In the matter of Taliberry Entertainment Pty Ltd

[2023] NSWSC 698

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Taliberry Entertainment Pty Ltd [2023] NSWSC 698

Hearing dates:

19 June 2023

Date of orders:

23 June 2023

Decision date:

23 June 2023

Jurisdiction:

Equity - Corporations List

Before:

Williams J

Decision:

See paragraph [51].

Catchwords:

PLEADINGS — summary dismissal — striking out — whether claims are so obviously untenable that they cannot succeed — whether no reasonable cause of action disclosed — whether embarrassing — no question of principle.

Legislation Cited:

Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 2, 18, 20, 236

Corporations Act 2001 (Cth), s 500(2)

Uniform Civil Procedure Rules 2005 (NSW), rr 13.4, 14.28

Cases Cited:

Banque Commerciale SA (En Liquidation) v Akhil Holdings Limited (1990) 169 CLR 279; (1990) 64 ALJR 244; (1990) 92 ALR 53; [1990] HCA 11

Berry v CCL Secure Pty Ltd (2020) 271 CLR 151; (2020) 94 ALJR 715; (2020) 381 ALR 427; [2020] HCA 27

DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts; HSBC Bank Ltd v Abboud; Potts v National Australia Bank Ltd (2022) 371 FLR 349; [2022] NSWCA 165

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; (1964) 38 ALJR 253; [1965] ALR 636; [1964] HCA 69

Lucantonio v Benscrape Pty Ltd [2020] NSWSC 579

Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357; (2010) 84 ALJR 644; (2010) 270 ALR 204; (2010) 16 ANZ Insurance Cases 61-862; [2010] ATPR 42-325; [2010] HCA 31

OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120

Nitopi v Nitopi (2022) 109 NSWLR 390; (2022) 405 ALR 470; [2022] NSWCA 162

Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94

Texts Cited:

N/A

Category:

Procedural rulings

Parties:

Taliberry Entertainment Pty Ltd (ACN 625 236 348) (Plaintiff)
Cyber Entertainment Pty Ltd (ACN 160 448 395) (First Defendant)
Harris John Meitanis (Second Defendant)
APE Events Pty Limited (in liquidation) (ACN 098 395 263) (Third Defendant)

Representation:

Counsel:
Mr D Klineberg (Plaintiff)
Mr M Kalyk (First and Second Defendant)
Third Defendant did not appear

Solicitors:
Frankel Lawyers (Plaintiff)
Carmody Lawyers (First and Second Defendants)
Third Defendant did not appear

File Number(s):

2023/109873

Publication restriction:

N/A

Judgment

Introduction

1. These proceedings were commenced by originating process filed on 5 April 2023. The defendants filed an interlocutory process seeking security for costs on 5 May 2023. Orders were subsequently made for the matter to proceed by way of pleadings, and the plaintiff filed its statement of claim on 22 May 2023. On 9 June 2023, the defendants filed an interlocutory process seeking orders summarily dismissing or striking out the statement of claim.

2. Both interlocutory processes were listed for hearing before me on 19 June 2023. For the reasons that follow, the defendants have succeeded in their summary dismissal/strike out application and it is neither necessary nor appropriate to determine their security for costs application.

The parties and the pleading

3. The plaintiff, Taliberry Entertainment Pty Ltd (Taliberry), claims that it was in the business by mid-2018 of organising and promoting African music and dance events using the name “1DanceAfrica” (the Name). Taliberry claims that its four directors “conceived of” the Name to be used in connection with such music and dance events.

4. Taliberry claims that it retained the third defendant, APE Events Pty Limited (APE Events), in or about November 2018 to assist Taliberry in the organisation and promotion of an African music and dance event. Taliberry claims to have made certain payments to APE under the “Retainer Agreement” during the period from November 2018 to July 2019. According to the statement of claim, the communications between Taliberry and APE Events in relation to the Retainer Agreement and the payments were conducted between a director of Taliberry and the second defendant, Mr Meitanis, who was the sole director and shareholder of APE Events. Taliberry pleads that the event that was the subject of the Retainer Agreement took place on 11 October 2019. The statement of claim is silent about whether the event was profitable or at least generated sufficient revenue to cover Taliberry’s costs, including the payments made to APE Events under the Retainer Agreement.

5. Taliberry claims that APE Events was insolvent at the time that Taliberry entered into the Retainer Agreement and made the payments referred to above.

6. Taliberry and APE Events entered into an agreement styled as a “Partnership Agreement” on 23 July 2019.

7. Pursuant to clause 2.1 of the Partnership Agreement, Taliberry agreed to exclusively partner with APE Events to produce “Events”. The term “Events” was defined as meaning live African music and entertainment events globally.

8. Clause 2.2 provided that the Name will only be used for Events.

9. Pursuant to clause 4.1 of the Partnership Agreement, Taliberry and APE Events agreed that “the title to, and Intellectual Property Rights, in the Name shall be owned jointly by A.P.E. and Taliberry”. The term “Intellectual Property Rights” was defined as meaning all intellectual property rights, including business names, trade names and “passing off rights”, whether registrable or unregistrable, and whether registered or unregistered.

10. Pursuant to clause 4.4 of the Partnership Agreement, Taliberry and APE Events agreed to use the Name exclusively for the Events jointly produced by them, and agreed that neither of them would use the name otherwise, or sell, license or deal with the Name, except with the written consent of the other.

11. Clause 4.4 also provided that, if either Taliberry or APE Events “exploits” the Name (defined as including to sell, license, deal with or use the Name), it must share equally all income howsoever derived through the use of the Name.

12. Clause 4.5 provided that clause 4 survives the termination of the Partnership Agreement.

13. Taliberry claims to have made certain payments to APE Events after entering into the Partnership Agreement on 23 July 2019. Taliberry claims that it made those payments for the purpose of 1DanceAfrica events that were promoted and held on 11 and 12 October 2019.

14. Taliberry pleads that no further 1DanceAfrica events have been held, and that APE Events “purported to terminate” the Partnership Agreement on 17 October 2019.

15. Taliberry pleads that, after purporting to terminate the Partnership Agreement, APE Events used the Name in the Intellectual Property Rights otherwise than for jointly produced events, without Taliberry’s written consent. The particulars of that allegation are that the Name and Intellectual Property Rights were “used on” a 1DanceAfrica Facebook page, a 1DanceAfrica website, an APE Events website, and a 1DanceAfrica Instagram account (the Social Media Platforms).

16. Taliberry claims that APE Events was insolvent at the time that it entered into the Partnership Agreement and made the payments referred to above.

17. Taliberry pleads that “the business of APE” was “purportedly sold” to the first defendant, Cyber Entertainment Pty Ltd (Cyber) for $1.00 on or about 10 June 2021, without Taliberry’s knowledge or consent. Taliberry further pleads that it was not requested to, and did not, “give its consent to any transfer of the Name or the Intellectual Property Rights the subject of the Partnership Agreement from APE to Cyber”. Taliberry claims that Mr Meitanis is the sole director and shareholder of Cyber, in addition to being the sole director and shareholder of APE Events.

18. Taliberry pleads that a liquidator was appointed to APE Events on 18 June 2021. APE Events remains in liquidation.

19. Taliberry pleads that the liquidator disclaimed any interest that APE Events may have in the Name and Intellectual Property Rights on 30 May 2022, and that the liquidator wrote to Mr Meitanis on 29 November 2022 claiming that the sale of the Name and the Intellectual Property Rights by APE Events to Cyber was an uncommercial transaction and that “those assets were required to be returned within seven days”. The inconsistency between the liquidator’s 30 May 2022 disclaimer and his subsequent demand for the “return” of the Name and Intellectual Property Rights is puzzling.

20. Taliberry pleads that neither Cyber nor Mr Meitanis have “effected the return of the Name or the Intellectual Property Rights”, notwithstanding the liquidator’s demand made on 29 November 2022. According to the statement of claim, Mr Meitanis has stated to Taliberry that he and Cyber intend to retain and use the Name and Intellectual Property Rights and the Social Media Platforms, unless Taliberry pays a considerable amount of money.

21. The statement of claim describes the alleged “current position” as follows. Control over the Name and Intellectual Property Rights, including Social Media Platforms and the content of those Social Media Platforms, is “with Mr Meitanis and Cyber” following “the purported sale by APE of its business to Cyber”. Taliberry has no ability to control the use of the Name and Intellectual Property Rights or the content of the Social Media Platforms, and is unable to organise and promote African music and dance events using the Name while the Social Media Platforms remain in the control of Mr Meitanis or Cyber.

22. Taliberry pleads three causes of action.

23. The first cause of action is in contract.

24. Taliberry pleads that:

1. Mr Meitanis and APE Events breached the Partnership Agreement by:

1. using the Name and Intellectual Property Rights on the Social Media Platforms after APE Events purported to terminate the Partnership Agreement in October 2019; and

2. selling the business of APE Events to Cyber on or about 10 June 2021 without Taliberry’s knowledge or consent; and

3. failing to obtain Taliberry’s consent to “any transfer of the Name or the Intellectual Property Rights the subject of the Partnership Agreement from APE to Cyber”; and

2. “Mr Meitanis and, or alternatively, APE and, or alternatively, Cyber, have further threatened to breach clauses 2.1, 2.2, 4.1 and 4.4 of the Partnership Agreement” by:

1. Mr Meitanis and APE Events allegedly communicating to Taliberry from about 1 November 2019 that they intended to continue using the Name and Intellectual Property Rights unless Taliberry paid “considerable amounts of money” to Mr Meitanis or to APE;

2. Mr Meitanis sending a message to one of Taliberry’s directors on or about 23 May 2022 seeking $250,000.00 for the Name and Social Media Platforms, failing which “Mr Meitanis will be producing another Event using the Name”; and

3. Mr Meitanis stating to Taliberry on or about 29 November 2022 that “he and Cyber intend to retain and use the Name and Intellectual Property Rights, including the Social Media Platforms, unless Taliberry pays a considerable amount of money”.

25. The relief sought by Taliberry in respect of the alleged breaches of contract, and threatened breaches of contract, is set out in prayers 1 to 3 of the statement of claim:

“1.   A declaration that the purported transfer of the Property by the Third Defendant [APE Events] to the First Defendant [Cyber] was void or, alternatively, of no effect.

2.   An order that the First and Second Defendants [Cyber and Mr Meitanis] deliver to the Plaintiff or, in the alternative, to the Third Defendant [APE Events], within seven days all user names, passwords and any other information necessary to access the Social Media Platforms.

3.   An order that the First and Second Defendants [Cyber and Mr Meitanis] be restrained from:

(a)   accessing or otherwise using the Social Media Platforms;

(b)   advertising or promoting the Events;

(c)   using the Name; and

(d)   associating itself or himself with the Events or the Name.”

26. The term “Property” used in prayer 1 of the claims for relief is defined as meaning, relevantly, the rights that APE Events had in the Name and the Intellectual Property Rights pursuant to the Partnership Agreement, prior to the “purported sale” of APE Events’ business to Cyber.

27. Submissions made on behalf of Taliberry clarified that the claim for relief in prayer 1 is a claim for a declaration that the transfer was void. The words “or, alternatively, of no effect” can be disregarded.

28. The claims for relief in the originating process that was filed prior to the statement of claim were in the same terms.

29. Taliberry’s second and third causes of action are claims for damages pursuant to s 236 of the Australian Consumer Law (ACL)[1] for alleged misleading or deceptive conduct by Mr Meitanis and APE contrary to s 18 of the ACL and/or alleged unconscionable conduct by Mr Meitanis and APE contrary to s 20 of the ACL. These causes of action are pleaded in the following terms in paragraphs 76 to 78 of the statement of claim:

“76.   The conduct between Taliberry and Meitanis and APE pleaded in paragraphs 19 to 25, 29 to 31, 35 to 37 and 41 and 42 above occurred in trade or commerce.

77.   The matters pleaded in paragraphs 26 to 28, 32 to 34 and 38 to 40 above are repeated.

78.   By reason of the matters pleaded in paragraphs 76 and 77 above, Mr Meitanis and or, in the alternative, APE engaged in:

(a) conduct that was misleading and deceptive contrary to section 18 of the Australian Consumer Law; and, or alternatively,

(b) conduct that was unconscionable conduct contrary to section 20 of the Australian Consumer Law.”

1. Competition and Consumer Act 2010 (Cth), Schedule 2.

30. Counsel appearing for Taliberry at the hearing on 19 June 2023 submitted that paragraphs 76 to 78 of the statement of claim should be read as a pleading that the conduct identified in paragraph 77, in the context of the matters pleaded in the paragraphs picked up by paragraph 76, was misleading or deceptive and/or unconscionable. The contextual matters pleaded in the paragraphs referred to in paragraph 76 are simply the essential facts of the dealings between the parties—the entry into the Retainer Agreement and Partnership Agreement, the payments made by Taliberry under each of those agreements, and the Events held on 11 and 12 October 2019.

31. Read in that way, the “conduct” that is alleged to have been misleading or deceptive and/or unconscionable is:

1. the alleged insolvency of APE Events from about 30 June 2018, the allegation that APE Events had purchased its business from another company of which Mr Meitanis was the sole director and shareholder and which went into liquidation soon after selling its business to APE Events (paragraphs 26, 32 and 38 of the statement of claim);

2. the alleged non-disclosure of those matters by Mr Meitanis and APE Events to Taliberry before Taliberry entered into the Retainer Agreement with APE Events or made payments to APE Events under the Retainer Agreement (paragraph 27 of the statement of claim); and

3. the alleged non-disclosure of those matters by Mr Meitanis and APE Events to Taliberry before Taliberry entered into the Partnership Agreement with APE Events or made payments to APE Events under the Partnership Agreement (paragraphs 33 and 39 of the statement of claim).

32. In paragraphs 28, 34, and 40 of the statement of claim, Taliberry pleads that:

1. it would not have entered into the Retainer Agreement in or about November 2018;

2. it would not have made payments to APE Events under the Retainer Agreement (which it claims to have made during the period from November 2018 to July 2019);

3. it would not have entered into the Partnership Agreement on 23 July 2019; and

4. it would not have made payments to APE Events under the Partnership Agreement (which it claims to have made during the period from 23 July 2019 to 11 October 2019),

if Mr Meitanis or APE Events had “advised” Taliberry of the matters referred to at [31] above.

33. Although the statement of claim pleads that Taliberry would not have done those things but for the allegedly misleading or unconscionable non-disclosure, Taliberry does not expressly plead that it has suffered loss. The only relief sought by Taliberry in respect of the alleged misleading or deceptive conduct and alleged unconscionable conduct is damages pursuant to s 236 of the ACL.

Summary dismissal / strike out application

34. The defendants seek an order summarily dismissing the originating process and statement of claim pursuant to r 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) on the basis that no reasonable cause of action is disclosed. Alternatively, the defendants seek an order striking out the originating process in whole or in part pursuant to r 14.28 as disclosing no reasonable cause of action and/or for having a tendency to cause prejudice, embarrassment, or delay in the proceedings.

35. The defendants’ written and oral submissions identified numerous reasons why they contend that the proceedings should be summarily dismissed or the pleadings struck out. The plaintiffs’ written and oral submissions responded to each of the defendants’ contentions and maintained that the pleadings are “straightforward and clear”. I have considered all of the parties’ submissions, but I do not find it necessary to refer to all of them in these reasons for judgment. The pleadings suffer from many deficiencies and it suffices to identify the principal reasons why the plaintiffs’ claim for alleged breach of contract must be summarily dismissed and the remainder of the originating process and statement of claim must be struck out.

The claim in contract

36. Taliberry’s claims for relief for alleged breach of contract are so obviously untenable that they cannot succeed. The allegations that Mr Meitanis breached the Partnership Agreement, and that Mr Meitanis and Cyber threatened to breach the Partnership Agreement, are manifestly groundless. [2] Neither Mr Meitanis nor Cyber are alleged to have been parties to the Partnership Agreement. The statement of claim does not plead any facts, or articulate any cause of action against Cyber and Mr Meitanis, that would arguably render them liable in respect of the pleaded breach by APE Events of a contract to which Mr Meitanis and Cyber were not parties.

    2. General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; (1964) 38 ALJR 253; [1965] ALR 636; [1964] HCA 69 at 112 CLR 129 (Barwick CJ).

37. The allegation that APE Events breached the Partnership Agreement is not untenable. However, Taliberry makes no claim for relief against APE Events in respect of its alleged breaches. The relief claimed in prayer 1 of the statement of claim would operate against Cyber, as the alleged transferee of the “Property”. Even if prayer 1 might arguably be said to operate against APE Events as the transferor, the notion that a transfer by Party A of its interest in property to Party C is void ab initio because Party A has made the transfer in breach of its obligations under a contract with Party B, is unorthodox. Counsel for Taliberry was unable to articulate the substance of the argument that would be made at trial in support of the claim for a declaration in terms of prayer 1, or to refer me to any principle or authority which might be deployed in aid of any such argument.

38. The injunctive relief claimed in prayers 2 and 3 is expressed in terms that would operate only against Mr Meitanis and Cyber, the non-parties to the Partnership Agreement.

The misleading or deceptive conduct claim

39. Taliberry’s pleaded claims for damages for alleged misleading or deceptive conduct are embarrassing because the statement of claim fails to perform the essential function of pleadings, which is to state with sufficient clarity the case that the defendants must meet. [3]

    3. Banque Commerciale SA (En Liquidation) v Akhil Holdings Limited (1990) 169 CLR 279; (1990) 64 ALJR 244; (1990) 92 ALR 53; [1990] HCA 11 at 169 CLR 286 (Mason CJ and Gaudron J); Lucantonio v Benscrape Pty Ltd [2020] NSWSC 579 at [118]-[120] (Ward CJ in Eq) and the authorities there referred to.

39. I reject the defendants’ submission that the statement of claim does not identify the conduct that is alleged to have been misleading or deceptive. As I have noted above, the relevant conduct is the alleged non-disclosure of APE Events’ alleged insolvency and of the alleged fact that APE Events had purchased its business from another company of which Mr Meitanis was the sole director and shareholder which had gone into liquidation soon after selling its business to APE Events. That alleged non-disclosure is said to have been misleading or deceptive in the context of the dealings between the parties in entering into the Retainer Agreement and Partnership Agreement, in Taliberry making and APE Events receiving the pleaded payments under each of those agreement, and in staging the Events on 11 and 12 October 2019.

40. However, the key factual matter that Mr Meitanis and APE Events allegedly failed to disclose to Taliberry is that APE Events was insolvent from 30 June 2018. The statement of claim does not plead the material facts on which Taliberry relies in support of the allegation that APE Events was insolvent from that date. Taliberry merely pleads that a liquidator was appointed to APE Events on 18 June 2021, and that the liquidator concluded that the company was insolvent from on or around 30 June 2018. The statement of claim provides particulars of the liquidator’s alleged conclusion, being sections 7.4 and 7.5 of the liquidator’s statutory report to creditors dated 17 September 2021, in which the liquidator expresses the opinion that APE Events was “likely experiencing solvency issues” from 30 June 2018 because it had insufficient assets available at that date to discharge its outstanding debts, including accruing tax debts. The liquidator stated that APE Events appears to have subsequently attempted to resolve its cash flow shortages through payment arrangements but was never able to discharge its tax debt in full. The liquidator concluded that further investigation was required to finalise the likely date of insolvency. Paragraph 8 of the statement of claim describes the liquidator’s opinion as a conclusion that APE Events was insolvent from about 30 June 2018. As the defendants submitted, that misrepresents the preliminary and inconclusive nature of the liquidator’s opinion.

41. Due to the tentative and preliminary nature of the liquidator’s opinion, neither the statement of claim nor the particulars state with sufficient clarity the case that the defendants must meet in relation to the alleged insolvency of APE Events as at 30 June 2018. That is embarrassing because the allegation of insolvency underpins the whole of Taliberry’s misleading or deceptive conduct case. Taliberry has failed to properly plead the very existence of the state of affairs that it alleges was not disclosed to it. That, without more, is sufficient reason to strike out the pleading of the misleading or deceptive conduct case. The substance of that alleged state of affairs, if and when it is properly pleaded, will inform what is required to properly plead that the alleged non-disclosure was misleading or deceptive. I note that the only circumstances that are presently pleaded as rendering the alleged non-disclosure misleading or deceptive (or, to put it another way, giving rise to a reasonable expectation of disclosure) are the dealings between the parties in entering into the Retainer Agreement and Partnership Agreement, in Taliberry making and APE Events receiving the pleaded payments under each of those agreement, and in staging the Events on 11 and 12 October 2019. [4]

    4. Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357; (2010) 84 ALJR 644; (2010) 270 ALR 204; (2010) 16 ANZ Insurance Cases 61-862; [2010] ATPR 42-325; [2010] HCA 31 at [14]-[23] (French CJ and Kiefel J) and [91]-[97] (Heydon, Crennan, and Bell JJ); see also Traderight (NSW) Pty Ltd v Bank of Queensland Ltd [2015] NSWCA 94 at [185]-[193] (Barrett JA, Bathurst CJ and Beazley P agreeing) and OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 at [177]-[178] (Gleeson JA, Macfarlan and Leeming JJA agreeing).

42. As the defendants submitted, the statement of claim seeks damages against Mr Meitanis for the allegedly misleading non-disclosure that is said to have occurred in the context of dealings between Taliberry and APE Events. The statement of claim does not identify the material facts on which Taliberry relies in attributing the alleged non-disclosure to Mr Meitanis, as opposed to APE Events. The pleading that Mr Meitanis failed to disclose the alleged insolvency of APE Events begs the question why there was a reasonable expectation that any disclosure would be made by Mr Meitanis rather than APE Events. As Taliberry conceded, it is not pleaded that Mr Meitanis was involved in relevant conduct of APE Events. Taliberry has submitted that it intends to amend “in due course” to plead that, to the extent that APE Events alone engaged in the impugned conduct, Mr Meitanis was a person involved in that conduct within the meaning of s 236(1) of the ACL. A bare assertion that Mr Meitanis was “involved” in the conduct of APE Events would be embarrassing because it would not identify which of the limbs of the definition of “involved” in s 2 of the ACL are to be relied upon.

43. The statement of claim pleads that Taliberry would not have entered into the Retainer Agreement or made the payments under that agreement, and would not have entered into the Partnership Agreement or made the payments under that agreement, if the allegedly non-disclosed matters had been disclosed. However, as the defendants submitted, the statement of claim does not identify the loss that Taliberry claims to have suffered by entering into those agreements and making those payments. I reject Taliberry’s submissions that it is sufficient for it to plead that it would not have done those things, and that the identification and quantification of the loss is a matter for trial. Contrary to Taliberry’s submissions, it is not self-evident that those things resulted in any loss. That would depend, amongst other things, on whether Taliberry earned any profits from the Events that were conducted under the Retainer Agreement and Partnership Agreement and funded by the payments that Taliberry made under those agreements. The defendants are entitled to know the nature and scale (if not the precise quantum) of the loss that Taliberry claims to have suffered as a result of the alleged misleading or deceptive conduct.

44. The identification of any loss will inform what is required to be pleaded in relation to causation. There is no rule of law that requires a plaintiff in every case to plead the material facts constituting each and every variation of the counterfactual scenarios that might be relied on to establish causation. However, a defendant is “entitled to a direct and unambiguous identification of the material facts relied on to establish the causal link between the conduct which plaintiffs impugn and the loss they allegedly suffered”, except in cases where the causal link between the impugned conduct and the alleged loss is obvious. [5] That entitlement is an incident of the essential function of pleadings to which I have referred above.

    5. DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts; HSBC Bank Ltd v Abboud; Potts v National Australia Bank Ltd (2022) 371 FLR 349; [2022] NSWCA 165 at [312]-[313] (Leeming and Kirk JJA and Basten AJA), referring to Berry v CCL Secure Pty Ltd (2020) 271 CLR 151; (2020) 94 ALJR 715; (2020) 381 ALR 427; [2020] HCA 27 at [72] (Gageler and Edelman JJ).

The unconscionable conduct claim

46. Taliberry’s pleaded claim for damages for alleged unconscionable conduct in contravention of the ACL relies on the same conduct that is the subject of the misleading or deceptive conduct claim. The pleading of the unconscionable conduct claim is embarrassing for the same reasons that I have explained above in relation to the misleading or deceptive conduct claim, and for the further reason that it fails to articulate any special disadvantage that Taliberry claims to have been labouring under, whether it is alleged that APE Events and/or Mr Meitanis had knowledge of any such disadvantage, and any conduct of APE Events and/or Mr Meitanis on which Taliberry relies as amounting to taking unconscientious advantage of its special disadvantage. [6]

    6. See Nitopi v Nitopi (2022) 109 NSWLR 390; (2022) 405 ALR 470; [2022] NSWCA 162 at [74]-[80], [95]-[105] (Ward P, Bell CJ and White JA agreeing).

Conclusion in relation to summary dismissal and strike out applications

47. Taliberry’s claims for relief in prayers 1 to 3 of the statement of claim for alleged breaches of contract must be summarily dismissed for the reasons explained above.

48. Neither the misleading or deceptive conduct case nor the unconscionable conduct case can be permitted to go forward with the fundamental pleading deficiencies identified above. [7] However, I do not accept the defendants’ submission that the deficiencies are such that the Court can conclude that no reasonable cause of action exists. Taliberry should have an opportunity to re-plead those causes of action on the proviso that it is not to file any amended statement of claim seeking damages or other relief against APE Events for alleged misleading or deceptive conduct or alleged unconscionable conduct without first obtaining leave under s 500(2) of the Corporations Act 2001 (Cth).

    7. Lucantonio v Benscrape Pty Ltd, supra, at [122] and the authorities there referred to.

Security for costs application

49. The defendants accepted at the outset of the hearing that their security for costs application need not be determined if they succeeded in their summary dismissal or strike out application. The parties’ submissions at the hearing on 19 June 2023 were directed principally to the pleading questions and very little time was spent on the security for costs application.

50. The appropriate course is to stand over the defendants’ interlocutory process for security for costs for directions on a future date that falls after the time for filing and service of any amended statement of claim. At that time, the parties will need to give further consideration to whether and in what quantum Taliberry should provide security for the defendants’ costs, having regard to the substance of the amended claims.

Conclusion and orders

51. For the foregoing reasons, the orders and directions of the Court are:

1. In relation to the interlocutory process filed by the defendants on 9 June 2023:

1. Order pursuant to r 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) that the plaintiff’s claims for relief in prayers 1 to 3 of the originating process and statement of claim for alleged breach of contract, and the allegations of breach of contract pleaded in the statement of claim against the first and second defendants, are summarily dismissed.

2. Order pursuant to r 14.28(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) that the statement of claim is otherwise struck out.

3. Grant leave to the plaintiff to re-plead its causes of action for alleged misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law and for alleged unconscionable conduct in contravention of s 20 of the Australian Consumer Law, on the condition that the plaintiff apply for and obtain the leave of the Court pursuant to s 500(2) of the Corporations Act 2001 (Cth) to proceed with any such claims against the third defendant in liquidation prior to filing and serving any amended statement of claim.

2. Order that any application by the plaintiff for leave pursuant to s 500(2) of the Corporations Act 2001 (Cth) be made by interlocutory process filed and served by 4:00pm on 24 July 2023, together with a supporting affidavit annexing a copy of the proposed amended statement of claim and written submissions in support of the application. Any such interlocutory process is to be returnable before the Corporations List Judge at 9:15am on 31 July 2023 for hearing if then appropriate.

3. Order that the plaintiff file and serve any amended statement of claim by 4:00pm on 7 August 2023, or within seven days after the determination of any application for leave made in accordance with order 2 above, whichever is later.

4. List the proceedings, including the interlocutory process filed by the defendants on 5 May 2023, for directions before the Corporations List Judge at 9:45am on 21 August 2023.

5. Grant liberty to apply on 3 days’ notice specifying the relief sought.

6. Direct the parties to notify one another in writing, with a copy to my Associate, by 4:00pm on 27 June 2023, of the costs order which that party seeks and direct that such notice be accompanied by service of any affidavit evidence on which that party intends to rely in support of the application for that costs order.

7. List the matter at 9:15am on 29 June 2023 for submissions in relation to costs.
    

52. My preliminary view is that the costs of the summary dismissal and strike out application (including the whole of the costs of the parties’ appearances at the hearing on 19 June 2023) should follow the event, with the result that Taliberry would be ordered to pay the costs of Cyber and Mr Meitanis costs on the ordinary basis as agreed or assessed. No costs order is required in relation to APE Events, which is in liquidation and did not appear at the hearing, in circumstances where Taliberry has not yet sought leave under s 500(2) of the Corporations Act to commence these proceedings against it. My preliminary view is subject to hearing from the parties in the event that either of them wish to contend for a different costs order.

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Endnotes

Decision last updated: 23 June 2023