Durban Roodepoort Deep, Limited v Mostert - [2004] WASC 228

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DURBAN ROODEPOORT DEEP, LIMITED -v- MOSTERT & ORS [2004] WASC 228

CORAM: MASTER SANDERSON

HEARD: 6 JULY, 19 AUGUST 2004

DELIVERED : 5 NOVEMBER 2004

FILE NO/S: CIV 1772 of 2002

BETWEEN: DURBAN ROODEPOORT DEEP, LIMITED (ARBN 086 277 616)
Plaintiff
AND
CHARLES PHILIP MOSTERT
First Defendant
JOHN STRATTON
Second Defendant
NOBLE INVESTMENTS PTY LTD (ACN 007 998 914)
LEADENHALL AUSTRALIA LTD (ACN 007 997 248)
ADVENT INVESTORS PTY LTD (ACN 008 134 209)
Third Defendants
TIMOTHY OWEN LEBBON
Fourth Defendant

FILE NO/S :CIV 1797 of 2002

BETWEEN :DRD AUSTRALASIA ApS
First Plaintiff
DRD AUSTRALASIA PTY LTD
Second Plaintiff
AND
JOHN STRATTON
Defendant

Catchwords:

Practice and procedure - Application for further and better particulars of statement of claim - Turns on own facts

Legislation:

Nil

Result:

Limited further particulars ordered

Category: B

Representation:

CIV 1772 of 2002

Counsel:

Plaintiff:     Mr S J Davis
First Defendant             :     Mr G I Macnish
Second Defendant         :     Mr G I Macnish
Third Defendants          :     No appearance
Fourth Defendant          :     No appearance

Solicitors:

Plaintiff:     Allens Arthur Robinson
First Defendant             :     Cocks Macnish
Second Defendant         :     Cocks Macnish
Third Defendants          :     No appearance
Fourth Defendant          :     No appearance

CIV 1797 of 2002

Counsel:

First Plaintiff                :     Mr S J Davis
Second Plaintiff            :     Mr S J Davis
Defendant:     Mr G I Macnish

Solicitors:

First Plaintiff                :     Allens Arthur Robinson
Second Plaintiff            :     Allens Arthur Robinson
Defendant:     Cocks Macnish

Case(s) referred to in judgment(s):

Bailey v The Commissioner of Taxation (1977) 136 CLR 214
Durban Roodepoort Deep Ltd v Mostert & Ors [2003] WASC 104
Palmos v Georgeson (1961) Qd R 186
Whelan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148

Case(s) also cited:

Adsteam Building Industries v Queensland Cement (1985) 1 Qd R 127
Ahern v R (1988) 165 CLR 87
Bruce v Odhams [1937] 1 KB 697
Dare v Pulham (1982) 148 CLR 658
Duke Group Ltd (In Liq) v Pilmer & Ors (2001) 31 ACSR 213
Fox v H Wood (Harrow) Ltd [1963] 2 QB 601
Gale v Denman Picture House Ltd [1930] 1 KB 588
Hyrtrac Conveyors Ltd v Conveyors International Ltd [1983] 1 WLR 44
Jingellic Minerals NL v Abbi Group Ltd (1992) 7 WAR 566
Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 47 ALR 114
Smith v Littlemore (1996) 15 WAR 289
R v Siracusa (1990) 90 Ct App R 340
STP (Gas) Retail v Jubilee Road, unreported; FCt SCt of WA; Library No980690; 17 September 1998

MASTER SANDERSON: This is the return of two chamber summonses one in each of these two actions. Each summons seeking to have the plaintiffs provide further and better answers to a request for particulars. These two actions although entirely separate are related. Although in each case the requests are different there is sufficient connection between the two actions and the two sets of requests for particulars to warrant the matters being dealt with together.
In each action the defendants applied to strike out the plaintiffs' statement of claim. For reasons which are not entirely clear I dealt with both applications but published only one set of reasons in CIV 1772 of 2002: see Durban Roodepoort Deep Ltd v Mostert & Ors [2003] WASC 104. I declined to strike out the statement of claim in either action. In the introduction to my decision I was somewhat critical of the defendants' strike‑out applications, suggesting it might have been better had they not been brought. This application is not at all in that class. Although I have determined that the plaintiffs need only provide limited further and better answers to the requests, this was not an unmeritorious application.
I will not in these reasons recount the nature of the actions brought by the plaintiffs against each of the defendants. The nature of the actions is apparent from reading my earlier reasons. Insofar as a recitation of the facts is necessary I would incorporate by reference, without repeating, what I said in those earlier reasons.
The principles relating to the supply of particulars to a pleading are well understood. Those principles were not in dispute between the parties. However counsel for the defendants in his submissions did make particular reference to a number of authorities including Palmos v Georgeson (1961) Qd R 186 at 192, 193 and Whelan v John Fairfax & Sons Ltd (1988) 12 NSWLR 148 at 153‑154. Counsel referred to these cases to make the point that matters which may be within the knowledge of a party seeking particulars is not a ground for refusing those particulars. Counsel further emphasised this point by reference to the decision of the High Court in Bailey v The Commissioner of Taxation (1977) 136 CLR 214. The facts in this case by reference to the headnote were as follows:
"By notice of assessment to income tax the Commissioner added to the income disclosed by a taxpayer in his return the amount of a distribution by a company in which the taxpayer had been a shareholder. An objection by the taxpayer was disallowed by the Commissioner and was treated as an appeal to the Supreme Court of New South Wales. From correspondence between the parties it appeared that the Commissioner had relied upon the operation of s 260 of the Income Tax Assessment Act 1936 (Cth) to subject the distribution to tax in the hands of the taxpayer. The taxpayer requested particulars of the 'arrangement' upon which his use of s 260 was based, but the Commissioner refused to supply them."
The High Court held that the particulars ought be supplied. Gibbs J (as he then was) said (at 219‑220):
"Particulars fulfil an important function in the conduct of litigation. They define the issues to be tried and enable the parties to know what evidence it will be necessary to have available and to avoid taking up time with questions that are not in dispute. On the one hand they prevent the injustice that may occur when a party is taken by surprise; on the other they may save expense by keeping the conduct of the case within due bounds. These considerations are no less important in revenue cases than in other cases. A taxpayer who comes to court in a case in which it is suggested that s 260 applies is, as a matter of justice, entitled to know what case it is that the Commissioner intends to raise against him. The circumstance that s 260 must be applied to the facts whether or not the Commissioner holds any opinion on the subject provides no reason why the issues of fact arising in the case should not be defined. The fact that the taxpayer bears the onus of proving that the assessment is excessive makes it all the more necessary that he should be given particulars of the basis of the assessment … The Commissioner is not likely to be disadvantaged by supplying particulars. In an appropriate case no doubt particulars may be framed in the alternative and if the Commissioner's particulars proved to be too narrow or to be erroneously stated the court may allow him to depart from them if the interests of justice require such a course …
The facts in a case arising under s 260 are not necessarily all within the knowledge of the taxpayer. However, it is a misapprehension to think that the only function of particulars is to reveal to a party facts of which existence he is unaware. As I have indicated, 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.
The question whether and what particulars should be ordered is one within the discretion of the court. In the present case the learned primary Judge indicated that he thought the taxpayer was morally entitled to particulars but that legally there was no power to order them to be given. In these circumstances this court may exercise the discretion that the learned Judge thought was not available to him."
Counsel made the point – emphasising what was said by Gibbs J in the passage I have quoted above – that under s 260 of the Income Tax Act (as it then stood) once an assessment was raised by the Commissioner it was for the taxpayer to show that the tax was not payable. In other words, the taxpayer had to demonstrate that the amount the Commissioner had included in the return was not the result of an "arrangement" which fell foul of s 260. Yet even in that situation where all of the facts of the surrounding circumstances were within the knowledge of the taxpayer and where the Commissioner had to prove nothing, the evidentiary onus being on the taxpayer, particulars were ordered. Counsel was particularly keen to point out that it was no answer to a request for particulars to say that an opposing party knows or should know of the surrounding circumstances and therefore does not need particulars. Counsel relied on this principle as a backdrop to his submissions.

CIV 1772 of 2002

It is convenient to begin with this action. The second defendant served his request on 13 August 2003. While there are only 25 requests many of those are broken down into subparagraphs so that in the result there are many questions the plaintiff was asked to answer. Some have been answered; most have not. Helpfully counsel broke his requests the subject of this application – that is to say requests which have not been answered or which in the opinion of the second defendant has not been adequately answered – into eight separate categories. In these reasons I will follow the approach adopted by the defendants. Counsel for the plaintiff did not adopt the same approach. He categorised the unanswered requests into three categories. I have found it more convenient to follow counsel for the second defendant's categories.

Authority

The requests that fall into this category are requests 1(a), (b) and (c) and 7(a)(iii), (iv) and (v). To illustrate this category I will deal with requests 1(a), (b) and (c). This request relates to par 3(b) of the statement of claim. By par 3(a) of the statement of claim the plaintiff alleges that the first defendant (Mostert) was a director and the chief financial officer of the plaintiff. It is also alleged that he was a member of the executive committee which is defined in par 2(c) of the statement of claim as being a group of senior of executive officers of the plaintiff. It is further said that the first defendant was a director in common with the second defendant (Stratton) of certain named companies, that they work from the same offices in South Perth and that they were in daily consultation. Paragraph 3(b) pleads that the first defendant had no authority to purchase shares on behalf of the plaintiff. In relation to that paragraph the second defendant makes the following request:
"1.As to paragraph 3(b) of the Statement of Claim:-
(a)Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that the First Defendant had no authority to purchase shares on behalf of the Plaintiff;
(b)Is it alleged he was expressly prohibited from purchasing shares on behalf of the Plaintiff;
(c)If it is so alleged provide the Usual Particulars of the prohibition."
The answer to that request is as follows:
"1(a) No authority had been given to the First Defendant to purchase shares on behalf of the Plaintiff, whether pursuant to the Plaintiff's Articles of Association referred to in paragraph 2(a) of the Statement of Claim or otherwise.
(b)The Plaintiff objects to answering this request on the grounds that it is not a request for particulars of an allegation made in the Statement of Claim.
(c)Not applicable."
On behalf of the second defendant it was submitted that the request was proper because the second defendant is entitled to know the case it has to meet. It was said that the authority of a director or officer may be actual (express or implied) or ostensible. The extent of the actual authority includes incidental authority and usual authority. It was said that it was implicit in the pleaded allegation that the first defendant had:
(a)no express actual authority, including incidental or usual authority to purchase shares on behalf of the plaintiff;
(b)no implied actual authority, including incidental or usual authority, to purchase shares on behalf of the plaintiff;
(c)no ostensible authority to purchase shares on behalf of the plaintiff; or
(d)been expressly forbidden from purchasing shares.
It was said that in each of these four cases the second defendant was entitled to know the basis upon which the implied allegation was made.
On behalf of the plaintiff it was said that so far as request 1(a) was concerned the answer had identified the matters relied on in support of the allegation made in the statement of claim. It was said by the plaintiff that it was a fact that it simply did not rely on any other matters. It was not a case of the particulars being "insufficient". The particulars that were given was all that the plaintiff was able to say. In relation to requests 1(b) and (c) it is said that there was no allegation that the second defendant was expressly prohibited from purchasing shares on behalf of the plaintiff. As the allegation had not been made no particulars of it could be ordered.
Dealing first with requests 1(b) and (c) these are not proper requests. It is not pleaded that the second defendant was expressly prohibited from purchasing shares and no particulars of an allegation not made can be ordered.
Nor is it appropriate to order the plaintiff to answer request 1(a). What is being alleged is a negative. It is said that the first defendant was not authorised to do certain things. Essentially what the second defendant says is that the allegation is what is sometimes referred to as a pregnant negative. That is certainly the way that the second defendant's submissions are couched. I am not satisfied that is the case. Based upon the pleading and upon what was said on behalf of the plaintiff in the submissions the allegation is that the first defendant had no authority to purchase shares on behalf of the plaintiff. By way of further particulars it is said that the Articles of Association did not authorise a person in the position of the plaintiff to purchase shares on its behalf and that the authority was not derived from any other source. The plaintiff will either be able to prove that allegation or it will not. But for its part the plaintiff need not give any further particulars and it certainly cannot be compelled to disclose the evidence upon which it intends to rely to prove the allegation. In the circumstances I am satisfied that the answer is sufficient.
I will not deal in detail with request 7(a)(iii), (iv) and (v). The same reasoning applies to this request as to the one dealt with above.

Consultation

Request 2 deals with par 4(e) of the statement of claim. Paragraph 4 of the statement of claim refers to the second defendant and pleads inter alia that he was an experienced director of public companies, he was a director of certain companies and that he worked from the same offices as the first defendant. By par 4(e) it is pleaded that the second defendant was "in daily consultation with the first defendant". Against that background the defendants make the following request:
"As to paragraph 4(e) of the Statement of Claim provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that the Second Defendant was in daily consultation with the First Defendant providing precise particulars of:
(a)What is meant by daily consultations; and
(b)Those matters in respect of which it is alleged that there was 'daily consultation'."
The plaintiff objected to answering that request on the grounds that "the meaning of the phrase is self‑evident". The defendants say that the meaning of the phrase "daily consultation" is not self‑evident. Based upon a dictionary definition of the word "consultation" the defendants say that they are unsure whether it is alleged that the first and second defendant met together for substantive discussions involving deliberation and decision making or whether something more informal is suggested. On that basis they seek particulars.
For its part the plaintiff says that it is the fact of the daily consultation that is material to its case not what the first and second defendant consulted one another about. It is submitted that the allegation is sufficiently clear to enable the second defendant to know the case it has to meet.
I am satisfied that the plaintiff's submission on this request should carry the day. A reading of the statement of claim makes it plain that what is being alleged by par 3 and 4 and other paragraphs of the statement of claim is a close working relationship between the first and second defendants. Establishing that close working relationship is central to the plaintiff's claim. So far as the allegations of "daily consultation" is concerned what is being said is that there was daily interaction or daily discussions. In other words there was an easy familiarity between the first and second defendants. While such interaction is an important aspect of the plaintiff's claim it is clear as is submitted on behalf of the plaintiff that it is not what was discussed which is of importance it is the fact of the interaction. That being so I am satisfied that particulars of the allegation need not be given.
I am also satisfied that the meaning of the phrase is self‑evident. In my view there is no magic in the choice of words. Once the allegation in the paragraph is put in context particularly when matched against par 3 as well as in the statement of claim or generally it is clear what is being alleged. No particulars need be provided.

Instructions, Requests Informed (in sense of instruction)

This sub‑heading deals with nine separate requests or sets of requests relating to nine different paragraphs or subparagraphs of the statement of claim. It will be sufficient if I illustrate the nature of the requests by reference to one only, the reasoning applying to this request applying to all others in this category.
By par 9 of the statement of claim it is pleaded that on or about 2 December 1999 the second defendant instructed one Pocock to prepare an agreement which is pleaded in par 11(a) of the statement of claim. It is further said that the agreement so prepared was to contain the terms pleaded in pars 11(b) and 15 of the statement of claim. It is then said that the agreement was executed by the first defendant on behalf of the plaintiff. Particulars of the paragraph are provided. These particulars are:
"The instructions were given in the course of telephone conversations between the second defendant and Mr A Pocock."
Request 4 is in the following terms:
"As to paragraph 9 provide the following further and better particulars:
(a)Every fact, matter, circumstance and thing relied upon for the allegation that the Second Defendant 'instructed' Pocock in respect of the matters pleaded in sub‑paragraph (b) thereof stating on whose behalf it was alleged the Second Defendant provided those instructions;
(b)Every fact, matter, circumstance and thing relied upon for the allegation that the Second Defendant 'instructed' Pocock in respect of the matters pleaded in sub‑paragraph (c) thereof giving particulars of the person or entity on whose behalf it is alleged the Second Defendant was acting in providing the 'instructions' pleaded."
The answer to this request was in the following terms:
"4(a) The Plaintiff objects to answering the first part of this request on the grounds that it is a matter for evidence. With respect to the second part of the request, ie as to on whose behalf it is alleged the Second Defendant provided the instructions, the Plaintiff objects to answering this part of the request on the grounds that it is not a request for particulars of an allegation made in the Statement of Claim.
(b)The Plaintiff objects to answering the first part of this request on the grounds that it is a matter for evidence. With respect to the second part of the request, ie as to on whose behalf it is alleged the Second Defendant provided the instructions, the Plaintiff objects to answering this part of the request on the grounds that it is not a request for particulars of an allegation made in the Statement of Claim."

On behalf of the defendants it is said that the word "instruction" carries with it the implication of a particular relationship between the person "instructing" and the person being "instructed". Such that the former has the power to "instruct" the latter and the latter has the obligation to obey the "instructions". By reference to par 37 of the statement of claim it is said that the allegation that the second defendant "instructed" Pocock is material to the claim made by the plaintiff against the second defendant. Further, it is said that nowhere is it pleaded that the second defendant was related to the parties to the Agreement nor it is alleged that Pocock was acting on the instructions of the fourth defendant given on behalf of the third defendants with respect to the Agreement. That being so, it was submitted, then it must be the case that the second defendant "instructed" Pocock either on behalf of the plaintiff, the first defendant, the third defendants, or one of them, the fourth defendant, himself or some other unidentified party. If the instructions were issued by the second defendant then it is said that plea is unexplained and inexplicable given that the second defendant was not a party to the agreement. Further, it is said that in the context of the plaintiff's allegations of dishonesty, conspiracy and conduct analogous to fraud it must be that the plaintiff's case will be that the second defendant "instructed" Pocock for the purpose of furthering that alleged conduct.
On behalf of the plaintiff it is said that there is no allegation in the statement of claim that the second defendant instructed Pocock on any particular basis or on behalf of anyone. It is said that it is therefore inappropriate to provide particulars of such an allegation. In answer to the second defendant's submission that allegations are made in the statement of claim of dishonesty, conspiracy and conduct analogous to fraud and that it is therefore implicit that the second defendant "instructed" Pocock for the purposes of furthering that alleged conduct the plaintiff refers to pars 37 and 40 of the statement of claim. Paragraph 37 appears under the heading "The second defendant's dishonest involvement in the first defendant's breaches of duty". It is said that the second defendant in giving the instructions pleaded in pars 9(b) and (c) and asking the first defendant to sign the agreement with the knowledge of matters pleaded in par 31 acted dishonestly in assisting and procuring the first defendant to commit breaches of fiduciary duty. Paragraph 31 pleads certain matters of which it is said the second defendant was aware. These are matters referred to in pars 7, 11 and 28. Paragraph 7 pleads what is defined as the Lavender Agreement. Paragraph 11 deals with the Lavender Release Agreement and par 28 deals with the value of certain shares and the payment of a facilitation fee. Paragraph 40 of the statement of claim deals with the defendants alleged conspiracy to defraud the plaintiff. Reference is made back to par 37 of the statement of claim and the involvement of all the defendants in the allegedly unlawful conspiracy.
I accept the plaintiff's submission in relation to this interrogatory. What is at issue is the allegation that the instruction was issued by the second defendant to Pocock. That is the material fact pleaded and it either did or did not occur. What may flow from a failure to plead other matters is not a matter to be addressed by a request for particulars. Once again I see no magic in the use of the word "instructed". In my view there is nothing contained within the words used which would justify the particulars as requested by the defendants.

Monies Belonging to the Plaintiff

Requests 9(a) and (b) related to par 19 of the statement of claim. The allegation in that paragraph is that on or about 22 December 1999 a certain sum belonging to the plaintiff was paid by S G Securities to Pocock on the instruction of the second defendant. The particulars refer to a letter from the second defendant to S G Securities dated 6 December 1999. Request 9 is in the following form:
"As to paragraph 19 of the Statement of Claim:-
(a)Give particulars of every fact, matter, circumstance and thing relied upon for the allegation that the sum of $2,450,000 'belonged' to the plaintiff;
(b)Give precise particulars of the source of the said sum.
(c)Give particuars of every fact, matter, circumstance and thing relied upon for the allegation that the Second Defendant provided 'instructions' to SGS [sic-SG] Securities and give particulars of the person or entity on whose behalf the Second Defendant is alleged to have provided those instructions."
The defendants say that as the plaintiff claims that it suffered the loss of $2,450,000 it must be material to the plaintiff's claim that such an amount was owned by the plaintiff. Further, the defendants say that the circumstances in which the $2,450,000 was paid to Pocock – that is to say the transaction pleaded in pars 15 to 18 meant that the sum did not "belong" to the plaintiff.
The plaintiff says, rightly in my view, that this last point is not an issue which is relevant to a request for particulars. It is a point to be raised in a strike out application or at trial in legal submissions. Other than that I am satisfied that the material fact pleaded in par 19, that is to say that the plaintiff was properly entitled to the $2,450,000 is clearly set out. It is either right or it is not. If it is, then it will be necessary for the plaintiff to establish that fact by admissible evidence. But no particulars of such an allegation are required.

Britham

There is only one request in this category. It is request 15(a) to (e). That request relates to par 26 of the statement of claim. Paragraph 26 of the statement of claim is in the following terms:
"By agreement made 19 May 2000 Britham purchased 278,017 shares in CNF from Advent for a price of $30,000."
Request 15 reads as follows:
"As to paragraph 26 of the Statement of Claim:-
(a)Is it alleged Britham was acting on its own behalf;
(b)If it is then provide particulars of every fact, matter, circumstance and thing relied upon for that allegation;
(c)If it is alleged Britham was not acting on its own behalf then on whose behalf is it alleged Britham was acting;
(d)Provide precise particulars of every fact, matter, circumstance and thing relied upon for the allegation that Britham was acting on behalf of the person or entity identified in answer to paragraph (c) hereof;
(e)Provide particulars of the source of the purchase monies."
On behalf of the defendants it is submitted that the plaintiff's allegations of dishonesty, conspiracy and conduct analogous to fraud found in the statement of claim mean that the plaintiff's case is that Britham was engaged for the purpose of furthering that alleged conduct. It must be material then, so the defendants say, to know whether the plaintiff's claim that Britham was acting on behalf of one of the defendants.
I am not satisfied that the defendants' submissions are correct. In my view, there is a clear plea of a material fact. There is no plea that Britham was acting on behalf of anyone. There is simply a plea as to what Britham did. If that plea is made out it may or may not assist the plaintiff's case but in my view there is no basis for ordering particulars of the paragraph as the paragraph stands at present.

Purpose, Benefit on Lavender

This subheading relates to requests 19(a) and (b) and (d) to (i). All of these requests relate to par 30 of the statement of claim. Paragraph 30 is in the following terms:
"The first defendant executed the Agreement for the purpose of conferring a benefit on Lavender
Particulars
The first defendant's purpose is to be inferred from the following:
1.The Agreement was in fact for the benefit of Lavender, by enabling it to avoid its liability to purchase the CNF shares at a price that was substantially in excess of their true value;
2.the first defendant executed the Agreement at the request of the second defendant;
3.the first defendant knew of the matters pleaded in paragraphs 4(b)(vi), 7, 11(a) and 28(a) hereof."
Request 19 relevantly reads as follows:
"As for paragraph 30 of the Statement of Claim:-
(a)Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that the First Defendant executed the Agreement for the 'purpose' of conferring a benefit on Lavender;
(b)Give particulars of why it is alleged that the First Defendant had the purpose alleged;
(c)…
(d)Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that the Agreement was of benefit to Lavender;
(e)Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that Lavender wished to avoid its liability to purchase the CNF shares.
…"
In response to that request the plaintiff either relied upon the particulars already provided to par 30 subparagraphs (a) and (d) or objected to the request on the basis that the request was for particulars of an allegation not made in the statement of claim (requests (b) and (e)). I am satisfied that this request need not be answered. As the plaintiff says requests 19(b) and (e) are requests for particulars of an allegation not made in the statement of claim. Both these requests seem to be directed at ascertaining what the plaintiff believes was the objective intention of the first defendant. Nowhere is the subjective intention of the first defendant pleaded nor is it relevant. Once again, the use of the word "purpose" is simply to convey the ultimate – and it must be said intended – result of the transaction. That is a matter which either can or cannot be proved by the plaintiff. But no particulars of that allegation are required. Subparagraph 1 of the particulars alleges that the agreement was for the benefit of Lavender because it enabled Lavender to avoid liability for the purchase of the CNF shares at a price substantially in excess of their true value. That particular appears to satisfy request 19(d).

Britham

I am not satisfied that any order should be made requiring further answers to this request. Again this involves only one request. It is request 20(e). That request relates to par 31(c) of the statement of claim. This paragraph pleads that the second defendant was at all material times aware of the matters pleaded in par 28(a) of the statement of claim. By par 28(a) it is pleaded that as at December 1999 the CNF shares had a value of no more than $1,115,000. Particulars of par 31(c) are provided. They are referred to as "Particulars of Knowledge". They are in the following form:
"The second defendant's knowledge is to be inferred from the following:
1.the second defendant had no evidence or other reasonable basis for believing that the CNF shares had a value of more than $1,115,000;
2.shares in CNF were listed on the Australian Stock Exchange, had lasted traded at no more than 10 cents per share, and had traded in the previous 12 months between 6.5 cents and 12 cents per share;
3.the amount of $1,115,000 was in fact the amount payable for the shares under the Agreement.
4.the matters pleaded in paragraphs 22 and 26 hereof."
Paragraph 22 of the statement of claim is in the following terms:
"In the course of the telephone conversation held on or about 24 December 1999 between the second defendant and Mr A Pocock, the second defendant informed Mr Pocock that the sum of $30,000 referred to in paragraph 20(b) hereof was to be held in trust in the name and for the account of Advent pending the finalisation of an offer by the plaintiff to purchase 278,017 shares in CNF for $30,000; being an average of 10.8 cents per share."
Paragraph 26 pleads that on 19 May 2000 Britham purchased 278,017 shares in CNF from Advent for $30,000. The defendants complain that particular 4 is irrelevant. As I understand the pleading however, what pars 22 and 26 are designed to show is that the CNF shares were worth a certain amount. The fact of the phone call referred to in par 22 and the transaction pleaded as being completed by par 26 is designed to establish that the second defendant was aware of that value. In my view, particular 4 is a proper plea.
In my view, the particulars of knowledge as provided are adequate and the request need not be answered. The plaintiff must lead evidence to establish all of the particulars referred to in par 31(c). It faces the difficulty of establishing the negative under particular 1. But that is a matter for evidence at trial and as it stands it is a proper particular of the plea made. In my view the use of the word "aware" is appropriate. It is a word which is interchangeable with the word "knowledge" at least in the circumstances of this plea. The particulars of knowledge provided are in effect the particulars of the second defendant allegedly being aware of the matters referred to in par 31. The provided particulars are sufficient.

Conspiracy – Agreement

Request 25(a) to (d) – the only request falling under this head related to par 40 of the statement of claim. Paragraph 40 pleads the defendants' alleged conspiracy to defraud the plaintiff. Request 25(a) which is pivotal to the rest of the paragraph asks whether it is alleged that there was an agreement between the third and fourth defendants on the one hand and the second defendant on the other to injure the plaintiff. It is well established that it is not necessary to allege or establish that there was an express agreement between the third and fourth defendants on the one hand and the second defendants on the other to plead a conspiracy. It is sufficient that two or more persons combine with the necessary intention or that they had deliberately co‑operated, albeit tacitly, to achieve a common end: see Bullen & Leake & Jacob, "Precedents of Pleading", 14th ed, (2001) at 50‑02. In my view the plaintiff is entitled to refuse to answer the request.

CIV 1797 of 2002

Once again counsel for the defendant has helpfully divided these requests into categories. As with the other action it is sufficient if I deal with one only of the requests as an example of the categories.

Defendant 'caused, instructed, directed or requested'

Request 1 relates to par 5 of the statement of claim. Paragraph 5 of the statement of claim is in the following terms:
"... on or about 19 October 1999 the defendant caused Consolidated African Mines Jersey Ltd (CAM Jersey) to render an invoice to the first plaintiff (the CAM Jersey invoice) which:
(a)sought payment from the first plaintiff of the sum of $930,000 for the 'Provision of Corporate Services Period August 1998 to October 1999';
(b)directed that payment of the said sum of $930,000 be paid to Castlehill Management Ltd (Castlehill)."
Request 1 then is in the following terms:
"As to paragraph 5 of the Statement of Claim provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that the Defendant caused CAM Jersey to render the CAM Jersey Invoice."
The plaintiffs have declined to answer this request on the basis that they say it is a request for evidence. On the part of the defendant it is said that the request is entirely proper. It is said that the defendant is entitled to know the basis upon which the first plaintiff alleges that the defendant caused CAM Jersey to render the CAM Jersey invoice particularly in circumstances where it is nowhere alleged that the defendant was related to CAM Jersey.
On balance I am satisfied that the request is properly made and should be answered. It may well be that in answering the request the plaintiffs may disclose matters of evidence. But in a situation where an allegation is made against a defendant that he was responsible for certain events occurring when there is no pleaded nexus between the party undertaking the action and the defendant, the defendant is entitled to know the case that he has to meet. The request should be answered.
The same reasoning applies to all of the other requests in this category. They are request 8(a) to (d), request 10(c) and (d), request 11(a) and (b), request 13, request 16(a) and (b), request 19(a) and (b) and request 21(a) and (b).

Mostert – Cause to Pay

This category includes three request. Request 2(a) relates to par 7 of the statement of claim. Paragraph 7 of the statement of claim is in the following terms:
"On or about 22 October 1999, Mostert caused the first plaintiff to pay the sum of $930,000 to Castlehill (the first payment)."
The reference to "Mostert" is a reference to Charles Mostert, who, it is pleaded in par 4 of the statement of claim was at all material times a director of the first and second plaintiffs. So what par 7 is pleading is that the first plaintiff paid the CAM Jersey invoice referred to in par 5 and that Mostert was the moving hand of the first plaintiff in the making of that payment. Request 2(a) is in the following terms:
"Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that Mostert caused the First Plaintiff to pay the sum of $930,000 to Castlehill."
The first plaintiff objected to answering that request on the grounds that the information sought is a matter for evidence. On balance I am satisfied that is the case. The material fact alleged in par 7 is that Mostert caused the first plaintiff to make payment of the $930,000. Precisely how he did that – whether it was by signing a cheque himself or directing the transfer of funds from the first plaintiff's banker or by some other means – is a matter for evidence. But the pleading in its present form alerts the defendant to the case he has to meet. The actual mechanism of the transfer is something which will be explained by the evidence. Particulars need not be provided.

Defendant's Knowledge

This subheading is in fact broken down into two different types of requests. First, where there is no allegation in the pleading of knowledge on the part of the defendant but it is said that knowledge is implicit in the pleading is illustrated by request 4(b). That request relates to par 9 of the statement of claim. By par 8 of the statement of claim it is pleaded that Mostert sent a facsimile to one Hendrik Buitendag providing Buitendag with details of accounts into which an amount of $945,000 was to be paid (presumably this is the first payment plus $15,000). It is said that $400,000 was to be paid to the defendant. Paragraph 9 then reads:
"Castlehill, at the request of Buitendag, transferred to the defendant $400,000 of the money that was paid to it by the first plaintiff."
Request 4(a) then asks whether it is alleged that the defendant was at any material time aware of the fact that Castlehill transferred the monies alleged to him. In response to that request the plaintiffs say that such an allegation is made in par 11 of the statement of claim. And so it is. Request 4(b) then asks:
"If it is so alleged then provide particulars of every fact, matter, circumstance and thing relied upon for that allegation."
The response of the plaintiffs is to say that particulars have already been provided and refer to par 11(ii) of the statement of claim. Paragraph 11(ii) of the statement of claim in turn refers back to pars 11(b) and (c). Those two paragraphs plead that $400,000 was paid to the defendant by Castlehill from the $930,000 that was paid to it by the first plaintiff and that Mostert caused the first plaintiff to make the first payment in the knowledge that the first plaintiff was not liable to make the payment. The plaintiffs then plead that the matters referred to in pars 11(b) and (c) "is to be inferred from the matters pleaded in paragraphs 5 to 10(a)".

This answer requiring as it does a tracking back through the pleading makes identifying the particulars very difficult. In my view the request should be answered. Even if that means setting out again matters which are to be found in pars 5 through to 10(a) then it should be done. Requiring the request to be answered is rather more a matter of convenience rather than an illustration of some deep underlying principle. Nonetheless the request should be answered.
The same reasoning applies to request 7, 14(c) and (d), request 14(g) to (i) and request 16(d) to (f).
The other category of requests under this subheading is what counsel for the defendant describe as requests where knowledge is alleged but no particulars are provided. An example of this category is request 6(b) to (f). These requests relate to par 11 of the statement of claim. I have already dealt briefly with that paragraph. Essentially what is pleaded is that the defendant receive the sum of $400,000 when he had no right and entitlement to those funds, the money was paid to him by Castlehill from the $930,000 paid to it by the first plaintiff and that Mostert had caused the first plaintiff to make the first payment in the knowledge that the first plaintiff was not liable to make that payment.
Request 6(a) asked for particulars as to why the defendant was not entitled to receive the payment of the sum of $400,000. It is the subject of a separate category and can be put to one side for a moment. The nature of the remaining requests can be illustrated by request 6(c). That request is in the following terms:
"Give particulars of every fact, matter, circumstance or thing relied upon for the allegation that the Defendant knew the sum of $400,000 if received by him was paid to him by Castlehill as alleged."
The first plaintiff responded by saying that the allegation is misdescribed. I have some difficulty seeing how that it is the case. After all the allegation in par 11(b) is that the $400,000 was paid to him by Castlehill. The plaintiff then refers to the particulars found in par 11(ii) and as I have said that paragraph in turn refers to par 11(b) and (c) of the statement of claim and matters 5 to 10(a) of the statement of claim. As I have indicated above, this rather convoluted way of giving particulars does cause some difficulty.
However I am not satisfied that it would be appropriate to order particulars as sought by the defendant to be provided. The allegation is the $400,000 was transferred to him by Buitendag: see par 9 of the statement of claim. Anyone who receives $400,000 is likely to know where it came from and if he is uncertain of the origin of the funds to take steps to find out. But on the plaintiffs' case the defendant knew where the money had come from and why it was paid to him from Castlehill. That is all set out in pars 5 through to 10 of the statement of claim. The scheme that is pleaded in those paragraphs could only have been put into effect with the knowledge and consent of the defendant. In my view it would serve no purpose to require particulars as sought by the defendant. There is sufficient information in the pleading as it stands at the present for the defendant to know the case he has to meet.

Agreements – Defendant and Unrelated Parties

This subheading deals with four requests and can be illustrated by reference to requests 5(j) and (k). Both of these requests relate to par 10(c) of the statement of claim. By par 10(c) of the statement of claim it is pleaded that the defendant caused the CAM Jersey invoice to be rendered pursuant to an agreement between the defendant, Mostert and Buitendag to the effect that the money paid pursuant to the CAM Jersey invoice would be distributed by Castlehill in accordance with Mostert's instructions. Particulars of that plea are provided. The particulars say that the agreement is to be inferred from the matters pleaded in pars 5 to 10(a) of the statement of claim.
Request 5(j) would have the plaintiffs:
"Provide particulars of every fact, matter, circumstance and thing relied upon for the allegation that there was an agreement between the Defendant, Mostert and Buitendag to the effect alleged in sub‑paragraph (c)."
The first plaintiff says that the particulars relied upon are those particulars provided to par 10(c). On balance I am satisfied that the particulars provided are sufficient. Once again it seems to me that the agreement between the parties is to be drawn from the paragraphs referred to in the particulars. The defendant knows the case he has to meet and the particulars are sufficient.

Monies Paid Out of Fund

This subheading involves only two requests. Request 12(c) relates to par 19(b) of the statement of claim. Paragraphs 13 through to 18 of the statement of claim plead what is described as "The Dayspring Holdings Invoices". In summary, what is alleged is that in November of 1999 Dayspring Holdings Ltd rendered invoices to the first plaintiff which sought payments of an amount of $1,420,000. It is alleged that no services were provided by Dayspring to the first plaintiff justifying the rendering of the invoices. It is alleged in November 1999 Mostert caused the first plaintiff to make payment of the invoices. It is further alleged that $600,000 of the money paid to Dayspring wound up with the defendant. By par 19 it is alleged that the defendant received the sum of $600,000 with the knowledge that he no right and entitlement to the benefit. It is further alleged by par 19(b) that the defendant knew that $600,000 was paid by Dayspring from the $1,420,000 that had been paid to it by the first plaintiff. Request 12(c) then asks the first plaintiff to:
"Give particulars of every fact, matter, circumstance and thing relied upon for the allegation of the sum of $600,000 allegedly paid by Dayspring was paid by Dayspring from the sum of $1,420,000 allegedly paid to it by the First Plaintiff."
In response to the request the first plaintiff says that the request misdescribes the allegation made in the statement of claim. With respect, it is difficult to see that that is the case. In any event, the first plaintiff objected to answering a question on the basis that it was a matter for evidence. I am satisfied that this objection is properly made. Once again there is an allegation of a receipt of money by the defendant. The precise mechanism by which Dayspring made payment of the $600,000 is a matter which can be covered by evidence. Particulars are not required.

Bauxite Agreement

This subheading also covers a limited number of requests. Requests 14(a) and (b) relate to par 22 of the statement of claim. By par 21 of the statement of claim it is pleaded that in December of 1999 Mostert on behalf of the first plaintiff received an agreement (referred to in the pleading as at the Bauxite Agreement). It is alleged that this agreement was sent to Mostert "at the request of the defendant". The agreement was for the sale of shares in a particular corporation to the first plaintiff and anticipated the payment by the first plaintiff of a non‑refundable deposit of $US1,650,000. It is further alleged that the deposit was to be paid to a company known as Transit Securities Inc. By par 22 it is then pleaded:
"On or about:
(a)16 December 1999:
(i)Mostert, purportedly on behalf of the first plaintiff, and the defendant signed the Bauxite Agreement;
(ii)Mostert sent Main a facsimile containing instructions for payments to be made by Transit totalling $2,585,000 of which:
(A)$426,226.32 was to be paid to the defendant;
(B)$854,274.28 was to be paid to Mostert.
(b)17 December 1999 Mostert caused the first plaintiff to pay to Transit the sum of US$1,650,000 or approximately $2,572,500 (the third payment)."
Request 14 relevantly reads as follows:
"As to paragraph 22 of the Statement of Claim:
(a)Give particulars of every fact, matter, circumstance and thing relied upon for the allegation that the Defendant signed the Bauxite Agreement;
(b)Give particulars of the person or entity on whose behalf it is alleged that the Defendant sign the Bauxite Agreement."
The first plaintiff declined to answer either request. As to request 14(a) it is said that what is sought is a matter of evidence. In my view that is correct. Either the defendant signed that agreement or he did not. Presumably a signature appears on the agreement. Either party is free to give evidence as to whether or not the signature on the agreement is the signature of the defendant.
The second request is rather curious. It is true that it is nowhere alleged in par 22 that the defendant signed the Bauxite Agreement on behalf of anyone. It is alleged that Mostert signed on behalf of the first plaintiff. By par 21(a) it is alleged that the Bauxite Agreement was between the first plaintiff and Bauxite Investments Ltd. That suggests that it is alleged the defendant signed the agreement on behalf of Bauxite Investments Ltd. If he did not sign in that capacity it is hard to see why he should have signed the agreement. I accept that the capacity in which the defendant signed the agreement is not central to the claim made against him. After all in par 25 it is alleged that the Bauxite Agreement was never performed and that it was not intended that it should be performed. The allegation in the pleading is effectively that the first plaintiff's funds were diverted to Transit Securities and wound up in the hands of the plaintiff and Mostert. Nonetheless it seems to me that the defendant is entitled to know in what capacity the Bauxite Agreement was signed by the defendant. The request should be answered as should be request 19(c) to (d).

Control or Influence

This subheading involves only two requests. It relates back to par 10(c) of the statement of claim. It is to be remembered that the allegation in par 10(c) is that the defendant caused the CAM Jersey invoice to be rendered pursuant to an agreement between the defendant Mostert and Buitendag with the effect that the money paid pursuant to the invoice would be distributed by Castlehill in accordance with Mostert's instructions. By request 5(l) the defendant asks whether it is alleged that either the defendant or Buitendag was in a position of control such that either or both was able to direct Castlehill to make the payment. Request 5(m) asks for the particulars of any allegations so made. The first plaintiff has responded that the allegation is not made in the statement of claim. That is clearly correct. It is true that there is no plea as to who controls Castlehill. That being so, on behalf of the defendant it is said that it is illogical that the defendant, Mostert and Buitendag could correct Castlehill to pay the money in accordance with Mostert's instructions. That submission might be right and is something that can be explored at trial but I am not satisfied that the request is proper and that the first plaintiff should be compelled to provide an answer. It is a request that really seeks clarification of the statement of claim and to that extent it is improper.

No Right or Entitlement

This subheading deals with request 6(a). That request in turn relates to par 11(a) of the statement of claim. I have already dealt with par 11 at some length when dealing with request 6(b) through to (f). What is sought by the defendant are particulars of the allegation that the defendant was not entitled to receive payment of the sum of $400,000. It is difficult to see how particulars of that allegation can be provided. If the defendant was not entitled to the sum of $400,000 he was not entitled to it. It is alleged that the first plaintiff was not liable to make payment of the CAM Jersey invoice. If that is right, then any payments made pursuant to that invoice were improperly made and no party taking consequent upon payment of the invoice can have any entitlement to any amount. In my view the position is clear and no further answer is required.

Defendant's Intention

This subheading relates to four requests, they being request 17(a) and (b), and request 19(e) and (f). Request 17(a) and (b) relate to par 25(b) of the statement of claim. By par 25 the plaintiffs allege that the Bauxite Agreement was never performed and was never intended by the defendant and others to be performed. Particulars are provided. It is said that the intention is to be inferred as a result of matters pleaded in pars 21 through to 25(a) of the statement of claim. The request is then in the following form:
"As to paragraph 25 of the Statement of Claim:-
(a)Given that it is not alleged that the Defendant was a party to the Bauxite Agreement give particulars of the basis upon which it is alleged that the Defendant could form and form the intention pleaded in sub‑paragraph (b);
(b)Given that it is not alleged the Defendant was a party to the Bauxite Agreement give particulars of the person or entity on whose behalf it is alleged that the Defendant formed the intention alleged."
In relation to request 17(a) the first plaintiff refers to the allegations made in par 25(b) and the particulars. In relation to request 17(b) the first plaintiff says that it is not a request for particulars of an allegation made in the statement of claim.
Reading pars 21 through to 25, it is clear that what is being alleged is that the Bauxite Agreement was a sham. Effectively it is alleged that the agreement was entered into with the non‑refundable deposit the intention being that the deposit would then be divided among certain persons including the defendant. I have already indicated I will require the first plaintiff to answer the requests specifying on whose behalf it is alleged the defendant signed the Bauxite Agreement. In the circumstances I am satisfied that this is sufficient. The plaintiffs will either be able to establish that the Bauxite transaction was a sham or they will not. In my view what the request does is highlight a potential weakness in the plaintiffs' case which will no doubt be fully explored at trial. But it is not a matter that should be further developed at this stage by an order for particulars. I would not order that these requests be answered.

Accounts

In par 7 of the statement of claim it is alleged that Mostert caused the first plaintiff to pay the sum of $930,000 to Castlehill. By request 2(b) the first plaintiff is asked to provide particulars of the bank account into which the payment to Castlehill is alleged to have been made. The first plaintiff objects to answering that request on the basis that it is a request for particulars of an allegation not made in a statement of claim. By that the first plaintiff means as I understand it that it is not alleged that the money was paid into a bank account. While that may literally be true it is difficult to understand how the money could otherwise have been handled by Castlehill given that there is an allegation further on in the statement of claim that the money was paid by Castlehill to other parties. Nonetheless in my view what the defendant is seeking is evidence. The pleaded material fact is that the money was paid to Castlehill. How the money was paid to Castlehill is the evidence that supports that allegation of material fact. That evidence must await trial.

Conclusion

I will hear the parties as to the precise form of order and as to costs.

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Citations

Durban Roodepoort Deep, Limited v Mostert [2004] WASC 228

Cases Citing This Decision

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Cases Cited

3

Statutory Material Cited

1

Durban Roodepoort Deep Ltd v Mostert [2003] WASC 104

Ainsworth v Burden [2005] NSWCA 174

Bailey v Federal Commissioner of Taxation [1977] HCA 11