Contact 121 Pty Ltd v Boden - [2018] SASC 61

SUPREME COURT OF SOUTH AUSTRALIA
(Appeal from a Master: Civil)
CONTACT 121 PTY LTD v BODEN
[2018] SASC 61
Judgment of The Honourable Justice Parker
15 May 2018
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - FORM OF PLEADING - GENERALLY
Appeal against a decision of a Master.
The respondent is an ex-director and former employee of the appellant company. The appellant commenced these proceedings in September 2014 in order to recover monies paid to the respondent as reimbursements for expenses. Since then, the parties have been embroiled in disputes over the Statement of Claim.
On 28 April 2017, the appellants sought permission to file what is now the ninth draft of the third Statement of Claim (‘proposed TSOC’). Permission was refused by a Master. That refusal forms the subject of this appeal.
Held, per Parker J, dismissing the appeal:
1. The Master gave adequate reasons for his decision (at [71]).
2. The proposed TSOC fails to properly plead the basis upon which both a loan agreement is said to exist and an indemnity is said to arise (at [72] and [74]).
3. Until such time as the appellant establishes a breach of fiduciary duty it cannot particularise the potential liabilities it asserts. Nevertheless, the appellant should clearly plead the basis upon which any liabilities are said to arise (at [76]-[77]).
4. The pleas with respect to the respondent’s employment contract and the appellant’s policies are unclear (at [78]-[79]).
5. The further application for permission to file the proposed TSOC was not an abuse of process. However, the failure by the appellant to make sufficient efforts to rectify deficiencies was relevant to the exercise of the Master’s discretion in respect of the subsequent application (at [82]).
6. A change in the facts being alleged by the appellant is, of itself, a matter for trial rather than a basis to refuse permission. However, a change in position that is not properly explained and which follows a long delay is relevant to the Court’s discretion to grant permission (at [84]).
7. Whether there has been any election and waiver is a matter to be decided at trial in light of all relevant evidence (at [87]).
8. The misleading and deceptive conduct claims cannot succeed because the communications between the respondent and the appellant were internal to the appellant company and therefore not within trade and commerce (at [91]).
9. The observation by the Master that these proceedings were not an audit of the respondent’s claims for expenses did not acknowledge that the alleged breaches of fiduciary duty were a matter for trial. However, because there are other significant deficiencies with the proposed TSOC that is not a basis to allow the appeal (at [94]).
10. If the appellant seeks permission to file yet another version of the proposed TSOC it should exclude those reimbursements that, on balance, it recognises are likely to be legitimate claims (at [95]-[97]).
Supreme Court Civil Rules 2006 (SA) r 98; Competition and Consumer Act 2010 (Cth) Schedule 2; Misrepresentation Act 1972 (SA), referred to.
New Cap Reinsurance Corporation Ltd v Daya (2008) 216 FLR 126; Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; House v The King (1936) 55 CLR 499; Lawson v Lee (1978) 19 SASR 442; Sun Alliance Insurance Ltd v Massoud [1989] VR 8; Papps v Police (2000) 77 SASR 210; Aon Risk Services v Australian National University (2009) 239 CLR 175; Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59, considered.

CONTACT 121 PTY LTD v BODEN
[2018] SASC 61

PARKER J: This is an appeal against a decision of a Master to refuse permission for the appellant to file a third statement of claim (‘SOC’). For the reasons that follow, I dismiss the appeal.
Background
The appellant company is in the business of providing call centre and business processing outsourcing services. From 1 October 2002 until 3 March 2014 the respondent was a director of the appellant. At all relevant times, Mr Martin Bill was also a director of the appellant and remains so. From 2002 until 2009 there was one other director, Mr Joseph Tawfik, in addition to the respondent and Mr Bill. From 1 October 2002 until 15 May 2014 the respondent was employed by the appellant as “General Manager Operations”.
The respondent and his wife were also shareholders in the appellant until the appellant sold their shares on 1 September 2014. The proceeds of sale, being $52,500, were set off against the sums said to be owed by the respondent to the appellant. Although the respondent and his wife had not authorised that sale or the set off, the appellant purported to exercise rights under a lien pursuant to clause 20.4 of the appellant’s Constitution.
The first statement of claim
The first SOC filed in September 2014 was limited to recovery of monies paid to the respondent as reimbursements for expenses. It alleged that, contrary to the company policy governing the reimbursement of expenses, the respondent had been overpaid the sum of $93,374.30. Other consequential losses were also claimed. An affidavit sworn by Mr Bill on 12 September 2014 supported the pleading in the first SOC.
The second statement of claim
The appellant filed its second SOC on 21 November 2014. It was alleged that a term of the oral contract of employment was that the respondent would be reimbursed by the appellant for expenditure made for the benefit of the appellant provided that the respondent supplied vouchers and receipts as and when the expenditure occurred. It was further alleged that, from time to time during the course of the respondent’s employment, the directors orally informed employees that the directors and certain employees would be reimbursed for reasonable expenses incurred in carrying out their duties provided that “appropriate source documents, payment receipts and statements and or similar documents” were submitted to substantiate any claim for reimbursement. This policy was allegedly discussed with each employee when claims were submitted for reimbursement of expenses.
The second SOC also alleged that during the financial years 2011 to 2013 and from 1 July 2013 to 15 May 2014, the respondent had requested payment of expenses in the sum of $93,374.30 knowing that such expenses could not be claimed and was paid that amount by the appellant. It was further alleged that the respondent failed to supply upon request expense and payment receipts and other source documents in support of the claims he made. It was also alleged that the respondent had not actually incurred expenses and kept the money claimed for his own purposes and not for the benefit of the appellant’s business. The particulars stated that the claims made by the appellant for the respondent to produce substantiating documents were made during numerous telephone conversations and meetings with the respondent in 2013 and 2014, and by emails and letters sent to the respondent in May 2014. It was specifically alleged that by email dated 5 March 2014 the respondent had acknowledged that he “had not submitted any expenses … since July 2012”.
The causes of action relied upon in the second SOC are breaches of ss 180 to 184 of the Corporations Act 2001 (Cth), breaches of directors duties and the general law, breaches of the respondent’s employment contract and breaches of his fiduciary obligations.
The sixth iteration of the third statement of claim
The first draft of the proposed third SOC was provided to the respondent’s solicitors on 4 March 2015. Thereafter further iterations of the proposed third SOC were provided to the respondent’s solicitors. An application for permission to file the first draft of the proposed third SOC was filed on 20 April 2015 as FDN 13 (‘FDN 13’). That application came before the Master on 28 September 2016, by which stage the parties were in dispute over the sixth draft of the proposed third SOC. The sum claimed by the appellant from the respondent had increased to $1,142,475.40. That represented a refund of all payments made to the respondent by way of reimbursement of expenses since 1 July 2007.
Senior counsel for the respondent made comprehensive submissions to the Master about the alleged defects in the sixth iteration of the proposed third SOC. Before hearing from counsel for the appellant the Master made clear that, in his view, there were many problems with the proposed third SOC. The Master indicated that he was inclined to adopt the submission by the respondent’s counsel that the application should be dismissed with the appellant being given the opportunity to make a further application to file an amended SOC. The appellant’s counsel stated “it is wasting my breath to argue against it”. On that basis the Master made orders granting the appellant liberty to make a further application to file an amended SOC and dismissing FDN 13.
Mr Bill’s third affidavit
Subsequently, the Master directed that Mr Bill file an affidavit in support of the appellant’s application to file a third SOC. In his third affidavit sworn on 14 March 2017, Mr Bill deposed that the appellant had made payment to the respondent’s credit card providers. Because of the alleged failure of the respondent to submit spreadsheets showing his expenses on a regular and timely basis it was not always possible to link the payments to the claims made by the respondent. Mr Bill stated that the first SOC had sought recovery of payments made to the respondent from July 2012 onwards when he ceased to submit claims for payment. However, because of the refusal by the respondent to provide documentation in respect of payments made prior to July 2012 the appellant was now seeking recovery of all payments that had been made to the respondent by way of reimbursement of expenses.
Mr Bill further deposed that he had not referred to the appellant’s Travel Policy in his first affidavit as the claim then being advanced sought recovery of payments made to the respondent in respect of which there had been no claim that the payments were for business expenses.[1] In his view, the Travel Policy had not been relevant to that claim. Mr Bill stated that the appellant considered that because of the failure of the respondent to provide documents when requested to substantiate his expense claims, many of the expenses that he had claimed appear not to be bona fide business expenses.
[1] The alleged terms of the Travel Policy appear at [18] below.
Mr Bill acknowledged in his affidavit that he had approved payments made by the appellant to the respondent but asserts that there is a difference between the making of a payment and the treatment of that payment, e.g. as a loan or reimbursement of an expense. The payments were made to the respondent’s credit card provider and on different occasions may have represented the full amount outstanding on the credit card, the minimum balance owing on the card or some other amount. The payments were not always made concurrently with the lodgement of spreadsheets that stated the basis for the claim. The information contained in the spreadsheets provided by the respondent was input into the appellant’s MYOB accounting system. Mr Bill stated that, in his opinion, his action in forwarding the spreadsheets provided by the respondent to the appellant’s accounting staff did not constitute an approval of the expenses referred to in the spreadsheet. In the opinion of Mr Bill, he was merely instructing staff to enter the data into the accounting system on the assumption that the respondent held documents to substantiate the claims in accordance with the appellant’s policy.
Mr Bill also asserted in his third affidavit that it would be possible for the respondent to obtain statements from American Express and Qantas or the Qantas Club so as to substantiate some of the claims that he had made for payment. Mr Bill also intended to subpoena records from credit card companies, financial institutions and airlines so as to independently verify the claims for expenses made by the respondent “in the same way that a tax audit would be conducted”.
The ninth iteration of the third statement of claim
Soon after the third affidavit of Mr Bill was filed, the appellant’s solicitors wrote to the respondent’s solicitors enclosing a ninth iteration of the third statement of claim (hereinafter, the ‘proposed TSOC’). The appellant’s application to file the proposed TSOC was heard by the Master on 28 April 2017. The application was dismissed and permission was refused. That decision by the Master forms the subject of this appeal. Accordingly, it is necessary for the terms of the proposed TSOC to be considered in some detail.
The causes of action relied upon in the proposed TSOC are restitution or unjust enrichment, repayment of director loans, breach of contract, breach of ss 181, 182 and 344 of the Corporations Act, misleading and deceptive conduct, breach of general law duties and a claim for money had and received.
The appellant pleads that under s 181 of the Corporations Act the respondent as a director and as an employee owed the appellant a duty to exercise his powers and discharge his duties in good faith and for a proper purpose. The appellant further pleads that under s 182 of the Corporations Act the respondent owed it a duty not to improperly use his position to gain advantage for himself or to cause detriment to the appellant. The appellant also pleads that as a director and senior employee the respondent owed the appellant duties at general law to act in good faith and for a proper purpose, not to apply company property for his own benefit without permission and not to make profit from his office without the fully informed consent of the appellant.
The appellant also pleads that it was required by s 262A of the Income Tax Assessment Act 1936 (Cth) to keep records explaining transactions for which expenses were claimed in a form that would enable the Australian Taxation Office (‘ATO’) to understand the essential features of the relevant transaction. The appellant further pleads that it was required by s 286 of the Corporations Act to keep financial records that correctly recorded and explained its transactions and financial position and would enable true and fair financial statements to be prepared and audited. The appellant alleges that s 344 of the Corporations Act required the respondent to take all reasonable steps to ensure that the appellant complied with its obligations under that Act.
The appellant alleges that in about September or October 2002 Mr Bill and Mr Tawfik discussed with the respondent an arrangement described as the “Expenses Policy”. That policy was allegedly adopted to ensure that the appellant complied with taxation laws. It was allegedly orally agreed that directors and employees could be reimbursed by the appellant for reasonable expenditure incurred for the benefit of the appellant if and only if they kept substantiating documents and records in accordance with the requirements of the ATO and produced such records to the appellant on request. The alleged requirement that records of expenditure be kept so as to meet ATO requirements is described as the “Compliance Policy”. A third policy allegedly discussed at the meeting in about September or October 2002 was the “Travel Policy” whereby travel within Australia should be at economy class, overseas travel should also be at economy class unless approved otherwise by all directors in advance and reimbursement would only be provided for travel by the employee or director and not for accompanying friends or relatives. These three policies were allegedly reiterated from time to time by the appellant and its accountant, both orally and by way of an annual letter sent to the directors.
Paragraphs [16], [17] and [21] to [23] of the proposed TSOC set out in greater detail the allegations made by Mr Bill in his third affidavit concerning the basis upon which the appellant met the claims for reimbursement of expenses allegedly incurred by the respondent. The essential points are that the respondent provided spreadsheets providing a short description of his expense claims. The spreadsheets supplied by the respondent simply included entries such as “Qantas” or “Officeworks” and stated that the expense related to, for example, “airfares” or “office furniture and equipment”. No supporting evidence in the form of receipts, credit card statements, diary notes or the like was provided by the respondent. It therefore was not possible for the appellant to identify from the limited information supplied whether any particular claim related to expenditure incurred on its behalf. The appellant had made payments to the respondent on the basis that it trusted him to provide substantiation if called upon.
The spreadsheets provided in the period from September 2008 until 30 June 2012 (“Period 1”) claimed expenses to a total of $635,027.94. Further payments of $86,748.84 made in Period 1 were not supported by spreadsheet claims. It is also alleged that the respondent had informed the appellant on a number of occasions that he had documents to substantiate his expense claims.
The proposed TSOC refers to requests made by the appellant for the respondent to substantiate his claims. The alleged requests were those referred to in [6] above in relation to the second SOC. The appellant alleges that the spreadsheets provided by the respondent do not satisfy the appellant’s Expenses Policy or its Compliance Policy because they do not contain sufficient information to determine whether the amounts claimed were legitimate business expenses. The spreadsheets would also allegedly not meet the requirements of the ATO. The appellant alleges that the respondent is capable of providing documents to substantiate his expense claims.
The appellant has pleaded the basis upon which it claims to be entitled to the relief sought. In essence, the basis for each cause of action is said to be that the respondent sought and received payment in circumstances where he had not complied with the appellant’s Expenses Policy and Compliance Policy. Because the appellant has no way of knowing which of the payments made to the respondent related to genuine business expenses, it seeks repayment from the respondent of all payments made to him in Period 1.
The appellant also seeks repayment of all payments made to the respondent after 1 July 2012 (“Period 2”) when he ceased to provide spreadsheets to the appellant recording his expenses on the basis that these payments constituted a loan. The alleged loan for Period 2 is in the sum of $139,591.42.
The appellant has not provided any particulars of the loan agreement that is said to be in force between it and the respondent. At [7] of the proposed TSOC the appellant asserts that it is “standard accounting treatment” for payments to a director that are not remuneration or reimbursement of expenses to be treated as a loan. At [16.1.3] the appellant alleges that any payments made to the respondent in excess of his entitlement to be reimbursed for business expenses must be treated as a director’s loan in the absence of specific contrary agreement that a payment represented a fringe benefit. The appellant does not allege that the respondent agreed to enter a loan agreement either specifically or as an element of a company policy that was a term of his employment contract.
The remedies sought by the appellant are restitution (i.e. repayment of all monies paid to the respondent), an order for accounts and enquiries, compensation under s 1317H of the Corporations Act, damages under the Misrepresentation Act 1972 (SA), damages or compensation under ss 236 and 237 of the Australian Consumer Law[2] and/or ss 84 and 85 of the Fair Trading Act 1987 (SA), repayment of loans in the sum of $86,748.84 (for Period 1) and $139,591.42 (for Period 2), i.e. a total of $226,376.26, and an indemnity in respect of any additional taxation liability, together with interest and costs.
[2] The Australian Consumer Law is set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth).
The Master’s reasons

The Master commenced his analysis by referring to r 98 of the Supreme Court Civil Rules 2006 (SA) (‘Rules’). Rule 98(2)(d) provides that a pleading must plead such facts and matters as give fair notice of a party’s case at trial.
After referring to the observations of the Full Court of the Federal Court in Betfair Pty Ltd v Racing New South Wales[3] and White J in Pope & Ors v Harris Orchard[4] the Master noted that the objections made by the respondent were two‑fold. The first objection was that the proposed pleading is contrary to r 98(2)(d) as it does not give fair notice of the appellant’s case at trial. His Honour noted that the alleged failure to give fair notice arose in several ways, which included:
1The pleading in paragraph 16.3 pleads that the plaintiff does not know whether or it is entitled to reimbursement of the expenses paid.
2The plaintiff maintains pleas contrary to known facts, in that Mr Bill approved the reimbursement and payments made by the company to the defendant.
3 There is no proper pleading of the alleged employment contract.
4There is now a pleading that director loans were created without any proper basis for how loans are said to arise.
[3] [2010] FCAFC 133 at [50].
[4] [2010] SASC 354 at [24].
The Master also noted that the appellant has also advanced a misleading and deceptive conduct claim which the respondent says is untenable and for which permission had previously been refused.
The second objection made to the proposed TSOC by the respondent was that it constitutes an abuse of process because the appellant is seeking to reargue matters for which permission to amend was refused when FDN 13 was dismissed.
The Master set out at [6] of his reasons the appellant’s Expenses Policy as pleaded in the first SOC. The Expenses Policy was pleaded as follows:
10.The Company had during Boden’s employment various policies and procedures including, but not exclusively, the following:
10.1. A policy that the Company would pay all of my, Boden’s and other employee’s reasonable expenses incurred during and for the purposes of carrying out their duties, provided appropriate source documents, payment receipts and statements and or similar documents were submitted to substantiate any request for reimbursement (expenses policy).
Mr Bill had deposed to the truth of that pleading in the first Bill affidavit.
The Master noted that the pleading in respect of the Expenses Policy has since substantially changed. The appellant now proposes to plead the following in [12] of the proposed TSOC:
12.In or about September or October 2002 Bill, Tawfik and Boden had a discussion about how the Company would reimburse employees and directors for any Company expenses that were paid at first instance by the directors or employees. They discussed that Barbie Chiro (‘Chiro’) would be the Company accountant and that she had stressed to them the need for the Company to comply with the taxation laws and that they would need to have in place policies and procedures that would comply with those taxation laws. They orally agreed that:
12.1. directors and employees could be reimbursed by the Company for reasonable expenditure incurred for the benefit of the Company if and only if they complied with paragraphs 12.2 and 12.3 below;
12.2. directors and employees needed to keep substantiating documents and records (including credit card statements, receipts, and other relevant documents to substantiate such expense claims), in line with the ATO requirements; and
12.3. that the employees or directors produce such records to the Company on request (whether the request was from other directors, through the Company accountant or any statutory body such as the ATO entitled to make that request).
(‘the expenses policy’).
The Master observed that the substantial change in the terms of the pleading has not been explained even though the correctness of the original pleading had been confirmed by Mr Bill. Under the proposed TSOC the appellant seeks recovery of all payments made to the respondent by way of reimbursement of expenses.
The Master stated that “as a matter of logic” it is unlikely that all the claims for reimbursement of expenses made by the respondent were inappropriate. The Master also noted that it seems that most of the expenses were actually approved by Mr Bill. Unsurprisingly, the Master noted that this fact would appear to create a difficulty for the appellant.
The Master held that it was sufficient to deal with only two of the specific complaints made by the respondent about the proposed TSOC. His Honour considered that the complaints made by the respondent in respect of both of those issues were well founded and for that reason it was not appropriate to allow the filing of the proposed TSOC.
The first issue addressed by the Master arises from [16.3] of the proposed TSOC which states:
16.3In the absence of substantiating documents the Company does not know whether any of the information in the spreadsheets is correct.
The Master observed that the background to this plea was that for at least ten years the respondent had claimed reimbursement of expenses on a monthly basis by providing a spreadsheet stating the amounts for which he was seeking reimbursement. The appellant processed those requests, approved those it thought appropriate and then paid the respondent.[5] However, the Master noted that the effect of the plea was that the appellant was now saying it does not know if any of the payments it had made to the respondent were appropriate. That plea was consistent with the prayer for relief which seeks restitution of all payments made.
[5] The appellant has denied that the action taken by Mr Bill constituted the approval of payment in respect of the claims made by the respondent. I consider that issue at [85]-[87] below.
The Master held that this plea was unsatisfactory because it does not provide the respondent with fair notice of the case he has to meet. It also does not assist the Court to identify the dispute between the parties. His Honour noted that these proceedings are not an audit of the claim for expenses made by the respondent. The respondent is not required to call any particular evidence. If he did not call any evidence concerning the expense payments, at the conclusion of the trial the Court could not grant judgment for the appellant if it had not established which of the payments were inappropriate. For that reason the Master commented that if the appellant is serious about the proceedings it has to determine what its claim actually is. His Honour commented that it is inherently unlikely that all expenses paid to the respondent over a 12 year period were inappropriate. Nevertheless, that is the effect of the current pleading.
The second issue addressed by the Master relates to the allegation that monies paid by way of reimbursement of expenses created a loan between the appellant and the respondent.
The Master found that that the facts and circumstances necessary to create a relationship of lender and borrower had not been properly pleaded. There was no pleading identifying the terms of the loan agreement, how the loan agreement was formed or any intention of the parties to be bound by such an agreement. His Honour observed that although accounting standards may require certain payments to be treated in the accounts of a company as loans to directors that does not, of itself, create a loan agreement. If the appellant wishes to allege that monies were lent to the respondent it has to properly plead how the agreement came about, what its terms were and the position in respect of the loan. His Honour further observed that a loan agreement cannot be created “out of thin air” without the express agreement of the parties to the loan. For that reason his Honour concluded that the pleading in respect of the loan was inadequate and permission to file the proposed TSOC in its current form should not be granted.
His Honour also noted that the respondent had made many other complaints about the proposed TSOC which varied in strength. His Honour observed that it was not necessary to decide those matters. Some of the complaints would appear to be justified but others were of a more marginal nature. His Honour also agreed with the submission by the respondent that it was not appropriate to simply resubmit pleadings that have previously been disallowed.
The Master concluded his reasons with the observation that the appellant needs to give serious consideration as to what its claim against the respondent really is. The appellant cannot sensibly go to trial with its position being that every reimbursement of expenses that it had made to the respondent should be repaid.
The grounds of appeal
The appellant has appealed on six grounds. The third ground raises five different matters. In essence, the grounds are that the Master erred by:
1Failing to give adequate reasons;
2Finding that the proposed TSOC did not plead a reasonably arguable cause of action;
3Failing to taking into account the following relevant considerations:
a.That the respondent was required under the terms of the pleaded contract to substantiate his expenses;
b.That the respondent owed statutory duties to the appellant to keep records;
c.That the respondent had not produced records as part of disclosure in this action;
d.That the absence of records means that the appellant cannot particularise its claim;
e.That part of the relief sought by the appellant was an order for account and enquiries;
f.That the appellant had previously proposed that the issues with respect to the legitimate business expenses could have been effectively dealt with by the parties filing a form of Scott Schedule;
4Finding that if the respondent did not lead evidence in respect of payment of the expenses then judgment at the trial could not be granted in favour of the appellant;
5Finding that the pleadings with respect to the loans were inadequate because if advances were made then it is “reasonably arguable” that they were loans;
6Finding it was “not appropriate to simply resubmit pleadings that had been disallowed on previous occasions”. That proposition was factually incorrect. Although an earlier application to amend the pleadings had been withdrawn resulting in its dismissal, that had occurred on the express basis that further amendments to the pleadings would be proposed. The Court had not ruled and given reasons for a ruling on each of the causes of action sought to be pleaded.
The notice of alternative contention
The respondent filed a notice of alternative contention raising additional or alternative grounds in support of the finding of the Master. The grounds are:
1The proposed TSOC is contradictory to its previous iterations, the second SOC, affidavit evidence and known facts;
2The purported Scott Schedules are untenable as they reverse the burden of proof. They are also an abuse of process because leave to amend to include Scott Schedules was previously refused by the Master.
3There is no proper pleading with respect to the employment contract, expectation damages, “potential liabilities”, misleading and deceptive conduct claims and the supposed fiduciary duty owed by the respondent;
4It is an abuse of process to seek to reargue these matters;
5The appellant has not provided a proper explanation to explain its delay in bringing these amendments and
6The proposed TSOC cannot be certified by a legal practitioner pursuant to r 98(1)(b)(i) of the Rules.
The second ground is not pressed as it was advanced in error. There are no purported Scott Schedules.
The appellant’s submissions
The appellant submits that the entitlement of the respondent to be reimbursed for reasonable expenditure incurred for the benefit of the appellant was subject to the requirements of the Expenses Policy and the Compliance Policy. He was also expected to comply with the Travel Policy and was only entitled to reimbursement of airfares in accordance with that policy.
The appellant further contends that disagreement arose between the appellant and the respondent about reimbursement of expenses. The respondent was requested to provide credit card statements or other source documents to substantiate his claims but has refused to do so. For that reason, the appellant is unable to particularise the precise expenses that are or are not reimbursable. Accordingly, the appellant contends that the respondent was not entitled to keep any of the monies advanced to him. That is the basis for the various remedies sought by the appellant.
The appellant contends that the second SOC and the proposed TSOC cover much the same issues. However, the latter refers to a longer period and thus the sum claimed has greatly increased. The proposed TSOC also provides greater particularity than the second version and introduces additional causes of action, i.e. an action for money had and received and claims for restitution and misleading and deceptive conduct.
The appellant submits that the primary question before the Master should have been whether the proposed TSOC disclosed a reasonably arguable cause of action. If so, permission for the amendment should have been granted. The Master failed to address each of the underlying causes of action and also did not decide the matter by considering which aspects of the claim were new and whether those new aspects were arguable.
The appellant also contends that the Master erred by concluding that the proceedings were not an audit of the respondent’s claim for expenses. In that respect, the Master overlooked that one of the remedies sought by the appellant was an order for accounts and enquiries. The respondent was required by s 286 of the Corporations Act and by Commonwealth taxation law to produce the substantiating documents when requested so that the appellant could comply with its statutory obligations. The appellant was entitled to seek relief from the Court to ensure that the payments it had made to the respondent were properly accounted for.
The appellant submits that the observation by the Master that the proceedings are not an audit fails to recognise that although the appellant cannot currently particularise whether the credit card payments were business or personal expenses this would not necessarily be the position at trial. The present lack of information may be resolved by disclosure of the relevant records by the respondent, non-party disclosure and issue of subpoenas. Production of the records would allow a determination as to whether the credit card payments were for personal or business expenses.
The appellant also submits that it is standard accounting practice that monies taken from a company by a director that are not wages, a fringe benefit or a reimbursement of expenses must be treated as a director’s loan. The standard accounting practice has been pleaded and anything beyond that is a factual issue for trial.
The respondent’s submissions
The respondent observes that the appellant is not entitled to amend its SOC as of right. It must persuade the Court to exercise its discretion to grant permission. Permission should be refused if the proposed TSOC is not in a proper form and fails to comply with the Rules. The proposed amendment must be properly explained or justified. In support of that contention the respondent refers to the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University[6] and the reasons of Bleby J in Channel 7 Adelaide Pty Ltd v Manock.[7] The respondent also submits in accordance with the observation made by the High Court in Aon that where a party has had sufficient opportunity to plead their case, it may be necessary for the Court to make a decision which may produce a sense of injustice in that party for the sake of doing justice to the opponent.[8]
[6] (2009) 239 CLR 175 at [30], French J, [108] and [114], Gummow, Hayne, Crennan, Kiefel and Bell JJ.
[7] [2010] SASCFC 59 at [46].
[8] Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [94], Gummow, Hayne, Crennan, Kiefel and Bell JJ.
In that context the respondent submits that the appellant has failed to provide a frank and fulsome explanation for the delay in pursuing the matters now being advanced in the proposed TSOC. The delay extends back to 2002, when the appellant contends that agreements were made with the respondent, and from 2008, when it is alleged that the respondent failed to keep records to validate his expense claims.
The respondent submits that the Master was correct in his conclusion that [16] of the proposed TSOC was unsatisfactory in that it does not provide the respondent with fair notice of the case he had to meet, nor does it assist the Court in determining what the dispute between the parties is. The respondent submits that the allegation that the appellant does not know whether the basis for the payments that it made were correct does not provide a tenable basis for a claim for recovery of the monies paid. Secondly, the respondent submits that this allegation cannot be the basis for the appellant’s proposed claim for the repayment of all monies paid to the respondent over many years. Further, the respondent submits that the allegation is contrary to the appellant’s own records in that its director, Mr Bill, had approved the payments. Finally, the respondent submits that the allegation purports to reverse the burden of pleading. The onus lies on the appellant to plead which reimbursements it says should not have been paid.
The respondent also submits that the Master was correct in finding that the pleas made in the proposed TSOC concerning the alleged director’s loan made to the respondent did not plead facts and circumstances so as to found an allegation that there is a relationship of lender and borrower between the appellant and respondent. In that respect the respondent submits that the pleading is clearly inadequate as the terms of the alleged loan agreement are not identified, nor is there any statement as to how the loan agreement was formed or any reference to the intention of the parties to be bound by such a loan agreement.
The respondent also contends that the Master correctly decided that if the respondent did not lead evidence that established that the payments he had received by way of reimbursements were not in respect of proper business expenses, judgment could not be granted for the appellant. That is said to be the case because the appellant has not and cannot identify those expenses that it alleges were not proper expenses. If the respondent does not lead any evidence about the payment of expenses it will not be possible for the appellant to particularise those expenses it says are appropriate and those it says are inappropriate.
The respondent also contends that the assertions made in grounds 3(a) to 3(d) of the Notice of Appeal summarised at [43] above, ignore the fact that the respondent had provided extensive information about his expenses up to 2012 which resulted in Mr Bill approving payment.
The respondent submits that the contention by the appellant that the Master failed to have regard to the fact that one of the remedies sought by the appellant was an order for accounts and enquiries cannot be sustained. The appellant has not and apparently cannot plead the basis for requiring the respondent to reimburse payments it says should not have been made. The making of allegations without any supporting particulars so as to obtain discovery is improper and an abuse of process.
Further to the latter complaint, the respondent contends that the appellant has given no information about the records that it alleges the respondent should have produced. Although Mr Bill had approved the reimbursements made by the appellant to the respondent for six years no request was made to the respondent that he produce substantiating documents until after these proceedings were issued.

The respondent observes that FDN 13 was dismissed by the Court and the appellant has not appealed that decision. One of the reasons for the dismissal of FDN 13 was that the appellant had pleaded that it did not know whether it had a cause of action. This deficiency has not been addressed in the proposed third SOC. Hence the appellant is seeking to re-litigate matters that were determined by the dismissal of FDN 13. That is an abuse of process.
The alternative contentions advanced by the respondent rely, in essence, on allegations of multiple pleading deficiencies in the proposed TSOC. One of those deficiencies is said to be that the appellant’s claim to have requested the respondent on several occasions to substantiate his expenses in accordance with the appellant’s policy is contrary to known facts.
A further alleged deficiency in the proposed TSOC is that certain matters pleaded are inconsistent. The appellant’s contention that its policies were the subject of an oral or implied term in the respondent’s employment contract is inconsistent with the allegation that there was an oral agreement between the directors about that matter. The respondent also complains that the appellant has not pleaded the terms of the respondent’s employment contract even though it claims that he breached that contract and caused the appellant to suffer loss.
Another alleged inconsistency is said to arise between the appellant’s claim to have suffered loss and its contention that the loss included a “potential liability” to the ATO.
The respondent also submits that no explanation has been provided by the appellant as to why fundamental changes have been made to the facts that it had pleaded in 2014. In that respect the respondent refers to factual differences between the information provided by Mr Bill in his first affidavit concerning the reimbursement policy of the appellant and the fundamentally different policy that the appellant seeks to advance in the proposed TSOC. Mr Bill has simply denied in his third affidavit that there has been any change in the appellant’s policy. Furthermore, Mr Bill has not explained why the Compliance and Travel Policies were not raised in previous pleadings.
Consideration
General principles
This is an appeal against an exercise of a judicial discretion by the Master to refuse permission to the appellant to file an amended SOC. In accordance with the long standing principles in House v The King the appeal will only succeed if the appellant demonstrates that the decision of the Master manifests either a process error or an outcome error.[9]
[9] (1936) 55 CLR 499.
The Master indicated there were other defects in the proposed TSOC but it was unnecessary for him to decide those matters. The effect of the respondent’s notice of alternative contention is that the Court must now consider the additional grounds not decided by his Honour.
The fundamental point made by the respondent, and correctly so, is that the Court will not grant leave for the filing of an amended pleading unless it complies with the Rules. In that respect the respondent correctly submits that a proper pleading must define the issues in dispute and give fair notice of the case that a party has to meet. Additionally, in the case of a SOC, the pleading must state the basis of each cause of action, contain a short statement of the material facts on which each cause of action is based and if the plaintiff relies on separate causes of action, the statement of claim must differentiate between facts that are common to both or all causes of actions and those that are only relevant to a particular cause of action.
Further to those submissions, the respondent also correctly submits that the object of particulars is to inform the opponent of the nature of the case that they have to meet as distinguished from the way in which that case will be proved, prevent the opponent from being taken by surprise at trial, limit the generality of pleadings and enable the opponent to know what evidence they should collect.
Adequacy of reasons
The appellant contends that the Master failed to give adequate reasons for his decision. Reasons for judgment must be “coherent, intelligible, and comprehensive”.[10] The adequacy of reasons will depend upon the circumstances of the case. Reasons will be inadequate if an appeal court is unable to ascertain the reasoning upon which the decision is based or justice is not seen to have been done.[11]
[10] Lawson v Lee (1978) 19 SASR 442 at 446, Hogarth ACJ, Bright and King JJ.
[11] Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18, Gray J; Papps v Police (2000) 77 SASR 210 at 219, Gray J, Olsson and Wicks JJ agreeing.
I consider that the reasons published by the Master satisfy each of the requirements referred to in the preceding paragraph. While his Honour did not address every point made by the parties, he has clearly not made an arbitrary decision. Having identified two grounds upon which the application must be rejected, it was not necessary for the Master to consider every other potential ground when dealing with an interlocutory application. Each step in his Honour’s reasoning process has been explained and in that sense the reasons were sufficiently comprehensive.
The loan agreement
I consider the finding by the Master that the proposed TSOC failed to properly plead the basis upon which a loan agreement was said to exist to be clearly correct. The proposed TSOC fails to specify any of the terms of the alleged loan agreement and provides no information as to how the loan agreement was formed beyond a general assertion about accounting practice. Such a pleading is grossly inadequate. It fails to inform the Court in any meaningful way of the issue between the parties and gives no information to the respondent about the case it has to meet.
The request for an indemnity
The notice of alternative contention complains that the appellant has failed to plead the basis upon which it contends that the respondent should provide an indemnity against the potential taxation liability to which it may be exposed. The only reference in the proposed TSOC to the claim for an indemnity appears in the statement of remedies being sought, i.e. the prayer for relief.
It might be inferred that the basis for the indemnity sought by the appellant is the allegation in [22] of the proposed TSOC that the respondent’s failure to keep records in the form required by the ATO will potentially expose it to an additional taxation liability. However, the appellant has not pleaded the basis upon which the alleged indemnity is said to arise, e.g. is it alleged to be a term of the Expenses or Travel Policies, a term of the respondent’s contract of employment or does it have some other basis. The result is that the pleading fails to inform the Court of the issue between the parties and does not give fair notice of the case that the respondent needs to meet.
Expectation damages and potential liabilities
The respondent has complained in the notice of alternative contention that the appellant has not made any tenable plea in respect of its claim for expectation damages. A closely related complaint is that the appellant has also referred in the proposed TSOC to “potential liabilities” which are not losses. The respondent submits that the appellant should particularise the losses that it asserts that it has suffered, or expects to be incurred, and the basis upon which those claims are advanced.
There is an element of circularity about this aspect of the dispute between the parties. It appears that the basis for the assertion of expectation damages and potential liabilities is the appellant’s contention that it may have an additional taxation liability to the extent that its taxable income has been improperly reduced by reimbursements made to the respondent for expenses that were not lawfully deductible. I have found at [93] below that the respondent cannot be called upon to justify his claims for reimbursement by way of an inquiry and account for profits unless it is first established to the satisfaction of the Court that he has breached his fiduciary duties and there has been no election and waiver or estoppel arising from the conduct of Mr Bill (and perhaps others). The result is that until such time as the appellant establishes a breach of fiduciary duty and also that there is no waiver or estoppel, it cannot particularise the potential additional taxation liability that it asserts.
I consider that the appellant should clearly plead the basis upon which the expectation damages and potential liabilities are said to arise. However, at this point it is not possible to particularise those claims.
Compliance with the appellant’s policies
A further complaint made by the respondent in its notice of alternative contention concerns the pleading relating to the respondent’s employment contract. The appellant has pleaded at [12] of the proposed TSOC that the respondent commenced employment on 1 October 2002 and in about September or October 2002 (i.e. shortly before or soon after the respondent commenced employment) there was a discussion between Mr Bill, Mr Tawfik and the respondent about compliance with the Expenses Policy, the Compliance Policy and the Travel Policy. It is alleged that these three men orally agreed that expenses incurred by directors and employees on behalf of the appellant would be reimbursed subject to compliance with those policies. It is not clear whether this allegation relates to the terms of the respondent’s employment contract or whether there is alleged to be an agreement between the directors outside the terms of his contract.
The appellant pleads at [27] of the proposed TSOC that it was an oral term of the respondent’s employment contract that he comply with the Expenses Policy and the Compliance Policy or, in the alternative, compliance with these policies was an implied term of his contract. The pleading does not make it clear whether the oral term of the respondent’s employment contract upon which the appellant relies was agreed at the meeting in about September or October 2002 or at some other time. That difficulty is compounded by the fact that the appellant has alleged in the alternative that the contractual term upon which it relies may be an implied term, i.e. there was no express agreement. In light of these deficiencies I accept the correctness of the respondent’s submission that the pleading does not give proper notice of the case it has to meet. Accordingly, this element of the proposed TSOC does not comply with the Rules governing pleadings.
The respondent also submits that whilst the appellant has claimed relief based upon alleged failures to comply with the Travel Policy, it has not pleaded that compliance with the Travel Policy was a term of the respondent’s contract of employment. The appellant submits that this omission resulted from an error in the drafting of [27.1] of the proposed TSOC. Paragraph [27.1] should have included a cross reference to [6] to [14] rather than [7], [8] and [12]. It seeks leave to amend the proposed TSOC to that effect. If that had been the only deficiency in the proposed TSOC, it would have been appropriate to grant permission for the document to be amended in those terms.
Resubmission of pleadings
The appellant contends that the Master erred in finding that it was not appropriate to resubmit pleadings that had previously been disallowed. The respondent submits that this ground of appeal does not have regard to the fact that on 28 September 2016, FDN 13 was dismissed. The respondent contends that it is an abuse of process to seek to re-litigate that dismissal.
In the course of hearing FDN 13 the Master made a number of forceful observations about the shortcomings of the proposed SOC. However, his Honour did not actually decide which particular deficiencies must result in dismissal of the application. The Master dismissed FDN 13 on the basis that the appellant would be given a further opportunity to resolve the deficiencies. For that reason, I do not consider that lodgement of the further application was an abuse of process. However, the failure by the appellant to make sufficient effort to rectify the deficiencies in the pleadings was certainly relevant to the exercise of his Honour’s discretion in respect of the subsequent application.
Change in position
A further complaint by the respondent is that the appellant has not explained the fundamental changes between the facts pleaded by the appellant in the two earlier versions of the SOC and what is now alleged. The respondent points out that Mr Bill deposed in his first affidavit that the appellant’s policy was to meet reasonable expenses provided that appropriate source documents were submitted to substantiate the claim. However, the proposed TSOC now alleges that expenses would be reimbursed upon request but directors and employees were required to keep substantiating documents and produce those when required. Nevertheless, Mr Bill has asserted in his third affidavit that there has been no change in the appellant’s case about the policies. That assertion is not consistent with what has been pleaded in the proposed TSOC as compared to the earlier versions.
A change in the facts being alleged by a party is, of itself, a matter for trial rather than a basis to refuse permission to file an amended SOC. Of course, a change in position might provide fertile ground for cross-examination and submissions at trial but that is not the present issue. However, a change in position that is not properly explained and which follows a long delay in advancing the claim is relevant to the exercise of the Court’s discretion to grant permission to file an amended pleading.
Election and waiver
The respondent submits that the action of Mr Bill as a director of the appellant by approving payment to the respondent based upon the information provided in the spreadsheets constitutes an election and waiver.
Mr Bill has asserted in his third affidavit that his sending of email messages to administrative staff did not constitute approval of the claims for payment made by the respondent. He asserts that he was simply authorising the staff to enter the claims into the MYOB accounting system. I note by way of example that in an email dated 16 August 2010 sent by Mr Bill to Gary Jerram (apparently an employee of the appellant) Mr Bill stated the following in respect of the respondent’s claim for reimbursement of expenses incurred in July and August 2010:
Gary
A few changes to these, as per the attached.
Can you please pay the amounts in green via BPay today. Details should be on the ANZ Internet banking, but see me if you want to run through this.
As I’ve changed these the highlighted consolidated numbers will need changing.
Regards
Martin Bill | Managing Director | Contact 1-2-1 Pty Ltd
…
In light of the contents of this email, and many others to generally similar effect, I hold strong reservations about the correctness of Mr Bill’s assertion that his actions were merely a step in the record keeping process. However, the truth or otherwise of that assertion and also the true meaning of this and other emails are matters for trial. Accordingly, whether or not there has been any election and waiver is a matter that should properly be decided at trial in light of all relevant evidence. The same may be said for any potential defence based on an estoppel.
Alleged breaches of the Australian Consumer Law
The appellant alleges that by representing that he could substantiate his claims for reimbursement by the production of receipts, vouchers and so forth he made a false representation contrary to the Misrepresentation Act 1972 (SA), made false and misleading representations contrary to s 56 of the Fair Trading Act 1987 (SA) and subsequently s 18 of the Australian Consumer Law. The respondent submits that the misleading and deceptive conduct claim cannot succeed because the communications between the respondent and the appellant about reimbursement of his expenses were internal to the appellant company and thus not within trade and commerce. That submission relies upon the judgment of Barrett J of the Supreme Court of New South Wales in New Cap Reinsurance Corporation Ltd v Daya.[12]
[12] (2008) 216 FLR 126.
Section 18 of the Australian Consumer Law in both the State and Commonwealth versions applies to misleading and deceptive conduct in the course of trade and commerce. The former s 56 of the Fair Trading Act was also limited to misleading and deceptive conduct in trade or commerce. Section 4 of the Misrepresentation Act applies to a misrepresentation in the course of trade or business.
The issue in New Cap Reinsurance Corporation was whether leave should be granted to proceed with a proposed cross claim. Barrett J applied the decision of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson[13] and held that the conduct which was the subject of the proposed cross claim had not occurred in trade or commerce. The impugned conduct had occurred at a meeting of company directors and was thus an “internal communication” rather than in trade or commerce. Barrett J therefore held that the proposed cross claim did not disclose a viable cause of action.[14] However, Barrett J also held that a claim based upon representations made to a “due diligence committee” was not necessarily doomed to fail. His Honour reached that conclusion on the basis that the members of the due diligence committee may have included persons from outside the company, such as auditors, solicitors, financial advisors and the like.[15]
[13] (1990) 169 CLR 594.
[14] New Cap Reinsurance Corporation Ltd v Daya (2008) 216 FLR 126 at [51].
[15] Ibid at [52].
Barrett J noted that in applying the principles expressed by the High Court in Concrete Constructions it may be difficult to define the limit of an “internal communication” that lies outside trade or commerce.[16] While I am cognizant of the potential difficulties that may arise in some fact situations, I consider it clear that a claim for reimbursement directed to a company by a director or employee in respect of expenses said to have been incurred on behalf of that company is an internal communication in the sense identified by the High Court in Concrete Constructions. While that question was not decided by the Master it would have provided a further basis to refuse permission to file the proposed TSOC.
[16] Ibid at [47].
The global claim for repayment
I turn to the first basis upon which the Master refused permission to file the proposed TSOC. The Master’s concern was that the appellant was seeking to reverse the onus of proof by requiring the respondent to justify all payments made to him. The appellant pleads that because of the manner in which the respondent completed his claims for reimbursement of expenses it does not know whether he was entitled to any of the payments that it had made to him. The appellant contends that the respondent can be required to justify his receipt of payments because it seeks an inquiry and account for profit based upon the respondent’s alleged breaches of fiduciary duty. The appellant contends that an enquiry into profits does not reverse the onus of proof.
The only basis upon which an account of profits may be ordered is if the appellant establishes that the respondent had breached his fiduciary duties to the appellant company by making an unauthorised profit. While there appear to be significant obstacles facing the appellant, whether or not the respondent breached his fiduciary duties is a matter for trial. If the contention is made out at trial then an enquiry might be ordered that requires the respondent to establish that he was entitled to the payments he received.
The observation by the Master that these proceedings were not an audit of the respondent’s claims for expenses did not acknowledge that the alleged breaches of fiduciary duty were a matter for trial. However, because there are other significant deficiencies with the proposed TSOC that is not a basis to uphold the appeal.

I consider that the appellant should take proper steps to narrow the scope of an enquiry as best as it can. The failure to do so lends support to the conclusion of the Master that the effect of the appellant’s approach was to reverse the onus of proof. That failure also supports a refusal of permission on discretionary grounds.
While the appellant pleads that it is not possible to determine the legitimacy of the many claims relating to air travel, interstate accommodation, meals, taxis, office equipment and so forth, even if that is correct it seems to me, because of the particular nature of some of the claims for reimbursement, the appellant should in many instances be able to recognise that the respondent would have been entitled to have those claims met. It should therefore attempt to identify those claims for reimbursement that appear to have been properly incurred by the respondent in his capacity as a director or as an employee. When conducting that exercise there is a possibility that it may also identify claims that could not possibly have been legitimate (subject to any waiver or estoppel considerations that might arise at trial).
If the appellant is to seek permission to lodge yet another version of the proposed TSOC it should exclude those reimbursements that, on balance, it recognises as likely to be legitimate claims.
I have examined some of the claims for reimbursement made to the appellant by the respondent. By way of example I have paid particular attention to the claims made for December 2008. My examination suggests that in a substantial number of instances, because of the nature of particular claims, the respondent may or should be able to identify expenditure that it knows to be legitimate.
In December 2008 the respondent made four claims for what he described as “billable reimbursements” in respect of Coles gift cards to a total value approaching $14,000. I also note that the respondent claimed approximately $6,000 in November 2008 for expenditure on Coles gift cards.[17] I find it difficult to conceive that the operators of a business of the size conducted by the appellant would not know whether one of its senior staff would have been required to spend such large sums on gift cards on behalf of the company. If the appellant knows that the respondent was required to make such expenditure on its behalf, and did do so, any future iteration of the SOC that the appellant seeks permission to file should exclude any claim in respect of that expenditure. On the other hand, if the appellant knows that such expenditure would not have been required it should plead that fact.
[17] There was also a claim made in June 2008 for reimbursement of approximately $1,600 spent on Coles gift cards. That expenditure precedes the period covered by the proposed TSOC.
Several other of the claims for reimbursement made by the respondent in December 2008 include particulars that might possibly assist the appellant to determine whether they are bona fide claims. By way of example I refer to three claims totalling approximately $617 that are described as “C121 staff picnic”.
By way of further example there was a claim in December 2008 for $759 paid to Walker Wayland (the appellant’s accountants) in respect of “WB Loan Account”. It seems safe to infer that WB is the respondent, Wayne Boden. Surely the appellant must be aware as to whether or not payment of the respondent’s loan account was a bona fide business expense.
In similar vein I note that in December 2008 the respondent claimed reimbursement of approximately $1,750 recorded as “Angas Regent (Simon Accom)” and coded as “Accom & Meals.” Also in December 2008 there was a claim for reimbursement of $222.95 in respect of “Flightcentre Simon Sheffield” and coded as “airfares”. In my view, the appellant should be aware whether Simon Sheffield was a person whose flight and accommodation expenses would have been met by the respondent on its behalf.
I also note that the spreadsheets relating to expenditure by the respondent in December 2008 include three items described as “FBT applicable”. These payments totalled approximately $350 made to restaurants and what appears to be a hotel. The fact that the respondent identified these payments as being subject to fringe benefits tax (‘FBT’) strongly suggests that the payments related to private expenditure that had been, or was to be, met by the appellant as an employment related fringe benefit. Given the sworn statement by Mr Bill at [18] in his third affidavit that the appellant took particular care to ensure that it complied with its taxation obligations, it might reasonably be expected that the appellant holds a record of the FBT transaction and included the value of the benefit in the payment summary (formerly a group certificate) provided to the respondent.
While the spreadsheets for December 2008 do not include any claims in respect of school fees, at other times the respondent regularly claimed reimbursement of payments in the order of $1,500 to $2,000 made to St Peter’s College. In some instances the basis for the payments to St Peter’s College was not explained and in other cases there is a reference to “bonus and incentives”. My previous observations about FBT and tax compliance issues may potentially also apply to these payments. I note that in a letter addressed to the respondent dated 3 March 2014 Ms Chiro of Walker Wayland expressed concern on behalf of the appellant about the accounting and taxation treatment of the payments in respect of school fees.
While I have not examined all of the many claims for reimbursement made by the respondent, my attention was caught by claims for expenditure during August and September 2009 that appear to be unusual, having regard to the fact that the appellant is a call centre operator and provider of business support. I refer to a series of payments for fuel made at Innamincka, Birdsville, Cunnamulla and various location across Queensland leading to the Gold Coast and then returning to Adelaide by way of Orange, Hay and other locations in New South Wales. It appears that these payments were incurred during a road trip to the Gold Coast via outback South Australia and Queensland with the return journey to Adelaide following the more conventional route across inland New South Wales. It seems to me that the appellant must be aware whether or not it would have required the respondent to travel to these locations on company business. Alternatively, it should know if it permitted him to travel for business purposes to and from its Gold Coast premises in this roundabout and time consuming fashion as an alternative to flying.[18]
[18] Some company email footers refer to the appellant conducting business in Adelaide, the Gold Coast, Melbourne and Sydney.
The claim by the respondent covering the period ending 31 December 2008 referred to a payment of $147 described as “massage Ginny” which was coded as “staff amenities” and described in the notes as “physio/massage”. Paragraph [20.3.2] of the proposed TSOC alleges that the respondent attended a meeting on 20 August 2013 with Ginny Bullen.[19] As the name “Ginny” is uncommon, I infer that Ms Bullen is likely to be the person identified in the claim for massage costs. Once again, the appellant would surely know whether it required the respondent to pay for massages as part of its business or provided this service as a fringe benefit. It should also know whether it was under an obligation to meet expenses incurred on behalf of “Ginny”. While the monetary amount involved in this instance is quite small, I simply refer to it as an example of a claim where the appellant should apply its special knowledge of the facts to determine whether it considers that it is entitled to pursue recovery.
[19] Some of the documents exhibited to affidavits describe Ginny Bullen as the Service Delivery Manager of the appellant.
I stress that I have merely identified by way of example a relatively small number of claims where there would appear to be good prospects of the appellant being capable of identifying whether or not they related to legitimate expenditure on company business. I anticipate that there will be many claims in addition to those for December 2008 where the appellant should be able to determine because of the peculiar nature of particular claims whether or not they were legitimate. I have not examined closely all of the spreadsheets submitted by the respondent. That is a task for the appellant and its legal representatives.
Conclusion
The appeal must be dismissed because the proposed TSOC fails to comply with the Rules governing pleadings in the several ways that I have identified above at [72], [74] and [79]. While that is sufficient to dispose of the appeal, I also find that there are discretionary considerations of the type identified by the High Court in Aon Risk Services v Australian National University[20] and by Bleby J in Channel Seven Adelaide Pty Ltd v Manock[21] that support the Master’s decision to refuse permission to file the revised SOC. I refer to the history of substantial changes in the appellant’s case without adequate explanation and the accompanying delay, strain and uncertainty imposed upon the respondent by the claim for repayment of all monies without any apparent attempt to identify legitimate claims for reimbursement and the failure to address properly several of the concerns expressed by the Master when he refused FDN 13.
[20] (2009) 239 CLR 175 at [30], French J, [108] and [114], Gummow, Hayne, Crennan, Kiefel and Bell JJ.
[21] [2010] SASCFC 59 at [46].
I dismiss the appeal.