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[2014] WASC 314
General information, not legal advice.
Supreme Court of WA
2014-09-09
Original judgment source is linked above.
9 Although it is nowhere stated in the affidavit evidence, it can be inferred from the fact this application has been made and the general tenor of the affidavit evidence, the plaintiffs want to take proceedings against the first defendant. It would seem the first plaintiff, and through it the second plaintiff, are, at present, prevented from acting as a finance broker occasioning both plaintiffs financial loss. The plaintiffs apparently believe the only way to rectify the position is to take some proceedings against the first defendant and perhaps others.
10 The plaintiffs have made some enquiries of the first defendant. On 1 February 2013 the plaintiffs' solicitors wrote to the first defendant effectively asking why his relationship with the first plaintiff was terminated. A copy of that letter is attachment G to the second plaintiff's first affidavit. The second plaintiff wrote back pointing out there was no contractual relationship between the plaintiffs and the first defendant. On 30 August 2013 the plaintiffs' solicitors wrote again to the first defendant setting out the plaintiffs' complaints in rather more detail and asking for a number of documents. That letter appears not to have drawn a response. In the circumstances I am satisfied the plaintiffs have made reasonable enquiries. I am also satisfied the plaintiffs have not been able to obtain sufficient information to enable a decision to be made as to whether to commence or take proceedings.
11 In my view there are reasonable grounds for believing the first defendant has in its possession documents which may assist in making the decision whether to take proceedings. It is clear from the documents there has been some interactions between the first and second defendants and SJFC. What is clear is an application for finance was lodged by the plaintiffs on behalf of Mr Thoms. Consideration of that application led directly to the termination of the plaintiffs' business arrangements with the second defendant and SJFC.
12 In summary then I am satisfied the four conditions necessary to justify an order being made were satisfied.
13 The further question is whether or not the plaintiffs may have a cause of action against the first defendant. Relying upon GLR Injection Technologies Pty Ltd v Forton Automative Treatments Pty Ltd [2009] WASC 131 the authors of Civil Procedure Western Australia [26A.4.1] set out seven criteria which an plaintiff must satisfy. They are:
14 It is the first of these criteria which the plaintiffs, in my view, were not able to satisfy. In his written submissions counsel for the plaintiffs identified what he saw as four potential causes of action. They were:
15 It is important to bear in mind when considering what cause of action the plaintiffs may have against the first defendant there was no contractual relationship between either of the plaintiffs and the first defendant. It would appear the first defendant had some contractual relationship with the second defendant. In a letter of 25 January 2013 from the first defendant to the second plaintiff reference is made to an 'Intermediary Agreement between the Commonwealth Bank and Australian Finance Group Pty Ltd': see attachment B to the second plaintiff's first affidavit. It would also seem there was a contractual relationship between the plaintiffs and SJFC. Although it is not possible to be sure from the documentation, it is likely there is some form of contractual arrangement between SJFC and the second defendant. But none of that creates any contractual relationship between the plaintiffs and the first defendant, and nothing in the plaintiffs' submissions suggest otherwise.
16 It has sometimes been said there is virtually no situation in respect of which a declaration cannot be made: see Meagher RP, Heydon JD and Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4th ed) [19075]. But it is difficult to see here how a declaration might arise. How, for instance, would such a declaration be formulated. There may well be issues between the plaintiffs, SJFC and the second defendant. But none of that feeds into a cause of action as between the plaintiffs and the first defendant. It is not possible to identify any legal or equitable right available to the plaintiffs which has been infringed by the first defendant. So the mere claim the plaintiffs intend to seek a declaration is not, in my view, sufficient to ground this application.
17 There are, in general terms, four elements to a cause of action for an injurious falsehood. They are:
See Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; [2001] 208 CLR 388 [52].
18 In this case there is no evidence of any statement being made by the first defendant, false or otherwise, concerning the plaintiffs. There is also no evidence of publication of that statement by the first defendant to a third person. If that is not enough there is certainly no evidence of malice on the part of the first defendant. At least three of the four elements of the cause of action are missing such as to make it unlikely a claim for injurious falsehood could succeed.
19 The tort of unlawful interference is 'embryonic' and difficult to define: see Hardie Finance Corp Pty Ltd v Ahern [2010] WASC 403. But it would appear the tort has at least three aspects. They are:
20 The state of the evidence presented by the plaintiffs does not satisfy any of these requirements. There is nothing to suggest whatever was done by the first defendant was in some way an unlawful act that was forbidden by the law. There is no evidence that any act taken was calculated to cause harm. Finally, it is possible to see how negligent acts on the part of the first defendant might cause loss to the plaintiffs. That being so it is doubtful whether the tort of unlawful interference would be available to the plaintiffs.
21 Finally there is the tort of conspiracy. The essential elements of such a cause of action are:
22 The plaintiffs have not provided evidence to satisfy the first three of these requirements and, consequently, have not satisfied the fourth. I need not go through each of the requirements in turn. It is sufficient if I say there is simply no evidence at all to justify such a cause of action.
23 Although it was not specifically advanced by the plaintiffs, it is possible to envisage a scenario consistent with the limited material available which might give rise to a cause of action in negligence. If it were the case the loan application was submitted to the first defendant and the first defendant negligently dealt with the application, formed an adverse view of the plaintiffs' honesty and accordingly put in chain a sequence of events which caused the plaintiffs' loss, then a cause of action may arise. But to put the position that way is to highlight the lack of any evidence in this case which would justify concluding such a cause of action may lie. Surely the place to start was with SJFC or perhaps the second defendant. Both have a much closer relationship with the plaintiffs than the first defendant. It would seem the plaintiffs have started at the wrong end of the chain.
24 Having said all of that I am in no way suggesting the plaintiffs do not have reason for complaint. After all, RISQ were asked to investigate the circumstances which led to the plaintiffs' contractual agreement with SJFC being terminated. They concluded there was no basis for such termination. RISQ's investigation took some eight months so presumably it was thorough. Perhaps there are some grounds for a contractual claim by the plaintiffs against SJFC. But on the state of the evidence at the moment there appears to be no prospect of taking proceedings against the first defendant.
25 For these reasons I dismissed the plaintiffs' motion. The plaintiffs should pay the defendants' costs of the application, including reserved costs to be taxed.
8 Based upon the decision in The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 2] [2008] WASC 147 the authors of Civil Procedure Western Australia [26A.4.0] set out four conditions which are necessary to justify the making of an order. They are: