appropriate for them to have a further opportunity to plead properly;
  1. (b)
    in the alternative to (a):-
  1. (i)
    striking out specific paragraphs of the Defence and Counterclaim with leave to re‑plead, or
  1. (ii)
    the provision of Further and Better Particulars of those specific paragraphs of the Defence and Counterclaim.
  1. The plaintiffs also seek the provision of copies of documents referred to in the Defence and Counterclaim pursuant to rule 222 UCPR.”

Nature of the defendants’ application

  1. [13]
    On 13 November 2008 the defendants filed a cross application for further and better particulars of the second further amended statement of claim, or as it is put in their outline, “preferably a third further statement of claim”.
  1. [14]
    This application may be summarised as being for:

  • further and better particulars of the second further amended statement of claim (the statement of claim) pursuant to r 161 of the Uniform Civil Procedure Rules 1999 (UCPR).

  • further and alternatively that the statement of claim be stuck out under r 171 of the UCPR.

  • further and alternatively that all necessary and appropriate directions be made to advance the matter under r 367 of the UCPR.

  1. [15]
    The defendants also submit that consideration should be given to a court appointed expert, such as a forensic accountant, to consider the suitability of the accounting services provided by the plaintiff. Further, given the extremely small amount in dispute and the complexity of the matter, it is submitted that the action is apt for court referred mediation (see r 320(b) of the UCPR).
  1. [16]
    The application was also for it to be heard together with the plaintiffs’ application. On 13 November 2008 an order was made to this effect.  As a result both applications were heard by me.

Background

The plaintiff’s case[3]

  1. [17]
    The plaintiff companies have carried on an accounting business under the name Kallinicos Bray Accountants since 12 July 2005.  The sixth defendant by counterclaim (the sixth defendant) is a director of the first plaintiff.
  1. [18]
    At a meeting on 26 June 2001 the second to fourth defendants[4] on behalf of themselves and the first defendant retained the accountancy firm then operated by the sixth defendant to:
  1. (a)
    prepare and submit to the ATO business activity statements (BAS) and tax returns based upon spreadsheets and summaries prepared by the third defendant or such other information provided by or on behalf of the defendants[5] as opposed to source documents.
  1. (b)
    act as their postal address for all ATO correspondence and to deal with and respond to any such correspondence.

This is referred to as the “tax agent retainer”.

  1. [19]
    As stated in footnote 2, the first to fifth defendants were present at this meeting, and informed the sixth defendant that the third defendant had authority to provide him with instructions on behalf of the defendants.
  1. [20]
    Between the date of that meeting and 30 June 2002 the sixth defendant on behalf of Leddy Kallinicos Pty Ltd regularly received instructions from the third defendant on behalf of the defendants.
  1. [21]
    Between 30 June 2002 and 11 July 2005, the sixth defendant on behalf of the first plaintiff regularly received instructions on behalf of the defendants.
  1. [22]
    Between 12 July 2005 and 11 July 2006, the sixth defendant on behalf of the plaintiffs regularly received instructions on behalf of the defendants.
  1. [23]
    By letter dated 11 July 2006, the third defendant purported to terminate the plaintiffs’ retainer.
  1. [24]
    The second to fifth defendants were at all material times in partnership with each other and directors of the first defendant. As members of the partnership, they were parties to a written joint venture agreement with the first defendant made on or about 13 June 2001.[6]
  1. [25]
    At all material times the third defendant was married to the second defendant and trustee of the Roach Family Trust; she was the sister of the fourth defendant and the sister-in-law of the fifth defendant; and as indicated she represented the defendants in dealings with the plaintiffs.
  1. [26]
    At all material times, the fourth defendant was married to the fifth defendant and trustee of the Lee Family Trust; and represented himself and the fifth defendant in dealings with the plaintiffs. In relation to this, it is alleged that between 26 June 2001 and 11 July 2006, the sixth defendant, or staff members assisting him, regularly received instructions and information from the fourth defendant for the preparation of his and the fifth defendant’s income tax returns.
  1. [27]
    It is alleged that the seventh defendant had adopted the tax agent retainer on and from its incorporation on 24 June 2003.
  1. [28]
    With the exception of the tax audit retainer the claim is based on a number of alleged retainers in which the defendants and the partnership allegedly engaged the plaintiffs to prepare their financial statements and income tax returns for the financial year ended 30 June 2005.
  1. [29]
    They are the Dundrenan retainer, the Partnership retainer, the Noel Roach retainer, the Nola Roach retainer, the Morris Lee retainer, the Roslyn Lee retainer, and the Dundrenan Developments retainer.
  1. [30]
    It is alleged that the Dundrenan, the Partnership, and the Dundrenan Developments retainers were oral and comprised of various discussions between the third defendant on behalf of the first defendant, the Partnership and the seventh defendant respectively and the sixth defendant on behalf of the plaintiff.
  1. [31]
    It is alleged that the Noel Roach and Nola Roach retainers were:
  1. (a)
    oral and comprised of various discussions between the third defendant on behalf of the second defendant and on her own behalf and the sixth defendant on behalf of the plaintiffs; or
  1. (b)
    evinced by the subsequent conduct of the second and third defendants in signing an ELS Declaration Form instructing the plaintiffs to lodge their 2005 tax returns and that they were true and correct.
  1. [32]
    It is alleged that the Morris Lee and Roslyn Lee retainers were:
  1. (a)
    oral and comprised of various discussions between the fourth defendant on behalf of the fifth defendant and on his own behalf and the sixth defendant on behalf of the plaintiffs; or
  1. (b)
    evinced by the subsequent conduct of the fourth and fifth defendants in signing an ELS Declaration Form instructing the plaintiffs to lodge their 2005 tax returns and that they were true and correct.
  1. [33]
    It is alleged that it was an implied term of each retainer that the relevant defendant or defendants would pay for the plaintiffs’ services on an hourly basis at the rates normally charged by them.
  1. [34]
    It is alleged that the plaintiffs provided professional services pursuant to the retainer. The plaintiffs purport to provide full particulars of these services by reference to specified tax invoices and copies of their billing worksheets which they have previously provided to the defendants’ solicitors. They also rely on these billing worksheets to particularise how the fees were calculated.
  1. [35]
    The plaintiffs allege that in breach of the retainers and despite demand, the defendants, have failed to pay the fees to which they are entitled.
  1. [36]
    The consequential alternative claims for breach of contract and on a quantum meruit basis are as follows:
  1. (a)
    against the first defendant (Dundrenan retainer) - $3,069.77
  1. (b)
    against the second to fifth defendants (Partnership retainer) - $2,420.00
  1. (c)
    against the second defendant (Noel Roach retainer) - $825.00
  1. (d)
    against the third defendant (Nola Roach retainer) - $1,650.00
  1. (e)
    against the fourth defendant (Morris Lee retainer) - $2,706.00
  1. (f)
    against the fifth defendant (Roslyn Lee retainer) - $605.00
  1. (g)
    against the seventh defendant (Dundrenan Developments retainer) - $2,468.86.
  1. [37]
    However, as indicated, the bulk of the claim is for $55,834.35 on the basis of the alleged tax audit retainer. It is said this arose on or about 22 August 2005 through the first to fifth defendants and the seventh defendant engaging the plaintiffs to provide professional services to the defendants in respect of an ATO audit of the financial affairs of the first defendant and the partnership.
  1. [38]
    It is alleged that the tax audit retainer was:
  1. (a)
    oral and comprised of various discussions between the third defendant on behalf of the defendants and the sixth defendant on behalf of the plaintiffs; or
  1. (b)
    alternatively evinced by subsequent conduct in receiving services of the plaintiffs in respect of the tax audit.
  1. [39]
    It is alleged that it was verbally agreed during the discussions referred to in paragraph [38(a)] that the defendants would be jointly liable for payment of the plaintiffs’ fees for services rendered in connection with the tax audit retainer; and it was an implied term of the retainer that the defendants would pay for the plaintiffs’ services on an hourly basis at the rates normally charged by the plaintiffs.
  1. [40]
    It is alleged that the plaintiffs provided professional services pursuant to the retainer. The plaintiffs again purport to provide full particulars of these services by reference to a specified tax invoices and copies of their billing worksheets which have previously been provided to the defendants’ solicitors. They also rely on these billing worksheets to particularise how the fees were calculated.
  1. [41]
    The plaintiffs allege that in breach of the tax audit retainer and despite the demand, the defendants have failed to pay the fees to which they are entitled.
  1. [42]
    Therefore the plaintiffs’ claim is for unpaid work alleged to have been done concerning the tax audit retainer and the 2005 tax returns. All previous work has been paid for.

Defendants’ case

  1. [43]
    As indicated, the defendants deny the claim and counterclaim on the basis of alleged Audit Errors which are asserted to have been identified in the ATO audit.
  1. [44]
    The defendants say that it was the first defendant, which orally agreed to retain the sixth defendant and subsequently the first plaintiff after the defendants (other than the seventh defendant), were introduced to him in late 2000. It is alleged that the retainer required the provision of the following services:
  1. (i)
    prepare, maintain, manage, and give advice in relation to the accounts of both the first defendant and the partnership.
  1. (ii)
    provide accounting, financial, and taxation advice to both the first defendant and the partnership in relation to the development and subsequent sale of the property identified in footnote 5.
  1. (iii)
    prepare tax returns for the first defendant, the partnership, and the individual partners.
  1. [45]
    It denies the existence of the tax agent retainer alleged by the plaintiffs. The defendants deny that the third defendant represented the defendants in dealings with the plaintiffs. Further, in paragraph 4 of the defence and counterclaim the defendants say that:
  1. (i)
    the meeting alleged to be relied upon by the plaintiffs as the basis of the allegation that the third defendant represented the defendants is alleged to have occurred on 26 June 2001.
  1. (ii)
    as at that date, the plaintiffs were not incorporated and therefore were not legal entities.
  1. (iii)
    it is pleaded by the plaintiffs that they did not commence carrying on business until 12 July 2005.
  1. (iv)
    therefore, any authority that may have been given by the defendants at the above meeting was not an authority to the plaintiffs, or an authority which could be relied on by them, to take instructions from the third defendant on behalf of the defendants.
  1. [46]
    Although the defendants admit that the sixth defendant, the first defendant, or the plaintiffs prepared tax returns for the financial year ending 30 June 2005, they say that the only engagement was for services to be provided pursuant to, or on the terms of, the retainer set out in paragraph [44].
  1. [47]
    Therefore, it denies that the Dundrenan, Partnership, Noel Roach, Nola Roach, Morris Lee, Roslyn Lee, and Dundrenan Developments retainers were entered into. Consequently, it also denies that the plaintiffs provided professional services to the defendants pursuant to those retainers and that any fees were payable to the plaintiffs.
  1. [48]
    Further, for this reason it denies that it was in breach of any agreement with the plaintiffs.
  1. [49]
    The defendants also deny requesting the plaintiffs to provide services as alleged in the claim on the quantum meruit basis.
  1. [50]
    With reference to the alleged tax audit retainer, although the defendants admit that on or about 22 August 2005 the third defendant attended a meeting with ATO officers and the sixth defendant for purposes relating to a tax office audit, they deny that any discussions between them comprised an agreement to provide professional services to the defendants.
  1. [51]
    They say that the sixth defendant was present as the tax agent who prepared and lodged the tax returns and business activity statements, and had given advice in relation to other matters the subject of the audit.
  1. [52]
    Therefore they deny that the alleged tax audit retainer was entered into.
  1. [53]
    In denying that the services alleged were performed pursuant to this alleged retainer, and that any fees are payable to the plaintiffs, the defendants also say that some of the services particularised refer to dates prior to the alleged retainer.
  1. [54]
    The defendants admit that the sixth defendant and the first plaintiff were involved in the audit as the tax agent responsible for the matters the subject of the audit but do not admit that the professional services alleged to have been provided were in fact provided for reasons, including that some of the descriptions of services contained on the invoice relied on by the plaintiffs are ambiguous such that the defendants cannot discern what is alleged to have been done or for whom.
  1. [55]
    In paragraph 6E of the defence and counterclaim the defendants say further that:

“… the involvement of Kallinicos[7] and JKA[8] and the Plaintiffs in the tax audit was almost entirely in relation to the services previously provided to the Defendants by Kallinicos, JKA, or the Plaintiffs which the ATO determined were in error, being:

  1. (a)
    the under-reporting of assessable income in the financial year ending 30 June 2003 by $196,505.00;
  1. (b)
    the Business Activity Statement (BAS) for the quarter ending 31 December 2002 over-reported GST payable by an amount of $6,536.00;
  1. (c)
    the BAS for the quarter ending 30 September 2003 under-reported GST payable by $7,843.00 and input credits by $313.00;
  1. (d)
    the amended BAS for the quarter ending 30 September 2003, which JKA prepared, was not lodged;
  1. (e)
    the BAS for the quarter ending 31 December 2005 under-reported GST payable by $6,730.00 (collectively the “Audit Errors”).”
  1. [56]
    It is then asserted in paragraph 6F:

“The Audit Errors:

  1. (a)
    were made by Kallinicos and/or JKA in providing the services to the Defendants in return for payment;
  1. (b)
    ought not have been made by a reasonably competent and experienced accountant;
  1. (c)
    were, in the premises, made negligently by Kallinicos and/or JKA and/or the Plaintiffs.”
  1. [57]
    Therefore, the defendants say that, if notwithstanding their contentions it is found that the plaintiffs performed services pursuant to the tax audit retainer and they are liable for the related fees, these fees were incurred because of the negligence of the first plaintiff and/or the sixth defendant in committing the Audit Errors.
  1. [58]
    They say the defendants are entitled to set off the full amount of the fees as damages resulting from the negligence of the sixth defendant and/or the first plaintiff; and alternatively, are not liable to remunerate the plaintiffs for services performed negligently or for services performed to remedy the plaintiffs’ negligence.
  1. [59]
    The Counterclaim against the plaintiffs and the sixth defendant is based on the Audit Errors, alleged breaches of the retainer referred to in paragraph [44], and negligence which is alleged to have caused the defendants loss and damage as follows:
  1. (a)
    the first defendant – ATO penalties of $22,920.96 and general interest charges;
  1. (b)
    the second defendant – ATO penalties of $7,539.10 and general interest charges of $8,536.00;
  1. (c)
    the third defendant – ATO penalties of $7,703.95 and general interest charges of $8,730.10;
  1. (d)
    the fourth defendant – ATO penalties of $3,897.50 and general interest charges of $4,408.50;
  1. (e)
    the fifth defendant – ATO penalties of $4,232.50 and general interest charges of $4,786.30;
  1. (f)
    the seventh defendant – general interest charges of $651.34;
  1. (g)
    in relation to the first to fifth and seventh defendants – legal fees of $18,174.52.

In the case of (a) to (f), the loss and damage is also said to include fees paid, to be assessed.

  1. [60]
    The claims for these amounts are on the basis of:
  1. (a)
    damages for breach of contract or negligence; or
  1. (b)
    compensation pursuant to s 82 of the Trade Practices Act 1974; or
  1. (c)
    payment pursuant to s 251M of the Income Tax Assessment Act 1936.
  1. [61]
    In summary, the defendants oppose the claim in relation to the tax audit on a number of grounds. First, the alleged retainer was not entered into, as the sixth defendant merely participated as the tax agent who prepared the matters under consideration. Second, the services were (in part) incurred prior to the relevant retainer (i.e. before 22 August 2005).  And, finally, that the services were substantially incurred due to the negligence of the plaintiffs in failing to properly conduct the accounting in the first place.  If a retainer is found to exist and services were performed pursuant to it, the defendants plead as set out on the basis of the Audit Errors.[9]

The competing contentions

  1. [62]
    The competing contentions clearly emerge from this analysis of the plaintiffs’ and defendants’ cases.
  1. [63]
    As stated, the plaintiffs sue for fees asserted to be due and owing for services provided to the defendants based on a number of alleged tax agent retainers and a tax audit retainer. In respect of the tax agent retainer, the plaintiffs’ case is that they just prepared the BAS and tax returns off the source documents provided to it by the defendants.[10]
  1. [64]
    The defendants deny the existence of the retainers alleged. They assert that the only retainer was that referred to in paragraph [44], and that this retainer required “something more” than simple reliance on source documents.[11]  Further, they counterclaim and seek a set off based on alleged Audit Errors.
  1. [65]
    It is against this background that the cross‑applications arise for resolution.

Legal issues

Object of particulars

  1. [66]
    As each party seeks further and better particulars of the opposing party’s pleading, regard must be had to r 157(1) of the UCPR which provides:

“A party must include in a pleading particulars necessary to-

  1. (a)
    define the issues for, and prevent surprise at, the trial; and
  1. (b)
    enable the opposite party to plead; and
  1. (c)
    support a matter specifically pleaded under rule 150.”

(emphasis added)

Rule 150(1)(a), (j), and (l) requires breach of contract, misrepresentation, and negligence to be specifically pleaded; and r 150(2) requires any fact from which any of these matters is claimed to be an inference to be specifically pleaded.

  1. [67]
    Consistently with this, particulars have the important function of informing a party of the nature of the case he has to meet and of limiting the issues of fact to be investigated by the court. They also prevent the injustice that may occur when a party is taken by surprise.[12]  However, the other party is not entitled to be told the evidence that will be called to prove the case.[13]  In Sims v Wran (1984) 1 NSWLR 317, Hunt J said at 321 with reference to particulars generally:

“It is not a question of whether one party has adequate knowledge of the actual facts; it is a question of whether he has adequate knowledge of what the other party alleges are the facts, for that is the case which he must meet.”

Striking out pleadings

  1. [68]
    Each party has submitted that consideration be given to striking out the opposite party’s pleading or part of the pleading pursuant to r 171 of the UCPR.  This provides:

“(1) This rule applies if a pleading or part of a pleading—

  1. (a)
    discloses no reasonable cause of action or defence; or
  1. (b)
    has a tendency to prejudice or delay the fair trial of the proceeding; or
  1. (c)
    is unnecessary or scandalous; or
  1. (d)
    is frivolous or vexatious; or
  1. (e)
    is otherwise an abuse of the process of the court.
  1. (2)
    the court, at any stage of the proceeding, may strike out all or part of the pleading …” (emphasis added)
  1. [69]
    In Kev Leamon Earthmovers Pty Ltd v Hammond Village Pty Ltd (1998) 19 Qld Lawyer Reps 10-11, McGill DCJ said, in relation to the principles applicable to strike out a pleading:

“The party opposite is entitled to a proper pleading as an incident of the requirement of procedural fairness: Banque Commerciale SA (In Liq.) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286.  A claim or defence which is bad in point of pleading should be struck out, but on the basis that the party delivering it should be given leave to replead.  As to the significance of striking out a pleading with leave to replead on the ground that it was defective in point of pleading, see Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69 at 74 per Barwick CJ; 97-98 per Jacobs J.”

Referral to mediation

  1. [70]
    Because Mr Handran for the defendants has submitted that the action is apt for court referred mediation, I give consideration to r 320 of the UCPR which provides:

“The court may also refer a dispute in a proceeding for mediation or case appraisal—

  1. (a)
    on application by a party; or
  1. (b)
    if the proceeding is otherwise before the court.”

Directions

  1. [71]
    The defendants’ application seeks in the alternative that all necessary and appropriate directions be made to advance the matter under r 367 of the UCPR which provides:

“(1) The court may make any further order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of these rules.

  1. (2)
    In deciding whether to make an order or direction, the interests or justice are paramount.”
  1. [72]
    In addition under r 161(2) of the UCPR the court, on an application for further and better particulars of the opposite party’s pleading, may make the consequential orders and give directions for the conduct of the proceeding it considers appropriate.

Defendants’ request for further and better particulars

  1. [73]
    Mr Handran submitted in his Outline of Submissions (30 January 2009) that the orders sought by the defendants should be made because, inter alia:
  1. (a)
    the second further amended statement of claim is pleaded in insufficient detail to enable the defendants to properly plead to it and provide the particulars;
  1. (b)
    the need for particulars of the defence and counterclaim is substantially in consequence of the paucity of the second further statement of claim.

In these circumstances it is convenient to first consider the defendants’ request for further and better particulars.

  1. [74]
    With the exception of requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51, I consider that the plaintiffs’ case is pleaded as to include the particulars necessary to comply with r 157(1) of the UCPR and to enable the defendants to know the nature of the case that they have to meet.
  1. [75]
    Other than request No. 22(g) and (h) the requests in respect of which I consider that further and better particulars are required relate to the plaintiffs’ alternative ground of claim in relation to the alleged tax audit retainer and the alleged tax retainers with the defendants, including the partnership.
  1. [76]
    For example, with reference to the alleged tax audit retainer, the plaintiffs plead in paragraph 9B of the Statement of Claim:

“Further and in the alternative, the fees are the Plaintiffs’ reasonable fees to provide the services requested by the Defendants and the Plaintiffs are entitled to recover the sum of $55,834.34 on a quantum meruit basis.”

  1. [77]
    The Defendants deny this allegation on the basis that they did not make such a request and are not liable for the fees claimed. They say that they are otherwise unable to plead to the allegations until proper particulars are provided.
  1. [78]
    By request No. 30 they seek full particulars of the allegation that the fees claimed are reasonable fees to provide the service including all the facts, matters, and circumstances relied upon to allege that:

“(a) state the amount of the fees are reasonable;

  1. (b)
    state the items of work for which fees have been charged were reasonably required to provide the services alleged to have been requested.”
  1. [79]
    The plaintiffs in reply refer to the particulars to paragraph 8A in support of the allegation.  These are as follows:

“Full particulars of the manner in which the fees are calculated are contained in the Plaintiffs’ Billing Worksheets copies of which have been provided to the Defendants’ solicitors, Home Wilkinson Lowry under cover of Harding Richards Lawyers letter dated 8 February 2007.”

  1. [80]
    Mr Hackett submits that the particulars requested have been provided.  It is alleged that these are the plaintiffs’ reasonable fees because they are “calculated on an hourly basis at the rates normally charged by the Plaintiffs” and that they are charges for the tax audit services by plaintiffs which are itemised in the billing worksheets referred to in the particulars to paragraph 8A.
  1. [81]
    Paragraphs 12B (Dundrenan retainer), 15B (partnership retainer), 18B (Noel Roach retainer), 21B (Nola Roach retainer), 24B (Morris Lee retainer), 27B (Roslyn Lee retainer), and 35 (Dundrenan Developments retainer) are in similar terms to paragraph 9B, the only relevant difference being to the quantum claim.  The relevant defendant or defendants deny this allegation on the same basis and seek particulars in the same terms by requests Nos 33, 36, 39, 42, 45, 48, and 51.
  1. [82]
    The plaintiffs respond to those requests by reference to the particulars of paragraphs 11A, 14A, 17A, 20A, 23A, 26A, and 31 of the statement of claim which are in similar terms to paragraph 8A, the only relevant difference again being quantum.  In each case the paragraphs to which these particulars relate to quantum of fees alleged to be payable by the defendants for the services provided by the plaintiffs pursuant to the relevant retainer.  Mr Hackett’s submission is the same in each case.  He said that “We rely upon the document as being a bill for all of the services we’re charging for.”[14] (emphasis added)
  1. [83]
    Mr Handran contends that the particulars of the services actually provided by the plaintiffs are impossible to divine from the billing worksheets.  He describes them as voluminous, Delphic, and as not informing the reader as to what services were in fact performed in relation to the particular aspects of the audit.  He observes that they do not set out separately as against each defendant the services that were performed.  In relation to this, he highlights that the majority, if not all, of the services appear in the worksheet in the name of the first defendant.  He also says that they bear notations in 2001 despite the tax audit retainer relating to the matters after August 2005.[15]
  1. [84]
    He refers to the worksheets recording items such as “sort through archive boxes and numerous other files, boxes and paperwork left in different places of the office by Mark … calculations done and checking Mark’s calculations on loose bits of working paper, etc. A complete mess,” and many entries referring to “historical data” being entered. He submits that although what aspect of the audit or which defendant these matters relate to can be discerned, the defendants face an impossible task in comprehending these details. Attention is also shown to fees for matters like “tidy up boardroom table”, “claen [sic] up boardroom”, “set up boardroom”, and charges without any description.[16]
  1. [85]
    My detailed analysis of the billing worksheets which are exhibit “MJH-1A” to the affidavit of Mr Hocking, the defendants’ solicitor, sworn on 12 November 2008 supports these contentions.  It is a voluminous document, consisting of 28 pages.  The difficulty of interpreting it is compounded by pages 1-10 and 13-22 essentially covering the same ground.  There are some additional entries and the entries are not always in the same order.  The final figure in each document is for “Dundrenan Pty Ltd … Total WIP”.  In the first document the related amount is $53,096.81”.  In the second document it is “53,547.20”.  The explanation for these differences may be that the first document is dated “4 May 06” and the second “12 Jul 06”.  However, this raises an issue for the defendants to determine which document is relied upon to provide the particulars sought.  The defendants are entitled to conclude that both documents have been provided as particulars for a purpose.  However, that purpose is not clear.  The difficulty that this creates is exacerbated by the fact that the final amount is different to the fees alleged to be payable under the tax audit retainer of $55,834.35”.  Further, I cannot find any final amount related to particular defendants which is the same as the fees alleged to be payable under a retainer related to that defendant.
  1. [86]
    It is also unclear as to whether the two documents relate to the tax audit retainer or to that and other alleged retainers; and if so, to what other retainers and which aspects relate to which retainer. As Mr Handran says, these documents are headed with the name of the first defendant and the last entry relates to that defendant.  However, it also has entries under headings relating to the second and fifth defendants.
  1. [87]
    There are then separate Billing Worksheets relating to the seventh defendant (pages 11-12), the third defendant (23), the further defendant (24), and the second to fifth defendants (27-28).  The latter document presumably relates to the partnership.  However, it is not clear if any aspect of these also relates to the tax audit retainer.
  1. [88]
    As Mr Handran submits, although the plaintiffs’ case relates to alleged tax retainers for the financial year ended 30 June 2005, based on discussions between April 2005 and April 2006 and the tax audit retainer which is said to have commenced on 22 August 2005, the documents contain notations relating to 2001 and 2002.  Reference is made to notations of “2001 Correspondence”, “2001 Tax/Accounts”, “2001 Activity Statement Workflow”, “2002 General”, “2003 General”, “2003 Correspondence”, 2003 Tax/Accounts”, “2003 Activity Statement Workflow”, and “2004 General” at pages 1, 7-13, 19-28.  These entries often appear in connection with entries which are presumably for fees.
  1. [89]
    The first of the 10 page documents contains the following entries for dates prior to 22 August 2005:

GEN ADV & MAT – CONSUL

09/08/2005 John Kallinicos 10[17] 250.00[18] SORT OUT MATERIAL FOR ATO[19]

Disbursements

08/08/2005 Other  10.00 RBA-ICA HANDLING  FEE[20]

BAS/IAS – PRE & LODGE

28/04/2005 Mark GW Herron 2 36.00 March bas for dundrenan developments[21]

GEN ADV & MAT – CONSULT

19/08/2005  20 500.00 review files[22]

Disbursements

24/06/2005 PAYG Qtly Notice 1 25.00 June 05 QTR[23]

The second 10 page document contains similar entries.

  1. [90]
    The billing worksheet in relation to the third defendant, and fifth defendant and the partnership each contain an entry for disbursements in relation to a PAYG Quarterly Notice before 22 August 2005.  In the case of the first and fifth defendants the date is “7/4/2005” and for the partnership it is “27/6/2005”.[24]
  1. [91]
    In addition, the billing worksheet for the third defendant contains a reference under “2001 Correspondence” to “sent fax to client” on “3/9/2001”.[25]
  1. [92]
    There is also reference in each of the 10 page documents to disbursements for PAYG Quarterly Notice for “3/10/2005”, “15/12/2005”, and “23/3/2006”, none of which appear to relate to the tax audit retainer or the tax retainers for the financial year ended 30 June 2005.[26]
  1. [93]
    The entries for “Tidy up boardroom” and “claen [sic] up boardroom” appear on pages 2 and 14, and “set up boardroom” appears on pages 3 and 15.
  1. [94]
    Examples of fees claimed without any entry to explain the work undertaken are at pages 5 and 6 and 17 and 18 of the worksheets.  They are:

22/11/2005 John Kallinicos 55 1375.00

22/11/2005 John Kallinicos 25 625.00

…

15/12/2005 John Kallinicos 5 125.00

…

18/12/2005 John Kallinicos 12 300.00

…

03/04/2006 John Kallinicos 10 250.00

24/04/2006 John Kallinicos 33 825.00

 

  1. [95]
    In Bloeman v Atkinson (1977) Qd R 291 at 295, Hanger CJ in deciding that a deed of settlement referred to in a statement of claim did not comply with the requirement equivalent to r 149(1)(a) of the UCPR to make a statement as brief as the nature of the case permits containing all the material facts on which the party relies; and did not provide a statement of those facts which would put the defendants on their guard and tell them what they have to meet when the case comes on for trial said:

“A plaintiff is not entitled to tell a defendant that his case is based on an identified document (which may contain five or fifty paragraphs – the number does not affect the principle) and leave the defendant to work out for himself what particular paragraph he thinks the plaintiff may be basing his case on.  He is entitled to be told what the plaintiff says was the effect of the portion of the document which he relies on.”

His Honour had earlier said at 293:

“He is not entitled to tell a defendant that if he looks at a document which the plaintiff identifies, he will know or be able to find out what the claim is.”

I consider that these words are apt to address the situation with which the defendants are confronted in the present case by virtue of the reliance on the plaintiffs’ billing worksheets as particulars of the fees payable by the defendants in respect of the tax audit and tax agent retainers for the basis of the claims and damages for breach of contract or alternatively on a quantum meruit basis.

  1. [96]
    In this case also the defendants are not to be left to work out for themselves which particular parts of the billing worksheets they think that the plaintiffs may be basing their case on in relation to a particular retainer and to establish the quantum of fees payable under that retainer. However, on the basis of the above analysis of the billing worksheets, this is what the defendants are required to do on a central aspect of the plaintiffs’ case.
  1. [97]
    To enable the defendants to know the nature of the case which they have to meet in relation to those aspects of the statement of claim to which the requests Nos 30, 33, 36, 39, 42, 45, 48, and 51 relate, I order that the plaintiffs and the sixth defendant provide the particulars requested.
  1. [98]
    Requests Nos 22(g) and (h) are:

“In relation to paragraph 6(b), provide full particulars of the allegation that the Tax Audit retainer was evinced by the subsequent conduct in receiving the plaintiffs’ services in respect of the tax audit, including:

…

  1. (g)
    state the calculations alleged to have been performed by the plaintiffs and whether such calculations were received orally or in writing or partly orally and partly in writing, and:
  1. (i)
    to the extent that such calculations were received in writing, provide a copy of such writing;
  1. (ii)
    to the extent that such calculations are alleged to have been received orally, state:
  1. (A)
    the parties to the alleged conversation;
  1. (B)
    the date and place of the alleged conversation;
  1. (C)
    the substance of the alleged conversation;
  1. (h)
    in relation to each alleged meeting and discussion that is alleged to evince the Tax Audit retainer, state:
  1. (i)
    the parties to every alleged meeting and conversation;
  1. (ii)
    the date and place of every alleged meeting and conversation;
  1. (iii)
    the substance of every alleged meeting and conversation.”
  1. [99]
    As stated at paragraph [38] it is alleged that the tax audit retainer was:
  1. (a)
    oral and comprised of various discussions between the third defendant on behalf of the defendants and the sixth defendant on behalf of the plaintiffs; or
  1. (b)
    alternatively evinced by subsequent conduct in receiving services of the plaintiffs in respect of the tax audit.

Paragraph 6(b) is the particular of this alternative basis for the tax audit retainer.  It further particularises the services relied on to involve:

“(i) acceptance of calculations performed by the Plaintiffs; and

  1. (ii)
    having meetings with and discussion with Kallinicos and the Defendants then tax adviser, Lindsay Reed of Home Wilkinson Lowry Solicitors.”
  1. [100]
    Requests Nos 22(g) and (h) are to be considered in context of requests Nos 22(a)-(f) which also relate paragraph 6(b).
  1. [101]
    Requests Nos 22(a)-(f) are that there be a statement of the services alleged to have been received by the first to fifth defendants and the seventh defendant in respect of the tax audit.  Mr Hackett responds that this is what is alleged in subparagraphs (b)(i) and (ii), namely acceptance of calculations performed by the plaintiffs and having meetings.[27]
  1. [102]
    I consider that the effect of subparagraphs (b)(i) and (ii) is to imply that the services received by each defendant was the performance of calculations and having meetings with and discussion with Kallinicos and the defendants then tax adviser.  This enables the defendants to know the nature of the case which they have to meet.  Therefore, I do not make the orders sought by requests Nos 22(a) to (f).
  1. [103]
    However, request No. 22(g) goes further to request a statement of the calculations alleged to have been performed by the plaintiffs and whether such calculations were received orally or in writing or partly orally and partly in writing, and to provide a copy of any such writing, and to state the parties, the date and place and substance of any conversations about such calculations.  Mr Hackett seeks to address this by his overarching submission on request No. 22, that none of the matters sought are necessary to enable the defendants to meet the allegations of fact made in paragraph 6.[28]
  1. [104]
    However, I consider that because the plaintiffs are alleging that as an alternative to the oral tax audit retainer agreements arising from discussions involving the third defendant on or about 22 August 2005, this is evinced by subsequent conduct, the defendants properly require the further and better particulars of the conduct relied upon for this purpose, in this case involving the performance and receipt of calculations.
  1. [105]
    It is one thing for the defendants to be able to properly meet paragraph 6(a) of the statement of claim by denying that any conversations that did occur comprised an agreement to provide professional services.  It is another to be able to properly meet an allegation that such an agreement can be evinced by conduct without being provided with the information requested by the defendants in paragraph 22(g).
  1. [106]
    Therefore I order that the plaintiffs and the sixth defendant provide the particulars sought by request No. 22(g).  I order that the copy of any writing provided under subparagraph (g)(i) be provided by the plaintiff producing the document to the defendants’ solicitor and permitting copies to be taken by that solicitor.
  1. [107]
    For the same reasons I consider that the plaintiffs and the sixth defendant should provide the particulars sought by request No. 22(h) which is a request in relation to every meeting and discussion alleged to evince the tax audit retainer, the parties thereto, the date, place, and the substance thereof.  Therefore I order that the particulars sought by request No. 22(h) be provided.
  1. [108]
    In ordering the particulars sought by request No. 22(g), I have said that this is to be done by the plaintiffs and the sixth defendant producing the document to the defendants’ solicitor and permitting copies to be taken by that solicitor.  This is consistent with the approach that I take to requests made by the defendants under r 222 of the UCPR, a number of which appear in the request for further and better particulars, the subject of the application.
  1. [109]
    The first of these is request No. 14(a) relating to paragraph 5C(b), which is:

“On 31 March 2006 in furtherance of the Tax Agent retainer, the Fourth and Fifth Defendants on behalf of themselves and the Lee Family Trust:

…

  1. (b)
    were aware, as was the case, at the time of signing the ELS declaration form that their tax return had been prepared based on information that they had provided by or on their behalf to Mr John Kallinicos or one of his staff, as that had been the case since the inception of the Tax Agent Retainer.”

The request is for a copy of the tax return referred to, to be provided pursuant to r 222 of the UCPR.

Rule 222 provides that:

“A party may, by written notice, require another party in whose pleadings, particulars or affidavits mention is made of a document—

  1. (a)
    to produce the document for inspection of the party making the requirement or the solicitor for the party; and
  1. (b)
    to permit copies to be taken.”

The Plaintiffs’ response is that a copy of the tax returns are available for inspection at the office of the solicitors for the plaintiff and a copy will be provided, together with other copy documents requested, upon undertaking to meet reasonable copying costs.

Therefore, Mr Hackett submits that this rule is being complied with, subject to the usual undertaking.[29]

  1. [110]
    However, Mr Handran submits with reference to Belela Pty Ltd v Menzies Excavation Pty Ltd [2005] 2 Qd R 230 that the longstanding practice on which the plaintiffs rely is not in accordance with the current language of the UCPR.
  1. [111]
    In Belela McMurdo J was concerned with r 214 of the UCPR which provides for disclosure by delivery of a list of documents and of copies, and said at 231:

“Sub‑rule (1) provides that a party performs the duty of disclosure by doing two things.  The first, described within para (a) is the delivery of a list of documents.  The second, described within para (b) is where requested by the other party, the delivery of copies of the documents mentioned in the list … So on the face of r 214, where there is a request for copies of documents referred to in a list, as occurred here, it is part of the obligation to make disclosure for the disclosing party to have to deliver copies, and by implication, to produce those copies at its own expense.”

  1. [112]
    His Honour also referred to the alternative method of disclosure under r 216 and to r 217 which provides that the documents must be produced for inspection and further, that the party producing the documents must:

“provide facilities (including mechanical and computerised facilities) for the inspection and copying of the documents.”

In relation to this, his Honour said:

“Again, that seems to clearly suggest that the party producing the documents must, at least, facilitate their copying by the party to whom they are produced, and free of charge.”

His Honour observed that while no doubt, the practice under which the solicitor disclosing the documents requested by the other party under r 214 had required the other party to provide the cost of copying, was a longstanding one which predates the present rules and usually occasions no difficulties, strictly speaking the point that there was an obligation to deliver the documents free of charge to the other party, should be upheld.

  1. [113]
    Rule 222 is also in different terms to r 214.  However, Belela reinforces the point which has been made on a number of occasions by the Queensland Court of Appeal that the present UCPR should be construed in accordance with the language used. As such, they should not be interpreted on the basis of an assumption that they are a restatement of the previous rules, including practices which operated under those rules.
  1. [114]
    This rule is concerned with the inspection of documents mentioned in pleadings, particulars, or affidavits. It provides that a party may require another party in whose pleadings a document is mentioned to do two things. The first, described within para (a), is the production of the document for inspection of the party making the requirement or the solicitor for the party.  The second, described within para (b), is to permit copies of the document to be made.
  1. [115]
    The rule says nothing about producing copies of the document for inspection or about facilitating the making of a copy. As Mr Handran submits, it also does not say that a copy has to be made by the solicitor who has possession of the document and that the party requiring production of the documents must undertake to meet reasonable copying costs.[30]
  1. [116]
    I agree with this submission. This is also consistent with the commentary to the rule at p 9205 of Civil Procedure Queensland I that “in the case of documents referred to in the statement of claim, those documents should be provided to permit the Defendants to draft the Defence so as to comprehensively address the allegations.” (emphasis added)
  1. [117]
    Accordingly the defendants cannot be required to attend the office of the plaintiffs’ solicitor and to undertake to meet any copying costs in order to be provided with a copy of any document requested under r 222.
  1. [118]
    As is the case with r 214, whatever practice may have existed prior to the current rule, the plaintiffs and the sixth defendant must comply with the terms of r 222 and produce the documents required to the defendants’ solicitor and to permit copies to be taken by that solicitor.
  1. [119]
    It is unfortunate that the defendants’ request for further and better particulars pursuant to r 222 was expressed in terms of providing a copy when the rule is not in these terms.  It may be this which has caused the plaintiffs to respond as they have.  This is even more so when Mr Handran submits that the rule can be satisfied at the office of the requesting party’s solicitor subject to an undertaking to return the original, and he stresses the importance of the production of the original to obtain instructions.[31]
  1. [120]
    However, because the request is to provide a copy “pursuant to rule 222 of the UCPR” I interpret it to be made in terms of that rule, namely to produce the document of which the copy is required for inspection by the solicitor for the party and permit that solicitor to make copies of it.[32]
  1. [121]
    I accept that while the longstanding practice on which the plaintiffs rely usually occasions no difficulty, and parties may agree to adopt it in other cases, as the defendants are insisting on production in this case in accordance with the strict application of r 222, the appropriate order in each case in which the defendants have required a copy of a document to be provided pursuant to that rule is that the plaintiffs and the sixth defendant produce the document required to the defendants’ solicitor and permit copies to be taken by that solicitor.  I order accordingly in relation to request No. 14(a).
  1. [122]
    This order therefore also applies to requests Nos 18(a), 19, 27(a), 28(a), and 50.  Although I note that there are other requests for further and better particulars pursuant to r 222, these are not the subject of the current application, or have not been pressed during argument.
  1. [123]
    I do not make the orders sought by the defendants’ other requests for further and better particulars which are the subject of the application for the reasons set out in paragraphs [124] to [232].
  1. [124]
    The first of these requests is No. 3.  This relates to paragraph 4(e) of the statement of claim which alleges that at all material times the third defendant “represented” the defendants[33] in dealings with the plaintiffs.  This is expressly denied in paragraph 4(b) of the defence; and in paragraph 4(c) it is said that any authority which may have been given by the defendants at a meeting on 26 June 2001 was not an authority to the plaintiffs, or an authority that could be relied upon by the plaintiffs, to take instructions from the third defendant on behalf of each defendant.  Request No. 3 seeks full particulars of this allegation including:

“(a) the terms of the alleged representation.”

  1. [125]
    I agree with Mr Hackett on behalf of the plaintiffs that the pleading does not allege any representation[34] which enables any meaningful response to be made to this request.  In accordance with ordinary dictionary definitions “represented” is used in paragraph 4(e) in the sense of “entitled to act or speak for”[35] whereas the request uses it in the different sense of “state by way of persuasion” or “declare or make out”.[36]  As the request is not responsive to the allegation in the pleading I do not order the plaintiffs to provide the further and better particulars sought.
  1. [126]
    I also agree with Mr Hackett in relation to request No. 3(b) which is “the extent of the third defendant’s alleged authority on behalf of the defendants”, that this is already expressed in particular (i) to paragraph 4(e), namely:

“At the meeting, Mr and Mrs Roach and Mr and Mrs Lee informed Mr John Kallinicos that Mrs Roach had authority to provide Mr Kallinicos with instructions on behalf of the Defendants.”

  1. [127]
    These instructions were clearly with respect to the “taxation and accounting services which the sixth defendant had been retained to provide” as also referred to in that particular. The extent of this tax agent retainer is the subject of paragraph 5B of the statement of claim.  I do not consider that the plaintiffs can be expected to provide any greater particulars than this.  Therefore I consider that the request has already been answered in the pleadings.
  1. [128]
    It follows that I take a similar view of request No. 3(c) as to “all of the facts, matters, and circumstances relied upon by the plaintiffs to allege such terms and extent.”  Simply put, this is set out in paragraph 4(e)(i).
  1. [129]
    With reference to request No. 3(d) as to “the specific dealings in relation to which the third defendant is alleged to have represented the defendants”, I again consider that this is answered by paragraph 4(e)(i).  The third defendant had general authority to provide the sixth defendant with instructions in relation to the taxation and accounting services which were the subject of his retainer.  As Mr Hackett put it, “implicitly” it is in respect of all dealings.[37]  I do not consider that the defendants require any greater clarity than this in order to know the nature of the case they have to meet.
  1. [130]
    Request No. 3(e) is:

“State specifically the instructions alleged to have been received, including the taxation and accounting services Mr John Kallinicos is alleged to have been instructed to provide at the meeting on 26 June 2001.”

  1. [131]
    What is being sought is a particular of a particular. The particulars to paragraph 4(e) relate to the third defendant’s representation of the defendants with the plaintiffs, not as to the instructions the sixth defendant received.  As I have said, these instructions are the subject of the tax agent retainer, which is in turn the subject of paragraph 5B of the statement of claim.  Accordingly I do not make the order sought.
  1. [132]
    Request No. 4 relates to paragraph 4(e)(i) of the statement of claim.  This paragraph is an aspect of the particulars to paragraph 4 of the statement of claim.  Therefore, again what is being sought, is a particular of a particular that has already been provided.  The request is to:

“provide full particulars of the allegation that the second, third, fourth, and fifth defendants represented to Kallinicos that the third defendant had authority to provide Kallinicos with instructions on behalf of the Defendants, including.”

I agree with Mr Hackett[38] that this request is answered in the particular itself because it includes:

“At the meeting [held on 26 June 2001] Mr and Mrs Roach and Mr and Mrs Lee informed Mr John Kallinicos that Mrs Roach had authority to provide Mr Kallinicos with instructions on behalf of the Defendants.”

  1. [133]
    This particular also answers request No. 4(a) which requests particulars as to “the terms of the authority represented to Kallinicos”.  And as to the further aspect of that request concerning “whether the authority was to provide instructions in all matters or specifically in relation to the services Kallinicos is alleged to have been instructed to provide at the meeting on 26 June 2001.”, I consider that this is sufficiently answered by paragraph 4 of the statement of claim which is relevantly s follows:

“At all material times, the Third Defendant:

…

  1. (e)
    represented the Defendants in dealings with the Plaintiffs.”  (emphasis added)

Again, implicitly it is in respect of all matters.

  1. [134]
    Requests Nos 4(b), (c), and (d) which relate to whether the representation of authority, and the alleged extent of that authority is express or implied are answered as Mr Hackett submits by the reference in paragraph 4(e)(i) to the sixth defendant being “informed”.  This is a clear reference to an “express” representation,[39] the substance of which is stated in that paragraph.  This is confirmed by the particulars to paragraph 5B (“the tax agent retainer”) of the statement of claim which includes that the retainer is “express” from the discussion particularised in paragraph 4(e)(i).  The statement of claim must be read as a whole.
  1. [135]
    Request No. 5 relates to paragraph 4(e)(ii) which is another aspect of the particulars of the statement of claim.  That paragraph states that:

“Between 26 June 2001 and 30 June 2002, Mr John Kallinicos on behalf of Leddy Kallinicos Pty Ltd regularly received instructions from Mrs Roach on behalf of the Defendants.”

The request is for full particulars of this allegation including (a) stating specifically the alleged instructions; (b) whether they are alleged to be oral or in writing, whether in whole or in part; (c) providing copies of any written instructions; and (d) the dates, substance of and parties to any conversations.

  1. [136]
    The purpose of paragraph 4(e)(ii) is again to be gleaned in the context of the statement of claim as a whole, including the particulars to paragraph 5B.  This includes the proposition that the tax agent retainer is also implied from the conduct of the defendants particularised in paragraphs 4(e)(ii) to (iv).  The substance of the specific instructions is not material to this.  Against this background paragraph 4 is pleaded in support of the proposition in paragraph 5B that a tax agent retainer had come into existence.  It is alleged that it came into existence because as particularised in paragraph 4(e)(i) the sixth defendant received express instructions to provide the defendants with taxation and accounting services at the 26 June 2001 meeting and was advised of the third defendant’s authority as their agent.  It is then alleged in paragraphs 4(e)(ii) to 4(e)(iv) that pursuant to this authority the third defendant gave instructions to the sixth defendant, including between 26 June 2001 and 30 June 2002, on behalf of Leddy Kallinicos Pty Ltd.  In context these instructions were for him to provide taxation and accounting services.  The particularisation of the systematic giving of those instructions in the various periods specified in paragraphs 4(e)(ii) to (iv) are clearly pleaded in support of the proposition that the existence of the tax agent retainer is to be implied from this, and that these instructions are consistent with the terms of the retainer pleaded in paragraphs 5B(a) and (b).  In my view the substance of the specific instructions are not material to the matter pleaded and as such are not necessary for the defendants to know the case they have to meet.  It follows that it is also unnecessary for this purpose for the defendants to know whether the instructions were oral or in writing, as is the need for copies of any written instructions which flows from the answer to that question.
  1. [137]
    Request No. 5(e) is to:

“State all the facts, matters, and correspondences relied on to allege that any instructions provided by the third defendant to Kallinicos between 26 June 2001 and 30 June 2002:

  1. (i)
    were provided on behalf of the Defendants;
  1. (ii)
    were provided with the authority of the Defendants;
  1. (iii)
    were provided to Leddy Kallinicos Pty Ltd.”

I consider that subparagraphs (i) and (ii) are answered by paragraph 4(e)(i).  And subparagraph (iii) is answered by the statement in paragraph 4(e)(ii) that the instructions were received by the sixth defendant “on behalf of Leddy Kallinicos Pty Ltd.”

  1. [138]
    Requests No. 6 and 7 which relate to paragraphs 4(e)(iii) and 4(e)(iv) of the statement of claim seek similar particulars in respect of the two following periods up to and including 11 July 2006.  For the same reasons that I have given in relation to request No. 5, I do not order the particulars sought.
  1. [139]
    Request No. 9 relates to paragraph 5(c) of the statement of claim which is that at all material times the fourth defendant represented himself and the fifth defendant (to whom it is admitted he was married) in dealing with the Plaintiffs.  The defendants say that the pleading is embarrassing and they are otherwise unable to plead to it until proper particulars are provided.  As with request No. 3(a), request No. 9 seeks full particulars of the allegation including:

“(a) the terms of the alleged representation.”

I do not order that the plaintiffs provide the particulars sought for the same reasons as given in relation to that request.

  1. [140]
    Request No. 9(b) is for “the extent of the fourth defendant’s alleged authority on behalf of the fifth defendant.” This is similar to request No. 3(b) and I do not make the order sought for similar reasons.  This information is expressed in paragraph 5(c) and the associated particulars of the statement of claim, namely that the extent of the fourth defendant’s authority was to represent the fifth defendant “in dealings with the plaintiffs … for the preparation of his own tax return and the Fifth Defendant’s income tax return.”  This is also to be read in the context of paragraph 5C(b) that since the inception of the tax agent retainer, the sixth defendant or one of his staff had prepared tax returns based on information that they had provided.
  1. [141]
    Request No. 9(c) as to “all facts, matters, and circumstances relied upon by the plaintiffs to allege such terms and extent” is similarly answered by the pleading itself.
  1. [142]
    With reference to request No. 5(d) as to “the specific dealings in relation to which the fourth defendant is alleged to have represented the fifth defendant” as in the case of the similar request No. 3(d) I consider that it is answered by reference to paragraph 5(c) and the associated particulars in the statement of claim.  In short, as Mr Hackett puts it, the sixth defendant and his staff “dealt with Mr Lee in receiving instructions to prepare tax returns for him and his wife and the family trust.  That is what the pleading says.”[40]  I also note that the defendants admit that the fourth defendant was a trustee of the Lee family Trust, and paragraph 5C(b) of the statement of claim extends to the preparation of tax returns on behalf of that Trust since the inception of the tax agent retainer.
  1. [143]
    Request No. 10 is similar to requests Nos 5-7 except that it relates to the particulars to paragraph 5 of the statement of claim relevant to the fourth defendant representing himself and the fifth defendant in dealings with the sixth defendant, in terms that:

“Between 26 June 2001 and 11 July 2006, Mr John Kallinicos or staff members assisting Mr Kallinicos regularly received instructions from the fourth defendant for the preparation of his own tax return and the Fifth Defendant’s income tax returns.”

The same reasoning in paragraph [136] concerning request No. 5 applies as adapted to what is pleaded in the statement of claim in relation to the fourth and fifth defendants.  On this basis I accept Mr Hackett’s submissions:

“None of this is necessary to meet this case.  They’re asking for particulars of particulars , as the first vice in this request, but, more importantly, the pleading tells them what happened in this period was that Mr Kallinicos or his staff received instructions and information from Mr Lee for the preparation of his own and his wife’s income tax return.  They don’t need to know any more.  They don’t need to know what the instructions were, the instructions were to prepare their income tax return, it’s self evident.”[41]

Once again paragraph 5 and the associated particulars are to be read in the context of paragraph 5C(b) of the statement of claim.  As with requests Nos 5‑7 I consider that in these circumstances it is also unnecessary in order for the defendants to meet the claim, for them to know whether the instructions were oral, or in writing, as is the need for copies of any written instructions.

  1. [144]
    Request No. 10(f) is to:

“state all the facts, matters, and circumstances relied on to allege that any instructions provided by the Fourth Defendant to Kallinicos or employees assisting Kallinicos between 26 June 2001 and 11 July 2006:

  1. (i)
    were provided on behalf of the Fifth Defendant;
  1. (ii)
    were provided with the authority of the Fifth Defendant;
  1. (iii)
    were provided to the Plaintiffs.

I do not consider that the defendants require the information requested in subparagraphs (i) and (ii) in order to know the nature of the case they have to meet.  The essence of this aspect of the statement of claim is that the fourth defendant gave instructions to the sixth defendant or staff members assisting him pursuant to his representation of the fifth defendant and himself for the preparation of their tax returns pursuant to the tax agent retainer.  In my view the Defendants have enough information to enable them to know the nature of the case they have to meet.

  1. [145]
    In relation to subparagraph (iii) the allegation in paragraph 5 of the statement of claim is not that between those dates instructions to the sixth defendant or staff members assisting him were provided to the plaintiffs.  Rather, the allegation is that at all material times the fourth defendant represented himself and the fifth defendant in dealings with the plaintiffs.  This is supported by the particulars that the sixth defendant or staff members assisting him are alleged to have received those instructions and information from the fourth defendant for the preparation of his own and the fifth defendant’s income tax returns between those dates.  It is therefore not necessary for the defendants to be provided with the information sought in order to know the nature of the case they have to meet.
  1. [146]
    Request No. 11 relates to paragraph 5B of the statement of claim which pleads what the sixth defendant was retained to do by the second to fourth defendants on behalf of themselves and the first defendant at the meeting on 26 June 2001 (the tax agent retainer).  These are set out in paragraphs (a) and (b).  Particulars are then provided.  The defendants deny these allegations and rely on what they plead in paragraph 3A of the defence that the sixth defendant (and subsequently the first plaintiff) was retained to do.  This is referred to in paragraph [44].  The introductory words of request No. 11 are:

“provide full particulars of the allegation that the Second, Third, and Fourth Defendants retained the accounting firm operated by Kallinicos on their own behalf and on behalf of the First Defendant, including:”

This information has already been provided in paragraph 4(e)(i) of the statement of claim.

  1. [147]
    Paragraph 4(e)(i) also answers request No. 11(a) as to “the terms of the alleged retainer.”  Further particularity is provided by paragraph 5B itself with reference to subparagraphs (a) and (b).  Paragraph 5C(b) (with reference to the fourth defendant) and paragraph 5D(b) (with reference to the first, second, and third defendants) make it clear that the tax agent retainer involved the sixth defendant or one of his staff preparing the tax returns for the relevant defendants based on information provided by them.
  1. [148]
    Requests Nos 11(b), (c), and (d) which relate to whether the retainer was express or implied are answered in the particulars to paragraph 5B itself which states:

“The retainer is both express, from discussion particularised in paragraph 4(e)(i) above, and implied from the conduct of the Defendants particularised in paragraphs 1B and 4(e)(ii) to (iv) above and paragraphs 5C and 5D below, together with the fact that each of the tax returns prepared and lodged with the ATO by the Plaintiffs on behalf of the Second to Fourth Defendants recorded their postal address as care of the accounting firm operated by Mr John Kallinicos.”

Therefore clearly the answer is that the alleged retainer is both express and implied, with the basis for this being clearly particularised in each case.  I note that the Plaintiffs have repeated the first sentence of subparagraph (a) of the particulars to paragraph 5B in their further and better particulars of the further amended statement of claim.[42]  I consider that the defendants do not require further information in order to know the nature of the case that they have to meet.

  1. [149]
    It will also be of assistance to the defendants that it was confirmed by Mr Hackett during argument that it is not alleged that it was a term of the retainer that any particular fees had been agreed.[43]
  1. [150]
    Request No. 12 (with the exception of subparagraphs (d) and (e)) which relates to paragraph 5B(b) is to the same effect as Request No. 11(b) to (d).  I again consider that this is answered by the particulars to paragraph 5B, which are repeated in the further and better particulars of the further amended statement of claim.[44]  Again I do not consider that the defendants require further information in order to know the nature of the case they have to meet.

Subparagraphs (d) and (e) of request No. 12 are to state specifically the manner in which, and the extent to which, the tax agent retainer is alleged to have required or enabled the firm to “deal with” and “respond to” correspondence from the ATO.  This is directed specifically to paragraph 5B(b) of the statement of claim which pleads that an aspect of the retainer was for sixth defendant’s accounting firm to act as a postal address for all ATO correspondence and to deal with and respond to any such correspondence.  I consider that paragraph 5B(b) is prospective in its terms in that it specifies what was required to be done pursuant to the retainer.  Read in context with paragraph 5B(a) it clearly means what it says, namely the firm was to deal with and respond to correspondence from the ATO relating to the taxation and accounting services which it was retained to provide the defendants.  In these circumstances I do not consider that the defendants require any further information than is provided in subparagraphs (d) and (e) in order to properly meet the claim.  I therefore do not make the order sought.

  1. [151]
    Requests Nos 14, 16, 18, and 19[45] relate to paragraphs 5C and 5D of the statement of claim which are subject to the defendant’s denial that any conduct was carried out pursuant to the alleged tax agent retainer.
  1. [152]
    Request No. 14 relates to paragraph 5C(b) of the statement of claim which states that on 31 March 2006 in furtherance of the tax agent retainer, the fourth and fifth defendants on behalf of themselves and the Lee Family Trust:

“(b) were aware, as was the case, at the time of the signing the ELS Declaration Form that their tax return had been prepared based on information that they had provided by or on their behalf to Mr John Kallinicos or one of his staff, as had been the case since the inception of the tax agent retainer.”

This is a reference to the ELS Declaration Form for lodgement of their 2005 tax returns referred to in paragraph 5C(a).

  1. [153]
    The defendants seek full particulars of this allegation including a copy of the tax return under r 222 of the UCPR; whether the information provided for the preparation of the return was oral or in writing whether in whole or in part; providing a copy of any written information supplied; and to the extent that the information was orally supplied, the identity of the persons who supplied and received it, and the dates, places, and substance of the alleged conversations.
  1. [154]
    The plaintiffs have refused to provide the particulars other than a copy of the tax return upon the defendants undertaking to meet the reasonable copying costs.

I consider that the plaintiffs will have provided the full particulars sought by providing a copy of the 2005 tax return in accordance with the order made in paragraph [121].

  1. [155]
    Paragraph 5C(b) is merely a further particular of the conduct particularised in paragraph 5B in support of the implication of the tax agent retainer.  It asserts nothing about the nature of the information supplied but only that in furtherance of the retainer the fourth and fifth defendants were aware at the time of signing that ELS Declaration Form that their tax return had been based on the information supplied.  As such I do not consider that the defendants require any information sought by request No. 14 beyond that provided by the 2005 taxation return.
  1. [156]
    Request No. 16 relates to the introductory words of paragraph 5D of the statement of claim as follows:

“On 4 May 2006 in furtherance of the Tax Agent retainer, the First, Second, and Third Defendants and the Seventh Defendant (which had adopted the Tax Agent retainer on and from its incorporation on 24 June 2003):”

  1. [157]
    The defendants seek full particulars that the seventh defendant adopted the tax agent retainer upon its incorporation and related particulars. The Plaintiffs have refused to provide those particulars on the basis it is not a proper request and any necessary particulars are contained in the statement of claim.
  1. [158]
    In oral argument Mr Hackett submits that paragraph 5D(a) provides these necessary particulars by reference to signing the ELS Declaration Forms instructing the first plaintiff to lodge its 2005 tax returns.
  1. [159]
    The claim against the seventh defendant is limited to the allegation of the Dundrenan Developments retainer with reference to the alleged engagement of the plaintiffs to prepare financial statements and income tax returns for the seventh defendant for the financial year ended 30 June 2005.  He makes the obvious submission that the company can only act through its officers who are the persons who had previously been the parties to the express tax agent retainer particularised in paragraph 4(e)(i) of the statement of claim.[46]  I therefore consider that the plaintiffs have provided the particulars requested and are bound by them.  As a result, the defendants know the nature of the case they have to meet.
  1. [160]
    Request No. 18 relates to paragraph 5D(b) which is in the same terms as paragraph 5C(b) but on this occasion relates to the first, second, third, and seventh defendants and to their state of knowledge on 4 May 2006.  The request for full particulars of the allegation is to the same effect as request No. 14.  Again, the plaintiffs have refused to supply the particulars other than a copy of the relevant tax return and upon the defendants undertaking to meet the reasonable copying costs.
  1. [161]
    For the reasons analogous to those that I have given in relation to request No. 14, I do not make the orders sought, other than that the Plaintiffs provide a copy of the 2005 tax return in accordance with the order made in paragraph [121].
  1. [162]
    Request No. 19 is also answered by the order made in paragraph [121].
  1. [163]
    Request No. 20 relates to paragraph 6 of the statement of claim which is the allegation of the tax audit retainer and is as follows:

“By an oral agreement made on or about 22 June 2005, the First, Second, Third, Fourth, Fifth, and Seventh Defendants (hereinafter referred to as “the Defendants”) engaged the Plaintiffs to provide professional services to the Defendants in respect of the audit of the financial affairs of the First Defendant and the partnership being conducted by the Australian Tax Office (“the Tax Audit Retainer”).

  1. [164]
    The particulars of this which are the subject of the requests Nos 21 and 22 are as follows:

“The Tax Audit retainer was:

  1. (a)
    oral and is comprised of various discussions between Nola Lillian Roach on behalf of the defendants and John Kallinicos on behalf of the Plaintiffs on or about 22 August 2005 at the offices of Kallinicos Bray Accountants, suite 3, 723 Sandgate Road, Clayfield, Queensland.  Mr Balraj Dillon, an audit officer of the Australian Tax Office, was also in attendance at that meeting.
  1. (b)
    or alternatively evinced by the subsequent conduct in receiving the services of the Plaintiffs in respect of the tax audit and in particular:
  1. (i)
    acceptance of calculations by the Plaintiffs, and
  1. (ii)
    having meetings with and discussions with Kallinicos and the Defendants then tax law adviser, Lindsay Reid of Home Wilkinson Lowry Solicitors.”
  1. [165]
    The defendants admit that the third defendant attended a meeting on or about 22 August 2005 with Mr Dillon and a senior ATO auditor and the sixth defendant for the purpose relating to an ATO audit.  However, as stated above, they deny that any discussion between them and the plaintiff comprised an agreement to provide professional services to the defendants.  It is said that the sixth defendant was present as the tax agent who prepared and lodged the tax returns and business activity statements, and gave advice in relation to other matters, the subject of the audit.
  1. [166]
    The introductory words of request No. 20 are a request for full particulars of the allegation expressly made in paragraph 6 of the statement of claim.  I consider that this request can only be addressed by consideration of the specific matters of which further and better particulars are requested.
  1. [167]
    Request No. 20(a) is for full particulars of:

“the terms of the alleged retainer.”

I agree with Mr Hackett that this has already been provided by paragraph 6 itself, as being to provide professional services to the defendants in respect of the ATO audit of the financial affairs of the first defendant and the partnership.[47]  Therefore I do not make the order sought.

  1. [168]
    Request No. 20(b) is for full particulars of:

“the professional services that it is alleged were agreed to be provided pursuant to the tax audit retainer.”

I also consider that this is set out in the allegation of fact in paragraph 6.  The professional services particularised are to be identified in the context of the whole statement of claim.  As such they are professional services of the type that are expected of a registered tax agent like the first plaintiff in relation to such audit.

  1. [169]
    Request No. 20(c) is for full particulars of:

“(c)the substance of the conversations said to form the oral agreement.”

I consider that the substance of the conversations are also set out in the allegation of fact.

  1. [170]
    The introductory words of request No. 21 are a request for full particulars of the allegation of the tax audit retainer made in paragraph 6(a).  I therefore consider that this request can only be addressed by consideration of the specific matters of which further and better particulars are requested.
  1. [171]
    Request No. 21(a) is as to:

“Whether it is in fact being alleged that the third defendant engaged the plaintiffs on behalf of the first to fifth defendants and Dundrenan Developments in the conversation pleaded rather than first to fifth defendants and Dundrenan Developments personally engaging the plaintiffs.”

I consider that this is clearly answered in paragraph 6(a) itself.  This states that the tax audit retainer is oral and is “comprised of various discussions between Nola Lillian Roach on behalf of the Defendants.”  Ms Roach is the third defendant.  This is further emphasised in the context of paragraph 4(e) of the statement of claim which is that “At all material times, the Third Defendant … (e) represented the Defendants in dealings with the Plaintiffs.”

  1. [172]
    Request No. 21(b) is:

“state all the facts, matters, and circumstances relied on to allege that any discussion with the third defendant on 22 August 2005 with Kallinicos:

  1. (i)
    was with the third defendant on behalf of the first to fifth defendants and Dundrenan Developments;
  1. (ii)
    was undertaken by the third defendant with the authority of the first to fifth defendants and Dundrenan Developments;
  1. (iii)
    was with Kallinicos on behalf of the plaintiffs.”

Mr Hackett’s response is that each of these particulars are expressly alleged in the pleading.[48]  I agree.

  1. [173]
    In respect of subparagraphs (i) and (ii), this information is provided in the particulars to paragraph 4(e), in particular paragraphs 4(e)(i) and (iv).  It is clear from these paragraphs that it is alleged that at the 26 June 2001 meeting the sixth defendant was informed that the third defendant had authority to provide him with instructions on behalf of the first to fifth defendants in respect of taxation and accounting services between 12 July 2005 and 11 July 2006 and that the sixth defendant regularly received instructions from her on their behalf.  The alleged tax audit retainer was a taxation and accounting service and the instructions alleged to be given in relation to it by the third defendant on or about 22 August 2005 were given within that period.  So far as the seventh defendant is concerned, it is alleged in paragraph 5D that it had adopted the tax agent retainer from its incorporation on 24 June 2003.  I have previously addressed request No. 16 with respect to the issue of adoption.  On the basis of the pleading that asserts the seventh defendant adopted the retainer, it can also be taken to have adopted the authority of the third defendant to provide instructions to the sixth defendant on its behalf.  Therefore I do not consider that more information is required for the defendants to know the nature of the case that they have to meet.
  1. [174]
    In respect of subparagraph (iii) this information is provided by paragraph 1 of the statement of claim that the plaintiffs “pursuant to an agreement in writing dated 29 July 2005, carry on and have since 12 July 2005, carried on an accounting business under the registered business name of Kallinicos Bray Accountants” and that they “were represented in their dealings” with the first to fifth defendants “by a director of the First Plaintiff, Mr John Kallinicos.”  It is on this basis that it can be alleged that the sixth defendant was acting on behalf of the plaintiffs on or about 22 August 2005.
  1. [175]
    Although paragraph 1(c) expressly limits the sixth defendant’s dealings on behalf of the Plaintiffs to the first to fifth defendants I consider that by pleading that the seventh defendant adopted the tax retainer on 24 June 2003 it is asserted that it also adopted the sixth defendant representing the plaintiffs in respect of its dealings to the same extent as the other defendants; and therefore that he also represented the plaintiffs in their dealings with the seventh defendant.  For this reason I do not consider that further information is required for the defendant to know the nature of the case that they have to meet.
  1. [176]
    Request No. 23 relates to paragraph 7 of the statement of claim which alleges that it was an express term of the tax audit retainer that the defendants would be jointly liable for payment of the plaintiff’s fees for services rendered by them in connection with the retainer.  Particulars are provided that this term was verbally agreed during discussions between the third defendant on behalf of the defendants and the sixth defendant  on behalf of the plaintiffs on or about 22 August 2005.
  1. [177]
    The defendants deny these allegations for the reasons already pleaded, the alleged tax audit retainer was not entered into and the third defendant did not agree to any such term. This is an occasion in which the defendants do not allege that they are unable to plead to the allegations until proper particulars are provided, and reserve their right to plead further on the provision of proper particulars.
  1. [178]
    Notwithstanding this, the defendants seek full particulars of this allegation, including by request No. 23(a):

“The substance of the discussions alleged to constitute the agreement.”

Mr Hackett again responds that this is exactly the allegation of fact and the particulars  that have been provided.  He says that it was an express term in the sense that the words were spoken and there was an agreement about it between the third defendant and the sixth defendant.[49]  Because I agree, I do not order the particulars sought.

  1. [179]
    Request No. 23(b) is in the same terms as request No. 21(b).  For the same reasons I do not make the orders sought.
  1. [180]
    It as agreed that request No. 24 does not arise for consideration.[50]
  1. [181]
    Requests Nos 25 to 28 relate to paragraph 7A of the statement of claim.  It is also relevant to paragraphs 10A, 13A, 16A, 19A, 22A, 25A, and 29 because each repeats and relies on the particulars pleaded in paragraph 7A.  My decision concerning the requests in relation to paragraph 7A will also apply to the requests insofar as they apply to the other paragraphs I have specified.
  1. [182]
    Paragraph 7A states that:

“It was an implied term of the retainer that the Defendants would pay for the Plaintiff’s services on an hourly basis at the rates normally charged by the Plaintiffs.”

  1. [183]
    The particulars are then provided in subparagraphs (i) to (iv) of the course of conduct from which this term is implied.  The requests in paragraphs 25‑28, which are in similar terms, relate to each of these paragraphs.
  1. [184]
    Request No. 25 relates to paragraph 7A(i), which is to a similar effect as paragraphs 4(e)(i) and 5B, in that it alleges that the sixth defendant first received instructions to provide the defendants with taxation and accounting services at the 26 June 2001 meeting, these instructions being provided by the first to fifth defendants.
  1. [185]
    The defendants deny the allegations because for the same reasons already pleaded the alleged tax audit retainer was not entered into. They say that they are otherwise unable to plead to the allegations until proper particulars are provided.
  1. [186]
    The defendants request full particulars of the allegation in paragraph 7A(i) by stating specifically the instructions alleged to have been received, whether they were oral or in writing or partly oral or in writing, to provide copies of any writing, to state the substance of any conversation, and to state what is relied on to allege that any such instructions were provided on behalf and with the authority of the first defendant and the seventh defendant, and were provided to the plaintiffs.
  1. [187]
    I do not consider that such particulars are required for the defendants to know the nature of the case they have to meet. As Mr Hackett submits the plaintiffs allege the existence of the tax audit retainer which contains an implied term about payment.  It is particularised that this term can be implied from the course of dealings with the defendants which commenced with the instructions provided on 26 June 2001.[51]
  1. [188]
    It was agreed that request No. 26 does not arise for consideration at least insofar as it relates to fees.[52]  In any event, to the extent that the request relates to instructions as opposed to fees, I take the same view as in relation to request No. 25.  In other words, the particulars are not required to enable the defendants to know the nature of the case they have to meet.
  1. [189]
    Request No. 27 relates to paragraph 7A(iii) of the statement of claim which alleges that during the period 1 July 2002 to 11 July 2005 the sixth defendant carried on business through the first plaintiff, and the defendants provided him with instructions on behalf of the first plaintiff and were invoiced by and paid by the first plaintiff for the services on an hourly basis at the rates normally charge by the first plaintiff.
  1. [190]
    In relation to subparagraphs (d) to (h) of this request, which relate to instructions as opposed to fees, I take the same view as in relation to request No. 25 and do not make the order sought.
  1. [191]
    In relation to subparagraph (a) of this request which is for the provision, pursuant to r 222 of the UCPR, of copies of the invoices from the first plaintiff to the first to fifth defendants and the seventh defendants for services provided during the relevant period, I consider that this is a proper request.  This is because it is the existence of such invoices that supports the existence of the implied term of the alleged tax audit retainer as to payment.  The order made in paragraph [121] applies to the provision of the copies of these invoices.
  1. [192]
    I consider that by providing the invoices, the rates normally charged by the first plaintiff for services provided during the relevant period will be disclosed. Therefore I do not make the order to this effect which is the subject of request No. 27(b).
  1. [193]
    Request No. 27(c) is to state specifically each payment alleged to have been made to the first plaintiff for services provided to the first to fifth defendants and the seventh defendant during the relevant period, including who made the payment and the service or services to which it is alleged to have been made.  I do not make the order sought because I consider that once the defendants have been provided with copies of the invoices they will know the nature of the case they have to meet and will be able to plead to the extent it is necessary to do so whether or not they paid these invoices.
  1. [194]
    Request No. 28 is similar to request No. 27 except that it relates to the period between 12 July 2005 and 11 July 2006 and to instructions provided to the sixth defendant on behalf of Kallinicos Bray Accountants.  I am of the same view in relation to this request as to request No. 27.  Accordingly I do not make the order sought other than that the plaintiffs provide to the defendants copies of the invoices referred to in request No. 28(a) in accordance with the order in paragraph [121].
  1. [195]
    Request No. 29 is not pressed and therefore does not arise for consideration.[53]
  1. [196]
    Request No. 31 relates to the “Dundrenan Retainer” which is alleged in paragraph 10 of the statement of claim to have been made between April 2005 and April 2006 by oral agreement by which the first defendant engaged the plaintiffs to prepare financial statements and income tax returns for it in the financial year ended 30 June 2005.  It is particularised as arising from various discussions between the third defendant on its behalf and the sixth defendant on behalf of the plaintiffs over that period.
  1. [197]
    The defendants admit that the sixth defendant or the first plaintiff or the plaintiffs prepared tax returns for that financial year and that the only engagement for services to be provided pursuant to the terms for the retainer is defined in paragraph 3A(d) of the defence.  This is the retainer referred to at paragraph [44].  Further, in paragraph 1A of the defence it is admitted that the first defendant did, at various times, instruct the first plaintiff to prepare company and personal tax returns, prepare BAS and to provide advice in relation to tax matters to, and for the benefit of, the defendants, and that the first plaintiff did, at various times, provide such services.
  1. [198]
    The defendants request full particulars of the allegation including the terms of the alleged engagement, the date and place of each conversation alleged to comprise the engagement, and the substance of each such conversation.
  1. [199]
    I agree with Mr Hackett that the terms of the oral engagement and the substance of the conversations alleged to comprise the engagement are set out in the statement of claim, namely to prepare financial statements and income tax returns for the financial year ending 30 June 2005.
  1. [200]
    In relation to the request for particulars of the date and place of each such conversation, Mr Hackett says:

“It is set out to the best of the Plaintiffs’ ability between the two people in that date range.”[54]

In circumstances where the plaintiffs’ counsel advises that no further particulars are able to be provided, and the defendants demonstrate that they understand the nature of the case they have to meet by expressly pleading that the engagement was limited to services which are defined in paragraph 3A(d) of the defence, I do not make the orders sought.

  1. [201]
    Request No. 34 relates to the “partnership retainer” in paragraph 13 of the statement of claim, which is also alleged to have been made between April 2005 and April 2006 by oral agreement by which the second to fifth defendants engaged the plaintiffs to prepare financial statements and income tax returns for the partnership for the financial year ended 30 June 2005.  At paragraph 3 of the statement of claim it is alleged that these defendants were in partnership with each other.  The defendants have admitted the existence of this partnership for the purposes of entering into a further agreement to develop land owned by them at Kangaroo Point, Queensland (paragraph 3(a)(i) of the defence).
  1. [202]
    It is particularised that the partnership retainer arises from various discussions between the third defendant on behalf of the partnership and the sixth defendant over the period alleged.
  1. [203]
    The defendants make similar admissions with respect to the partnership retainer as those specified at paragraph [197] in relation to the Dundrenan retainer.
  1. [204]
    The defendants request full particulars of the same nature as those requested in relation to the Dundrenan retainer, in subparagraphs (a)‑(c).
  1. [205]
    As in the case of the request for further and better particulars in relation to the Dundrenan retainer at paragraph [199], I consider that the terms of the oral engagement and the substance of the conversations alleged to comprise the agreement are set out in the statement of claim, namely to prepare financial statements and income tax returns for the partnership for the financial year ending 30 June 2005.
  1. [206]
    I proceed on the basis that Mr Hackett’s statement in response to the request for particulars of the date and place of each conversation relating to the Dundrenan retainer is also applicable to the partnership retainer.  And for the same reasons as expressed in paragraph [200], I do not make the orders sought.
  1. [207]
    Request No. 34(d) is to:

“State all the facts, matters, and circumstance relied on to allege that such discussions between the third Defendant and Kallinicos between April 2005 and April 2006:

  1. (i)
    were by the third Defendant on behalf of the Partnership;
  1. (ii)
    were with the authority of the Partnership;
  1. (iii)
    were with Kallinicos on behalf of the plaintiffs.”

The response to this is similar to the way in which I have approached request No. 21(b) in paragraph [173] and [174].  It is clear from paragraphs 4(e)(i), (iii), and (iv) of the statement of claim that it is alleged that at the 26 June 2001 meeting the sixth defendant was informed that the third defendant had authority to provide him with instructions on behalf of the first to fifth defendants in respect of taxation and accounting services and between 30 June 2002 and 11 July 2006 the sixth defendant regularly received instructions from her on their behalf.  The alleged partnership retainer involved the second to fifth defendants, was to provide taxation and accounting services in the sense of preparing BAS and income tax returns for the partnership, and the discussions alleged to have occurred between the third defendant and the sixth defendant were within that period.  In relation to subparagraph (iii) this information is provided by paragraph 1 of the statement of claim that the plaintiffs “pursuant to an agreement in writing dated 29 July 2005, carry on and have since 12 July 2005 carried on an accounting business under the registered business name of Kallinicos Bray Accountants” and they “were represented in their dealings” with the first to fifth defendants “by a director of the First Plaintiff, Mr John Kallinicos”.  Further, it is particularised in paragraph 4(e)(iii) that the sixth defendant on behalf of the first plaintiff regularly received instructions from the third defendant between 30 June 2002 and 10 July 2005.  It is on this basis that the sixth defendant was acting on behalf of the plaintiffs during the relevant period.  I therefore consider that the defendants know the nature of the case that they have to meet.

  1. [208]
    Request No. 37 relates to the “Noel Roach Retainer” which is alleged in paragraph 16 of the statement of claim to have been made between April 2005 and April 2006 by oral agreement by which the first defendant engaged the plaintiffs to prepare income tax returns for him for the financial year ended 30 June 2005.  It is also particularised as arising from various discussions between the third defendant on his behalf and the sixth defendant over that period or alternatively evinced by the second defendant subsequently signing an ELS Declaration Form instructing the plaintiffs to lodge his 2005 tax return and that it was true and correct.
  1. [209]
    The defendants’ response is the same as in the case of the alleged Dundrenan and partnership retainers. They seek similar particulars to those sought in relation to the partnership retainer.
  1. [210]
    For the same reasons as I have given in relation to the Dundrenan and partnership retainers, I do not make the orders sought.
  1. [211]
    Request No. 40 relates to the “Nola Roach retainer”.  The allegations in relation to it are similar to the “Noel Roach retainer” except that it is alleged that the third defendant engaged the plaintiffs to prepare the income tax returns and financial statements not only for her personally but also in her capacity as trustee of the Roach Family Trust.  The particulars are also similar to those in support of the Noel Roach retainer.
  1. [212]
    The defendants respond in similar terms as with the Dundrenan, partnership and Noel Roach retainers.
  1. [213]
    The Defendants request full particulars in subparagraph (a) to (c) in similar terms in relation to those retainers.  For the reasons that I have previously given in relation to those retainers I do not make the orders sought.
  1. [214]
    Request No. 40(d) is:

“State all the facts, matters, and circumstances relied on to allege that such discussion between the third defendant and Kallinicos between July 2005 and April 2006:

  1. (i)
    were by the third defendant as trustee for the Roach Family Trust; and
  1. (ii)
    were with Kallinicos on behalf of the Plaintiffs.
  1. [215]
    It is alleged in paragraph 4(a) of the statement of claim that at all material times the third defendant was the trustee of the Roach Family Trust.  It is difficult to see what more the plaintiffs can do to particularise the allegation that the plaintiffs were engaged by her in that capacity other than to allege it in the statement of claim.
  1. [216]
    In relation to the request for particulars that the discussions were with the sixth defendant on behalf of the plaintiffs, this is answered by paragraph [207] in relation to the partnership retainer.
  1. [217]
    Request No. 43 relates to the “Morris Lee retainer” which is alleged in paragraph 22 of the statement of claim to have been made between July 2005 and April 2006 by oral agreement by which the fourth defendant engaged the plaintiffs to prepare income tax returns for him personally and also in his capacity as trustee of the Lee Family Trust.  It is particularised as arising from various discussions between the fourth defendant and the sixth defendant over that period or alternatively evinced by the subsequent conduct of Mr Lee in signing an ELS Declaration Form instructing the plaintiffs to lodge his 2005 tax return and that it was true and correct.
  1. [218]
    The defendants’ response is the same as in relation to the Dundrenan retainer, the partnership, the Noel Roach, and the Nola Roach retainers. Particulars are sought in the same terms with the addition of a request to state all the facts, matters, and circumstances relied on to allege that such discussions between the fourth defendant and the sixth defendant during the relevant period were by him as trustee for the Lee Family Trust and were with the sixth defendant on behalf of the plaintiffs.
  1. [219]
    For the same reasons that I have previously given in relation to similar requests concerning the other retainers, I do not make the orders sought under requests Nos 43(a) to (c).
  1. [220]
    In relation to the request that I have specifically mentioned under subparagraph (d) in relation to the engagement of the plaintiff as trustee of the Lee Family Trust, for the same reasons that I have given in respect of the similar request with reference to the third defendant as trustee for the Roach Family Trust, I consider that no further particulars can be given or required.  Similarly, the request for particulars that the discussions were with the sixth defendant on behalf of the plaintiffs, is also answered by paragraph [207] in relation to the partnership retainer.  Accordingly, again I do not make the orders sought.
  1. [221]
    Request No. 46 relates to the “Roslyn Lee retainer” which is alleged to have been made between July 2005 and April 2006 by oral agreement by which the fifth defendant engaged the plaintiffs to prepare income tax returns for the fifth defendant for the financial year ended 30 June 2005.  It is particularised as arising from various discussions between the fourth Defendant on behalf of the fifth defendant and Mr Kallinicos over that period.
  1. [222]
    The defendants’ response and request for further and better particulars is in similar terms to the other retainers commencing from the Dundrenan retainer with the addition that subparagraph (d) is:

“State all the facts, matters, and circumstance relied on to allege that such discussions between the fourth defendant and Kallinicos between July 2005 and April 2006:

  1. (i)
    were by the fourth defendant on behalf of the fifth defendant;
  1. (ii)
    were with the authority of the fifth Defendant;
  1. (iii)
    were with Kallinicos on behalf of the Plaintiffs.”
  1. [223]
    For the same reasons that I have given in relation to the requests concerning the other retainers, I do not make the orders sought by requests No 46(a) and (c).
  1. [224]
    In relation to request No. 46(d)(i) and (ii) these are in similar terms to request No. 10(f)(i) and (ii) which I have addressed in paragraph [144].  For the same reasons that I gave in relation to that request, I consider that the defendants have enough information to allow them to plead one way or the other on this issue.
  1. [225]
    For the same reasons I have given in relation to similar requests for particulars as to what is relied on to allege that the sixth defendant was acting on behalf of the plaintiffs, I also do not make the orders sought.
  1. [226]
    Request No. 49 relates to the “Dundrenan Developments Retainer”, which is alleged in paragraph 28 to have been made between April 2005 and April 2006 by oral agreement by which the seventh defendant engaged the plaintiffs to prepare financial statements and income tax returns for it for the financial year ended 30 June 2005.  It is particularised as arising from various discussions between the third defendant on its behalf and the sixth defendant on behalf of the plaintiffs over that period.
  1. [227]
    The defendants’ response is the same as in relation to the other retainers. The request for particulars is also in similar terms, with the addition of subparagraph (d) which is:

“State all the facts, matters, and circumstance relied on to allege that such discussions between the third Defendant and Kallinicos between April 2005 and April 2006:

  1. (i)
    were by the third defendant on behalf of the Dundrenan Developments;
  1. (ii)
    were with the authority of the Dundrenan Developments;
  1. (iii)
    were with Kallinicos on behalf of the Plaintiffs.”
  1. [228]
    For the same reasons I have given in relation to similar requests for particulars to those contained in request No. 49(a) to (c), I do not make the orders sought.
  1. [229]
    With reference to request No. 49(d)(i) and (ii), for the same reasons that I gave in paragraph [173] in response to request No. 21(b) I consider that the seventh defendant can be taken to have adopted the authority of the third defendant to provide instructions to the sixth defendant on its behalf.  Therefore I do not make the order sought.
  1. [230]
    With reference to request No. 49(d)(iii), for the reasons I have previously given, I consider that particulars have been given on this issue.
  1. [231]
    Request No. 50 is made pursuant to r 222 of the UCPR to provide a copy of the letter expressly referred to in paragraph 32 of the statement of claim, being the plaintiffs’ demand for payment of fees.
  1. [232]
    For the reasons I have previously given, I order that the plaintiffs provide a copy of the document the subject of request No. 50 to the defendants in accordance with my order in paragraph [121].
  1. [233]
    Accordingly the requests for the reasons given in paragraphs [124] to [232], the related requests for particulars are dismissed.

Defendants’ alternative application under r 171 of the UCPR

  1. [234]
    I consider that when the further and better particulars are provided by the plaintiffs and the sixth defendant in accordance with the orders that I have made in favour of the defendants in relation to requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51 together with the documents the subject of requests Nos 22(g), 14(a), 18(a), 19, 27(a), 28 and 50, the defendants will have the proper pleading required as an incident of procedural fairness.  Further, this is not a case in which the claim is obviously untenable.  In these circumstances, I do not consider that it is appropriate to exercise my discretion to strike out the second further amended statement of claim.  Accordingly, I dismiss the defendants’ alternative application to this effect.

Defendants’ alternative application under r 367 of the UCPR

  1. [235]
    I will address this issue after considering the plaintiffs’ applications.[55]

Plaintiffs’ request for further and better particulars[56]

  1. [236]
    The plaintiffs’ primary application is that the defence and counterclaim is devoid of relevant particulars to such an extent that it be struck out in its entirety pursuant to r 171 UCPR and that judgment be entered in favour of the plaintiffs.  The alternative application is that specific paragraphs of the defence and counterclaim be struck out with leave to replead, or that an order for further and better particulars be made.  Because the defendants resist the application, it is convenient to commence with a consideration of whether further and better particulars are required.  In this way, a determination can be made as to whether the defence and counterclaim are so devoid of relevant particulars that the discretion under r 171 should be exercised.
  1. [237]
    Mr Hackett submitted in his Outline (30 January 2009) that the plaintiffs require particulars of what they are alleged to have done which does not meet with the standard of care of a reasonably competent accountant.

In submitting that the plaintiffs’ application should be dismissed, Mr Handran argues that:

  • the request is prolix, oppressive, and not directed to resolve the real issues between the parties at a minimum of cost, time, and inconvenience in accordance with r 5(1) of the UCPR; and

  • no explanation has been given for the undue delay in bringing the application.

  1. [238]
    The first of these issues has been addressed by the significant reduction in the scope of the request during argument, including a decision not to press request No. 1 which was relied on by the defendants in support of the proposition that there was no legitimate forensic purpose.
  1. [239]
    In relation to the second issue, the defendants say that the pleadings closed on 10 November 2007, upon the plaintiffs’ filing their reply and answer.  They say that no explanation is given for the inordinate delay and how they were able to plead a response in November 2007, yet subsequently not know the case against them.
  1. [240]
    The defendants refer to the fact that although they requested further and better particulars of the further amended statement of claim and reply and answer on 17 January 2008, a response was not filed until 15 May 2008.  And further, although they delivered further and better particulars of the defence to the second further amended statement of claim on 8 September, the plaintiffs’ application was not filed until 5 November 2008.
  1. [241]
    Notwithstanding this chronology, an application having been made by the plaintiffs, the issue remains whether the defendants have complied with r 157(1) of the UCPR.  This raises the question of whether the particulars which have been provided by the defendants inform the plaintiffs of the nature of the case they have to meet.
  1. [242]
    In this regard the defendants expand on the proposition that the plaintiffs were able to file a response in November 2007 by submitting:

“Despite contending that they do not know the case they must meet at trial, a detailed reply and answer joining issue with the alleged negligence and averring that the Audit Errors were solely due to the information provided by the Defendants, upon which the accounting was originally conducted has be filed.”[57]

Therefore it is submitted that the pleadings demonstrate that the parties are sufficiently aware of the case they have to meet.[58]

  1. [243]
    The reference to the response filed in November 2007 is to the reply and answer,[59] and in particular paragraph 12 which replies to paragraph 6E of the amended defence.  Paragraph 6E, which is set out at paragraph [55], particularises the alleged Audit Errors.  In the reply, the plaintiffs relied upon their assertion that the tax agent retainer required them to just prepare the BAS and tax returns off the source documents provided to them by the defendants.  They also denied they were responsible for the alleged Audit Errors.  In relation to the alleged errors as to the amount of GST payable, it was asserted that this was determined by spreadsheets and summaries provided to them by the third defendant.  And in relation to the alleged failure to lodge an amended BAS, it was asserted that the defendants did not return the electronic lodgement statement to them so that it could be lodged electronically with the ATO.
  1. [244]
    In paragraph 26(d) of the reply and answer, the plaintiffs:

“(d) say that the penalties and general interest charge imposed by ATO were incurred as a consequence of the

  1. (i)
    spreadsheets prepared by the Third Defendant as opposed to providing source documents to the Plaintiffs; or
  1. (ii)
    the conduct of their legal advisers, Home Wilkinson Lowry Solicitors; or
  1. (iii)
    the manner in which the Defendants and Home Wilkinson Lowry negotiated with the ATO.”[60]
  1. [245]
    The further and better particulars of the reply and answer filed on 15 May 2008 also specify the facts, matter, and circumstances relied upon by the plaintiffs in support of the fact that penalties and the general interest charge imposed by the ATO were incurred as a consequence of “the spreadsheets and summaries prepared by the third defendant as opposed to providing source documents to the plaintiffs.”[61]
  1. [246]
    This confirms my earlier observation at paragraphs [62] to [64] that the competing contentions clearly emerge from an analysis of the plaintiffs’ and defendants’ cases.
  1. [247]
    It is for this reason that the plaintiffs are able to make this response in the reply and answer and the further and better particulars of the reply and answer to the defence and counterclaim based on the alleged Audit Errors.
  1. [248]
    It has been made clear to the plaintiffs that the defendants allege that the retainer required something more than simple reliance on source documents provided by the defendants.
  1. [249]
    It has also been made clear to them that the defendants allege that it was an implied term of the retainer that the sixth defendant, and subsequently the first plaintiff, would:
  1. (a)
    exercise all reasonable care and skill in the provision of the services; and
  1. (b)
    take all reasonable and proper care that the services provided were correct and not contain inaccuracies or give a misleading view of the financial or taxation position of the defendants.[62]
  1. [250]
    Further, they have been told by the defendants that the Audit Errors:
  1. (a)
    were made by the sixth defendant and/or the first plaintiff in providing the services to the defendants in return for payment;
  1. (b)
    ought not have been made by a reasonably competent and experienced accountant; and
  1. (c)
    were, in the premises, made negligently by the sixth defendant and/or the first plaintiff and/or the plaintiffs.[63]
  1. [251]
    However, the defendants are still required by r 157(1)(c) to plead particulars necessary to support their claim for negligence which has been specifically pleaded under r 150.  It is only in this way that the plaintiffs will know the nature of the case of negligence that they have to meet as opposed to a general allegation that the sixth defendant and/or the first plaintiff and/or the plaintiffs have been negligent.
  1. [252]
    It is against this background that the plaintiffs’ request for further and better particulars and the defendants’ response to it arises for consideration.
  1. [253]
    In the plaintiffs’ Outline (12 November 2008) they refer to their requests Nos 6 and 7 as examples to demonstrate the substance of their application.  This relates to the paragraph 6C of the defence in response to paragraph 8 of the statement of claim.
  1. [254]
    Paragraph 8 of the statement of claim alleges that pursuant to the tax audit retainer, the plaintiffs provided professional services to the defendants.  Particulars of this are then provided by reference to a specified tax invoice and copies of the billing worksheets.
  1. [255]
    In paragraph 6C of the defence, the defendants:

“(a) deny that the services alleged were performed pursuant to the alleged tax audit retainer because:

 …

  1. (ii)
    some of the services particularised refer to dates prior to the alleged retainer;
  1. (b)
    admit that Kallinicos and JKA were involved in the audit as the tax agent responsible for the matters the subject of the audit but do not admit that the professional services were in fact provided as:
  1. (i)
    some of the description of services contained in the invoice … are ambiguous such that the Defendants cannot discern what is alleged to have been done or for whom.”

The particulars sought were:

“6. As to paragraph 6C(a)(ii) of the Defence, insofar as it is alleged that “some of the services” performed by the Plaintiffs “refer to dates prior to the [Tax Audit] retainer” give particulars of:

  1. (a)
    The meaning of the expression “refer to” in this context; and
  1. (b)
    The services which it is alleged “refer to dates prior to the [Tax Audit] retainer” including, for each of those services, the date referred to.
  1. As to paragraph 6C(b)(i) of the Defence, give particulars of the description of services contained in invoice … which it is alleged are “ambiguous such that the Defendant cannot discern what was done or for whom.”

”

  1. [256]
    The Defendants’ response in their further and better particulars was:

“6. In relation to paragraph 6C(a)(ii) of the Defence, the request for particulars does not relate to the allegation made or is otherwise not a proper request for particulars.  It is not alleged that services performed by the Plaintiffs “refer to” dates prior to the retainer, but rather that the particulars pleaded by the plaintiffs in the Statement of Claim refer to dates prior to the retainer or are otherwise vague or confusing.

  1. In relation to paragraph 6C(b)(i) of the Defence, paragraph 8 of the Statement of Claim pleads each entry in a written invoice as particulars of the services alleged to have been performed.  The particulars are vague and confusing as to what is alleged to have been performed.  It is not a proper request for particulars to ask how the plaintiff’s particulars are vague and confusing.”

Mr Handran submits that these requests are an abuse because they seek dates of particulars provided by the plaintiffs in their own billing worksheets (with reference to request No. 6) and seek particulars of the description of services particularised by the plaintiffs by delivery of an invoice (in relation to request No. 7).[64]

  1. [257]
    On the other hand, Mr Hackett submits that it is not for the plaintiffs to guess what the defendants’ case is; and unless the particulars are provided, the plaintiffs do not know what they must meet and cannot identify the documents to be disclosed.  He says, for example, that they do not know which working papers to disclose as some only are in issue, but they do not know which ones.[65]
  1. [258]
    I agree with the defendants’ response to request No. 6 and with Mr Hackett’s submission about request No. 7.
  1. [259]
    If there was any initial ambiguity in paragraph 6C(a)(ii) of the defence in denying that the services alleged were performed pursuant to the tax audit retainer because “some of the services particularised refer to dates prior to the alleged retainer”, this is removed by the defendants’ subsequent statement that this is an allegation that “the particulars pleaded by the plaintiffs in the Statement of Claim refer to dates prior to the retainer”.
  1. [260]
    “Refer to” is an ordinary English expression, the meanings of which include “have a particular relation” and “be directed”.[66]

Therefore the defendants have pleaded in their defence that the plaintiffs’ particulars provided in the specified tax invoice and the copies of the billing worksheets direct them to some dates prior to 22 August 2005 when it is alleged that the tax audit retainer was entered into.  As appears from the discussion at paragraphs [88] to [92] above, I have readily been able to identify such dates on the face of the billing worksheets.  These dates will be equally obvious to the plaintiffs.  Therefore they will know which dates are the subject of the defendants’ response to request No. 6, and as such the nature of the case which they have to meet.  Accordingly, I do not order the particulars sought by request No. 6.

  1. [261]
    Although the defendants oppose request No. 7 on the basis that it is not a proper request for particulars for the plaintiffs to ask how their own particulars in the form of the invoice are ambiguous, as Mr Hackett submits:

“What your Honour might think is ambiguous, what I might think is ambiguous and what the pleader of this document might think is ambiguous are entirely different matters.”[67]

I agree with this proposition.  In these circumstances I consider that it is necessary for the defendants to give particulars of the descriptions of services contained in the invoice which it is alleged are “ambiguous such that the Defendant cannot discern what was done or for whom” in order to define the issues and prevent surprise at the trial, and thereby ensure that the plaintiffs know the nature of the case that they have to meet.  Accordingly, I order that the defendants provide the particulars sought by request No. 7.

  1. [262]
    Requests Nos 8 and 9 are in the same terms as requests Nos 6 and 7 respectively.  The defendants oppose them on the same basis.  I do not order the particulars sought by request No. 8, but order that the defendants provide the particulars sought by request No. 9, in each case for the same reasons give in respect of requests Nos 6 and 7.
  1. [263]
    Requests Nos. 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), and 15(g) and (h)(iv) seek particulars of the “Audit Errors” pleaded by the defendants in paragraph 6E of the defence.  That paragraph, which is set out at paragraph [56] commences:

“… the involvement of Kallinicos and JKA and the Plaintiffs in the tax audit was almost entirely in relation to the services previously provided to the Defendants by Kallinicos, JKA or the Plaintiffs which the ATO determined were in error, being:”

The alleged individual Audit Errors are then listed in subparagraphs (a) to (e).

  1. [264]
    Request No. 10 seeks the following particulars with reference to the introductory paragraph, and the other requests seek particulars in relation to each of the itemised Audit Errors.
  1. [265]
    The particulars sought by request No. 10 are as follows:

“(a)Details of the services previously provided by Kallinicos, JKA and the Plaintiffs, which it is alleged the ATO determined were in error;

  1. (b)
    What is meant by the expression “in relation to” in this context?
  1. (c)
    Details of the “involvement” of Kallinicos, JKA and the Plaintiffs in the tax audit “in relation to the services previously provided by them, which the ATO determined were in error”; and
  1. (d)
    Details of “the involvement of Kallinicos, JKA and the Plaintiffs in the tax audit which is alleged were not “in relation to” the services previously provided, which the ATO determined were in error.”
  1. [266]
    The Defendants responded in paragraph 10 of their further and better particulars that the services provided which the ATO determined to be in error are pleaded in paragraphs 6E(a)-(e) of the defence and the involvement in the tax audit which was/was not in relation to the services provided cannot be particularised other than as pleaded in this paragraph until the plaintiffs properly particularise the services the subject of the statement of claim.  They also say that “what is meant by” is not a request for particulars.
  1. [267]
    In support of the defendants’ position, Mr Handran submits that the plaintiffs plead and therefore will know that Kallinicos was retained on 26 June 2001 to “prepare and submit to the [ATO] business activity statements and tax returns” for the second to fourth defendants, and that the money claim is based on the audit services relating to the periods in relation to which the ATO audit was undertaken.  He therefore submits there is no element of surprise, especially because the ATO findings were posted to the first plaintiff.[68]
  1. [268]
    Further, he submits that the plaintiffs contribute to the defendants’ inability to respond because the billing worksheets relied on by the plaintiffs to identify the services allegedly provided do not assist as previously discussed in relation to the defendants’ request for further and better particulars. Consequently, he submits that the particulars pleaded in paragraph 6E are the best that can be given without any further cooperation of the plaintiffs.[69]
  1. [269]
    In support of the plaintiffs’ application Mr Hackett submits:

“29. The difficulty for the defendants is that they try to provide particulars of the services allegedly provided and negligence by the plaintiffs by reference to the “Audit Errors” identified by the ATO.

  1. For example, in respect of the first alleged Audit Error identified by the ATO, “under-reporting of assessable income for the financial year ending 30 June 2003 by $196,505”, is it alleged that the plaintiffs carried out the assessment or merely produced a document to the ATO on behalf of the defendants which evidenced such under-reporting.  The difference is significance in a case of negligence as against an Accountant.  So much is clear from paragraph 6F(c) of the Defence and Counterclaim.  The defendants merely say that the Audit Errors were made negligently by the plaintiffs; but the plaintiffs do not know what they are alleged to have done negligently … .”[70]
  1. [270]
    During argument Mr Hackett said that the ATO documentation is not sufficient to give the particulars requested:

“Because it does not identify, one, what my client did not did not do.  It is directed to the tax office’s determination of an error on the part of the taxpayer in respect of the returns submitted to it.  Your Honour cannot discern from the tax office’s analysis as to whether the accountant that lodged the document is responsible for the error as a consequence of anything he or it did as opposed to the taxpayer being responsible for the error because of information provided to their accountant. … They do not identify who is responsible for the error … ”[71]

  1. [271]
    I agree with Mr Hackett that a reference to the ATO documentation does not sufficiently particularise how the sixth defendant and/or the first plaintiff made the Audit Errors, and in particular what they are alleged to have been done which did not meet the standard of a reasonably competent and experienced accountant.
  1. [272]
    Although the ATO “Reasons for Decision” documentation in relation to the first defendant includes a statement that “You and/or your tax agent was unable to show all the tax invoices relating to the expenses/creditable purchases indicated in the BAS. Further, checks were conducted on the General Ledger data for 2002 income year prepared by your tax agent to find and cross match the expenses/creditable acquisitions for the relevant tax period … you were unable to show tax invoices for alleged creditable purchases amounting to $153,310 and Input tax credits on those purchases amounting to $13,579. As you did not hold the tax invoices for the alleged creditable acquisitions, you were not entitled to claim input tax credits for them.”,[72] it is the first defendant and not the sixth defendant or the plaintiffs who are found to have failed to take reasonable care which resulted in the tax shortfall amount.[73]  The other ATO findings are also that there has been a failure to take reasonable care on behalf of the second to fifth defendants individually and constituting the partnership.[74]
  1. [273]
    The ATO findings are silent as to whether the sixth defendant or the plaintiffs, as opposed to the defendants, were responsible for the under-reporting, over-reporting or the failure to lodge the BAS as a result of which penalties were imposed on the defendants. Further, in the event that they are responsible for this, the findings are silent as to how they are responsible.
  1. [274]
    This is the case, notwithstanding the “Reasons for Decision” in relation to the first defendant include a statement that the ATO considered the relevant facts to include:

“Your tax agent used cheque books, bank statements, invoices, etc to prepare business activity statements (BAS), financials and income tax returns.”[75]

I understand this to be information provided by the defendants to ATO, and that it has not been adopted by the plaintiffs.

  1. [275]
    Therefore the ATO findings are not sufficient to tell the plaintiffs what they are alleged to have done negligently so as to be responsible for the Audit Errors. As Mr Hackett submits, these are matters which the plaintiffs must know to meet the case of negligence against it and which is at the heart of the defence and counterclaim.[76]
  1. [276]
    In these circumstances, the plaintiffs are entitled to the particulars sought by request No. 10 in order to know the nature of the case of negligence which they are to meet.
  1. [277]
    The answers to sub‑paragraphs (a), (c), and (d) of the request will provide the answer to sub‑paragraph (b) as to what is meant by the expression “in relation to” in this context.  In my view this is another ordinary expression the meanings of which include “existence or effect of a connection”.[77]  Therefore paragraph 6E of the defence involves an assertion that the involvement of the sixth defendant, the first plaintiff, and the plaintiffs in the tax audit was almost entirely in connection with the services they had previously provided to the defendants by them, which services it is alleged the ATO determined were in error.
  1. [278]
    I therefore order that the defendants provide the particulars sought by request No. 10.
  1. [279]
    The defendants’ ability to provide these particulars will be facilitated by my orders that the plaintiffs and the sixth defendant provide the further and better particulars in relation to the billing worksheets. This will address the concerns expressed in Mr Handran’s submissions set out in paragraph [268].
  1. [280]
    Request No. 11(g) is as follows:

“As to the allegation in paragraph 6E(a) of the Defence, wherein it is alleged that the services previously provided to the Defendants by Kallinicos, JKA or the Plaintiffs were determined by ATO to be in error, in that there was alleged “under-reporting of assessable income for the financial year ending 30 June 2003 by $165,505”,[78] give particulars as to:

…

  1. (g)
    What are the facts, matters and circumstances by which it is alleged that the allegedly correct assessable income ought to have been reported, including particulars as to what comprised the allegedly correct assessable income and the manner in which the allegedly correct assessable amount ought to have been calculated.”
  1. [281]
    The Defendants’ response to request No. 11 is:

“The Defendants are not required to provide the particulars requested of the under-reporting of assessable income pleaded in paragraph 6E(a) of the Defence as it is an admitted fact and, in any event, particulars to avoid surprise at trial and enable the plaintiffs to properly plead to the allegation are already pleaded in the Defence or by the plaintiffs in their reply.”[79]

The Defendants give a similar response to requests Nos 12-14.[80]

  1. [282]
    Mr Handran’s submission in relation to this request, and requests Nos 12-18, is that they are plainly an abuse.  He submits that the particulars sought are sufficiently contained in the ATO findings or are matters within the providence of expert evidence.  He says that it must be borne in mind that the plaintiffs’ very claim is for the “audit services”; yet they seek details of the errors subsequently found, from the defendants, who the plaintiffs contend they acted for.[81]
  1. [283]
    However, consistently with what I have said in considering request No. 10, even accepting that the ATO findings are that there has been an under-reporting of the assessable income to the extent particularised, this does not suffice to tell the plaintiffs what they are alleged to have done negligently to be responsible for this.
  1. [284]
    The answer to request No. 11(g) is necessary to provide the plaintiffs with the information they need in order to know the nature of the case of negligence which they have to meet.
  1. [285]
    I therefore order the defendants to provide the particulars sought by request No. 11(g).
  1. [286]
    Request No. 12(g) is as follows:

“As to the allegation in paragraphs 6E(b) of the Defence wherein it is alleged that the services previously provided to the defendant by Kallinicos, JKA or the plaintiff were determined by ATO to be in error, in that the “Business Activity Statement” (“BAS”) for the quarter ending 31 December 2002 over-reported GST payable by an amount of $6,536”, give particulars as to:

  1. (g)
    What are the facts, matters and circumstances by which it is alleged that the allegedly correct GST amount ought to have been reported, including the manner in which the allegedly correct GST amount ought to have been calculated;”
  1. [287]
    In addition, to the submission from Mr Handran which I have already referred to in relation to these paragraphs, he said during argument:

“The matters under 12 and 12(g) are, in my submission, adequately detailed in the ATO information.  And that’s the same with all the repetitive requests which follow in respect of the particular over-reporting or under-reporting that appears.”[82]

  1. [288]
    For the reasons that I have given in relation to requests Nos 10 and 11(g) I do not consider that the information in the ATO findings is sufficient for the plaintiffs to know the nature of the case of negligence they have to meet.
  1. [289]
    Accordingly I order the defendants to provide the particulars sought by request No. 12(g).
  1. [290]
    For the same reason I order that the defendants provide the particulars sought by requests Nos 13(g) and (j), and 14(e) and (f).
  1. [291]
    Requests Nos 13(g) and (j) are as follows:

“As to the allegation in paragraph 6E(c) of the Defence, that the services previously provided to the Defendants by Kallinicos, JKA or the Plaintiffs were determined by the ATO to be in error, in that “the BAS” for the quarter ending 30 September 2003 under-reported GST payable by $7,843 and tax input credits by $313”:

…

  1. (g)
    What are the facts, matters and circumstances by which it is alleged that the allegedly correct GST amount ought to have been reported, including the manner in which the allegedly correct GST amount ought to have been calculated;

…

  1. (j)
    What are the facts, matters and circumstances by which it is alleged that the allegedly correct amount of input tax credits [ought][83] to have been reported, including the manner in which the allegedly correct amount of input tax credits ought to have been calculated.”
  1. [292]
    Requests Nos 14(e) and (f) is as follows:

“As to the allegation in paragraph 6E(d) of the Defence, that services previously provided to the Defendants by Kallinicos, JKA and the Plaintiffs were determined by the ATO to be in error, in that “the amended BAS for the quarter ending 30 September 2003, which JKA prepared, was not lodged”, give particulars as to:

…

  1. (e)
    What are the facts, matters and circumstances which it is alleged that the non-lodgement of the amended BAS was an “error”; and
  1. (f)
    What are the facts, matters and circumstances by which it is alleged that the ATO determines the service to be in error …”
  1. [293]
    Request No. 15(g) is as follows:

“As to the allegation in paragraph 6E(e) of the Defence, wherein it is alleged that the services provided to the Defendants by Kallinicos, JKA and the Plaintiffs were determined by the ATO to be in error, in that “the BAS for the quarter ending 31 December 2003 were under-reported GST payable by $6,730.00”’

…

  1. (g)
    What are the facts, matters and circumstances by which it is alleged that the allegedly correct GST amount ought to have been reported, including the manner in which the correct GST ought to have been calculated;”
  1. [294]
    The further and better particulars provided by the defendants in response are:

“(a) the BAS prepared by the plaintiffs advised the ATO that a credit was due to the seventh defendant in the amount of $6,854.00 when in fact the due credit was only $124.00;

  1. (b)
    the change in the BAS is recorded in notice from ATO dated 22 November 2006 with document identification number document 13505197987 which has already been disclosed to the plaintiffs.”[84]
  1. [295]
    However, this is not responsive to the request for particulars as it does not tell the plaintiffs what they are alleged to have done negligently, to be responsible for this. It is therefore insufficient to enable them to know the nature of the case of negligence they have to meet.
  1. [296]
    Accordingly, I order the defendants to provide the particulars sought by request No. 15(g).
  1. [297]
    Request No. 15(h)(iv) is for the defendants to produce pursuant to r 222 of the UCPR a copy of any determination made or communication in writing by the ATO that the services referred to in that paragraph were in error.  I will address this issue subsequently together with requests Nos 22(h) and 24(e)(ix) which are the only remaining requests for the production of copies of documents which are pressed by the plaintiffs under paragraph 5 of their application.
  1. [298]
    Requests Nos 16-18 request particulars in relation to paragraph 6F of the defence and counterclaim which is set out in paragraph [56].
  1. [299]
    Request No. 16 relates to the allegation in paragraph 6F(a) that the alleged Audit Errors “were made by Kallinicos and/or JKA in providing the services to the Defendants in return for payment.”  This allegation is denied by the Plaintiffs.  Requests No. 16(a)-(e) then seek in relation to each Audit Error alleged[85] particulars of the payment or payments that it is alleged were made, including for each payment:
  1. (i)
    The date upon which the payment was made;
  1. (ii)
    The identity of the person or entity who made the payment;
  1. (iii)
    The identity of the person or entity on whose behalf the payment was made;
  1. (v)
    The amount of the payment; and
  1. (vi)
    The date upon which the payment was made.”
  1. [300]
    The particulars provided in response are:[86]

“(a) the errors were committed in the course of plaintiffs providing services during the engagement pleaded in paragraph 3A(d) of the Defence;[87]

  1. (b)
    services performed by the plaintiffs during the engagement pleaded in paragraph 3A(d) of the Defence were invoiced to, and paid by, the first defendant (but for the invoices the subject of the claim);
  1. (c)
    further particulars are unnecessary for the plaintiffs to be able to plead to the allegation or to avoid surprise at trial.”
  1. [301]
    I do not agree that further particulars are unnecessary for the plaintiffs to know the nature of the case they have to meet in a situation where, paragraph 6F is relied on in support of the counterclaim[88] which seeks damages in respect of each of the defendants for fees paid for the preparation of the financial statements and income tax returns the subject of the Audit Errors.  A general statement that the Audit Errors were made by the sixth defendant and/or the first plaintiff in return for payment is not sufficient.
  1. [302]
    Therefore I order the defendants to provide the particulars sought by request No. 16.
  1. [303]
    Request No. 17 relates to the allegation in paragraph 6F(b) that the alleged Audit Errors ought not have been made by a reasonably competent and experienced accountant.  This is denied by the plaintiffs.  Request No. 17(a)-(e) seeks in relation to each Audit Error alleged, particulars of the facts, matters and circumstances by which it is alleged that such an accountant ought not have made the alleged error.
  1. [304]
    The particulars provided in response are that a reasonably competent and experienced accountant would have exercised due care and skill, and in doing so would not have committed any of the alleged Audit Errors which are again set out.[89]
  1. [305]
    This approach to providing particulars again relied upon the ATO findings to provide particulars sought. For the reasons previously given in relation to requests Nos 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), and 15(g), this is insufficient to enable the plaintiffs to know the nature of the case of negligence they have to meet as it does not tell them what they are alleged to have done negligently to be responsible for the alleged Audit Errors.  As Mr Hackett puts it, requests Nos 17 and 18 are made because there is “just effectively an allegation and conclusion in this pleading.  There’s no meat in between telling us what we did and what we ought not have done.”[90]
  1. [306]
    Accordingly I order the defendants to provide the particulars sought by request No. 17.
  1. [307]
    Request No. 18 relates to the allegation in paragraph 6F(c) that the alleged Audit Errors were made negligently by the sixth defendant, and/or the first plaintiff and/or the plaintiffs.  This is denied by the plaintiffs.  Request No. 18(a)-(e) seeks in relation to each alleged Audit Error particulars of the alleged negligence by:
  1. (i)
    the sixth defendant;
  1. (ii)
    the first plaintiff; and
  1. (iii)
    the plaintiffs.
  1. [308]
    The particulars provided in response are that the plaintiffs owed the defendants a duty to perform the services with reasonable care and skill and to the standard of a reasonably competent and experienced accountant, and such an accountant would not have made the Audit Errors.[91]
  1. [309]
    Again the particulars do not tell the plaintiffs what they are alleged to have done which does not meet the standard of a reasonably competent and experienced accountant. It does not tell them what they are alleged to have done negligently to be responsible for the alleged Audit Errors. Therefore it is insufficient to enable them to know the nature of the case of negligence they have to meet.
  1. [310]
    Accordingly I order the defendants to provide the particulars sought by request No. 18.
  1. [311]
    It may not be difficult for the defendants to provide many of the particulars that are the subject of requests Nos 10-18 to the extent that they can be answered by reference to whether, as Mr Hackett has put it, the allegation is that “the plaintiffs carried out the assessment or merely produced a document to the ATO on behalf of the defendants”[92] which evidenced the under-reporting or over-reporting.
  1. [312]
    The balance of the requests relate to the counterclaim.
  1. [313]
    Request No. 21 seeks further and better particulars of paragraph 5 of the counterclaim, which is:

“In purported pursuance of the Retainer, but in breach of its terms and the aforesaid duty,[93] Kallinicos and/or JKA committed the Audit Errors.”

The plaintiffs deny this allegation.

  1. [314]
    The further and better particulars sought by request No. 21(a)-(e) are the facts, matters and circumstances by which it is alleged that each alleged Audit Error:
  1. (i)
    Was committed in breach of the implied term referred to in paragraph 2(a) of the Counterclaim, namely the duty to exercise all reasonable care and skill in the provision of the services;
  1. (ii)
    Was committed in breach of the implied term referred to in paragraph 2(b) of the Counterclaim, namely the duty to take all reasonable and proper care that the services provided were correct and did not contain inaccuracies or give a misleading view of the financial or taxation position of the Defendants;
  1. (iii)
    Was committed in breach of the duty referred to in paragraph 3(a) of the Counterclaim (namely the duty to properly prepare financial accounts and returns for lodgement to the Australian Taxation Office on behalf of the plaintiff); and
  1. (iv)
    Was committed in breach of the duty referred to in paragraph 3(b) of the Counterclaim, namely the duty to communicate and give sound accounting and taxation advice to the plaintiffs in a timely manner.
  1. [315]
    The defendants’ response to this request is to repeat and rely on the matters pleaded in the defence and particularly paragraph 6F of the defence, sufficient particulars of which, it asserts, has already been provided.[94]
  1. [316]
    Mr Handran submits that requests Nos 21-38 are repetitive, an abuse, and seek particulars of matters sought in requests Nos 11-20.  He also relies on the submission referred to at paragraph [268].[95]
  1. [317]
    However, if the defendants counterclaim on the basis that the plaintiffs breached their duties to properly prepare financial accounts and tax returns, to communicate and give sound accounting and taxation advice, to exercise all reasonable care and skill and take all reasonable and proper care in providing services, the plaintiffs are entitled to be told how they are alleged to have done this in relation to each of the alleged Audit Errors.
  1. [318]
    It is not sufficient for the defendants to repeat and rely on matters pleaded in the defence and particularly in relation to paragraph 6F which I have already found is not sufficiently particularised.
  1. [319]
    Therefore I consider that for the same reasons that I have previously given with reference to the requests concerning paragraph 6F of the defence, the defendants’ response does not enable the plaintiffs to know the nature of the case they have to meet.
  1. [320]
    Accordingly I order the defendants to provide the particulars sought by request No. 21.
  1. [321]
    If this request involves repetition of the particulars sought in requests Nos 11-20 (to the extent they have been pressed by the plaintiffs) it will be sufficient for the defendants to repeat and rely on those particulars.
  1. [322]
    Request No. 22(j) and (k) relates to paragraph 6(a) of the counterclaim which is:

“As a consequence of the Audit Errors, and the aforesaid breaches of the Retainer and negligence, the first defendant has suffered loss and damage as follows:

  1. (a)
    penalties imposed by the ATO in the amount of $22,920.66.”

The plaintiffs deny this allegation.

  1. [323]
    In relation to this allegation, the plaintiffs in request No. 22 seek the following further and better particulars for each penalty comprising that amount:

“(j) The breach or breaches of the alleged Retainer which it is alleged the penalty was a consequence of; and

(k) The negligence which it is alleged the penalty was a consequence of.”

  1. [324]
    The plaintiffs submit that “the amounts claimed by way of damages in paragraphs 6 to 10 of the counterclaim are not particularised” by reference to the individual Audit Errors and the years to which they relate as would be expected in respect of ATO penalties and general interest charges on unpaid tax.[96]  This submission is also relevant to the discussion in paragraphs [328] to [343].
  1. [325]
    The defendants’ response is that the penalty was imposed on the first defendant in the amount of $12,521.50 by notice dated 9 March 2006, a copy of which has been provided; and the balance of the requests are not proper requests for particulars of the allegation.[97]
  1. [326]
    The penalty referred to in this response is different from that specified in paragraph 6(a) of the counterclaim.  I do not agree that this is a sufficient response and that it is not a proper request, when particulars are sought of the breach or breaches of an alleged retainer and negligence from which penalties are alleged to have been imposed, in respect of which damages are sought by a counterclaim.  The plaintiffs are entitled to know how they are said to have breached the retainer and been negligent so as to give rise to each penalty imposed.  This is essential in order for them to know the nature of the case they have to meet.
  1. [327]
    Therefore I order the defendants to provide the particulars sought by request No. 22(j) and (k).
  1. [328]
    Request No. 24(a)-(e)[98] relates to paragraph 6(c) of the counterclaim which is:

“As a consequence of the Audit Errors, and the aforesaid breaches of the Retainer and negligence, the first defendant has suffered loss and damage as follows:

…

  1. (c)
    fees paid to the first defendant in respect of the preparation of the financial statements and income tax returns the subject of Audit Errors, particulars of which shall be provided following disclosure.”

This is also denied by the plaintiffs.

  1. [329]
    I agree with the plaintiffs as set out in the note immediately preceding request No. 24 that the reference to the “first defendant” in paragraphs 6(c), 7(c), 8(c), 9(c), 10(c), and 10A(c) of the counterclaim are typographical errors, and should be references to the plaintiffs.  I proceed on this basis.
  1. [330]
    In relation to this allegation, the plaintiffs in request No. 24(a)-(e) seek full particulars thereof and full particulars of the amount of loss and damage allegedly suffered by the first defendant as a result, namely particulars of the fees allegedly paid to the Plaintiffs for the preparation of financial statements and income tax returns as a consequence of each alleged Audit Error.
  1. [331]
    The defendants’ response is that fees paid to the plaintiffs for work performed by the plaintiffs are matters within the plaintiffs’ knowledge but in any event further particulars of fees will be provided by way of expert evidence.[99]
  1. [332]
    Although the plaintiffs may know what fees were paid to them for their work, the fees alleged to be paid to them as a result of the alleged Audit Errors, which they deny, are a different matter. And where damages are sought by a counterclaim in respect of fees paid in respect of preparation of financial statements and income tax returns which are alleged to be the subject of Audit Errors, the plaintiffs are entitled to know not only how they are said to have committed these errors but also which of the fees paid to them is alleged to be for the work effected by these errors. Again, this is essential for them to know the nature of the case they have to meet.
  1. [333]
    Accordingly, I order the defendants to provide the particulars sought by request No. 24(a)-(e).
  1. [334]
    Requests Nos 25(j) and (k) concerning the second defendant, 28(j) and (k) concerning the third defendant, 31(j) and (k) concerning the fourth defendant, and 34(j) and (k) concerning the fifth defendant are to the same effect as request No. 22(j) and (k).  The defendants’ response and the competing submissions are also to the same effect.[100]
  1. [335]
    For the same reasons that I have given in relation to request No. 22(j) and (k), I order the defendants to provide the particulars sought by requests Nos 25(j) and (k), 28(j) and (k), 31(j) and (k), and 34(j) and (k).
  1. [336]
    Requests Nos 27(a)-(e) concerning the second defendant, 30(a)-(e) concerning the third defendant, 33(a)-(e) concerning the fourth defendant, 36(a)-(e) concerning the fifth defendant, and 38(a)-(e) concerning the seventh defendant are to the same effect as request No. 24(a)-(e).[101]  The defendants’ response and the competing submissions are to the same effect.[102]
  1. [337]
    For the same reasons that I have give in relation to request No. 24(a)-(e) I order that the defendants provide the particulars sought by requests Nos 27(a)-(e), 30(a)-(e), 33(a)-(e), 36(a)-(e), and 38(a)-(e).
  1. [338]
    Request no. 32 relates to paragraph 9(b) of the counterclaim which is:

“As a consequence of the Audit Errors, and the aforesaid breaches of Retainer and negligence, the fourth defendant has suffered loss and damages as follows:

…

  1. (b)
    general interest charges in the amount of $4,408.50.”

The plaintiffs deny this allegation.

  1. [339]
    In relation to this allegation, the plaintiffs request No. 32 is as follows:

“As to the allegation in paragraph 9(b) of the Counterclaim that, in consequence of the alleged Audit Errors, general interest charges were imposed by the ATO on the penalties referred to in paragraph 9(a) of the Counterclaim, as a result of which the Fourth Defendant suffered loss and damage, provide particulars thereof and particulars of the loss and damage alleged to have been suffered by the first defendant[103] as a result thereof.”

  1. [340]
    The defendants’ response is that the general interest imposed on the second defendant[104] in the amount of $4,408.54 by notice dated 5 June 2006, a copy of which has already been disclosed.[105]
  1. [341]
    Once the particulars which I have ordered in response to requests 31(j) and (k) have been provided, the plaintiffs will know the nature of the breach or breaches of the alleged retainer and the nature of the negligence which it is alleged the penalties imposed on the fourth defendant were a consequence of. As general interest charges are imposed on these penalties, it follows that they will also know the nature of the breach or breaches of the alleged retainer and the nature of the negligence which is alleged to give rise to these penalties. I consider that having regard to this and the defendants’ response as to the quantum of those charges provides the particulars necessary for the plaintiffs to know the nature of the case that they have to meet in relation to paragraph 9(b) of the counterclaim.  Therefore I do not order the defendants to provide the particulars sought by request No. 32.
  1. [342]
    Requests Nos 35 concerning the fifth defendant and 37 in relation to the seventh defendant are to the same effect as request No. 32.  The defendants’ response and the competing submission are also to the same effect.[106]
  1. [343]
    For the same reasons that I have given in relation t request No. 32 I do not order the defendants to provide the particulars sought.
  1. [344]
    Request No. 39 relates to paragraph 11 of the counterclaim which is:

“… the Defendants incurred legal costs of $18,174.52 in rectifying, and negotiating with the ATO in relation to the Audit Errors as a consequence of the Plaintiffs’ negligence and/or breach of Retainer.”

  1. [345]
    The plaintiffs and the sixth defendant do not admit this because it is not within their knowledge that the defendants incurred these legal costs and that these costs relate to the alleged Audit Errors; say that any of these legal costs were incurred as a consequence of the spreadsheets and summaries prepared by the third defendant as opposed to providing source documents to the plaintiffs, or the conduct of the defendants’ legal advisers or the manner in which those advisers negotiated with the ATO; the legal costs were not properly due and payable; and otherwise deny the allegation because it is untrue.[107]
  1. [346]
    In relation to this allegation the plaintiffs in request No. 39 seek the following further and better particulars:

“(a) The name of the solicitors to whom the said costs were payable;

  1. (b)
    The terms of the client agreement or costs agreement under which those costs were incurred;
  1. (c)
    The identity of the client/s who incurred those costs;
  1. (d)
    The identity of the person/s (including corporations) who paid those fees;
  1. (e)
    The date or dates and manner in which those fees were paid;
  1. (f)
    A detailed breakdown of those costs, showing the amount of the professional fees and the amount of outlays, including details of how those amounts were composed.  As to the professional fees, provide particulars of each attendance which it is alleged the said solicitors made in rectifying and/or negotiating with the ATO in relation to the alleged Audit Errors including for each attendance:
  1. (i)
    The nature of the attendance (i.e. what the solicitors did);
  1. (ii)
    The date of the attendance;
  1. (iii)
    If the attendance was charged for on an item basis, the amount of the costs charged for that attendance;
  1. (iv)
    If the attendance was charged on a time-costing basis:
  • The name of the person who made the attendance;
  • The position or professional status of that person (that is to say, whether the person is a partner, solicitor, trainee solicitor, law clerk, or something else) and the hourly rate charged in respect of that person’s time;
  • The time taken and charged for that attendance; and
  • The cost charged for that attendance;
  1. (v)
    Which of the alleged Audit Errors it is alleged were being rectified or negotiated in respect of; and
  1. (vi)
    The facts, matters and circumstances by which it is alleged that such attendance was made for the purpose of rectifying or negotiating in respect of that alleged Audit Error.”
  1. [347]
    The plaintiffs’ submission in support of this request is that as is the case with the amounts claimed by way of damages in paragraphs 6 to 10 of the counterclaim, the legal fees claimed in paragraph 11 of the counterclaim are not particularised by reference to the individual Audit Errors and the years to which they relate or to which defendant.[108]
  1. [348]
    The defendants’ response is that particulars of the legal costs incurred are set out in five specified invoices from their legal advisers, Home Wilkinson Lowry dated between 30 March and 28 July 2006, and that it is not otherwise a proper request for particulars.[109]
  1. [349]
    Mr Handran’s submission on behalf of the defendants is that detailed invoices have been delivered and referred to in the response, and therefore he submits that sufficient particulars have been provided.  He also argues that this request is hypocritical given that the plaintiffs have delivered invoices as particulars.[110]
  1. [350]
    The fact that the plaintiffs have delivered invoices as particulars does not mean that invoices delivered by the defendants provide sufficient particulars of their case. The plaintiffs are entitled to know which attendances and associated fees are allegedly related to rectifying in negotiating in respect of each alleged Audit Error, and how those fees have been quantified. This will be of particular relevance if in the event there is a finding of negligence and/or breach of retainer against the plaintiffs this relates to only some of the alleged Audit Errors and not others. This is essential in order for the plaintiffs to know the nature of the case they have to meet.
  1. [351]
    Because the answer to request No. 39(a) has been provided in the defendants’ response, it remains necessary for them to provide the particulars sought by request No. 39(b)-(f).  I have not been provided with a copy of the invoices to which they refer.  It is possible that some of the particulars can be provided by reference to these invoices.
  1. [352]
    I therefore order the defendants provide the particulars sought by request No. 39(b)‑(f).
  1. [353]
    Request No. 41 relates to paragraph 13 of the counterclaim which is:

“Further and in the alternative, the services were:

  1. (a)
    provided by the defendants in trade or commerce within the meaning of the Trade Practices Act 1974 (Cth);
  1. (b)
    amounted to representation as to the state of the Defendants then accounts and taxation liabilities;
  1. (c)
    in the premises of the Audit Errors, misleading and deceptive or likely to mislead and deceive in contravention of s 52 of the Trade Practices Act (1974) (Cth) (the “TPA”).
  1. [354]
    The plaintiffs and the sixth defendant admit the allegation in paragraph 13(a) in respect of the preparation and submission to the ATO of BAS and tax returns based upon the spreadsheets and summaries prepared by the third defendant as opposed to source documents, and otherwise deny the allegation because it is untrue.  They deny the allegations in paragraphs 13(b) and (c).[111]
  1. [355]
    In relation to this allegation the plaintiffs seek the following further and better particulars:

“(a) Each particular act performed or thing done, comprised in the services, which is alleged amounted to a representation;

  1. (b)
    For each such act or thing alleged performed or done, which of the plaintiffs it is alleged did or performed that act or thing;
  1. (c)
    For each such act or thing done or performed, precisely what it is alleged was represented to be the state of the Defendants the accounts and taxation liabilities; and
  1. (d)
    The facts, matters and circumstances by which it is alleged those representations were misleading or deceptive or likely to mislead or deceive.”
  1. [356]
    The defendants’ response is that the production of the accounts and taxation records by the plaintiffs incorporating the Audit Errors was a representation that the accounts and records as produced were true and correct; the request is not otherwise a proper request for particulars; and the plaintiffs have not in any event adequately particularised each act or thing done in providing the services.[112]
  1. [357]
    The order that I have made requiring the plaintiffs to provide further and better particulars of the billing worksheets will address the last issue raised by the defendants.
  1. [358]
    Mr Handran’s submission is that this request has been sufficiently addressed in the defendants’ response.
  1. [359]
    However, I do not consider that this general response sufficiently particularises a misrepresentation (in this case a representation alleged to be misleading or deceptive, or likely to be misleading or deceptive) which is not only required to be specifically pleaded under r 150(1)(j) of the UCPR but under r 157(1)(a) must include in the pleading the particulars necessary to support it.[113]
  1. [360]
    I therefore order the defendants provide the particulars sought by request No. 41.
  1. [361]
    Request No. 42 relates to paragraph 14 of the counterclaim which is:

“On the basis of the representations, the Defendants submitted the tax returns and BAS the subject of the Audit Errors.”

The plaintiffs deny this allegation.

  1. [362]
    In relation to this allegation, for each separate representation which it is alleged led the defendants to submit tax returns and BAS, the plaintiffs seek particulars (to the extent not already provided in response to request No. 41) of:

“(a) The date on which the representation was made;

  1. (b)
    The identity of the plaintiff which made the representation;
  1. (c)
    Precisely how it is alleged the representation was made (was it made orally or in writing or partly orally and partly in writing. If it was made in writing or partly in writing, provide a copy of the writing, and if it was oral or partly oral what was the substance of the oral communication);
  1. (d)
    To whom it is alleged the representation was made;
  1. (e)
    The content of the representation (that is, what was allegedly represented); and
  1. (f)
    The details of the tax return or BAS that it was alleged was submitted by the Defendants on the basis of the misrepresentation, including:
  1. (i)
    Whether it was an income tax return or BAS;
  1. (ii)
    Furnish a copy thereof;
  1. (iii)
    The date on which it was allegedly submitted; and
  1. (iv)
    The name of the entity which was the subject of the income tax return or BAS.”
  1. [363]
    The defendants’ response as in the case of request No. 41 is that the production of the accounts and taxation records by the plaintiffs incorporating the Audit Errors was a representation that the accounts and records so produced were true and correct; and in addition, that the representations were made on the date or dates that such accounts or records (including BAS) were submitted to the defendants for execution or otherwise provided to the defendants, and although the plaintiffs have not adequately particularised the acts performed and things done in providing the services to allow the defendants to identify precise dates, such information should be in the possession of the plaintiffs.[114]
  1. [364]
    Again the order that I have made requiring the plaintiffs to provide further and better particulars of the billing worksheets will address the last issue raised by the defendants.
  1. [365]
    Mr Handran’s submission is the same as in relation to request No. 41.
  1. [366]
    This request is related to the misrepresentations which are the subject of paragraph 13 of the counterclaim.  Again I do not consider that this general response sufficiently particularises the misrepresentations as required by r 157(1)(a) of the UCPR.  To the extent that request No. 42(f) requires particulars which go beyond the alleged misrepresentations themselves, I consider that they are necessary for the plaintiffs to know the nature of the case they have to meet in relation to the consequences of each separate misrepresentation.
  1. [367]
    I therefore order that the defendants provide the particulars sought by request No. 42.
  1. [368]
    To the extent that providing these particulars require a copy of a document to be furnished, as may be the case in relation to request No. 42(c) and (f)(ii) consistently with the approach that I have taken to the defendants’ request for particulars, I order that it be provided by the defendants producing the document to the plaintiffs’ solicitor and permitting copies to be made by that solicitor.
  1. [369]
    Request No. 43 relates to paragraph 15 of the counterclaim which is:

“As a consequence of the misleading and deceptive conduct, the Defendants suffered the loss and damage pleading in paragraphs 6 to10 above.”

The plaintiffs deny this allegation.

  1. [370]
    In relation to this allegation, the plaintiffs seek full particulars of the loss and damage alleged to have been suffered by the defendants including:

“(a) the amount of the loss or damage incurred by each defendant; and

  1. (b)
    how that loss or damage is calculated or arrived at.”
  1. [371]
    The defendants’ response is that the loss or damage is already pleaded in paragraphs 6 to 10A of the counterclaim and further particulars have been provided.[115]
  1. [372]
    Mr Handran’s submission in relation to this request and request No. 43 is that they have been sufficiently addressed.  Further, he says that the details of the further losses sustained by the defendants cannot be provided until the plaintiffs deliver proper particulars.  He submits that otherwise the matters are within the knowledge of the sixth defendant as he conducted the services the subject of the ATO audit.[116]
  1. [373]
    However, I have concluded that with the exception of the paragraphs with respect to the allegation that the loss and damage suffered included general interest charges on the penalties imposed by ATO that paragraphs 6 to 10A and the further particulars provided in relation to them do not provide sufficient particulars to enable the plaintiffs to know the nature of the case they have to meet.  Consequently the reference to these paragraphs by the defendants in response to request No. 43 is also insufficient.
  1. [374]
    Accordingly I order the defendants to provide the particulars sought by request No. 43.
  1. [375]
    When the further and better particulars are provided by them in respect of paragraphs 6 to 10A in accordance with my orders, the defendants will be able to properly adopt these particulars in response to request No. 43.
  1. [376]
    Request No. 44 relates to paragraph 16 of the counterclaim which is:

“Pursuant to section 75B of the TPA, Kallinicos, as the agent of the first and second plaintiffs, was a person involved in the contravention of section 52 of the TPA.”

The plaintiffs deny this allegation.

  1. [377]
    In relation to this allegation, for each alleged contravention of the TPA, the plaintiff seeks particulars as to:

“(a) Which plaintiff corporation committed the contravention; and

  1. (b)
    The facts, matters and circumstances by which it is alleged that Kallinicos was a person involved in the alleged contravention.”
  1. [378]
    The defendants’ response is that:

“(a) the plaintiffs have not sufficiently particularised between the plaintiffs the acts done in performing the services;

  1. (b)
    the facts, matters and circumstances otherwise relied upon to allege Kallinicos was a person involved in the contravention is otherwise sufficiently pleaded.”[117]
  1. [379]
    Mr Handran’s submission is the same as in relation to request No. 43.
  1. [380]
    The defendants’ response that the plaintiffs have not sufficiently particularised between themselves the acts done in performing the services, is answered by my decision on the defendants’ request for further and better particulars.
  1. [381]
    Having regard to my decisions on the plaintiffs’ requests for further and better particulars, I do not agree that the involvement of the sixth defendant in the contravention is sufficiently pleaded.
  1. [382]
    Accordingly I order the defendants to provide the particulars sought by request No. 44.
  1. [383]
    Under paragraph 5 of the application the plaintiffs seek that pursuant to r 222 of the UCPR, the defendants produce documents identified in specified paragraphs of the request for further and better particulars.
  1. [384]
    Although paragraph 5 of the application seeks the production of documents identified in 71 paragraphs of the request, this was reduced to three paragraphs during argument.  Mr Hackett said:

“… I’ve adopted what I regard is a practical approach where we have a document, even though we’re entitled to ask for a copy that they have.  There’s three places where we don’t have a document.”[118]

  1. [385]
    This approach provides another answer to the defendants’ contention that the plaintiffs’ request for particulars is prolix, oppressive, and not directed to resolving the real issues between the parties at a minimum of cost, time, and inconvenience.
  1. [386]
    As noted at paragraph [297] this application now relates to requests Nos 15(h)(iv), 22(h), and 24(e)(ix).
  1. [387]
    Request No. 15(h)(iv) relates to the determination by ATO of the alleged Audit Error which is the subject of paragraph 6E(e) of the defence, and requests:

“If the determination was made or communicated in writing, supply a copy thereof.”

  1. [388]
    Request No. 22(h) relates to the allegation in paragraph 6(a) of the counterclaim that the first defendant suffered loss or damage in that penalties were imposed by the ATO as a result of alleged breaches of the retainer and negligence, and requests:

“… a copy of the instrument by which the penalty was imposed or a copy of the notification and penalty.”

  1. [389]
    Request No. 24(e)(ix) relates to fees allegedly paid to the Plaintiffs for the preparation of financial statements and income tax returns the subject of the alleged Audit Error referred to in paragraph 6E(e) of the defence, and requests:

“a copy of the relevant fee note/s or invoice/s.”

  1. [390]
    In my view, if the defendants have possession or control of the documents which are the subject of these requests, the documents should be provided so that the plaintiffs know the nature of the case they have to meet.
  1. [391]
    In response to request No. 15 the defendants say that the change in the BAS is recorded in a specified notice from the ATO which has already been disclosed to the plaintiffs.[119]  However, the plaintiffs would argue that this is not a determination that services previously provided to the defendants by the sixth defendant, the first plaintiff, and the plaintiffs were in error as alleged in paragraph 6E(e) of the Defence.  This is the subject of the request, and Mr Hackett says that the plaintiffs do not have it.  In my view, if such a document exists and is in the defendants’ possession and control, it should be provided.  If it does not exist to the defendants’ knowledge or is not in their possession or control, it is easy to say so.
  1. [392]
    Although in response to request No. 22 the defendants say that the penalty was imposed on the first defendant by a specified notice, a copy of which has already been provided, Mr Hackett says that the plaintiffs do not have it.  It is possible that it has gone astray.  In order to remove any doubt and to expedite proceedings for the future, it should be provided.
  1. [393]
    Although in response to request No. 24 the defendants say that fees paid to the plaintiffs are matters within the plaintiffs’ knowledge, Mr Hackett says that the plaintiffs do not have the fee note/s or invoice/s.  They may have lost them or destroyed them.  Again, they should be provided to remove any doubt and expedite proceedings for the future.[120]
  1. [394]
    Accordingly I order that documents referred to in requests Nos 15(h)(iv), 22(h), and 24(e)(ix) be provided by the defendants producing them to the solicitor for the plaintiffs and the sixth defendant and permitting copies to be made by that solicitor.

Plaintiffs’ alternative application under r 171 of the UCPR

  1. [395]
    As in the case of the plaintiffs’ application under r 171 of the UCPR, I consider that when the further and better particulars are provided by the defendants, together with the documents the subject of the requests which I have ordered be complied with by them, the plaintiffs will have a proper pleading as required as an incident of procedural fairness.  Further, this is not a case where the defence is obviously untenable.
  1. [396]
    In these circumstances, I do not consider that it is appropriate to exercise my discretion to strike out:
  1. (a)
    the defence and counterclaim and enter judgment in favour of the plaintiffs in respect of the claim; and
  1. (b)
    specific paragraphs of the defence and counterclaim, with leave to replead by filing and serving an amended defence and counterclaim within seven days.

Defendants’ application with reference to r 320 of the UCPR

  1. [397]
    As stated, Mr Handran submitted that the action is apt for the court referred mediation under r 320 of the UCPR.
  1. [398]
    He submits that:

“40. Given the extremely small claim, complexity of the matter and the considerable expense required to properly prepare it for trial, the court ought to be satisfied that it is in the interests of all parties and in accord with the philosophy that the matter be stayed[121] pending its being referred on the motion of the Court, to mediation.

  1. If the parties continue to be involved in interlocutory skirmishes of this kind, the costs of litigation will far exceed the amount of money in dispute.”[122]
  1. [399]
    Mr Hackett’s response is that at the very least the allegations must be particularised before there is something to mediate.[123]
  1. [400]
    Despite Mr Handran’s concern that if I order particulars to be provided before exercising the discretion to refer the dispute to mediation, there will be further expense incurred through interlocutory skirmishes about the sufficiency of particulars provided, I do not consider that it is appropriate to exercise this discretion at this time.
  1. [401]
    This is a case in which I have ordered all parties to provide further and better particulars in order that they know the nature of the case they have to meet. It is only when these particulars are provided that the issues will have sufficiently crystallised that mediation will be a sufficiently meaningful option to be considered.
  1. [402]
    For this reason, I do not exercise my discretion to refer this dispute for mediation.[124]

Applications for further orders, directions, or relief

  1. [403]
    The defendants’ also apply that further and alternatively, I make all necessary and appropriate directions to advance this trial under r 367 of the UCPR.
  1. [404]
    As I have already observed, I also have power under r 161(2) in an application of this nature to make consequential orders and give directions for the conduct of the proceeding, as I consider appropriate.
  1. [405]
    The plaintiffs also apply for such further or other orders, directions, or relief that the court thinks fit.
  1. [406]
    Because I have ordered all parties to provide further and better particulars, the next step is to establish a timetable for these particulars to be provided, in circumstances in which it is appropriate that the plaintiffs provide these particulars first.[125]
  1. [407]
    In this regard, r 367 and r 161(2) overlap.  Therefore, to advance this trial I direct that the legal representatives for the parties make contact with my associate within seven days of the date of this order to arrange that this matter be listed for argument on the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these reasons.  This time period will enable the parties to consider the nature and extent of my orders.

Costs

  1. [408]
    The plaintiffs seek an order that the defendants pay the plaintiffs’ and sixth defendant’s costs of the application and action on the indemnity basis.
  1. [409]
    The defendants seek an order that the plaintiffs pay the defendants’ costs of and incidental to the application to be assessed.
  1. [410]
    As each party has been successful in respect of parts of their applications for further and better particulars, I extend my directions in paragraph [407] to making arrangements for an argument on the question of costs.

Conclusion

  1. [411]
    The orders will be:
  1. The first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, as requested in the first to fifth and seventh defendants' request for further and better particulars dated 17 January 2008, being requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51.
  1. In relation to requests Nos 22(g), 14(a), 18(a), 19, 27(a), 28(a), and 50, the first and second plaintiffs and the sixth defendant by counterclaim produce the documents requested to the solicitor for the first to fifth and seventh defendants and permit copies to be taken by that solicitor.
  1. Otherwise the application by the first to fifth and seventh defendants that the first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, is dismissed.
  1. The application by the first to fifth and seventh defendants that the second further amended statement of claim filed on 29 April 2008, be struck out under r 171 of the UCPR is dismissed.
  1. The first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 as requested in the first and second plaintiffs’ and the sixth defendant by counterclaim request for further and better particulars dated 8 July 2008, being requests Nos 7, 9, 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), 15(g), 16, 17, 18, 21, 22(j) and (k), 24(a)-(e), 25(j) and (k), 27(a)-(e), 28(j) and (k), 30(a)-(e), 31(j) and (k), 33(a)-(e), 34(j) and (k), 36(a)-(e), 38(a)-(e), 39(b)-(f), 41, 42, 43, and 44.
  1. In relation to requests Nos 15(h)(iv), 22(h), and 24(e)(ix), the first to fifth and seventh defendants produce the documents requested to the solicitor for the first and second plaintiffs and the sixth defendant by counterclaim and permit copies to be taken by that solicitor.
  1. Otherwise, the application by the first and second plaintiffs and the sixth defendant by counterclaim that the first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 and to provide copies of documents pursuant to r 222 of the UCPR be dismissed.
  1. The application by the first and second plaintiffs and the sixth defendant by counterclaim that the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out in its entirety pursuant to r 171 of the UCPR, and judgment be entered in favour of the first and second plaintiffs and sixth defendant by counterclaim in respect of the claim is dismissed.
  1. The application by the first and second plaintiffs and the sixth defendant by counterclaim that specified paragraphs of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out and the first to fifth and seventh defendants file and serve an amended defence and counterclaim is dismissed.
  1. The legal representatives for the first and second plaintiffs and the sixth defendant by counterclaim, and the first to fifth and seventh defendants make contact with my associate within seven days of the date of this order to arrange that this mater be listed for argument on:
  1. (i)
    the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these orders; and
  1. (ii)
    costs.
  1. [412]
    In making these orders I have found it convenient to categorise the paragraphs in which and of which particulars have been sought as requests which are identified by the paragraph numbers.
  1. [413]
    In ordering that the defendants provide further and better particulars in respect of requests Nos 24(a)-(e), 27(a)-(e), 30(a)-(e), 33(a)-(e), 36(a)-(e), and 38(a)-(e), I have done so on the basis that during argument Mr Hackett restricted that application to the alphabetical paragraphs and did not press the related roman numeral sub‑paragraphs.[126]  The order is made and is to be interpreted on that basis.
  1. [414]
    In any case in which the further and better particulars ordered are to be provided by reference to and the production of copies of documents, this is to be facilitated by the production of the documents to the solicitor for the other party and permitting copies to be taken by that solicitor. This is the case whether or not the documents are the subject of the requests identified in orders (2) and (6).

Footnotes

[1]A reference to the “defendants” in this judgment does not include a reference to the sixth defendant by counterclaim who is described as the “sixth defendant” throughout.

[2]The application is also made on behalf of the sixth defendant by counterclaim.  For convenience, reference is made to the plaintiffs’ application as encompassing the sixth defendant.

[3]The summary of the plaintiffs’ case is based on the statement of claim.

[4]At para 4(e)(i) of the statement of claim it is pleaded that the fifth defendant was also present at this meeting and together with the first to fourth defendants informed the sixth defendant that the third defendant had authority to provide him with instructions on behalf of the defendants.  At this stage of the pleading the reference to “defendants” is to the first to fifth defendants, see para 1(c).

[5]As noted by virtue of para 1(c) of the pleading, the reference to “defendants” at this stage of the pleading is to the first to fifth defendants.

[6]To place this allegation in context in the defence and counterclaim the defendants admit this to the extent that:

  1. (i)
    the second and third defendants entered into an oral partnership with the fourth and fifth defendants for the purposes of entering into a further agreement to develop land owned by them at Kangaroo Point, Queensland; and
  1. (ii)
    the  partnership entered into a written development agreement with the first defendant as developer for the subsequent sale of the property.

    [7]The sixth defendant.

    [8]The first plaintiff.

    [9]Outline of Submissions on behalf of the Defendants (30 January 2009), paras 6 and 7.

    [10]Transcript, 1-82 (submission by Mr Handran for the defendants).

    [11]Ibid.

    [12]Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 per Gibbs J at 219.

    [13]Trade Practices Commission v Total Australia Ltd (1975) 24 FLR 413 at 417; see also The King v Associated Northern Collieries (1910) 11 CLR 738 at 740-741.

    [14]Transcript, p 1-20.

    [15]Outline of Submissions on behalf of the Defendants (30/1/09), para 4.

    [16]Ibid, para 5.  See also Mr Handran’s submissions at Transcript 1-36 to 1-41.

    [17]This is under the heading “Units”.

    [18]This is under the heading “Amounts”.

    [19]Page 1

    [20]Ibid.

    [21]Page 5.

    [22]Page 6.  The next entry is: 22/08/2005 John Kallinicos, 30, 750.00, meeting with ato & nola roach.

    [23]Page 9.  This is under the heading of “LEE, ROSLYN SEYMOUR”, a reference to the fifth defendant.  A similar reference appears at pages 11 (DUNDRENAN DEVELOPMENTS) and 25 (LEE, MORRIS ARTHUR).

    [24]Pages 23, 24, and 28.

    [25]Page 23.

    [26]Pages 9 and 21.

    [27]Transcript, 1-101.

    [28]Ibid.

    [29]Transcript, 1-98.

    [30]Transcript, 1-110.

    [31]Transcript, 1-110 to 1-111.

    [32]I proceed on the basis that despite the reference in r 222(a) to the alternative of producing the document to the party, Mr Handran’s submissions suggest that it is the party’s solicitor to whom production is sought in this case.

    [33]This is a reference to the first to fifth defendants.

    [34]Transcript 1‑88.

    [35]The Australian Concise Oxford Dictionary, second edition, 1996 reprint.

    [36]Ibid.

    [37]Ibid.

    [38]Transcript, 1-89.

    [39]Transcript, 1-89.

    [40]Transcript, 1-92.

    [41]Transcript, 1-91.

    [42]Document No. 14, filed on 15 May 2006, para 11.

    [43]Transcript, 1-94.

    [44]Document No. 14, filed on 15 May 2006, para 12.

    [45]Requests Nos 13, 15, and 17, which relate to paras 5C(a), 5C(c), and 5D(a) of the statement of claim, are not the subject of the defendants’ application.

    [46]Transcript, 1-98.

    [47]Transcript, 1-100.

    [48]Transcript 1-100.

    [49]Transcript, 1-102.

    [50]Transcript, 1-76.

    [51]Transcript, 1-102.

    [52]Transcript, 1-78.  For this reason, request No. 26(a), which requests the provision pursuant to r 222 of copies of specified invoices, does not arise for consideration.

    [53]Transcript, 1-103.

    [54]Transcript, 1-105.

    [55]See paragraphs [403] to [407].

    [56]This application is also made by the sixth defendant.  For convenience in addressing the request, I will refer to the plaintiffs as encompassing the application by the sixth defendant.

    [57]Outline of Submissions on behalf of the Defendants (30/1/09), para 8.

    [58]Ibid, para 21.  See also Transcript, 1-44, where Mr Handran submits, “There is no mystery about this case.  The real issue is on whether or not a reasonably prudent accountant in the plaintiff’s position would have done things that were done …”

    [59]Filed on 16 November 2007.

    [60]Paragraph 27(c) is to the same effect with reference to any legal costs incurred.

    [61]Paragraph 9.

    [62]Counterclaim, para 2.

    [63]Defence to the Further Amended Statement of Claim and Counterclaim, para 6F.

    [64]Outline of Submissions on behalf of the Defendants (30/1/2009), paras 29 and 30.

    [65] Applicant/Plaintiffs Outline (12/11/08), paras 21-23.

    [66]The Australian Concise Oxford Dictionary, second edition, 1996 reprint.

    [67]Transcript, 1-20.

    [68]Outline of Submissions on behalf of the Defendants (30/1/2009), para 31; see also Transcript, 1-34 to 1-36, and 1-44 (where Mr Handran submits that “the Audit Errors are crystal clear; they are apparent off the ATO findings and off the information which has been exchanged in this proceeding.  There is no mystery about what amount of money was under-reported, what amount of money was over-reported.  The ATO have made those findings.”); 1-71 to 1-73.

    [69]Ibid, para 32; see also at 1-70 (where Mr Handran submits that “the words ‘almost entirely’ are put in there having regard to the billing worksheets that have been delivered … there would be a handful in which there are sufficient details provided … .”

    [70]Applicant/Plaintiffs Outline (12/11/08).

    [71]Transcript, 1-82 to 83.

    [72]Affidavit of Matthew Justin Hocking (12/11/08), folio 34.

    [73]Ibid, folios 37 and 38.

    [74]Ibid, folios 51, 52, 59, 60, 67, 68, 75, 76, 83, and 84.

    [75]Ibid, folio 32.

    [76]Transcript, 1-28.

    [77]The Australian Concise Oxford Dictionary, second edition (1996 reprint).

    [78]The figure actually particularised in the defence and counterclaim is $196,505.  I proceed on the basis that the plaintiffs’ request relates to this amount.

    [79]Defendants’ Further and Better Particulars, para 11 (Affidavit Charles George Londy (5/11/2009)), folio 83.

    [80]Ibid.

    [81]Outline of Submissions on behalf of the Defendants (30/1/2009), para 33.

    [82]Transcript, 1-71.

    [83]It is accepted that “ought” was intended to be included in this request.

    [84]Mr Londy’s affidavit, folio 84.

    [85]This is a reference to the Audit Errors alleged in paragraphs 6E(a)-(e) of the defence and counterclaim.

    [86]Mr Londy’s affidavit, folio 84.

    [87]These are the services which constitute the retainer pleaded by the defendants.

    [88]See Counterclaim, para 1.

    [89]Mr Londy’s affidavit, folios 84-85.

    [90]Transcript, 1-23.

    [91]Mr Londy’s affidavit, para 85.

    [92]Applicants/Plaintiffs Outline (12/11/09), para 30.

    [93]The reference to the “aforesaid duty” is to para 3 of the counterclaim which asserts that the plaintiffs’ duty was to:

    “(a)properly prepare financial accounts and tax returns for lodgement with the Australian Tax Office on behalf of the plaintiffs;

    1. (b)
      communicate and give sound accounting and taxation advice to the plaintiffs in a timely manner.”

    [94]Mr Londy’s affidavit, folio 85.

    [95]Outline of Submissions on behalf of the Defendants (30/1/2009), para 34.

    [96]Applicants/Plaintiffs Outline (12/11/08), para 33.

    [97]Mr Londy’s affidavit, folios 85-86.

    [98]The plaintiffs do not press for particulars under the roman numeral sub‑paragraphs, subject to the request for the production of documents by sub‑paragraph (e)(ix).

    [99]Mr Londy’s affidavit, folio 86.

    [100]Mr Londy’s affidavit, folios 86-87.

    [101]In each case the plaintiffs do not press for particulars under the roman numeral sub‑paragraphs.

    [102]Mr Londy’s affidavit, folios 86-88.

    [103]In context, I proceed on the basis that this is a reference to the fourth defendant.

    [104]In context, I also proceed on the basis that this is a reference to the fourth defendant.

    [105]Mr Londy’s affidavit, folio 87.

    [106]Ibid, folio 88.

    [107]Reply and Answer, para 27.

    [108]Applicants/Plaintiffs Outline (12/11/2008), para 34.

    [109]Mr Londy’s affidavit, folio 39.

    [110]Further Outline of Submissions on behalf of the Defendants (30/1/2009), para 35.

    [111]Reply and Answer, para 28.

    [112]Mr Londy’s affidavit, folio 89.

    [113]Rule 150(2) of the UCPR also requires that any fact from which a misrepresentation is claimed to be an inference to be specifically pleaded.

    [114]Mr Londy’s affidavit, folios 89-90.

    [115]Mr Londy’s affidavit, folio 90.

    [116]Outline of Submissions on behalf of the Defendants (30/1/09), para 38.

    [117]Mr Londy’s affidavit, folio 90.

    [118]Transcript, 1-63.

    [119]Mr Londy’s affidavit, folio 84.

    [120]Mr Londy’s affidavit, folio 86.

    [121]See r 321 of the UCPR.

    [122]Outline of submissions on behalf of the Defendants (30/1/09); see also Transcript, 1-42 to 43.

    [123]Transcript, 1-84.

    [124]In argument, reference was also made by Mr Handran to the need for independent joint expert accountants to confer to resolve the dispute.  It was accepted that I do not have the power to appoint an expert under r 429G(2) and (3) of the UCPR; see Transcript, 1-42.

    [125]This proposition also applies to the production of documents as required by these orders.

    [126]This is with the exception of the request for the production of documents under request No. 24(e)(ix).

    Close

    Editorial Notes

    • Published Case Name:

      John Kallinicos Accountants Pty Ltd & Anor v Dundrenan Pty Ltd & Ors

    • Shortened Case Name:

      John Kallinicos Accountants Pty Ltd v Dundrenan Pty Ltd

    • MNC:

      [2009] QDC 141

    • Court:

      QDC

    • Judge(s):

      Irwin DCJ

    • Date:

      29 May 2009

    Appeal Status

    Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

    Cases Cited

    Case NameFull CitationFrequency
    Bailey v Federal Commissioner of Taxation (1977) 136 C.L.R 214
    2 citations
    Jump To
    Cite 1 - (1977) 136 C.L.R 214
    Cite 2 - (1977) 136 C.L.R 214
    Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
    1 citation
    Jump To
    Cite 1 - (1990) 169 CLR 279
    Belela Pty Ltd v Menzies Excavation Pty Ltd[2005] 2 Qd R 230; [2004] QSC 478
    3 citations
    Jump To
    Cite 1 - [2005] 2 Qd R 230
    Cite 2 - [2005] 2 Qd R 230
    Cite 3 - [2005] 2 Qd R 230
    Bloeman v Atkinson [1977] Qd R 291
    2 citations
    Jump To
    Cite 1 - [1977] Qd R 291
    Cite 2 - [1977] Qd R 291
    Kev Leamon Earthmovers Pty Ltd v Hammond Villages Pty Ltd (1998) 19 Qld Lawyer Reps 10
    2 citations
    Jump To
    Cite 1 - (1998) 19 Qld Lawyer Reps 10
    Cite 2 - (1998) 19 Qld Lawyer Reps 10
    Sims v Wran (1984) 1 NSWLR 317
    2 citations
    Jump To
    Cite 1 - (1984) 1 NSWLR 317
    Cite 2 - (1984) 1 NSWLR 317
    The King v The Associated Northern Collieries and Ors (1910) 11 CLR 738
    2 citations
    Jump To
    Cite 1 - (1910) 11 CLR 738
    Cite 2 - (1910) 11 CLR 738
    Trade Practices Commission v Total Australia Limited (1975) 24 FLR 413
    2 citations
    Jump To
    Cite 1 - (1975) 24 FLR 413
    Cite 2 - (1975) 24 FLR 413
    Turner v Bulletin Newspaper Co. Pty Ltd (1974) 131 CLR 69
    1 citation
    Jump To
    Cite 1 - (1974) 131 CLR 69

    Cases Citing

    No judgments on Queensland Judgments cite this judgment.

    1

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