Joinery Products Pty Ltd v Imlach (No 2)
[2009] TASSC 88
•30 September 2009
[2009] TASSC 88
COURT: SUPREME COURT OF TASMANIA
CITATION: Joinery Products Pty Ltd v Imlach (No 2) [2009] TASSC 88
PARTIES: JOINERY PRODUCTS PTY LTD
KELLY, Christopher John
CHRIS KELLY INVESTMENTS PTY LTD
as Trustee for the Kelly Family Trust
v
IMLACH, Brian David
GP GLASS PTY LTD
TOP CENTRE PTY LTD
SHARMAN, Philip John
FILE NO/S: 32/2007
DELIVERED ON: 30 September 2009
DELIVERED AT: Hobart
HEARING DATE: 4 September 2009
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Procedure – Supreme Court procedure – Tasmania – Practice under Rules of Court – Pleadings – Particulars – Function and scope of particulars.
Supreme Court Rules 2000 (Tas), r253.
Aust Dig Procedure [272]
REPRESENTATION:
Counsel:
Plaintiffs: P L Jackson
Defendants: M E O'Farrell SC
Solicitors:
Plaintiffs: Simmons Wolfhagen
Defendants: Levis Stace & Cooper
Judgment Number: [2009] TASSC 88
Number of paragraphs: 29
Serial No 88/2009
File No 32/2007
JOINERY PRODUCTS PTY LTD & ORS v BRIAN DAVID IMLACH & ORS
REASONS FOR JUDGMENT HOLT AsJ
30 September 2009
The defendants have applied for an order requiring the plaintiffs to deliver further and better particulars of the statement of claim.
The allegations which are relevant to the dispute about particulars are as follows:
●Mr Christopher Kelly and Mr Brian Imlach were shareholders in and directors of Joinery Products Sales Pty Ltd (JP Sales). Prior to 8 September 2004 JP Sales carried on two businesses from its factory and office complex at Devonport. There was a joinery business conducted under the business name "Benchtop Centre" and a business engaged in the manufacture, supply and installation of aluminium window frames and windows. In about April 2004 Mr Kelly and Mr Imlach entered into negotiations with a view to Mr Kelly acquiring the joinery business and Mr Imlach acquiring the window business. The negotiations culminated in the creation of a disaggregation agreement on 8 September 2004. Pursuant to that agreement Joinery Products Pty Ltd, a company in which Mr Kelly was a shareholder and director, acquired the joinery business from JP Sales. Pursuant to the agreement GP Glass Pty Ltd, a company in which Mr Imlach was a shareholder and director acquired the window business from JP Sales. Mr Kelly, Mr Imlach and some others were also parties to the disaggregation agreement. The agreement contained no provision restraining Mr Imlach and GP Glass from operating a competing joinery business.
●Between June 2004 and 8 September 2004 Mr Imlach and GP Glass represented to Mr Kelly and Joinery Products that it was not their intention to carry on a competing business. However, from July 2004, or earlier, Mr Imlach and/or GP Glass commenced to set up such a business. In January 2005 Top Centre Pty Ltd was incorporated with Mr Imlach being a shareholder and director. Since its incorporation Top Centre has operated a joinery business in competition with Mr Kelly's company, Joinery Products.
●Up until the disaggregation the manager of the joinery business conducted by JP Sales was Mr Philip Sharman. When JP Sales ceased trading Mr Sharman's employment was transferred to Joinery Products. In early 2005 Mr Sharman resigned from Joinery Products and commenced employment with Top Centre.
The claim against Mr Imlach and GP Glass includes a claim for damages for misleading and deceptive conduct contrary to the Fair Trading Act 1990. The claim against Mr Sharman includes a claim for equitable compensation for breach of his employee's duty of good faith and fidelity owed to Joinery Products.
The pleas, the subject of the dispute about particulars, are as follows:
"10 Unknown to the Plaintiffs, or any of them, from at least in or about July of 2004, Imlach and/or G P Glass commenced to and continued to set up a joinery business ('the Competing Business') to manufacture, supply and install custom postform bench tops and wardrobes in competition with the Joinery Business and Joinery Products.
PARTICULARS
…
b)In or about July or August 2004, Imlach made approaches to various employees of the Joinery business offering them, in confidence, employment with a new joinery business, such employment to commence on and from 8 September 2004 or at various dates thereafter.
…
31Between July 2004 and February 2005 Sharman, while still employed by J P Sales and, or, Joinery Products:
…
(c)Actively solicited current and former customers of 'Benchtop Centre' to transfer their business to the Competing Business; and
(d)Obstructed the operation of the business of 'Benchtop Centre' by the unauthorised removal from the premises of Joinery Products of documents essential to the smooth operation of the business of 'Benchtop Centre'.
PARTICULARS OF DOCUMENTS
(i)Hard copies of the 'Benchtop Centre' pre-printed order forms containing details of customers;
(ii)The 'Benchtop Centre' price sheets for materials and labour relating to the supply of postform bench tops;
(iii)The current 'Benchtop Centre' charge-out/invoice books (x 2) used for recording orders and invoicing customers; and
(iv)Various suppliers' invoices.
(e)Caused freight, including benchtops, purchased by Joinery Products for delivery to Joinery Products to be redirected to GP Glass for use in the Competing Business."
The relevant requests for particulars are these:
"As to Paragraph 10(b):
1 Please identify the 'various employees' referred to.
2 In the case of each employee, please give particulars of:
i the date or dates of each approach made;
ii the person or persons by whom the approach was made;
iii the person, or entity (if any) on whose behalf the approach was made;
ivthe location of each approach to each employee, including whether the approach was in person, by telephone or some other and, if so, what means;
vwhether the approach was made orally, in writing, or partly orally or partly in writing.
viif the approach was oral, or partly oral, give the substance of the words spoken;
viiiif the approach was in writing, or partly in writing, identify the document by date and author.
As to Paragraph 31(c):
Give particulars of:
1The identity of the former customers referred to.
In the case of each former customer:
ithe date or dates of the solicitation;
iithe person or persons who solicited the customer;
iiithe person, or entity (if any) on whose behalf the solicitation was made;
ivthe location of each solicitation, including whether it was in person, by telephone or some other and, if so, what means;
vwhether the solicitation was made orally, in writing, or partly orally or partly in writing.
viif the solicitation was oral, or partly oral, give the substance of the words spoken;
viiif the solicitation was in writing, or partly in writing, identify the document by date and author.
2Is it alleged that Sharman was successful in causing any current or former customer of Benchtop Centre to transfer their business to the 'competing business'. If so please
aidentify the customers who transferred their business,
bthe date upon which the transfer of their business took place.
As to Paragraph 31(d):
Please advise:
1The manner in which the removal of the documents obstructed the operation of the business. Please specify by references to the particular customer, job number, page number etc, each of the documents referred to in section 31(d)(i-iv). If you wish to provide us with copies of these documents that would suffice.
2Please advise the date each of the documents was removed from the premises and the date which each of the aforementioned documents was returned to the premises.
…
4Please advise the bases upon which is alleged that the removal of documents was 'unauthorised'.
Is it alleged that the removal of these documents required specific authorisation? If so from whom should that authorisation been obtained? Was the requirement for authorisation made known to Sharman? If so when, in what manner and in what terms and by whom?
As to Paragraph 31(e):
1Give particulars of each item of freight, including benchtops, redirected to GP Glass.
2In the case of each item of freight, including benchtops:
ithe date or dates on which each item was first ordered by Joinery Products;
iiby whom it is alleged that the goods were ordered.
Iiifrom whom were the goods ordered.
ivby whom were the goods to be delivered to Joinery Products.
vthe date or dates of each redirection was made;
vithe person or persons by whom the redirection was made;
viithe person, or entity (if any) on whose behalf the redirection was made;
viiithe location of each redirection to each supplier or carrier (identifying which), including whether the approach was in person, by telephone or some other and, if so, what means;
ixwhether the approach was made orally, in writing, or partly orally or partly in writing.
xif the approach was oral, or partly oral, give the substance of the words spoken;
xiif the approach was in writing, or partly in writing, identify the document by date and author.
xiiby whom were the goods delivered to GP Glass.
xiiiby whom and when was the payment for these goods effected.
xivplease identify any purchase order, delivery docket, tax invoice, receipt or other documents relating to such purchase, redirection, delivery or payment. If you wish to provide us with copies of these documents that would suffice.
xvIs it alleged that the redirection of these goods required the Plaintiff to reorder those goods. If so,
1give particulars of the reorder.
2when and to whom was such reorder made?
3when were the reordered goods received by the Plaintiff?
4identify such reorder and redelivery by reference to any purchase order, delivery docket, tax invoice, receipt or such other documents relating to such reorder, delivery, or payment. If you wish to provide us with copies of these documents that would suffice."
Each of these requests for particulars has been met with the same response, namely:
"This is not a proper request for particulars."
The Supreme Court Rules 2000, r253, provides a discretionary power to order particulars. Subrule (1) is as follows:
"The Court or a judge may order at any time the delivery of –
(a) a further and better statement of the nature of the claim or defence; or
(b) further and better particulars of any matter stated in any pleading."
Counsel for the plaintiffs has submitted that no further detail of the allegations is required and that in reality the defendants are seeking to have the plaintiffs disclose the names of the persons whom they might call as witnesses at the trial and the mode by which they intend to prove their case.
The following principles are relevant:
"… the opposite party shall always be fairly apprised of the nature of the case he is called upon to meet, shall be placed in possession of its broad outlines and the constitutive facts which are said to raise his legal liability." The King v Associated Northern Collieries (1910) 11 CLR 738 at 740:
"All allegations made in pleadings are capable of being analysed, reduced and dissected into an infinite number of detailed parts. But merely because each such part can be said to better inform the opposite party of an allegation being made against him does not automatically entitle that party to be furnished with further particulars. It is a matter for the Court in the exercise of its discretion to determine what degree of particularity is appropriate in each case." Magna Alloys v Ten Haaf Tas U/R 42/1980.
"… in ordinary circumstances, the obligation of the plaintiff to prove his case in the first instance affords considerable practical protection against surprise." Associated Northern Collieries at 741.
"A party may not, however, obtain from an opponent, by way of particulars, the evidence by which he proposes to prove his case at the trial: Aga Khan v Times Publishing [1924] 1 KB 675; nor may he be required to disclose the names of persons whom he proposes to call as witnesses at the trial: Bishop v Bishop [1901] P 325 at 326, 327. However, if the particulars sought are such as otherwise ought to be given, a party cannot refuse to give them merely on the ground that his answer will disclose the names of persons he may intend to call as witnesses at the trial. If the name of a person is a substantial part of a fact material to an issue in the case, or an essential element in the case, it must be disclosed, even though it be the name of a person proposed to be called as a witness at the trial: Marriott v Chamberlain (1886) 17 QBD 154 at 161; Wootton v Sievier [1913] 3 KB 499 at 503, 504; National Starch Co v Robert Harper [1906] VLR 8 at 12."
Perpetual Trustees v Brenton (1985) 35 NTR 44 at 46.
The allegation in par10 of the statement of claim is that in the months leading up to the execution of the disaggregation agreement Mr Imlach and/or GP Glass commenced to set up a competing joinery business. The defendants are entitled to know the constitutive facts in sufficient detail to enable them to properly prepare for the trial.
The plaintiffs have given a broad outline, but no constitutive facts. The amount of detail requested is not excessive. The employment of the staff of JP Sales was to be transferred to new companies. Mr Imlach was a director of JP Sales and GP Glass. It would be natural for possible future employment arrangements to be discussed with staff and amongst staff. Who was going to be employed by whom, in what position and on what terms? If such discussions are to be put forward to support the allegation in par10 they need to be particularised. The precise content of what is alleged to have been said is material. Whether conversations were for the purpose of securing staff for a competing business or were for the purpose of securing staff for the operation of the window business needs to be ascertained. Relevant to the ascertainment will be the roles of the particular employees within the JP Sales structure. Also relevant will be the skills the prospective employee has and which might be brought to Mr Imlach's window business. Accordingly, the identities of the staff members said to be involved in the conversations are material.
The degree of particularity sought is appropriate. Although the particulars when delivered will provide the names of potential witnesses and may disclose the mode by which the plaintiffs' case is to be proved, this consequence is incidental and does not deprive the defendants of the entitlement.
There will be an order that the plaintiffs provide the further and better particulars requested in respect of par10(b).
Next, there is the par31(c) solicitation plea. Counsel for the plaintiffs submitted:
"The material fact alleged in paragraph 31(c) is that Sharman solicited customers away from the joinery business to the competing business. How he is alleged to have done that is clearly articulated in the particulars already provided. … The material facts are clearly and concisely articulated."
No particulars have been given other than those which appear in par31(c). The defendants are entitled to be apprised of the constitutive facts.
It was submitted that the form of the request is such as to require the plaintiffs to disclose the names of their potential witnesses and the evidence by which they intend to prove their case. Insofar as the provision of the particulars which ought to be supplied have this effect the consequence is incidental and does not negate the defendants' entitlement. The particulars requested are particulars of facts material to a fact in issue.
There will be an order that the plaintiffs provide the particulars requested as to par31(c).
The plea in par31(d) is that Mr Sharman obstructed the operation of the joinery business by removing from the business premises certain documents without authority. It is preceded by a plea that Mr Sharman was employed as the manager. The fourth defendant is entitled to know the facts to be relied upon to link the alleged removal with obstruction and the facts relied upon to support the allegation of lack of authority.
Counsel for the plaintiffs submitted:
"The level of detail that is sought by the defendants descends into the evidence by which the plaintiffs will prove those allegations."
With respect, I do not think that the request calls upon the plaintiffs to disclose evidence to be presented in support of the allegation. It is concerned with the facts and matters to be asserted and not the means by which the facts are to be proved.
Next it was submitted that the identification of the particular documents concerned is a matter for discovery. This cannot be an answer as the discovery procedure will not distinguish the par31(d) misappropriated documents from other documents of the same type.
It was also submitted that some of the information sought:
"… cannot possibly constitute a fact or a substantial part of a fact that is material to any of the issues whether Sharman removed the documents, whether he had authority to do so or whether his doing so obstructed the operation of the existing joinery business."
Counsel gave no assistance as to how it is said that the particulars sought go beyond the ambit of the allegations. On their face, they are confined to the further identification of the documents allegedly removed, the way in which it is contended that the removal caused obstruction to the operation of the business and the matter of authorisation.
There will be an order that the plaintiffs provide the particulars requested as to par31(d).
Finally, there is the request as to par 31(e). The submission of counsel for the plaintiffs was as follows:
"The material fact alleged in this paragraph is that Sharman caused freight that was purchased by the first named plaintiff to be delivered instead to GP Glass for use in the competing business.
The allegation is clearly and concisely articulated.
The level of detail that is sought by the defendants descends into the evidence by which the plaintiffs will prove that allegation.
None of the information sought in paragraphs 1 and 2 of the request constitutes a fact or a substantial part of a fact that is material to the issue whether Sharman did what paragraph 31(e) alleges he did."
Further particulars of the allegation are required. The fourth defendant is entitled to know what the facts and matters to be relied upon in support of the assertion are. The period, the subject of the allegation, is around the time of the disaggregation when there may have been accidental misdirection of goods on consignment. Detailed information of the type requested needs to be provided prior to the trial to enable the fourth defendant to properly prepare. Responding to the request may result in disclosure of the mode by which the case is to be proved, but this is incidental.
There will be an order that the plaintiffs provide further and better particulars of par31(e) as requested.
The application seeks the delivery of the particulars within 21 days of the making of an order. That timeframe was not the subject of any dispute.
The order will be that within 21 days the plaintiffs are to deliver further and better particulars of the statement of claim pars10(b), 31(c), (d) and (e) pursuant to the defendants' request made by letter dated 19 May 2009.
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