Addenbrooke Pty Ltd v Duncan (No 2)

Addenbrooke Pty Ltd, as the plaintiff, brought an action against Duncan, and others, alleging breaches of the Australian Securities and Investments Commission Act 2001 (ASIC Act) and seeking damages, declarations, and other remedies. The central issue in the dispute revolves around whether the first defendant, Mr Kinghorn, was involved in the contraventions of the ASIC Act by Cascade Coal Pty Ltd and Southern Cross Equities Pty Ltd. This involves the interpretation and application of the accessorial liability provisions under the Corporations Act, specifically s 79, which aligns with the Trade Practices Act 1974. The court needed to determine whether Mr Kinghorn had actual knowledge of the falsity of the representations made by Cascade and Southern Cross and whether he intentionally participated in the contraventions.

The court found that the plaintiff's claim of accessorial liability against Mr Kinghorn was deficient in its pleadings. The plaintiff had alleged that Mr Kinghorn was a person involved in the contraventions, but the particulars did not sufficiently allege that Mr Kinghorn had actual knowledge of the falsity of the representations or that he intentionally participated in the contraventions. The court noted that the authorities require these essential elements to be properly pleaded. The plaintiff’s reliance on particulars and an email from Mr Kinghorn was insufficient to establish the necessary elements of accessorial liability. The court emphasised that while pleadings serve a purpose, they must still adequately allege the material facts necessary to support the claim, and this requirement is particularly stringent for claims involving quasi-criminal standards of civil liability.

The court concluded that the first claim of accessorial liability was not adequately pleaded and thus dismissed it. The court did not find it necessary to address the other claims in the proceeding as the dismissal of the first claim was sufficient. The final order was that the first claim of accessorial liability was dismissed, and the proceeding was to continue on the other claims against the defendants.