John Kallinicos Accountants Pty Ltd & Anor v Dundrenan Pty Ltd & Ors
[2009] QDC 141
•29 May 2009
DISTRICT COURT OF QUEENSLAND
CITATION:
John Kallinicos Accountants Pty Ltd & Anor v Dundrenan Pty Ltd & Ors [2009] QDC 141
PARTIES:
JOHN KALLINICOS ACCOUNTANTS PTY LTD
(First Plaintiff)
AND
DUDLEY GROUP HOLDINGS PTY LTD
(Second Plaintiff)
AND
DUNDRENAN PTY LTD
(First Defendant)
AND
NOEL DAVID ROACH
(Second Defendant)
AND
NOLA LILLIAN ROACH
(Third Defendant)
AND
MORRIS ARTHUR LEE
(Fourth Defendant)
AND
ROSLYN SEYMOUR LEE
(Fifth Defendant)
AND
JOHN GEORGE KALLINICOS
(Sixth Defendant by counterclaim)
AND
DUNDRENAN DEVELOPMENTS PTY LTD
(Seventh Defendant)
FILE NO/S:
BD3783/06
DIVISION:
Civil
PROCEEDING:
Application
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
29 May 2009
DELIVERED AT:
Brisbane
HEARING DATE:
30 January 2009
JUDGE:
Irwin DCJ
ORDER:
1. The first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, as requested in the first to fifth and seventh defendants' request for further and better particulars dated 17 January 2008, being requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51.
2. In relation to requests Nos 22(g), 14(a), 18(a), 19, 27(a), 28(a), and 50, the first and second plaintiffs and the sixth defendant by counterclaim produce the documents requested to the solicitor for the first to fifth and seventh defendants and permit copies to be taken by that solicitor.
3. Otherwise the application by the first to fifth and seventh defendants that the first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, is dismissed.
4. The application by the first to fifth and seventh defendants that the second further amended statement of claim filed on 29 April 2008, be struck out under r 171 of the UCPR is dismissed.
5. The first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 as requested in the first and second plaintiffs’ and the sixth defendant by counterclaim request for further and better particulars dated 8 July 2008, being requests Nos 7, 9, 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), 15(g), 16, 17, 18, 21, 22(j) and (k), 24(a)-(e), 25(j) and (k), 27(a)-(e), 28(j) and (k), 30(a)-(e), 31(j) and (k), 33(a)-(e), 34(j) and (k), 36(a)-(e), 38(a)-(e), 39(b)-(f), 41, 42, 43, and 44.
6. In relation to requests Nos 15(h)(iv), 22(h), and 24(e)(ix), the first to fifth and seventh defendants produce the documents requested to the solicitor for the first and second plaintiffs and the sixth defendant by counterclaim and permit copies to be taken by that solicitor.
7. Otherwise, the application by the first and second plaintiffs and the sixth defendant by counterclaim that the first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 and to provide copies of documents pursuant to r 222 of the UCPR be dismissed.
8. The application by the first and second plaintiffs and the sixth defendant by counterclaim that the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out in its entirety pursuant to r 171 of the UCPR, and judgment be entered in favour of the first and second plaintiffs and sixth defendant by counterclaim in respect of the claim is dismissed.
9. The application by the first and second plaintiffs and the sixth defendant by counterclaim that specified paragraphs of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out and the first to fifth and seventh defendants file and serve an amended defence and counterclaim is dismissed.
10. The legal representatives for the first and second plaintiffs and the sixth defendant by counterclaim, and the first to fifth and seventh defendants make contact with my associate within seven days of the date of this order to arrange that this mater be listed for argument on:
(i) the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these orders; and
(ii) costs.
CATCHWORDS:
PROCEDURE – Particulars – requests for further and better particulars – applications to strike out pleadings
PROCEDURE – Particulars – request for further and better particulars – request for production of documents pursuant to Uniform Civil Procedure Rules 1999 r 222 – manner of compliance – whether sufficient to make the documents available for inspection at the office of the party’s solicitor and for copies to be provided upon the other party undertaking to meet reasonable copying costs – whether the party must produce the document to the other party’s solicitor and permit copies to be taken.
PROCEDURE – Mediation – whether to exercise discretion to refer dispute to mediation
Uniform Civil Procedure Rules 1999 rr 5, 150, 157, 161, 171, 222, 320, and 367
Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214
Belela Pty Ltd v. Menzies Excavation Pty Ltd [2005] 2 Qd R 230
Bloeman v Atkinson (1977) Qd R 291
Kev Leamon Earthmovers Pty Ltd v Hammond Village Pty Ltd (1998) 19 Qld Lawyer Reps 10-11
The King v Associated Northern Collieries (1910) 11 CLR 738
Sim v Wran (1984) 1 NSWLR 317
Trade Practices Commission v Total Australia (1975) 24 FLR 413
COUNSEL:
P. W. Hackett for the plaintiffs and sixth defendant by counterclaim
G. J. Handran for the first, second, third, fourth, fifth, and seventh defendants
SOLICITORS:
Londy Lawyers for the plaintiffs and sixth defendant by counterclaim
HWL Ebsworth for the first, second, third, fourth, fifth, and seventh defendants
Introduction
The plaintiffs are accountants and registered tax agents. They sue for unpaid fees asserted to be due and owing for services provided to the defendants.[1]
[1]A reference to the “defendants” in this judgment does not include a reference to the sixth defendant by counterclaim who is described as the “sixth defendant” throughout.
The claim is based on a number of alleged tax retainers with the defendants, including a partnership retainer. The bulk of the claim is for $55,834.35, which is alleged to arise from a tax audit retainer entered into as a result of an Australian Taxation Office (ATO) audit concerning the defendants.
The claim is for damages for breach of contract. Alternatively, it is based on a quantum meruit basis. There is no material difference in the quantum of the claims.
The defendants deny the claim and counterclaim for damages for breach of contract or negligence based on alleged Audit Errors which are asserted to have been identified in the ATO audit. In the alternative, it seeks compensation under the Trade Practices Act 1974 or payment under the Income Tax Assessment Act 1936.
Chronology of proceedings
The plaintiffs commenced proceedings against the first to fifth defendants on 22 December 2006. After amendment of the statement of claim the defendants filed an amended defence and counterclaim on 19 June 2007. The sixth defendant was added by the counterclaim.
On 16 November 2007 the plaintiffs filed a further amended statement of claim adding the seventh defendant. The plaintiffs also filed a reply and answer on this date. This court gave leave to add the seventh defendant on 21 April 2008.
On 17 January 2008 the defendants requested further and better particulars of the further amended statement of claim and the reply and answer.
On 29 April 2008 the plaintiffs filed a second further amended statement of claim and an amended claim.
On 15 May 2008 the plaintiffs filed further and better particulars of the further amended statement of claim and the reply and answer.
On 28 May 2008 the defendants filed the defence to the second further amended statement of claim and counterclaim.
On 9 July 2008 the plaintiffs requested further and better particulars of the defence to the second further amended statement of claim and counterclaim. These were delivered on 8 September 2008.
Applications
Nature of the plaintiffs’ application[2]
[2]The application is also made on behalf of the sixth defendant by counterclaim. For convenience, reference is made to the plaintiffs’ application as encompassing the sixth defendant.
The nature of the plaintiffs’ application which was filed on 5 November 2008 is summarised in their 13 November 2008 outline as follows:
“1.The Defence to the Second Further Amended Statement of Claim and Counterclaim (the Defence and Counterclaim) is devoid of relevant particulars to such an extent that the following relief is sought:
(a)striking out the Defence and Counterclaim in its entirety pursuant to rule 171 UCPR. If that is done, the plaintiffs also seek judgment, however, Your Honour may think it more appropriate for them to have a further opportunity to plead properly;
(b)in the alternative to (a):-
(i)striking out specific paragraphs of the Defence and Counterclaim with leave to re‑plead, or
(ii)the provision of Further and Better Particulars of those specific paragraphs of the Defence and Counterclaim.
2. The plaintiffs also seek the provision of copies of documents referred to in the Defence and Counterclaim pursuant to rule 222 UCPR.”
Nature of the defendants’ application
On 13 November 2008 the defendants filed a cross application for further and better particulars of the second further amended statement of claim, or as it is put in their outline, “preferably a third further statement of claim”.
This application may be summarised as being for:
· further and better particulars of the second further amended statement of claim (the statement of claim) pursuant to r 161 of the Uniform Civil Procedure Rules 1999 (UCPR).
· further and alternatively that the statement of claim be stuck out under r 171 of the UCPR.
· further and alternatively that all necessary and appropriate directions be made to advance the matter under r 367 of the UCPR.
The defendants also submit that consideration should be given to a court appointed expert, such as a forensic accountant, to consider the suitability of the accounting services provided by the plaintiff. Further, given the extremely small amount in dispute and the complexity of the matter, it is submitted that the action is apt for court referred mediation (see r 320(b) of the UCPR).
The application was also for it to be heard together with the plaintiffs’ application. On 13 November 2008 an order was made to this effect. As a result both applications were heard by me.
Background
The plaintiff’s case[3]
[3]The summary of the plaintiffs’ case is based on the statement of claim.
The plaintiff companies have carried on an accounting business under the name Kallinicos Bray Accountants since 12 July 2005. The sixth defendant by counterclaim (the sixth defendant) is a director of the first plaintiff.
At a meeting on 26 June 2001 the second to fourth defendants[4] on behalf of themselves and the first defendant retained the accountancy firm then operated by the sixth defendant to:
[4]At para 4(e)(i) of the statement of claim it is pleaded that the fifth defendant was also present at this meeting and together with the first to fourth defendants informed the sixth defendant that the third defendant had authority to provide him with instructions on behalf of the defendants. At this stage of the pleading the reference to “defendants” is to the first to fifth defendants, see para 1(c).
(a) prepare and submit to the ATO business activity statements (BAS) and tax returns based upon spreadsheets and summaries prepared by the third defendant or such other information provided by or on behalf of the defendants[5] as opposed to source documents.
(b) act as their postal address for all ATO correspondence and to deal with and respond to any such correspondence.
This is referred to as the “tax agent retainer”.
[5]As noted by virtue of para 1(c) of the pleading, the reference to “defendants” at this stage of the pleading is to the first to fifth defendants.
As stated in footnote 2, the first to fifth defendants were present at this meeting, and informed the sixth defendant that the third defendant had authority to provide him with instructions on behalf of the defendants.
Between the date of that meeting and 30 June 2002 the sixth defendant on behalf of Leddy Kallinicos Pty Ltd regularly received instructions from the third defendant on behalf of the defendants.
Between 30 June 2002 and 11 July 2005, the sixth defendant on behalf of the first plaintiff regularly received instructions on behalf of the defendants.
Between 12 July 2005 and 11 July 2006, the sixth defendant on behalf of the plaintiffs regularly received instructions on behalf of the defendants.
By letter dated 11 July 2006, the third defendant purported to terminate the plaintiffs’ retainer.
The second to fifth defendants were at all material times in partnership with each other and directors of the first defendant. As members of the partnership, they were parties to a written joint venture agreement with the first defendant made on or about 13 June 2001.[6]
[6]To place this allegation in context in the defence and counterclaim the defendants admit this to the extent that:
(i)the second and third defendants entered into an oral partnership with the fourth and fifth defendants for the purposes of entering into a further agreement to develop land owned by them at Kangaroo Point, Queensland; and
(ii)the partnership entered into a written development agreement with the first defendant as developer for the subsequent sale of the property.
At all material times the third defendant was married to the second defendant and trustee of the Roach Family Trust; she was the sister of the fourth defendant and the sister-in-law of the fifth defendant; and as indicated she represented the defendants in dealings with the plaintiffs.
At all material times, the fourth defendant was married to the fifth defendant and trustee of the Lee Family Trust; and represented himself and the fifth defendant in dealings with the plaintiffs. In relation to this, it is alleged that between 26 June 2001 and 11 July 2006, the sixth defendant, or staff members assisting him, regularly received instructions and information from the fourth defendant for the preparation of his and the fifth defendant’s income tax returns.
It is alleged that the seventh defendant had adopted the tax agent retainer on and from its incorporation on 24 June 2003.
With the exception of the tax audit retainer the claim is based on a number of alleged retainers in which the defendants and the partnership allegedly engaged the plaintiffs to prepare their financial statements and income tax returns for the financial year ended 30 June 2005.
They are the Dundrenan retainer, the Partnership retainer, the Noel Roach retainer, the Nola Roach retainer, the Morris Lee retainer, the Roslyn Lee retainer, and the Dundrenan Developments retainer.
It is alleged that the Dundrenan, the Partnership, and the Dundrenan Developments retainers were oral and comprised of various discussions between the third defendant on behalf of the first defendant, the Partnership and the seventh defendant respectively and the sixth defendant on behalf of the plaintiff.
It is alleged that the Noel Roach and Nola Roach retainers were:
(a) oral and comprised of various discussions between the third defendant on behalf of the second defendant and on her own behalf and the sixth defendant on behalf of the plaintiffs; or
(b) evinced by the subsequent conduct of the second and third defendants in signing an ELS Declaration Form instructing the plaintiffs to lodge their 2005 tax returns and that they were true and correct.
It is alleged that the Morris Lee and Roslyn Lee retainers were:
(a) oral and comprised of various discussions between the fourth defendant on behalf of the fifth defendant and on his own behalf and the sixth defendant on behalf of the plaintiffs; or
(b) evinced by the subsequent conduct of the fourth and fifth defendants in signing an ELS Declaration Form instructing the plaintiffs to lodge their 2005 tax returns and that they were true and correct.
It is alleged that it was an implied term of each retainer that the relevant defendant or defendants would pay for the plaintiffs’ services on an hourly basis at the rates normally charged by them.
It is alleged that the plaintiffs provided professional services pursuant to the retainer. The plaintiffs purport to provide full particulars of these services by reference to specified tax invoices and copies of their billing worksheets which they have previously provided to the defendants’ solicitors. They also rely on these billing worksheets to particularise how the fees were calculated.
The plaintiffs allege that in breach of the retainers and despite demand, the defendants, have failed to pay the fees to which they are entitled.
The consequential alternative claims for breach of contract and on a quantum meruit basis are as follows:
(a) against the first defendant (Dundrenan retainer) - $3,069.77
(b) against the second to fifth defendants (Partnership retainer) - $2,420.00
(c) against the second defendant (Noel Roach retainer) - $825.00
(d) against the third defendant (Nola Roach retainer) - $1,650.00
(e) against the fourth defendant (Morris Lee retainer) - $2,706.00
(f) against the fifth defendant (Roslyn Lee retainer) - $605.00
(g) against the seventh defendant (Dundrenan Developments retainer) - $2,468.86.
However, as indicated, the bulk of the claim is for $55,834.35 on the basis of the alleged tax audit retainer. It is said this arose on or about 22 August 2005 through the first to fifth defendants and the seventh defendant engaging the plaintiffs to provide professional services to the defendants in respect of an ATO audit of the financial affairs of the first defendant and the partnership.
It is alleged that the tax audit retainer was:
(a) oral and comprised of various discussions between the third defendant on behalf of the defendants and the sixth defendant on behalf of the plaintiffs; or
(b) alternatively evinced by subsequent conduct in receiving services of the plaintiffs in respect of the tax audit.
It is alleged that it was verbally agreed during the discussions referred to in paragraph [38(a)] that the defendants would be jointly liable for payment of the plaintiffs’ fees for services rendered in connection with the tax audit retainer; and it was an implied term of the retainer that the defendants would pay for the plaintiffs’ services on an hourly basis at the rates normally charged by the plaintiffs.
It is alleged that the plaintiffs provided professional services pursuant to the retainer. The plaintiffs again purport to provide full particulars of these services by reference to a specified tax invoices and copies of their billing worksheets which have previously been provided to the defendants’ solicitors. They also rely on these billing worksheets to particularise how the fees were calculated.
The plaintiffs allege that in breach of the tax audit retainer and despite the demand, the defendants have failed to pay the fees to which they are entitled.
Therefore the plaintiffs’ claim is for unpaid work alleged to have been done concerning the tax audit retainer and the 2005 tax returns. All previous work has been paid for.
Defendants’ case
As indicated, the defendants deny the claim and counterclaim on the basis of alleged Audit Errors which are asserted to have been identified in the ATO audit.
The defendants say that it was the first defendant, which orally agreed to retain the sixth defendant and subsequently the first plaintiff after the defendants (other than the seventh defendant), were introduced to him in late 2000. It is alleged that the retainer required the provision of the following services:
(i) prepare, maintain, manage, and give advice in relation to the accounts of both the first defendant and the partnership.
(ii) provide accounting, financial, and taxation advice to both the first defendant and the partnership in relation to the development and subsequent sale of the property identified in footnote 5.
(iii) prepare tax returns for the first defendant, the partnership, and the individual partners.
It denies the existence of the tax agent retainer alleged by the plaintiffs. The defendants deny that the third defendant represented the defendants in dealings with the plaintiffs. Further, in paragraph 4 of the defence and counterclaim the defendants say that:
(i) the meeting alleged to be relied upon by the plaintiffs as the basis of the allegation that the third defendant represented the defendants is alleged to have occurred on 26 June 2001.
(ii) as at that date, the plaintiffs were not incorporated and therefore were not legal entities.
(iii) it is pleaded by the plaintiffs that they did not commence carrying on business until 12 July 2005.
(iv) therefore, any authority that may have been given by the defendants at the above meeting was not an authority to the plaintiffs, or an authority which could be relied on by them, to take instructions from the third defendant on behalf of the defendants.
Although the defendants admit that the sixth defendant, the first defendant, or the plaintiffs prepared tax returns for the financial year ending 30 June 2005, they say that the only engagement was for services to be provided pursuant to, or on the terms of, the retainer set out in paragraph [44].
Therefore, it denies that the Dundrenan, Partnership, Noel Roach, Nola Roach, Morris Lee, Roslyn Lee, and Dundrenan Developments retainers were entered into. Consequently, it also denies that the plaintiffs provided professional services to the defendants pursuant to those retainers and that any fees were payable to the plaintiffs.
Further, for this reason it denies that it was in breach of any agreement with the plaintiffs.
The defendants also deny requesting the plaintiffs to provide services as alleged in the claim on the quantum meruit basis.
With reference to the alleged tax audit retainer, although the defendants admit that on or about 22 August 2005 the third defendant attended a meeting with ATO officers and the sixth defendant for purposes relating to a tax office audit, they deny that any discussions between them comprised an agreement to provide professional services to the defendants.
They say that the sixth defendant was present as the tax agent who prepared and lodged the tax returns and business activity statements, and had given advice in relation to other matters the subject of the audit.
Therefore they deny that the alleged tax audit retainer was entered into.
In denying that the services alleged were performed pursuant to this alleged retainer, and that any fees are payable to the plaintiffs, the defendants also say that some of the services particularised refer to dates prior to the alleged retainer.
The defendants admit that the sixth defendant and the first plaintiff were involved in the audit as the tax agent responsible for the matters the subject of the audit but do not admit that the professional services alleged to have been provided were in fact provided for reasons, including that some of the descriptions of services contained on the invoice relied on by the plaintiffs are ambiguous such that the defendants cannot discern what is alleged to have been done or for whom.
In paragraph 6E of the defence and counterclaim the defendants say further that:
“… the involvement of Kallinicos[7] and JKA[8] and the Plaintiffs in the tax audit was almost entirely in relation to the services previously provided to the Defendants by Kallinicos, JKA, or the Plaintiffs which the ATO determined were in error, being:
(a)the under-reporting of assessable income in the financial year ending 30 June 2003 by $196,505.00;
(b)the Business Activity Statement (BAS) for the quarter ending 31 December 2002 over-reported GST payable by an amount of $6,536.00;
(c)the BAS for the quarter ending 30 September 2003 under-reported GST payable by $7,843.00 and input credits by $313.00;
(d)the amended BAS for the quarter ending 30 September 2003, which JKA prepared, was not lodged;
(e)the BAS for the quarter ending 31 December 2005 under-reported GST payable by $6,730.00 (collectively the “Audit Errors”).”
[7]The sixth defendant.
[8]The first plaintiff.
It is then asserted in paragraph 6F:
“The Audit Errors:
(a)were made by Kallinicos and/or JKA in providing the services to the Defendants in return for payment;
(b)ought not have been made by a reasonably competent and experienced accountant;
(c)were, in the premises, made negligently by Kallinicos and/or JKA and/or the Plaintiffs.”
Therefore, the defendants say that, if notwithstanding their contentions it is found that the plaintiffs performed services pursuant to the tax audit retainer and they are liable for the related fees, these fees were incurred because of the negligence of the first plaintiff and/or the sixth defendant in committing the Audit Errors.
They say the defendants are entitled to set off the full amount of the fees as damages resulting from the negligence of the sixth defendant and/or the first plaintiff; and alternatively, are not liable to remunerate the plaintiffs for services performed negligently or for services performed to remedy the plaintiffs’ negligence.
The Counterclaim against the plaintiffs and the sixth defendant is based on the Audit Errors, alleged breaches of the retainer referred to in paragraph [44], and negligence which is alleged to have caused the defendants loss and damage as follows:
(a) the first defendant – ATO penalties of $22,920.96 and general interest charges;
(b) the second defendant – ATO penalties of $7,539.10 and general interest charges of $8,536.00;
(c) the third defendant – ATO penalties of $7,703.95 and general interest charges of $8,730.10;
(d) the fourth defendant – ATO penalties of $3,897.50 and general interest charges of $4,408.50;
(e) the fifth defendant – ATO penalties of $4,232.50 and general interest charges of $4,786.30;
(f) the seventh defendant – general interest charges of $651.34;
(g) in relation to the first to fifth and seventh defendants – legal fees of $18,174.52.
In the case of (a) to (f), the loss and damage is also said to include fees paid, to be assessed.
The claims for these amounts are on the basis of:
(a) damages for breach of contract or negligence; or
(b) compensation pursuant to s 82 of the Trade Practices Act 1974; or
(c) payment pursuant to s 251M of the Income Tax Assessment Act 1936.
In summary, the defendants oppose the claim in relation to the tax audit on a number of grounds. First, the alleged retainer was not entered into, as the sixth defendant merely participated as the tax agent who prepared the matters under consideration. Second, the services were (in part) incurred prior to the relevant retainer (i.e. before 22 August 2005). And, finally, that the services were substantially incurred due to the negligence of the plaintiffs in failing to properly conduct the accounting in the first place. If a retainer is found to exist and services were performed pursuant to it, the defendants plead as set out on the basis of the Audit Errors.[9]
[9]Outline of Submissions on behalf of the Defendants (30 January 2009), paras 6 and 7.
The competing contentions
The competing contentions clearly emerge from this analysis of the plaintiffs’ and defendants’ cases.
As stated, the plaintiffs sue for fees asserted to be due and owing for services provided to the defendants based on a number of alleged tax agent retainers and a tax audit retainer. In respect of the tax agent retainer, the plaintiffs’ case is that they just prepared the BAS and tax returns off the source documents provided to it by the defendants.[10]
[10]Transcript, 1-82 (submission by Mr Handran for the defendants).
The defendants deny the existence of the retainers alleged. They assert that the only retainer was that referred to in paragraph [44], and that this retainer required “something more” than simple reliance on source documents.[11] Further, they counterclaim and seek a set off based on alleged Audit Errors.
[11]Ibid.
It is against this background that the cross‑applications arise for resolution.
Legal issues
Object of particulars
As each party seeks further and better particulars of the opposing party’s pleading, regard must be had to r 157(1) of the UCPR which provides:
“A party must include in a pleading particulars necessary to-
(a) define the issues for, and prevent surprise at, the trial; and
(b) enable the opposite party to plead; and
(c) support a matter specifically pleaded under rule 150.”(emphasis added)
Rule 150(1)(a), (j), and (l) requires breach of contract, misrepresentation, and negligence to be specifically pleaded; and r 150(2) requires any fact from which any of these matters is claimed to be an inference to be specifically pleaded.
Consistently with this, 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. They also prevent the injustice that may occur when a party is taken by surprise.[12] However, the other party is not entitled to be told the evidence that will be called to prove the case.[13] In Sims v Wran (1984) 1 NSWLR 317, Hunt J said at 321 with reference to particulars generally:
“It is not a question of whether one party has adequate knowledge of the actual facts; it is a question of whether he has adequate knowledge of what the other party alleges are the facts, for that is the case which he must meet.”
[12]Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 per Gibbs J at 219.
[13]Trade Practices Commission v Total Australia Ltd (1975) 24 FLR 413 at 417; see also The King v Associated Northern Collieries (1910) 11 CLR 738 at 740-741.
Striking out pleadings
Each party has submitted that consideration be given to striking out the opposite party’s pleading or part of the pleading pursuant to r 171 of the UCPR. This provides:
“(1) This rule applies if a pleading or part of a pleading—
(a)discloses no reasonable cause of action or defence; or
(b)has a tendency to prejudice or delay the fair trial of the proceeding; or
(c)is unnecessary or scandalous; or
(d)is frivolous or vexatious; or
(e)is otherwise an abuse of the process of the court.
(2)the court, at any stage of the proceeding, may strike out all or part of the pleading …” (emphasis added)
In Kev Leamon Earthmovers Pty Ltd v Hammond Village Pty Ltd (1998) 19 Qld Lawyer Reps 10-11, McGill DCJ said, in relation to the principles applicable to strike out a pleading:
“The party opposite is entitled to a proper pleading as an incident of the requirement of procedural fairness: Banque Commerciale SA (In Liq.) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286. A claim or defence which is bad in point of pleading should be struck out, but on the basis that the party delivering it should be given leave to replead. As to the significance of striking out a pleading with leave to replead on the ground that it was defective in point of pleading, see Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69 at 74 per Barwick CJ; 97-98 per Jacobs J.”
Referral to mediation
Because Mr Handran for the defendants has submitted that the action is apt for court referred mediation, I give consideration to r 320 of the UCPR which provides:
“The court may also refer a dispute in a proceeding for mediation or case appraisal—
(a)on application by a party; or
(b)if the proceeding is otherwise before the court.”
Directions
The defendants’ application seeks in the alternative that all necessary and appropriate directions be made to advance the matter under r 367 of the UCPR which provides:
“(1)The court may make any further order or direction about the conduct of a proceeding it considers appropriate, even though the order or direction may be inconsistent with another provision of these rules.
(2)In deciding whether to make an order or direction, the interests or justice are paramount.”
In addition under r 161(2) of the UCPR the court, on an application for further and better particulars of the opposite party’s pleading, may make the consequential orders and give directions for the conduct of the proceeding it considers appropriate.
Defendants’ request for further and better particulars
Mr Handran submitted in his Outline of Submissions (30 January 2009) that the orders sought by the defendants should be made because, inter alia:
(a) the second further amended statement of claim is pleaded in insufficient detail to enable the defendants to properly plead to it and provide the particulars;
(b) the need for particulars of the defence and counterclaim is substantially in consequence of the paucity of the second further statement of claim.
In these circumstances it is convenient to first consider the defendants’ request for further and better particulars.
With the exception of requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51, I consider that the plaintiffs’ case is pleaded as to include the particulars necessary to comply with r 157(1) of the UCPR and to enable the defendants to know the nature of the case that they have to meet.
Other than request No. 22(g) and (h) the requests in respect of which I consider that further and better particulars are required relate to the plaintiffs’ alternative ground of claim in relation to the alleged tax audit retainer and the alleged tax retainers with the defendants, including the partnership.
For example, with reference to the alleged tax audit retainer, the plaintiffs plead in paragraph 9B of the Statement of Claim:
“Further and in the alternative, the fees are the Plaintiffs’ reasonable fees to provide the services requested by the Defendants and the Plaintiffs are entitled to recover the sum of $55,834.34 on a quantum meruit basis.”
The Defendants deny this allegation on the basis that they did not make such a request and are not liable for the fees claimed. They say that they are otherwise unable to plead to the allegations until proper particulars are provided.
By request No. 30 they seek full particulars of the allegation that the fees claimed are reasonable fees to provide the service including all the facts, matters, and circumstances relied upon to allege that:
“(a) state the amount of the fees are reasonable;
(b)state the items of work for which fees have been charged were reasonably required to provide the services alleged to have been requested.”
The plaintiffs in reply refer to the particulars to paragraph 8A in support of the allegation. These are as follows:
“Full particulars of the manner in which the fees are calculated are contained in the Plaintiffs’ Billing Worksheets copies of which have been provided to the Defendants’ solicitors, Home Wilkinson Lowry under cover of Harding Richards Lawyers letter dated 8 February 2007.”
Mr Hackett submits that the particulars requested have been provided. It is alleged that these are the plaintiffs’ reasonable fees because they are “calculated on an hourly basis at the rates normally charged by the Plaintiffs” and that they are charges for the tax audit services by plaintiffs which are itemised in the billing worksheets referred to in the particulars to paragraph 8A.
Paragraphs 12B (Dundrenan retainer), 15B (partnership retainer), 18B (Noel Roach retainer), 21B (Nola Roach retainer), 24B (Morris Lee retainer), 27B (Roslyn Lee retainer), and 35 (Dundrenan Developments retainer) are in similar terms to paragraph 9B, the only relevant difference being to the quantum claim. The relevant defendant or defendants deny this allegation on the same basis and seek particulars in the same terms by requests Nos 33, 36, 39, 42, 45, 48, and 51.
The plaintiffs respond to those requests by reference to the particulars of paragraphs 11A, 14A, 17A, 20A, 23A, 26A, and 31 of the statement of claim which are in similar terms to paragraph 8A, the only relevant difference again being quantum. In each case the paragraphs to which these particulars relate to quantum of fees alleged to be payable by the defendants for the services provided by the plaintiffs pursuant to the relevant retainer. Mr Hackett’s submission is the same in each case. He said that “We rely upon the document as being a bill for all of the services we’re charging for.”[14] (emphasis added)
[14]Transcript, p 1-20.
Mr Handran contends that the particulars of the services actually provided by the plaintiffs are impossible to divine from the billing worksheets. He describes them as voluminous, Delphic, and as not informing the reader as to what services were in fact performed in relation to the particular aspects of the audit. He observes that they do not set out separately as against each defendant the services that were performed. In relation to this, he highlights that the majority, if not all, of the services appear in the worksheet in the name of the first defendant. He also says that they bear notations in 2001 despite the tax audit retainer relating to the matters after August 2005.[15]
[15]Outline of Submissions on behalf of the Defendants (30/1/09), para 4.
He refers to the worksheets recording items such as “sort through archive boxes and numerous other files, boxes and paperwork left in different places of the office by Mark … calculations done and checking Mark’s calculations on loose bits of working paper, etc. A complete mess,” and many entries referring to “historical data” being entered. He submits that although what aspect of the audit or which defendant these matters relate to can be discerned, the defendants face an impossible task in comprehending these details. Attention is also shown to fees for matters like “tidy up boardroom table”, “claen [sic] up boardroom”, “set up boardroom”, and charges without any description.[16]
[16]Ibid, para 5. See also Mr Handran’s submissions at Transcript 1-36 to 1-41.
My detailed analysis of the billing worksheets which are exhibit “MJH-1A” to the affidavit of Mr Hocking, the defendants’ solicitor, sworn on 12 November 2008 supports these contentions. It is a voluminous document, consisting of 28 pages. The difficulty of interpreting it is compounded by pages 1-10 and 13-22 essentially covering the same ground. There are some additional entries and the entries are not always in the same order. The final figure in each document is for “Dundrenan Pty Ltd … Total WIP”. In the first document the related amount is $53,096.81”. In the second document it is “53,547.20”. The explanation for these differences may be that the first document is dated “4 May 06” and the second “12 Jul 06”. However, this raises an issue for the defendants to determine which document is relied upon to provide the particulars sought. The defendants are entitled to conclude that both documents have been provided as particulars for a purpose. However, that purpose is not clear. The difficulty that this creates is exacerbated by the fact that the final amount is different to the fees alleged to be payable under the tax audit retainer of $55,834.35”. Further, I cannot find any final amount related to particular defendants which is the same as the fees alleged to be payable under a retainer related to that defendant.
It is also unclear as to whether the two documents relate to the tax audit retainer or to that and other alleged retainers; and if so, to what other retainers and which aspects relate to which retainer. As Mr Handran says, these documents are headed with the name of the first defendant and the last entry relates to that defendant. However, it also has entries under headings relating to the second and fifth defendants.
There are then separate Billing Worksheets relating to the seventh defendant (pages 11-12), the third defendant (23), the further defendant (24), and the second to fifth defendants (27-28). The latter document presumably relates to the partnership. However, it is not clear if any aspect of these also relates to the tax audit retainer.
As Mr Handran submits, although the plaintiffs’ case relates to alleged tax retainers for the financial year ended 30 June 2005, based on discussions between April 2005 and April 2006 and the tax audit retainer which is said to have commenced on 22 August 2005, the documents contain notations relating to 2001 and 2002. Reference is made to notations of “2001 Correspondence”, “2001 Tax/Accounts”, “2001 Activity Statement Workflow”, “2002 General”, “2003 General”, “2003 Correspondence”, 2003 Tax/Accounts”, “2003 Activity Statement Workflow”, and “2004 General” at pages 1, 7-13, 19-28. These entries often appear in connection with entries which are presumably for fees.
The first of the 10 page documents contains the following entries for dates prior to 22 August 2005:
GEN ADV & MAT – CONSUL
09/08/2005 John Kallinicos 10[17] 250.00[18] SORT OUT MATERIAL FOR ATO[19]
[17]This is under the heading “Units”.
[18]This is under the heading “Amounts”.
[19]Page 1
Disbursements
08/08/2005 Other 10.00 RBA-ICA HANDLING FEE[20]
[20]Ibid.
BAS/IAS – PRE & LODGE
28/04/2005 Mark GW Herron 2 36.00 March bas for dundrenan developments[21]
[21]Page 5.
GEN ADV & MAT – CONSULT
19/08/2005 20 500.00 review files[22]
[22]Page 6. The next entry is: 22/08/2005 John Kallinicos, 30, 750.00, meeting with ato & nola roach.
Disbursements
24/06/2005 PAYG Qtly Notice 1 25.00 June 05 QTR[23]
The second 10 page document contains similar entries.
[23]Page 9. This is under the heading of “LEE, ROSLYN SEYMOUR”, a reference to the fifth defendant. A similar reference appears at pages 11 (DUNDRENAN DEVELOPMENTS) and 25 (LEE, MORRIS ARTHUR).
The billing worksheet in relation to the third defendant, and fifth defendant and the partnership each contain an entry for disbursements in relation to a PAYG Quarterly Notice before 22 August 2005. In the case of the first and fifth defendants the date is “7/4/2005” and for the partnership it is “27/6/2005”.[24]
[24]Pages 23, 24, and 28.
In addition, the billing worksheet for the third defendant contains a reference under “2001 Correspondence” to “sent fax to client” on “3/9/2001”.[25]
[25]Page 23.
There is also reference in each of the 10 page documents to disbursements for PAYG Quarterly Notice for “3/10/2005”, “15/12/2005”, and “23/3/2006”, none of which appear to relate to the tax audit retainer or the tax retainers for the financial year ended 30 June 2005.[26]
[26]Pages 9 and 21.
The entries for “Tidy up boardroom” and “claen [sic] up boardroom” appear on pages 2 and 14, and “set up boardroom” appears on pages 3 and 15.
Examples of fees claimed without any entry to explain the work undertaken are at pages 5 and 6 and 17 and 18 of the worksheets. They are:
22/11/2005 John Kallinicos 55 1375.00
22/11/2005 John Kallinicos 25 625.00
…
15/12/2005 John Kallinicos 5 125.00
…
18/12/2005 John Kallinicos 12 300.00
…
03/04/2006 John Kallinicos 10 250.00
24/04/2006 John Kallinicos 33 825.00
In Bloeman v Atkinson (1977) Qd R 291 at 295, Hanger CJ in deciding that a deed of settlement referred to in a statement of claim did not comply with the requirement equivalent to r 149(1)(a) of the UCPR to make a statement as brief as the nature of the case permits containing all the material facts on which the party relies; and did not provide a statement of those facts which would put the defendants on their guard and tell them what they have to meet when the case comes on for trial said:
“A plaintiff is not entitled to tell a defendant that his case is based on an identified document (which may contain five or fifty paragraphs – the number does not affect the principle) and leave the defendant to work out for himself what particular paragraph he thinks the plaintiff may be basing his case on. He is entitled to be told what the plaintiff says was the effect of the portion of the document which he relies on.”
His Honour had earlier said at 293:
“He is not entitled to tell a defendant that if he looks at a document which the plaintiff identifies, he will know or be able to find out what the claim is.”
I consider that these words are apt to address the situation with which the defendants are confronted in the present case by virtue of the reliance on the plaintiffs’ billing worksheets as particulars of the fees payable by the defendants in respect of the tax audit and tax agent retainers for the basis of the claims and damages for breach of contract or alternatively on a quantum meruit basis.
In this case also the defendants are not to be left to work out for themselves which particular parts of the billing worksheets they think that the plaintiffs may be basing their case on in relation to a particular retainer and to establish the quantum of fees payable under that retainer. However, on the basis of the above analysis of the billing worksheets, this is what the defendants are required to do on a central aspect of the plaintiffs’ case.
To enable the defendants to know the nature of the case which they have to meet in relation to those aspects of the statement of claim to which the requests Nos 30, 33, 36, 39, 42, 45, 48, and 51 relate, I order that the plaintiffs and the sixth defendant provide the particulars requested.
Requests Nos 22(g) and (h) are:
“In relation to paragraph 6(b), provide full particulars of the allegation that the Tax Audit retainer was evinced by the subsequent conduct in receiving the plaintiffs’ services in respect of the tax audit, including:
…(g)state the calculations alleged to have been performed by the plaintiffs and whether such calculations were received orally or in writing or partly orally and partly in writing, and:
(i)to the extent that such calculations were received in writing, provide a copy of such writing;
(ii)to the extent that such calculations are alleged to have been received orally, state:
(A)the parties to the alleged conversation;
(B)the date and place of the alleged conversation;
(C)the substance of the alleged conversation;
(h)in relation to each alleged meeting and discussion that is alleged to evince the Tax Audit retainer, state:
(i)the parties to every alleged meeting and conversation;
(ii)the date and place of every alleged meeting and conversation;
(iii)the substance of every alleged meeting and conversation.”
As stated at paragraph [38] it is alleged that the tax audit retainer was:
(a) oral and comprised of various discussions between the third defendant on behalf of the defendants and the sixth defendant on behalf of the plaintiffs; or
(b) alternatively evinced by subsequent conduct in receiving services of the plaintiffs in respect of the tax audit.
Paragraph 6(b) is the particular of this alternative basis for the tax audit retainer. It further particularises the services relied on to involve:
“(i)acceptance of calculations performed by the Plaintiffs; and
(ii)having meetings with and discussion with Kallinicos and the Defendants then tax adviser, Lindsay Reed of Home Wilkinson Lowry Solicitors.”
Requests Nos 22(g) and (h) are to be considered in context of requests Nos 22(a)-(f) which also relate paragraph 6(b).
Requests Nos 22(a)-(f) are that there be a statement of the services alleged to have been received by the first to fifth defendants and the seventh defendant in respect of the tax audit. Mr Hackett responds that this is what is alleged in subparagraphs (b)(i) and (ii), namely acceptance of calculations performed by the plaintiffs and having meetings.[27]
[27]Transcript, 1-101.
I consider that the effect of subparagraphs (b)(i) and (ii) is to imply that the services received by each defendant was the performance of calculations and having meetings with and discussion with Kallinicos and the defendants then tax adviser. This enables the defendants to know the nature of the case which they have to meet. Therefore, I do not make the orders sought by requests Nos 22(a) to (f).
However, request No. 22(g) goes further to request a statement of the calculations alleged to have been performed by the plaintiffs and whether such calculations were received orally or in writing or partly orally and partly in writing, and to provide a copy of any such writing, and to state the parties, the date and place and substance of any conversations about such calculations. Mr Hackett seeks to address this by his overarching submission on request No. 22, that none of the matters sought are necessary to enable the defendants to meet the allegations of fact made in paragraph 6.[28]
[28]Ibid.
However, I consider that because the plaintiffs are alleging that as an alternative to the oral tax audit retainer agreements arising from discussions involving the third defendant on or about 22 August 2005, this is evinced by subsequent conduct, the defendants properly require the further and better particulars of the conduct relied upon for this purpose, in this case involving the performance and receipt of calculations.
It is one thing for the defendants to be able to properly meet paragraph 6(a) of the statement of claim by denying that any conversations that did occur comprised an agreement to provide professional services. It is another to be able to properly meet an allegation that such an agreement can be evinced by conduct without being provided with the information requested by the defendants in paragraph 22(g).
Therefore I order that the plaintiffs and the sixth defendant provide the particulars sought by request No. 22(g). I order that the copy of any writing provided under subparagraph (g)(i) be provided by the plaintiff producing the document to the defendants’ solicitor and permitting copies to be taken by that solicitor.
For the same reasons I consider that the plaintiffs and the sixth defendant should provide the particulars sought by request No. 22(h) which is a request in relation to every meeting and discussion alleged to evince the tax audit retainer, the parties thereto, the date, place, and the substance thereof. Therefore I order that the particulars sought by request No. 22(h) be provided.
In ordering the particulars sought by request No. 22(g), I have said that this is to be done by the plaintiffs and the sixth defendant producing the document to the defendants’ solicitor and permitting copies to be taken by that solicitor. This is consistent with the approach that I take to requests made by the defendants under r 222 of the UCPR, a number of which appear in the request for further and better particulars, the subject of the application.
The first of these is request No. 14(a) relating to paragraph 5C(b), which is:
“On 31 March 2006 in furtherance of the Tax Agent retainer, the Fourth and Fifth Defendants on behalf of themselves and the Lee Family Trust:
…
(b)were aware, as was the case, at the time of signing the ELS declaration form that their tax return had been prepared based on information that they had provided by or on their behalf to Mr John Kallinicos or one of his staff, as that had been the case since the inception of the Tax Agent Retainer.”
The request is for a copy of the tax return referred to, to be provided pursuant to r 222 of the UCPR.
Rule 222 provides that:
“A party may, by written notice, require another party in whose pleadings, particulars or affidavits mention is made of a document—
(a)to produce the document for inspection of the party making the requirement or the solicitor for the party; and
(b)to permit copies to be taken.”
The Plaintiffs’ response is that a copy of the tax returns are available for inspection at the office of the solicitors for the plaintiff and a copy will be provided, together with other copy documents requested, upon undertaking to meet reasonable copying costs.
Therefore, Mr Hackett submits that this rule is being complied with, subject to the usual undertaking.[29]
[29]Transcript, 1-98.
However, Mr Handran submits with reference to Belela Pty Ltd v Menzies Excavation Pty Ltd [2005] 2 Qd R 230 that the longstanding practice on which the plaintiffs rely is not in accordance with the current language of the UCPR.
In Belela McMurdo J was concerned with r 214 of the UCPR which provides for disclosure by delivery of a list of documents and of copies, and said at 231:
“Sub‑rule (1) provides that a party performs the duty of disclosure by doing two things. The first, described within para (a) is the delivery of a list of documents. The second, described within para (b) is where requested by the other party, the delivery of copies of the documents mentioned in the list … So on the face of r 214, where there is a request for copies of documents referred to in a list, as occurred here, it is part of the obligation to make disclosure for the disclosing party to have to deliver copies, and by implication, to produce those copies at its own expense.”
His Honour also referred to the alternative method of disclosure under r 216 and to r 217 which provides that the documents must be produced for inspection and further, that the party producing the documents must:
“provide facilities (including mechanical and computerised facilities) for the inspection and copying of the documents.”
In relation to this, his Honour said:
“Again, that seems to clearly suggest that the party producing the documents must, at least, facilitate their copying by the party to whom they are produced, and free of charge.”
His Honour observed that while no doubt, the practice under which the solicitor disclosing the documents requested by the other party under r 214 had required the other party to provide the cost of copying, was a longstanding one which predates the present rules and usually occasions no difficulties, strictly speaking the point that there was an obligation to deliver the documents free of charge to the other party, should be upheld.
Rule 222 is also in different terms to r 214. However, Belela reinforces the point which has been made on a number of occasions by the Queensland Court of Appeal that the present UCPR should be construed in accordance with the language used. As such, they should not be interpreted on the basis of an assumption that they are a restatement of the previous rules, including practices which operated under those rules.
This rule is concerned with the inspection of documents mentioned in pleadings, particulars, or affidavits. It provides that a party may require another party in whose pleadings a document is mentioned to do two things. The first, described within para (a), is the production of the document for inspection of the party making the requirement or the solicitor for the party. The second, described within para (b), is to permit copies of the document to be made.
The rule says nothing about producing copies of the document for inspection or about facilitating the making of a copy. As Mr Handran submits, it also does not say that a copy has to be made by the solicitor who has possession of the document and that the party requiring production of the documents must undertake to meet reasonable copying costs.[30]
[30]Transcript, 1-110.
I agree with this submission. This is also consistent with the commentary to the rule at p 9205 of Civil Procedure Queensland I that “in the case of documents referred to in the statement of claim, those documents should be provided to permit the Defendants to draft the Defence so as to comprehensively address the allegations.” (emphasis added)
Accordingly the defendants cannot be required to attend the office of the plaintiffs’ solicitor and to undertake to meet any copying costs in order to be provided with a copy of any document requested under r 222.
As is the case with r 214, whatever practice may have existed prior to the current rule, the plaintiffs and the sixth defendant must comply with the terms of r 222 and produce the documents required to the defendants’ solicitor and to permit copies to be taken by that solicitor.
It is unfortunate that the defendants’ request for further and better particulars pursuant to r 222 was expressed in terms of providing a copy when the rule is not in these terms. It may be this which has caused the plaintiffs to respond as they have. This is even more so when Mr Handran submits that the rule can be satisfied at the office of the requesting party’s solicitor subject to an undertaking to return the original, and he stresses the importance of the production of the original to obtain instructions.[31]
[31]Transcript, 1-110 to 1-111.
However, because the request is to provide a copy “pursuant to rule 222 of the UCPR” I interpret it to be made in terms of that rule, namely to produce the document of which the copy is required for inspection by the solicitor for the party and permit that solicitor to make copies of it.[32]
[32]I proceed on the basis that despite the reference in r 222(a) to the alternative of producing the document to the party, Mr Handran’s submissions suggest that it is the party’s solicitor to whom production is sought in this case.
I accept that while the longstanding practice on which the plaintiffs rely usually occasions no difficulty, and parties may agree to adopt it in other cases, as the defendants are insisting on production in this case in accordance with the strict application of r 222, the appropriate order in each case in which the defendants have required a copy of a document to be provided pursuant to that rule is that the plaintiffs and the sixth defendant produce the document required to the defendants’ solicitor and permit copies to be taken by that solicitor. I order accordingly in relation to request No. 14(a).
This order therefore also applies to requests Nos 18(a), 19, 27(a), 28(a), and 50. Although I note that there are other requests for further and better particulars pursuant to r 222, these are not the subject of the current application, or have not been pressed during argument.
I do not make the orders sought by the defendants’ other requests for further and better particulars which are the subject of the application for the reasons set out in paragraphs [124] to [232].
The first of these requests is No. 3. This relates to paragraph 4(e) of the statement of claim which alleges that at all material times the third defendant “represented” the defendants[33] in dealings with the plaintiffs. This is expressly denied in paragraph 4(b) of the defence; and in paragraph 4(c) it is said that any authority which may have been given by the defendants at a meeting on 26 June 2001 was not an authority to the plaintiffs, or an authority that could be relied upon by the plaintiffs, to take instructions from the third defendant on behalf of each defendant. Request No. 3 seeks full particulars of this allegation including:
In response to request No. 15 the defendants say that the change in the BAS is recorded in a specified notice from the ATO which has already been disclosed to the plaintiffs.[119] However, the plaintiffs would argue that this is not a determination that services previously provided to the defendants by the sixth defendant, the first plaintiff, and the plaintiffs were in error as alleged in paragraph 6E(e) of the Defence. This is the subject of the request, and Mr Hackett says that the plaintiffs do not have it. In my view, if such a document exists and is in the defendants’ possession and control, it should be provided. If it does not exist to the defendants’ knowledge or is not in their possession or control, it is easy to say so.
[119]Mr Londy’s affidavit, folio 84.
Although in response to request No. 22 the defendants say that the penalty was imposed on the first defendant by a specified notice, a copy of which has already been provided, Mr Hackett says that the plaintiffs do not have it. It is possible that it has gone astray. In order to remove any doubt and to expedite proceedings for the future, it should be provided.
Although in response to request No. 24 the defendants say that fees paid to the plaintiffs are matters within the plaintiffs’ knowledge, Mr Hackett says that the plaintiffs do not have the fee note/s or invoice/s. They may have lost them or destroyed them. Again, they should be provided to remove any doubt and expedite proceedings for the future.[120]
[120]Mr Londy’s affidavit, folio 86.
Accordingly I order that documents referred to in requests Nos 15(h)(iv), 22(h), and 24(e)(ix) be provided by the defendants producing them to the solicitor for the plaintiffs and the sixth defendant and permitting copies to be made by that solicitor.
Plaintiffs’ alternative application under r 171 of the UCPR
As in the case of the plaintiffs’ application under r 171 of the UCPR, I consider that when the further and better particulars are provided by the defendants, together with the documents the subject of the requests which I have ordered be complied with by them, the plaintiffs will have a proper pleading as required as an incident of procedural fairness. Further, this is not a case where the defence is obviously untenable.
In these circumstances, I do not consider that it is appropriate to exercise my discretion to strike out:
(a) the defence and counterclaim and enter judgment in favour of the plaintiffs in respect of the claim; and
(b) specific paragraphs of the defence and counterclaim, with leave to replead by filing and serving an amended defence and counterclaim within seven days.
Defendants’ application with reference to r 320 of the UCPR
As stated, Mr Handran submitted that the action is apt for the court referred mediation under r 320 of the UCPR.
He submits that:
“40.Given the extremely small claim, complexity of the matter and the considerable expense required to properly prepare it for trial, the court ought to be satisfied that it is in the interests of all parties and in accord with the philosophy that the matter be stayed[121] pending its being referred on the motion of the Court, to mediation.
41.If the parties continue to be involved in interlocutory skirmishes of this kind, the costs of litigation will far exceed the amount of money in dispute.”[122]
[121]See r 321 of the UCPR.
[122]Outline of submissions on behalf of the Defendants (30/1/09); see also Transcript, 1-42 to 43.
Mr Hackett’s response is that at the very least the allegations must be particularised before there is something to mediate.[123]
[123]Transcript, 1-84.
Despite Mr Handran’s concern that if I order particulars to be provided before exercising the discretion to refer the dispute to mediation, there will be further expense incurred through interlocutory skirmishes about the sufficiency of particulars provided, I do not consider that it is appropriate to exercise this discretion at this time.
This is a case in which I have ordered all parties to provide further and better particulars in order that they know the nature of the case they have to meet. It is only when these particulars are provided that the issues will have sufficiently crystallised that mediation will be a sufficiently meaningful option to be considered.
For this reason, I do not exercise my discretion to refer this dispute for mediation.[124]
[124]In argument, reference was also made by Mr Handran to the need for independent joint expert accountants to confer to resolve the dispute. It was accepted that I do not have the power to appoint an expert under r 429G(2) and (3) of the UCPR; see Transcript, 1-42.
Applications for further orders, directions, or relief
The defendants’ also apply that further and alternatively, I make all necessary and appropriate directions to advance this trial under r 367 of the UCPR.
As I have already observed, I also have power under r 161(2) in an application of this nature to make consequential orders and give directions for the conduct of the proceeding, as I consider appropriate.
The plaintiffs also apply for such further or other orders, directions, or relief that the court thinks fit.
Because I have ordered all parties to provide further and better particulars, the next step is to establish a timetable for these particulars to be provided, in circumstances in which it is appropriate that the plaintiffs provide these particulars first.[125]
[125]This proposition also applies to the production of documents as required by these orders.
In this regard, r 367 and r 161(2) overlap. Therefore, to advance this trial I direct that the legal representatives for the parties make contact with my associate within seven days of the date of this order to arrange that this matter be listed for argument on the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these reasons. This time period will enable the parties to consider the nature and extent of my orders.
Costs
The plaintiffs seek an order that the defendants pay the plaintiffs’ and sixth defendant’s costs of the application and action on the indemnity basis.
The defendants seek an order that the plaintiffs pay the defendants’ costs of and incidental to the application to be assessed.
As each party has been successful in respect of parts of their applications for further and better particulars, I extend my directions in paragraph [407] to making arrangements for an argument on the question of costs.
Conclusion
The orders will be:
1. The first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, as requested in the first to fifth and seventh defendants' request for further and better particulars dated 17 January 2008, being requests Nos 22(g) and (h), 30, 33, 36, 39, 42, 45, 48, and 51.
2. In relation to requests Nos 22(g), 14(a), 18(a), 19, 27(a), 28(a), and 50, the first and second plaintiffs and the sixth defendant by counterclaim produce the documents requested to the solicitor for the first to fifth and seventh defendants and permit copies to be taken by that solicitor.
3. Otherwise the application by the first to fifth and seventh defendants that the first and second plaintiffs and the sixth defendant by counterclaim provide further and better particulars of the second further amended statement of claim filed on 29 April 2008, is dismissed.
4. The application by the first to fifth and seventh defendants that the second further amended statement of claim filed on 29 April 2008, be struck out under r 171 of the UCPR is dismissed.
5. The first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 as requested in the first and second plaintiffs’ and the sixth defendant by counterclaim request for further and better particulars dated 8 July 2008, being requests Nos 7, 9, 10, 11(g), 12(g), 13(g) and (j), 14(e) and (f), 15(g), 16, 17, 18, 21, 22(j) and (k), 24(a)-(e), 25(j) and (k), 27(a)-(e), 28(j) and (k), 30(a)-(e), 31(j) and (k), 33(a)-(e), 34(j) and (k), 36(a)-(e), 38(a)-(e), 39(b)-(f), 41, 42, 43, and 44.
6. In relation to requests Nos 15(h)(iv), 22(h), and 24(e)(ix), the first to fifth and seventh defendants produce the documents requested to the solicitor for the first and second plaintiffs and the sixth defendant by counterclaim and permit copies to be taken by that solicitor.
7. Otherwise, the application by the first and second plaintiffs and the sixth defendant by counterclaim that the first to fifth and seventh defendants provide further and better particulars of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 and to provide copies of documents pursuant to r 222 of the UCPR be dismissed.
8. The application by the first and second plaintiffs and the sixth defendant by counterclaim that the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out in its entirety pursuant to r 171 of the UCPR, and judgment be entered in favour of the first and second plaintiffs and sixth defendant by counterclaim in respect of the claim is dismissed.
9. The application by the first and second plaintiffs and the sixth defendant by counterclaim that specified paragraphs of the defence to the second further amended statement of claim and counterclaim filed on 28 May 2008 be struck out and the first to fifth and seventh defendants file and serve an amended defence and counterclaim is dismissed.
10. The legal representatives for the first and second plaintiffs and the sixth defendant by counterclaim, and the first to fifth and seventh defendants make contact with my associate within seven days of the date of this order to arrange that this mater be listed for argument on:
(i) the establishment of a timetable for the provision of the further and better particulars and the production of documents in accordance with these orders; and
(ii) costs.
In making these orders I have found it convenient to categorise the paragraphs in which and of which particulars have been sought as requests which are identified by the paragraph numbers.
In ordering that the defendants provide further and better particulars in respect of requests Nos 24(a)-(e), 27(a)-(e), 30(a)-(e), 33(a)-(e), 36(a)-(e), and 38(a)-(e), I have done so on the basis that during argument Mr Hackett restricted that application to the alphabetical paragraphs and did not press the related roman numeral sub‑paragraphs.[126] The order is made and is to be interpreted on that basis.
[126]This is with the exception of the request for the production of documents under request No. 24(e)(ix).
In any case in which the further and better particulars ordered are to be provided by reference to and the production of copies of documents, this is to be facilitated by the production of the documents to the solicitor for the other party and permitting copies to be taken by that solicitor. This is the case whether or not the documents are the subject of the requests identified in orders (2) and (6).
0
1
1