Mineral Resources Ltd v Destec Pty Ltd [No 5]

Case

[2024] WASC 449

29 NOVEMBER 2024

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MINERAL RESOURCES LTD -v- DESTEC PTY LTD  [No 5] [2024] WASC 449

CORAM:   HILL J

HEARD:   29 JUNE 2023 (WRITTEN SUBMISSIONS FILED 27 SEPTEMBER 2024, 9 OCTOBER 2024 & 16 OCTOBER 2024)

DELIVERED          :   29 NOVEMBER 2024

FILE NO/S:   CIV 1465 of 2020

BETWEEN:   MINERAL RESOURCES LTD

First Plaintiff

CRUSHING SERVICES INTERNATIONAL PTY LTD

Second Plaintiff

AND

DESTEC PTY LTD

First Defendant

STEPHEN LESLIE WYATT

Second Defendant

FILE NO/S:   CIV 1466 of 2020

BETWEEN:   CRUSHING SERVICES INTERNATIONAL PTY LTD

First Plaintiff

MINERAL RESOURCES LTD

Second Plaintiff

AND

STEPHEN LESLIE WYATT

Defendant


Catchwords:

Practice and procedure - Application to strike out second amended consolidated statement of claim - Whether extension of time required to bring application - Proper construction of Rules of the Supreme Court 1971 (WA), O 20 r 19(3)

Practice and procedure - Pleadings - Claim that client information, rates and design of crushing, screening and processing plants are confidential - Claim that defendants misused confidential information - Whether confidential information sufficiently identified in statement of claim - Whether breach of confidential information adequately pleaded

Legislation:

Rules of the Supreme Court 1971 (WA) O 1 r 4A, O 1 r 4B, O 3 r 5, O 20 r 13(3), O 20 r 19(1), O 20 r 19(3), O 21 r 3

Result:

Application allowed in part

Category:    B

Representation:

CIV 1465 of 2020

Counsel:

First Plaintiff : S Penglis SC & S Samaraweera
Second Plaintiff : S Penglis SC & S Samaraweera
First Defendant : P D Evans
Second Defendant : P D Evans

Solicitors:

First Plaintiff : Bennett
Second Plaintiff : Bennett
First Defendant : HFW Australia
Second Defendant : HFW Australia

CIV 1466 of 2020

Counsel:

First Plaintiff : S Penglis SC & S Samaraweera
Second Plaintiff : S Penglis SC & S Samaraweera
Defendant : P D Evans

Solicitors:

First Plaintiff : Bennett
Second Plaintiff : Bennett
Defendant : HFW Australia

Cases referred to in decision:

Agility CIS Ltd v White [2021] FCA 1145

Ammon v Consolidated Minerals Ltd (No 3) [2007] WASC 232

Coco v AM Clark (Engineers) Ltd (1969) RPC 41

Creative Brands Pty Ltd v Franklin [2001] VSC 338

Dalgety Australia Ltd v Rubin (Unreported, WASCFC, Library No 5485, 24 August 1984) 3

Dow Corning Australia Pty Ltd v Girys [2001] WASCA 361

English v Vantage Holdings Group Pty Ltd [2021] WASCA 47

Gardiner v Ray [1999] WASC 140

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566

Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) [2021] WASC 161

Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) [2024] WASC 20

Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group (No 2) [2009] FCA 363

Metaxas v Legal Profession Complaints Committee [2020] WASCA 27

Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167

Newcrest Mining Ltd v Santos WA Northwest Pty Ltd [2022] WASC 315

Niven v Grant (1903) 29 VLR 102, 106; (1903) 9 ALR 122

Ogbonna v Programmed Integrated Workforce Ltd (No 2) [2022] WASCA 79

Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd [2005] WASCA 236

Trackem Pty Ltd v Revenue Partners (A Partnership) [2021] WASC 245

Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398

HILL J:

  1. On 27 April 2023, the defendants applied to strike out the plaintiffs' second amended consolidated statement of claim dated 18 April 2023 (Statement of Claim).  The defendants seek an order for the entirety of the Statement of Claim, alternatively, that certain paragraphs of the Statement of Claim, be struck out on the grounds that it:

    (a)discloses no reasonable cause of action (O 20 r 19(1)(a) of the Rules of the Supreme Court 1971 (WA) (Rules));

    (b)may prejudice, embarrass or delay the fair trial of the action (O 20 r 19(1)(c) of the Rules); or

    (c)is an abuse of process (O 20 r 19(1)(d) of the Rules).

  2. For the reasons that follow, it is my view that:

    (a)[23.5], [27.6] and [27.7] of the Statement of Claim should be struck out with leave to replead;

    (b)[27.5] of the Statement of Claim should not be struck out; and

    (c)the defects identified by the defendants in relation to [23.2] and [23.3] can be remedied by the provision of further particulars and it is not necessary for these paragraphs to be struck out at this stage.  However, I will hear from the parties before making any orders in relation to these paragraphs.

Procedural background to application

  1. On 2 April 2020, Mineral Resources Ltd (MRL) commenced proceedings against Destec Pty Ltd (Destec), being CIV 1465 of 2020.  On the same date, the plaintiffs commenced proceedings against Mr Wyatt, being CIV 1466 of 2020. 

  2. On 1 May 2020, the plaintiffs filed statements of claim in each of these proceedings, together with an amended writ in CIV 1465 of 2020.  On 8 June 2020, the defendants filed defences in each proceeding.  On 21 July 2020, amended statements of claim were filed, and on 20 August 2020, amended defences were filed in both proceedings.

  3. Orders were made to consolidate the two proceedings on 8 December 2020. 

  4. Following the consolidation of the proceedings, the plaintiffs filed a consolidated statement of claim on 3 March 2021.  On 14 April 2021, the defendants filed a consolidated defence.

  5. None of the previous statements of claim were the subject of any application to strike out by the defendants.  Nor, prior to the filing of the plaintiffs' consolidated statement of claim, was any request made by for particulars of these pleadings.

  6. On 7 May 2021, the first request by the defendants for particulars was filed.  Particulars were sought in relation to the consolidated statement of claim (Request for Particulars).  On 25 June 2021, the plaintiffs responded to this request (Further Particulars).

  7. On 31 March 2021, at the request of the plaintiffs' solicitors, the court issued two subpoenas, including a subpoena to Rio Tinto Ltd.  The defendants' solicitors filed an application to set aside these subpoenas on 12 April 2021.  On 21 October 2021, Acting Registrar Hosking ordered that these subpoenas be set aside.

  8. On 28 October 2021, the plaintiffs filed a notice of appeal against the decision of Acting Registrar Hosking, which was listed for hearing before me on 28 January 2022.  On 21 January 2022, shortly prior to the hearing of the appeal, the plaintiffs filed an amended consolidated statement of claim.  As a consequence of these amendments, on 28 January 2022, orders were made to adjourn the hearing of the appeal until 16 February 2022, and to extend the time for the defendants to bring any strike out application of the plaintiffs' amended consolidated statement of claim until 7 February 2022.  No such application was made by the defendants by 7 February 2022.

  9. On 16 February 2022, orders were made setting aside the orders of Acting Registrar Hosking, and the time for compliance with the subpoenas was extended to 18 March 2022.

  10. On 2 March 2022, the defendants filed an amended consolidated defence (Defence).

  11. On 23 May 2022, the defendants filed a notice of change of representation.

  12. During 2022 and 2023, the parties addressed various issues concerning access to certain documents produced on subpoena and the categories of documents required to be discovered. 

  13. On 30 March 2023, both matters were listed for a strategic conference.  At the strategic conference, orders were made for the plaintiffs to file and serve any further amendments to their amended consolidated statement of claim by 17 April 2023.  Orders were also made requiring the defendants to file and serve any application to disallow the plaintiffs' further amendments, alternatively, to file and serve any further amended defence, by 1 May 2023.

  14. On 18 April 2023, the plaintiffs filed the Statement of Claim.  On 27 April 2023, the defendants filed this application, rather than an application to disallow the further amendments.  At this stage, the defendants have not yet filed a defence to the Statement of Claim. 

Pleadings

Statement of Claim

  1. The plaintiffs' primary claims against the defendants arise from three agreements entered into between the parties, namely:

    (a)two agreements between MRL and Destec, being a general services agreement for the provision of consultancy services (dated on or about 20 April 2015) (Consulting Agreement), and a separate general services agreement for the provision of engineering, design and modelling services (dated on or about 16 March 2017) (Engineering Agreement); and

    (b)an executive services agreement between Crushing Services International Pty Ltd (CSI) and Mr Wyatt dated 26 June 2006 (Executive Services Agreement).

  2. Each of the agreements contains a definition of 'confidential information' and imposes contractual obligations on the relevant defendant in respect of the retention and use of this information.  Given this aspect of the Statement of Claim is central to the defendants' application, I have summarised these definitions and obligations below. 

  3. The plaintiffs say they have developed proprietary modular crushing plants which can be rapidly deployed, installed and mobilised, as well as rapidly demobilised and relocated.  The plaintiffs say Destec is a trade competitor who contends it has designed and constructed its own novel crushing and screening plant which is modular and quick to erect on site.

  4. The plaintiffs allege that during the course of the defendants' performance of the agreements, confidential information (which included information in relation to the design, manufacture and commissioning of crushing, screening and processing plants) was imparted to the defendants in circumstances of confidence.

  5. The plaintiffs say that, in breach of the obligations of confidentiality under the agreements, the defendants failed to return all of the plaintiffs' documents in their possession despite the plaintiffs' request; have copied and retained confidential documents; and have used the confidential information in Destec's business to design and develop modular crushing, screening and processing plants, and to tender for work. 

  6. In addition to these contractual claims, the plaintiffs also plead that Mr Wyatt's conduct in using or causing another entity to use all or part of the 'Combined Confidential Information' (the definition of which is set out at [78]) was a breach of his equitable duty to keep any confidential information confidential and s 183 of the Corporations Act 2001 (Cth).

  7. The plaintiffs also contend that Mr Wyatt's conduct in copying the files and retaining the storage devices was a breach of each of the three contracts pleaded.

  8. By way of relief, the plaintiffs seek delivery up of any documents comprising and/or containing the confidential information as well as documents of which they own the copyright; an injunction to restrain the defendants from using or disclosing any confidential information; damages; and equitable compensation.

  9. Other than the Request for Particulars, no further requests for particulars have been made or filed.  Particulars were previously sought and provided for some of the paragraphs that are the subject of this claim (in the Further Particulars) and are summarised at the relevant part of these reasons. 

Defence

  1. The defendants have not yet filed a defence to the Statement of Claim. 

  2. In their Defence (which responds to the plaintiffs' amended consolidated statement of claim filed 21 January 2022), the defendants admit they are trade competitors of the plaintiffs and otherwise deny the remainder of the allegations.[1]

    [1] Defence [26(a) - (b)].

  3. Relevantly, in answer to a number of allegations raised by the plaintiffs, the defendants plead that the plaintiffs have failed to identify with requisite specificity the information said to comprise the confidential information, and the documents or information said to have been accessed by Mr Wyatt.[2]  In response to the plaintiffs' claim that an inference can be drawn from the defendants' conduct as to the use of the plaintiffs' confidential information in designing their own 'novel and/or bespoke' modular crushing and screening plant, the defendants say this inference is not open and should be rejected on the evidence.[3]

    [2] Defence [10(a)], [15] - [18], [22(c) - (d)].

    [3] Defence [26(c)].

Principles governing strike out application

  1. The principles which govern this application were not in dispute between the parties and were summarised by Smith J in Vantage Holdings Group Pty Ltd v Donnelly [No 4].[4]  Without repeating her Honour's summary, I have applied her Honour's statement of those principles in this decision. 

    [4] Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60]. This summary was approved by the Court of Appeal on the appeal from her Honour's decision: English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [56] (Murphy and Vaughan JJA).

  2. As a general rule, a party is entitled to have its case heard, facts found, and the opportunity to make submissions in relation to any issues of law that may arise in the proceedings.  In considering an application to strike out a pleading, all of the facts alleged in the pleading must be accepted as true.[5]  It is only where there is no basis for the legal conclusion contended for (even if the facts are found as pleaded by a party) that a pleading should be struck out.[6] 

    [5] Niven v Grant (1903) 29 VLR 102, 106; (1903) 9 ALR 122, 124 (Holroyd J, Madden CJ agreeing).

    [6] Dalgety Australia Ltd v Rubin (Unreported, WASCFC, Library No 5485, 24 August 1984) 3 (Burt CJ).

  3. The court is not required to strike out a statement of claim that is 'less than optimal'.  Where 'there is enough' in the statement of claim and particulars (including schedules) to enable the defendant to adequately prepare to meet the case against it, the court may exercise its discretion to refuse to strike out a defective pleading.[7]

    [7] Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167 [34] - [35] (Steytler and Wheeler JJ).

  4. Where one party knows the facts and the other does not, the ability of a party to obtain discovery before providing particulars does not mean that allegations may be pleaded without a proper factual foundation.[8]  What constitutes a proper factual foundation varies with the circumstances of each case.[9]

    [8] Trackem Pty Ltd v Revenue Partners(A Partnership) [2021] WASC 245 [34] - [35] (Archer J).

    [9] Metaxas v Legal Profession Complaints Committee [2020] WASCA 27 [69] (Quinlan CJ and Pritchard JA).

  5. That said, as Franklyn J stated in Jingellic Minerals NL v Abigroup Ltd:[10]

    There is authority for the proposition that when one party knows the facts and the other does not, an insufficiently particularised allegation may be made in a statement of claim and the plaintiff be permitted to obtain discovery of documents and answers to interrogatories before providing the necessary particulars. 

    [10] Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566, 570.

Admissibility of evidence on a strike out application

  1. The defendants relied on five affidavits in support of their application, namely:

    (a)an affidavit of Nicholas James Rohr filed 29 April 2021 (on behalf of the plaintiffs);

    (b)two affidavits of Peter Edward Sadler filed 2 May 2023 and 19 June 2023; and

    (c)two affidavits of Stephen Leslie Wyatt: a non-confidential affidavit filed 2 May 2023 and [1] - [21] of a confidential affidavit filed 1 June 2022.

  2. On an application to strike out a pleading for failure to disclose a reasonable cause of action, evidence is not admissible, save for documents which are specifically pleaded.[11]  In respect of the remaining grounds for the application, evidence is admissible.[12]

    [11] Rules of the Supreme Court 1971 (WA) O 20 r 19(2), O 20 r 19(1)(a).

    [12] Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd [2005] WASCA 236 [3] (McLure JA).

  3. The plaintiffs filed a schedule of objections to the defendants' evidence. In essence, the plaintiffs do not accept that any of the affidavits filed by the defendants are admissible on their application, in so far as it is brought under O 20 r 19(1)(a) of the Rules. In so far as the affidavits are relied upon for the application under O 20 r 19(1)(c) and O 20 r 19(1)(d) of the Rules, the plaintiffs contend that they are irrelevant. At the hearing, senior counsel for the plaintiffs accepted the affidavits should be received by the court provisionally and that their admissibility be determined as part of the application.

  4. In response to the application, the plaintiffs relied on two affidavits of Andrew James Filing filed 9 June 2023 and 28 June 2023.

  5. Ultimately, apart from some of the factual background to the application which has been taken from these affidavits and the schedules to Mr Filing's affidavits, it has not been necessary to refer to these affidavits in reaching my decision.  Given this, it is not necessary to resolve the question as to the admissibility of this evidence.

Is an extension of time required to bring the application?

  1. Before turning to the substance of the application, it is necessary to first address the question of whether the defendants require an extension of time to bring the application. 

  2. The plaintiffs say the defendants require an extension of time to bring the application in so far as they seek to strike out parts of the Statement of Claim that were not the subject of the most recent amendments.  This is because some of the paragraphs, which are the subject of the application (namely, [23.3] and [27.5] - [27.7]), were included in the amended consolidated statement of claim filed 21 January 2022 and have not been amended or substantively amended in the Statement of Claim.[13] The plaintiffs say that any application to strike out these paragraphs of the Statement of Claim was required to have been filed by 11 February 2022, pursuant to O 20 r 19(3)(a) of the Rules. On this basis, the plaintiffs say the application was filed almost 15 months out of time.

    [13] It is accepted that [23.2] and [23.5] have been substantially amended by the Statement of Claim. 

  3. In support of this submission, senior counsel for the plaintiffs referred me to the decision of the Full Court of the Supreme Court of Western Australia in Dow Corning Australia Pty Ltd v Girys.[14]  The plaintiffs submitted that the wording of the rule in relation to the timeframe for requesting particulars was in similar terms to the rule governing the strike out of pleadings and that, on this basis, the same conclusion applied. 

    [14] Dow Corning Australia Pty Ltd v Girys [2001] WASCA 361.

  4. The defendants deny an extension of time is required as their application was brought within 21 days of the Statement of Claim being filed.  In support of this submission, they relied on the decision of Tottle J in Newcrest Mining Ltd v Santos WA Northwest Pty Ltd.[15]  In that case, his Honour concluded that an application could be made to strike out the entirety of an amended pleading brought within 21 days of it being served and was not restricted to the amendments that had been made.[16]

    [15] Newcrest Mining Ltd v Santos WA Northwest Pty Ltd [2022] WASC 315.

    [16] Newcrest Mining Ltd v Santos WA Northwest Pty Ltd [7] - [8].

  5. Both parties also referred to my earlier decision in Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd).[17]  In that decision, I expressed the view that the defendants required an extension of time to bring the application because the majority of the paragraphs the subject of the application were included in an earlier version of the pleading and had not been objected to at that time.[18]

    [17] Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) [2021] WASC 161.

    [18] Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) [5].

  1. After the hearing of this application and prior to delivery of these reasons, I delivered a further decision on Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) in which I reconsidered this issue and reached a different conclusion.[19]  Given this, I invited the parties to file further short submissions on this issue which I have taken into account in reaching my decision.[20]

    [19] Litigation Capital Partners LLP Pte Ltd (Registration No 200922518M) v ACN 117 641 004 Pty Ltd (in liq) (formerly known as Vale Cash Management Fund Pty Ltd) [2024] WASC 20 and addendum.

    [20] Defendants' submissions filed 27 September 2024 and 16 October 2024; Plaintiff's submissions filed 9 October 2024.

  2. Order 20 r 19(3) of the Rules provides that:

    (3)An application for an order under subrule (1) must —

    (a)be made within 21 days of the service of any pleading, or amended pleading, or writ to which the application refers; and

    (b)where the application is to strike out certain pleadings, specify —

    (i)the paragraph of subrule (1) under which the application is made; and

    (ii)those parts of the pleadings which the applicant seeks to have struck out;

    and

    (c)where the application is to strike out the entire pleading, clearly indicate that intention in the application.

  3. The text of this rule requires a strike out application to be made within 21 days of service of the relevant pleading, whether that is the original pleading or amended pleading. The rule does not restrict the application to the parts of the amended pleading that are the subject of the amendment, but simply refers to the pleading in its entirety. The requirement under O 20 r 19(3)(b)(ii) that the application refer to the parts of the pleading which are sought to be struck out requires the applicant to make two matters plain. First, whether the application is to strike out the entire pleading, or only parts of it (and if so, which parts). Second, whether the same grounds are relied upon to strike out each paragraph of the pleading.

  4. The rationale for the time limit contained in O 20 r 19(3)(a) of the Rules is that applications to strike out pleadings cause delay and expense, often with no countervailing benefit. By imposing a time limit on when a strike out application can be brought, it makes clear that any such application must be brought promptly so as not to impact the proceedings.[21]

    [21] Gardiner v Ray [1999] WASC 140 [33] (Steytler J).

  5. The text of O 20 r 19(3)(a) can be contrasted with the text of the Rules dealing with the provision of particulars (O 20 r 13(3)) as well as the striking out of amendments made to pleadings without leave of the court (O 21 r 3).

  6. In relation to the provision of particulars, O 20 r 13(6) of the Rules provides that an order under O 20 r 13 (requiring the provision of particulars) 'shall not be made' unless a written request for the particulars is filed and served 'within 30 days of the service of the pleadings or such other time as the Court may allow'.

  7. In Dow Corning Australia Pty Ltd v Girys, the Full Court of the Supreme Court of Western Australia held that where a party has previously sought and been given particulars of an allegation and no objection has been taken to the answers provided, service of an amended pleading did not entitle that party to re-open a request for particulars of a pleading which had not been amended (emphasis added).[22]  However, the court did not express any view as to whether a party is entitled to make an initial request for particulars of a paragraph that was not the subject of the amendment.  In that case, this did not need to be determined for two primary reasons.  First, there was no dispute that an extension of time was required for the application for further and better particulars.  Second, the merits of the application did not justify granting an extension of time. 

    [22] Dow Corning Australia Pty Ltd v Girys [2001] WASCA 361 [18] (Kennedy J, Wallwork and Wheeler JJ agreeing).

  8. That is, this decision addressed the ability of a party to renew a request for particulars following the service of an amended pleading, rather than a party's ability to make a new request for particulars of parts of the pleading that had not been amended. On this basis, I do not consider that this decision is of any significant assistance in resolving the question of the proper construction of O 20 r 19(3) of the Rules.

  9. Order 21 r 3 of the Rules entitles any party to amend its pleadings without leave up until seven weeks prior to the commencement of the trial. Any application to strike out 'any amendment in the pleading' must be made within seven working days of service of the amended pleading. That is, in contrast to O 20 r 19(3), this rule specifically limits any strike out application to the amendments in the pleading. This limitation is not contained in the text of O 20 r 19(3).

  10. In my view, on the proper construction of O 20 r 19(3) of the Rules, the defendants do not require an extension of time to file their application and are entitled as of right to apply to strike out any paragraphs of the Statement of Claim. This is because the rule allows an application to be brought within 21 days of service of an amended pleading. That said, allowing a party to take advantage of the service of an amended pleading to apply to strike out long-standing paragraphs of the pleading is inconsistent with the purpose of the rule (as articulated by Steytler J), as well as the case management principles set out in O 1 r 4A and O 1 r 4B of the Rules. Accordingly, even if the defendants do not require an extension of time to bring the application, a relevant factor in the exercise of the court's discretion as to whether or not to grant the application is the length of time the relevant paragraph has formed part of the pleading and the reason for the delay in raising the issues.  Where the defects raised by a party do not, in any material way, impede the progress of the action, it is my view that the application should be refused.[23]

    [23] Gardiner v Ray [34].

  11. Even if I am wrong on the construction of the Rules, the court has the discretion to extend the time period for the making of a strike out application 'on such terms as it thinks just'.[24] In considering the principles that govern an application to strike out a pleading brought outside the time limit prescribed by O 20 r 19(3)(a) of the Rules, the Court of Appeal stated in Ogbonna v Programmed Integrated Workforce Ltd (No 2):[25]

    An application for an extension of time under O 3 r 5 is ultimately to be determined having regard to the interests of justice in all the circumstances of the case, including taking into account case management considerations. Moreover, as Martin CJ observed in Rayney:

    [T]he fact that the delay in bringing an application to strike out a part of a pleading is unjustifiable is not necessarily determinative of the application. Even in such a case, the decision to be made by the court on such an application is to be made having regard to the interests of justice, including the interests which are served by the case management principles which are embodied in the Rules of the Supreme Court[.]

    (footnotes omitted) (citations omitted)

    [24] Rules of the Supreme Court 1971 (WA) O 3 r 5.

    [25] Ogbonna v Programmed Integrated Workforce Ltd (No 2) [2022] WASCA 79 [105] (Quinlan CJ, Murphy and Beech JJA).

  12. The court went on to observe that:[26]

    An application to extend time in the circumstances of the present case is more appropriately addressed by reference to the broad principles referred to in [105] above, in which the presence or absence of prejudice to the other party is a factor to be weighed in determining where justice lies, as are considerations such as the extent of the delay, any explanation (or absence of explanation) for it, and the merits of the underlying application for which an extension of time is required.

    [26] Ogbonna v Programmed Integrated Workforce Ltd (No 2) [107] (Quinlan CJ, Murphy and Beech JJA).

  13. In this case, no affidavit evidence was adduced by the defendants as to why their application was not filed at an earlier date or until issues concerning the scope of discovery were raised.  Given this, if an extension is required, it would be necessary to consider the merits of the application.  If the court considers there is merit in the application, the court may be minded to grant any extension of time that is required.  On the other hand, if the application is unmeritorious, any extension of time that may be required for the application should be refused.

Requirements of pleading a cause of action for misuse of confidential information

  1. The general approach of the court is to discourage pleadings disputes.  While issues in an action continue to be defined by the pleadings, modern case management enables various procedural steps to be taken to ensure that by the time of the trial, there is no uncertainty as to what is precisely in issue between the parties. 

  2. A more nuanced approach is generally taken in relation to the pleading of a claim for misuse of confidential information, particularly if it concerns a claim by a former employer against a former employee.  As Anderson J stated in Agility CIS Ltd v White:[27]

    In the context of a claim for misuse of confidential information, it has often been said that it is vital that the information which is said to be confidential is defined with precision, and the disclosure or use of that information which is said to constitute a misuse of that information is specified with particularity.  In Pioneer Concrete Services Limited v Galli, the Court observed:

    What is important in the present case, as in all other cases of this kind, is that the court should be able, both, to define the precise nature of the confidential information which it is sought to protect and to identify with some particularity the disclosure or use which is alleged against the defendants.

    One of the reasons the courts insist on such specificity is to avoid the bringing of actions that are merely speculative in character, and to prevent a former employer from using a generally worded claim to stifle the right of an employee to use the skill and experience of that employee.

    If the claim amounts in substance to little more than that the defendants left their former employer, established their own business, and are now competing in a market place against their former employer that will not be sufficient to make out even an arguable case of misuse of confidential information.

    Even where there is some attempt to identify the information, if it is merely expressed in wide and general terms, it can still be used as "an instrument of oppression or harassment against a defendant.  In Ocular Sciences, Laddie J explained why a failure to give proper particulars of such a claim is "a particularly damaging abuse of process":

    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.  This is not only for the reasons set out by Edmund Davies LJ in Zink (John) & Co Ltd v Lloyds Bank Ltd but for at least two other reasons.  First, the plaintiff usually seeks an injunction to restrain the defendant from using its confidential information.  Unless the confidential information is properly identified, an injunction in such terms is of uncertain scope and may be difficult to enforce ...  Secondly, 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. 

    (citations omitted)

    [27] Agility CIS Ltd v White [2021] FCA 1145 [10] - [14] (Anderson J).

  3. It is insufficient for a party asserting a misuse of their confidential information to make a global or general claim for protection of what they contend is confidential information.  This is because, as a general proposition, the courts are reluctant to permit a previous employer to use a generally worded claim to prevent an employee from using their skill and experience as distinct from an ex-employer's 'secrets'.[28]

    [28] Creative Brands Pty Ltd v Franklin [2001] VSC 338 [16] (Warren J).

  4. For a claim for misuse of confidential information to succeed, it is necessary for a party to prove three matters:[29]

    (a)the information sought to be protected is confidential;

    (b)the information was imparted in circumstances which import an obligation of confidence; and

    (c)there has been an unauthorised use of the information to the detriment of the party who communicated it.

    [29] Ammon v Consolidated Minerals Ltd (No 3) [2007] WASC 232 [286] - [310] (Martin CJ, citing with approval Megarry J in Coco v AM Clark (Engineers) Ltd (1969) RPC 41, 47).

  5. To establish information is confidential, it is necessary for a party to distinguish between those parts of the information which are confidential from that which is common knowledge.[30]

    [30] Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited trading as ANI Bradken Rail Transportation Group (No 2) [2009] FCA 363 [52] (McKerracher J).

Relevant factual background

  1. The second defendant, Mr Wyatt, is a boilermaker and welder by trade who has, since the early days of his career, been involved in the maintenance, refurbishment and design of crushing, screening and processing plants. 

  2. In May 1995, CSI was incorporated, with Chris Ellison (the managing director of MRL), his brother and Mr Wyatt appointed as directors.  Mr Wyatt provided services relating to crushing, screening and processing plants to CSI through a corporate entity. 

  3. From June 2006 until about February 2015, Mr Wyatt was employed as the general manager of CSI pursuant to the Executive Services Agreement.  During this period, Mr Wyatt continued to design, construct, commission and operate crushing, screening and processing plants for CSI's clients.

  4. On 10 March 2015, Destec was incorporated and Mr Wyatt appointed as a director.  In April 2015, Destec entered into the Consulting Agreement, and in March 2017, entered into the Engineering Agreement.  Both of these agreements included the provision of services for the design, manufacture and commissioning of crushing, screening and processing plants.

  5. In 2018, Destec ceased providing services to MRL under the Consultancy Agreement and the Engineering Agreement and on 20 July 2018, Mr Wyatt ceased to be a director of CSI.  From about November 2019, Destec has been in competition with the plaintiffs in relation to the design, manufacture and commissioning of crushing, screening and processing plants.

  6. Senior counsel for the plaintiffs submitted that, given this background, this case should not be characterised as a claim by a former employer against a former employee.  It was emphasised that Mr Wyatt was a founding director of CSI, its general manager for a significant period of time, and responsible for the management of CSI's business.  The plaintiffs say that they are not attempting to stifle Mr Wyatt's rights to use his skill, experience or know-how but are simply seeking to protect their confidential information.

  7. Before turning to the specific paragraphs which the defendants seek to strike out, it is useful to first consider how the plaintiffs have defined confidential information in the Statement of Claim and how the obligations of confidence are said to arise.

Description of confidential information

  1. Each of the agreements between the plaintiffs and defendants separately defines 'confidential information'. 

  2. In the Executive Services Agreement, the plaintiffs plead that 'confidential information' is defined to mean 'all information relating to the current or future business interests, methodology or affairs of CSI or entities related to CSI including clients, suppliers, inventions, novel designs, know-how, manuals, diagrams, specifications, records, concepts, discoveries, ideas, designs, processes, plans, drawings, methods, price lists reasonably regarded as confidential, being information not in the public domain or known to competitors of CSI'.[31]  The defendants emphasised that this definition excluded information that was already in Mr Wyatt's possession at the commencement of the Executive Services Agreement.

    [31] Statement of Claim [10.7].

  3. In the Consulting Agreement, the plaintiffs plead that 'confidential information' is defined to mean 'any information that concerns the business operations, finances, plans or customers of MRL disclosed to or acquired by Destec and which is its nature (sic) confidential or is designated by MRL as confidential or Destec knows or ought to know is confidential but does not include information that is or becomes public knowledge other than by breach, or information in the possession of Destec or information that has been independently developed or acquired by Destec'.[32]

    [32] Statement of Claim [13.4].

  4. In the Engineering Agreement, the plaintiffs plead that confidential information is defined to mean 'any information or intellectual property other than Contractor IP (defined to mean the IP Rights discovered, created or otherwise delivered by Destec other than in connection with the Services set out in Schedule 2 of the Engineering Agreement) that concerns the business, operations, finances, plans or customers of MRL or any of its related companies that is disclosed to or acquired by Destec and which is by its nature confidential or is designated by MRL as confidential or Destec knows or ought to know is confidential'.[33]

    [33] Statement of Claim [15.7].

  5. A number of observations can be made about these definitions.  First, each of the definitions is relatively broad.  Second, information can be 'confidential information' for three different reasons, namely:

    (a)information which is inherently confidential;

    (b)information which is designated by MRL as confidential; or

    (c)information which Destec knows or ought to know is confidential. 

  6. Third, while there is some overlap, there are important differences between these definitions of 'confidential information'.  The definition in the Consulting Agreement is limited to operational, financial and planning information as well as customer information, and does not include the intellectual property of the plaintiffs.  In contrast, the Engineering Agreement focusses on the protection of the plaintiffs' intellectual property.  Finally, the definition in the Executive Services Agreement is the broadest of the definitions.  Essentially, it is a 'catch-all' definition which extends to 'all' confidential information of the business.

  7. The Statement of Claim then pleads the information the plaintiffs say was 'confidential information' within the meaning of that term in the Executive Services Agreement,[34] which is defined as 'Employment Agreement Confidential Information'.  This information is pleaded to be information which was imparted to Mr Wyatt in circumstances of confidence, not publicly available, and 'included' information relating to the 'design, manufacture and commissioning of crushing, screening and processing plants including CSI's mobile, semi-mobile and modular fast construction installations'.  The particulars of this pleading say this information included:[35]

    [34] Statement of Claim [16].

    [35] Statement of Claim [16.4].

    (i)crushing, screening and processing plant designs for mobile and fixed plant and equipment;

    (ii)crushing, screening and processing plant models for mobile and fixed plant and equipment';

    (iii)process flowsheets;

    (iv)designs, specifications, technical data, mobilisation spreadsheets and drawings relating to various mining projects and associated projects;

    (v)estimating and pricing information documents;

    (vi)budgets, projected profit calculations, forecasts and quotations;

    (vii)meeting minutes and internal emails between employees of CSI and/or MRL;

    (viii)pre-contractual correspondence and contracts between CSI and/or MRL and their clients; and

    (ix)lists of CSI and/or MRL's past and present employees, contractors and suppliers, including contact details such as telephone numbers. 

  1. The plaintiffs say that further particulars may be provided following inspection of discovered and subpoenaed documents, and expert evidence.[36]

    [36] ts 400 (29 June 2023).

  2. These same allegations and particulars are provided in support of the claims of what constitutes confidential information under the Consultancy Agreement (defined as 'Consultancy Agreement Confidential Information') and Engineering Agreement (defined as 'Engineering Agreement Confidential Information').[37] 

    [37] Statement of Claim [17.4], [17A.4].

  3. These terms (Employment Agreement Confidential Information, Consultancy Agreement Confidential Information, and Engineering Agreement Confidential Information) are then collectively defined as 'Combined Confidential Information'.[38]  The Combined Confidential Information is pleaded to have been developed in circumstances of confidence, otherwise imparted in circumstances of confidence, or is information of a confidential character.  The pleading does not distinguish between which circumstances apply to each category of confidential information and the documents said to comprise the confidential information.

    [38] Statement of Claim [18].

  4. The plaintiffs say that they have sufficiently particularised the confidential information that they allege has been misused by the defendants by reference to the documents which Mr Wyatt copied and deleted on his laptop. 

  5. I do not agree. 

  6. In my view, there are three issues with this aspect of the Statement of Claim.

  7. First, the plaintiffs have not identified the alleged confidential information with sufficient precision as to enable the defendants to identify what information the plaintiffs seek to protect under each agreement.  At present, the information is not properly defined in a manner which could support the granting of an injunction,[39] as the scope of any such relief would be uncertain. 

    [39] Statement of Claim, Prayer for Relief C.

  8. Second, it is not possible, given the level of generality in the pleading, for the defendants to know the case they are required to meet.  For example, unless the plaintiffs specifically plead the basis on which each category of information is said to be confidential and under which agreement, the defendants will be unable to properly address how the information was developed and imparted to the defendants (or either of them), or whether it is contended that the information is inherently confidential.  It is critical that this is made clear, particularly in circumstances where each of the agreements contain carve outs as to what information is confidential to the plaintiffs and what can be used by the defendants.

  9. Third, given the difference in the definitions in each of the agreements, it is not sufficient for the plaintiffs to repeat the same pleading and particulars in respect of each agreement.  By way of example, even putting to one side the broad description of the categories of confidential information, it is not clear how a list of past and present employees falls within the definition of confidential information in the Engineering Agreement.  Similarly, it is not clear how designs, specifications, technical data, and drawings fall within the definition of confidential information in the Consulting Agreement. 

  10. While these matters are not the subject of the defendants' application to strike out specific paragraphs of the Statement of Claim, they are the basis of the application to strike out the Statement of Claim in its entirety.  The plaintiffs' failure to sufficiently particularise what they contend is confidential information has caused evident issues when considering their pleading about the alleged misuse of this information.

Misuse of confidential information

  1. The alleged misuse of the plaintiffs' confidential information is said to arise from:

    (a)Mr Wyatt's access to the plaintiffs' files relating to the plaintiffs' crushing plant and screening plant drawings, designs and contract rates (defined as 'Accessed Files') after he ceased to be a director of CSI;[40]

    (b)Mr Wyatt's copying of files relating to the plaintiffs' projects, crushing designs and commercial documents and business contacts (defined as 'Copied Files');[41]

    (c)Mr Wyatt's deletion of other files, which included the Copied Files and Accessed Files located on his laptop;[42] and

    (d)Mr Wyatt's failure or refusal to return to the plaintiffs the Combined Confidential Information or the storage devices to which the Accessed Files and/or Copied Files were copied.[43] 

    [40] Statement of Claim [23.2].

    [41] Statement of Claim [23.3].

    [42] Statement of Claim [23.4], [23.6].

    [43] Statement of Claim [25] - [26].

  2. The plaintiffs say the Accessed Files and Copied Files include documents constituting Combined Confidential Information[44] and that it should be inferred from the defendants' conduct, as well as the fact that the Destec plant is not the subject of a patent application, that the defendants have used all or part of the plaintiffs' confidential information in the design of the crushing plant produced by Destec[45] to the detriment of the plaintiffs.[46]

    [44] Statement of Claim [23.5].

    [45] Statement of Claim [27.6].

    [46] Statement of Claim [27.7].

  3. Particulars of each of these allegations are included in the Statement of Claim.  These particulars set out the basis on which it is contended that Mr Wyatt accessed the plaintiffs' files located on his laptop, external storage devices, and MRL's computer server, by reference to 'Link Files', 'Jump Lists', and a 'USB Detective Report'.  The particulars explain what is meant by 'Link Files', 'Jump Lists' and a 'USB Detective Report'.  Copies of these lists and report are annexed to the Further Particulars.  These annexures are a complete list of the files accessed by Mr Wyatt on the dates pleaded or particularised.  The plaintiffs say that the Jump Lists and USB Detective Report identify that Mr Wyatt accessed and retained files relating to its crushing and screening plants.

  4. In relation to the contention that Mr Wyatt copied the Copied Files from his laptop onto external storage devices in February 2020, the particulars set out the facts relied upon by the plaintiffs; namely, that a user logged on to Mr Wyatt's laptop and connected various USBs to the laptop.  The particulars give a broad description of the categories of documents that were copied and assert these documents included the rates charged to certain named clients, and the designs and drawings of crushing and screening plants.  They do not, however, itemise the documents which the defendants claimed were copied.

  5. Further and better particulars of these allegations (as they were then pleaded in the consolidated statement of claim filed 3 March 2021) were sought by the defendants in May 2021.  The defendants requested that the plaintiffs provide a complete list of the files that were copied that related to the projects, crushing designs, commercial documents and business contacts.[47]  In the Further Particulars, the plaintiffs provided particulars as to the basis on which they contend Mr Wyatt copied documents from his laptop to external storage devices and annexed various spreadsheets.  These annexures set out the history of activity on Mr Wyatt's laptop and run to more than 250 pages.

    [47] Request for Particulars [4(c)].

  6. The defendants' complaint, in essence, is that these annexures list thousands of documents, many of which are unrelated to crushing and screening plants or contract rates and that the plaintiffs' have failed to identify with any precision which of these documents comprise the Accessed Files or Copied Files.  The plaintiffs reject this complaint and say the pleading, in its present form, is clear.  They refer to the limitations of the forensic examination that was undertaken and state that, at present, it is not possible to identify the exact documents that were accessed. 

  7. While I accept there are limitations with the forensic examination done by the plaintiffs, in my view, the defendants' complaint is well-made.  It is clear from an examination of the spreadsheets annexed to the Further Particulars that they contain a complete list of all documents that were once on Mr Wyatt's laptop, including those documents which had been accessed by him and have since been copied or deleted.  Not all of these documents are confidential or documents belonging to the plaintiffs'.  The most notable example of this is the reference to 'Game of Thrones Season 5' on the USB Detective Report 1.  That said, the spreadsheets also include references to Destec\New Train Structure', 'Destec\3D models', various 'RTIO\Drawings', and 'Steve bc\Contract rates 2012' which, at least on the basis of their description, may fall within matters of which the plaintiffs complain.

  8. The basis on which the plaintiffs assert Mr Wyatt accessed the plaintiffs' files and the files that have been accessed (by reference to file name and path in the annexures to the particulars) is, in my view, sufficiently clear from the Statement of Claim and Further Particulars.  However, no attempt has been made by the plaintiffs in the Statement of Claim, the Further Particulars or the annexures to particularise only those documents which are said to be either Accessed Files or Copied Files.  Consistent with the authorities that I have referred to above, it is my view that the plaintiffs are required to specifically identify the information that is in issue. 

  9. That said, my preliminary view is that it is not necessary at this stage to strike out either [23.2] or [23.3] of the Statement of Claim as the defects identified by the defendants can be remedied by the provision of proper particulars which identify the documents comprising the Accessed Files and Copied Files (as those terms are defined in the Statement of Claim).  For that reason, I will hear from the parties before making any orders in relation to these paragraphs.

  10. The issue raised by the defendants in relation to [23.5] of the Statement of Claim is, in my view, more substantive and is not simply a matter of particularisation.  It contends that the Accessed Files and Copied Files included documents constituting Combined Confidential Information.  Neither the Statement of Claim nor the Further Particulars specify the documents or information which the plaintiffs say constitute the Combined Confidential Information.  The plaintiffs accept that not all of the documents in the Accessed Files and Copied Files are the plaintiffs' documents, let alone confidential information.  As set out above, in order to make good their cause of action, it is necessary for the plaintiffs to specifically identify what they contend constitutes Combined Confidential Information.  This has not been done. 

  11. Through the access, copying, and deletion of the Accessed Files and Copied Files, the plaintiffs plead that an inference should be drawn that Destec did not design its own crushing and screening plant, but used all or part of the Combined Confidential Information to design its plant, source parts and hardware, and tender for work.  While particulars of these specific allegations have not been requested, particulars were previously sought as to the 'facts, matters and circumstances' relied upon in support of the allegation that the files were used for purposes other than the Executive Services Agreement, Consulting Agreement or Engineering Agreement.  In the Further Particulars, the plaintiffs relied on the 'facts, timing and circumstances' of the copying of the files and said that further particulars would be provided after the return of subpoenas, discovery, and any expert evidence. 

  12. The defendants say that it is not clear from the pleading what aspects of the design of the Destec crushing and screening plants resulted from the misuse of the Combined Confidential Information and that, as a result, these paragraphs should be struck out.  In their submission, if the plaintiffs' claim is limited to a contention that the crushing and screening plant was modular, this cannot sustain any cause of action against the defendants.  This is because the plaintiffs' production of modular crushing and screening plants is in the public domain (as evidenced from a video published on the first plaintiff's website).[48]

    [48] Affidavit of Peter Edward Sadler filed 2 May 2023 [7].

  13. The defendants submit that, as presently pleaded, the plaintiffs rely on the access by Mr Wyatt to these files as the sole basis on which they contend the defendants have used all or part of the Combined Confidential Information.  As presently pleaded, the plaintiffs have failed to:

    (a)identify which of the thousands of files particularised in the annexures to the Further Particulars relate to the crushing and screening plant drawings, designs and contract rates, and contain confidential information;

    (b)plead the use of this information in the design of Destec's plant or business; and

    (c)identify the basis upon which it is contended that the defendants have used all or part of the Combined Confidential Information to design its own crushing plant, including by reference to any alleged similarities in the plants.

  14. The plaintiffs reject these criticisms of their pleading.  They submit that the defendants have not previously taken issue with the pleading and that the amendments that have been made in the Statement of Claim simply provide additional detail.  In their submission, the defendants 'well know the case they must meet at trial' and can plead to it.[49]

    [49] Plaintiffs' submissions filed 9 June 2023 [62].

  15. I do not agree. 

  16. While I accept the defendants have previously responded to these allegations, their pleadings (including their initial defence filed 8 June 2020) specifically referred to the failure to identify the documents or information said to comprise the alleged confidential information.[50]  That is, the defendants have always complained about the lack of detail and identification of the relevant confidential information in the plaintiffs' pleading. 

    [50] Defence filed 8 June 2020 [9(a)], [15(c)].

  17. In my view, the defendants' complaints about this aspect of the plaintiffs' pleading are well-founded.  In its present form, the Statement of Claim does not set out which of the documents accessed, copied, and deleted by Mr Wyatt are said to constitute Combined Confidential Information.  This is required so that the defendants can understand what confidential information the plaintiffs say has been accessed by Mr Wyatt.  This is particularly important in circumstances where the plaintiffs ask the court to draw an inference that these documents have been used by the defendants to advance Destec's interests and harm the plaintiffs' interests.  While I accept that the plaintiffs may prove an alleged misuse of confidential information by inference,[51] it is necessary that they identify with precision the Combined Confidential Information they allege to have been misused, and the basis for this contention. 

    [51] Lynx Engineering Consultants Pty Ltd v The ANI Corporation Ltd trading as ANI Bradken Rail Transportation Group (No 2) [2009] FCA 363 [49] (McKerracher J).

  18. As McKerracher J noted in Lynx Engineering Consultants Pty Ltd v The ANI Corporation Ltd trading as ANI Bradken Rail Transportation Group (No 2):[52]

    Precision is required to identify the confidential information, … and then, in each instance, the breach.  The need for precision does not preclude the possibility of proof of a breach by inference.  But there must at least be precision in identification of what it is that constitutes the breach.  Clearly most applicants cannot give chapter and verse of precisely when, how and by whom a breach was committed.  But what constitutes the breach must be identified.

    [52] Lynx Engineering Consultants Pty Ltd v The ANI Corporation Ltd trading as ANI Bradken Rail Transportation Group (No 2) [49].

  19. At present, the plaintiffs do not explain how they contend an inference should be drawn that 'all or part' of the Combined Confidential Information has been used by the defendants.  Without this, I accept the defendants do not know the case they are required to meet at trial. 

  20. For these reasons, I consider that, in their present form, [23.5], [27.6] and [27.7] of the Statement of Claim do not make out an arguable case of misuse of confidential information. 

  21. However, I do not agree that [27.5] should also be struck out.  This paragraph asserts, as a matter of fact, that Destec has not designed its own 'novel and/or bespoke modular crushing and screening plant'.  This is a matter which is within the defendants' own knowledge and that can be responded to. 

  22. The question then arises as to whether, given the delay, the court should exercise its discretion to strike out the Statement of Claim or specific paragraphs.

  23. In my view, the defendants' application raises matters of substance in respect of the Statement of Claim.  While I accept there has been a significant delay in bringing the application, the plaintiffs have been on notice as to the alleged defects with the pleading since 8 June 2020 when the defendants filed their initial defences.  In addition, any delay needs to be viewed in the context of the overall conduct of these proceedings.  At the time the application was filed, the plaintiffs had only recently filed the Statement of Claim, and the parties were commencing the process of discovery.  The matter is not listed for trial and, to date, the parties have been unable to give the court an estimate of the likely length of the trial or when it will be ready to be listed for hearing.

  24. While I accept the plaintiffs' submission that there are inefficiencies in effectively re-starting the pleading process at this stage, on balance, I consider this the lesser of two evils.  Either the matter will proceed on inadequately pleaded and particularised claims which will expand the scope of discovery, evidence, and the trial length, or these matters can be addressed at this stage, which will narrow each of these processes.

  25. That said, I am not satisfied that the entirety of the Statement of Claim should be struck out.  Even taking account of the issues identified, these matters do not impact on the claim that Mr Wyatt's conduct in copying files and retaining the storage devices is a breach of the obligations he owed to the plaintiffs.  I am, however, satisfied that it is appropriate to exercise my discretion to strike out [23.5], [27.6] and [27.7] of the Statement of Claim as not disclosing a reasonable cause of action.  In my view, the defects with these paragraphs are substantive and mean the defendants are not able to adequately prepare their defence or know the case they are required to meet. 

  26. Even if I am wrong on the question of whether an extension of time is required, in the circumstances of this case, I would have granted the extension of time to bring the application.  In my view, the interests of justice, taking into account the impact of these matters on discovery, expert evidence, and the likely length of the trial, support the extension being granted.

Conclusion

  1. For these reasons, I consider the appropriate order is for [23.5], [27.6] and [27.7] of the Statement of Claim to be struck out with leave to replead. 

  2. As set out above, my preliminary view is that the defects identified by the defendants in relation to [23.2] and [23.3] of the Statement of Claim can be remedied by the provision of further particulars and that it is not necessary for these paragraphs to be struck out.  However, I will hear from the parties before making a formal order in relation to these paragraphs.

  3. My preliminary view is that the plaintiffs should pay the defendants' costs of the application but will hear from the parties before making any order.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

JN

Associate to the Honourable Justice Hill

11 DECEMBER 2024


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