Permark International Interiors Pty Ltd v Amoveo Pty Ltd (Ruling No. 1)

[2012] VSC 522

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT GEELONG
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

No. S CI 2010 07038

PERMARK INTERNATIONAL INTERIORS PTY LTD (ACN 126 585 886)
Plaintiff
v
AMOVEO PTY LTD
(ACN 105 938 798)	First Defendant
and
PROCUTECH TARGETED SUPPLY CHAIN SOLUTIONS CO LIMITED
Second Defendant

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JUDGE:	CROFT J
WHERE HELD:	Geelong
DATE OF HEARING:	22 October 2012
DATE OF RULING:	22 October 2012
CASE MAY BE CITED AS:	Permark International Interiors Pty Ltd v Amoveo Pty Ltd & Ors (Ruling No. 1)
MEDIUM NEUTRAL CITATION:	[2012] VSC 522

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PRACTICE AND PROCEDURE – Application to file and serve second amended statement of claim – Application granted Civil Procedure Act 2010 s 29 - Supreme Court (General Civil Procedure) Rules 2005

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Dickenson	Harwood Andrews
For the First Defendants	Mr A. Bell (Solicitor)	Andrew Bell Lawyer
For the Second Defendant	Mr. J.B. Davis	Norton Gledhill

HIS HONOUR:

1. On the basis of the proposed second amended statement of claim, it is in my view tolerably clear that the Plaintiff is seeking to advance a case against Procutech Targeted Supply Chain Solutions Co Limited (“Procutech”) on the basis of:

(a)       confidential information provided by Permark International Interiors Pty Ltd  (“the Plaintiff”) (and Amoveo Pty Ltd (“Amoveo”)) in the course of developing the design, construction and presentation of the cabins for sale;

(b)      a joint venture agreement between the Plaintiff, Amoveo and Procutech with respect to the design, construction and presentation of the cabins for sale;

(c)       an agency agreement whereby Procutech would act as agent for the Plaintiff and Amoveo in their dealings with Bunnings regarding the supply of the cabins;

(d)      a prospective joint venture case raising fiduciary obligations binding on the parties; and

(e)       a quantum meruit claim or an unjust enrichment claim against Procutech for the benefits of the Plaintiff’s “efforts” with respect to the cabins – though this claim is not particularised at all. 

As with the claims put on the other bases it is not clear from the pleadings whether and to what extent, if any, Amoveo's “proportion” of its “benefit” as the supplier of confidential information, as a joint venturer or as a principal would need to be “deducted” from the Plaintiff’s claim.  It should be noted, however, that the nature of Amoveo’s rights with respect to any confidential information is, to say the least, not very clear.  Amoveo is not, it is also noted, apparently joined as a defendant other than for the purpose of binding it to any determinations in this proceeding – particularly the taking of accounts.  The Plaintiff makes no claims against it.

1. There is also a claim against Mr Gary Gale who it is pleaded[1] is the Managing Director of Procutech; a shareholder (though it is not pleaded that he is the sole shareholder); a person with an interest in the profits of Procutech (though the basis of this interest is not specified – and the pleading of “receipt of benefit” at paragraph 49 of the proposed pleadings appears to be confined to receipt of some unspecified dividend).

   [1]Paragraph 6A of the Proposed Second Amended Statement of Claim.

1. Mr Gale is also the Chief Executive of MomoVido (Shanghai) Industry Co Ltd which it is alleged (though only in particulars) received confidential information and entered into an agreement with Bunnings to supply the cabins.  In summary, the claim against Mr Gale appears to be a “knowing receipt” claim with respect to moneys and/or a benefit alleged to be the subject of a trust in favour of the Plaintiff and also Amoveo as discussed during the course of the proceedings today.

1. As also discussed in the course of the proceedings today there are a number of difficulties with the proposed pleadings – even as sought to be explained by the affidavit of Mr Perry Gourlay, a director of the Plaintiff. Nevertheless, speaking of the proposed pleadings as a whole I would not, if this were an application by Procutech for summary judgment or a strikeout application under s 62 of the Civil Procedure Act, or Order 23 of the Supreme Court (General Civil Procedure) Rules, respectively, accede to such an application at this stage. 

1. More particularly, I am not satisfied, for the purposes of s 62 that the Plaintiff “has no prospects of success” or, for the purposes of Order 23, that no cause of action is disclosed. In any event, I would be of the view that, for the purposes of s 64 of the Civil Procedure Act, the proceeding should not be disposed of summarily because it would not be in the interests of justice to do so and also because the dispute is of such a nature that only a full hearing of the dispute is appropriate as it is, in all the circumstances, the only way of assessing the claims and factual bases relied upon in an informed and fair manner.

1. Although the present situation is neither an application for summary judgment nor a strike out application by Procutech a consideration of the proposed pleadings from this perspective does inform the proper course with respect to the present application. 

1. I should, however, qualify my views with respect to the proposed pleadings as a whole with respect to the matters alleged and the claim made against Mr Gale.  The particular difficulties with respect to this pleading have already been discussed and it is sufficient for present purposes for me to indicate that if these pleadings had stood alone and Mr Gale was not, as it seems, closely connected with the defendant Procutech and likely to be closely involved in its defence of the Plaintiff's claims in any event, I would not grant leave for their filing in the present form.  Nevertheless, I am of the view that in all the circumstances any further delay and expense in relation to the settling or otherwise of this aspect of the pleadings is not justified or in the interests of any of the parties at this stage.  This does not mean, however, that in light of responsive and reply pleadings the difficulties with respect to this aspect of the pleadings, if they remain, may not justify a summary judgment or strikeout with respect to any claim or claims against Mr Gale.

1. In terms of any pleading difficulties and prejudice more generally, I am satisfied that any prejudice that does occur to either of the defendants is able to be addressed adequately by costs orders and if necessary by resort to the range of remedies provided for under the Civil Procedure Act, particularly orders for costs and/or compensation under s 29 of that Act, against parties and others subject to the overarching obligations under that Act, including the legal practitioners.

1. Additionally it might be observed that the tortured process which the Plaintiff has allowed to occur in the development of its pleadings in these proceedings has not served it well.  Apart from causing unnecessary costs – which it has had to bear both on its own account and, as a result of various costs orders, also for the defendants –  it has produced material in the form of proposed pleadings, affidavits and annexures which are unlikely to assist its substantive case.

1. For these reasons I will give leave for the filing of the proposed second amended statement of claim.  This leave does not, however, preclude any further application by the defendants with respect to deficiencies in the pleadings as may now exist or emerge during the ongoing process of pleading and discovery – but after those processes, particularly discovery, have been allowed to proceed to a point where resolution of deficiencies ought reasonably to have been addressed.

1. As with civil litigation generally, it might be expected that this process, once allowed to proceed, will indicate or highlight matters that require further attention by way of additions, modifications or refinement of pleadings.  This is not to invite a process of wholesale re-pleading but simply to observe that in many cases pleadings are, in the context of the pleadings and discovery processes, evolutionary to some degree.  Neither is it an indication of the position I may take on the issue of costs with respect to any further application or applications.

1. Finally, I should observe that nothing I have said should be taken as any indication that procedural fairness to all parties in these proceedings is not a matter of the utmost importance.  The defendants are entitled to know precisely the case they are being asked to meet.  To some extent I am comforted in this respect by the submissions and discussions that have taken place today and on previous occasions which indicate, in my view, that there is an understanding of the issues involved, at least in general terms. Consequently a party is unlikely to be surprised by issues as they are ultimately articulated – in the pleadings and, if necessary, through a case management conference which I will convene if that becomes necessary – both for this and other purposes.

1. I will hear the parties in relation to the appropriate form of orders to give effect to this ruling.