Stodulka v Vogue Pergolas Canberra Pty Ltd

[2023] ACTSC 211

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Stodulka v Vogue Pergolas Canberra Pty Ltd

Citation: 

[2023] ACTSC 211

Hearing Date: 

30 June 2023

Decision Date: 

30 June 2023

Before:

Curtin AJ

Decision: 

(1)    Paragraph [12] of the plaintiff’s Amended Statement of Claim filed 9 June 2022 is struck out.

(2)    The plaintiff is granted leave to file and serve a Further Amended Statement of Claim (in relation to the existing [12]) by 4:00pm on 14 July 2023.

(3)    Stand over the balance of the defendant’s application filed 26 June 2023 and the plaintiff’s application filed 18 May 2023 to 31 July 2023 at 9:30am before Curtin AJ.

(4)    Costs of both applications are reserved.

Catchwords: 

CIVIL PROCEDURE – INTERLOCUTORY APPLICATION – application to strike out paragraphs of amended statement of claim – whether defendant has knowledge of case to meet – whether inconsistency on the face of the pleadings – whether pleadings adequately define issues for trial – application granted in part

Legislation Cited: 

Court Procedures Rules 2006, rr 411, 414, 430

Parties: 

Andrea Stodulka ( Plaintiff/First Defendant to Counterclaim)

Vogue Pergolas Canberra Pty Ltd ( Defendant/Counterclaimant)

Design Construct Industries Pty Ltd (Second Defendant to Counterclaim)

Representation: 

Counsel

P Walker SC w/ J Masters ( Plaintiff/First Defendant to Counterclaim)

D Robens ( Defendant/Counterclaimant)

Solicitors

United Legal ( Plaintiff/First Defendant to Counterclaim)

Harrington Hall ( Second Defendant to Counterclaim)

File Number:

SC 59 of 2022

CURTIN AJ:  

EX TEMPORE (REVISED)

Introduction

1․This is an application filed on 26 June 2023 by the defendant to strike out [8], [11] and [12] of the Amended Statement of Claim filed 9 June 2022.

2․The plaintiff also filed an application on 18 May 2023 for further discovery which was listed for hearing on the same day as the defendant’s application. However, the plaintiff’s application is not the subject of this judgment.

3․The proceedings concern a commercial dispute between a vendor and purchaser of a business and some related entities.

Background

4․The plaintiff was a director and shareholder of Vogue Pergolas Pty Ltd (VP).

5․Prior to 2014 VP operated a business designing and manufacturing outdoor pergolas and similar structures.

6․The plaintiff alleges that he, and not VP, was the owner of certain intellectual property, being engineering designs and specifications used in the manufacture of pergolas sold by VP, including the effort, expertise and skill demonstrated in the research and development of the same. The plaintiff alleges that he has never sold the rights to that intellectual property.

7․The plaintiff alleges that he entered into negotiations with a Mr Padrota for the sale of VP's business, as well as the payment of an ongoing royalty in relation to the intellectual property. A written business sale agreement was prepared and circulated between the parties, but never signed.

8․The plaintiff has confirmed to me today (and therefore has confirmed to the defendant) that the document at pages 149 to 154 inclusive of the Schedule of Correspondence, filed on 26 June 2023, is the written licence agreement the subject of [8] of the Amended Statement of Claim. That paragraph asserts that on or about 14 July 2014 a written licence agreement for the use of the intellectual property between the plaintiff and the defendant was prepared, however, that agreement was never signed.

9․On or about the same date (being 14 July 2014), VP's business was transferred to the defendant pursuant to the terms of the business sale agreement, after which time the defendant commenced manufacturing pergolas.

10․It is alleged that on or about 12 September 2014 the defendant paid the purchase price for the purchase of the business.

11․The plaintiff then alleges that the defendant used and continued to use the subject intellectual property in the conduct of the business the defendant had purchased from VP. The plaintiff alleges in [11] of the Amended Statement of Claim that by reason of the conduct of that business after its transfer from VP to the defendant, and the use of the intellectual property, the defendant accepted the licence agreement pleaded in [8].

12․Paragraph [12] of the Amended Statement of Claim says:

In the alternative, in the absence of an agreement between the plaintiff and the defendant for the licensing of the Engineering Work, the defendant has been unjustly enriched by the use of the Engineering Work, for with [sic] the plaintiff claims on a quantum valebant basis.

(Emphasis original)

13․The plaintiff then pleads that he has not been paid the royalties due under the written licence agreement referred to in [8] of the Amended Statement of Claim since 2014.

14․The defendant disputes the assertion that the plaintiff and not VP owned all of the intellectual property to which I have referred to above. In short, the defendant alleges that VP and not the plaintiff owned that intellectual property.

15․In its defence, the defendant also particularises (but does not plead) an oral consultancy agreement alleged to have been entered into between the plaintiff and the defendant pursuant to which the plaintiff would provide “consulting engineering expertise” at the request of the defendant, when necessary, depending on the specific project. The defendant also says that pursuant to that consultancy agreement, the plaintiff would be required to provide engineering designs capable of obtaining all required approvals to allow the construction of the structure requested by the relevant client of the defendant.

16․The defendant particularises that the plaintiff would be, pursuant to that consultancy agreement, remunerated for his engineering consultancy work at the rate of $10 per square metre of installed pergola or shade structure.

17․The defendant also filed a Counterclaim in which it referred to the consultancy agreement I have referred to above and alleged that the plaintiff provided the engineering services the subject of that agreement following the sale of the business.

18․Paragraph [11] of the Counterclaim pleaded:

Following the Pergola Business Sale, Stodulka continued to provide consulting engineering services to the counterclaimant pursuant to the Consultancy Agreement, signing off and verifying that the engineering design to some structures installed by the counterclaimant were structurally sound.

19․In answer to that pleading the plaintiff (being the first defendant to the Counterclaim) and the second defendant to the Counterclaim (being a company through which the plaintiff traded) pleaded that they:

11.   … admit(ted) paragraph [11] of the Counterclaim insofar as it refers to Stodulka provided [sic] consultancy services between in or about July 2014 and February 2022 on terms that:

i. Stodulka would provide consulting engineering expertise at the request of the counterclaimant, when necessary, depending on the specific project.

ii.Stodulka would be required to provide engineering designs capable of obtaining all required approvals to allow the construction of the structure requested by the relevant client of the counter claimant.

iii.The counterclaimant would rely on Stodulka’s engineering expertise to ensure that the pergolas and shade structures that was [sic] installed were constructed to engineering standards suitable to ensure they are structurally sound and meet all applicable standards and requirements for the individual contract between the counterclaimant and its client.

iv.The plaintiff would be renumerated for his engineering consultancy work, as set out at paragraph 3(h)(i)-(iii), at a rate of $10 per square metre of installed pergola or shade structure using the Cantilever Designs.

v.Stodulka would accept manufactured pergola and shade products from the defendant in lieu of receiving payment for his consultancy services

vi. All designs developed through the Consultancy Agreement would be the property of the counterclaimant.

20․The plaintiff says that [8] of the Amended Statement of Claim does not disclose a cause of action or tends to prejudice, embarrass or delay the fair trial of the proceedings.

21․The plaintiff says that r 411 of the Court Procedures Rules 2006 requires the effect of the relevant document to be stated in the pleading. It relies upon r 414 which prohibits inconsistent pleadings, and it relies on r 430 to the effect that pleadings must be drafted in such a way as to define the issues and prevent surprise at the trial.

Decision

22․As the plaintiff has clearly identified the written document referred to in [8] of the Amended Statement of Claim, the agreement alleged is asserted to be wholly in writing and because the defendant has a copy of that document, I am satisfied that, at least as a matter of practicality, the defendant clearly knows the case it has to meet and the cause of action upon which the plaintiff relies in relation to the alleged breach of the agreement. Therefore, I dismiss the application in relation to [8] of the Amended Statement of Claim.

23․I do not accept there is any inconsistency on the face of the pleadings between [8] of the Amended Statement of Claim and the Amended Answer to Counterclaim when looked at in the context of [3] of the Defence and [11] of the Counterclaim.

24․On the face of the pleadings there are two separate agreements. One is a written licence agreement ([8] of the Amended Statement of Claim) the terms of which refer to the use of intellectual property. The other agreement referred to in the Counterclaim and the Amended Answer to Counterclaim is an oral consultancy agreement which alleges that the plaintiff would receive certain remuneration for the provision of engineering services. On the face of the pleadings those two agreements are not inconsistent.

25․The defendant accepted that if I was against it on the application in relation to [8], then its objections to [11] fell away.

26․That leaves for decision the issue relating to [12] of the Amended Statement of Claim.

27․In my view, [12] does not adequately define the issues for and prevent surprise at the trial in relation to the substance of the matters it addresses, a view with which the plaintiff took no issue.  

Orders

28․I make the following orders:

(1)Paragraph [12] of the plaintiff’s Amended Statement of Claim filed 9 June 2022 is struck out.

(2)The plaintiff is granted leave to file and serve a Further Amended Statement of Claim (in relation to the existing [12]) by 4:00pm on 14 July 2023.

(3)Stand over the balance of the defendant’s application filed 26 June 2023 and the plaintiff’s application filed 18 May 2023 to 31 July 2023 at 9:30am before Curtin AJ.

(4)Costs of both applications are reserved.

I certify that the preceding twenty-eight [28] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Curtin.

Associate:

Date: