Evans v Brannelly & Ors [2006] QDC 348

DISTRICT COURT OF QUEENSLAND CITATION: Evans v Brannelly & Ors and Delmenico v Brannelly & Ors [2006] QDC 348 PARTIES: PAUL EVANS Plaintiff and PAUL A. BRANNELLY First Defendant and BRANNELLY FINANCIAL PTY LTD (A.B.N. 72 011 021 640) Second Defendant and DEAKIN FINANCIAL PTY LTD (ABN 98 084 676 871) Third Defendant And JAMES DELMENICO Plaintiff and PAUL A BRANNELLY First Defendant and BRANNELLY FINANCIAL PTY LTD Second Defendant and DEAKIN FINANCIAL PTY LTD Third Defendant -- 1 of 11 -- 2 FILE NO/S: BD1916 of 2006, BD1917 of 2006 DIVISION: Civil PROCEEDING: Applications for orders for further and better particulars of statements of claim ORIGINATING COURT: DELIVERED ON: 20 September 2006 DELIVERED AT: Brisbane HEARING DATE: 11 August 2006, supplementary written submissions 15 September 2006 JUDGE: Robin QC DCJ ORDER: As per draft reproduced at [15] CATCHWORDS: Uniform Civil Procedure Rules r 135, r 139 – partially successful application by defendants seeking further and better particulars of statements of claim – application entertained despite defendants having filed no notice of intention to defend (or defence) – circumstances in which no costs order was made COUNSEL: Mr Forde for the plaintiff Mr Perry SC and Ms Chapple for the first and second defendants (applicants) SOLICITORS: Quinn & Scattini for the plaintiff Clarke Kann for the first and second defendants (applicants) [1] This is the “wash up” of similar applications by the first and second defendants in each of the proceedings for an order for further and better particulars of some 34 paragraphs of the statement of claim and “that pursuant to r 161(2) or alternatively r 367 of the Uniform Civil Procedure Rules the first and second defendants file and serve their defence within 28 days after the delivery of the further and better particulars”. The applications gave an estimate of a hearing time of 30 minutes each. They were dealt with substantially on 11 August 2006, taking up a whole day, effectively. There were matters for consideration over and above the merits of the individual requests for particulars. -- 2 of 11 -- 3 [2] After the participants separated, exhausted, at 5.30 p.m. on 11 August, my Associate trawled through the transcript to extract the components of a suitable order, the issues having been dealt with one by one, but not always in order, sometimes on the basis that the determination about one would indicate the outcome in respect of another. The task proved complex. The court now has the advantage of supplementary submissions from Ms Chapple, junior counsel to Mr Perry SC, for the applicant first and second defendants and from Mr Forde, counsel for the respective plaintiffs (both dated 15 September 2006). There was one agreed change1 , and, beyond that, Ms Chapple identified a couple of others to correct slips. The supplementary submissions are essentially about costs. [3] The applicants’ efforts resulted in a mixture of successes and failures. [4] The plaintiffs (and, the court was told, others who have commenced their own proceedings) complain of losses attributable to investments in a venture of the Westpoint Group identified as the Bayshore Port Melbourne development. The first defendant is depicted as the person responsible for the recommendation, he acting as an employee of the second defendant. The third defendant is said to conduct business “via an advisory network”, of which the other defendants formed part. The statements of claim are somewhat prolix (26 and 28 pages). The requests for particulars cover half as many pages (or more) of closer typing. It is difficult to accept that the defendant/applicants and their legal advisors are genuinely ignorant or confused about the case made against them (essentially of recommending an investment which failed badly). There can be no disputing their entitlement to insist 1 In light of directions made by the Chief Judge in the interim, the following provision became unnecessary: “In respect of paragraph 16, the plaintiffs should give any particulars sufficient to identify which were requested of a, b, c, g, h, i, j, k and l, subject to the qualification that it is sufficient in j to identify by its number in court records the proceedings, and in l to identify what RECA is and the dates of the warnings.” -- 3 of 11 -- 4 on the plaintiff complying with the rules of pleading, so that they know what are the issues for trial. [5] There is no reason to revisit the resolution of particular aspects. It may be useful to repeat here the order produced by the State Reporting Bureau which has been excluded from pp 37 and 38 of the transcript: “HIS HONOUR: The first request for particulars relates to the agency of the first defendant for the third defendant. Given that there is no corresponding request for particulars in respect of his pleaded agency for the second defendant, there is an appearance of some discrimination in what I take it is presented as an oppressive and improper request for particulars. I am conscious of Judge McGill’s decision in Cattermole v Lennon D110 of 2002 (15 th of July 2003) to the effect that ‘Agency is not really a conclusion, it is a fact, either A is the agent of B or A is not’. His Honour went on to say there might be complications if the agency relied on ‘ostensible’ or ‘apparent’ authority which he thought it not necessary to go into. The principal argument of Mr Forde is that his client is deprived of a ‘forensic advantage’ that would otherwise be available if the defendant were required to plead to the allegation of agency knowing no more about the case against him other than that the allegation is made. I appreciate that it may assist a party facing an allegation in a pleading, here the defendant, to be spared cross-examination as to his or her responsibility for a stance taken in a pleading which ultimately proves not maintainable. On the other hand, we are in an era of attempting to remove from litigation the traditional aspects of ambush or surprise. There is nothing in relation to this particular request which strikes me as oppressive except for what has been acknowledged above. If Mr Forde is right, that the first defendant signed the letter referred to in paragraph 7 of the statement of claim (if not the one referred to in paragraph 10), following events could be identified as emanating from the paragraph 7 letter, also that the letter pleaded in paragraph 10 emanated from the third defendant as well as the second defendant and was signed by the first defendant. Between the letters in the pleading came certain oral representations by the first defendant upon receipt of information from the plaintiff. It is hardly drawing a long bow to use the correspondence to draw in -- 4 of 11 -- 5 the third defendant. As presently advised, I think it is a sufficient response to the request for particulars to indicate the link already mentioned. ... HIS HONOUR: I accept that the third defendant would have a stronger claim to provision of this particular but I think nonetheless that the first defendant is entitled to seek it. ...” [6] A later ruling at pp 85 and 86, against the applicants, was: “HIS HONOUR: Paragraph 11 of the statement of claim pleads that ‘in making the express representations referred to in paragraphs 7, 8 and 10 above, the first, second and or third defendants, by inference, made the following representations’. Lettered representations up to ‘M’ follow but there’s no ‘J’. There are a greater number of representations in paragraphs 7, 8(C) and 10. Mr Perry’s argument, which at first I thought persuasive, was that the plaintiff should be required to particularise which of the many representations in paragraphs 7, 8(C) and 10 are relied on as the basis for the inferences which paragraph 11 pleads should be drawn that further non-express representations were made. I accept that some of the express representations, by their very nature, have no useful role to play, assuming they’ve been proved, in a process of inferring other representations. I agree with Mr Perry that inferences are to be drawn from facts which are proved. In principle, the plaintiff could be put to an exercise of assigning lists of numbers from the subparagraphs of 7, 8(C) and subparagraphs of 10 to the subparagraphs of paragraph 11. It’s hard to think that would be particularly helpful to the defendants. It’s close to a request for particulars of the submissions that the plaintiff might make to the Court, as Mr Forde says. I think it might be unfair to the plaintiff as well to be confined in this way, even assuming that the plaintiff overlooks nothing in the particularising exercise I’ve contemplated. I think there may be other circumstances, such as common understandings of the way commerce operates, which the Court may be confident about, which would play a role, along with proved facts, in an inference drawing process. In the end, I’m not inclined to order particulars of paragraph 11.” -- 5 of 11 -- 6 [7] Anyone interested in the reasons for other rulings may discern them from the transcript. Of more general interest and of particular relevance in respect of costs is the following ruling at pp 54-55: “HIS HONOUR: Mr Forde makes a general objection that the application for particulars is incompetent because no notice of intention to defend has been filed. That’s the case, the justification put up being that the first and second defendants ought not to have to defend in the sense of filing a defence, given the state of the pleadings to date. In my opinion, although by rule 139 a party filing notice of intention to defend is required to attach a defence, this is one of the many examples of respects in which there may be non-compliance with the rules which is excused one way or another, depending on the circumstances. It seems to me the UCPR allow for a defendant to file notice of intention to defend without a pleading attached. There’s a long hallowed practice of the Courts to decline to hear persons who have not filed a notice or entry of appearance. That’s what it used to be called - now notice of intention to defend. The reason for requiring such document to be filed is primarily I would think so that there’s an address for service. The first and second defendants here have filed no address for service, notwithstanding that the name and address of the solicitor appears in the footer of an application which is on the file and maybe on other documents. In my opinion, Mr Forde’s point is technically correct. It’s not overcome by the circumstance that solicitors on both sides have been in communication and for serious purposes such as the plaintiff’s undertaking not to seek to enter a default judgment. Even if it were the case that there’d been the equivalent of an undertaking to accept service, I don’t think that would suffice. Notwithstanding the technical objection that might be open to the bringing of any application for particulars, I think the Court ought to get to the substance of the dispute about particulars. The price of the Court’s doing so is that the applicant/defendants will be required to file at least a notice of intention to defend, incorporating an address for service and perhaps, depending on how things develop, a defence, but that remains to be seen.” [8] I ought also to record the arguably indulgent approach which I brought to the first and second defendants’ application, consistently with my approach in Kettering Pty -- 6 of 11 -- 7 Ltd v Noosa Shire Council [2006] QPEC 024 and to acknowledge Mr Forde’s submissions about that: “HIS HONOUR: My usual starting point is to say that if a litigant wants the particulars then, unless the request is outlandish, it ought to be met. What sorts of objections to giving particulars should the Court really indulge? I suppose there are some such as that they cannot be given or they couldn't be given without totally disproportionate time, effort and cost being required. There must be other things. You can get privilege points too – if I give these particulars I might be incriminated. MR FORDE: If they ask for evidence – the rules specifically state when not to plead evidence. Yet they [the defendants] say for example, ‘provide particulars of the facts, matters and circumstances in which it is alleged’ – sorry, ‘the circumstances that form the basis upon which it is alleged that the third defendant’, blah, blah, blah. Well, we make an allegation of fact. They’re not entitled to get what evidence do you have to form the basis upon making that allegation of fact so that we can test your evidence before we admit or deny. HIS HONOUR: I would have thought that the basis of the rule against pleading evidence is to prevent the pleader putting in too much. If you turn it around the other way and you have a defendant who says I want to know the evidence, in these days of no secrets in litigation, what is so objectionable about a defendant, or plaintiff come to that, who tries to get evidence under the guise of particulars, getting it? Is it that you want to keep something up your sleeve? MR FORDE: No. We want this matter to proceed. When we make an allegation of material fact, we want the defendant to plead to that material fact. We don’t want the defendant to say, before I have to respond you tell me what evidence you’ve got. Then he goes away and he says----- HIS HONOUR: We’re going to go down on that one, we’d better admit it. MR FORDE: That’s right. We’re going to colour our admissions and our denials because----- HIS HONOUR: So, we look better to the jury or the Judge. We haven’t contested every little thing. We’ve made reasonable admissions. MR FORDE: They’re saying, if they can prove that then I’ll admit but if they can’t prove it, I’ll deny it. Because if they make a false -- 7 of 11 -- 8 denial then we can use that as a method of attacking their credit when the matter comes to trial.” [9] I was somewhat surprised at the plaintiffs’ scattergun approach to particularising assertions that the defendants knew or should have known of certain warning signs about the Westpoint Group. Mr Forde may assert that this would be a matter of evidence, but I would have thought it tenable to make assertions along the lines not only that a financial advisor ought to be aware of some “warning signs” pleaded and particularised (some of which purported to be further particularised in limited respects), but also that the information appeared in at least one of – • the Australian Financial Review • the financial section of the “Australian” newspaper • the financial section of the leading daily newspaper published in the advisor’s own capital city, for example in Brisbane, the Courier-Mail. There may be other professional or “trade”, even official publications covering the same ground. It ought to be a simple matter to identify relevant items from any particular publication. One might expect that the plaintiffs at trial would call some expert witness experienced as a financial advisor to give opinion evidence about the sources of information a competent financial advisor would consult. [10] All of this underlines the extent to which the applicants are seeking to flush out evidence at a very early stage in the proceedings, the claims having been started only in July 2006. The plaintiffs cannot realistically be expected to have assembled all of their evidence. One can understand the view being taken by lay people that the loss of their investments almost immediately bespeaks serious inadequacy in the financial advice they were given. My approach was that once the defendants, facing the claims, sought particulars, it was reasonable to force the plaintiffs to get their cases more organised than they might have been to date. In particular, I think this applies to allegations that the defendants (a) knew or (b) ought to have known of -- 8 of 11 -- 9 various adverse aspects of the Westpoint Group’s activities which are listed in the statements of claim. The particulars for (a) may be very different from those for (b). [11] A point was reached in the hearing when Mr Forde foreshadowed that the statements of claim would be amended, replaced by pleadings incorporating the particulars the court required. Thus, the formal orders foreshadowed by me provided for that course to be followed. [12] In respect of costs, in the ordinary event, the plaintiffs would have to pay them, having been ordered to give further and better particulars. That the applicant/defendants failed in some respects would not ordinarily lead to their being denied a general order for costs of the application. Here, however, the application assumed such gargantuan proportions that the plaintiffs are arguably entitled to some recognition for their partial success. That success could have been complete, if Mr Forde’s objection mentioned in paragraph [7] had been acceded to.. [13] Traditionally, the fate of an interlocutory application brought by a defendant without entering an appearance was that it must be dismissed, as exemplified by Tucker v Walker [1920] VLR 385, cited in Ryan, Weld and Lee, Queensland Supreme Court Practice, 12.1.5. Now, r 135(1) provides that, except with the court’s leave, a defendant may take a step in a proceeding only if there has been first filed a notice of intention to defend. It is only by the court’s indulgence that the defendants got their application heard, with a useful result. [14] An early inclination in light of the supplementary submissions was to order that the applicant defendants’ costs be their costs in the cause, as to part of them and that the plaintiffs’ costs, likewise, be their costs in the cause as to part of them. On reflection, given the relatively modest sums that might have been involved, I have -- 9 of 11 -- 10 preferred to save the parties the costs of working out the costs at some future time and to make no order as to costs. [15] The orders ultimately made, identical in the two proceedings, are as follows: Order that the plaintiff give further and better particulars limited in view of the plaintiffs foreshadowing amendment to the Statement of Claim: 1. In respect of paragraphs 1(a)(iii) and 1(a)(iv) the first and second defendants’ application for further and better particulars must be complied with. 2. In respect of paragraphs 1(c)(vii) and 1(c)(viii) no orders are made in light of the ruling on 1(a)(iii). 3. In respect of paragraph 2, the application for particulars of paragraph 2 is refused, without prejudice to the first and second defendants’ right to request particulars of it should paragraph 3 be amended. 4. In respect of paragraph 5, order that particulars be given of the facts whereby the first and second defendants were aware of the matters described in 5(a) to 5(d) being particulars of the facts whereby first and second defendants were aware of those matters other than those pleaded in paragraphs nominated in paragraph 5. Further order that particulars be given of the facts whereby the first and second defendants should have been aware of the matters described in 5(a) and 5(d) being particulars of the facts whereby first and second defendants should have been aware of those matters other than those pleaded in paragraphs nominated in paragraph 5. 5. As to paragraph 8(b) the plaintiffs must provide particulars of the investment referred to therein for the purpose of clarifying whether it is a reference to paragraph 8(a) or paragraph 7(x). 6. In respect of paragraph 17(j)(ii) the plaintiffs are ordered to give particulars of the facts whereby the Bayshore development was not the best one for the purposes of investing. 7. In respect of paragraph 17(k)(v) and 17(k)(vi) the first and second defendants’ application for further and better particulars must be complied with. -- 10 of 11 -- 11 8. In respect of paragraph 19 the plaintiffs must provide particulars of the facts relied on for the falsity of the representations set out in 18(b)(i). 9. In respect of paragraph 23(a) particulars limited to the 1st and 2 nd defendants are ordered. 10. In respect of paragraph 24(a) and (b) particulars limited to the 1st and 2nd defendants are ordered. 11. Leave to the plaintiffs to amend their statement of claim. 12. Order that the first and second defendants file immediately a notice of intention to defend without attaching a defence in the first instance if so advised. 13. Leave to the first and second defendants to file and serve their defence within the time allowed under the rules following filing of the amended statement of claim. 14. No order as to costs. -- 11 of 11 --