FEDERAL COURT OF AUSTRALIA

Tameeka Group Pty Limited v Landan Pty Limited [2015] FCA 1218

THE COURT ORDERS THAT:

1.    Paragraphs 31, 35 and 41 of the Statement of Claim be struck out.

2.    The applicants have leave to re-plead paragraphs 31, 35 and 41 of the Statement of Claim and to file an Amended Statement of Claim by 25 November 2015.

3.    The applicants to respond to the requests for particulars at paragraphs 3(b), (c), (d) and (e) of the Amended Interlocutory Application by 25 November 2015.

4.    Otherwise dismiss the Amended Interlocutory Application.

5.    The respondents pay the applicants’ costs of the Amended Interlocutory Application.

6.    The matter be relisted for directions before Markovic J on a date to be notified.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    The first and second applicants, Tameeka Group Pty Ltd (Tameeka Group) and 2444 On the Green Pty Ltd (2444) respectively, commenced proceedings against the first to fourth respondents, Landan Pty Ltd (Landan), Gran-Dia Investments Pty Ltd (Gran-Dia), Malcolm Corbett and Dianne Preston respectively, on 17 August 2015 by the filing of an Originating Process and Statement of Claim (SOC).

2    Tameeka Group and 2444 allege in the SOC that Landan breached the terms of a call option deed and engaged in unconscionable conduct within the meaning of s 21 of Sch 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law) (ACL), when Landan granted a long term lease over commercial property on favourable terms to Gran-Dia, a related entity, so as to deny Tameeka Group or its nominee the substantial benefit of the call option allowing one or the other to buy the commercial property unburdened.

3    The applicants also allege an alternative cause of action of conspiracy by lawful means in respect of an alleged agreement between Landan and Gran-Dia to enter into the lease the purported effect of which was to diminish the value or benefit of the call option to Tameeka Group or its nominee, 2444. The predominant purpose of the agreement is said to be to cause injury to Tameeka Group or its nominee.

4    The principal relief sought by Tameeka Group and 2444 is a declaration that Landan engaged in unconscionable conduct in granting the lease to Gran-Dia, an order that the lease between Landan and Gran-Dia be set aside or declared void ab initio and that the respondents pay damages.

5    By Amended Interlocutory Application filed on 18 September 2015, the respondents to the proceedings seek orders that:

(1)    the proceedings be stayed until further order or, alternatively, that they be transferred pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-vesting Act) to the Supreme Court of New South Wales;

(2)    in the alternative to (1), that pursuant to rr 16.21(1)(c), (d) or (e) of the Federal Court Rules 2011 (Rules) the Originating Process and the SOC both filed on 17 August 2015 be struck out or, alternatively, that paras 9(b), 22 and 38, 29, 31, 32, 33 and 41 of the SOC be struck out;

(3)    in the alternative to (2), that the applicants provide the particulars set out in paras 3(a)–(j) of the Amended Interlocutory Application.

6    The respondents rely on two affidavits sworn by Michael Flaherty on 8 and 18 September 2015 respectively in support of the Amended Interlocutory Application. The applicants oppose all of the orders sought in the Amended Interlocutory Application. They rely on an affidavit sworn by James Kay on 6 October 2015.

The Facts

7    A dispute has arisen between the parties arising out of the entry into of a Deed of Option dated 4 May 2010 between Landan, as grantor, Tameeka Group, as grantee, and Paul Andrew Barr, the sole director, secretary and shareholder of Tameeka Group, as guarantor (the Option Deed).

8    Just prior to the entry into of the Option Deed, pursuant to a lease dated 27 April 2010, Tameeka Pty Ltd (Tameeka), a company of which Mr Barr is the sole director and secretary and in which he holds nine of the issued shares, leased the property described as a shop with two basement car spaces located at 17–19 Horton Street, Port Macquarie, New South Wales being Lot 1 in SP79256 (the Property) for a three year term commencing on 1 July 2010 with a 5 year option to renew and annual rental of $148,000 plus GST from Landan (the First Lease).

9    Relevantly, the Option Deed provides that on payment of the Call Option Fee of $100 by Tameeka Group to Landan, Landan grants to Tameeka Group the Call Option to require Landan to sell the Property on the terms and conditions set out in the Option Deed and the contract for sale of land annexed to the Option Deed (the Contract). The Contract identifies Tameeka Group as the purchaser and provides that the Property will be sold subject to existing tenancies and GST-free because the sale is the supply of a going concern under s 38-325 of the A New Tax System (Goods and Services Tax) Act 1997 (Cth). The purchase price is $1.25m.

10    Under the terms of the Option Deed, the Call Option can only be exercised during the Call Option Period which expired on the Call Option Expiry Date being 12:00 pm on 30 June 2013. Further, the Call Option can only be exercised by Tameeka Group or the Nominee delivering to Landan:

(1)    a Notice of Exercise of Call Option executed by Tameeka Group or the Nominee being the person nominated by Tameeka Group pursuant to the Call Option Nomination Notice provided that person is registered for GST and is not either Tameeka or any other entity then being the lessee of the premises;

(2)    a counterpart of the Contract completed with the name of the purchaser and dated with the date of the exercise of the Call Option; and

(3)    if the Notice of Exercise of Call Option is exercised by the Nominee, the Call Option Nominee Notice executed by Tameeka Group irrevocably certifying that the Nominee has been nominated, to the exclusion of Tameeka Group, to exercise the Call Option.

11    Upon receipt of the documents required by cl 2.2 of the Option Deed, Landan must deliver to Tameeka Group a counterpart of the Contract executed by it and completed with the name of the purchaser and the date of exercise of the Call Option. On the exercise of the Call Option, a contract for the sale and purchase of the Property on the terms set out in the Contract is concluded between Tameeka Group or the Nominee, as the case may be, and Landan. The exchange of counterparts of the Contract is intended to “record permanently the detailed terms of the Contract and it is [the grantor and grantee’s] intention that the parties to the Contract be and are bound by the Contract on the date and by virtue of the exercise of the Call Option”.

12    At the time of entry into the Option Deed, Mr Barr paid Mr Corbett $100,000 as further consideration for entry into the Option Deed.

13    By letter dated 16 May 2013, Tameeka notified its desire to exercise the “expired lease option” in the First Lease and “in association with this requires … to revise and extend … the ‘Option to Purchase’, namely for a further three year period”. On 3 July 2013, Landan entered into a new lease with Tameeka for a five year period with two five-year options to renew commencing on 1 July 2013 at an annual rent of $170,000 plus GST per annum until the first review date (the 2013 Lease).

14    On 1 August 2013, Tameeka Group, Mr Barr and Landan entered into a deed of variation of the Option Deed. By that deed, the terms of the Option Deed were varied so that the Call Option Expiry Date became 12:00 pm on 30 June 2016 and the definition of Call Option Period became the period commencing on 1 June 2015 and ending on the Call Option Expiry Date, i.e. 12:00 pm on 30 June 2016.

15    On 12 May 2015, a liquidator was appointed to Tameeka. By letter dated 13 May 2015, the liquidator of Tameeka wrote to Landan notifying it, in accordance with s 568A of the Corporations Act 2001 (Cth), of its disclaimer of the 2013 Lease. By letter of the same date Landan terminated the 2013 Lease.

16    On 15 May 2015, Landan entered into a lease with Gran-Dia for a period of 10 years with an option to renew of 10 years at a rent of $60,000 plus GST per annum to be reviewed annually and increased by CPI on each anniversary (the Gran-Dia Lease). Gran-Dia and Landan have a common director and secretary, Malcolm Corbett, and common shareholders.

17    Tameeka Group lodged a caveat on the title of the Property which prevents Landan from registering the Gran-Dia Lease. Tameeka Group claims an equitable interest as the grantee of an option to purchase an estate in fee simple of the land which may be exercised on or before 12.00 pm on 30 June 2016.

18    Between 10 July 2015 and 28 August 2015, the solicitors for the applicants and the respondents exchanged correspondence. That correspondence relevantly provided as follows:

(1)    on 10 July 2015, Tameeka Group, through its solicitors, informed Landan that it had “formally nominated” 2444 to exercise the Call Option. The applicants also informed the respondents that their actions in entering into the Gran-Dia Lease would cause 2444 financial loss and damage which it would seek to recover from the respondents in proceedings in this Court;

(2)    by letter dated 13 July 2015, the respondents’ solicitors informed the applicants of their clients’ view that the Option Deed was “invalid and incapable of exercise”;

(3)    by letter dated 15 July 2015, the applicants’ solicitors provided the respondents with a copy of a draft Originating Application and Statement of Claim. That letter also referred to the Civil Dispute Resolution Act 2011 (Cth) and invited the respondents to meet and discuss the matters in dispute with a view to resolving them;

(4)    by letter dated 20 July 2015, the respondents’ solicitors accepted the applicants’ offer to meet and discuss the matters in dispute. In addition, the respondents’ solicitors noted that, in their view, the proceedings contemplated by the draft pleadings were misconceived, that their clients, Landan and Gran-Dia, did not propose to terminate the Gran-Dia Lease, that their client Landan does not accept that the Call Option remains open for exercise and is of the view that it expired either on 30 June 2013 or when the lease between Landan and Tameeka was terminated and that, even if the Call Option was capable of being exercised, the Option Deed and the Contract provided for sale of the Property “subject to existing tenancies”;

(5)    on 23 July 2015, the applicants responded to the letter dated 20 July 2015;

(6)    a meeting between the parties took place on 5 August 2015;

(7)    the Originating Process and SOC commencing these proceedings was filed on 17 August 2015;

(8)    by letter dated 28 August 2015, the respondents’ solicitors notified the applicants of what they believed the real issues in dispute to be and that those issues would be more properly dealt with in proceedings filed in the Real Property List of the Equity Division of the Supreme Court of New South Wales. That letter also raises issues in relation to particular paragraphs of the SOC.

19    Landan has prepared a draft Summons naming Tameeka Group and 2444, the first and second applicants to these proceedings, as first and second defendant respectively which it says it proposes to file in the Real Property List of the Equity Division of the Supreme Court of New South Wales (Proposed Supreme Court Proceedings). In the Proposed Supreme Court Proceedings, Landan seeks the following relief:

1    A declaration that it was an implied term of the Deed of Option between the first Plaintiff and the First Defendant dated 4 May 2010 (as varied) (“the Option Deed”), that the Call Option granted by the Plaintiff in the Option Deed was exercisable during the Call Option Period (as varied), but only if:

a.    At the time of exercise, the Plaintiff was still bound as Landlord pursuant to the lease between the Plaintiff and Tameeka Pty Ltd dated 3 July 2013; or, in the alternative,

b.    The Plaintiff was still bound as Landlord vis a vis Tameeka Pty Ltd up to 1 July 2015.

2    A declaration that from 13 May 2013, the Option deed was no longer capable of being exercised.

3    In the alternative to 1 and 2, and in the event the Option Deed remains open to be exercised:

a.    A declaration that the Option Deed, by its terms, does not preclude the Plaintiff from granting the lease dated 15 May 2015 to Gran-Dia Investments Pty Limited (“the Gran-Dia Lease”); and

b.    A declaration that upon the Option Deed being exercised by the First Defendant or its nominee, that the Contract for sale of land to be entered between the Plaintiff and the First Defendant or its nominee in respect of lot 1 in SP79256 (“the Property”) will be subject to the Gran-Dia Lease and will be validly entered by the Plaintiff by executing a copy of the contract with a copy of the Gran Dia Lease attached.

4    An order pursuant to section 74MA of the Real Property Act 1900 that the first Defendant withdraw caveat reference AJ59774E lodged in relation to the Property.

The application to stay or transfer the proceedings

Legal framework

20    The principles relating to a stay of proceedings pending determination of proceedings raising the same issues in another jurisdiction were set out by Lockhart J in Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287 (Sterling) at 290–291:

The court has a general power to control its own proceedings, and that power extends to enable it to order a temporary stay of proceedings in various circumstances including the case where proceedings are pending in another court and it is desirable that those proceedings should proceed to their conclusion first … The court has power specifically conferred by 0 20, r 2 to order that a proceeding in the court be stayed or dismissed generally, where no reasonable cause of action is disclosed or the proceeding is frivolous or vexatious or an abuse of the process of the court; but this power is not the court’s sole source of power to stay proceedings in the court. The court is a superior court of record and obviously may control its own proceedings including, where appropriate, the exercise of a power to grant a stay … In my opinion relevant considerations to be taken into account in the present case include the following:

•    Which proceeding was commenced first.

•    Whether the termination of one proceeding is likely to have a material effect on the other.

•    The public interest.

•    The undesirability of two courts competing to see which of them determines common facts first.

•    Consideration of circumstances relating to witnesses.

•    Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

•    The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

•    How far advanced the proceedings are in each court.

•    The law should strive against permitting multiplicity of proceedings in relation to similar issues.

•    Generally balancing the advantages and disadvantages to each party.

(Citations omitted.)

21    Those principles have been applied subsequently see for example: Macquarie Bank Ltd v Juno Holdings S.a.r.l. [2015] NSWSC 919 at [18]. The matters to be taken into account set out by Lockhart J in Sterling are a non-exhaustive guide which accords with the task of exercising judicial discretion see Oswal v Burrup Fertilisers Pty Limited (Recs and Mgrs apptd) (2011) 85 ACSR 531 at [30] where Mansfield and Foster JJ approved the approach of the primary judge.

22    The Cross-vesting Act deals with the transfer of proceedings between courts. Section 5(4) provides:

(4)    Where:

(a)    a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Federal Court or the Family Court (in this subsection referred to as the first court); and

(b)    it appears to the first court that:

(i)    the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;

(ii)    having regard to:

(A)    whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been incapable of being instituted in that court, apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross‑vesting of jurisdiction; and

(B)    whether, in the opinion of the first court, the relevant proceeding or a substantial part of it would have been capable of being instituted in the Supreme Court of a State or Territory, apart from this Act and any law of a State or Territory relating to cross-vesting of jurisdiction; and

(C)    the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (B) and not within the jurisdiction of the first court apart from this Act and any law of the Australian Capital Territory or the Northern Territory relating to cross-vesting of jurisdiction; and

(D)    the interests of justice;

it is more appropriate that the relevant proceeding be determined by that Supreme Court; or

(iii)    it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;

the first court shall transfer the relevant proceeding to that Supreme Court.

23    In BHP Billiton Ltd v Schultz (2004) 221 CLR 400 the majority, comprising Gleeson CJ, McHugh and Heydon JJ, said at [14] that, in the context of the Cross-vesting Act, the Court is:

… required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross-vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court “shall transfer” the proceedings to that other court.

The concept of the interests of justice is to be interpreted widely. At [15] their Honours observed that the interests of justice are not the same as the interests of one party, that “there may be interests wider than those of either party to be considered” but that despite this, the “interests of the respective parties, which might in some respects be common … and in other respects conflicting, will arise for consideration”. Their Honours went on to note at [19] that:

In many cases there will be such a preponderance of connecting factors with one forum that it can readily be identified as the most appropriate, or natural, forum. In other cases, there might be significant connecting factors with each of two different forums. Some of the factors might cancel each other out … Weighing considerations of cost, expense, and convenience, even when they conflict, is a familiar aspect of the kind of case management involved in many cross-vesting applications.

Consideration

24    The respondents submit that these proceedings are an inappropriate vehicle to deal with the real issues in dispute and that, in turn, makes this Court a “clearly inappropriate forum” to determine the dispute. In the alternative, the respondents submit that, in the interests of justice, these proceedings should be stayed.

25    The respondents identify the real issues in dispute as:

(1)    the proper construction of the Option Deed, namely, whether the Option Deed (as varied) is open for acceptance;

(2)    if the Option Deed remains open for acceptance, whether upon being exercised, the Contract is to be subject to the Gran-Dia Lease; and

(3)    whether the caveat lodged by the first applicant should be withdrawn pursuant to s 74MA of the Real Property Act 1900 (NSW)

(the Respondents’ Issues).

26    The Proposed Supreme Court Proceedings raise the Respondents’ Issues for determination. The respondents submit that the proceedings in this Court, which allege breach of contract, unconscionable conduct and conspiracy to injure, and claim remedies, including damages, add unnecessary complexity, time and cost to the determination of the Respondents’ Issues. Accordingly, a stay should be granted to enable proceedings to be commenced in the Supreme Court of New South Wales.

27    Further reasons provided by the respondents for a stay of these proceedings are that the Supreme Court has jurisdiction to deal with all matters in dispute, the respondents have brought their application for a stay of these proceedings or alternatively their transfer promptly so as to avoid any wasted cost and the Supreme Court of New South Wales, with its Real Property List and having jurisdiction to order the withdrawal of the caveat, can provide more effectively for the complete resolution of the whole of the dispute between the parties.

28    In my view, having regard to the non-exhaustive list of considerations set out by Lockhart J in Sterling, a stay of these proceedings ought not be granted. I note the following factors relevant to reaching this conclusion:

(1)    despite the passage of time, proceedings have not been commenced in the Supreme Court of New South Wales. Counsel for the respondents has indicated that, should an order be made, such proceedings would be commenced within seven days of the date of the order. However, there was, as submitted by counsel for the applicants, sufficient time to do that up until the commencement of these proceedings;

(2)    assuming it is capable of exercise, there is a “drop-dead” date for the exercise of the Call Option, being 30 June 2016. Any proceedings must be determined prior to that date. There is no evidence before me as to the time it would take in the Supreme Court to do all things necessary to prepare the matter for hearing, when the matter might be heard and if it could be determined more expeditiously than in this Court;

(3)    while these proceedings are at an early stage and have not moved beyond the filing of the Originating Application, Statement of Claim and a Defence, the parties have invested some time, effort and resources in them. Subject to one matter, there is no reason why the Respondents’ Issues cannot be raised by way of cross-claim and determined in these proceedings. That combined with the relative urgency to have the proceedings determined is an important factor to take into account;

(4)    the one matter which flows from the Respondents’ Issues that cannot be finally determined in this Court is an order for the removal of the caveat lodged by Tameeka Group. The power to remove a caveat vests exclusively in the Supreme Court of New South Wales: see s 74MA of the Real Property Act 1900 (NSW). However, if the respondents raise the first two issues included in the Respondents’ Issues in these proceedings, their determination may well dictate the fate of the caveat;

(5)    as to the issue of an order for removal of the caveat, there is no evidence before me as to any urgency to deal with that matter. The first respondent was notified of lodgement of the caveat by letter dated 23 June 2015. The Proposed Supreme Court Proceedings were not commenced prior to the commencement of these proceedings on 17 August 2015. Nor is there evidence of the lodging of a lapsing notice or evidence that the first respondent is suffering damage as a result of the caveat.

(6)    it is undesirable to have two courts determine the same issues. However, as noted, with the exception of the issue of removal of the caveat, to the extent they do not already arise for determination on the claim as pleaded, the Respondents’ Issues can be raised in these proceedings by way of cross-claim. Similarly, it is undesirable not to have all issues arising from the same transaction and factual matrix determined in the same forum. If the Respondents’ Issues are determined in isolation then, subject to their outcome, that may still leave for determination the claims raised by the applicants in these proceedings. All claims and issues ought be resolved in one forum.

29    In the alternative, the respondents submit that these proceedings should be transferred to the Supreme Court of New South Wales pursuant to s 5(4)(b)(iii) of the Cross-vesting Act. The applicants oppose the transfer of the proceedings. The respondents submit that, taking into account the matters specified in s 5(4)(b)(i) of the Cross-vesting Act, it is otherwise in the interests of justice that the proceedings be determined by the Supreme Court of New South Wales. The matters which the respondents say support that conclusion are:

(1)    assuming the Proposed Supreme Court Proceedings are filed, the proceedings in this Court would be related to those proceedings;

(2)    the proceedings currently before this Court would not have been incapable of being instituted in this Court, apart from the Cross-vesting Act.

(3)    the proceedings in this Court would have been capable of being commenced in the Supreme Court of New South Wales, apart from the Cross-vesting Act;

(4)    the matters for determination in this Court are not matters involving questions as to the application, interpretation or validity of the law of New South Wales;

(5)    the interests of justice would favour the present proceedings being determined by the Supreme Court of New South Wales because the Respondents’ Issues are not related to any legislation conferring federal jurisdiction and, to the extent that the applicants wish to maintain allegations of breach of the ACL, the Supreme Court of New South Wales has jurisdiction;

(6)    the Supreme Court of New South Wales has a specialist list, the purpose of which is to facilitate the prompt and efficient resolution of issues in dispute in real property matters;

(7)    the application has been brought promptly;

(8)    the questions of fact and law to be determined in the withdrawal of the caveat would largely need also to be determined in the claim being brought by the applicants;

(9)    jurisdiction to order the withdrawal of the caveat is with the Supreme Court.

30    The respondents rely on s 5(4)(b)(iii) of the Cross-vesting Act as there is no other proceeding pending in the Supreme Court of a State or Territory. Thus the basis for transfer is only enlivened if it is in the interests of justice to do so. I am not of the opinion that the interests of justice favour a transfer of these proceedings to the Supreme Court of New South Wales. My reasons for reaching that conclusion are the same as those relating to my refusal to grant a stay. In particular:

(1)    save for the issue of removal of the caveat which, at this stage does not seem to be a matter requiring the urgent attention of the court, the Respondents’ Issues can be raised and dealt with by this Court;

(2)    there is a timing issue requiring these proceedings to be dealt with as efficiently as possible. There is no evidence before the Court that proceedings in the Supreme Court of New South Wales’ Real Property List will be determined more expeditiously;

(3)    the matter ought be dealt with in a timely manner and all issues determined in one forum. The applicants commenced these proceedings in August and both parties have invested effort and resources in them. They should continue and be heard by a court at the earliest convenient date.

The application to strike out parts of the Statement of Claim

Legal framework

31    The respondents rely on rr 16.21(1)(c), (d) or (e) of the Rules in support of their application to strike out a part or specified paragraphs of the SOC. Those rules relevantly provide as follows:

(1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

…

(c)    is evasive or ambiguous; or

(d)    is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)    fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or …

32    The power to strike out proceedings or portions of pleadings is discretionary. In Australian Competition & Consumer Commission v Pauls Ltd (2000) ATPR 41-747 at [10] the Court said:

The power to strike out pleadings or portions of pleadings is discretionary and should be employed sparingly and only in a clear case (Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 at 193). The modern system of pleading requires only that the material facts on which a party’s claim is based be stated; the claim is not expected to be formulated as an elegant model of legal purity: Carr v McDonald’s Australia Ltd (1994) 63 FCR 358 at 367 and there is now a tendency against taking a pedantic approach to a pleading: Coshott v Kam Tou Mak (Wilcox J, 3 March 1998, unreported).

33    A pleading may be struck out as evasive or ambiguous pursuant to r 16.21(1)(c) if it is unintelligible, ambiguous or so vague that it fails to identify the material factual allegations so that the other party is not given notice of the real substance of the claim: Elston v Commonwealth of Australia [2013] FCA 108 at [30].

34    The concept of embarrassment in r 16.21(1)(d) can include a pleading that is susceptible to various meanings, contains inconsistent allegations, contains alternatives which are confusingly intermixed, contains irrelevant allegations which will tend to increase expense, is unintelligible or vague see: Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905 at [22]; Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263 at 269, [18]. In Spiteri, Edmonds J went on to note at [23], in the context of considering what constitutes embarrassment for the purposes of the predecessor to r 16.21(1)(d), that a pleading should assert the “basic and constituent facts, not the evidence that will or may be proved at trial” and that a pleading is “defective if it simply asserts a conclusion to be drawn from the facts not stated”.

35    The power to strike out a pleading because it discloses no reasonable cause of action is only to be exercised in a plain and obvious case, where it is clear that no reasonable amendment can cure the alleged defect and there is no reasonable question to be tried: see Polar Aviation Pty Limited v Civil Aviation Safety Authority (2012) 203 FCR 325 at 337, [43]. An application to strike out a statement of claim on the basis that it does not disclose a reasonable cause of action involves establishing that the applicant’s case is so untenable that it cannot possibly succeed: see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130.

Consideration

36    In their amended interlocutory application, the respondents seek an order striking out paras 9(b), 22, and 38, 29, 31, 32, 33, 41 of the SOC. While the order in relation to those paragraphs is sought in the alternative to an order to strike out the whole of the Originating Process and the SOC, counsel for the respondents indicated in oral argument that his submissions focussed on strike-out of the nominated paragraphs and that the Court should confine itself to consideration of those paragraphs.

37    Based on their written and oral submissions, the respondents’ complaints fall into four categories: those relating to the pleading of the tort of conspiracy by lawful means at cross paras 22 and 38, those relating to the pleading at para 29, those relating to the pleading of unconscionable conduct at paras 32 and 33 and those relating to the pleading of damages at paras 31, 35 and 41. Despite there being a claim for strike out of 9(b) of the SOC no written or oral submissions were made by the respondents in relation to this paragraph of the SOC. I decline to strike it out.

Paragraphs 22 and 38

38    The first category of complaint relates to the pleading of the tort of conspiracy by lawful means. The respondents note that the allegation of tort of conspiracy is said to follow from what is pleaded at para 22. However, the respondents submit that what is pleaded at para 22 cannot follow from the particulars at para 22. Paragraph 38 provides:

38.    Tameeka Group and 2444 repeat paragraph 22 above and say that in the premises:

(a)    The sole, true, dominating or main purpose of the Agreement was to injure Tameeka Group and/or the Nominee in order to achieve any one or more the outcomes referred to at paragraph 24 above; and

(b)    Constituted a conspiracy among each of the respondents to injure the Tameeka Group and/or the Nominee in order to achieve any one or more the outcomes referred to at paragraph 24 above.

Paragraph 22 provides:

22.    On or about 17 June, 2015, Corbett informed Barr that in order to prevent Tameeka Group exercising the Call Option, Landan had entered into a long-term lease of the Property with a related company at a low market rental of $60,000 per annum and would then have the related company sub-let the Property at a reasonable current market rental.

Particulars

The conversation occurred at the Flower Power Garden Centre, Mona Vale Road, Terry Hills. The conversation included words to the effect:

Barr:    “The Tameeka Group intends to exercise the option”.

Corbett:    “The gloves were now off and I have to protect my family”.

Barr:    “What do you mean the gloves are off?”

Corbett:    “I have put a lease in place from Landan to another company that I own for 10 years with a 10 year option for $60,000.00 per year.”

39    The legal principles governing the tort of conspiracy by lawful means were considered by Foster J in Danthanarayana v Commonwealth of Australia [2014] FCA 552. After referring to and extracting the relevant passages from the leading case of McKernan v Fraser (1931) 46 CLR 343 Foster J said at [74]:

Thus, for a combination or acts done in furtherance of the combination to be actionable, where the end is not in itself unlawful (the present case) and the means are not unlawful (also the present case) and no threat of illegality is made in furtherance of the combination (also the present case), the parties to an alleged conspiracy must have been impelled to combine, and to act in pursuance of the combination, by a desire to harm the plaintiff and this must have been the sole, the true or the dominating or main purpose of their conspiracy. It is not sufficient to adopt a course of action which inevitably interferes with the plaintiff in the exercise of his calling and thus injures him without having the requisite purpose.

40    Counsel for the applicants submitted that all of the essential elements of the cause of action are pleaded, in the SOC:

(1)    the agreement to enter into the Gran-Dia Lease, is pleaded at par 36;

(2)    the applicants plead the conspiracy and allege that its true, dominating or main purpose was to injure the applicants at para 38. While not specifically referred to by counsel for the applicants, as para 22 is repeated in para 38, it is presumably part of the pleading of the conspiracy;

(3)    at para 39, the applicants plead that the agreement was carried into effect by the entry into of the Gran-Dia Lease; and

(4)    the damage suffered is pleaded at para 41.

41    The specific complaint made about para 22 is that what is pleaded there cannot follow from the particulars to that paragraph. It is the case that the conversation set out between Mr Barr, the director of the first applicant, and Mr Corbett, the director of the first and second respondents in which it is alleged that Mr Corbett, among other things, informs Mr Barr that he has put the Gran-Dia Lease in place only particularises a part of what is pleaded at para 22. Notwithstanding this, the respondents have filed a defence in which Mr Corbett, the third respondent, has pleaded, in some detail, to para 22 of the SOC. It cannot be said that the respondents do not know the case that they have to meet insofar as the tort of conspiracy by lawful means is pleaded against them at para 38 and following and insofar as that pleading incorporates para 22. In my view the deficiency in the particulars to para 22 do not make the pleading such that it ought be struck out pursuant to rr 16.21(1)(c), (d) or (e) of the Rules. Any deficiency can be cured by the provision of further and better particulars.

Paragraph 29

42    Paragraph 29 of the SOC is alleged to be ambiguous. That paragraph provides:

2444 is ready, willing and able to exercise and complete the Call Option, but by reason of the matters in the preceding paragraph Landan refuses to complete the Call Option.

43    The respondents submit that the ambiguity arises because:

(1)    the Call Option can only be exercised by the grantee or the Nominee delivering a signed Notice of Exercise of Call Option and a counterpart of the Contract;

(2)    the SOC does not identify the contract that 2444 intends to deliver so that the respondents do not know the contract for sale of land that the applicants say is to be entered into upon the exercise of the Call Option;

(3)    it appears that the applicants may be contending that 2444 is entitled and ready, willing and able to complete a contract for sale of land that provides that 2444 is the purchaser, the Property is sold with vacant possession and the Property is no longer to be sold as a going concern. If so, that is not pleaded and it is not what is provided for by the Contract.

44    Paragraph 29 pleads the state of readiness of 2444 and must be considered in the context of para 28 which provides as follows:

28.    On 20 July 2015, Landan advised Tameeka Group and 2444 that:

(a)    The Call Option was not open for exercise;

(b)    The Call Option expired either on 30 June, 2013 or when a lease between Landan and Tameeka Pty Limited ACN 092 988 657 was terminated;

(c)    By implication sub-paragraphs from (a) and (b), denied that the Call Option was valid and enforceable.    

Particulars

Letter from Michael Flaherty (on behalf of Landan) to Falvey Kay Associates (on behalf of Tameeka Group and 2444) dated 20 July 2015.

45    In my view, para 29 of the SOC is not ambiguous in the sense of not giving the respondents notice of the claim. Indeed, the respondents have pleaded to para 29 in their defence. Further para 29 is not ambiguous in the sense that it is likely to cause any prejudice, embarrassment or delay to the proceedings. In my view para 29 ought not be struck out.

Paragraphs 32 and 33

46    The third category of complaint relates to the pleading of unconscionable conduct in paras 32 and 33 of the SOC. Those paragraphs provide as follows:

32.    At all material times the Call Option Deed and the Deed of Variation and each of their terms constituted a service or services within the meaning of Section 2 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law) (‘ACL’).

33.    The conduct of Landan referred to at paragraphs 15-24 and 28-29 above (‘Conduct’) jointly and/or severally constituted conduct in trade or commerce in connection with the supply or possible supply, or acquisition or possible acquisition, of services from a person which was in all the circumstances unconscionable and a contravention by Landan of section 21 ACL (‘Contravention’), including that:

(a)    There was no legitimate commercial reason to enter into the New Lease on the terms contained therein;

(b)    The conduct was engaged in which had the effect and for the purposes referred at paragraph 24 above;

(c)    2444 has been financially disadvantaged and has suffered loss and damage by the Conduct;

(d)    Landan engaged in unfair tactics by engaging in the Conduct;

(e)    Landan failed to disclose that it may engage in the Conduct; and

(f)    Landan failed to act in good faith by engaging in the Conduct.

47    The respondents submit that paras 32 and 33 are confusing and ambiguous in that the SOC does not plead the facts relied on to allege how the existence of the Option Deed, of itself, constitutes a service or services within the meaning of the ACL or how the conduct of the first respondent in granting the Gran-Dia Lease constitutes conduct in connection with the supply or possible supply or acquisition or possible acquisition of the services from the first respondent. The respondents submit that the allegation that entry into of the Gran-Dia Lease was unconscionable is not referable to the list of relevant matters at subss 22(1)(a) to (l) of the ACL that the Court may take into account and it is otherwise not clear what the conduct is that amounts to unconscionable conduct.

48    The respondents rely on Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110 at [114] to [117] and [162] and Transerve Pty Ltd v Blue Ridge WA Pty Ltd [2015] FCA 953 at [275] in support of a submission that s 21 of the ACL does not extend to third parties but is concerned with parties to the relevant transaction. The respondents submit that the transaction took place in 2010 and possibly 2013, when the parties entered into the deed of variation. They further submit that the transaction was between Tameeka Group and Landan and that 2444 is not a party to the relevant transaction and thus it cannot get the benefit of s 21 in respect of the Option Deed in the context of the allegation pleaded against Landan. Further, if the service or services are the Option Deed, they were supplied in 2010 or 2013. The conduct in entering into the Gran-Dia Lease, which took place in 2015, cannot be conduct in connection with the supply or possible supply of the services.

49    The applicants rely on the definition of services in s 2 of the ACL which is in the following terms:

services includes:

(a)    any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and

(b)    without limiting paragraph (a), the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under:

(i)    a contract for or in relation to the performance of work (including work of a professional nature), whether with or without the supply of goods; or

(ii)    a contract for or in relation to the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or

(iii)    a contract for or in relation to the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or

(iv)    a contract of insurance; or

(v)    a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or

(vi)    any contract for or in relation to the lending of money;

but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.

50    Paragraph 22 of the SOC is not vague or ambiguous. It sets out the transaction and the documents that are alleged to constitute the service. The question of whether the Option Deed is a service is one to be addressed at final hearing. There is an issue to be determined which requires construction of the Option Deed in the context of the statutory definition. It cannot be said that there is no “reasonable question to be tried” in relation to this issue or that the claim is so hopeless that it will fail.

51    Again the question of whether the conduct complained of is unconscionable within the meaning of s 21 of the ACL is a matter of fact to be determined at the trial. The authorities establish that the concept of unconscionability is incapable of a precise definition. In Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (2009) 253 ALR 324 at 347, Foster J when considering the predecessor section to s 21 of the ACL (s 51AC of the Trade Practices Act 1974 (Cth)), noted at [114]:

The above statements of principle provide useful guidance as to the content of the concept of unconscionability or unconscionable when used is s 51AC of the TPA. Of necessity, the authorities to which I have referred do not prescribe a precise definition which would be able to be applied to every set of circumstances presented to the Court for consideration. The application of the meaning accorded to the concept will always be a matter of judgment in every case and will depend upon a careful consideration of the circumstances of each case.

52    In Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389, the NSW Court of Appeal said at [291], when considering the meaning of unconscionability in the context of the statutory provisions in which it appears that it “is neither possible nor desirable to provide a comprehensive definition” and that a “finding requires an examination of all the circumstances”.

53    The conduct that is said to give rise to the alleged unconscionable conduct is pleaded at paras 15 to 24 and paras 28 to 29 of the SOC. Those paragraphs set out, among other things, the entry into of the Gran-Dia Lease, its terms, the alleged purpose behind the entry into and the alleged effect of the entry into the Gran-Dia Lease. In this respect, the pleading cannot be said to be confusing or ambiguous. While s 22 of the ACL sets out matters to which the Court may have regard for the purpose of determining whether a person has contravened s 21 in the supply or possible supply of goods or services, those matters are not exhaustive or exclusive. There is no requirement that an applicant plead them as part of its cause of action.

54    The Option Deed contemplates that the Call Option can be exercised by a Nominee of Tameeka Group appointed according to the terms of the Option Deed. The applicants submit that 2444, as Tameeka Group’s duly appointed Nominee, is not a third party but that it has been granted a right, benefit or privilege under the Option Deed and thus can have the benefit of a claim under s 21 of the ACL. The position of 2444 and whether it has been duly appointed as Nominee under the Option Deed are matters to be determined at trial. The authorities establish that s 21, like its predecessor, is concerned with the effect of conduct on a party to whom the respondent supplies the services and not with the effect of that conduct on third parties. The question to be determined at trial is whether, assuming the Option Deed is a service, 2444 is a party to whom the relevant services have been supplied, taking into account the terms of the Option Deed and its date. I do not think that 2444’s claim falls into the category of being so untenable that it is doomed to fail or that there is no reasonable question to be tried.

55    In light of the matters set out above I am not persuaded to strike out paras 32 and 33 of the SOC.

Paragraphs 31, 35 and 41

56    These paragraphs set out the pleading of damage for each head of claim: breach of contract, unconscionable conduct and the breach of the tort of conspiracy by lawful means. In their Amended Interlocutory Application, the respondents seek to strike out paras 31 and 41. However, their written and oral submissions also addressed para 35 in this context as did the applicants’ submissions. Accordingly, I will consider the three paragraphs together.

57    Paragraphs 31, 35 and 41 are in similar terms and are as follows:

31.    As a consequence of the breach of the First Implied Term and/or the Second Implied term, each of Tameeka Group and 2444 have suffered loss and damage.

Particulars

(i)    Loss of profit that would have been earned if the Call Option was exercised;

(ii)    Alternatively, the loss of value of the Call Option;

(iii)    Alternatively, if the Call Option is exercised within the Call Option Period, the difference between the reasonable market rental for the Property and the rental under the New Lease.

…

35.    By reason of the Contravention and the matters in the preceding paragraph, Tameeka Group and 2444 have suffered loss and damage and continue to suffer loss and damage.

Particulars

(i)    Loss of profit that would have been earned if the Call Option was exercised;

(ii)    Alternatively, the loss of value of the Call Option;

(iii)    Alternatively, if the Call Option is exercised within the Call Option Period, the difference between the reasonable market rental for the Property and the rental under the New Lease;

(iv)    The applicants will serve an expert report prior to hearing.

(v)    Alternatively, loss of the Cash Payment.

…

41.    By reason of the matters pleaded in paragraphs 39 and 40 above, Tameeka Group and 2444 have suffered loss and damage and continue to suffer loss and damage.

Particulars

(i)    Loss of profit that would have been earned if the Call Option was exercised;

(ii)    Alternatively, the loss of value of the Call Option;

(iii)    Alternatively, if the Call Option is exercised within the Call Option Period, the difference between the reasonable market rental for the Property and the rental under the New Lease.

58    The respondents make the following submissions:

(1)    in pleading that the same loss has been suffered by each of the first and second respondents, the SOC pleads inconsistent claims that are not in the alternative;

(2)    the SOC provides no basis for understanding what is meant by “loss of profit that would have been earned if the call option was exercised” or “loss of value of the call option”;

(3)    the particulars at (i), (ii) and (iii) of each of paras 31, 35 and 41 do not arise if the Option Deed is no longer available to be exercised, or the Call Option is exercised and the Court finds that the Gran-Dia Lease is an impermissible interference with the first respondent’s equitable interest that ought to be set aside; and

(4)    finally, even if the Call Option remains open to be exercised, there can be no damages in the sense of lost profit or value to either applicant until it has been exercised. If that occurs then, even if damage is suffered, such damage will have been suffered because of the failure of the first or second applicant to actually seek to exercise the Call Option.

59    I accept the respondents’ submission that Tameeka Group and 2444 cannot both suffer the same damage flowing from the alleged conduct of the respondents. While in each case the particulars include heads of damage in the alternative, the claim for damages by Tameeka Group and 2444 is not pleaded in the alternative. The question arises as to whether the failure to plead the claim for damages in the alternative in each case causes the relevant paragraphs of the SOC to plead inconsistent claims as submitted by the respondents and thus to be embarrassing such that they should be struck out.

60    There is no inconsistency in the sense of pleadings of material facts completely at odds with one another and causing confusion as between claims made: see Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263 at 275–277, [28]–[35]. The inconsistency, if that is the correct descriptor, which can be said to arise is because both applicants claim the same damages arising from the same conduct. While the respondents have filed a defence which pleads to each of paras 31, 35 and 41, I accept that some confusion may be caused by the pleading as framed. The question of damages, should it arise, is, as submitted by counsel for the applicants, one for final hearing. However, the respondents are entitled to know and understand which applicant seeks which head of damage and if the claim for damages is in the alternative it should be so pleaded. In the circumstances I will make an order striking out paras 31, 35 and 41 of the SOC but will grant leave to the applicants to re-plead those paragraphs.

61    As to the other matters raised by the respondents in relation to paras 31, 35 and 41, they are all issues that should be addressed at final hearing. In those respects, paras 31, 35 and 41 do not offend rr 16.21(1)(c), (d) or (e).

Request for particulars

62    As an alternative to an order for stay or transfer of the proceedings and an order that various paragraphs of the SOC be struck out, the respondents seek an order pursuant to r 16.45 of the Rules that the applicants provide the particulars set out in paras 3(a) to (j) of their Amended Interlocutory Application. Those paragraphs seek particulars of paras 9(b), 14, 16, 22, 27, 29, 31, 32, 33, 35 and 41 of the SOC.

Legal principles

63    Rule 16.45 of the Rules provides as follows:

16.45 Application for order for particulars

(1)    If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of the party’s case, the party may apply to the Court for an order that the party who filed the pleading serve on the party:

(a)    particulars of the claim, defence or other matter stated in the pleading; or

(b)    a statement of the nature of the case relied on; or

(c)    if there is a claim for damages—particulars of the damages claimed.

(2)    An application under subrule (1) may be made only if:

(a)    the particulars in the pleading are inadequate; and

(b)    the party seeking the order could not conduct the party’s case without further particulars.

(3)    A respondent who applies to the Court for an order under subrule (1) before filing the respondent’s defence must satisfy the Court that an order is necessary or desirable to enable the respondent to plead.

Note: The intent of the pleading rules is that a party should include all material facts in its pleadings as initially filed so that there is no unfairness to another party by any lack of particularity. If the party has not done so, the Court may at trial refuse to allow the party to present a case that is outside the terms of their pleading.

64    In Power Infrastructure Pty Ltd v Downer EDI Engineering Power Pty Ltd (No 3) [2011] FCA 539, when considering an application for particulars under the predecessor rule, Katzmann J set out the relevant principles at [10] to [12] as follows:

10    Young CJ in Eq provided a convenient summary of the relevant principles in Deemah Marble & Granite Pty Ltd (in liq) v Sutherland [2001] NSWSC 829 at [6] (“Deemah Marble & Granite”):

(1)    The basal function of particulars is to reduce costs by alerting the opponent to the scope of the real case being made so the opponent is not caught by surprise, nor does the opponent waste time and money in preparing to meet issues that the other party does not intend to raise: see eg Sims v Wran [1984] 1 NSWLR 317, 321 and Banque Commerciale SA (In Liquidation) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286.

(2)    Particulars are supplied of the material facts pleaded as P E Joske J said in Trade Practices Commission v Total Australia (1975) 24 FLR 413, 417:

“While the defendant is entitled to know the case it is called upon to meet, it is not entitled to be told the evidence that will be called to prove the case. A defendant is entitled to ask for the material facts upon which the plaintiff will rely and he may make his request for the facts and matters relied on, which is taken to mean the same thing. When he asks for the facts and circumstances relied on he is going beyond the scope of particulars, and is probing for evidence.”

(3)    However, every litigation lawyer knows it may be appropriate, in order to carry out the aim which I have stated in (1), it will almost be inevitable to disclose some of the evidence, and that if this happens, it is no answer that evidence must be disclosed by the giving of the particulars. See Sims v Wran at 321 and Wilson v Wilson (1952) 69 WN 358.

(4)    The party’s obligation is only to supply the best particulars he or she can supply, provided that after discovery those particulars are supplemented, if possible; see Marshall v Inter-Oceanic Steam Yachting Co (1885) 1 TLR 394.

(5)    When one party has the means of knowing the real facts, ordinarily the opponent will not be ordered to supply particulars until after discovery: Millar v Harper (1888) 38 Ch D 110; TPC v CC (NSW) Pty Ltd (1995) 131 ALR 581, 593.

(6)    The degree of particularity depends upon the nature of the case: American Flange and Manufacturing Co Inc v Rheem Australia Pty Ltd [1963] NSWR 1121, 1126.

(7)    In equity, because other remedies may seem appropriate, and because evidence is filed by affidavit, the Court is less likely to order particulars and will not permit parties to slow down proceedings unjustifiably in their preparation for trial. This proposition is partly derived from the American Flange case and partly from the tactic used up to about 1980 by large firms acting for defendants, who created delays by constant requests for copious particulars, a worldwide phenomenon, as shown by the judgment of Wessels JA in the Appellate Division of the Supreme Court of South Africa in Moaki v Reckitt & Colman (Africa) Ltd (1968) 3 SA 98, 102.

(8)    The order for particulars is discretionary, the object being to ensure the efficient process of the Court.

11    The point his Honour made at (7) is of particular relevance here. In Police & Nurses Credit Society Ltd v Burgess Rawson (WA) Pty Ltd [2006] FCA 1395 at [17] French J (as his Honour then was) went further:

What are “necessary” particulars of any claim, defence or other matter pleaded is a matter of judgment. The underlying principle is that the case of each of the parties is adequately exposed to the other. It is important to maintain a sense of balance in the detail of particulars sought and ordered. The provision of particulars should not be allowed unduly to increase the cost and delay associated with litigation. In contemporary commercial litigation where, frequently, the court will direct the filing of witness statements or affidavits on either side subject to the right to cross examination, the necessity for elaborate particulars and lengthy debates about them is even more questionable.

12    These remarks are reinforced by the terms of Part VB of the Federal Court of Australia Act 1976 (Cth) (“the Act”). Section 37M(1) declares that the overarching purpose of the civil procedure provisions of the Act and Rules is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (“the overarching purpose”). Section 37M(3) imposes an obligation on the Court to exercise any power conferred by the Act or the Rules in the way that best promotes the overarching purpose.

65    While the filing of a defence does not preclude a party from seeking particulars, a party seeking to invoke r 16.45 will need to meet the requirements of sub-rules (1) and (2) before the court will make an order requiring a party to provide particulars.

Consideration

66    The respondents have made only the barest submissions on why particulars are required. There is no evidence filed on behalf of the respondents to indicate why, in relation to the specific paragraphs, the particulars in the SOC are inadequate or why particulars are necessary for them to conduct their case. I was not taken to the request for particulars included in the Amended Interlocutory Application and provided with an explanation as to why each request was made and how any deficiency arose in the corresponding paragraph of the SOC.

67    Counsel for the applicants submitted that an order for particulars should be refused because a defence has been filed and no evidence has been provided that particulars are necessary, particulars in the form included in paras 3 (a) to (j) were not sought prior to the filing of the Amended Interlocutory Application and, if the proceedings stay in this Court, there will be orders for the filing of evidence and the proper time for a request for particulars is after the close of evidence, if there remains uncertainty.

68    As I have already observed, the filing of a defence does not preclude a party making a request for particulars. A party is entitled to know the case it has to meet and particulars may be allowed to ensure that occurs, that the issues are defined and that the case can run efficiently.

69    I have considered paras 22, 29, 31, 32, 33, 35 and 41 of the SOC in the context of the respondents’ application that those paragraphs be struck out. Given the conclusion I have reached in relation to paras 31, 35 and 41 of the SOC the need for particulars falls away. In relation to para 22, for the reasons already provided, I am of the view that the request for particulars in para 3(d) of the respondents’ Amended Interlocutory Application should be allowed. I do not think that the respondent is entitled to particulars of paras 29, 32 or 33 of the SOC.

70    The remaining paragraphs in relation to which particulars are sought are para 9(b), 14, 16 and 27. I will consider each in turn.

71    Paragraph 9(b) of the SOC sets out one of the terms that the applicants say is implied into the Option Deed namely that Landan “would not take any step which would have the effect of reducing the commercial value of the Call Option”. In their defence the respondents have denied the existence of the implied term and now seek particulars of what is said to be the “commercial value of the Call Option” and the facts relied on to assert the implied term. Particulars are to be supplied of the material facts pleaded. They are not to be used for the purpose of eliciting the evidence that a party will rely on to prove its case. I refuse this request for particulars. The respondents know the case they have to meet in this regard.

72    Paragraphs 14 and 16 of the SOC are in similar terms and plead knowledge on the part of the respondents of certain matters. They are as follows:

14.    During 2014 and 2015, each of Corbett, Preston, Landan and Gran-Dia were aware of the matters in paragraphs 12 and 13 above.

16.    At all material times Gran – Dia, through its directors Corbett and secretary Preston, was aware of the matters at paragraph 5 -15 above.

73    In each case particulars are sought of the “facts relied on to assert the conclusion that each of the Respondents were aware of the matters” in the relevant paragraphs. In their defence, the respondents have not pleaded to paras 14 or 16 of the SOC saying that those paragraphs plead a conclusion, not facts, and the respondents do not understand what is meant by either paragraph.

74    Rule 16.02 of the Rules requires a pleading to state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against it at trial, but not the evidence. Rule 16.43(1) of the Rules requires a party who pleads a condition of mind, which is defined in subr (2) to include “knowledge”, to state in the pleading particulars of the facts on which the party relies. Rule 16.45(1) is enlivened if a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of its case.

75    There are no particulars to paras 14 and 16 of the SOC. Those paragraphs do not comply with r 16.43(1). There is no evidence and no submissions have been made as to whether the respondents could not conduct their case without further particulars as required by r 16.45(2). The fact that the respondents have not pleaded to those paragraphs in their defence, because they say they cannot understand what is meant by either paragraph, may mean that the respondents will be unable to conduct their case without the further particulars. In the circumstances I am of the view that the particulars sought of paras 14 and 16 of the SOC should be allowed.

76    Paragraph 27 of the SOC is in the following terms:

On 8 July 2015, Tameeka Group irrevocably appointed 2444 as the Nominee under the Call Option Deed.

The respondents have pleaded to para 27 in their defence and now seek particulars of the facts relied on to assert the conclusion that Tameeka Group irrevocably appointed 2444 as its nominee. It is not clear on the face of the pleading how that occurred. The respondents are in my view entitled to seek the particulars of para 27 in the terms sought.

Conclusion

77    I will make orders:

(1)    striking out paras 31, 35 and 41 of the SOC and will give the applicants leave to replead those paragraphs and to file an Amended Statement of Claim;

(2)    requiring the applicants to respond to the requests for particulars at paras 3(b), (c), (d) and (e) of the Amended Interlocutory Application;

(3)    otherwise dismissing the Amended Interlocutory Application;

(4)     re-listing the proceedings for directions before me on a date to be notified.

78    I turn now to the question of costs. While the respondents have achieved some success on their interlocutory application, I note that, at least in relation to the order seeking particulars of specified paragraphs of the SOC, there is no evidence before me to suggest that the respondents approached the applicants seeking particulars in that form prior to the filing of their Interlocutory Application or their Amended Interlocutory Application. The only attempt to seek clarification was in an early letter from the respondents’ solicitors to the applicants’ solicitors which raised queries in relation to a draft Statement of Claim that was provided to the respondents. In my view, this omission goes to the exercise of my discretion in ordering costs.

79    The usual rule is that costs will be awarded to the successful party. In this instance there is no entirely successful party. However, taking into account the issue I have raised in relation to the seeking of particulars and given that the applicants have been substantially successful in their opposition to the amended interlocutory application, I will order that the respondents pay the applicants’ costs of the interlocutory application.

Associate:

Dated:    11 November 2015