DISTRICT COURT OF QUEENSLAND
CITATION:
Just Water Pty Ltd & Anor v ACN 130 166 899 Pty Ltd & Anor [2018] QDC 168
PARTIES:
JUST WATER PTY LTD (ACN 153 825 266)
(applicant/first defendant)and
RICHARD JOHANNES CORNELIS HUISMAN
(applicant/second defendant)v
ACN 130 166 899 PTY LTD at (ACN 130 166 899) (in liquidation) AS TRUSTEE FOR AI BUILDERS TRUST (ABN 22910450260)
(first respondent/first plaintiff)and
DAVID HAMBLETON AS LIQUIDATOR OF ACN 130 166 899 PTY LTD (ACN 130 166 899) (IN LIQUIDATION) AS TRUSTEE FOR AI BUILDERS TRUST (ABN 22910450260)
(second respondent/second plaintiff)FILE NO/S:
BD1061/18
DIVISION:
Civil
PROCEEDING:
Chamber application
ORIGINATING COURT:
Brisbane
DELIVERED ON:
22 August 2018
DELIVERED AT:
Brisbane
HEARING DATE:
20 August 2018
JUDGE:
Richards DCJ
ORDER:
1. The plaintiffs are to provide further particulars of paragraphs 6, 7, 9, 9 (f), 9(g), 9(h), 12(a), 12(b), 12(c), 18 and 19 of the statement of claim within 14 days.
2. The defendants have 21 days after the receipt of the further particulars to file a defence in response to the statement of claim.
3. The plaintiffs pay the costs of and incidental to the application to be assessed.
CATCHWORDS:
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – PARTICULARS – FURTHER AND BETTER – where the first and second applicants made an application for further and better particulars – where the respondents provided documents to support the pleadings - whether the respondents have adequately plead and particularised the case against the applicants.
SOLICITORS:
Mr S Moore from Stokes Moore for the applicants
Mr B Long of Celtic Legal for the respondents
This is an application for further particulars of a statement of claim filed on 21 March 2018. A request for further particulars was served on 27 June 2018. An ineffective response was given on 13 July 2018. Further letters were sent on 18 July and 24 July 2018. On 25 July 2018 a response was given purporting to provide particulars in response to the request. That response attached 214 pages of documents and this application was consequently brought.
Rule 157 of the UCPR provides that:
“A party must include in a pleading particulars necessary to –
(a) Define the issues for, and prevent surprise at, the trial; and
(b) Enable the opposite party to plead; and
(c) Support a matter specifically pleaded under rule 150.”
Rule 160 provides that a party giving further particulars must file a copy of the particulars. It is common ground that this has not happened.
The plaintiffs seek to recover compensation from the defendants for the loss accrued by the company incurring debts whilst it was insolvent. The claims are made against the first defendant under section 588V and 588W of the Corporations Act 2001 (Cth) (“the Act”) as a holding company and against the second defendant under section 588M of the Act as a director of the first defendant.
The original claim seeks a declaration that the first defendant contravened s588V(1) of the Act in relation to the incurring of debts totalling $231,983.77 in the period on or about 24 February 2015 to 17 September 2016, and an order that the first defendant pay that sum to the second plaintiff. Secondly, it seeks a declaration that the second and third defendants contravened s588G(2) of the Act in relation to the incurring of debts totalling $488,785.14 in a period from on or about 1 July 2017 to 15 September 2017, and that they pay that amount to the second plaintiff. There is also a declaration sought that the second and third defendants contravened the civil penalty provisions pursuant to section 1317(e) of the Act namely, sections 180, 181, 182 and 183.
The statement of claim pleads that the first defendant was the sole shareholder of the first plaintiff from or about 24 February 2015 to 15 September 2016, and that the second defendant was a director of the first defendant during that time.[1]
[1] Statement of claim para 2 and 3.
The plaintiffs state from 1 July 2014 to 17 September 2017 the first plaintiff incurred debts totalling $488,785.14 chiefly to the Deputy Commissioner of Tax, and that from 24 February 2015 to 15 September 2016 the first plaintiff incurred debts totalling $231,983.77 to the Deputy Commissioner of Tax. Presumably the $231,000 is part of the $418,000 owed to the Taxation Commissioner overall.[2] There is no detail given about when and how the debt was incurred. It also alleges that there was a failure to lodge and keep documents, and that the defendants were aware that there were reasonable grounds of suspecting that the first plaintiff was insolvent and therefore, the second plaintiff is entitled to recover the money from the defendants.
[2] Statement of claim para 6 and 7.
To say that the statement of claim is poorly drafted is an understatement. It is unclear and confusing in its allegations. At the hearing of this matter, the respondent’s solicitor submitted that they cannot be any more definite in their pleading because they are the liquidators and can only go on the records they have in their possession.
I don’t accept this submission at all. The response to the request for particulars attached 214 pages of documents including proof of debts from the tax department, profit and loss statements and tax returns. It was suggested that the defendants can work out the debts form those documents. With respect, if the defendants can work out the liability from the documents then surely the plaintiff, who is going to have to prove the case, can provide that information in the proper form.
I accept the submission that it is inappropriate to simply refer the defendant to 214 pages of documents as a basis for the plaintiff’s response. In Lenard’s Pty Ltd v Gow Pty Ltd & Ors,[3] Fryberg J discussed how particulars should be provided to the opposing party and the inadequacy of simply providing documents to support the pleading:
“In terms of overall structure, the response constitutes a roughly chronological summary of a number of documents, and in parts, a listing of documents. That is not adequate. The task of the drawer of particulars is to reassemble the information which may come to him or her in chronological order into a sensible format responsive to the request for particulars, and easily able to be related to it. That is not something done for the benefit of the plaintiff, it is also done for the benefit of the Court, and in that regard it is very much in the defendants' own interests that the particulars be properly drawn. Sooner or later, a trial Judge may have to read the particulars and use them to help identify what the defendants' counterclaim is about. The counterclaim will be the first inkling a Judge has of the contentions being raised by the defendants, and it behoves their lawyers to put the particulars in as clear and persuasive a form as is possible. An inability to do this is often a sign of a confused case, or even one which is not going to be able to made out.”
[3] [2007] QSC 377 at [5].
Turning then to the particulars requested, paragraph 6 and 7 of the statement of claim are ambit claims for a large amount of money, mostly tax debts. The division of the debts cover the whole of the periods since the liquidator says the company was insolvent and then the period when the first defendant was involved with the first plaintiff, and the second and third defendants were directors during that time. It is clear that the defendants are entitled to know when the debts were incurred and how that debt is calculated so that they can properly answer whether they carry liability for the incursion of some or all of that debt.
Similarly, in relation to paragraph 9 of the claim, the plaintiff has made general statements that cannot be answered without further information. The defendants should not be put in a position where they are required to do their own calculations and proceed as if this is the plaintiff’s case.
Paragraph 11 of the statement of claim is said to offend UCPR 146(1) (f) in that the paragraph contains multiple allegations of fact. In my view, they are broken into separate categories and such are able to be answered sufficiently. The allegations are simply that nothing was maintained or kept from a certain date. Those particulars are sufficient.
Similarly the case in relation to paragraph 12 is vague. The plaintiff is claiming actual or imputed knowledge. He should be able to plead which factors lead to that actual or imputed knowledge.
In relation to paragraph 18 and 19 of the statement of claim, that is clearly insufficiently particularised. It is insufficient to simply plead that sections of an act have been breached. The pleading refers to the defendants duties when those duties clearly only relate, if they relate at all, to the second and third defendants. The plaintiff is obliged to plead which actions constitute breaches of the directors duties and to which defendant the breach relates. The defendants cannot raise defences to the allegations until they know what they are alleged to have done and when.
In my view, it is appropriate to order as follows:
The plaintiffs are to provide within 14 days further particulars of paragraphs 6, 7, 9, 9(f), 9(g), 9(h), 12(a), 12(b) 12(c), 18 and 19 of the statement of claim pursuant to rule 7 and 367 of the UCPR.
The time for the defendants to file a defence in response to the statement of claim is extended to a date 21 days after receipt of the further particulars.
The plaintiffs are ordered to pay the first and second defendants costs of and incidental to the application to be assessed.