Federal Court of Australia
BCI Media Pty Ltd v CoreLogic Australia Pty Ltd [2022] FCA 1128
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Pursuant to r 16.21 of the Federal Court Rules 2011 (Cth) (the Rules), the statement of claim filed on 1 April 2021 be struck out.
2. Leave be refused to file the amended statement of claim in the form appearing in Schedule B to the amended interlocutory application filed on 1 February 2022.
3. Pursuant to rr 1.32 and 1.35 of the Rules, leave be required to file any amended statement of claim.
4. The applicant serve on the respondents any further draft amended statement of claim by 4 November 2022.
5. By 4.00 pm on 25 November 2022, or within such further time as the Court might permit, the respondents inform the applicant of any objection(s) to the filing of any draft amended statement of claim served pursuant to Order 4, and the basis for the objection(s).
6. The proceeding be listed for case management on 2 December 2022 at 9.30 am.
7. The applicant pay the respondents’ costs to date of the interlocutory application filed on 24 June 2021 and of the amended interlocutory application filed on 1 February 2022.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
YATES J:
Introduction
1 There are two interlocutory applications before the Court concerning pleading matters.
2 On 1 April 2021, the applicant, BCI Media Group Pty Ltd, filed an originating application and statement of claim claiming relief against CoreLogic Australia Pty Ltd (the first respondent), RP Data Pty Ltd (the second respondent), Cordell Information Pty Ltd (the third respondent), CoreLogic, Inc (the fourth respondent), and Angelo Colangelo (the fifth respondent). (I note that the originating application and statement of claim are dated 31 March 2021 but, by operation of r 2.25 of the Federal Court Rules 2011 (Cth) (the Rules) these documents are taken to have been filed on 1 April 2021.)
3 The first to fourth respondents are companies within (what can be conveniently called) the CoreLogic group of companies. BCI pleads: that CoreLogic is the ultimate holding company of CoreLogic Australia; that RP Data is a wholly-owned subsidiary of CoreLogic Australia; and that Cordell is a wholly-owned subsidiary of RP Data. It is convenient to refer to the first to fourth respondents as the CoreLogic respondents.
4 By an interlocutory application filed on 24 June 2021 (the first interlocutory application), the CoreLogic respondents and the fifth respondent seek orders, pursuant to r 16.21 of the Rules, that the proceeding against CoreLogic be struck out and that the statement of claim, or various paragraphs of the statement of claim, remaining against the other respondents be struck out. As yet, the respondents have not filed defences to the statement of claim.
5 By an amended interlocutory application dated 31 January 2022, but filed on 1 February 2022 (the second interlocutory application), BCI seeks orders that CoreLogic Solutions LLC be joined as the sixth respondent to the proceeding and that Artis Group be joined as the seventh respondent. BCI contends that CoreLogic Solutions is a wholly-owned subsidiary of CoreLogic.
6 BCI also seeks leave to file an amended originating application and an amended statement of claim. BCI contends that, insofar as the existing respondents are concerned, it does not need leave to file the amended statement of claim in the form it proposes because pleadings against those parties have not closed: r 16.51. The requirement for leave appears to be because BCI wishes to join the other two parties—CoreLogic Solutions and Artis.
7 BCI further contends that the existing respondents have not applied for an order disallowing the amendments made by the amended statement of claim in accordance with r 16.52. I observe, however, that the amended originating application and the amended statement of claim have not been filed, because of the requirement for leave referred to in the preceding paragraph. The CoreLogic respondents contend, correctly, that the circumstance in which they can apply for an order pursuant to r 16.52 has not arisen, even though they have been served with the (unfiled) amended originating application and amended statement of claim. In these circumstances, the amended originating application and the amended statement of claim are to be understood as draft documents.
8 Given that BCI wishes to join CoreLogic Solutions and Artis as respondents on the basis of the amended originating application and the amended statement of claim, and seeks leave to do so, the parties have approached the hearing of the second interlocutory application on the basis that the existing respondents can oppose the making of the amendments.
The general nature of BCI’s allegations
9 The general nature of BCI’s allegations can be summarised as follows. BCI, on the one hand, and CoreLogic Australia, RP Data and Cordell (who BCI calls the CoreLogic Parties) on the other, are competitors. They offer competing products that provide customers with access to information in relation to building projects throughout Australia. The information is accessed through a secure Internet site or a phone application by subscribing (for a fee) to the respective products and accessing the information they provide using individualised login details. BCI’s product is called LeadManager. The CoreLogic Parties’ competing product is called Cordell Connect.
10 BCI alleges that, between 2016 and 2019, the CoreLogic respondents surreptitiously accessed LeadManager. BCI alleges that the access was surreptitious because the CoreLogic Parties paid third parties (namely, the Forum Group, Skill Tech, and Gingold Investments) to obtain subscriptions to LeadManager in their own names. The third parties then provided their login details to the CoreLogic Parties, after which the CoreLogic Parties accessed LeadManager and “scraped” content from it, including by using the services of Telus International and Artis.
11 BCI alleges that this was done by the CoreLogic Parties themselves or through agents or subcontractors they engaged. The “scraping” was undertaken using manual processes (humans logging in and performing the “scraping”) and automated processes (in the form of programs known as “bots”). BCI alleges that the CoreLogic Parties used what they “scraped” from LeadManager to make comparisons between the contents of LeadManager and the contents of Cordell Connect. BCI alleges that these comparisons were used by the CoreLogic Parties for internal purposes, to improve Cordell Connect, and to procure customers.
The amended statement of claim
12 The present proceeding was commenced by filing an originating application and statement of claim. It was commenced after BCI had obtained orders for preliminary discovery in proceeding NSD 529 of 2020 against parties that included CoreLogic Australia, RP Data, Cordell and Mr Colangelo but before the giving of preliminary discovery was completed. Some of the history of the matter is recorded in BCI Media Group Pty Ltd v CoreLogic Australia Pty Ltd (No 3) [2021] FCA 884 at [1] – [14].
13 Following complaints made by the respondents about the drafting of the statement of claim as filed, but in the knowledge that it intended, in any event, to prepare a more complete pleading once preliminary discovery had been fully given, BCI prepared and served the amended statement of claim together with the amended originating application.
14 The amended statement of claim is a lengthy and complex pleading, comprising 90 pages. It is based, in part, on documents that were produced as part of preliminary discovery after the originating application and statement of claim were filed. It has been presented as a marked-up document which contains additions (shown by underlining) and deletions (shown by strike-through) to the statement of claim. The additions include added paragraphs, shown alphanumerically (for example, 25A and 25B).
15 The amended statement of claim pleads causes of action for:
(a) breach of contract (paras 89A – 99) and related conduct (para 100);
(b) interference with contractual relations (paras 100A – 104A) and related conduct (para 105);
(c) infringement of copyright (paras 106 – 111) and related conduct (para 112);
(d) breach of confidence (paras 113 – 117) and related conduct (paras 117A and 117B);
(e) misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) (paras 118 – 123) and related conduct (paras 120(b), 120A(b), 120B, and 123A); and
(f) tortious interference with chattels (paras 124 – 126) and related conduct (para 127).
16 BCI seeks to join CoreLogic Solutions as a respondent based on allegations that CoreLogic Solutions facilitated and participated in the unauthorised access to, and data “scraping” of, the LeadManager database. BCI alleges that CoreLogic Solutions entered contractual arrangements with Telus International on 1 March 2018 to carry out aspects of the data “scraping” activity about which it complains. BCI contends that CoreLogic Solutions should be joined as a party to the proceeding so that all issues can be determined in the one proceeding without the need to commence a separate proceeding against CoreLogic Solutions.
17 BCI seeks to join Artis as a party based on allegations that it facilitated and participated in the unauthorised access to, and data “scraping” of, the LeadManager database. BCI alleges that Artis was engaged by RP Data under a Master Services Agreement to set up and run aspects of the automated processes to which I have referred. BCI contends that Artis should be joined as a party so that all issues can be determined in the one proceeding without the need to commence a separate proceeding against Artis.
The CoreLogic respondents’ objections
18 The CoreLogic respondents have raised a number of objections to the pleading of the statement of claim and to the pleading of the amended statement of claim. They have done so by reference to the following categories of objections.
Rolled-up and conclusory allegations
19 In paras 29A to 96 BCI pleads numerous, diverse allegations around the narrative that LeadManager was accessed through the instrumentalities of the Forum Group, Skill Tech, and Gingold Investments; that Artis and Telus International were engaged to “scrape”, and did “scrape”, data therefrom; and that the results of this activity, and of the other work that Artis and Telus International each undertook in that regard, were used by the CoreLogic Parties in various ways.
20 The CoreLogic respondents contend that many of these paragraphs contain broad, rolled-up allegations involving multiple respondents (and, in the case of the amended statement of claim, proposed respondents) without attempting to plead the material facts relied upon with respect to each respondent.
21 They contend that pleading in this way makes it impossible to know: how particular allegations relate to particular respondents; what material facts are alleged against each respondent; how each duty or obligation that is subsequently pleaded is alleged to have been breached by each respondent; the causal analysis said to flow from each breach; and the loss that is alleged to flow from each breach.
22 I accept the CoreLogic respondents’ contentions. The statement of claim and the amended statement of claim do not conform to the requirements of r 16.02 of the Rules and, in particular, rr 16.02(1)(b), (c) and (d) and 16.02(2)(c), (d), and (e) thereof.
23 A number of paragraphs plead rolled-up allegations in the sense that the allegations are made with respect to groups of individuals or entities, including groups of respondents. This does not enable one to tell, with clarity, the precise allegation that is made against a given individual/entity or a given respondent. On occasion, when various forms of conduct are pleaded, the conduct itself is “rolled-up”. These deficiencies are evident, in various forms of conduct, in, for example, paras 29G, 30, 30D, 30E, 31, 38A, 39, 49, 50B, 57, 62, 62B, 70A, 71 – 85, 88, 89, 91, 93, 95, and 100 of the amended statement of claim. The allegations must be “unrolled”.
24 As I later note, BCI’s habit of pleading rolled-up and conclusory allegations is repeated in later paragraphs of the amended statement of claim dealing with specific causes of action. A particular example is given by BCI’s pleading in respect of its allegations of interference with contractual relations (as to which see [38] – [45] below).
25 I would add that a number of paragraphs plead vague generalisations, when greater specificity is required to meet the requirement to plead material facts: see, for example, paras 29G, 30, 31, 41, 41A, 42, 46, 52A, 61A, 79, and 83.
26 The pleading of the amended statement of claim in particular lacks coherence and clarity. A number of allegations are pleaded as being premised on, or are particularised by reference to, a large number of other paragraphs in the amended statement of claim, many of which, themselves, have the defects or deficiencies to which I have referred.
27 In many paragraphs, the particulars given are said to be the particulars given in other paragraphs of the amended statement of claim which, in turn, refer to other particulars or other paragraphs in the pleading, and so on. When one tries to read the amended statement of claim with these incorporated references, one is sent on a chase backwards and forwards through the pleading in a fruitless effort to better understand the precise allegations that are sought to be made against specific respondents or other (non-party) individuals or entities. Many of the particulars have no apparent relevance to, or connection with, the allegation that is pleaded. To compound the difficulties of comprehension this causes, the particulars given in a number of paragraphs are simply references to paragraphs of affidavits, or blanket references to documents.
28 The amended statement of claim also uses expressions such as “including” and “and/or”. Use of these expressions promotes imprecision, uncertainty, and confusion. As the majority in Forrest v Australian Securities and Investments Commission [2012] HCA 486; 247 CLR 486 observed at [27], the task of pleading the facts of a cause of action might require facts or characterisations of facts to be pleaded in the alternative. But this does not extend to “planting a forest of forensic contingencies”. In Forrest, the plurality referred, with approval, to the observations of Keane CJ in the Full Court below (Australian Securities and Investments Commission v Fortescue Metals Group Ltd [2011] FCAFC 19; 190 FCR 364 at [16]) that:
The presentation of a range of alternative arguments is not apt to aid comprehension or coherence of analysis and exposition; indeed, this approach may distract attention from the central issues.
29 Relatedly, the CoreLogic respondents contend that BCI’s pleading of agency throughout the amended statement of claim is unclear. The CoreLogic respondents contend that, where agency is relied on, the pleading does not articulate the basis for, and scope of, the agency. I also observe that para 29D introduces the description “Agent of the CoreLogic Parties” to refer to named individuals who are said to be “a number of employees and agents”, without distinguishing between those individuals who are employees and those individuals who are agents. The CoreLogic respondents contend that a number of paragraphs in the amended statement of claim plead acts by “Agents of the CoreLogic Parties” without sufficiently identifying the person or persons who are said to be the agents: see, for example, paras 30, 39, 41, 41A, 42, and 45.
30 I accept the CoreLogic respondents’ contentions. The term “agent” is one that can be used in different contexts with different meanings. If, in the amended statement of claim, the term “agent” is to be taken as a legal concept with legal incidents, as I assume it to be, then the basis for, and scope of, the agency must be properly pleaded. The pleading also needs to identify those individuals who are said to be “agents” in relation to particular pleaded acts and conduct. I observe that the particulars to the paragraphs which the CoreLogic respondents have identified refer to emails passing between named individuals. It may be that BCI was intending to particularise these individuals as agents. However, the pleading is not clear.
Breach of contract claims
31 BCI pleads that the Forum Group, Skill Tech, and Gingold Investments entered into subscription agreements to access and use LeadManager. BCI pleads that the Forum Group, Skill Tech, and Gingold Investments breached their respective subscription agreements, and BCI’s fair usage policy, in various ways: paras 89A – 89C; 90 – 92, and 93 – 96.
32 However, in para 96A BCI also pleads that each of the CoreLogic Parties were and are bound by its subscriber terms and conditions and its fair usage policy and, in paras 97 and 98, that the CoreLogic Parties breached the subscriber terms and conditions, and the fair usage policy, in various ways. (I note that, in the statement of claim, BCI did not plead that the CoreLogic Parties are and were bound by the subscriber terms and conditions and the fair usage policy, but did plead that the CoreLogic Parties breached the terms and conditions, and the fair usage policy.) BCI relies on paras 96A – 98, amongst other paragraphs, to found an allegation that it has suffered, and continues to suffer, loss and damage: para 128.
33 The CoreLogic respondents contend that the pleading of breach by the CoreLogic Parties in the statement of claim is defective because there is no allegation of any agreement between BCI and the CoreLogic Parties by which the CoreLogic Parties could be bound by the subscriber terms and conditions and the fair usage policy. The CoreLogic respondents contend that the position is not made clearer by para 96A of the amended statement of claim because, apart from para 96A(b), there is no pleading of how the CoreLogic Parties are bound by the subscriber terms and conditions or the fair usage policy as a matter of contract (if that is the theory by which BCI says that the CoreLogic Parties were and are bound).
34 The CoreLogic respondents point out that para 96A(b) of the amended statement of claim pleads that the CoreLogic Parties subscribed to LeadManager through the agency of the Forum Group, Skill Tech, and Gingold Investments, without actually pleading that each of those entities contracted with BCI as agent for the CoreLogic Parties as undisclosed principals (so as to bind each of the CoreLogic Parties contractually to each subscription agreement). The CoreLogic respondents further point out that, if that is what BCI intends to plead, then para 119(a)(i) pleads, inconsistently, that the CoreLogic Parties were not subscribers to LeadManager.
35 I accept the CoreLogic respondents’ contentions. Neither the statement of claim, nor the amendment proposed by para 96A in the amended statement of claim, pleads with sufficient clarity the basis upon which it is alleged that the CoreLogic Parties were and are bound by the subscriber terms and conditions and the fair usage policy. Nor is the amended statement of claim clear as to how it is also said, apparently inconsistently, that the CoreLogic Parties were not subscribers to LeadManager. The pleading is confusing and embarrassing in this regard.
36 I would add that it is not clear from para 96A whether BCI is also alleging that the CoreLogic Parties were and are bound by the subscriber terms and conditions and fair usage policy for some additional or other reason (i.e., other than by contract). If some additional or other reason is to be advanced, then this should be identified and pleaded with precision.
37 I observe that, in para 99 of the amended statement of claim, BCI also adopts a similar pleading style to allege that Artis and Telus International are bound by the subscriber terms and conditions and the fair usage policy. However, how, why, and in what sense, Artis and Telus International are allegedly bound is not at all clear. This matter is important because, in para 102A, BCI pleads that various respondents induced or procured “Artis Group and/or Telus International” to breach various provisions of the subscriber terms and conditions and the fair usage policy. Leaving aside the rolled-up nature of this allegation, little sense can be made of the paragraph without BCI properly pleading the nature of the alleged legal relations between the relevant actors.
Interference with contractual relations
38 In paras 100A to 102A, BCI pleads, by reference to paras 29A to 89, and various combinations of paras 90 to 99A, that the CoreLogic Parties, CoreLogic, and CoreLogic Solutions, together with (in two cases) Artis, induced or procured breaches of the subscriber terms and conditions and the fair usage policy. In paras 102B to 104A, BCI pleads, by reference to paras 100A, 101, 102 and 102A, that the CoreLogic Parties, CoreLogic, and CoreLogic Solutions together with (in two cases) Artis, interfered with contractual relations. In para 105, BCI pleads that, to the extent that “any” of the CoreLogic Parties, CoreLogic, CoreLogic Solutions, and Artis did not engage in the activities pleaded in paras 100A to 104A, that party entered into a common design with the other parties “in respect of the activities and breaches pleaded in those paragraphs”.
39 The CoreLogic respondents contend that this is an example of BCI pleading broad, rolled-up allegations against multiple respondents, without attempting to plead the particular facts relied upon in respect of each respondent.
40 I accept the CoreLogic respondents’ contentions in this regard.
41 Continuing my observations at [22] – [27] above, the statement of claim and the amended statement of claim plead allegations of conduct against groups of respondents set against a general factual narrative spanning many paragraphs and pages. The reader of the statement of claim and the amended statement of claim is left to search through a dense body of material (often involving confusing alternatives and seemingly irrelevant allegations) in an attempt to work out which paragraphs of the narrative stand, or might stand, as the allegations of material facts against each respondent, and then to form a judgment about the particular basis on which it is said—or might be said—that a particular respondent is allegedly liable to BCI.
42 Taking the example of BCI’s allegations that certain entities induced or procured other entities to breach provisions of the subscriber terms and conditions and of the fair usage policy—BCI should plead, by reference to statements of material facts, why each of the CoreLogic Parties, CoreLogic, CoreLogic Solutions, and Artis induced or procured a particular person— the particular persons, here, being the Forum Group, Skill Tech, and Gingold Investments—to breach a particular provision of the subscriber terms and conditions or a particular provision of the fair usage policy.
43 When, in this context, I refer to “the CoreLogic Parties”, I do so advisedly. I do not intend to suggest that BCI must necessarily plead in respect of each of CoreLogic Australia, RP Data, and Cordell if BCI is intending to allege that, in the case of particular conduct, those particular respondents—the CoreLogic Parties—acted jointly. This appears to be BCI’s purpose in pleading paras 29A to 29F of the amended statement of claim. I note, in particular, the allegation in para 29F that, at all material times, CoreLogic Australia, RP Data, and Cordell held themselves out as one business and deployed their resources for their own and each other’s benefit. However, having reached that stage, BCI does not plead the next step(s)—namely, what the allegations in paras 29A to 29F entail for other allegations in the pleading. This needs to be clarified by appropriate pleading.
44 If by using the expression “the CoreLogic Parties”, BCI is not intending to allege that CoreLogic Australia, RP Data, and Cordell were acting jointly, it will be necessary for BCI to plead why, in this example, each of them induced or procured each of the other entities (the Forum Group, Skill Tech, and Gingold Investments) to breach particular provisions of the subscriber terms and conditions and particular provisions of the fair usage policy. Nothing less will suffice.
45 My comments in this regard apply equally to other allegations of conduct said to involve the CoreLogic Parties.
Copyright claim
46 In the statement of claim and the amended statement of claim, BCI uses the expression “BCI Works” to refer to literary works, artistic works, and “combination literary and artistic works”: paras 24 and 25.
47 The literary works are described generically as:
… project materials including project descriptions, leads, research reports, training programs, underlying spreadsheets, compilations of data relating to each project, and the underlying source code for LeadManager …
48 The artistic works are also described generically:
… the BCI Australia logo, all visual images on LeadManager and the underlying artwork for those images …
49 Likewise, the “combination” works are described generically:
… in graphs and charts on LeadManager.
50 In the amended statement of claim, BCI has added allegations that each of the (generically described) literary works above is a literary work and an original work, and that each of the (generically described) artistic works is an artistic work and an original work, within the meaning of the Copyright Act 1968 (Cth) (the Copyright Act): paras 25A and 25B.
51 In para 27A of the amended statement of claim, BCI pleads that it is the owner of the copyright in the works by reason of the fact that the BCI Works were “developed by BCI Media Group and BCI Asia Philippines, Inc employees based in Australia and the Philippines” and that, on or around 8 May 2020, the two companies entered into a Confirmatory Intellectual Property Assignment Deed.
52 The CoreLogic respondents contend that BCI’s pleading of the copyright claim in the statement of claim is hopelessly imprecise as to the identification of each of the alleged copyright works. They also contend that the statement of claim fails to plead allegations of material facts with respect to the subsistence of copyright in each work (including as to the originality of each work). They contend that the pleading of the copyright claim in the amended statement of claim does not overcome the deficiencies of the statement of claim in this regard.
53 Just prior to the hearing of the interlocutory applications, BCI produced a document entitled “The Applicant’s Particulars to Amended Statement of Claim” (the particulars document).
54 The particulars document says that the literary works are “embodied by Project Reports, Project Remarks, Export Spreadsheets and the LeadManager Database”. In oral submissions, I was taken to an example of each of the Project Reports, the Project Remarks, and Export Spreadsheets, but these examples are not referred to in the particulars document.
55 The particulars document then takes each category and gives a general description of the documents said to comprise the category, and makes generalised assertions about the authorship of the documents, the status of the authors, the qualification of the authors, and the date of creation of the “works”. The particulars document also asserts that any copyright in the documents (comprising the described category) that vested in BCI Asia Philippines, Inc was assigned to BCI.
56 The particulars document says that the artistic works “include” works referred to as “the Project Report Design” and “the LeadManager Designs”. It then takes the two categories and makes generalised assertions of the kind made with respect to the categories of literary works.
57 The CoreLogic respondents’ contentions in their written submissions were advanced without the benefit of the particulars document. However, I accept the CoreLogic respondents’ contentions. The pleading of the copyright claim is undeniably inadequate. Moreover, it is not improved by the provision of the particulars document, which contains nothing more than high-level generalisations.
58 If BCI wishes to advance a claim based on copyright infringement, it must identify, with precision, each copyright work on which it relies, and state the material facts on which it relies to establish that copyright subsists in that work, and that it is the owner of that copyright.
59 The pleading of the copyright claim is also deficient on the infringement side of the ledger. In para 108, BCI pleads rolled-up allegations of infringement against the CoreLogic Parties, Artis, and Telus International. It also pleads a series of infringing acts (reproducing, making an adaptation, and making available online or electronically transmitting) cumulatively and individually (“further or in the alternative”) without identifying, with respect to each instance of alleged infringement, the particular act(s) relied on to make good the alleged infringement. BCI must specify the manner in which each copyright work (on which it relies) is alleged to be infringed and must give at least one instance of each type of infringement alleged: r 34.35.
60 In para 112 of the statement of claim, BCI pleads the rolled-up allegation that, to the extent that any one of the CoreLogic Parties did not do certain acts, then that particular respondent engaged in one of four alternative acts, namely that the respondent: authorised the doing of the acts, or induced or procured, or entered into a common design with, or were joint tortfeasors with, the party or parties that did the acts. In written submissions, the CoreLogic respondents made the following submissions, which I accept:
22. … no factual basis is pleaded for the allegations in paragraph 112. It contains numerous rolled-up conclusory allegations and so is liable to be struck out. It includes a plea that unidentified parties committed a tort which tort is also unidentified. It assumes that at least one of the CoreLogic Parties did not do the acts pleaded, but pleads that that party is nonetheless involved in the other CoreLogic Parties having done so. However at no point is there any conduct attributed to any one of the CoreLogic Parties. It is in effect a catch all – “in case we are wrong about our allegation that you all did this, then whomever didn’t do it was involved somehow, although we will not tell you how we say that entity was so involved”. With respect it is obvious that this is a deficient plea.
61 In para 112 of the amended statement of claim, in an attempt, it would seem, to meet the objections that had been raised, BCI pleads the rolled-up allegation that “CoreLogic Australia, RP Data, Cordell, CoreLogic Solutions LLC, CoreLogic, Inc and/or Artis Group” did one of the four (alternatively pleaded) acts. In written submissions, the CoreLogic respondents made the following submissions, which I accept:
23. No improvement is proposed by the proposed amended statement of claim; indeed it appears to be worse. By the proposed amended statement of claim the applicant:
a. identifies no pleaded premises for the allegation;
b. does not identify the conduct which could form the basis of the conclusion pleaded.
c. maintains a rolled-up conclusory allegation that no fewer than six different entities engaged in four different types of alternative conduct; and
d. does not identify how it is that any particular entity is alleged to have engaged in the various conduct pleaded.
Breach of confidence
62 In the statement of claim and amended statement of claim, BCI uses the expression “BCI Confidential Information” to refer to a broadly-described body of information which BCI alleges is “of a confidential and valuable nature” that is used in its business: paras 28 and 29. The information is not identified beyond the fact that it “includes” certain information, being “information pertaining to the design and operation of the LeadManager technology” and “confidential data and information available on LeadManager including LeadManager project entries and compilations thereof”: para 29. It is particularised as including the BCI Works, and thus includes quotidian matters such as the BCI Australia logo, which (one would have thought) could not possibly be confidential information.
63 The CoreLogic respondents contend that the identification of the BCI Confidential Information in the statement of claim and the amended statement of claim is inadequate in that the information is described only in extremely general terms. Further, much of the content in LeadManager is publicly available information. One cannot tell from the statement of claim or the amended statement of claim whether, and if so what, publicly available information is alleged to be confidential information. The CoreLogic respondents contend that this is important not merely to understand the breach of confidence allegations that are pleaded, but also to understand the loss that is alleged to flow from the alleged breaches.
64 I accept the CoreLogic respondents’ contention that the BCI Confidential Information is not properly identified in the statement of claim or the amended statement of claim.
65 The particulars document provides some elucidation. It says that the BCI Confidential Information is the information contained on LeadManager behind a paywall, accessible only by obtaining a subscription by which subscribers are issued with valid usernames and passwords. The particulars document says that information sitting in this form behind the paywall is not information in the public domain.
66 Considered at this level of generality, the particulars document appears to say that all information sitting behind the paywall, regardless of its provenance, nature, and its (otherwise) public availability, is information that can be, and in this case is, the proper subject of an equitable obligation of confidence.
67 However, the particulars document then lists a large number of categories of information which appear to be provided as examples only, given BCI’s use of the expressions “including”, “relating to”, and “such as” throughout the particulars document.
68 It is not clear whether the listing of these categories is intended to create a subset of information behind the paywall that is the BCI Confidential Information, or whether the listing is no more than a description of the kind of information that sits behind the paywall. If the former is intended, then there must be other matters, in respect of each category, that mark out the information as confidential information. However, these other matters are not pleaded or particularised.
69 Therefore, notwithstanding the particulars document, BCI’s identification of the BCI Confidential Information is still deficient. BCI must identify, with specificity, the particular information that it alleges to be confidential information and must state the material facts, and give sufficient particulars, as to why that information is confidential.
70 BCI also pleads a series of rolled-up allegations in paras 114 and 115 of the amended statement of claim, particularly as to the knowledge of the CoreLogic Parties, Telus International, and Artis. It also pleads a series of rolled-up allegations of breach in paras 116 to 117B. As the CoreLogic respondents correctly contend, these allegations are overarching conclusions that are pleaded by reference to long narratives of facts without identifying the parties or breaches to which the particular facts relied upon are intended to relate.
Misleading or deceptive conduct
71 The CoreLogic respondents point to the fact that, in paras 118 to 118A, and 120 to 120B, of the amended statement of claim, BCI pleads a number of rolled-up allegations concerning the CoreLogic Parties, CoreLogic Solutions, Telus International, and Artis.
72 In para 118B of the amended statement of claim, BCI pleads that each of the CoreLogic Parties made representations. This appears to be an allegation with respect to CoreLogic Australia, RP Data, and Cordell individually. If that is what BCI intends to plead, then para 118B is also a rolled-up allegation.
73 I also observe that, in paras 118B and 119, BCI alleges that each of the CoreLogic Parties made certain representations (referred to as Third Party Representations). These representations are not pleaded beyond vague generalities. No particulars are given. Further, the Third Party Representations are alleged to be “false, misleading and/or deceptive” because the CoreLogic Parties “did not accurately compare information on LeadManager to information on Cordell Connect”, and that Cordell Connect “did not contain more comprehensive and therefore superior information to that on LeadManager”. These allegations are bald assertions. No material facts are pleaded to support them.
74 These are all defects and deficiencies in BCI’s pleading of alleged contraventions of the Australian Consumer Law.
75 Further, as the CoreLogic respondents correctly contend, para 120B of the amended statement of claim is particularly problematic. This paragraph introduces CoreLogic to contraventions of the Australian Consumer Law by simply pleading three separate conclusions that CoreLogic was “involved in the contraventions” without pleading material facts, where the “contraventions” are, themselves, pleaded by rolled-up allegations. Further, the requisite element of knowledge by CoreLogic is not pleaded. I accept the CoreLogic respondents’ submission that the pleading of para 120B is grossly deficient.
Causation and loss and damage
76 The CoreLogic respondents point to the fact that, in paras 128, 130, and 131 of the statement of claim and the amended statement of claim, BCI alleges that it suffered loss and damage, without identifying the loss and damage it says it suffered. Moreover, BCI does not plead any causal connection between the impugned conduct and the (unidentified) loss it suffered, and how the particular loss arose (including no pleading of any counterfactual).
77 Further, para 128 is premised on conduct that is described collectively as “the conduct alleged in paragraphs 89A to 127”. This conduct covers BCI’s allegations of breach of contract, interference with contractual relations, copyright infringement, breach of confidence, misleading or deceptive conduct, and tortious interference with chattels. BCI makes no attempt to distinguish between, for example, the loss it allegedly suffered from a particular alleged breach of contract by one respondent and the loss it allegedly suffered from the allegedly misleading or deceptive conduct by another respondent, or the loss it allegedly suffered from the alleged infringement of copyright by yet another respondent. In short, para 128 does not distinguish between loss attributable to different causes of action or to different actors.
78 The same deficiencies appear in BCI’s pleading in para 129 of the statement of claim and the amended statement of claim concerning the making of profits. This paragraph is premised on “the conduct alleged in paragraphs 96A to 127”. It is not apparent how every cause of action, pleaded in these paragraphs, could, if established, even give rise to a claim to profits. Further, para 129 is a rolled-up allegation concerning the making of profits by the CoreLogic Parties, CoreLogic Solutions, CoreLogic, and Artis. BCI makes no attempt to identify, or distinguish between, the profits which each entity allegedly made.
79 In para 132 of the statement of claim and the amended statement of claim, BCI pleads the rolled-up allegation that the CoreLogic Parties, CoreLogic Solutions, CoreLogic, “and/or” Artis allegedly infringed its copyright with certain knowledge, without distinguishing between the knowledge that each is alleged to have had. This allegation is also pleaded with reference to the broad narrative pleaded in paras 29G to 89 of the amended statement of claim, which has all the pleading defects and deficiencies to which I have referred.
80 In paras 135 and 136, BCI pleads allegations of future conduct and the making of future profits. Once again, these paragraphs plead rolled-up allegations against various parties collectively, without BCI pleading its case against each party. Further, the allegations in these paragraphs are simply conclusions that are not supported by statements of material facts.
81 I accept that these are all defects and deficiencies in BCI’s pleading of loss and damage.
Mr Colangelo’s objections
82 Mr Colangelo, the fifth respondent, was one of the moving parties to the first interlocutory application, which was filed before he changed his legal representation. He made submissions in support of the first interlocutory application and in opposition to the second interlocutory application, specifically with respect to prayers 9, 10 and 12 of the originating application and the amended originating application, and paras 121, 123A, and 128 of the amended statement of claim.
Prayers 9 and 10 of the originating application
83 Prayers 9 and 10 of the originating application and the amended originating application seek declarations that Mr Colangelo breached the Gingold Renewal Subscription Agreement (referred to in para 20 of the statement of claim and the amended statement of claim), and BCI’s fair usage policy. In para 20, BCI pleads that Gingold Investments was bound by the Gingold Renewal Subscription Agreement and, in paras 93 to 96, that Gingold Investments breached that agreement and clauses of the fair usage policy. There is no allegation in the statement of claim or the amended statement of claim that Mr Colangelo was bound by the Gingold Renewal Subscription Agreement or that he breached that agreement or the fair usage policy. For that reason, prayers 9 and 10 of the originating application are liable to be struck out. Accordingly, leave should not be granted to BCI to file the amended originating application containing the same prayers for relief.
84 I accept Mr Colangelo’s contention.
Prayer 12 of the originating application
85 Prayer 12 of the originating application and the amended originating application seeks a declaration that Mr Colangelo aided, abetted, counselled or procured, or was knowingly concerned in or party to, certain contraventions of the Australian Consumer Law by reference to other prayers in the originating application and the amended originating application (in the amended originating application, the prayer contains an erroneous reference to prayer 13E of the amended originating application). Prayer 11 of the originating application and the amended originating application seeks a declaration that Mr Colangelo contravened s 18 of the Australian Consumer Law by making (what BCI calls) the Colangelo Representations. Prayer 11 is one of the contraventions referred to in prayer 12.
86 Mr Colangelo contends that he cannot have contravened s 18 of the Australian Consumer Law and, at the same time, aided, abetted, or counselled or procured, or been knowingly concerned in, his own contravention. For that reason, prayer 12 of the originating application is liable to be struck out. Accordingly, leave should not be granted to BCI to file the amended originating application containing the same prayer for relief (which also includes the erroneous reference to prayer 13E).
87 I accept Mr Colangelo’s contention.
Paragraph 123A of the amended statement of claim
88 Mr Colangelo also advances a number of contentions with respect to prayer 12 of the originating application and the amended originating application based on BCI’s pleading of para 123A of the amended statement of claim.
89 In para 123A of the amended statement of claim, BCI pleads that Mr Colangelo was involved in the contraventions of the Australian Consumer Law referred to in para 120(a) of the amended statement of claim. I have already observed that para 120 is defective in that it pleads a number of rolled-up allegations concerning the CoreLogic Parties, CoreLogic Solutions, Telus International, and Artis.
90 In addition, Mr Colangelo contends that para 123A is deficient in that it fails to plead, and particularise, an essential ingredient of the allegation of involvement, namely Mr Colangelo’s knowledge of the elements of the alleged contravention.
91 I accept Mr Colangelo’s contention.
92 Further, Mr Colangelo contends that the pleading of para 123A of the amended statement of claim is deficient in other respects. Paragraph 123A “refers” to a range of paragraphs of the amended statement of claim (namely, paras 42 to 61 and 66) on the basis of which it is alleged that Mr Colangelo was “involved” in contraventions of the Australian Consumer Law by the CoreLogic Parties, Telus International, and Artis. These paragraphs of the amended statement of claim are concerned with how various subscriptions to LeadManager were obtained and how LeadManager was accessed using a particular username. None of these paragraphs plead any allegations against Mr Colangelo other than para 41A, which is to the effect that Mr Colangelo had discussions with “Agents of the CoreLogic Parties” about transferring Skill Tech’s LeadManager subscription to Gingold Investments, and in para 54, which is to the effect that Mr Colangelo signed the Gingold Renewal Subscription Agreement. I observe that para 61 alleges that certain user details for LeadManager were given to “Agents of the CoreLogic Parties” by “Gingold Investments or Colangelo”, but no particulars are provided for the allegation. This appears to be an instance of speculative pleading.
93 Mr Colangelo contends that it is difficult to see how these isolated paragraphs in the amended statement of claim support any of the rolled-up allegations of involvement pleaded in para 123A with respect to the rolled-up allegations of contravention in para 120(a). I agree. Indeed, there is no allegation that Mr Colangelo had any dealings with Telus International or Artis, whose conduct is included in the broad ambit of para 120(a).
94 The pleading of para 123A is confusing and does not adhere to rr 16.02(1)(d) and 16.02(2)(d) and (e) of the Rules.
Paragraph 121 of the statement of claim and amended statement of claim
95 In para 121, BCI pleads that Mr Colangelo represented that Gingold Investments intended to use, and was using, its subscription to LeadManager legitimately and that Gingold Investments was complying with the terms of the Gingold Renewal Subscription Agreement (which included the subscriber terms and conditions). However, para 121 is similarly based on the broad range of allegations made in paras 42 to 61 and 66. Mr Colangelo contends, once again, that only some paragraphs within this broad range plead allegations against him.
96 I accept Mr Colangelo’s contention.
97 Mr Colangelo also contends that the allegation that he signed the Gingold Renewal Subscription Agreement cannot properly support an allegation of representational conduct with respect to subsequent events (i.e., that Gingold Investments was using the subscription legitimately and complying with the terms of the Gingold Renewal Subscription Agreement).
98 Again, I accept Mr Colangelo’s contention. This is another example of the confusion that is introduced by pleading conduct in a rolled-up fashion.
99 The pleading of para 121 does not adhere to rr 16.02(1)(d) and 16.02(2)(d) and (e) of the Rules.
Paragraph 128 of the statement of claim and amended statement of claim
100 Mr Colangelo contends that para 128 of the statement of claim and the amended statement of claim is deficient for, substantially, the same reasons advanced by the CoreLogic respondents. I have already addressed those matters.
Conclusion
101 The pleading of the amended statement of claim is defective and deficient in many respects. For this reason, I will not grant leave to BCI to file and rely upon this document. However, I will give BCI the opportunity to provide a further draft of an amended statement of claim.
102 I would add that my reading of the amended statement of claim suggests to me that BCI has sought to plead as many causes of action as it possibly can, against as many parties as it possibly can, with references to various combinations of alleged facts. In so doing, it has, possibly, over-complicated its claim and, perhaps, lost focus on how that claim can be heard and determined most efficiently and expeditiously at a cost that is proportionate to obtaining effective relief. I would also add that it is not clear to me how all these causes of action can be pleaded on consistent legal premises.
103 As to the pleading of the statement of claim, the CoreLogic respondents seek an order that the statement of claim as a whole be struck out or, alternatively, that certain paragraphs be struck out: paras 7, 25, 26, 28 – 31, 38 – 39, 41, 42, 45, 46, 47, 49, 57, 61 – 62, 71 – 85, 89, 91, 93, 95, and 97 – 137. It is necessary to look at these paragraphs without reference to the amended statement of claim or what might be gleaned from the amended statement of claim.
104 Having regard to the comments I have made above, the following paragraphs should be struck out: 7, 25 – 27 (I have included para 27 because it makes no sense left on its own), 28 – 29, 30, 31, 38, 39, 41, 42, 46, 49, 57, 61, 62, 71 – 85, 89, 91, 93, 95, 97 – 100, 101 – 105, 106 – 112, 113 – 117, 118 – 120, 124 – 127 (these paragraphs are not separately discussed above, but also contain rolled-up allegations), and 128 – 137. Having regard to Mr Colangelo’s contentions, which I have accepted, paras 121 – 123 should also be struck out.
105 In light of the great number of paragraphs that should be struck out, it is appropriate that the statement of claim, as a whole, be struck out.
The position of CoreLogic
106 The CoreLogic respondents seek an order that the proceeding against CoreLogic be struck out. I am not prepared to make such an order at this stage. It is appropriate that this question be considered in the light of any further draft amended statement of claim that BCI might bring in.
Joinder of coreLogic solutions and artis
107 In the absence of a properly pleaded statement of claim, I am not prepared to grant leave to BCI to join these parties at this time.
Disposition
108 I will make an order that the statement of claim be struck out. I will refuse leave to file the amended statement of claim but order that BCI serve on the present respondents any further draft amended statement of claim. I will order that the respondents inform BCI of any objections to the filing of any draft amended statement of claim that is served. I will modify the operation of the Rules to provide that leave is required for BCI to file any amended statement of claim. I will order that BCI pay the respondents’ costs to date of the first interlocutory application and of the second interlocutory application. I will make no other orders in respect of the first interlocutory application and the second interlocutory application at the present time.
I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. |
Associate:
NSD 285 of 2021 | |
CORELOGIC, INC | |
Fifth Respondent: | ANGELO COLANGELO |
