FEDERAL COURT OF AUSTRALIA

Metalsistem Australia Storage and Display Solutions Pty Ltd v Kirk [2017] FCA 1259

ORDERS

THE COURT ORDERS THAT:

1.    The Respondent’s application for summary judgment be dismissed.

2.    Paragraph 10 of the Applicant’s statement of claim be struck out, with leave to replead and file an amended statement of claim.

3.    Subject to order 4, there be no orders as to costs.

4.    Liberty to the parties to apply within 5 days to set aside or vary order 3.

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

REASONS FOR JUDGMENT

DAVIES J:

1    The respondent (“Ms Kirk”) is a former director of the applicant (“Metalsistem” or “the company”). Metalsistem has brought proceedings against Ms Kirk for breach of trust and confidence and for breach of s 183 of the Corporations Act 2001 (Cth) (“the Act”) for allegedly accessing the company’s bank account without authority and downloading transactional data relating to the conduct of the company’s business. Ms Kirk has defended the proceedings. By way of defence to the whole of the claims against her, Ms Kirk has pleaded that the terms of a release contained in Terms of Settlement operates as a complete bar to the company bringing or prosecuting this proceeding. Ms Kirk has applied pursuant to r 26.01(a)–(d) of the Federal Court Rules 2011 (Cth) for an order that judgment be given against the company in relation to the whole of the proceeding. Alternatively Ms Kirk has sought an order pursuant to r 16.21(1)(b)–(f) that paragraphs 10 and 11 of the statement of claim be struck out. Paragraph 10 contains the allegation with respect to the statutory claim under s 183 of the Act and paragraph 11 pleads the applicant’s entitlement “to recover full compensation by way of damages in respect of all unlawful acts committed by the respondent”.

The application for summary judgment

2    Rule 26.01(1)(a)–(d) of the Federal Court Rules relevantly provides as follows:

(1)    A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)    the proceeding is frivolous or vexatious; or

(c)    no reasonable cause of action is disclosed; or

(d)    the proceeding is an abuse of the process of the Court; or

…

3    The source of the power for Rule 26.01 is s 31A of the Federal Court of Australia Act 1976 (Cth). Subsections 31A(2) and (3) relevantly provide:

(2)      The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)      the first party is defending the proceeding or that part of the proceeding; and

(b)      the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)      For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)      hopeless; or

(b)      bound to fail;

for it to have no reasonable prospect of success.

4    The leading authority on the power of the Court under s 31A to order summary judgment is Spencer v The Commonwealth [2010] HCA 28. In the joint judgment of French CJ and Gummow J, their Honours said at [24]–[26]:

24.    The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said:

“The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried”.

More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following:

“Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”

There would seem to be little distinction between those approaches and the requirement of a “real” as distinct from “fanciful” prospect of success contemplated by s 31A. That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions.

25.    Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the Court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.

26.    Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact.

(footnotes omitted)

Thus, whilst the test for summary judgment does not require Ms Kirk to show that the company’s claims against her are hopeless or bound to fail, the Court must consider whether there are any real, as opposed to fanciful, issues of fact or law to be decided. If so, the merits must be tested and the Court should not grant summary judgment.

5    In short compass, Ms Kirk contended that the release in the Terms of Settlement (“the settlement deed”) operates as a complete bar to the claims made by Metalsistem in this proceeding and accordingly that the claims against her have no reasonable prospect of succeeding.

6    The release is in the following terms:

4.    Release

4.1    Subject to the performance of the obligations and pursuit of any rights arising under these Terms of Settlement, the parties to these Terms of Settlement hereby discharge and release the other parties, their shareholders, associates and directors, from all claims of whatsoever kind and whensoever and wheresoever arising in connection with:

(a)    Solutions; and

(b)    Property.

4.2    In this Deed:

(a)    Claim includes the Proceedings and all claims, notices, demands, actions, proceedings, litigation, government investigations, judgment, damages, losses, costs, expenses or liabilities however arising, whether present, unascertained, immediate, future or contingent and whether based in contract, tort or statute.

7    By way of background, Ms Kirk had initiated proceedings against Metalsistem (defined as “Solutions” in the deed) (and a related company (“Property”) (collectively, “the companies”) in the Supreme Court of Victoria. Ms Kirk at the time was a 30% shareholder in the company. The recital to the settlement deed records that Ms Kirk had alleged “amongst other matters” that the companies were in breach of s 232 of the Act for oppressive conduct which the companies denied. The recital also records that without admission of liability by either company the parties had agreed to resolve the proceedings on the terms contained in the settlement deed.

8    Ronen Atzmon (“Mr Atzmon”), a current director of the company, swore an affidavit in opposition to the summary judgment application. Mr Atzmon deposed that Ms Kirk was the sole director and secretary of the company from October 2003 until 29 April 2015 when she was removed and Mr Atzmon, along with Ronan Buchwalter (“Mr Buchwalter”), were appointed as directors in her place. Prior to their appointments, Ms Kirk’s duties as the sole director of the company included responsibility for the accounts of the company and its bank account and to that end she was a signatory to the bank accounts of Metalsistem and its related company and also a guarantor for the overdrafts on those bank accounts. Following her removal as director, the bank informed Mr Atzmon and Mr Buchwalter that the bank was required to reissue fresh authorisation forms and loan documents in order to ensure that Ms Kirk was removed from the bank accounts as guarantor and authorised signatory, and for Mr Atzmon and Mr Buchwalter to be inserted as the responsible people for the accounts. Mr Atzmon deposed that he and Mr Buchwalter instructed the bank to proceed to reissue loan and authorisation documents to them and that Ms Kirk’s authority to transact on the company’s accounts was removed by the bank. Mr Atzmon deposed that Ms Kirk was later given authority for a limited period to access the company’s bank account on 1 July 2015 for the sole purpose of finalising the company’s end of year financial position and attending to payment on outstanding accounts of the company to third parties. The period of the authority was from 9 am 1 July 2015 to 6 pm 2 July 2015.

9    Mr Atzmon also deposed that following Ms Kirk’s removal as director, an inspection of the company’s books and records disclosed irregularities and caused Mr Atzmon and Mr Buchwalter to have significant concerns in relation to the remuneration that Ms Kirk and her husband (who was the company’s operational manager) had been paid, and in relation to various transactions that had been made to third parties whilst Ms Kirk was the company’s director (“the Director Conduct Claims”). These concerns were raised with Ms Kirk and her lawyers.

10    Also around this time, Ms Kirk was endeavouring to sell her 30% shareholding in the company to the other existing shareholders. According to Mr Atzmon, the parties were unable to resolve the purchase of Ms Kirk’s shares and Ms Kirk commenced oppression proceedings in the Supreme Court of Victoria, which eventually settled on the terms contained in the settlement deed which included the mutual release in clause 4. Mr Atzmon deposed that:

In good faith and on the basis that [the company] understood and believed that the only claims against [Ms] Kirk relating to [Metalsistem] and [Property] were the Director Conduct Claims and the only claims that [Ms] Kirk had against [Metalsistem] and [Property] were raised in the Supreme Court proceedings, [Metalsistem] agreed to the … release clause being included in the Terms of Settlement.

11    Mr Atzmon further deposed that in November 2016 he was informed by Mr Buchwalter that Mr Buchwalter had been told by a representative of Bowen Group, the company’s distributor, that Bowen had received a recent phone call from Ms Kirk in which Ms Kirk was reported to have said that she was aware that the company was selling merchandise to a competitor of Bowen, she was aware of the monetary value of a transaction that the company had with the competitor on 31 July 2016, and she still had access to the company’s bank account so she could view the transactions. Mr Atzmon deposed that he initiated an investigation with the bank and, on enquiries of the bank, was told that Ms Kirk’s online access had not been cancelled by the bank as and from 6 pm 2 July 2017 (as the company had believed) due to an oversight by the bank. The bank cancelled Ms Kirk’s access to the company’s bank account as of 9 November 2016 and also provided Mr Atzmon with details in relation to her access of the company’s bank account. The details provided to him by the bank were said to show that in the period between 16 April 2016 and 8 November 2016, Ms Kirk had accessed the company’s bank account about 37 times. Mr Atzmon deposed that at no time before or during the negotiation of the Supreme Court proceedings and the terms of settlement was he or Mr Buchwalter aware or made aware that Ms Kirk still had access to the company’s bank account having believed that she could no longer access the company’s bank account as and from 2 July 2015. Mr Atzmon further deposed that Ms Kirk had not disclosed that she still had access to the bank account and was accessing the bank account at the time of the settlement of the Supreme Court proceedings. He deposed that had he been aware that Ms Kirk still had access to, and was accessing the bank account at the time of settlement of the Supreme Court proceedings the company would not have entered into the terms of settlement as signed and/or would have negotiated alternative terms of resolution.

12    On Ms Kirk’s argument, she is entitled to summary judgment against Metalsistem because the claims made by the company against her in these proceedings fall within the terms of the release clause in the settlement deed. The company, on the other hand, submitted that Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 is authority that:

(a)    as a matter of construction, a release expressed in general words will usually be read down by reference to what was in the contemplation of the parties at the time of the execution of the release; and

(b)    in appropriate cases equity will restrain a party from unconscientious reliance on the general words of the release.

13    As to the rule of construction, the majority (Dixon CJ, Fullagar, Kitto and Taylor JJ) at [10] endorsed the statement of Lord Langdale in Lindo v Lindo [1839] EngR 728; (1839) 1 Beav 496 (48 ER 1032) that “the general words of release are to be restrained by the contract and intention of the parties, that contract and intention appearing by the deed itself or from any other proper evidence that may be adduced upon the occasion”. Their Honours continued at [18]:

The question is whether upon a proper interpretation of the deed the general release clause should be restrained to matters in dispute within the meaning of these recitals. The question depends primarily on the application of the prima facie canon of construction qualifying the general words of a release by reference to particular matters which recitals show to be the occasion of the instrument. But it is also affected by the general tenor of the deed. It is unnecessary to say more about the canon of construction or to discuss further the contents of the deed. As to the first all that remains is to apply the principle that prima facie the release should be read as confined to the matters forming the subject of the disputes which the deed recites. As to the second, such indications as can be found in the provisions of the deed point rather in the same direction. The detailed character of the terms of settlement, the careful readjustment of rights, the specific reference to the debt of H. C. Grant and his wife and its discharge and the particularity of the allocation of things and contracts between the companies do not favour the view that a general release was intended going outside the actual area of dispute.

14    As to the equitable principles which apply, the majority said at [14]:

From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.

Equity permits an investigation of the circumstances, including consideration of the actual intention of the parties, in order to determine whether enforcement of the general words of a release would be against conscience: The Owners Corporation of Strata Plan 61390 v Multiplex Corporate Agency Pty Limited and Ors (No 2) [2012] NSWSC 322 at [29]–[30] (Pembroke J).

15    In Doggett v Commonwealth Bank of Australia [2015] 47 VR 302, Whelan JA (with whom McLeish JA and Garde AJA agreed) at [63] endorsed the observation by Pembroke J in The Owners Corporation of Strata Plan 61390 v Multiplex Corporate Agency Pty Ltd (No 2) at [22] that the principle for which Grant v John Grant stands is sometimes described more widely than is justified and the case is not authority for the proposition that a release can only ever apply to matters then known to the parties. His Honour continued at [63]:

It is possible to enter into an arrangement which does settle “all conceivable further disputes”. The equitable principles articulated in Grant v John Grant restrain a party from unconscientious reliance on legal rights. Particular circumstances may reveal that it would be unconscientious to allow the general words of a release to be relied upon. Grant v John Grant was such a case. But there will be no room for the application of those equitable principles if it is clear that the parties intended the general words of a release to encompass all conceivable further disputes.

It was argued for Ms Kirk that it is clear that the parties to the settlement deed under consideration in this matter did intend the general words of the release to encompass all conceivable further disputes.

16    I am, however, not satisfied the company does not have any reasonable prospect of successfully prosecuting the proceeding because of the release. As Whelan JA in Doggett v Commonwealth Bank of Australia further stated at [64], evidence of non-awareness of the existence or likelihood of a particular claim may or may not be significant in the particular circumstances. In Grant v John Grant, the plaintiff had no knowledge at all of the liability of the defendant that the plaintiff sought to enforce but which the defendant contended was caught by the general words of a release entered into. Here, the subject matter of the proceeding in which the settlement was entered into related to allegations of oppressive conduct by the companies against Ms Kirk as a minority shareholder, which claims were denied by the companies. The recitals to the deed record that without admission of liability by the companies, the parties had agreed to resolve the proceedings on the terms contained. Applying the canon of construction that the general words of the release should be construed by reference to the subject matter of the disputes which the recitals said that the parties had resolved to settle on the terms of the deed (for which Grant v John Grant & Sons Pty Ltd is authority), it is at least arguable that the general release was not intended to extend to all future disputes. Furthermore, on the evidence of Mr Atzmon, the claims the subject of the current proceedings, were not then conceivable because the company was unaware that Ms Kirk still had access to the company’s bank account at the time of settlement. The evidence of Mr Atzmon raises both factual and legal questions for determination in relation to whether the equitable principle in Grant v John Grant applies in relation to Ms Kirk’s reliance on the terms of the release.

17    It follows that I do not accept the contention that the release must operate as a complete bar to the claims made by the company in this proceeding. In those circumstances, the application for summary judgment based on the release must be dismissed.

18    In the alternative, Ms Kirk has applied for an order pursuant to r 16.21(1)(b)–(f) (inclusive) that the company’s claim against her for breach of s 183 of the Act be struck out. Rule 16.21(1)(b)–(f) relevantly provides:

(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:

…

(b)    contains frivolous or vexatious material; or

(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

(f)    is otherwise an abuse of the process of the Court.

19    The power to strike out the claim requires a consideration of the pleading. As the authorities show, the power to strike out a pleading because it discloses no reasonable cause of action should be exercised only in a plain and obvious case, where no reasonable amendment could cure the alleged defect and there is no reasonable question to be tried: Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126; on appeal Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97 at [42]. A “reasonable cause of action” for this purpose means one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant: Wride v Schulze [2004] FCAFC 216 at [25]. In Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (unreported FCA Beaumont J, 13 September 1994), Beaumont J at [24] cited the following principles:

(1)    A “reasonable cause of action” means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185.

(2)    The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238.

(3)    Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455.

(4)    It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.

(5)    Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W & H Trade Marks [1986] AC 368

See also Polar Aviation Pty Ltd v Civil Aviation Safety Authority at [43].

20    Section 183(1) of the Act provides that:

A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:

(a)      gain an advantage for themselves or someone else; or

(b)      cause detriment to the corporation.

21    Paragraphs 10 and 11 as pleaded are in the following terms:

10.    The Respondent, without the consent of the Applicant and in breach of an obligation of trust and confidence, unlawfully made use of the Confidential Information:

(a)    to gain an advantage for herself or someone else; or

(b)    to cause detriment to the Applicant.

PARTICULARS

(i)    In about October 2016, the Respondent called a distributor of the Applicant, to advise them that the Applicant had been selling products to a competitor company of the distributor.

(ii)    In the course of the conversation with Applicant's distributor, the Respondent advised them:

(A)    of the date of the transaction with the competitor;

(B)    the company name of the distributor's competitor to whom the Applicant had sold goods;

(C)    the amount of the transaction;

(D)    that she still had access to the Applicant's Bank Account.

11.    By reason of foregoing, the Applicant has suffered loss and damage and the Applicant will seek to recover full compensation by way of damages in respect of all unlawful acts committed by the Respondent.

22    Further and better particulars of those paragraphs were ordered and provided as follows:

1.    As to paragraph 10:

(a)    In November 2016, the Applicant’s distributor, Bowen Group (Bowen Storage Solutions) (“Bowen”) visited Metalsistem SpA being the Italian manufacturer of the Metalsistem shelving solutions. Mr Ronen Buchwalter of the Applicant was also in attendance at Metalsistem SpA in Italy.

(b)    Bowen knew the Respondent from her previous employment with our client.

(c)    During a meeting between Ronen Buchwalter of the Applicant and Bowen management team held at the premises of Metalsistem SpA a representative of Bowen management team approached Mr Buchwalter and said to him that Bowen had received a recent phone call from the Respondent in which the Respondent had informed Bowen as follows:

(i)    The Respondent was aware that the Applicant was selling merchandise to competitors of Bowen, relevantly, Steelspan SS;

(ii)    The Respondent was aware of the monetary value of the transaction the Applicant had with Steelspan SS namely a payment made by Steelspan to the Applicant 31 July 2016; and

(iii)    The Respondent still had access to the Applicant's NAB bank account so the Respondent could view the transactions.

(d)    The Respondent worked for a competitor after she ceased being involved with the Applicant, namely One Stop Office Interiors and ROSSS Australia. The Applicant was and remains concerned that the Confidential Information was used by the Respondent whilst working for a competitor of the Applicant.

(e)    Further details may be provided after discovery and before trial.

2.    As to paragraph 11:

(a)    The Applicant pleads damages or an account of profits in the alternative. In respect of its claim for loss and damage, to date the Applicant is not aware that it has suffered any monetary loss and damage, particularly since the full extent of the Respondent's use of the Confidential Information is as yet unknown to the Applicant Further particulars may be provided after discovery and before trial.

23    In written submissions, counsel for Ms Kirk submitted that paragraph 10 as pleaded is fatally defective because it contains a series of rolled up conclusions which are not made out on the pleadings and, it was said, “despite being ordered to do so, [the company] has been unable to and must be assumed, cannot, provide even the barest of particulars to establish a basis to maintain the claim made”. It was submitted that “neither of the elements of the allegation are made out on a pleading basis by either the particulars as originally pleaded or by the further and better particulars provided”. The “elements of the allegation” was a reference to paragraphs 10(a) and (b).

24    This contention was founded on the judgment of Deane J in Chew v R (1992) 173 CLR 626. In issue in that case was the proper construction of s 229(4) of the Companies (Western Australia) Code 1981 (WA) (since repealed but not materially different to s 183 for present purposes). The question of construction was whether the word “to” was purposive in the sense of “in order to” or causative in the sense of "so as to” or “with the result of gaining or causing”. Deane J stated at 636–7 that:

Prima facie, the combination of the words “make use of [something]” and the words “to gain or to cause [something else]” conveys both a purposive and causative relationship between the two phrases. As a matter of ordinary language, a person has not made use of something to gain or cause something else if he or she did not intend to gain or cause that other thing at all. Nor has a person made use of something to gain or cause something else if he or she did not gain or cause that other thing at all. That being so, the phrase “make use of a position to gain or cause” something prima facie connotes the use of position in order to and in fact to gain or cause the particular thing. That is to say, the prima facie meaning of the relevant words of s.229(4) encompasses both purpose and result and it is a mistake to see the identification of the meaning of the words as necessarily requiring a choice between a purposive and a causative connotation.

        …

It follows from what has been said above that an accused is not, in my view, guilty of an offence against s.229(4) unless he has made use of his position both for the purpose and with the result of gaining or causing a specified advantage or detriment.

Counsel for Ms Kirk cited this passage in support of the contention that it is an element of the statutory claim for breach of s 183 that the alleged improper use of information has resulted in either the gaining of an advantage or causing detriment to the company. It was submitted that it was evident from the particulars to par 10 and 11 that this element, it was submitted, cannot be satisfied and the statutory claim made out.

25    However, as counsel for the company pointed out, Deane J was in the minority. The majority in Chew v R (Mason CJ, Brennan, Gaudron and McHugh JJ) held that the word “to” imported a purposive, not a causative, requirement and meant “in order to”. At 633 the majority stated it was a corollary of that interpretation that it was not necessary to show that the actions of the person concerned actually resulted either in gaining an advantage for that person or someone else or causing detriment to the company. Contrary to the submissions for Ms Kirk, it is thus not an element of the statutory cause of action to plead that an advantage was actually achieved or detriment suffered. Accordingly I reject the submission that the statutory claim as pleaded has no reasonable prospects of success.

26    I also reject the alternative application that the pleadings in paragraphs 10 and 11 should be struck as an abuse of process. It was submitted that “in the circumstances where the barest of claims cannot be pleaded” and the company, on its case, cannot identify any loss or damage that it has suffered, notwithstanding the allegation in paragraph 11 that loss and damage has been suffered, “the Court should have real concerns about the purpose of the proceeding”. There are two responses to this submission. First, as stated, to maintain an action for breach of s 183 it does not have to be shown that the improper use of the information has in fact led to an advantage or detriment. Secondly, compensatory damages is an available and alternative remedy if the company succeeds on either or both claims, and the fact that the company cannot at this stage identify any loss and damage does not make it an abuse of process to make the allegation. The basis for the relief sought is clear and no hint of any improper purpose arises on the material.

27    Finally, it was submitted that paragraphs 10 and 11 should be struck out because of the inadequacy of the company’s articulation of the statutory claim. Further it was argued that the particulars provided in paragraph 10 were wholly inadequate as particulars of the allegation and did not fulfil the function of informing Ms Kirk with sufficient clarity of the case that she will have to meet at trial. To the extent that this submission was again based on the apparent misconception that to maintain an action for breach of s 183 it has to be shown that the improper use of the information has in fact led to an advantage or detriment, the submission is rejected. However, it does seem to me that paragraph 10, even when read in conjunction with the further and better particulars, is insufficiently pleaded as the paragraph merely adopts the language of the statutory provision, containing the bare allegation that Ms Kirk made improper use of the information to gain an advantage or cause detriment for the company without pleading the material facts supporting the elements of the statutory cause of action. The particulars do not cure these deficiencies. Particulars are not a substitute for the requirement to plead material facts but, in any event, the particulars do not address the “purposive” element of the cause of action for breach of s 183 and, furthermore, are otherwise too generalised to identify with such sufficient clarity the case that the Ms Kirk must meet on the statutory claim

28    Accordingly there will be an order striking out paragraph 10 and giving leave to the company to replead that paragraph.

29    I consider it appropriate to depart from the usual order that costs follow the event. In my view it is appropriate that there be no order as to costs. Whilst Ms Kirk has achieved limited success on her application, it was not on the basis on which her application was based. Furthermore, Ms Kirk, without explanation, did not comply with the orders of the Court putting the company in the position where, in order to comply with the Court orders, it filed written submissions in opposition to the application without the benefit of the submissions for Ms Kirk. Orders are not to be ignored at the whim of a party and the failure of Ms Kirk to file submissions in accordance with the Court orders was not excusable. If there was good reason not to file the submissions as ordered, the proper course was to seek either a vacation of the order or a variation of the order. Simply ignoring the order was not an option. The consequence of ignoring the order was that the company incurred unnecessary costs and wasted time in anticipating and dealing with arguments that subsequently were not advanced by Ms Kirk. In the circumstances, I consider it fair and just that no order as to costs be made, reflecting Ms Kirk’s partial success but also the incurring of unnecessary costs by the company in preparing for its opposition to the application.

Associate:

Dated:    26 October 2017