WESTPAC NEW ZEALAND LIMITED v ANDERSON [2017] NZHC 2204

WESTPAC NEW ZEALAND LIMITED v ANDERSON [2017] NZHC 2204 [12 September 2017]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2016-409-000373[2017] NZHC 2204BETWEEN WESTPAC NEW ZEALAND LIMITEDPlaintiffAND PATRICIA KARENIA ANDERSONDefendantHearing: 6 September 2017Appearances: R G Smedley and T Grimwood for Plaintiff/RespondentG M Brodie for Defendant/ApplicantJudgment: 12 September 2017JUDGMENT OF ASSOCIATE JUDGE OSBORNEon application for further particularsIntroduction[1] The defendant has applied for a number of interlocutory orders.[2] The orders sought included the striking out of a paragraph in the statement of claim and the filing of a supplementary affidavit of documents. The defendant has not pursued those applications and I will dismiss the application in that regard.[3] The remaining application is for further and better particulars. After the application was filed, the plaintiff filed a first amended statement of claim (which Iwill refer to here simply as the "statement of claim"). The statement of claim dealtwith a number of the matters raised in the defendant's application. The balance of the defendant's application is opposed.[4] In this judgment, I deal with such matters as the defendant, through Mr Brodie's submissions, has pursued to hearing, together with (at [69] – [70]) somematters which counsel agree should be incorporated into a second amended statement of claim.Overview of the claim[5] The plaintiff sues the defendant in the tort of deceit for damages of approximately $50.8 million. The plaintiff pleads one alternative cause of action, in the tort of conspiracy to defraud by unlawful means, seeking the same damages.[6] The defendant filed a particularised statement of defence to the original statement of claim but, pending the outcome of this application, has not filed a defence to the amended statement of claim.[7] The defendant affirmatively pleads a limitation defence to which the plaintiffhas filed a reply. The defendant's application here does not require further consideration of the limitation pleadings.Factual background[8] The claim has its background in the plaintiff's relationship (as banker) withcompanies forming the Lane Walker Rudkin Group ("LWR Group"), which were generally administered through Lane Walker Rudkin Industries Limited ("LWR").[9] The defendant and her husband, Ken Anderson, had ownership, governance and management involvement with the LWR Group.[10] They were signatories, including as guarantors, to the plaintiff's letter of offerof banking facilities in June 2001 whereby the LWR Group obtained various facilities and lending including a $2.5 million letter of credit (LOC) facility. It is alleged that at the time the defendant and Ken Anderson represented they were accountants.[11] The defendant and Ken Anderson separated in 2005 and thereafter effected a division of their relationship property. In June 2006, the defendant's guarantee cameto an end (the plaintiff alleging by release, whereas the defendant alleges it was bythe expiry of the guarantee's five-year term). The plaintiff asserts that its lending to the LWR Group grew from $36 million in November 2005 to $42 million in June 2006 and to $130 million in April 2009.[12] In April 2009, the plaintiff appointed receivers to the LWR Group companies. The plaintiff asserts that the receivers have, as at 2 August 2017, recovered on behalf of the plaintiff approximately $41 million.The causes of action[13] The plaintiff asserts that from 2004 the LWR Group began encountering financial difficulties and that its financial position thereafter deteriorated. The plaintiff alleges that there was a shortfall in working capital and that the defendant (and other managers of the LWR Group) decided to use the facility to obtain short- term funding ("the LOC fraud"). It alleges (and the defendant accepts) that she remained a director of one of the LWR Group companies, Florian Ltd. The plaintiff alleges that Florian was then used to document supposed sales of product for payment under the LOC facility following which the funds obtained from the plaintiff were used instead as short-term funding.[14] The plaintiff asserts that the process of calling on the LOC facility was dishonest because there was no stock being sold by Florian and the invoices for fictitious stock were created to enable funds to be drawn down. Drawdowns which occurred between December 2005 and August 2007 are particularised in Schedule A to the statement of claim.[15] The plaintiff alleges that the defendant was a party to the LOC fraud by executing documents which she knew to be false, including documents listed in Schedule B to the statement of claim.[16] The plaintiff alleges that if it had been aware of the financial difficulties, the fact that the Andersons were not accountants and the LOC fraud, it would neither have released the defendant from her guarantee nor increased its lending to LWRI and the LWR Group. Further, as a result of the LOC fraud, its losses amount to approximately $50.8 million.[17] The plaintiff's first cause of action is pleaded in deceit.[18] By its second (alternative) cause of action, the plaintiff alleges that the defendant conspired and combined with the management of companies in the LWR Group and Ken Anderson to perpetrate the LOC fraud, causing the plaintiff to sustain losses of approximately $50.8 million.[19] The defendant here asserts that in a number of aspects the statement of claim is defective.The requirement of pleadings – r 5.26 High Court Rules[20] Rule 5.26 High Court Rules provides:5.26 Statement of claim to show nature of claimThe statement of claim—(a) must show the general nature of the plaintiff's claim to the reliefsought; and(b) must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief issought of the plaintiff's cause of action; and(c) must state specifically the basis of any claim for interest and the rate at which interest is claimed; and(d) in a proceeding against the Crown that is instituted against the Attorney-General, must give particulars of the government department or officer or employee of the Crown concerned.Further particulars of pleadings – applicable principles[21] I adopt as the principles applicable to consideration of an application for further and better particulars the following:1(a) The primary purpose of pleadings is to define the issues and thereby to inform the parties in advance of the case they have to meet and so enable them to take steps to deal with it.1 Adopting the principles as set out in Benmarroc Estates Ltd v Molyneux Management Ltd HC Dunedin CIV-2007-412-735, 23 June 2009, at [8].(b) The statement of claim should state the claim in each case so that the Court has sufficient clarity and detail to understand the issues it has to rule on, and the defendant knows the case which is to be met and is able to prepare for trial. The function of particularised pleading therefore includes:(i) limiting the scope of matters a party may put in issue of the trial (or in pre-trial settlement discussions);(ii) enabling the other party to know the witnesses it will need to retain and to enable the party to start preparing ahead of the formal exchange of evidence; and(iii) providing an opportunity for the other party to seek summarydetermination on the basis that the other party's position isuntenable.2(c) Specifically required by r 5.26(b) High Court Rules are suchparticulars " of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances as may suffice to inform the Court and the party or parties against whom relief is sought of theplaintiff's cause of action".(d) The pleading must set out the facts or circumstances relied upon as giving rise to each cause of action alleged and the relief claimed as a consequence.(e) The nature and level of particulars will depend on the facts of the individual case. In complex cases, over-pleading may obscure rather than clarify the issues.3(f) The distinction between particulars and interrogatories is important —particulars are matters of pleading, designed to make plain to the2 Platt v Porirua Council [2012] NZHC 2445 at [19].3 BNZ Investments Ltd v CIR (2008) 23 NZTC 21,821 (HC) at [45].opposite party the case to be raised, whereas interrogatories are sworn statements of fact, procured by the opposite party to assist that party in proving his or her case.(g) A request for further particulars can be resisted if the request goes beyond the scope of particulars and probes for evidence.(h) Questions which a Court can usefully ask itself are:(i) Has sufficient information been provided to inform the other party of the case they have to meet and to enable them to take steps to respond?(ii) Is there a real risk that the other party may face a trial by ambush if further particulars are not provided?(iii) Is the request oppressive or an unreasonable burden upon the party concerned?(i) In considering whether any party is likely to be taken by surprise, the Court is entitled to have regard to the fact that:(i) If the particulars sought are within the knowledge or control of the requesting party an order for further particulars may be declined pending the completion of discovery or other matters;(ii) Case management is available to ensure each side is fairly informed of what is in issue, with the Court able to require leading counsel to agree a list of issues;4(iii) Briefs of evidence will be exchanged well in advance of the hearing.5 The Court is also entitled to take into account its ability in cases with substantial evidence to provide for4 BNZ Investments Ltd v Commissioner of Inland Revenue, above n 3, at [45].5 Petrocorp Exploration Ltd v New Zealand Refining Co Ltd (1992) 7 PRNZ 53 (HC), at [57].defendants to have extended periods of time to digest and respond to the evidence of the plaintiff.(j) Particulars of pleading should be approached in a practical and not a theoretical, mechanical or pedantic manner.6[22] By reason of r 5.33 High Court Rules, the requirements of the particularisation of a claim apply equally to the pleading of special damages. Rule 5.33 High Court Rules reflects the policy underlying r 5.26.7[23] Particular considerations and responsibilities attach to pleading where allegations of fraud or dishonesty are involved. The general requirements were stated by the Court of Appeal in Schmidt v Pepper New Zealand (Custodians) Ltd,where the Court said:8[15] Allegations of fraud or dishonesty are very serious. They must be pleaded with care and particularity. As the authors of Bullen & Leake & Jacob's Precedents of Pleadings9 emphasise, counsel must not draft any originating process or pleading containing an allegation of fraud unless they have reasonably credible material which, as it stands, establishes a prima facie case of fraud – that is, material of such a character which would lead to the conclusion that serious allegations could properly be based upon it. Fraud cannot be left to be inferred from the facts – fraudulent conduct must be distinctly alleged and as distinctly proved.10 General allegations, however strong the words may be appear to be, are insufficient to amount to a proper allegation of fraud.11The particulars soughtParagraphs 17 to 19 – "financial difficulties"[24] The plaintiff by its (amended) claim pleads:17 In 2004 and 2005, the LWR Group began encountering financialdifficulties ("Financial Difficulties") which are particularised in paragraph 18 below.6 Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998 at 19.7 McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR 5.33.01].8 Schmidt v Pepper New Zealand (Custodians) Ltd [2012] NZCA 565.9 Bullen & Leake & Jacob's Precedents of Pleadings (16th ed, Sweet & Maxwell, London, 2008) vol 2 at [49-02].10 Davy v Garrett (1878) 7 Ch D 473 (CA) at 489.11 Wallingford v Mutual Society (1880) 5 App Cas 685 (HL) at 697.18 Mrs Anderson was aware of the Financial Difficulties encountered by the LWR Group.Particulars(a) From about 2004, LWRI's financial controller Mr DavidSugden ("Mr Sugden") told Mr and Mrs Anderson that:(i) the LWR Group was struggling for cash;(ii) the LWR Group was reporting trading losses; and(iii) the LWR Group was unable to pay its debts as they became due without the injection of outside funds.(b) At all material times:(i) Mrs Anderson was the joint CEO of LWRI; and(ii) participated in the management of LWRI including attending management meetings and receiving LWRI management reports.19 The LWR Group's management accounts from 2004 showed that theLWR Group's financial position continued to deteriorate.[25] On their face, these three paragraphs address different concepts. Paragraph 17 pleads the encountering of financial difficulties. Paragraph 18 pleads thedefendant's awareness of the financial difficulties and particularises how and why she was aware. Paragraph 19 pleads that the accounts show a continueddeterioration of the LWR Group's financial position from 2004.[26] Mr Brodie submits that the most important details lacking in this pleading arethe particulars of "financial difficulties". He further notes that, to the extent the(amended) pleading suggests that particulars of the "financial difficulties" arecontained in paragraph 18, it is incorrect. What Mr Sugden told the defendant may inform issues of her awareness (the matter pleaded in paragraph 18). It does notconstitute an allegation of particulars which identify what "financial difficulties"means.[27] I agree. It is for the plaintiff to allege (by way of particulars) the material facts which are to be relied on by the plaintiff as constituting the financial difficulties. That might be done by the plaintiff asserting (if this is its factualassertion) the matters identified at paragraph 18(a)(i) – (iii) but as stand-alone assertions of fact as particulars in paragraph 17 itself.[28] There is a consequential, closely related concern in relation to paragraph 19which contains the allegation of "continued deterioration". The paragraphappropriately calls for particulars of the aspects of financial position which deteriorated, whether they are related to the three aspects identified in paragraph 18(a)(i) – (iii) or otherwise.[29] The remaining submission of Mr Brodie in relation to these paragraphs relates to the detail of the alleged communications of Mr Sugden (as pleaded in paragraph 18). Mr Brodie submits that the plaintiff should particularise whether communications were in the form of documents, conversations or otherwise.[30] I agree. Given that the plaintiff is relying on a proposition that Mr Sugden told the defendant of certain matters, the defendant and her counsel reasonably need to know the form and occasions in order to respond to the over-arching allegation. This is particularly so when the claim was first served in mid-2016 and relates in part, if not wholly, to events 12 years previously.[31] Orders will be made below in relation to these paragraphs.Paragraph 23(c) – Florian's dealings with plaintiff[32] By paragraph 23(c) of the claim, the plaintiff pleads:23 Between 22 December 2005 and 14 August 2007, the LOC facility was used by the LWR Group to drawdown funds from Westpac including in the following manner:(c) Florian, through its bank (BNZ) provided Westpac with copies of the Invoices and sought payment under the LOC facility;(The LOC Fraud.)[33] In her application, the defendant asserted that this pleading is defective because it does not inform her sufficiently of the circumstances of the request. Her application is for particulars of the time, date, place and method of each occasion upon which payment was sought and identification of the personnel involved in seeking payment.[34] For the defendant, Mr Smedley notes that the drawdowns requested to pay the invoices are particularised in Schedule A to the statement of claim. On a plain reading of the statement of claim as a whole, the allegations thereby are that seven drawdowns occurred on invoices and that Florian (through its bank) provided the plaintiff with copies of each and sought payment on each.[35] Mr Smedley is correct to submit that paragraph 23(c), when read with Schedule A, is adequately particularised. Relevant dates are identified in Schedule A. The pleading sufficiently informs the defendant of the events relied upon.Paragraph 24 – dishonesty[36] In paragraph 24 of the claim, the plaintiff pleads:The process of calling on the LOC facility was dishonest because there was no stock being sold by Florian and the Invoices for fictitious stock were created to enable funds to be drawn down.[37] The defendant states as her grounds for replying for further particulars:8. This pleading is defective. It does not identify the date by which stock was to be supplied. It does not particularise whether the invoices were for the delivery of stock at a future date and if so whether or not there was an intention to supply stock at that future date. It does not identify any basis upon which it can be said that an invoice for stock to be delivered at a date in the future is dishonest. It alleges dishonesty but it does not allege by whom the dishonesty was being practiced. It does not identify whether Mrs Anderson personally is alleged to have acted dishonestly and if so in which respect. It does not identify whether the fraud was intended to permanently deprive the plaintiff.[38] In support of this application, Mr Brodie invoked particularly the observations of the Court of Appeal in Schmidt v Pepper New Zealand (Custodians) Ltd, which are set out at [23] above.12[39] In his written submissions, however, Mr Brodie then focused on the alternative cause of action (conspiracy to defraud by unlawful means) rather than the first cause of action (in deceit) which is being pleaded at this point of the statement of claim. When his written submissions returned to focus on the allegation inparagraph 24 as to "dishonesty" the submission reads much more as an application to strike out the pleading for not disclosing the cause of action. Three paragraphs fromMr Brodie's synopsis illustrate the point.27. This is not a case where money has been obtained by deception. This is not a case where the plaintiff pleads that the alleged deception enabled LWR to extract money from Westpac which money was then lost. Westpac is not suing to recover the money which was drawn against the LOCs. Westpac claims that this series of drawdowns caused it to act in a way which it would not otherwise have done and this later conduct has led to its loss.28. The LWR group has drawn against its LOC facility by requesting the issue of a letter of credit in favour of Florian. The terms of the facility required the letter of credit to be repaid within 90 days. The cashpayment was made in each case to Florian's Bank and immediately repaid to LWR group's bank account with the plaintiff. LWR thenrepaid the facility within the 90 day period of credit. In many but not all cases LWR used the cash to pay for the goods described in the invoice.29. This is not a simple case of causing Westpac to lose money which it has paid out against a false invoice. There is no question of LWR effectively stealing the money.[40] As Mr Smedley submitted, it is helpful to begin an examination of the adequacy of the pleading of dishonesty by reference to the essential elements of the tort of deceit. The allegation of a dishonest calling on the LOC facility in paragraph 24 has to be read with the following (paragraph 26) allegation that:Mrs Anderson was a party to the LOC Fraud by executing documents that she knew to be false, including those listed in the attached schedule marked"B".12 Schmidt v Pepper New Zealand (Custodians) Ltd, above n 8.[41] Mr Smedley notes that one element of the tort of deceit is that the defendant in one way or another misrepresented a fact that they knew to be untrue. Mr Smedley submits that the present pleading is adequate because it alleges (through paragraph 26) that the defendant was a party to a misrepresentation (through the documents she executed) which she knew to be false in that:(a) The scheduled invoices issued by Florian related to "fictitious stock"(or as Mr Smedley paraphrased it, stock which was not a genuinely intended subject of sale); and(b) The money drawn down by LWRI on the strength of those invoices was to be used to pay for the fictitious stock when it was not being so used.[42] Mr Brodie in his synopsis focuses only on paragraph 24. He was thereby able to note that there was not an allegation as to who was dishonest. That is appropriately a matter which should be particularised. The allegation is that the defendant was a party to the fraudulent behaviour (pleaded in paragraph 24) by executing the scheduled documents which she knew to be false. The Court and the defendant should be informed through a particularised paragraph 24, of the identities of the persons with whom the defendant is alleged (by paragraph 26) to have been a party.[43] I turn now to the initial emphasis in Mr Brodie's oral submissions, which was upon the alternative cause of action (conspiracy to defraud by unlawful means). In the additional paragraphs in the statement of claim which plead that cause of action, (paragraphs 51 to 54) there is a pleading that the LOC fraud was an unlawful means.[44] Mr Brodie submitted at some length that if the defendant's conduct as allegedin paragraphs 24 and 26 is alleged to be unlawful, the plaintiff should be required to identify the exact reason why it is said to be unlawful. Mr Brodie asked rhetorically– "is it alleged that the conduct is in breach of the criminal law?".[45] These submissions might more appropriately have been made on a strike out application. It is being suggested for the defendant that the facts pleaded do not make out the cause of action.[46] Mr Smedley notes (contrary to the implication of Mr Brodie's rhetorical question) that the "unlawful means", which are an ingredient of the tort of conspiracy to defraud by unlawful means, encompass tortious conduct such as deceit.13 Professor Todd notes in his text that, where conspirators commit torts, there may be no need for the plaintiff to allege conspiracy because the defendants would in any event be liable as joint tortfeasors. But it is open to a plaintiff, as done in this case, to plead the alternatives.[47] On that aspect of the plaintiff's pleading of paragraph 24, there is no basis for an order for further particulars.Paragraph 26 – an inclusive list[48] The plaintiff pleads at paragraph 26 (as already noted above at [41]) that:Mrs Anderson was a party to the LOC Fraud by executing documents that she knew to be false including those listed in the attached Schedule marked"B".[49] By her application, the defendant seeks two sets of further particulars. First, it is suggested that there was a failure to identify separately each of these documents referred to as in paragraph 26. Secondly, the use of the word "including" suggests anintention to possibly rely on other documents not identified.[50] The first complaint is unjustified. Schedule B to the statement of claim (incorporated into paragraph 26) clearly identifies 15 documents by date and description.[51] The second complaint is justified. It is for the plaintiff to identify which documents the defendant executed and knew to be false. If the plaintiff subsequently becomes aware of other documents which it suggests support its case, they should be13 S Todd (ed) The Law of Torts in New Zealand (7th ed, Thomson Reuters, 2016) at [13.4.03(2)], n 360.particularised specifically at that time, before the close of pleadings. For the time being, the appropriate course is for the plaintiff either to state directly that the Schedule B documents are the documents (ie by stating "being those listed " rather than "including those listed ", or the plaintiff should plead (whether in Schedule B or elsewhere) such additional documents as comprise the full set relied upon by the plaintiff. There will be an order accordingly.Paragraph 27[52] The plaintiff has at paragraph 27 an allegation which appears to be more in the nature of evidence than an allegation of a material part of the cause of action. (The defendant by her statement of defence has pleaded to that paragraph and denies the allegations).[53] Mr Brodie advised me at the hearing that the defendant no longer seeks an order in relation to the pleading at paragraph 27. He nevertheless reserves his position as to whether it contains a proper matter for pleading.Paragraph 29(c) and (d) – causation[54] The plaintiff pleaded:29. The LOC fraud:(a) was intended to cause Westpac to advance short term funding to the LWR Group;(b) resulted in Westpac advancing funds that were used by the LWR Group as short term funding;(c) caused Westpac to believe that the LWR Group was financially sound as the LWR Group's use of the short term funding allowed itto stay within its facility limits; and(d) thus deceived Westpac into believing that:(i) the LWR Group was not in Financial Difficulties; and(ii) providing the LWR Group with further funding was an acceptable risk.[55] Mr Brodie submits that paragraph 29(c) – (d) is inadequately particularised.[56] In his submissions, Mr Brodie also identified a complaint as to the plaintiff'spleading (in the subsequent paragraph 30) of Westpac's continued lending. As thatparagraph of pleading was not part of the application, I disregard the complaint and focus on the pleading at paragraph 29(c) – (d).[57] The defendant's application states as the grounds of the complaint in relation to paragraph 29(c) – (d):14 This pleading is defective. It does not identify how and in what circumstances Westpac was induced to believe that the LWR Group was financially sound. It does not identify which offices of the bank were caused to believe that the LWR Group was financially sound when it was not. It does not identify on what particular occasions or in what circumstances the bank was caused to hold such a belief. It does not identify what is meant bythe expression "was financially sound."15. The pleading that Westpac was deceived into believing that the LWR Group was not in financial difficulty is defective. It does not identify who within the bank was deceived and it does not sufficiently identify the circumstances of the deception and it does not identify what is meant by theexpression "was not in financial difficulty".[58] In his written synopsis Mr Brodie did not focus on the grounds identified in the application for further particulars.[59] I nevertheless deal with those grounds first. Central to those grounds is the complaint that the pleading identifies neither the individuals representing the plaintiff who were deceived nor the occasions of deceptions.[60] For the plaintiff, Mr Smedley refers to a later paragraph in the statement of claim (paragraph 35) in which reference is made to the involvement of one MichelleThompson in relation to the plaintiff's agreement to release the defendant from her guarantee (in 2006). In his submissions, Mr Smedley has referred also to discussions which have occurred in the correspondence between the solicitors as to Ms Thompson's involvement. Mr Smedley refers also to copies of correspondence attached to his synopsis which indicate the involvement of at least two other employees of the plaintiff.[61] Mr Smedley submits it is unnecessary to in order that the plaintiff plead which of its personnel or branches were involved in the plaintiff's decision-making to inform the defendant of the case against her.[62] Most of the explanatory material referred to by Mr Smedley sits outside the pleading. Mr Brodie, for the defendant, correctly focuses on the pleading (in paragraph 29) of the plaintiff's belief. As Mr Smedley's submissions implicitlyaccept, the belief of a corporation comes about through particular individuals. Thedefendant is entitled to know which individuals' beliefs are asserted by the plaintiffto represent the belief of the plaintiff.[63] There will be an order requiring the pleading itself to identify the individual or individuals involved (such as through a pleading that "the LOC Fraud causedWestpac through x, y and z to believe ").[64] It is also appropriate that the pleading should refer to the relevant dates on which it is alleged that the individuals were caused to acquire the belief. The date of causation is material, having regard to the fact that it is the plaintiff's case that itundertook certain actions as a result of Westpac's false beliefs. It also assists the defendant in determining the relevant periods to which any documentary causation should relate.[65] There will accordingly be an order that further particulars of timing be provided.[66] That will serve to dispose of the defendant's issues in relation to paragraph 29(c) – (d).[67] In developing a submission concerning the plaintiff's paragraph 30 pleading, Mr Brodie made submissions as to what the plaintiff will be required to prove by way of causation and quantification of loss and he framed more rhetorical questionsas to what the plaintiff is asserting in relation to loss. Once again, Mr Brodie'ssubmissions in large part have the flavour of strikeout submissions. Mr Smedley has made it clear that the plaintiff is content, in terms of the authorities, to rely on itspresent pleading of consequences. It is the plaintiff's case that it will be entitled to damages on reliance-based principles, such as will put the plaintiff in the position it would have been if the deceit had not occurred. The plaintiff's case is that other tests of remoteness of damage will not apply and that a lack of foreseeability of loss willnot affect the plaintiff's entitlement to damages.[68] A short answer to Mr Brodie's rhetorical questions may therefore have been that they are questions in relation to a case with the plaintiff is not developing. In the event, because those matters were not the subject of application, no order will be made in relation to them.Informally provided particulars[69] It was apparent from correspondence attached to counsels' submissions that the parties' solicitors had gone some way to resolving some requests for furtherparticulars through correspondence. The correspondence contemplated that particulars thereby provided by Mr Smedley would constitute pleadings by which the plaintiff would be bound.[70] Counsel recognised at the hearing that the informal exchange of particulars inthat way is not an adequate substitute for allegations contained in the parties'documents as filed in Court. It was agreed by counsel that the order I make should include a direction that the plaintiff incorporate into its Second Amended Statement of Claim the particulars that it has previously provided informally. Such a direction will be made.Outcome[71] Some aspects of the defendant's application are granted in the orders madebelow. To the extent that the application pursued other particulars, it is dismissed.[72] Counsel agreed that it will be appropriate that there be no order as to costs.Orders[73] I order:(a) In relation to the following paragraphs in the plaintiff's first amendedstatement of claim, that the plaintiff is to provide the following further and better particulars, to be incorporated in a seconded amended statement of claim which is to be filed and served within 15 working days:(i) paragraph 17 – further particulars of "financial difficulties";(ii) paragraph 18 – further particulars of "Mr David Sugden toldMr and Mrs Anderson ", specifying the method and time of communication;(iii) paragraph 19 – further particulars of the aspects in which theLWR Group's financial position continued to deteriorate;(iv) paragraph 24 – further particulars of who was dishonest;(v) paragraph 26 – amending the pleading of "including" toparticularise all documents relied upon by the plaintiff or to state that those listed in Schedule B are the documents; and(vi) paragraph 29(c) – (d) – further particulars identifying the individual within the plaintiff's organisation whose beliefs are alleged to constitute the plaintiff's beliefs and stating the date at which such individual/s acquired such belief.(b) To the extent that the plaintiff has previously informally provided (through correspondence) further particulars of matters not addressed in this judgment, the plaintiff shall incorporate such particulars into its second amended statement of claim.(c) Except to the extent orders are made at (a) above, the defendant'sapplication is dismissed.(d) There is no order as to costs.Associate Judge OsborneSolicitors:Anthony Harper, ChristchurchCunningham Taylor, ChristchurchCounsel: G M Brodie, Christchurch