Teakle Property Australia v Business Initiatives Pty Ltd [2021] FCA 13

Teakle Property Australia v Business Initiatives Pty Ltd [2021] FCA 13

The proposed pleading was defective insofar as it alleged actual knowledge, deemed knowledge, inferred knowledge and fourth Baden category knowledge because the cross-referenced allegations either relied on insufficient or circular facts, constructive notice or fifth Baden category inquiry concepts not sufficient under Australian law, or speculative alternatives intended to be clarified by discovery. The only knowledge pleading permitted was proposed [24.2.4], alleging wilful blindness or wilful and reckless failure to make enquiries, because the respondents raised no compelling objection to that confined plea.

Jurisdiction
Australia
Judgment Date
22 January 2021
Procedural Posture
Practice and Procedure; Pleadings; Application for Leave to Amend Statement of Claim / Interlocutory Application for Leave to File and Serve an Amended Statement of Claim
Outcome
Leave to amend granted in part; proposed amendments disallowed in part.
Legal Topics
['pleadings' 'leave to Amend Statement of Claim' 'accessorial Liability' 'knowing Assistance' 'second Limb in Barnes V Addy' 'fraud and Serious Misconduct Pleading Requirements' 'conditions of Mind' 'discovery']
['practice and Procedure' 'equity' 'commercial and Corporations' 'regulator and Consumer Protection'] ['pleadings' 'leave to Amend Statement of Claim' 'accessorial Liability' 'knowing Assistance' 'second Limb in Barnes V Addy' 'fraud and Serious Misconduct Pleading Requirements' 'conditions of Mind' 'discovery']

Case Brief

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Procedural Posture

Practice and Procedure; Pleadings; Application for Leave to Amend Statement of Claim / Interlocutory Application for Leave to File and Serve an Amended Statement of Claim

Legal Issues

  1. 1 ['Whether the applicants should have leave to amend their statement of claim to plead that the respondents knowingly participated in a fraudulent and dishonest design under the second limb in Barnes v Addy.' "Whether the proposed pleading sufficiently particularised the respondents' alleged states of mind for a knowing assistance claim." 'Whether parts of the proposed pleading relied on Baden categories of knowledge not sufficient under Australian law, or on speculative allegations to obtain discovery.']

Ratio Decidendi

The proposed pleading was defective insofar as it alleged actual knowledge, deemed knowledge, inferred knowledge and fourth Baden category knowledge because the cross-referenced allegations either relied on insufficient or circular facts, constructive notice or fifth Baden category inquiry concepts not sufficient under Australian law, or speculative alternatives intended to be clarified by discovery. The only knowledge pleading permitted was proposed [24.2.4], alleging wilful blindness or wilful and reckless failure to make enquiries, because the respondents raised no compelling objection to that confined plea.

Court Disposition

Leave to amend granted in part; proposed amendments disallowed in part.

Orders

  • ['The name of the first applicant be amended to include "Pty Ltd" following "Teakle Property Australia".' 'The applicants have leave to file and serve an amended statement of claim in the form of the proposed pleading comprising annexure LJCR-2 to the affidavit of Luke John Charlton Rowley sworn on 23 December 2020,...