ETS Nominees Pty Ltd & Ors v Webb & Ors [1991] QSC 220

IN THE SUPREME COURT OF QUEENSLAND BETWEEN: No. 1277 of 1990 AND: AND: AND: AND: AND: E.T.S. NOMINEES PTY. LTD. First Plaintiff E.T.S. ENGINEERING CONSULTANTS PTY. LTD. Second Plaintiff E.T.S. ARCHITECTS PTY. LTD. Third Plaintiff IAN WEBB First Defendant LINDSAY FAWDRY Second Defendant URBAN ENGINEERING PTY. LTD. Third Defendant EXTEMPORE REASONS - SENIOR MASTER HORTON Q.C. Delivered the Twenty-fifth day of June, 1991 This .is a commercial cause in which the plaintiffs seek various relief against former employees and the present employers of those former employees. I use these descriptions of the parties to describe their practical functions as distinct from the legal niceties that have been created by virtue of incorporation. -- 1 of 7 -- The plaintiff in addition to a plea of breach of fiduciary duty against the first and second defendants, which their counsel Mr. Morris properly concedes has on the pleadings raised an arguable case, the allegation is made against all defendants for conspiracy and further as against the third defendant the allegation of an inducement to breach the contract of employment. It is clear that the law requires where such plea is raised that an allegation that the defendant "knowingly induced or procured" a breach of the contract of employment is made. See Short v. City Bank of Sydney 15 C.L.R. 148 at 159 where Isaacs J. said:- "The word 'knowingly' is essential. In Fosset v. Breerthe word is 'sciens' . In Blake v. Lanyon, it is laid down it must be 'after notice' .... In Quinn v. LeathernLord Macnaghten had previously spoken of 'a violation oflegal right committed knowingly'." In this case by the particulars paragraph 10, the plaintiff pleads:- "as to (being made):- sub-paragraphthe paragraph 1 4 (a) of wherein thethe Statement of Claim plea is originally (a) the acts whereby the third, fourth, fifth and sixth defendants procured the first and second defendants to commit the breaches of their employment agreements referred to therein were to approach each of the first and second defendants to leave their employment the plaintiffs, to offer to employ each of the first and second defendants and to propose as a condition of the offer of employment but the first and second defendants approach clients of the plaintiffs with a view to having those clients become clients of the third defendant." In my view, such a plea particularised as above is not sufficient to ground an action as pleaded. In my view it is clear on the authorities that a plaintiff setting up such a plea must go further and plead the fact that at the time of -- 2 of 7 -- the approach to the first and second defendants it, namely the third defendant, was aware that a term of the contract of employment between the plaintiffs and the first and second defendants included a provision prohibiting such conduct in the event of the first and second defendants ceasing to be employees of the plaintiffs. In other words it seems to me that the plaintiff must assert and ultimately prove this "guilty knowledge" in the third defendant at the time of the approach. To particularise the approach as an approach designed "to commit the breaches of their employment agreements" is in my view not sufficient and accordingly the plaintiff has failed to plead those facts as giving rise to the cause of action as pleaded. I turn now to the application by all defendants to strike out the allegations going to conspiracy. It is trite law to say that an allegation of conspiracy is one that ought not to be likely made and must when properly made be the subject of proper and detailed particulars. See Castlemaine Perkins Limited v. Queen Street Hotels Pty. Ltd & Ors. 1968 Q.L.R. 501 per W.B. Campbell J. at 511 wherein His Honour had this to say:- "If a party imputes fraud, negligence or misconduct to his opponent, the facts must be stated with special particularity. In Wooten v. Sievier [1913] 3 K.B. 499, Kenedy L.J., delivering the judgment of the Court, said at p.503 - 'In every case in which the defence raised an imputation of misconduct against him, a plaintiff ought to be enabled to go to trial with knowledge not merely of the general case he has to meet, but also of the acts which it is alleged that he has committed and upon which the defendant intends to rely as justifying the imputation'." -- 3 of 7 -- Further on in the same judgment His Honour referred to the earlier High Court decision of McKernan v. Fraser 46 C.L.R. 343 at p.346 wherein Evatt J. said:- "The interests of justice usually require that when allegations of conspiracy are levelled, particulars should be given. The persons charged should know what is the case alleged against them and what overt acts are intended to be proved. The requirement of particulars in cases of criminal conspiracy has recently been affirmedin this Court (R. v. Weaver). The reasons for applyingthe practice to cases of civil conspiracy are almost as cogent because, apart from special dispensation given by statute, it now seems clear that the tort of civil conspiracy cannot be established unless the plaintiff proves (inter alia) the existence of a conspiracy punishable in criminal jurisdiction." There have been two previous orders made by myself in the commercial causes jurisdiction wherein I ordered the plaintiff to supply particulars of the conspiracy. An attempt has been made to comply with those orders albeit somewhat belatedly. In my view the attempts have been sadly deficient and indeed, when one looks at the pleading and the particulars supplied, the pleader obviously is impressed by the dearth of his instructions and is unable to do any more than merely recast the bald assertions in different language. There are no real particulars in terms of the facts given and I am confident that the reason for this is that indeed after discovery and inspection there is no case. There is the further element raised by both Mr. Morris and Mr. David Cooper of the need to plead as a dominant purpose of the conspiracy the desire to damage or injure the plaintiffs. Here in my view it is clear that no doubt such a plea is not made on the grounds that any agreement reached -- 4 of 7 -- between these parties was one made for the dominant purpose of promoting the interests of the defendant. Further I am not of course to be taken as making a finding to this effect for I am not sitting to determine issues of facts. One can do no more than turn to the words of Toohey J. whilst a member of the Federal Court of Australia in Hughes v. Western Australian Cricket Association (Inc.) & Ors. 69 A.L.R. 660 at p.705 wherein His Honour quoted from Professor Flemming, the learned author of The Law of Torts 6th ed. at p.663:- "Its principal remaining role is to strike at those rare combinations whose predominant motive is not self- interest but injury to the plaintiff or the promotion of some other 'unjustifiable' end." "While a malevolent intent is not an essential ingredient of the tort (Crofter Handwoven Harris Tweed Co. v. Veitch [1942] A.C. 435 at 471-2), it does involve a combination the real purpose of which ' is the inflicting of damage on A as distinguished from serving the bona f ide and legitimate interests of those who so combine'. Like fraud, it is not an allegation that should lightly be made." Later on His Honour at p.706 in that case had this to say:- "In my view the applicant failed to show that there was any agreement made between the respondents, or any of them to injure him. There was conduct that injured him and it was the conduct of the respondents. But more is required before the respondents can be held to have conspired. For this reason I am of the opinion that there is little to be gained by referring to the many cases mentioned by counsel for the applicant that deal with the notion of intention to injure, the concept of purpose and the nature of the damage that may be suffered. These matters only arise once a relevant agreement has been proved, and this the applicant failed to do. In fairness to the respondents I should say that I do not think they did conspire to injure the applicant. They were acting in what they saw as the best interests of cricket though, in doing so, they acted in contravention of the Trade Practices Act and in restraint of trade. Conspiracy is a serious allegation to make and it was not sustained." -- 5 of 7 -- _§_ Here I am satisfied that a similar set of circumstances were pleaded previously and hence, I am satisfied that the plea of conspiracy as against all defendants should be struck out. The question then is what I should do with respect to the plea of procuring a breach of contract of employment. As Mr. David Cooper of counsel has reminded me this is a commercial cause which has been reviewed on numerous occasions commencing in February of this year. The plaintiff has on a number of occasions had its pleading attacked and in consequence of that attack there have been amendments and particulars ordered and supplied. There comes a time in my view when enough is enough and in view of the position of the case on the commercial causes list, the facts that discovery and inspection have been had, which it is not asserted has changed the position of the plaintiff in any material way, I am of the view that the time has come when the plaintiffs must face the consequences of the deficiency of their pleadings. Accordingly I order that the pleading of the plaintiff as against the third defendant be struck out. Further I order that the pleading in so far as it pleads conspiracy as against the first and second defendants be struck out. I order the plaintiff to pay the applicant third defendant's costs of and incidental to the action including this application and the application for joinder to be taxed. -- 6 of 7 -- l I order the plaintiffs to pay the applicant first and second defendants' costs of the application to strike out and costs thrown away by the plea of conspiracy to be taxed. I dismiss the application for joinder of Neilsen and I adjourn the application to join Eraland Pty. Ltd. to a date to be fixed in commercial causes. I order that the plaintiff and respondent first and second defendants' costs of this application be reserved. -- 7 of 7 --