Altrad Australia Pty Ltd v Dropulich (No 3)

This decision came from an ongoing Federal Court commercial dispute, not a final trial. The applicants alleged that representations had been made in Valmec annual reports, financial statements and other financial documents about EBITDA, trade creditor liabilities, and trade and other payables across the 2018 to 2021 financial years. They also alleged that some Valmec financial statements failed to give a true and fair view of the company’s financial position and performance.

The immediate fight was narrower. Mr Harveer Singh, the third respondent, asked the court to order the applicants to provide further and better particulars of several allegations in their second further amended statement of claim. In plain terms, he said the applicants had identified totals and conclusions, but had not yet identified the transactions and accounting basis needed for him to understand how the case would actually be proved.

The court therefore had to decide a practical litigation question: at this stage of the proceeding, what level of detail was needed to give Mr Singh fair notice of the case he had to meet?

The procedural background was important to the result. This was the second interlocutory dispute about the statement of claim. An earlier application by Mr Singh and Mr Dropulich to strike out an earlier version of the pleading had already been dismissed in April 2025.

After that earlier hearing, the court made case management orders requiring parties, except in urgent cases, to confer in person before filing an interlocutory application. A short note confirming that conferral had occurred also had to be filed with any application. Mr Singh did not comply with those orders before bringing this particulars application.

The judge was critical of that failure. The reasons say that, absent later consent orders allowing the matter to be dealt with on the papers, the non-compliance would have been sufficient reason to dismiss the application with costs. The court also said that proper in-person conferral would likely have narrowed the dispute and may have avoided the need for the application altogether.

For business readers, this is a reminder that procedural discipline matters. Even if you have a legitimate complaint about the other side’s pleading, ignoring case management directions can weaken your position.

The judgment quotes the relevant pleaded allegations. They included claims that Valmec’s EBITDA for FY21 was less than $12 million and had been overstated, and that trade creditor liabilities at 30 June 2021 were understated by at least a specified amount. The pleading also alleged that trade and other payables for FY18, FY19 and FY20 were understated by identified amounts.

Some of those allegations were linked to claims that annual reports or financial statements failed to give a true and fair view of Valmec’s financial position and performance. The judgment specifically refers to allegations concerning the 2019 and 2020 annual reports, and to the applicants’ broader case that financial statements in the 2019, 2020 and 2021 financial years contravened certain Corporations Act requirements.

Mr Singh’s complaint was not that he could not understand the broad accusation. He could see that the applicants were alleging overstatement of EBITDA and understatement of liabilities or payables. His complaint was that he still did not know the mechanics of the case. He said it was unclear why the trade creditor liabilities or trade and other payables were said to be understated, whether the case was limited to liabilities not recorded in the accounts, and if so which trade creditors or transactions were actually in issue.

That distinction matters in commercial litigation. A party may know the conclusion being alleged against it, but still not know the path by which the other side intends to prove that conclusion.

The judgment gives a useful explanation of a pleading concept that often confuses non-lawyers. The court said there is a difference between pleading material facts and providing particulars of those facts. Broadly, material facts tell the other side what facts are to be proved. Particulars tell the other side how those facts are to be proved.

In business terms, a material fact might be an allegation that trade and other payables for a financial year were understated by a certain amount. Particulars are the supporting detail that shows how that allegation will be made good, such as the transactions relied on, their dates, their amounts, and the reason they should have been included or treated differently.

The court also made an important procedural point. The level of detail needed for fair notice is not fixed. It depends on the nature of the case, the allegations made, the detail already provided, other pre-trial steps, and the stage the proceeding has reached. A pleading may be detailed enough to survive an early strike-out challenge, but still not detailed enough later for the opposing party to conduct its case properly without further particulars.

That is exactly what happened here. The applicants argued that the court had already accepted the basic adequacy of similar allegations when the earlier strike-out application failed. The judge rejected the idea that this ended the matter. The earlier ruling dealt with whether the pleading could stand at all. This application dealt with whether, at a later stage, more detail was now required so the respondent could fairly defend the case.

The court looked closely at the stage the proceeding had reached. Since the earlier strike-out ruling, defences had been filed, discovery had been given, attempts had been made to agree common expert briefs, and a trial had been listed and then vacated to accommodate recent amendments to the statement of claim. The judge said that a significant amount of water had passed under the bridge and that the applicants should now be able to say more about how they intended to prove their case.

The court did not accept every complaint made by Mr Singh. It rejected his argument that it was unclear whether the alleged overstatement of EBITDA in 2018 and 2021 might rest on reasons other than understatement of liabilities or payables. The judge said it was tolerably clear from the relevant paragraphs that the only basis given for the overstatement of EBITDA was understatement of trade creditor liabilities and trade or other payables.

The court also rejected the idea that Mr Singh could do nothing but deny the allegations. Because he had pleaded that he was Valmec’s company secretary and chief financial officer during the relevant period, and that he was a certified public accountant, the judge said he should have direct knowledge of how the financial statements and related documents were prepared, what accounting policies and standards were used, and whether they were applied correctly. The court also noted that expert reports would later provide fuller particulars.

Even so, the judge accepted the core point. The current level of particularity was not adequate for Mr Singh to know why the trade creditor liabilities or trade and other payables were said to be understated. Without that information, he could not know how the applicants intended to prove the case against him. It was also difficult to see how he could plead a positive defence specifically to those allegations or narrow the issues through a more targeted response.

The court said it was not reasonable, and not consistent with the overarching purpose of civil procedure, for a party to remain unaware for an extended period of how the case would be proved against them and to have to wait until expert evidence arrived before receiving fair notice.

The court granted limited relief. It ordered the applicants, by 4.30 pm AWST on 10 June 2026, to serve on Mr Singh particulars of the allegations pleaded in paragraphs 48, 48A, 48B, 48C, 52D and 52I of the second further amended statement of claim filed on 19 December 2025.

Those particulars had to include two things. First, a list of each transaction, described by date, nature and amount, alleged to comprise part of the total amount by which trade creditor liabilities or trade and other payables were said to be understated in each relevant paragraph. Secondly, the basis upon which, or reason for which, those liabilities or payables were said to be understated.

The court did not give Mr Singh everything he asked for. Apart from those particulars, his interlocutory application was dismissed. There was no order as to costs. The judge linked that costs outcome to Mr Singh’s non-compliance with the earlier case management orders about conferral before filing interlocutory applications.

The result therefore reflected both sides of the dispute. Mr Singh was right that he needed some additional detail. But he was wrong in the breadth and form of the requests he made, and his own procedural non-compliance affected the costs position.

If your business is involved in a dispute about financial statements, earn-out calculations, acquisition pricing, warranties, or alleged misleading financial representations, this case is a practical warning against relying only on summary allegations. Courts may expect a party to move from totals to transactions once the case has progressed.

For claimants, the lesson is preparation. If you allege that EBITDA was overstated or liabilities were understated, you should expect to identify the transactions said to make up the problem and explain the accounting basis for your position. If you cannot do that, you may face delay, extra cost and court-ordered particulars.

For defendants, the lesson is to test whether you have fair notice of the case you must meet. Ask whether the pleading tells you only the conclusion, or whether it also tells you enough about the transactions and accounting reasoning to let you admit, deny, explain, or positively respond.

For finance teams, the case reinforces the value of records that connect reported figures to source transactions, invoices, journals, policies and supporting documents. In a later dispute, that trail can be critical.

For anyone already in litigation, there is also a process lesson. Follow conferral and case management directions carefully. A party can have a valid point on particulars and still lose leverage on costs or court sympathy by ignoring procedural orders.

These steps are especially relevant where a dispute turns on EBITDA adjustments, unrecorded liabilities, payables recognition, or whether financial statements gave a true and fair view. The earlier the accounting theory and the legal theory are matched, the less likely it is that the case will be sidetracked by pleading disputes.

This page is based on the Federal Court of Australia decision in Altrad Australia Pty Ltd v Dropulich (No 3) [2026] FCA 619, decided by Feutrill J on 20 May 2026. The matter was determined on the papers.

It should be read as an interlocutory ruling about further and better particulars, fair notice and case management. It should not be read as a final determination of the underlying misleading conduct or financial reporting allegations.