Sealanes (1985) Pty Ltd v Connolly
[2009] WADC 189
•19 NOVEMBER 2009
| JURISDICTION | : | DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL |
| LOCATION | : PERTH | ||
| CITATION |
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| CORAM |
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| HEARD |
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| DELIVERED |
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| FILE NO/S |
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| BETWEEN |
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AND
MARTIN CONNOLLY
First Defendant
COASTAL FISHERIES PTY LTD
(ACN 129 314 085)
Second Defendant
Catchwords:
Practice and procedure - Leave to amend pleadings
Legislation:
Nil
[2009] WADC 189
Result:
Application refused
Representation:
Counsel:
| Plaintiff | : | Ms L M Randall |
| First Defendant | : | Mr P T Arns |
| Second Defendant | : | Mr P T Arns |
Solicitors:
| Plaintiff | : | Q Legal |
| First Defendant | : | Arns & Associates |
| Second Defendant | : | Arns & Associates |
Case(s) referred to in judgment(s):
Australian Competition & Consumer Commission v Golden West Network Pty
Ltd & Geraldton Telecasters Pty Ltd [1997] FCA 792
Frank Jasper Pty Ltd & Anor v Deloitte Touche Tohmatsu (a firm) & Ors [2006]
WASC 24
Hooker Corp Ltd v Commonwealth (1986) 65 ACTR 32
Sinclair v James [1894] 3 Ch 554
Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
[2009] WADC 189
PRINCIPAL REGISTRAR GETHING
PRINCIPAL REGISTRAR GETHING: The application before me is the plaintiff's chamber summons dated 27 October 2009 for leave to further amend the amended statement of claim filed. As a result of conferral, the amendments sought to be made are now as set out in a substituted minute of proposed further amended statement of claim dated 10 November 2009 ("Minute"). I will refer to the Minute in these reasons.
2 In terms of legal context, the court will not grant leave to a party to
make an amendment which does not disclose a reasonable course of action: Sinclair v James [1894] 3 Ch 554 at 557. Neither will the court grant leave to make an amendment which could be struck out as defective on any of the grounds set out in Rules of the Supreme Court 1971 (WA) ("RSC") O 20 r 19(1)(b) to r 19(1)(d): Hooker Corp Ltd v Commonwealth (1986) 65 ACTR 32 at 38.
3 The principles relating to pleadings challenges are conveniently
summarised by Master Newnes (as his Honour then was) in Frank Jasper Pty Ltd & Anor v Deloitte Touche Tohmatsu (a firm) & Ors [2006] WASC 24 as follows (par 11):
"… In determining the adequacy of a pleading it is fundamental that a party is entitled to a statement of the opponent's case sufficiently clear to allow the party a fair opportunity to meet it: Gould & Birbeck & Bacon v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490 at 517; Dare v Pulham (1982) 148 CLR 658 at 664. A pleading may therefore be struck out where it is vague, ambiguous or pleaded at too great a level of generality so as to leave the other party in doubt as to how to respond to the pleading: Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 413; Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J."
4 Master Newnes then goes on to comment that these principles have
to be applied in the context of the case management objectives of the
Supreme Court.5 The learned Master also referred to comments of Lockhart J in
Australian Competition & Consumer Commission v Golden West Network Pty Ltd & Geraldton Telecasters Pty Ltd [1997] FCA 792, where his Honour stated:
"It is important that I say something about motions to strike out statements of claim in the conduct of modern litigation. Today,
[2009] WADC 189
PRINCIPAL REGISTRAR GETHING
courts are playing an increasingly active role in case management. Motions to strike out pleadings are matters of procedure and practice. In its role of case management, courts devise various procedures to overcome deficiencies in pleadings other than by simply ordering that the offending paragraphs be struck out. Sometimes it is appropriate to strike them out, sometimes not. On some occasions it is better for the court to direct the applicant whose statement of claim is under challenge, to furnish particulars or to file and serve affidavits to show that there really are facts which can be proved and which, if proved, would support the general statements made in the statement of claim."
Turning then to the Minute and the particular statements under challenge, the first paragraph is par 12. It reads as follows:
"Prior to the plaintiff's entry into the Non-Competition Variation, on 27 October 2007 and again on 4 December 2007, the First Defendant expressly represented to the Plaintiff that the List of Competitors would contain all relevant competitors required for the Plaintiff's business upon the First Defendant ceasing his employment, and to reflect the existing Non-Competition Obligation set out in his employment agreement (Representations)."
There are then particulars of an email and of an oral representation.
8 The defendants submit that this paragraph is embarrassing in the
sense that it is not sufficiently clear for the defendants to be able to plead to it. In my view, this submission has merit. What is unclear from the paragraph is what words or words to the effect were actually stated, and what meaning is to be extracted from those words.
9 It seems to me that the paragraph ought to be re-pleaded setting out
exactly the words, or words to the effect, that were said. If it then turns out that the meaning ascribed to those words in the context is something different from the words actually stated, then that should be separately pleaded.
10 The next paragraph under review is par 17 which contains a plea of
estoppel. Essentially, the plaintiff pleads that the first defendant is estopped from asserting that the second defendant is not a named competitor in the Non-Competition Variation as defined. In the classic statement of what constitutes promissory estoppel by Brennan J (as his
[2009] WADC 189
PRINCIPAL REGISTRAR GETHING
Honour then was) in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428 - 429 one of the key elements is reliance to the detriment of the plaintiff.
11 Here reliance is pleaded in par 13. However, there is no plea of
detriment. In my view, par 17, as it stands, does not disclose a reasonable
cause of action as there is no plea of detriment.12 The next paragraph under review is par 19(e). This is a plea that the
first defendant breached his employment agreement by disclosing confidential information. The relevant plea is that the first defendant is in breach by:
"Disclosing confidential and client information to the second defendant in breach of the confidentiality obligation, such information including client lists and pricing and marketing material."
13 The issue taken by the defendant is that, as pleaded, it is unclear
exactly what information was said to have been disclosed, and why the information is said to have been confidential within the terms of the employment agreement. In my view, that objection holds merit.
14 In order for this issue to be intelligently aerated at trial, there is a
need to have a specific basket of information identified. The trial judge will then need to review that basket of information to determine whether or not each item falls within the confidentiality obligation set out in the employment agreement.
15 The next paragraph under review is par 26(b). This contains a plea
that the first defendant, in breach of certain provisions of the relevant
agreements:"Solicited another employee of the plaintiff being David Edmonds, Assistant Seafood Manager, who subsequently resigned from his employment with the Plaintiff and took up employment with the Second Defendant."
16 There are particulars of Mr Edmonds' cessation of employment with
the plaintiff and commencement of employment with the second
defendant.
[2009] WADC 189
PRINCIPAL REGISTRAR GETHING
17 The objection taken to this clause is that there was no material facts
pleaded as to what is said to have constituted the solicitation. In my view,
this defect has been established.18 In order for there to be reasonable cause of action, or in order for the
plea not to be embarrassing, there needs to be material facts as to what is alleged to have constituted the solicitation. That, in turn, will both inform the defendants as to the case they have to meet, and enable the trial judge to assess whether or not the actual conduct was in breach of the relevant obligations under the employment agreements.
The final paragraph under review is par 34(b). This is an allegation that the first defendant, in breach of his fiduciary duties to the plaintiff:
"[p]urchased a Persine Fillet Machine (Filleting Machine) on behalf of the Plaintiff on or about 1 October 2007 for the sum of $37,463.25, such a sum not being reflective of the current market value of the Filleting Machine, were [sic] the first defendant knew or ought to have known that the price paid for the Filleting Machine exceeded its market value."
20 Particulars are provided as to the purchase order and the cheque.
The particulars also provide an expert report will be provided after discovery as to the current market value. I note that the discovery as between the plaintiff and the first defendant has occurred, though the second defendant, who was added at a later time, has not yet provided discovery.
21 The defendants submit that the plea is not sufficiently detailed to
allow them a fair opportunity to meet it. In particular, the plea does not set out what fiduciary obligation the facts are said to constitute a breach of and how the breach occurred. Nor does it set out the basis for the plea that the first defendant knew or ought to have known the price paid exceeded its market value. The objection is accepted.
For those reasons, in my view, the application at this stage ought to
be denied.
23 There then remains the question of further case management.
My inclination is to require the plaintiff to provide a reasonably extensive bundle of information at the same time as it serves a further minute of proposed further amended statement of claim, so that the plaintiff's case can be presented at its strongest and most developed, and then reflected in the pleadings.
[2009] WADC 189
PRINCIPAL REGISTRAR GETHING
I will hear from counsel in terms of further orders.
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