Teico Investments v WA Blue Gum Limited
[2022] VSC 379
•5 July 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S CI 2017 03613
| TEICO INVESTMENTS PTY LTD (ACN 057 341 92) & ANOR (according to the attached Schedule) | Plaintiffs |
| v | |
| WA BLUE GUM LIMITED (ACN 060 179 982) & ORS (according to the attached Schedule) | Defendants |
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JUDGE: | ATTIWILL J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 May 2022 and 17 June 2022 |
DATE OF RULING: | 5 July 2022 |
CASE MAY BE CITED AS: | Teico Investments & Anor v WA Blue Gum Limited & Anor |
MEDIUM NEUTRAL CITATION: | [2022] VSC 379 |
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PRACTICE AND PROCEDURE – Pleadings – Application to amend pursuant to r 36.01(1) of theSupreme Court (General Civil Procedure) Rules 2015 (Vic) – Application to file a second further amended statement of claim – Applicable principles on application to amend – Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 – Civil Procedure Act 2010 (Vic) – Unintelligible and embarrassing pleadings – Leave refused to make certain amendments
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | P Cawthorn QC with D Luxton | Walpole Menzies |
| For the Defendants | P Bick QC with K Brazenor | Colin Biggers & Paisley |
HIS HONOUR:
Introduction
The issue before the Court is whether the plaintiffs should be given leave to amend in the form proposed in a second further amended statement of claim (proposed pleading).[1]
[1]The plaintiffs made the application for leave by summons filed 5 April 2022. The latest version of the proposed pleading is exhibited to the Stops 17 June affidavit, pgs 6-78.
The plaintiffs relied upon submissions filed 18 May 2022 (plaintiffs’ submissions) and affidavits of Mr Stops, the plaintiffs’ solicitor, sworn:
(a)5 April 2022 (exhibit ‘AWTS-1’ limited to the following pages: 20-89, 90-91, 93, 456-464, 465-471, 472-477, 478-479, 480-482, 484-505) (Stops 5 April affidavit);[2]
(b)18 May 2022 (exhibit ‘AWTS-2’ limited to the following pages: 22, 25, 114, 115-117) (Stops 18 May affidavit);[3]
(c)15 June 2022 (Stops 15 June affidavit); and
(d)17 June 2022 (Stops 17 June affidavit).
[2]See document titled ‘Material relied on by the plaintiffs in support of application for leave to amend’: exhibit ‘AWTS-1’ to the Stops 17 June affidavit, pgs 79-80.
[3]Ibid.
The defendants relied upon submissions filed 6 May 2022 (defendants’ submissions) and affidavits of Mr McGirr, the defendants’ solicitor, sworn:
(a) 6 May 2022 (exhibit ‘JLM-13’ limited to the following pages: 23-104, 105, 109-110, 176-177, 291- 409) (McGirr 6 May affidavit);[4]
(b) 27 May 2022 (excluding exhibit ‘JLM-14’) (McGirr 27 May affidavit);[5] and
(c) 16 June 2022 (McGirr 16 June affidavit).
[4]See ‘Material relied on by the first and second defendants in opposition to the plaintiffs’ application for leave to amend’ filed on 20 June 2022.
[5]Ibid.
Counsel for the parties made submissions at the hearing of the application.
The defendants did not oppose some of the amendments.[6] I will give leave to the plaintiffs to make those amendments. The defendants did oppose some of the amendments (the impugned amendments).[7] For reasons that follow, I will refuse leave for the plaintiffs to make the impugned amendments.
[6]See ‘Table of the first and second defendants’ objections to the paragraphs of the updated proposed second further amended statement of claim provided on 17 June 2022’ filed on 20 June 2022. The defendants do not object to the following paragraphs: 10C(aa), 10C(aa) (particulars) 17(b), 17B(aa), 18(d), 18(d) (particulars), 19AA (particulars), 19BA, 19D, 23B (particulars), 23C(aa), 23C(c) (particulars), 29A(aaa), 31A(c) (particulars), 31C, 31E, 33B (particulars), 33C(aa), 33C(c) (particulars), 38A(aaa), 40A(c) (particulars), 40C, 40E, 42B (particulars), 42C(aa), 42C(c) (particulars), 48A(aaa), 50A(b) (particulars), 50C, 50E, 52(i) and C of the Prayer for Relief.
[7]Ibid. The first and second defendants object to the following amendments in paragraphs: 19AAA, 19AAA (particulars), 19AAB, 19AAB (particulars), 19AAC, 19AAC (particulars), 19AAD, 19AAD (particulars), 19AB(i), 19AB(c), 19AB(d), 19AB (particulars), 19I(c)(iv) (particulars), 19I(c)(v) (particulars), 20(c)(ivA)(AA), 20(c)(ivA)(AB), 20(c)(ivA) (particulars (ixA)), 31(ca)(ia), 31A(eA), 31A(eA) (particulars), 31F (particulars), 40(ca)(ia), 40A(eA), 40A(eA) (particulars), 40F (particulars), 50(ca)(ia), 50A(dA), 50A(dA) (particulars) and 50F (particulars).
Applicable Legal Principles
The applicable principles on applications for leave to amend have been set out recently by Connock J in Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3):[8]
[8][2022] VSC 283, [23]-[31] (citations omitted). See also Dugan v Process Holdings Pty Ltd (No 3) [2021] VSC 737, [49]-[58] (Lyons J).
23 Rule 36.01(1) provides that:
(1) For the purpose of—
(a)determining the real question in controversy between the parties to any proceeding; or
(b) correcting any defect or error in any proceeding; or
(c) avoiding multiplicity of proceedings—
the Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.
24The general principles relating to the grant or refusal of leave to amend pleadings are well known. They were succinctly referred to by Elliott J in Cargill Australia Limited v Viterra Malt Pty Ltd (No 18) as follows:
The principles relating to the granting or refusal of leave to amend pleadings are well established. Rule 36.01(1)(a) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) empowers the court to grant leave to any party to amend any document for the purpose of “determining the real question in controversy between the parties to any proceeding”. Leave may be granted at any stage of the proceeding.
In deciding whether to grant leave to a party to amend its pleadings, the court must consider whether the proposed amendments facilitate the identification of the real issues in dispute and the just resolution of the proceeding.
The power to grant leave to a party to amend its pleading to raise an arguable issue is a discretionary power. There is no right or entitlement for a party to amend its pleading subject to the payment of costs referable to the amendment. The nature and importance of the proposed amendments must be considered. This factor must be weighed against case management considerations such as cost, delay and the potential for unfair prejudice to other parties to the proceeding, the court and other litigants that might arise if the proposed amendments are allowed.
Further, in exercising the power to grant leave, the court may give any direction or impose any term or condition it thinks fit.
25A helpful summary was also set out in ABL Nominees Pty Ltd v MacKenzie (No 2):
The power to amend in r 36.01 (1) of the Supreme Court (General Civil Procedure) Rules 2005 (Rules) authorises the court to order that a party have leave to amend any pleading for the purpose of determining the real question in controversy between the parties to any proceeding, correcting any defect or error or avoiding multiplicity of proceedings.
It is common ground that an amendment which is futile because it is obviously bad in law will not be allowed: Commonwealth v Verwayen. Similarly, if a proposed pleading would be liable to be struck out if it had been contained in an original pleading, either because the pleading is bad in law or is defective as a pleading, then leave to file the proposed pleading will not be allowed: Horton v Jones (No.2); Gimson v Victorian WorkCover Authority. The court, on this type of application, will not engage in an examination of the merits of the case foreshadowed by the proposed amendment, but where that amendment introduces a patently hopeless issue for determination then its inclusion will be futile and that will be a significant, and probably decisive, matter in the exercise of the court’s discretion.
As J Forrest J observed in Matthews v SPI Electricity Pty Ltd (Ruling No 6), having regard to the terms of the Civil Procedure Act 2010 (CPA), the test is best expressed in the words of s 63 of that Act: if the amendment has no real prospect of success at trial then that would be a highly relevant factor in the exercise of the discretion to refuse the application.
In Namberry Craft Pty Ltd v Watson, Vickery J summarised the relevant factors to be considered, as a result of the decision in AON Risk Services Australia v Australian National University, as follows:
[T]here are to be limits placed upon re-pleading. The High Court in AON Risk Services Australia referred to a range of other considerations which need to be weighed in the balance in the exercise of the discretion to grant an amendment to a pleading. The High Court made reference to the following factors:
(a)Whether there will be substantial delay caused by the amendment;
(b)The extent of wasted costs that will be incurred;
(c) Whether there is an irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for, whatever costs may be awarded;
(d) Concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;
(e) Whether the grant of the amendment will lessen public confidence in the judicial system; and
(f) Whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.
This list of factors is not exhaustive. It is made against the background of the earlier decision of the High Court in Queensland v JL Holdings Pty Ltd, and the authorities that preceded it, including the famous case of Cropper v Smith, where the liberal approach to the amendment of pleadings finds its lead in the dissenting judgment of Bowen LJ.
On the other hand, pleadings are not an end in themselves. They are a means of ensuring that real issues of controversy are raised for determination in a way that is procedurally fair, both to a plaintiff and a defendant. This allows claims and defences to be clearly articulated, granting parties an opportunity to present their case properly prepared, on clear notice of allegations and defences raised in the proceedings. On this basis, the authorities clearly establish that, absent extraordinary circumstances, leave to amend will be granted.
26In Ultra Thoroughbred Racing Pty Ltd t/as Baree Stud v Those Certain Underwriters at Lloyd’s (Ultra Thoroughbred), J Forrest J observed that, following the High Court’s decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon), courts must consider: the wider public interest and the efficient use of limited court resources when deciding whether to grant applications to amend pleadings; that parties will not be permitted to raise any arguable case in any stage of proceedings subject only to payment of costs; and that amendments that produce delay impact on the entire court system and affect parties desirous of utilising that particular court system. As his Honour noted, in Aon, the High Court said as follows:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases...
A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to the parties having a sufficient opportunity to identify the issues they seek to agitate.
In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
27In Northern Health v Kuipers (Northern Health), Kyrou and McLeish JJA referred to the above extract, the reasons of J Forrest J in Ultra Thoroughbred, and echoed the observations of the High Court regarding the just resolution of proceedings being a paramount consideration:
It has been said by this Court that Aon may have ‘reinvigorated the procedural paradigm’ insofar as time, costs and limited judicial resources are relevant considerations in the determination of whether to allow certain interlocutory processes. However, as J Forrest J observed in Ultra, ‘the primary question still remains: what do the interests of justice dictate?’; Aon reminds courts that ‘the prism through which these interests are viewed is wider than just that of the moving party’.
28The court must have regard to the relevant provisions of the Civil Procedure Act 2010 (Vic) (CP Act) when addressing case management matters, including applications for leave to amend. This was emphasised by Kyrou and McLeish JJA in Northern Health, where the CP Act was described as ‘... pivotal to the resolution of disputes about case management issues in civil proceedings to which the Act applies ...’, and it was stressed that ‘... it is important that ... trial judges engage with the Act’s provisions in balancing the competing interests of the parties and those of the administration of justice more generally.’
29Their Honours were also swift to recognise that procedural rulings must often be made promptly with succinct reasons, noting that engaging with the provisions of the CP Act ‘... does not mean that trial judges must set out each applicable provision of the Act and state reasons in relation to it ... [but that] it must be apparent from the reasons for the ruling — either expressly or inferentially — that the judge took into account the applicable provisions.’
30On a different topic, it has been concluded in various cases that no further opportunity ought to be given to a plaintiff to reformulate the claims in question. Often such observations are founded on the observations of the High Court in Aon earlier referred to. The observations of Sifris J in MacFadyen & Ellis v Bank of Queensland (No 2) (MacFadyen) and Gleeson CJ in Sialepis v Ironaid Pty Ltd (Sialepis) are two examples. In MacFadyen, Sifris J said as follows regarding the circumstances in that case:
46.The right to seek relief from a Court is not an absolute right. It carries with it a responsibility, now directly enshrined in legislation, namely the Civil Procedure Act 2010 (Vic) (‘CPA’). The Plaintiffs have not discharged this responsibility. Given this history, the Court cannot be confident that the Plaintiffs will ever be able to articulate their claim. They should not be permitted to continue. To permit the Plaintiffs to have yet ‘another go’ would not be in the interests of justice and would not be consistent with the overarching purpose set out in s 7 of the CPA which requires ‘the just, efficient, timely and cost effective resolution of the real issues in dispute’.
31In Sialepis the Court concluded that the plaintiff had ‘far more than ample opportunity to formulate a viable claim ... if one existed’ and on the facts of that case Gleeson CJ concluded that the difficulty which the lawyers had experienced in ‘... framing a plausible statement of her cause of action against the respondents is a good indication, on the facts known to them, or they can realistically expect to prove, that there is no cause of action’. However, and as Gleeson CJ in Sialepis also observed, it is important to ensure that where a party has a substantial viable claim ‘... it is not defeated by mere drafting imperfections.’
In Wheelahan & Anor v City of Casey & Ors (No 12)[9] John Dixon J made the following observations on pleadings in the context of an application under r 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic):
[9][2013] VSC 316, [25] (‘Wheelahan’) (citations omitted). Wheelahan was referred to with approval by the Court of Appeal in Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186; (2020) 61 VR 580, 599–600 [50] (Niall, Hargrave and Emerton JJA) (‘Uber’).
(a) Order 13 of the Rules set out the relevant requirements of a sufficient pleading, while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;
(b) the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;
(c) the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence). The expression ‘material facts’ is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;
(d) as a corollary, the pleading must be presented in an intelligible form – it must not be vague or ambiguous or inconsistent. Thus a pleading is ‘embarrassing’ within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;
(e) the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;
(f) pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);
(g) a pleading which contains unnecessary or irrelevant allegations may be embarrassing – for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;
(h) it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;
(i) every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));
(j) the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);
(k) particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement – namely, to fill in the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;
(l) a pleading should not be so prolix that the opposite party is unable to ascertain with precision the causes of action and the material facts that are alleged against it…
In Australian Pharmaceutical Industries Ltd v Central Park Pharmacy (Sydney) Pty Ltd; Australian Pharmaceutical Industries Ltd v Lemon[10] I referred to the above passage in Wheelahan & Anor v City of Casey & Ors (No 12) and then noted:
[10][2021] VSC 796 [31]-[33] (citations omitted).
32In Babcock & Brown DIF III Global Co-Investment Fund, LP & Anor v Babcock & Brown International Pty Limited & Ors (No 2), Hargrave J referred to the principles summarised by John Dixon J in Wheelahan and added the following observation:
To this summary, I would add that the Court should consider the pleading under a challenge as a whole and adopt a practical case management approach to pleading objections, rather than accepting technical objections when the true nature of the case to be met is clear from reading the pleading as a whole and there is no embarrassment to filing a responsive pleading. Such an approach accords with the discretionary nature of the power to strike out and with the overarching purpose under the Civil Procedure Act. However, in cases alleging dishonesty or fraud, precise pleadings with full particulars are required.
33 In Babcock, Hargrave J also stated:
Before considering these issues, it is necessary to stand back and consider the statement of claim and the third party notice as a whole and, in that light, ask:
Does the plaintiffs’ case previously advanced against Ms Talintyre, as adopted and expanded by the RBS defendants in the third party notice, give Ms Talintyre clear notice of the case she needs to meet at trial?
Are the impugned amendments embarrassing?
I will first consider whether the impugned amendments are embarrassing.
The plaintiffs submitted:
(a) The application is to be decided on the basis of the form of the ‘pleading as articulated’.[11]
[11]Transcript of Proceeding, Teico Investments Pty Ltd & Anor v WA Blue Gum Ltd & Ors (Supreme Court of Victoria, S CI 2017 03613, Attiwill J, 31 May 2022) (‘Transcript of Proceeding (31 May 2022)’), 95.3-4 (Mr Cawthorn QC).
(b) It is important to ensure that where a party has a substantial viable claim it is not defeated by ‘mere drafting imperfections’.[12] The plaintiffs do not accept that there are drafting imperfections.[13]
(c) A pleading must, inter alia, fulfil its basic functions of identifying the issues.[14]
(d) The pleadings are not defective as they identify the real issues in dispute sufficiently for the defendants to have notice of them, especially where further witness statements and discovery will assist in clarifying those issues.[15]
[12]Transcript of Proceeding, Teico Investments Pty Ltd & Anor v WA Blue Gum Ltd & Ors (Supreme Court of Victoria, S CI 2017 03613, Attiwill J, 17 June 2022) (‘Transcript of Proceeding (17 June 2022)’), 103.28-104.4 (Mr Cawthorn QC), quoting Gleeson CJ in Sialepis v Ironaid Pty Ltd [1997] NSWCA 286 [2], as reproduced in Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 [31].
[13]Transcript of Proceeding (17 June 2022), 104.4-5 (Mr Cawthorn QC).
[14]Ibid 98.31 (Mr Cawthorn QC), quoting Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority and Anor [2006] WASC 281, [7].
[15]Ibid 96.22-31 (Mr Cawthorn QC). The plaintiffs also relied upon the observations of Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority and Anor [2006] WASC 281, [5]-[7].
The defendants submitted that the proposed pleading is a ‘dodgy pleading’[16] and ‘has been unacceptably badly pleaded’.[17]
[16]Transcript of Proceeding (31 May 2022), 108.6 (Mr Bick QC).
[17]Transcript of Proceeding (17 June 2022), 82.5-6 (Mr Bick QC).
Paragraph 19AAA
Paragraph 19AAA provides (excluding the particulars):
Further or alternatively, the first defendant enabled or allowed other investors, including investors associated with the defendants, to acquire interests in the 2004 investment at per hectare rates lower than that applied to the plaintiffs.
The particulars set out:
(a) the identity of twelve investors (in some cases joint investors) in the 2004 investment and the amounts paid by them per hectare;
(b) the association between six investors and the defendants; and
(c) an extract from part of a document described as the ‘Register of 2004 WABG Growers’ (2004 Register).
The allegations in paragraph 19AAA give rise to proposed amendments concerning breach, loss and damage and a failure to account.[18]
[18]Proposed pleading, [19AB(i)], [19AB(iii)(c)], [19AB (particulars)], [19I (particulars)] and [20(c)(ivA)(AA)]. These proposed amendments also relate, in part, to the allegations in paragraphs 19AAB, 19AAC and 19AAD.
Similar claims are made in the relation to the plaintiffs’ investments in 2010, 2011 and 2012.[19] These claims also give rise to proposed amendments concerning breach, loss and damage and a failure to account.[20]
[19]See proposed pleading, [31A(eA)], [40A(eA)] and [50A(dA)].
[20]2010 investment: proposed pleading, [31(ca)(ii)], [31A(eA)] and [31F (particulars)]. 2011 investment: proposed pleading, [40(ca)(ia)], [40A(eA)] and [40F (particulars)]. 2012 investment: proposed pleading, [50(ca)(ia)], [50A(dA)] and [50F (particulars)].
Submissions
The plaintiffs submitted:
(a) The pleadings in paragraphs 19AAA to 19AAD are ‘properly drawn’.[21] These are the key paragraphs and ‘the rest hang off those’.[22]
[21]Transcript of Proceeding (17 June 2022), 30.8-13 (Mr Cawthorn QC).
[22]Ibid 30.8-13 (Mr Cawthorn QC).
(b) The pleadings in paragraphs 19AAA to 19AAD are ‘derived’ from the defendants’ documents.[23]
[23]Ibid 30.15 (Mr Cawthorn QC).
(c) ‘The preferential treatment of others is apparent on the face of [the 2004 Register]’.[24] The claim is based upon the 2004 Register, being a document of the defendants. The plaintiffs submitted: ‘[The 2004 Register] records that the WABG Defendants have allowed trusts controlled by their directors, and the legal partners of the directors, to pay only 13% of what the Plaintiffs paid for the same interest.’[25]
[24]Plaintiffs’ submissions, [22] (citations omitted).
[25]Ibid (citations omitted).
(d) ‘The trustee owes a duty to act impartially as between beneficiaries. So that lack of impartiality we say would be a breach, and that’s something that’s pleaded. It’s something that’s an obligation on the trustee as the responsible entity and ensure there’s no conflict between its position and that of others and to treat each member fairly and equitably’.[26]
[26]Transcript of Proceeding (31 May 2022), 26.20-27 (emphasis added). The submission was made in the context of the proposed amendment to 19AAB. See also Transcript of Proceeding (17 June 2022), 107.11-29 (Mr Cawthorn QC) .
(e) ‘[T]he investment creates a trustee beneficiary relationship between the responsible entity and the investors, so not just the plaintiff, the other investors as well’.[27] The plaintiffs have pleaded the investment agreement, the product disclosure statement and an obligation by the trustee to comply with the product disclosure statement.[28]
[27]Transcript of Proceeding (17 June 2022), 112.14-17 (Mr Cawthorn QC).
[28]Ibid 112.28 to 113.1 (Mr Cawthorn QC).
(f) ‘So 19AAA we submit is consistent with s 601FC [Corporations Act 2001 (Cth)], consistent with the duties we plead owed to us because the duties we plead owed to us in 17B, sub-paragraph [(b)], to act in the plaintiff's best interests and not put their own interests or those of others ahead of the plaintiff's interest. ‘[29]
[29]Ibid 117.3-8 (Mr Cawthorn QC) .
(g) The plaintiffs do not need to plead that the first defendant owed duties as a trustee to other investors.[30]
(h) ‘…we submit with 19AAA there's nothing defective about the way 19AAA is pleaded. It refers to enabling other investors, including investors associated with the defendants and we've identified who they are, to acquire interests in the 2004. We know it's an investment. We can't ignore that. My learned friend wants to say it's a discrete investment, ignoring the product disclosure statement, ignoring the managed investment responsible entity regime under which the structure appears.’[31]
(i) ‘We submit they are not in any respect defective pleadings, and you should not approach the consideration of the form of the pleading like one would approach the construction of a statute. It is designed to give notice to the opposing party of the case to be met, and in circumstances where we have a managed list, where there have been, and are going to be, further witness statements and further discovery, you will be able to identify, and our opponents will be able to identify, the real issues.’ [32]
[30]Ibid 109.16 (Mr Cawthorn QC).
[31]Ibid 118.21-30 (Mr Cawthorn QC).
[32]Transcript of Proceeding (17 June 2022), 96.22-31 (Mr Cawthorn QC).
The defendants submitted:
(a) ‘… 19AAA through to 19AAD, are in fact particulars of the allegations in 19AB. And they have no place being pleaded as separate substantive allegations. They are merely particulars. That’s the first point. And they are only particulars of breach of trust, not of any other contractual or other obligation’.[33]
[33]Transcript of Proceeding (31 May 2022), 124.12-17 (Mr Bick QC).
(b) There is nothing that precedes paragraphs 19AAA to 19AAD which amounts to a duty or a term of an agreement which has been breached by paragraph 19AAA.[34]
[34]Ibid 123.19-21 (Mr Bick QC).
(c) The expression ‘enabled or allowed’ is an ‘entirely vague expression’.[35]
[35]Transcript of Proceeding (17 June 2022), 61.6-10 (Mr Bick QC). This was in relation to proposed paragraph 19AAB, but the term is used also in paragraphs 19AAA, 19AAC and 19AAD.
(d) ‘The fall of this pleading is less defective than the later paragraphs, but it is defective in that it is not related to the position of the plaintiffs. It must be presumably by detriment, but the detriment can be specified later but isn't, it can also be specified in 19AAA, we think it should be, but it isn't.’ [36]
(e) ‘The plaintiffs cannot, we say, rope in a comparison with other investors. It won't fit with the agreement they plead, the so called 2004 investment agreement, which was made between their side and our side and nobody else, and the trustee duties which arose in relation to that agreement are duties that can only be owed by the 1st defendant to the plaintiffs, not to the plaintiffs in relation to anybody else.
They are not joint duties as if they are all beneficiaries, all growers were investors under one trust or one scheme. Even though there is a scheme set out by the PDS, all of the terms of which are said by these plaintiffs to apply to all investors, including themselves, it does not mean that they were joint investors, it does not mean they were joint beneficiaries, it does not mean they had joint rights or that obligations were owed to them and other investors jointly for example, to be treated equally.’[37]
[36]Ibid 63.18-23 (Mr Bick QC).
[37]Ibid 77.7-24 (Mr Bick QC).
Analysis
In my view, paragraph 19AAA is unintelligible and embarrassing. It does not give clear notice to the defendants of the case against them. It is a defective plea. I will refuse leave for the plaintiffs to make amendments in the form of paragraph 19AAA, the related proposed amendments concerning breach, loss and damage and a failure to account (insofar as they concern the allegations in paragraph 19AAA),[38] and the proposed amendments in the relation to the plaintiffs’ investments in 2010, 2011 and 2012.[39] For convenience, I will address my reasons to paragraph 19AAA.
[38]Proposed pleading, [19AB(i)], [19AB(c)], [19AB (particulars)], [19I (particulars], [20(c)(ivA)(AA)].
[39]See proposed pleading, [31A(eA)], [40A(eA)] and [50A(dA)]. 2010 investment: proposed pleading, [31(ca)(ii)], [31A(ea)] and [31F (particulars)]. 2011 investment: proposed pleading, [40(ca)(ia)], [40A(eA)] and [40F (particulars)]. 2012 investment: proposed pleading, [50(ca)(ia)], [50A(dA)] and [50F (particulars)].
Firstly, paragraph 19AAA alleges that ‘the first defendant enabled or allowed’ other investors to acquire interests in the 2004 investment at per hectare rates lower than that applied to the plaintiffs. It is not clear what acts and/or omissions of the first defendant the plaintiffs seek to impugn. In this context, ‘enabled or allowed’ is vague and ambiguous.
Secondly, it is unclear from paragraph 19AAA why the amount paid for the acquisition of investments by other persons is relevant to the amount paid for the acquisition of investments by the plaintiffs. This is not identified with clarity in the pleading.
The plaintiffs submitted that the acquisition of investments by other persons is relevant to the acquisition of investments by the plaintiffs as ‘[t]he trustee [i.e. the first defendant, allegedly] owes a duty to act impartially as between beneficiaries. So that lack of impartiality we say would be a breach, and that’s something that’s pleaded.’[40] This submission makes it plain that, by paragraph 19AAA, the plaintiffs seek to impugn acts and/or omissions of the first defendant as a trustee in relation to the plaintiffs and other persons as beneficiaries. The plaintiffs do not allege that any other particular investors were, in fact, beneficiaries with them in a trust of which the first defendant was trustee.[41] In the absence of such a plea, it remains unclear from paragraph 19AAA why the amount paid for the acquisition of investments by other persons is relevant. Further, paragraph 19AAA concerns the acts and/or omissions of the first defendant (i.e. ‘enabled or allowed’) in relation to the acquisition of investments. That is, acts and/or omissions at a time when, presumably even on the plaintiffs’ case, the other persons may not have been investors and therefore not beneficiaries. This is unclear. Paragraph 19AAA fails to give clear notice of the plaintiffs’ case against the defendants.
[40]Above n 26.
[41]I accept the plaintiffs’ submissions that it is implicit in the present pleading that upon making an investment, a beneficiary and trustee relationship arose between an investor and the first defendant.
Paragraphs 19AAB and 19AAC
Paragraph 19AAB provides:
Further or alternatively, the first defendant enabled or allowed the price per tonne paid on trees the subject of the plaintiffs’ interest in the 2004 investment to be significantly less than the price per tonne paid on trees the subject of other investors’ interests in the 2004 investment, where the former trees and the latter trees were:
(a) harvested within 4 weeks of each other; and
(b) located within 50 kilometres of each other.
Particulars
The plaintiffs refer to WAPRES Recipient Created Tax Invoices and Stumpage Reconciliations for harvests conducted in 2014 and early 2015 for their full terms and effect, including that stumpage rates as to the plaintiffs’ interest in the East Plantation were paid at $4.50 to $10.09, whereas stumpage rates as to the interests of other investors in adjacent plantations (such as Smeathers) were paid at $17.56 to $18.49.
Paragraph 19AAC provides:
Further or alternatively, the first defendant enabled or allowed the harvest haulage rates (dollar cost per kilometre per tonne) applied to the trees the subject of the plaintiffs’ interest in the 2004 investment to be significantly greater than the rates applied to trees the subject of other investors’ interests in the 2004 investment, where the former trees and the latter trees were:
(a) harvested within 4 weeks of each other; and
(b) located within 50 kilometres of each other.
Particulars
The plaintiffs refer to and repeat the particulars to paragraph 19AAB above insofar as the stumpage rates were affected by haulage costs.
Paragraphs 19AAB and 19AAC are confined to the plaintiffs’ 2004 investment. No similar claims are sought to be made in relation to the plaintiffs’ investments in 2010, 2011 and 2012. The Court was informed that this is because the trees the subject of those investments have not been harvested.[42]
[42]Transcript of Proceeding (17 June 2022), 12.7-13 (Mr Cawthorn QC)..
The allegations in paragraphs 19AAB and 19AAC give rise to proposed amendments concerning breach, loss and damage and a failure to account.[43]
[43]Proposed pleading, [19AB(i)], [19AB(iii), (c)], [19AB (particulars)], [19I (particulars)] and [20(c)(ivA)(AA)].
Submissions
The plaintiffs submitted:
(a) ‘The preferential treatment of others is apparent on the face of the relevant Recipient Created Tax Invoices and Stumpage Reconciliations. Those documents indicate (for example) that – though harvested within the same period – the timber harvested from two plantations within close proximity, were subject to vastly different stumpage and/or haulage rates. The Plaintiffs received lower stumpage rates and/or paid more for haulage than other investors: stumpage of $4.72 per tonne was recorded as to the Plaintiffs’ interests in the ‘East’ Plantation; stumpage of $17.56 per tonne was recorded for another investor’s interests in ‘Smeathers’.’ [44]
(b) ‘[Regarding] 19AAB, 19AAC and 19AAD [Mr Bick QC] said we should be pleading who the other investors are because he said, well, you should be telling us the rate. You know the rate you have, you should be telling us the rate that Mr Brown, Mr Jones and Mr Black have. But we can't know that. It can only be within the knowledge of the defendant. So that's the answer to that.’[45]
[44]Plaintiffs’ submissions, [25] (citations omitted).
[45]Transcript of Proceeding (17 June 2022), 124.31-125.6 (Mr Cawthorn QC).
The defendants submitted:
(a) ‘The pleading is vague, it's uncertain, it's unparticularised, the investors and what each of them received or paid are not set out. They ought to be set out.’[46]
[46]Ibid 57.31-58.3 (Mr Bick QC).
(b) Paragraphs 19AAB and 19AAC are ‘entirely unacceptable pleadings’.[47]
[47]Ibid 63.3 (Mr Bick QC).
(c) ‘[paragraph 19AAB]… can only be relevant if there is an antecedent plea that there was an obligation to ensure this didn’t happen. There isn’t. It needs to be pleaded as a term of the investment agreement or an obligation of the trustee that this should not be permitted to occur. There is no such plea.‘[48]
[48]Transcript of Proceeding (31 May 2022), 121.21-31(Mr Bick QC).
(d) ‘Well, the other investors need to be identified. The price paid in respect of the plaintiffs’ trees per tonne needs to be identified. The price paid to the other investors needs to be identified. There needs to be some linking of the harvesting within four weeks of each other to the relevant material facts, in other words why is that significant, and why is it significant in relation to the position of the plaintiff. And the same in relation to the 50 kilometres part of the pleading.
In addition, it's necessary to identify, as part of this material fact, why that's detrimental to the plaintiff. That's not done. If one goes to the particulars, there is a reference to some invoices, but nothing is said beyond a range of stumpage rates, in relation to the price per tonne, and no other investors were identified, there is no connection of the particulars to the timing of the harvest, that is within four weeks, nor any connection with the location, that is within 50 kilometres.’[49]
[49]Transcript of Proceeding (17 June 2022), 57.3-21 (Mr Bick QC).
(e) The submissions set in sub-paragraph (d) immediately above also apply to paragraph 19AAC.[50]
(f) ‘And in relation to the time period and the distance parameter which have been introduced in this version of the pleading, Your Honour, the pleading doesn't explain why those things are relevant or how they might affect the plaintiff or how they might affect the other investors at all. It's just left hanging in the air. It's presumably an attempt to try and look like, or make the issue look like it's much narrower than it might first appear, but in fact it simply clouds the waters.
And it also suggests that there might be some different duty or different version of the duty owed for harvests which are more than four weeks apart or plantations which are more than 50 kilometres apart. Again, it just clouds the issue.’ [51]
[50]Ibid 57.25-28 (Mr Bick QC).
[51]Ibid 62.20-63.2 (Mr Bick QC).
Analysis
In my view, paragraphs 19AAB and 19AAC are unintelligible and embarrassing. They do not give clear notice to the defendants of the case against them. They are defective pleas. I will refuse leave for the plaintiffs to make amendments in the form of paragraphs 19AAB and 19AAC and the proposed amendments concerning breach, loss and damage and a failure to account (insofar as they concern the allegations in paragraphs 19AAB and 19AAC).[52]
[52]Proposed pleading, [19AB(i)], [19AB(c)], [19AB (particulars)], [19I (particulars], [20(ivA)(AA)].
Firstly, paragraph 19AAB alleges that ‘the first defendant enabled or allowed’ alleged prices. No adequate particulars are provided of the alleged enabling or allowing. It is not clear what acts and/or omissions of the first defendant the plaintiffs seek to impugn. In this context, ‘enabled or allowed’ is vague and ambiguous.
Secondly, paragraph 19AAB refers to ‘significantly less’, but it is not clear what this means. Further, implicit in the plea is that the plaintiffs make no complaint about every case in which the price was less, only those cases in which it was ‘significantly less’. This is vague and ambiguous.
Thirdly, paragraph 19AAB refers to ‘investors’, ‘harvested’ and the location of trees. The particulars identify the invoices and ‘other investors in adjacent plantations (such as Smeathers).’ It is unclear whether the plaintiffs’ claims are limited to ‘adjacent plantations’, being those that satisfy the criteria in (a) and (b), or whether this is an example. It is also unclear whether the reference to ‘other investors’ is a reference to all other investors of trees harvested in the time and area specified or only some of them. No other particulars are provided of the alleged investors, harvests or the alleged location of the trees within 50 kilometres.
Fourthly, paragraph 19AAC alleges that ‘the first defendant enabled or allowed’ harvest haulage rates to be applied. No adequate particulars are provided of the alleged enabling or allowing. It is not clear what acts and/or omissions of the first defendant the plaintiffs seek to impugn. In this context, ‘enabled or allowed’ is vague and ambiguous.
Fifthly, paragraph 19AAC refers to ‘significantly greater’ but it is not clear what this means. Further, implicit in the plea is that the plaintiffs make no complaint about circumstances in which the haulage rates applied were greater, only those cases in which they were ‘significantly greater’. This is vague and ambiguous.
Sixthly, paragraph 19AAC also refers to ‘investors’, ‘harvested’ and location of trees. The particulars refer to the particulars to paragraph 19AAB ‘insofar as the stumpage rates were affected by haulage costs’. As a result, I refer to my reasons above concerning the particulars to paragraph 19AAB. In addition, the words ‘insofar as the stumpage rates were affected by haulage costs’ are vague and uncertain. It is unclear whether the plaintiffs are claiming that stumpage rates were, in fact, affected by haulage costs or something else, and if so, what its relevance is to the plaintiffs’ claims.
Finally, the vice in the pleas in paragraphs 19AAB and 19AAC is made plain by the plaintiffs’ submissions that they cannot identify the relevant investors or the stumpage or haulage rates they allegedly paid, except for ‘Smeathers’. Despite this submission, the plaintiffs nonetheless seek leave to make the allegations in paragraphs 19AAB and 19AAC. These allegations are not confined to Smeathers, but relate to other unidentified investors of whom no adequate particulars are provided.
Paragraph 19AAD
Paragraph 19AAD provides:
Further or alternatively, the first defendant has diverted or enabled or allowed the diversion of the proceeds of the 2004 harvest of the plaintiffs’ East Plantation to or through three trusts related to the defendants, without the plaintiffs’ authority and to the detriment of the plaintiffs.
Particulars
The plaintiffs [sic] interest in the 2004 investment included approximately 51% of the 2004 East Plantation.
The proceeds of the harvest of the 2004 East Plantation were distributed to the plaintiffs in amounts less than 51% of the proceeds.
The plainttiffs [sic] refer to WAPRES Recipient Created Tax Invoices from 2014 and 2015, to the effect that WAPRES paid proceeds in the amounts of 47.1% to WA Blue Gum Afforestation Management Trust, 11.59% to WA Blue Gum Management Trust and 41.31% to WA Blue Gum Timber Management Trust, and setting out amounts payable to the first two of these trusts but not the third.
The defendants also refer to an excel spreadsheet as to the 2004 harvest to the effect that the total proceeds due to the plaintiffs in respect of the East Plantation was $164,734.73.
Paragraph 19AAD is confined to the plaintiffs’ 2004 investment. No similar claims are sought to be made in relation to the plaintiffs’ investments in 2010, 2011 and 2012, for the same reasons as mentioned in relation to paragraphs 19AAB and 19AAC.[53] The allegations in paragraph 19AAD give rise to proposed amendments concerning breach, loss and damage and a failure to account.[54]
[53]See [24] above.
[54]Proposed pleading, [19AB(iii)], [19AB(d)], [19AB (particulars)], [19I (particulars)] and [20(c)(ivA)(AB)].
Submissions
The plaintiffs submitted:
(a) ‘The apparent diversion is suggested by the Recipient Created Tax Invoice as particularised.’[55] However, the plaintiffs also submitted that: ‘As to the three trusts… references to the same within a limited number of Recipient Created Tax Invoices and stumpage reconciliations do not in and [of] themselves indicate breaches of duty. Again, absent the forensic analysis of other issues as to the Recipient Created Tax Invoices, the import of the three trusts might have been missed. There is no suggestion that the WABG Defendants ever previously explained the distribution of proceeds to the three trusts as set out in the 6 May 2022 McGirr Affidavit.’[56]
(b) ‘We should have been paid at 51 per cent and we were paid less, that’s the simple point. And that’s particularised in the first three sub-paragraphs of the particulars.’[57]
(c) Paragraph 19AAD is both an allegation that the first defendant has diverted or enabled or allowed the diversion of proceeds, and an allegation that the plaintiffs received less than 51% of the proceeds.[58]
[55]Plaintiffs’ submissions, [28].
[56]Ibid [44] (footnotes omitted) (emphasis added).
[57]Transcript of Proceeding (17 June 2022), 48.9-12 (Mr Cawthorn QC).
[58]Ibid 48.22-26 (Mr Cawthorn QC).
The defendants submitted:
(a) The proposed amendments are deficient as the three trusts are not identified, the harm alleged to have been suffered is unclear and the gravamen of the proposed allegations is also unclear.[59] The defendants also submitted that ‘[t]he reader would be [disposed] to ask what harvest proceeds, owing to which investors, in what amounts, were diverted where?’[60]
[59]Defendants’ submissions, [31].
[60]Transcript of Proceeding (31 May 2022), 125.8-10 (Mr Bick QC).
(b) ‘Whether or not the allegation in 19AAD is permitted to go forward, the plaintiffs already bring a claim of a failure to account in relation to their 2004 investment, and one would imagine that anything of the type that it [has] attempted to include by paragraph 19AAD could be provided by way of particulars to the allegation that's already in.
But going back to 19AAD, Your Honour will see that this allegation refers ultimately, at the end of the substantive paragraph, to the detriment of the plaintiffs. There are no particulars of the detriment. If one goes to the particulars that are there, Your Honour queried aspects of the third and fourth sub‑paragraphs of the particulars. Can I draw your attention to a couple of features of the first two paragraphs, and then I'll get onto the third and fourth paragraphs.
The allegation is the plaintiffs' interest in the 2004 investment included approximately 51 per cent of the 2004 East Plantation. What is approximately 51 per cent, what does that mean? Can it be 55 per cent, can it be 47 per cent? It's unacceptably vague.
The second paragraph in the particulars states that the plaintiffs received amounts less than 51 per cent. Well they must know what they received, they must be able to put a dollar figure on it. And because they're comparing it with what they think they should have received, they ought to be able to put a figure on that as well. That would be the detriment, but they fail to do that.
Then in the third paragraph they refer to invoices, as presumably the source of what they are attempting to get at here. And the relevant trust for the plaintiffs is WA Blue Gum Forestation Management Trust, that much ought to have been apparent to the plaintiffs from their involvement in the last five years of this litigation. And the figure there is 47.1 per cent, which may or may not be within the realm of approximately 51 per cent, we really wonder what this is about. And without particulars setting out the relevant amounts, we really wonder whether this attempt adds anything to the plaintiffs' claims at all or not.’ [61]
[61]Transcript of Proceeding (17 June 2022), 65.15 to 66.25 (Mr Bick QC).
Analysis
In my view, paragraph 19AAD is unintelligible and embarrassing. It does not give clear notice to the defendants of the case against them. It is a defective plea. I will refuse leave for the plaintiffs to make amendments in the form of paragraph 19AAD and the related proposed amendments concerning breach, loss and damage and a failure to account (insofar as they concern the allegations in paragraphs 19AAD).[62]
[62]Proposed pleading, [19AB(i)], [19AB (particulars)], [19AB(d)], [19I (particulars)] and [20(ivA)(AB)].
First, no adequate particulars are provided of how the first defendant ‘diverted or enabled or allowed’ the diversion of proceeds. It is not clear what acts and/or omissions of the first defendant the plaintiffs seek to impugn. In this context, ‘diverted, enabled or allowed’ is vague and ambiguous.
Secondly, the allegation that the three trusts were ‘related to the defendants’ is vague. The relationship is not adequately alleged or particularised.
Thirdly, the alleged diversion and detriment are both unclear. It is unclear:
(a) whether the plaintiffs claim that they were entitled to 51% of the proceeds or approximately 51% of the proceeds, and if it is the latter, what is meant by ‘approximately 51%’;
(b) what amount of the proceeds they allege were inappropriately diverted;
(c) what amount of the proceeds they received;
(d) whether any proceeds that were allegedly diverted were ultimately received by them;
(e) whether the plaintiffs claim that they were entitled to proceeds in the sum of $164,734.73 referred to in the particulars to paragraph 19AAD but, in fact, received something less;
(f) whether the involvement of the alleged trusts and the alleged diversion is relevant to the alleged detriment, and if it is, how so.
Paragraph 19AB
Paragraph 19AB alleges that the first defendant breached its duties as trustee. The plaintiffs seek to add two further instances of breach as paragraphs 19AB(c) and (d) as follows:
(c) by preferring the interests of other investors to the detriment of the plaintiffs, as to investing in, returns upon, and/or expenses in connection with the 2004 investment;
(d) by diverting, enabling or allowing the diversion of the proceeds of the 2004 harvest.
Particulars
As to (c) and (d) the plaintiffs refer to paragraphs 19AAA, 19AAB, 19AAC and 19AAD.
Similar proposed amendments are made with respect to claims for loss and damage and accounting for the 2004 investment[63] and claims for breach, loss and damage and accounting for the 2010, 2011 and 2012 investments.[64]
[63]Proposed pleading, [19I (particulars)] and [20(ivA)].
[64]Proposed pleading, [31(ca)(ia)], [31F (particulars)], [40(ca)(ia)], [40F (particulars)], [50(ca)(ia)] and [50F (particulars)].
Submissions
The plaintiffs submitted that it is ‘a matter of argument about whether or not [the paragraphs referred to in the particulars to paragraph 19AB do or don’t amount to that kind of preference. That’s how we put it. It may be refined in due course…’.[65]
[65]Transcript of Proceeding (17 June 2022), 51.2-5 (Mr Cawthorn QC).
The defendants submitted:
(a) ‘This paragraph, or the amendments to this paragraph, trouble us because they are vague and general. You will see that the only particulars given in relation to the new allegations relate to 19AAA to 19AAD, which we’ve already criticised for various reasons and those paragraphs are completely unparticularised, they are devoid of satisfactory particulars’.[66]
(b) No proper particulars are provided of the allegation of ‘preferring the interests’.[67]
[66]Ibid 68.5-11 (Mr Bick QC).
[67]Ibid 68.23-27 (Mr Bick QC).
Analysis
In my view, paragraph 19AB(c) and (d) are unintelligible and embarrassing. They do not give clear notice to the defendants of the case against them. They are defective pleas. I will refuse leave for the plaintiffs to make amendments in the form of paragraph 19AB(c) and (d) and the proposed amendments concerning loss and damage and a failure to account regarding the 2004, 2010, 2011 and 2012 investments.[68] For convenience, I will address my reasons to paragraph 19AB(c) and (d).
[68]Proposed pleading, [19AB(i)], [19AB (particulars)], [19I (particulars)], [20(ivA)(AB)], [31(ca)(ia)], [31F (particulars)], [40(ca)(ia)], [40F (particulars)], [50(ca)(ia) and [50F (particulars)].
First, paragraphs 19AB(c) and (d) rely upon paragraphs 19AAA to 19AAD. As a result, I refer to my reasons concerning these paragraphs.[69]
[69]At [18]-[21], [28]-[35] and [40]-[43] above.
Secondly, paragraph 19AB(c) alleges that the first defendant breached the alleged duties ‘by preferring the interests of other investors’. The particulars refer back to the substantive allegations. I reject that this is a matter for ‘argument’. In this context, the word ‘preferring’ appears to refer to choosing the interests of other investors over the plaintiffs’ interests. No adequate particulars are provided. The defendants are entitled to know now, with clarity, the plaintiffs’ case against them.
Thirdly, paragraph 19AB(c) alleges ‘detriment’ but the particulars again refer back to paragraphs 19AAA to 19AAD. No ‘detriment’ is expressly alleged in paragraphs 19AAA to 19AAC. As a result, the reference to detriment is unintelligible.[70] It is not clear:
[70]I have already addressed ‘detriment’ in the context of paragraph 19AAD earlier in these reasons at [42], as paragraph 19AAD expressly alleges detriment.
(a) whether the plaintiffs claim the detriment with respect to paragraph 19AAA is that the plaintiffs should have paid a lesser sum to make the investment, or that the other investors should have paid a greater sum or the same sum as the plaintiffs, or something else;[71]
(b) whether the plaintiffs claim the detriment with respect to paragraph 19AAB is that the plaintiffs should have been paid a higher price, or that the other investors should have been paid a lesser price or the same as the plaintiffs, or something else;[72]
(c) whether the plaintiffs claim the detriment with respect to paragraph 19AAC is that the haulage rates applied to the trees the subject of the plaintiffs’ interests should have been lower, or that the haulage rates applied to the trees the subject of the other investors’ interests should have been higher or the same as the plaintiffs’, or something else.[73]
[71]If the plaintiffs should have paid a lesser sum, then it is not clear what sum should have been charged; if the other investors should have paid a greater sum, the detriment to the plaintiffs is not clear.
[72]If the plaintiffs should have been paid a higher price, then it is not clear what price should have been applied; if the other investors should have been paid a lesser price or the same as the plaintiffs, the detriment to the plaintiffs is not clear.
[73]If the haulage rates applied to the trees the subject of the plaintiffs’ interests should have been lower, then it is not clear what rates should have been applied; if the haulage rates applied to the trees the subject of the other investors’ interests should have been higher or the same as the plaintiffs, the detriment to the plaintiffs is not clear.
Conclusion
In conclusion, I will:
(a) give leave to the plaintiffs to amend paragraphs 10C(aa), 10C(aa) (particulars) 17(b), 17B(aa), 18(d), 18(d) (particulars), 19AA (particulars), 19BA, 19D, 23B (particulars), 23C(aa), 23C(c) (particulars), 29A(aaa), 31A(c) (particulars), 31C, 31E, 33B (particulars), 33C(aa), 33C(c) (particulars), 38A(aaa), 40A(c) (particulars), 40C, 40E, 42B (particulars), 42C(aa), 42C(c) (particulars), 48A(aaa), 50A(b) (particulars), 50C, 50E, 52(i) and C of the Prayer for Relief in the terms set out in the proposed pleading;
(b) refuse leave to the plaintiffs to amend paragraphs 19AAA, 19AAA (particulars), 19AAB, 19AAB (particulars), 19AAC, 19AAC (particulars), 19AAD, 19AAD (particulars), 19AB(i), 19AB(c), 19AB(d), 19AB (particulars), 19I(c)(iv) (particulars), 19I(c)(v) (particulars), 20(c)(ivA)(AA), 20(c)(ivA)(AB), 20(c)(ivA) (particulars (ixA)), 31(ca)(ia), 31A(eA), 31A(eA) (particulars), 31F (particulars), 40(ca)(ia), 40A(eA), 40A(eA) (particulars), 40F (particulars), 50(ca)(ia), 50A(dA), 50A(dA) (particulars) and 50F (particulars) in the terms set out in the proposed pleading.
The impugned amendments are unintelligible and embarrassing. The proposed case against the defendants in the impugned amendments is unclear. I am not satisfied that, if I allowed the impugned amendments, further processes, such as further witness statements, discovery and written opening submissions, would cure them. Further, the defendants are entitled to know now the case that is made against them with clarity. This is especially the case given that the matter is listed for trial next month.
I am not satisfied that the plaintiffs’ claims in the impugned amendments are patently hopeless. This cannot be determined in the absence of an intelligible pleading. Given that I will refuse leave on the basis that the impugned paragraphs are unintelligible and embarrassing, it is not necessary for me to consider other discretionary factors that are relevant upon an application for leave to amend a pleading.
The parties are directed to confer and attempt to agree on orders, including on a timetable for the amended pleadings, the costs of the plaintiffs’ summons filed 5 April 2022, and a mediation prior to trial, by 4pm on 8 July 2022 and to provide any agreed orders to chambers by that time. In the absence of agreement, each party should provide a submission (limited to 3 pages) and their proposed form of orders to chambers by 4pm on 11 July 2022. The Court will then list the matter for hearing at a time and date to be fixed.
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SCHEDULE OF PARTIES
S CI 2017 03613
BETWEEN
TEICO INVESTMENTS PTY LTD (ACN 057 341 929) First Plaintiff
TIECO INTERNATIONAL (AUST) PTY LTD (ACN 005 658 364) Second Plaintiff
- and -
WA BLUE GUM LIMITED (ACN 060 179 982) First Defendant
WA BLUE GUM AFFORESTATION PTY LTD (ACN 082 919 542) Second Defendant
HERBERT GEER (A FIRM) Third Defendant
AND BETWEEN
WA BLUE GUM LIMITED (ACN 060 179 982) First Plaintiff by Counterclaim
WA BLUE GUM AFFORESTATION PTY LTD Second Plaintiff by Counterclaim
(ACN 082 919 542)
- and -
TEICO INVESTMENTS PTY LTD (ACN 057 341 929) First Defendant by Counterclaim
TIECO INTERNATIONAL (AUST) PTY LTD Second Defendant by Counterclaim
(ACN 005 658 364)
5
1