Cardaci v Filippo Primo Cardaci as Executor and Trustee of Marco Antonio Cardaci [No 2]
[2018] WASC 106
•11 APRIL 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: CARDACI -v- FILIPPO PRIMO CARDACI AS EXECUTOR AND TRUSTEE OF MARCO ANTONIO CARDACI [No 2] [2018] WASC 106
CORAM: LE MIERE J
HEARD: ON THE PAPERS
DELIVERED : 11 APRIL 2018
FILE NO/S: CIV 1750 of 2017
BETWEEN: MAE CARDACI
Plaintiff
AND
FILIPPO PRIMO CARDACI AS EXECUTOR AND TRUSTEE OF MARCO ANTONIO CARDACI
First Defendant
WASHBURN PTY LTD ATF WASHBURN PTY LTD
Second Defendant
RECTANGULAR PTY LTD ATF MARCO ANTONIO CARDACI TESTAMENTARY TRUST
Third Defendant
ONGOLD CORPORATION PTY LTD
Fourth Defendant
Catchwords:
Procedure - Pleadings - Particulars - Request for further and better particulars - Response to request under the cover of objection - Whether further and better particulars to be given if response is provided under the cover of objection
Legislation:
Nil
Result:
No order for plaintiff to give further and better particulars
Defendants may renew application after discovery
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Herbert Smith Freehills |
| First Defendant | : | Bennett + Co |
| Second Defendant | : | Bennett + Co |
| Third Defendant | : | Bennett + Co |
| Fourth Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
Day v William Hill (Park Lane) LD [1949] 1 KB 632
Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566
Mallik v McGeown [2008] NSWSC 129
Mitchell v Tsiros (No 1) [1982] VR 191
LE MIERE J:
The plaintiff filed a substituted statement of claim on 9 November 2017. The defendants filed a request for further and better particulars of the substituted statement of claim on 17 November 2017. The plaintiff filed further and better particulars of the substituted statement of claim on 23 November 2017. The defendants say that the answers to the request for further and better particulars of [36(g)], [36(m)], [57] and [96] of the substituted statement of claim are inadequate and apply for an order that the plaintiff give further and better particulars of those paragraphs of the substituted statement of claim.
For the reasons which follow I will not order the plaintiff to give further and better particulars of [36(g)] or [96] of the substituted statement of claim. I will not require the plaintiff to give further and better particulars of [36(m)] and [57] of the substituted statement of claim at this time. The defendants may renew their application after discovery and, if leave to administer interrogatories is given, answers to interrogatories if the plaintiff does not then give further and better particulars, or adequate particulars, of those paragraphs.
Answers 'under cover of objection'
Before considering the defendants' objections to specific answers given by the plaintiff, I will refer to an objection the defendant makes in relation to each of the plaintiff's answers objected to. In several of her answers the plaintiff states that she objects to the request and provides a response 'under cover of that objection'. The defendants say it is not appropriate for a party providing particulars to do so under the cover of objections; a party should not be able to avoid the binding nature of particulars through the shield of fallacious objections.
The introductory words that the plaintiff objects to the request and provides an answer under cover of that objection of the plaintiff’s answers have no consequence; they are not effective to prevent the answers from being regarded as answers. Notwithstanding the objection, the plaintiff has in fact and in law answered the request and her purported objection is nugatory: Mitchell v Tsiros (No 1) [1982] VR 191, 192; Mallik v McGeown [2008] NSWSC 129 [43]. It is not necessary to order the plaintiff to provide further answers on that ground alone. The defendants may rely upon the answers without the introductory words of objection.
Paragraph 36(g)
Paragraph 36 of the substituted statement of claim is, relevantly:
36.Alternatively, if there was power to remove Ongold and appoint a new trustee of Marc's Testamentary Trust (which is denied) then the power was exercised in circumstances that involved a fraud on the power in that:
…
(g)in July 2016, Philip made an offer orally (on or about 13 July 2016) and in writing (by emails dated 19 and 24 July 2016) to settle the plaintiff's claims against Marc's estate and Marc's Testamentary Trust and the Washburn Trust and any other claims again Cadaci family interests for $2 million (Offer);
(h)the Offer was repeated by emails from Philip to the plaintiff dated 12 and 31 August 2016;
(i)the Offer was rejected by the plaintiff;
(j)on 25 November 2016, Philip revised the Offer to include a Birg Eagle 780 boat which was an asset of the estate, and a Maserati motor vehicle which was in Marc's possession prior to his death;
(k)the revised Offer was rejected;
(l)the executors of the estate of Grace could only act jointly and therefore the removal of Ongold could only occur with the concurrence of Philip; and
(m)it is to be inferred from the matters pleaded in sub-paragraphs (a) to (l) that the power to remove and replace Ongold was directed or influenced by Philip in his own interests in order to secure a settlement with the plaintiff and take control of Marc's Testamentary Trust for his own benefit or the benefit of Philip and other Cardaci family interests.
The defendants' request for particulars of [36(g)] and the plaintiff's response are:
Request: As to paragraph 36(g) of the Substituted Statement of Claim, provide full particulars of the alleged oral offer, including who was involved in any conversation which forms part of the alleged oral offer and what was said in any such conversation and where any such conversation occurred.
Response
(a)the plaintiff objects to the request on the basis that it is a request for evidence and is not required to be answered as part of a process of effective case management of these proceedings. Under cover of that objection the plaintiff provides the following response;
(b)particulars of the conversation as provided in the affidavit of the plaintiff sworn 9 May 2017 and filed herein.
The defendants are entitled to particulars of an oral offer as they would be entitled to particulars of an alleged oral agreement. They are entitled to particulars of when, where and by whom the relevant utterances were made and, in substance, the terms of the offer. The particulars of the conversation provided in the affidavit of the plaintiff sworn 9 May 2017 are adequate. A party should not give particulars by incorporating by reference the contents of another document. However, I will not order the plaintiff to give further and better particulars of [36(g)] of the substituted statement of claim. The plaintiff is bound by the answer she has given. To require the plaintiff to deliver further particulars stating the particulars she has given in her affidavit rather than incorporating them by reference would put the plaintiff to added expense and inconvenience for no commensurate benefit to the defendants.
Paragraphs 36(m) and 57
The defendants' request for particulars of [36(m)] and the plaintiff's response are:
Request: As to paragraph 36(m) of the Substituted Statement of Claim, provide full particulars of 'the other Cardaci family interests'.
Response:
(a)the plaintiff objects to the request on the basis that it is a request for particulars of matters in the peculiar knowledge of the first defendant and all defendants are jointly represented, it is a request for evidence and is not required to be answered as part of a process of effective case management of these proceedings. Under cover of that objection the plaintiff provides the following response;
(b)the other Cardaci family interests are those that were proposed by the first defendant to benefit from the settlement of all claims as part of the Offer pleaded in paragraph 36(g) of the Substituted Statement of Claim.
The plaintiff resists providing further and better particulars at this time for the following reasons. The plea at [36(m)] comprises an inference to be drawn from the matters pleaded in [36(a)] to [36(l)]. Those matters include the email dated 24 July 2016 pleaded in [36(g)] and that dated 31 August 2016 pleaded in [36(h)] of the substituted statement of claim. Documents which are pleaded form part of the pleading and may be read as such: Day v William Hill (Park Lane) LD [1949] 1 KB 632, 639. The email of 24 July 2016 says:
The Washburn Trust owns shares in the family businesses and the majority of its income comprises discretionary dividends paid from the businesses each year. You are a beneficiary of this trust, along with a broad class of beneficiaries. It is the decision of the Trustee, Appointor and Guardian each year where distributions should flow, if any, from The Washburn Trust.
The email of 31 August 2016 includes:
In relation to the settlement offer this would be done by way of a settlement deed, which would cover all entities within the Cardaci Family Group.
The defendants' request accordingly seeks particulars of what the first defendant meant by his references to 'the family businesses' and 'the broad class of beneficiaries [of the Washburn Trust]' in his email to the plaintiff dated 24 July 2016 and the reference to 'all entities in the Cardaci Family Group' in his email dated 31 August 2016. Save for the classes of beneficiaries of the Washburn Trust, which can be identified from the Trust Deed, those are matters peculiarly within the knowledge of the first defendant. As such, the plaintiff should be permitted to obtain discovery of documents and answers to the interrogatories before providing particulars: Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566, 570.
I accept the plaintiff’s submission. The plaintiff will not be required to give further and better particulars before discovery and interrogatories, if leave to deliver interrogatories is granted. If the plaintiff does not give further and better particulars or adequate further and better particulars of [36(m)] after discovery and, if leave to deliver interrogatories is given, answers to interrogatories, the defendants may renew their application for further and better particulars of [36(m)].
Paragraph 57
The defendants accept that the application with respect to [36(m)] and [57] of the substituted statement of claim stand or fall together. I will not order further and better particulars of [57] at this time for the same reasons as in relation to [36(m)].
Paragraph 96
Paragraph 96 of the substituted statement of claim is:
By reason of Philip's control of Washburn Pty Ltd and Rectangular, and in the ongoing discharge of Philip's duties as a director of those trustee companies there is likely to be a conflict between the interest of the companies referred to in paragraph 95 and the interests of the beneficiaries of the Washburn Trust and Marc's Testamentary Trust (as the case may be).
The defendants' request for particulars and the plaintiff's response is:
Request: As to paragraph 96 of the Substituted Statement of Claim, provide full particulars of the:
(a)the alleged conflict;
(b)the specific alleged 'interests of the companies referred to in paragraph 95'; and
(c)the specific alleged 'interest of beneficiaries of the Washburn Trust and Marc's Testamentary Trust'.
Response:
(a)the plaintiff objects to the request on the basis that it is a request for particulars of matters in the peculiar knowledge of the defendants who are jointly represented, it is a request for evidence and is not required to be answered as part of a process of effective case management of these proceedings. Under cover of that objection the plaintiff provides the following response:
(b)the plaintiff is a beneficiary of the Washburn Trust and Marc's Testamentary Trust;
(c)the first defendant has an interest in at least the companies listed in the answer to [the request for particulars of paragraph 95];
(d)by reason of the first defendant's interest in those companies he has a financial interest in advancing the interest of those companies (the first interest);
(e)the trustee of each of the Washburn Trust and Marc's Testamentary Trust, have a financial interest (in their capacity as trustee acting on behalf of the beneficiaries of those trusts) in securing the most favourable outcome for the beneficiaries of those trusts) in securing the most favourable outcome for the beneficiaries of the trust in respect of amounts due to or from the companies (the second interest);
(f)the first interest and the second interest are opposing financial interests.
The defendants say that the answer to the request does not or does not adequately provide the particulars requested. Subparagraph (c) does not identify what 'interests' the first defendant is alleged to have had. In subpar (d) where it is alleged that 'by reason of the first defendant's interest … he has a financial interest in advancing the interests of those companies' does not identify what is alleged to be the nature of the first defendant's 'interest' in those companies. The particulars do not provide the particulars requested of the alleged 'interest of the companies' and the 'interest of beneficiaries' and how the two may give rise to a conflict. By reference to subpar (f) it is not identified how the two interests 'are opposing financial interests'. Subparagraph (d) is no more than another way of expressing the alleged conflict, and does so without providing any particulars.
The plaintiff resists giving further particulars for the following reasons. The defendants have sought 'full particulars' of 'the alleged conflict'. This is a request for particulars of a conclusion, rather than of fact. In any event, the conflict alleged is set out in the particulars already provided. The first defendant has an interest (by way of a beneficial or non‑beneficial shareholding or a relevant directorship) of alleged debtors of the Washburn Trust and Marc's Testamentary Trust. By way of example, the first defendant therefore has an incentive to reduce those alleged debtors' liability to the Washburn Trust and Marc's Testamentary Trust. But the first defendant is also the director of the trustees of the Washburn Trust and Marc's Testamentary Trust. Those trusts have an interest in being repaid.
The defendants have sought full particulars of 'the specific alleged "interests of the companies referred to in paragraph 95"'. This request seeks particulars of a conclusion to be drawn from facts. In any event, the plaintiff's particulars have set out, by reference to accounts prepared by the first defendant's advisers, loans to five trusts and six companies from the Washburn Trust and Marc's Testamentary Trust, and identifies some of the Cardaci family members said to hold the interests alleged. Those five trusts and six companies have at least an interest in reducing, delaying or avoiding the repayment of debts to the Washburn Trust and Marc's Testamentary trust, in the absence of any suggestion that any of the loans bear interest.
The defendants have sought particulars of 'the specific alleged "interest of beneficiaries of the Washburn Trust and Marc's Testamentary Trust'''. The plaintiff's particulars set out by way of example the assets of the Washburn Trust and the $5,813,278 assets of Powercity (of which the Washburn Trust is a majority shareholder). The beneficiaries of the Washburn Trust and Marc's Testamentary Trust have an interest in such capital being duly administered for their benefit. Such administration includes, by way of example, collecting alleged liabilities to companies controlled by the first defendant. It could also include, by way of example, companies controlled by the first defendant declaring dividends to Marc's Testamentary Trust or the Washburn Trust.
The particulars given by the plaintiff are adequate to inform the defendants of the case they have to meet and to collect evidence to meet it. Insofar as the particulars comprise an inference or conclusion to be drawn from other matters pleaded or particularised, the defendants know the case they have to meet. Whether or not the inference or conclusion should be drawn is a matter for argument at trial.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RK
ASSOCIATE TO LE MIERE J11 APRIL 2018
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