Mineral Resources Limited v Langford
[2018] FCA 1532
•11 October 2018
FEDERAL COURT OF AUSTRALIA
Mineral Resources Limited v Langford [2018] FCA 1532
File number: WAD 635 of 2017 Judge: BARKER J Date of judgment: 11 October 2018 Catchwords: PRACTICE AND PROCEDURE – interlocutory application for further and better particulars of defence – where parties agreed application should be determined on the papers Legislation: Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth))
Corporations Act 2001 (Cth)
Date of hearing: Determined on the papers Date of last submissions: 18 September 2018 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 22 Solicitor for the Applicant: Bennett + Co Solicitor for the Respondent: HWL Ebsworth Lawyers ORDERS
WAD 635 of 2017 BETWEEN: MINERAL RESOURCES LIMITED (ACN 118 549 910)
Applicant
AND: MICHAEL LANGFORD
Respondent
JUDGE:
BARKER J
DATE OF ORDER:
11 OCTOBER 2018
THE COURT ORDERS THAT:
1.The respondent provide within 21 days further and better particulars of [21.2] of the defence as requested in the applicant’s notice for further and better particulars dated 15 May 2018.
2.There be no order as to costs on the interlocutory application dated 15 May 2018.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BARKER J:
This judgment deals with the applicant’s application for further and better particulars of [21.2] and [23.2] of the respondent’s defence. The parties agreed that I should determine the application on the papers.
In support of its application, the applicant filed two affidavits of Alastair Thomas Forward made 15 May 2018 and 8 August 2018.
THE CLAIMS AND RELEVANT PLEADINGS
In the proceeding, the applicant claims:
·A declaration that the respondent engaged in misleading or deceptive conduct, or conduct likely to mislead or deceive in contravention of the Australian Consumer Law (ACL) being Sch 2 of the Competition and Consumer Act 2010 (Cth), and the Corporations Act 2001 (Cth).
·Orders and injunctions pursuant to the ACL that the respondent forthwith be restrained from making the representations concerning the applicant of the kind made by a publication via the internet on 30 November 2017 and 6 December 2017, of and concerning any part of the applicant’s lithium operation at Wodgina; and publish a retraction as well as remove or delete publications within his control from the internet.
By its statement of claim, so far as the misleading or deceptive conduct claim is concerned, the applicant pleads as follows:
The Parties
1 The Applicant (MRL) is and at all material times has been:
1.1a company duly incorporated under the Corporations Act 2001 (Cth);
1.2entitled to sue in its own name;
1.3carrying on the businesses (inter alia) of mining and exporting for sale lithium ore;
1.4a company whose securities are listed for quotation on the Australian Securities Exchange (ASX) under the ASX code ‘MIN’ and therefore a disclosing entity pursuant to the Corporations Act 2001 (Cth).
2 The Respondent is and at all material times has been:
2.1an Executive Director of Airguide International Pte Limited (Airguide), being a company registered in Singapore and which conducts inter alia the business of corporate advisory and consulting services; and
2.2the person who maintained an account registered with the social media internet platform at the URL (Twitter) bearing the username ‘@ML_SuperNinja’.
MRL’s Operations
3As and from 9 September 2016, MRL has conducted mining at the Wodgina Mine Site in the Pilbara region of Western Australia in order to produce (inter alia) a Direct Shipping Ore (DSO) lithium product (Product), for sale on the global market.
4In relation to the Wodgina Mine Site, MRL has announced to the market by the ASX announcements platform to the effect that:
4.1MRL (via a subsidiary) acquired the rights with respect to the Wodgina Mine Site on 9 September 2016;
4.2the blasting of DSO at the Wodgina Mine Site commenced on or about 6 March 2017;
4.3as at June 2017, the Wodgina Mine Site delivered an annualised product rate of over 4 million wet tonnes of Product;
4.4as at 30 September 2017, MRL had exported 1,448,000 wet tonnes of Product to Asian markets;
4.5as at 22 November 2017, MRL had contracts with 5 DSO clients in China taking delivery of Product produced by MRL from the Wodgina Mine Site;
Particulars
MRL will refer to the ASX announcement of 9 September 2016, its Annual Report dated 18 October 2017 and its Managing Director’s Presentation to AGM dated 22 November 2017.
5In respect of lithium:
5.1Lithium is a chemical element utilised in the manufacture of steel and aluminium products as well as lithium ion batteries, which batteries are utilised to power household and commercial electronics;
5.2at all material times:
5.2.1China Baowu Steel Group Corporation Limited (Baosteel) was a Chinese company and steel producer; and
5.2.2Shandong RuiFu Lithium Co Ltd (RuiFu) was a Chinese company which had plans to manufacture lithium carbonate and/or lithium hydroxide for industrial purposes.
Twitter Publications by the Respondent
6On or about 30 November 2017, the Respondent using the account described in paragraph 2.2 above published the following words to the Twitter platform:
‘#Baosteel says Mineral Resource $MIN DSO is low quality, contains lepidolite and hard to produce a 5% concentrate. Wodgina deposit is not reputable now in #China. Difficult for MIN to complete desire 2 sell 51%. $AVZ best available & largest, lowest cost #lithium asset globally.’ (First Publication)
7By making the First Publication, as and from that time the Respondent represented to users of the Twitter platform and users of the internet at large to the effect that:
7.1Baosteel held the view or opinion that MRL’s Direct Shipping Ore (DSO) produced from the Wodgina Mine Site was of low quality and was difficult to process into a useful concentrate (Quality Representation);
7.2MRL’s DSO from Wodgina did not have a good reputation amongst processors and producers of lithium in China and/or manufacturers of lithium-based products in China (Reputation Representation);
Particulars
MRL refers to the following:
(a)the First Publication was copied or otherwise disseminated to and on the forum hosted on the internet at the URL (Hot Copper);
(b)the First Publication was visible to and accessible by any internet user searching either for the First Publication (or words contained therein) utilising search engines such as Google, or searching for or navigating to the hashtags utilised by Twitter and present in the First Publication; and
(c)the MRL will provide further and better particulars prior to trial.
8On or about 6 December 2017, the Respondent using the account described in paragraph 2.2 above published the following words to the Twitter platform:
‘Mineral Resource $MIN supplied 4 shipments of Direct Shipping Ore (DSO) to #RuiFu. RuiFu did not pay. Negative for future of #DSO with MIN also not being able to meet product specification requirements & MIN P&L’. (Second Publication).
9By making the Second Publication, as and from that time and alternatively in the context of having made the First Publication, the Respondent:
9.1represented to users of the Twitter platform and users of the internet at large to the effect that:
9.1.1MRL had supplied RuiFu with 4 shipments of DSO from Wodgina and RuiFu had not paid for the shipments on the basis that the DSO did not meet the contractual specification requirements between MRL and RuiFu (Non-Payment Representation); and
9.1.2RuiFu had informed the Respondent as to the matters set out in paragraph 9.1.1 above.
9.2otherwise repeated to users of the Twitter platform and users of the internet at large the substance of the Quality Representation and the Reputation Representation set out in paragraphs 7.1 and 7.2;
9.3represented to users of the Twitter platform and users of the internet at large that MRL would face ongoing issues of the kind set out in paragraphs 7.1, 7.2 and 9.1;
Particulars
(a)The Second Publication was visible to and accessible by any internet user searching either for the First Publication (or words contained therein) utilising search engines such as Google, or searching for or navigating to the hashtags utilised by Twitter and present in the Second Publication; and
(b)MRL will provide further and better particulars prior to trial.
10Further to the matters pleaded in paragraph 7 and 9 above, the First and Second Publications, by having been published on Twitter and republished on Hot Copper, constituted:
10.1conduct in Australia; further and alternatively
10.2conduct partially occurring in Australia.
Particulars
MRL will refer to:
(a)The subject matter of the First and Second Publications involving MRL. MRL repeats paragraph 1.4 herein;
(b)The persons accessing or viewing the First and Second Publication included members of the Australian public;
(c)The said persons referred to in subparagraph (b) accessing or viewing the First and Second Publications included those who did so from within Australia; and
(d)Section 6 of the Competition and Consumer Act 2010 (Cth) in so far as publication of the First and Second Publications by the Respondent was by the use of telegraphic or telephonic services (including internet services) and persons referred to in subparagraphs (b) and (c) viewed or accessed the First and Second Publications by the use of telegraphic or telephonic services (including internet services).
11Further to paragraph 10 above, the First and Second Publications constituted conduct:
11.1in trade and commerce:
Particulars
MRL will refer to:
(a)the Respondent’s business being that of corporate advisory and consulting in Singapore and globally;
(b)the Twitter Account of the Respondent expressly referring to the business of Airguide (in respect of which MRL repeats paragraph 2 hereof);
(c)the Second Publication containing an image of Airguide’s corporate insignia and branding.
11.2conduct concerning the nature, characteristics and/or suitability for purpose of goods (namely Product).
Particulars
MRL will refer to:
(a)paragraphs 4 and 6 to 9 hereof;
(b)section 33(1) of the ACL.
12On or about 7 December 2017, MRL (by its solicitors) wrote to the Respondent:
12.1complaining that the First and Second Publications were incorrect and therefore misleading or deceptive;
12.2requiring that the Respondent remove the First and Second Publications by 9.00am (AWST) on 8 December 2017; and
12.3requiring that the Respondent publish a retraction by 9.00am (AWST) on 8 December 2017.
Particulars
MRL will refer to its correspondence dated 7 December 2017, being 2 letters from Bennett + Co to the Respondent sent by email to the Respondent’s email address at [email protected].
13The Respondent failed or neglected and continues to fail or neglect to respond to MRL’s communications referred to in paragraph 12.
14At or about 7.40pm (AWST) on 7 December 2017, the Respondent removed the First Publication from Twitter, following which it was no longer visible or accessible on the Respondent’s Twitter account but remained otherwise available on the internet.
15At or about 7.40pm (AWST) on 7 December 2017, the Respondent removed the Second Publication from Twitter, following which it was no longer visible or accessible on the Respondent’s Twitter account.
Misleading or Deceptive Conduct (Australian Consumer Law)
First Publication
16In respect of the Quality Representation and the Reputation Representation Baosteel did not inform the Respondent of such matters prior to the First Publication or at all.
Second Publication
17In relation to the Non-Payment Representation, all shipments sent to RuiFu have been paid in full.
18In relation to the matters set out in paragraph 9.2 above, in so far as the Second Publication repeated the substance of the Quality Representation and the Reputation Representation, MRL repeats paragraph 16 hereof.
19In relation to the matters set out in paragraphs 9.3 above, in so far as the representations involved representations as to future matters, the Respondent had no reasonable basis for making the representations.
Contraventions of Australian Consumer Law
20By reason of the matters referred to in paragraphs 6 to 9 hereof the Respondent engaged in conduct utilising telephonic services within the meaning of the expression in section 6 of the Competition and Consumer Act 2010 (Cth).
21By the Respondent making the Quality Representation and the Reputation Representation, and by reason of the matters pleaded in paragraph 16 hereof the Respondent has engaged in conduct that is misleading or deceptive or is likely or liable to mislead or deceive within the meaning of:
21.1section 18 of the Australian Consumer Law (being Schedule 2 to the Competition and Consumer Act 2010 (Cth) and Schedule 2 to the Fair Trading Act 2010 (WA), together the ACL); further and alternatively
21.2section 33 of the ACL.
22Further to the matters pleaded in paragraph 9.2 hereof, by engaging in the repetition of the Quality Representation and the Reputation Representation, and by reason of the matters pleaded in paragraph 16 hereof, the Respondent has engaged in conduct that is misleading or deceptive or is likely to mislead or deceive within the meaning of section 18 of the ACL.
23By the Respondent making the Non-Payment Representation, and by reason of the matters pleaded in paragraph 17 hereof, the Respondent has engaged in conduct that is misleading or deceptive or is likely to mislead or deceive within the meaning of section 18 of the ACL.
24By the Respondent engaging in the conduct set out in paragraphs 9.3 and by reason of the matters set out in paragraph 23, the Respondent has engaged in conduct that is misleading or deceptive or is likely to mislead or deceive within the meaning of sections 4 and 18 of the ACL.
In his defence, the respondent joins issue on many of the matters pleaded at [1]‑[24], as follows:
1.He admits paragraph 1.
2.He admits paragraph 2.
3.He admits paragraph 3.
4.He does not admit paragraph 4.
5.He admits paragraph 5.
6.He admits paragraph 6.
7.He denies paragraph 7 and says further that by making the First Publication, the Respondent represented to users of the Twitter Platform that:
7.1Baosteel held the view or opinion that MRL’s Direct Shipping Ore (DSO) produced from its Wodgina Mine Site was of low quality and in respect of which it was difficult to produce a 5% concentrate;
7.2MRL’s DSO from Wodgina did not have a good reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China.
8.He admits paragraph 8.
9.He denies paragraph 9 and says further that by making the Second Publication, the Respondent represented to users of the Twitter Platform that:
9.1MRL had supplied RuiFu with 4 shipments of DSO from Wodgina in respect of which RuiFu did not pay for the shipments;
9.2the outlook for the Applicant was negative by reason of it not being able to meet product specification requirements for DSO and profitability.
10.The Respondent denies that he republished the First and Second Publications on Hot Copper and otherwise does not admit paragraph 10.
11.He does not admit paragraph 11.
12.Save that the Respondent admits that by letter dated 7 December 2017, the Applicant made the complaints and demands referred to, he otherwise denies paragraph 12.
13.Save that the Respondent admits that he did not respond to the letter dated 7 December 2017, he otherwise denies paragraph 13.
14.Save that the Respondent does not admit that the First Publication remained available on the internet, he otherwise admits paragraph 14.
15.He admits paragraph 15.
16.He does not admit paragraph 16 and says further that paragraph 16 does not disclose a cause of action and should be struck out.
17.He does not admit paragraph 17 and says further that paragraph 17 does not disclose a cause of action and should be struck out.
18.He denies paragraph 18.
19.He denies paragraph 19.
20.As to paragraph 20, the Respondent denies paragraphs 7 and 9 and otherwise does not admit paragraph 20.
21.The Respondent denies paragraph 21 and says further that the First Publication was not false, misleading and deceptive or likely or liable to mislead or deceive, in that:
21.1Baosteel in fact held the view or opinion that MRL’s DSO produced from its Wodgina Mine Site was of low quality and in respect of which it was difficult to produce a 5% concentrate;
21.2MRL’s DSO from Wodgina did not have a good reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China.
PARTICULARS
On or about 18 July 2017, in a conversation on the online platform WeChat between Mr Lui Rong, a Senior Trader employed by Baosteel, and the Respondent, Mr Liu told the Respondent that the Applicant’s mine ‘did not perform’, ‘the proportion of sand and mud [in the Applicant’s DSO] was very large’ and ‘it is very difficult to wash and floatation’.
On or about 20 July 2017, in an online conversation between Mr Lui Rong and the Respondent on WeChat, Mr Lui told the Respondent that ‘at the moment, raw ore [from the Applicant] has problem, so it is relatively difficult to resolve the floatation’.
On or about 25 July 2017, at a meeting in the office building of Baosteel Resources in Shanghai with Mr Lui Rong, another Senior Trader employed by Baosteel (Mr Danny Wang), the Respondent and the Respondent’s business partner (Thomas Cheung), the Respondent was told by one or other of those Traders words to the effect that the Applicant’s DSO produced from its Wodgina mine site was of low quality in that it contained mica, sand and mud, which made it difficult to separate out the lithium.
On or about 1 December 2017, in an online conversation on WeChat between Mr Lui and the Respondent, Mr Lui told the Respondent words to the effect that Baosteel cannot produce a 5% concentrate from the Applicant’s DSO, the result of floatation of the DSO was ‘not so good’, the recovery rate was ‘too bad’ and that the Applicant’s DSO contained lepidolite.
Lepidolite is a member of a mica group of metals that is a secondary, inferior source of lithium.
As at the date of the First Publication, the Applicant’s DSO had a reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China for being of poor quality in that the Applicant’s DSO contained mica, sand and mud.
22.He denies paragraph 22 and refers to and repeats paragraph 21.
23.He denies paragraph 23 and says further that the Second Publication was not false, misleading and deceptive or likely or liable to mislead or deceive, in that:
23.1MRL had supplied RuiFu with 4 shipments of DSO from Wodgina in respect of which RuiFu did not pay for the shipments;
23.2The outlook for the Applicant was negative by reason of the Applicant not meeting product specification requirements for DSO and by reason of the likely impact on its profitability.
PARTICULARS
Between in or about July and November 2017, MRL supplied RuiFu with 4 shipments of DSO from Wodgina in respect of which RuiFu did not pay for the shipments.
The 4 shipments of DSO from Wodgina were paid for by Baosteel, not RuiFu, further particulars of which will be provided after discovery.
The product specification requirements are contained in a product sheet supplied in about 2017 by the Applicant to several of its customers in China, including Baosteel and RuiFu, a copy of which is in the possession of the Respondent and may be inspected by appointment. Further particulars of the product sheet and the Applicant’s customers in China will be provided after discovery.
The product sheet does not provide for the DSO to contain mica, sand or mud.
The likely impact on the Applicant’s profitability arises from the poor quality of the Applicant’s DSO in that it contained mica, sand and mud, and that by reason of such poor quality, the Applicant was at risk of losing one or more customers in China, including Baosteel and Ruifu.
24.He denies paragraph 24 and refers to and repeats paragraph 23.
SHOULD FURTHER PARTICULARS OF [21.2] BE PROVIDED?
The applicant seeks the following further and better particulars of [21.2] of the defence:
As to paragraph 21.2
3Please provide the usual details of the allegation that ‘the Applicant’s DSO had a reputation among processors and producers of lithium in China and/or manufacturers of lithium based products in China for being of poor quality’ including the identity those processors and producers of lithium in China and/or manufacturers of lithiumbased products in China which are alleged to hold the view constituting the alleged reputation as regards the Applicant’s DSO.
The applicant, in support of its request, makes the following submissions (footnotes omitted) in relation to [21] of the defence:
5By paragraph 3 of the Application, MRL seeks further and better particulars to a confined yet fundamental aspect to paragraph 21 of the Defence. MRL’s request is as follows:
Please provide the usual details of the allegation that ‘the Applicant’s DSO had a reputation among processors and producers of lithium in China and/or manufacturers of lithium based products in China for being of poor quality’ including the identity of those processors and producers of lithium in China and/or manufacturers of lithium-based products in China which are alleged to hold the view constituting the alleged reputation as regards the Applicant’s DSO.
6To properly consider MRL’s request, a close analysis of paragraph 21 of the Defence is required in that:
6.1Mr Langford makes an allegation concerning Baosteel’s alleged opinion regarding MRL’s DSO (paragraph 21.1); and
6.2Mr Langford alleges as a positive statement of fact that MRL’s DSO did not have a good reputation amongst processors, producers and manufacturers of lithium or lithium-based products (paragraph 21.2).
7The particulars are deficient in their present form as they do not support the plea in paragraph 21.2 of the Defence. That is, the particulars do not disclose the identity of those processors and producers of lithium in China and/or manufacturers of lithiumbased products in China who are alleged to hold the views constituting the alleged reputation as regards MRL’s DSO.
8MRL’s request is simple, discrete and necessary to ensure that MRL knows of the case it has to meet at trial. [Dare v Pulham (1982) 148 CLR 658 at 664; Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356 at [49]-[52].] Paragraph 4 of the particulars to paragraph 21 merely recites the effect of what is pleaded in paragraph 21.2 without any further particularity:
... the Applicant’s DSO had a reputation among processors and producers of lithium in China and/or manufacturers of lithium based products in China for being of poor quality. [Emphasis added]
9The structure of the particulars to paragraph 21 confuses matters further.
10The first four paragraphs concern alleged conversations between Mr Langford and Mr Lui Rong and Mr Danny Wang; these alleged conversations relate only to Baosteel, which is arguably consistent to support the plea of Baosteel’s alleged knowledge at paragraph 21.1 of the Defence.
11However, paragraph 21.2 alleges, more broadly, a reputation amongst ‘processors, producers and manufacturers’ (that is, in plurality such as to support a ‘reputation’). Therefore, if the first four paragraphs of the particulars are to be read in support of the positive ‘broader’ allegation in paragraph 21.2, the particulars are insufficient to maintain the plea as those particulars only relate to Baosteel and do not identify any additional ‘processors and producers of lithium in China’.
12Mr Langford’s position is that the particulars sought are a matter for evidence and he will not provide the particulars requested. These are not matters of evidence. MRL is entitled to know the case that it has to meet; it is a question of whether MRL has adequate knowledge of what Mr Langford alleges are the facts.
13For the above reasons, the current particulars are insufficient to maintain the plea at paragraph 21.2 of the Defence. Mr Langford should plainly identify those ‘processors, producers and manufacturers’ which are alleged to hold the view constituting the alleged reputation as regards MRL’s DSO. Alternatively, subject to this Honourable Court’s view, MRL seeks to strike out paragraph 21.2 of the Defence as it does not state the necessary particulars required by Rule 16.41 of the Federal Court Rules.
The respondent, in answer to these submissions, says (footnotes omitted):
3.By paragraph 6 of the Statement of Claim, the Applicant alleges that ‘[o]n or about 30 November 2017, the Respondent using the account described in paragraph 2.2 above published the following words to the Twitter platform:
‘#Baosteel says Mineral Resources $MIN DSO is low quality, contains lepidolite and hard to produce a 5% concentrate. Wodgina deposit is not reputable now in #China. Difficult for MIN to complete desire 2 sell 51%. $AVZ best available & largest, lowest cost #lithium asset globally.’ (First Publication)’
4.By his Defence, the Respondent admits paragraph 6.
5.By paragraph 7 of the Statement of Claim, the Applicant alleges that ‘[b]y making the First Publication, as and from that time the Respondent represented to users of the Twitter platform and users of the internet at large to the effect that:
7.1Baosteel held the view or opinion that MRL’s Direct Shipping Ore (DSO) produced from the Wodgina Mine Site was of low quality and was difficult to process into a useful concentrate (Quality Representation);
7.2MRL’s DSO from Wodgina did not have a good reputation amongst processors and producers of lithium in China and/or manufacturers of lithium-based products in China (Reputation Representation).’
6.The Respondent denies paragraph 7 and ‘says further that by making the First Publication, the Respondent represented to users of the Twitter Platform that:
7.1Baosteel held the view or opinion that MRL’s Direct Shipping Ore (DSO) produced from its Wodgina Mine Site was of low quality and in respect of which it was difficult to produce a 5% concentrate;
7.2MRL’s DSO from Wodgina did not have a good reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China.’
7.The key aspects of the denial, therefore, are the references to ‘users of the internet at large’ and the form of the first of the representations.
8.By paragraph 21 of the Statement of Claim, the Applicant alleges, among other things, that ‘[b]y the Respondent making the Quality Representation and the Reputation Representation … the Respondent has engaged in conduct that is misleading or deceptive or likely to mislead or deceive.’
9.The Respondent denies paragraph 21 and says further that the First Publication was not false, misleading and deceptive or likely or liable to mislead or deceive, in that:
21.1Baosteel in fact held the view or opinion that MRL’s DSO produced from its Wodgina Mine Site was of low quality and in respect of which it was difficult to produce a 5% concentrate;
21.2MRL’s DSO from Wodgina did not have a good reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China.
PARTICULARS
On or about 18 July 2017, in a conversation on the online platform WeChat between Mr Lui Rong, a Senior Trader employed by Baosteel, and the Respondent, Mr Liu told the Respondent that the Applicant’s mine ‘did not perform’, ‘the proportion of sand and mud [in the Applicant’s DSO] was very large’ and ‘it is very difficult to wash and floatation’.
On or about 20 July 2017, in an online conversation between Mr Lui Rong and the Respondent on WeChat, Mr Lui told the Respondent that ‘at the moment, raw ore [from the Applicant] has problem, so it is relatively difficult to resolve the floatation’.
On or about 25 July 2017, at a meeting in the office building of Baosteel Resources in Shanghai with Mr Lui Rong, another Senior Trader employed by Baosteel (Mr Danny Wang), the Respondent and the Respondent’s business partner (Thomas Cheung), the Respondent was told by one or other of those Traders words to the effect that the Applicant’s DSO produced from its Wodgina mine site was of low quality in that it contained mica, sand and mud, which made it difficult to separate out the lithium.
On or about 1 December 2017, in an online conversation on WeChat between Mr Lui and the Respondent, Mr Lui told the Respondent words to the effect that Baosteel cannot produce a 5% concentrate from the Applicant’s DSO, the result of floatation of the DSO was ‘not so good’, the recovery rate was ‘too bad’ and that the Applicant’s DSO contained lepidolite.
Lepidolite is a member of a mica group of metals that is a secondary, inferior source of lithium.
As at the date of the First Publication, the Applicant’s DSO had a reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China for being of poor quality in that the Applicant’s DSO contained mica, sand and mud.
10.These are particulars to paragraph 21, not solely to paragraph 21.2. The Applicant’s contention that the structure of the particulars to paragraph 21 ‘confuses matters further’ (Applicant’s submissions, [9]) is wide of the mark. The Applicant uses the same structure in paragraph 7 of the Statement of Claim. Those particulars are to the whole of paragraph 7, not solely to paragraph 7.2.
11.Further, it is apparent from the terms of the particulars to paragraph 21 that the final paragraph of the particulars is that which relates to paragraph 21.2
12.The particulars are adequate. They inform the Applicant of the case which it has to meet. The particulars provide the nature of the poor reputation (‘poor quality in that the Applicant’s DSO contained mica, sand and mud’) and they describe the class of persons among whom the reputation is held (‘processors and producers of lithium in China and/or manufacturers of lithium-based products in China’.
13.The identity of those among the relevant class of persons who hold that view of the reputation of the Applicant’s DSO is neither a material fact nor a necessary particular. It will be a matter of evidence.
Having considered these carefully made submissions, I have come to the view that further and better particulars at [21.2] should be provided by the respondent.
I accept, as the respondent submits, that the particulars currently provided at the end of and after [21.2] are not solely particulars to [21.2].
However, in my view, they are not, as contended for, adequate. While they inform the applicant of much of the case which it has to meet, they significantly do not state who, among what the respondent calls a class of persons who held the relevant view of the reputation of the Direct Shipping Ore (DSO), actually held the view.
It is not sufficient, in my view, simply to say that all will be revealed when the evidence is led at trial. The allegation is that the DSO “did not have a good reputation among processors and producers of lithium in China and/or manufacturers of lithium-based products in China”. It is appropriate for the respondent to give particulars, as requested, of the identity of those processors and producers of lithium in China and/or manufacturers of lithium-based products in China said to hold the view.
SHOULD FURTHER PARTICULARS OF [23.2] BE PROVIDED?
The applicant seeks further and better particulars of [23.2] as follows:
As to paragraph 23.2
4Please provide the usual particulars and details of:
4.1the allegation of ‘the Applicant not meeting product specification requirements for DSO’ including the alleged specifications of the Applicant’s DSO;
4.2the allegation that the product sheet was supplied to ‘several of the Applicant’s customers in China’ including the identity of those customers and the date(s) on which the product sheets were provided; and
4.3the allegation that the Applicant was at risk of losing ‘one or more of its customers in China, including Baosteel and Ruifu’ including the names of those customers.
In respect of the request in relation to [23.2] of the defence, the applicant makes the following submissions (footnotes omitted):
14MRL seeks further and better particulars regarding the following allegations in paragraph 23.2 of the Defence:
14.1MRL ‘not meeting product specification requirements for DSO’ including the alleged specifications of MRL’s DSO; and
14.2MRL was at risk of losing ‘one or more of its customers in China, including Baosteel and Ruifu’ including the names of those customers.
15During conferral, Mr Langford’s solicitors provided a written response to the request for further and better particulars to paragraph 23.2 of the Defence, including:
(a)The ‘product specification requirements’ for the Direct Shipping ore (DSO) were contained in the Product Specification Sheet, a copy of which is attached.
(b)The DSO did not meet the product specification requirements as the product contained mud and sand.
…
The product sheets were provided to Ruifu, Qianyun Tech, Baosteel, Chengtun, Jiante and Baichun on or before 27 April 2017 …
[Mr Langford] was told on 25 July 2017 by Baosteel that the product provided by Mineral Resources Limited to Baosteel:
(a)contained a large quantity of mud and sand, which meant it was unable to undertake benefaction process; and
(b)did not contain the products percentages set out in paragraph 2 [of HWL Ebsworth’s letter dated 18 July 2018- ‘ATF-25’].
16By reason of the above, Mr Langford has clarified aspects of MRL’s request for further and better particulars, however, MRL maintains paragraphs 4.1 and 4.3 of the Application for the reasons set out below.
Paragraph 4.1 of the Application
17MRL seeks further and better particulars of Mr Langford’s allegation in paragraph 23.2 of MRL ‘not meeting product specification requirements for DSO’ including the alleged specifications of MRL’s DSO.
18Mr Langford’s position in conferral is that a representative from Baosteel told him that MRL’s DSO did not contain the percentages in the product specification sheet. Baosteel’s alleged understanding does not support the allegation at paragraph 23.2 that ‘the outlook for the Applicant was negative by reason of the Applicant not meeting the product specification requirements for DSO...’.
19That is, the plea at paragraph 23.2 alleges, as a positive fact, that MRL’s product did not meet the product specification requirements for DSO, which squarely brings into issue what were the product specifications.
20Mr Langford should provide the particulars requested. Alternatively, subject to this Honourable Court’s view and as set out above, MRL seeks to strike out paragraph 23.2 of the Defence as it does not state the necessary particulars, as required by Rule 16.41 of the Federal Court Rules.
Paragraph 4.3 of the Application
21MRL seeks further particulars of the allegation at paragraph 23.2 that it was at risk of losing ‘one or more of its customers in China, including Baosteel and Ruifu’ including the names of those customers pleaded to be ‘one or more’.
22It should be remembered that the practical effect of paragraph 23 is to allege in defence of MRL’s misleading or deceptive conduct claims that the matters are not misleading and are true. Therefore, Mr Langford should have had this information at the time of pleading.
23Mr Langford has provided no particulars as to how it is said that MRL was at risk of losing ‘one or more customers’. It may be arguable, given the information provided during conferral for this Application, that MRL was allegedly at risk of losing Baosteel as a customer. However, no particulars have been provided in respect of any other customer(s) that MRL was at risk of losing.
24It is not sufficient for Mr Langford to await discovery as a means of finding information that will support his case. If the only customer that MRL was at risk of losing was Baosteel, it should be pleaded as such.
25Mr Langford should provide the particulars requested. In the alternative, MRL would seek leave to strike out the offending part of paragraph 23.2 on that basis that the plea is unsustainable in its current form.
In relation to [23] of the defence particulars request, the respondent submits:
14.The Respondent has provided adequate particulars in respect of paragraphs 4.1 and 4.3 of the Interlocutory Application.
15.In relation to paragraph 4.1, the particulars to paragraph 23 of the Defence include the following:
‘… The product specification requirements are contained in a product sheet supplied in about 2017 by the Applicant to several of its customers in China, including Baosteel and RuiFu, a copy of which is in the possession of the Respondent and may be inspected by appointment. Further particulars of the product sheet and the Applicant’s customers in China will be provided after discovery.
The product sheet does not provide for the DSO to contain mica, sand or mud.’
16.The Respondent has given particulars as to how the Applicant has not met the specification requirements. The product sheet does not provide for the DSO to contain mica, sand or mud. In the case of a defamation defence of justification, a defendant may supplement the particulars even after the defence has been served. As Neill LJ observed in McDonald’s Corporation v Steel [1995] EMLR 527, 534-5 (see also Sali v Australian Broadcasting Corp (ABC) (Ruling No 2) [2013] VSC 719, [26]; Collins on Defamation, Oxford University Press, 2014, [8.62]):
‘It is true that a pleader must not put a plea of justification (or indeed a plea of fraud) on the record lightly or without careful consideration of the evidence available or likely to become available. But, as counsel for the plaintiffs recognised in the course of the argument, there will be cases where, provided a plea of justification is properly particularised, a defendant will be entitled to seek support for his case from documents revealed in the course of discovery or from answers to interrogatories.’
17.In relation to paragraph 4.3 of the Application, the final paragraph of the particulars to paragraph 23 provides:
‘The likely impact on the Applicant’s profitability arises from the poor quality of the Applicant’s DSO in that it contained mica, sand and mud, and that by reason of such poor quality, the Applicant was at risk of losing one or more customers in China, including Baosteel and Ruifu.’
18.The circumstances giving rise to the risk are provided, namely the poor quality of the Applicant’s DSO in that it contained mica, sand and mud. That poses a general risk of the Applicant losing customers. It is not a necessary particular to name the customers, even though two have been. The relevant risk arises as a matter of both logic and common sense.
Having regard to the submissions made by the parties, I am satisfied that the respondent has provided sufficient particulars of the allegation of the applicant “not meeting product specification requirements for DSO”, including the alleged specifications of the applicant’s DSO.
I accept the submissions made on behalf of the respondent at [15] and [16] of his written submissions set out above.
It might be thought that those particulars may prove inadequate to support the allegation that the applicant was “not meeting product specification requirements for DSO”, but nonetheless I am satisfied that particulars have been given.
As to particulars of the applicant being “at risk” of losing one or more customers in China, including Baosteel and RuiFu, I accept the submission made by the respondent in [18] of his written submissions set out above. In particular I agree that relevant risk arises as a matter of both logic and common sense.
CONCLUSION AND ORDERS
In these circumstances, I would order that the respondent provide further and better particulars of [21.2] of the defence as requested by the applicant.
So far as costs of this application are concerned, given that the applicant and the respondent have succeeded in part in obtaining an order for particulars and resisting the provision of particulars respectively, I will not make any order as to costs.
The Court orders:
(1)The respondent provide within 21 days further and better particulars of [21.2] of the defence as requested in the applicant’s notice for further and better particulars dated 15 May 2018.
(2)There be no order as to costs on the interlocutory application dated 15 May 2018.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate:
Dated: 11 October 2018
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