Maitre D Marketing Pty Ltd v Patties Foods Pty Ltd
[2017] VCC 413
•12 April 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION GENERAL LIST | Revised |
Case No. CI-16-03054
| MAITRE D MARKETING PTY LTD ACN 006 431 492 | Plaintiff |
| v | |
| PATTIES FOODS PTY LTD ACN 007 157 182 | Defendant |
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JUDGE: | HER HONOUR JUDGE MARKS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 March 2017 | |
DATE OF RULING: | 12 April 2017 | |
CASE MAY BE CITED AS: | Maitre D Marketing Pty Ltd v Patties Foods Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 413 | |
REASONS FOR RULING
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Catchwords: PLEADINGS – Allegations of trade secrets – Application for further and better particulars.
Cases Cited:GlaxoSmithKline Australia Pty Ltd v Ritchie & Anor [2008] VSC 164; Ocular Sciences v Aspect Vision Care Ltd (1997) RPC 289.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr T Bevan | Fernandez & Johnson |
| For the defendant | Mr M McKillop | Minter Ellison |
HER HONOUR:
1This matter was heard on 14 March 2017. At the hearing orders were made and oral reasons were given. On 15 March 2017 the parties requested written reasons. These are those reasons.
2By summons dated 24 February 2017 the defendant seeks an order that the plaintiff provide further and better particulars of its statement of claim as ordered by his Honour Judge Anderson on 24 November 2016.
3Further and better particulars were provided. The defendant complains that they are inadequate.
4I am satisfied that there has been an endeavour to comply with his Honour Judge Anderson’s order, and that some significant work has been done in compiling the documents that appear as the schedules to the further and better particulars that were provided – which consist of various recipes, workflow procedures and so on. However, the particulars filed do not go far enough to make clear what the parameters of this dispute are. That is the function of pleadings.
5At the moment, the statement of claim in the matter is in extremely broad brush. As was pointed out by his Honour Judge Anderson on the last occasion that this matter was before a judge, it is a “bare bones” pleading. The critical allegation of the terms of the agreement relied on, the breach of the terms, and the damages alleged to flow, are all pleaded with very little precision or detail.
6Relevantly, it is alleged that trade secrets have been taken but there is no clarity about what trade secrets are said to have been taken. That is a critical point that needs to be made clear at the outset so that both parties can prepare their case going forward knowing exactly what is said to have been taken.
7His Honour Judge Anderson, in his order made on 24 November 2016, provided at paragraph 4, that the plaintiff must file and serve further and better particulars of the “trade secrets” referred to in paragraph 13 of the statement of claim:
“Including but not limited to: a) a copy of any document evidencing the recipes said to constitute them; b) a copy of any document evidencing the processes or techniques said to constitute them; c) and details of the recipes, processes and techniques to the extent that they are not included in the documents.”
8At paragraph 1 of the further and better particulars, the plaintiff starts by referring back to the particulars under paragraph 3 of the statement of claim. However, the particulars under paragraph 3 are far too generic in the first place. Paragraph 3 does not assist. It then goes on to say that the documents evidencing the recipes are working formulas stored in the Movex and BIZCAP systems used by Patties to manage production. It states:
“Attached to these particulars at Schedule A are the recipes generated in human readable form by the Movex system for the meat pies, sausage rolls, veggie rolls, white bread, pizza rolls and lamingtons, and working formulas and process guides prepared by Rick Grant for the use of the employees of Patties Foods attached to these particulars at Schedule B.
9At sub-paragraph (b) it goes on to say that the processes and techniques are set out in the documents under schedule B and a process flow chart is attached at schedule C.
10There are a number of recipes attached in the schedules. There is also a process manual which replicates some of those recipes and adds more, and possibly goes further than the recipes. There are also various formulations and workflow documents. However, it is not for the Court or for the defendant to have to work its way through a bundle of documents to try to understand, in relation to each particular trade secret that is said to have been taken, what it is that constitutes the trade secret for specific recipes and which parts are not part of the alleged trade secrets. There are patently matters in the workflows in the documents, for example, that are simply standard, “This is how you cook” items. There are other matters that, of themselves, could not possibly constitute a trade secret. There is reference, for example, in the manual at schedule B under the gluten free pastry recipes to “before starting ensure all ingredients are present”. Is that claimed to be part of the trade secret? It seems unlikely. Further, when it says “add the dry ingredients to the wet ingredients”, is that claimed to be a trade secret?
11It may be that the particular order that things are done is a trade secret, but it is not clear whether every element of what has been included in the documents is claimed as a trade secret. It is also not appropriate that the Court and the defendant has to move between multiple different documents in order to try to understand what is being said about which particular recipe. The case is being put in relation to a number of specific recipes where trade secrets are said to have been taken. For each of those, the further and better particulars should make clear in a schedule, what the recipe is that constitutes the trade secret, and, to the extent that processes and techniques relate to it that are also said to be the trade secret, what those processes and techniques are. It should not be necessary for the Court and the defendant to sift through multiple documents, and it should not be necessary for guesswork to be applied as to what items are in fact trade secrets and what items are perhaps standard cooking techniques or otherwise not secret. Some of the work necessarily has already been done in collating those documents, but the very specific work needs to be done of particularising what the trade secrets are.
12There are further paragraphs of the further and better particulars which do not simply annex documents. There is some useful information there, and much of it may form the basis of evidence, and possibly expert evidence, and will be dealt with at trial. But they do not assist sufficiently in identifying the trade secrets.
13Paragraphs of the particulars describe, for example, the sensitivity of gluten free bread dough and pastry to humidity and environmental factors. If some aspect of that is a trade secret, it will need to be specified which precise aspect it was that the plaintiff knew, and that the plaintiff told under conditions of trade secrecy to the defendant and so on.
14There is a procedural necessity for clarity in matters of this nature. In GlaxoSmithKline Australia Pty Ltd v Ritchie,[1] Harper J stated at paragraph 38:
“It ought not be the judge who is left to identify that which, in a breach of confidence case, the plaintiff contends has been misused.”
[1]& Anor [2008] VSC 164.
15His Honour went on:
“… the law must insist not only upon the clear and precise identification of the information upon which the plaintiff relies, but also that that identification be restricted to information that is properly characterised as confidential.”
16It is the lack of discrimination at the moment between what is in fact a trade secret, and what may not be, that is part of the problem with just annexing a bundle of documents.
17Harper J went on, quoting Laddie J in the case of Ocular Sciences v Aspect Vision Care Ltd:[2]
“The requirement of particularity may impose a heavy burden on the plaintiff. In a case where the plaintiff has a large quantity of confidential information and much of it has been taken by the defendant, the obligation to identify all of it might involve a great deal of work and time. … The normal approach of the court is that if a plaintiff wishes to seek relief against a defendant for misuse of confidential information it is his duty to ensure that the defendant knows what information is in issue. … the defendant must know what he has to meet. He may wish to show that the items and information relied on by the plaintiff are matters of public knowledge. His ability to defend himself will be compromised if the plaintiff can rely on matters of which no proper warning was given. It is for all these reasons that failure to give proper particulars may be a particular damaging abuse of process.”
[2](1997) RPC 289.
18The work that has been done in collating this is by no means lost. It is a necessary first step. But what needs to be put into the statement of claim is to make very clear what precisely is claimed as trade secrets. That is what was required by his Honour Judge Anderson’s order.
19In the particulars in the narrative at paragraph (f) there is a description of there being “precise combinations of starches and proteins” that form the trade secret. If those precise combinations are set out in the recipe, the recipe will speak for itself. But if there is something else that was imparted that is part of the trade secret, now is the time to make that clear in the statement of claim. Knowing the case to be met will significantly reduce the amount of cost and time that the parties spend in preparing, and it will significantly reduce the time in trial. It is to everyone’s advantage.
20Counsel for the plaintiff complained of the fact that the recipes that have been annexed to the particulars are recipes that were on the defendant’s system and says that different recipes have been provided as part of the preliminary discovery process called “shop recipes”. I have had a look at the “shop recipes” which are annexed to the second affidavit of Mr Middleton, and I can immediately see a few differences with a couple of the recipes that are annexed to the further and better particulars.
21It is for the plaintiff to say what its trade secret is and, whether that is contained in the initial shop recipe, some later recipe, or the recipes that are presently annexed to the further and better particulars. The point of the pleading is to make clear which recipe is part of the alleged trade secret. If variations are claimed as part of the trade secret, then that too needs to be made clear.
22It was not part of the orders made by his Honour Judge Anderson that there be wholesale discovery of every document relating to the trade secrets at this point. What has been ordered at this stage was intended to make clear the scope of the trade secrets. If, as time goes on, the defendant seeks to test at what point recipes changed, that is something that can be looked at later when full discovery is made. For the moment, everyone needs to be clear about what the case is. The plaintiff must file and serve an amended statement of claim containing further and better particulars.
23 Accordingly, orders were made on 14 March 2017 that:
(1) The plaintiff file and serve a proposed amended statement of claim by 4.00pm on 11 April 2017, including the particulars referred to in paragraph 4 of the order of his Honour Judge Anderson made on 24 November 2016.
(2) If the defendant notifies the plaintiff in writing that it will not oppose the plaintiff having leave to file an amended statement of claim in the form in which the proposed amended statement of claim was served, or any amended form, then the plaintiff should seek an order "on the papers" for leave to file the amended statement of claim. If the defendant does not so notify the plaintiff within a reasonable time, an application for leave to deliver an amended statement of claim must be made to the Commercial Division Duty Judge as soon as is reasonably practicable.
(3) The defendant file and serve a defence to the amended statement of claim within 30 days of an order being made that the plaintiff have leave to file the amended statement of claim.
(4) The date in paragraph 5 of his Honour Judge Anderson’s order of 24 November 2016 be extended to 30 days after the filing of the defence to the amended statement of claim.
(5) The plaintiff pay the defendant’s costs of this application fixed at $3,000.00.
(6) The defendant’s summons dated 24 February 2017 is otherwise dismissed.
(7) There be liberty to apply.
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Certificate
I certify that these 7 pages are a true copy of the reasons for ruling of her Honour Judge Marks, delivered on 14 March 2017 and revised on 12 April 2017.
Dated: 12 April 2017
Samantha Marinic
Associate to Her Honour Judge Marks
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