Batterham v Clayton Utz Partnership

Introduction 1 This is an application for leave to appeal from a judgment of a judge of the Court in which the claims brought by the applicant, Mr Batterham, against the three respondents were all summarily dismissed. These reasons assume familiarity with the reasons of the primary judge which are published as Batterham v Clayton Utz Partnership [2022] FCA 360 (PJ). 2 It is not in dispute that leave to appeal will only be granted if the decision from which leave to appeal is sought is attended by sufficient doubt to warrant the grant of such leave, and that substantial injustice would result from a refusal of such leave: Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397. 3 Mr Batterham was self-represented before the primary judge, including in drafting the statement of claim and the amended statement of claim, and he is self-represented in the proceeding before me. It is apparent that Mr Batterham struggled to meaningfully articulate his claims in the proceeding before the primary judge, and he has struggled to meaningfully articulate the grounds on which he relies in seeking leave to appeal. I have done the best that I can in identifying and understanding the errors that he says that the primary judge made.

Background 4 The relevant background to the claims which Mr Batterham sought to assert against the three respondents in the now dismissed proceeding from which he seeks leave to appeal is extensive, stretching back to 1999 and involving many different proceedings in a number of different courts in the intervening period. The background is summarised at PJ[12]-[64]. Save for some detail at PJ[41] which is not presently relevant, Mr Batterham's draft notice of appeal does not take issue with any part of that summary. 5 The claims that Mr Batterham wishes to pursue against the respondents are summarised at PJ[103]-[126]. Again, Mr Batterham's draft notice of appeal does not take issue with any part of that summary. For present purposes, the pleaded claims against the respondents can be further identified as follows.

The asserted claims against Clayton Utz (the first respondent) 6 Mr Batterham pleads that he commenced proceedings referred to as the QSR Proceedings, which were commenced in June 2003 in the New South Wales Industrial Relations Commission and which were ultimately dismissed by the High Court in Batterham v QSR Ltd [2006] HCA 23; 225 CLR 237, on the advice of Clayton Utz. He complains that Clayton Utz wrongly advised in relation to those proceedings. 7 Shortly before the matter was heard in the High Court, Mr Batterham terminated Clayton Utz's retainer to act for him, and retained Turner Freeman, the second respondent. Mr Kenzie QC, who had previously been briefed by Clayton Utz, continued to appear for Mr Batterham. Turner Freeman later claimed costs from Mr Batterham, both for itself and for Mr Kenzie QC. The claim for costs was assessed by a Costs Assessor, who determined that Mr Batterham was liable to Turner Freeman for Mr Kenzie QC's fees. Turner Freeman subsequently obtained a judgment in the Local Court in respect of those fees, which then became the basis for Mr Batterham's estate being sequestrated in November 2014. Mr Batterham's various attempts to resist bankruptcy, including by seeking to set aside the bankruptcy notice that was issued against him on the application of Turner Freeman and subsequently seeking review of the sequestration order, all failed. 8 Mr Batterham previously asserted a claim against Clayton Utz in respect of its conduct of the QSR Proceedings. That claim was settled and a Deed of Release that was signed by him in December 2007. He pleads that he was ignorant at the time of signing the Deed of Release that he might be made bankrupt by reasons of costs invoiced to him by Turner Freeman on behalf of counsel engaged and briefed by Clayton Utz to appear in the High Court. 9 Mr Batterham pleads that Clayton Utz breached ss 18 (misleading and deceptive conduct) and 21 (unconscionable conduct) of the Australian Consumer Law (ACL) in its conduct of the QSR Proceedings. He does not particularise the conduct amounting to the breaches, other than to refer to the High Court judgment and a letter of complaint by his then solicitors, Hunt & Hunt, to Clayton Utz dated 14 December 2007. It was that complaint that led to the Deed of Release.

The asserted claims against Turner Freeman (the second respondent) 10 Mr Batterham pleads that Turner Freeman engaged in misleading and deceptive conduct by representing to the Costs Assessor that: (1) it had instructed Mr Kenzie QC in the High Court in circumstances where it did not provide a brief to Mr Kenzie QC or enter into a costs agreement with him; and (2) Mr Batterham had instructed Turner Freeman to represent him in the High Court, rather than merely attend the hearing to provide administrative assistance. 11 Mr Batterham then pleads that for Turner Freeman to cause his bankruptcy nine years after the High Court hearing was unconscionable. He pleads that his bankruptcy made it effectively impossible to continue the mergers and acquisitions business that he had conducted for over 20 years which prevented him from earning an income. Additionally, he pleads that it stymied proceedings that the Batterham Retirement Fund (BRF), his self-managed super fund, brought in the New South Wales Supreme Court in April 2016 against Marcel Nauer, represented by Stephen Rush (the third respondent) a director of Esplins Pty Ltd. On that basis it is said that Turner Freeman breached ss 18 and 21 of the ACL.

The asserted claims against Stephen Rush (the third respondent) 12 Mr Batterham's amended statement of claim (ASOC) refers variously to Mr Rush and Esplins and the third respondent is described as "Stephen Rush Director Esplins Pty Ltd". No technical point was taken in relation to this on behalf of Mr Rush and the primary judge proceeded on the basis that the conduct alleged against Esplins is also alleged against Mr Rush. 13 The claim against Mr Rush is said to arise from his position as a director and legal advisor to Vesture Ltd. 14 Various allegations are made in relation to Mr Rush, over a period between 2008 and 4 July 2011. 15 It is alleged that Mr Rush "before and after 17 February 2011" conspired with Mr Nauer (a director of Vesture) and a Mr Zuellig to draft two agreements that "knowingly financially disadvantaged" the BRF and Mr Batterham. 16 It is alleged that this conduct was in breach of s 184 of the Corporations Act 2001 (Cth) on the basis that by those actions Mr Rush assisted Mr Nauer to secretly cause agreements to be entered into that knowingly disadvantaged BRF of its equitable interest in the proceeds of Vesture purchasing the assets of Ztrata Capital Ltd (ZCL) and intentionally removing the bargaining power of BRF "in the shareholder agreement entered into between [Vesture] and ZCL drafted by Esplins". 17 Further matters involving Mr Rush and/or Esplins are set out in the ASOC, culminating in the drafting of a Settlement Deed dated 4 July 2011. 18 It is alleged that Esplins used "subterfuge" in drafting the Settlement Deed to "attempt to secretly provide immunity for Nauer for his wrongdoing". This behaviour is described as unconscionable. 19 It is pleaded that Mr Rush had knowledge of the contravention and assisted in creating documents to enable it as detailed in the ASOC. It is said that Mr Rush and Esplins breached ss 18, 21 and 236 of the ACL. 20 Given the confusing and narrative way in which the claim against, in particular, Mr Rush is presented in the ASOC, it is helpful to quote from the amended originating application which expresses the essence of the claim: 6. The Third Respondent breached s 18, s 21 and s 236 of the Competition and Consumer Act 2010 by knowingly aiding and abetting his client to breach s 184 of the Corporations Act 2001 and drafting various documents on behalf of his client that he knew had the express intent to disadvantage the Applicant's Self Managed Super Fund (SMSF) and the Applicant as its sole beneficiary to the benefit of his client as detailed in the Statement of Claim. 7. In August 2017 the Third Respondent filed a motion to dismiss the April 2016 proceedings before being heard for want of due dispatch based on SMSF not being a proper party to instigate the April 2016 proceedings due to the Applicant's bankruptcy in November 2014 and have costs awarded against the Applicant personally. This Motion was successful and stymied any action against his client for his wrongdoing aided and abetted by the Third Respondent. 21 The documents referred to in [6] of the amended originating application include the Settlement Deed on 4 July 2011, and otherwise all precede that date.

The relief claimed 22 The relief claimed in the ASOC, which does not differentiate between the different respondents but rather asks that the Court apportion the relief between the respondents "as appropriate", is put as follows: (a) The loss of $1,653,758 for the value of SMSF's ZCL shares for which SMSF received no compensation, plus the imputed increase in value of these shares since September 2013 or interest, whichever is the greater. (b) Compensation for costs orders in the amount of $168,595.52 that remain outstanding and cannot be paid. (c) Compensation for stress and anxiety the respondents imposed on the Applicant over many years by their wrongdoing and the loss of future income as a promoter of private equity opportunities after Batterham became bankrupt. 23 The relief claimed is put in essentially the same way in the amended originating application. The relief is expressly claimed under s 236 of the ACL (actually, the Competition and Consumer Act 2010 (Cth), although clearly the ACL was intended which is the basis on which the primary judge dealt with the matter and which Mr Batterham does not contest).

The primary judge's reasons 24 The primary judge summarised his Honour's conclusions on the summary dismissal applications as follows (PJ[10]): I am satisfied that the claims pleaded by Mr Batterham in the AOA and the ASOC disclose no reasonable cause of action, fail to articulate any coherent basis on which the loss and damage alleged can be attributed to the respondents, can fairly be characterised as an abuse of process, are time barred, precluded by the doctrines of res judicata and issue estoppel and in the case of Clayton Utz are also precluded, at least in part, by a deed of release. Further, I am satisfied that to the extent that any cause of action might have been available to Mr Batterham in respect of the alleged loss of future income as a promoter of private equity opportunities it would have vested in his trustee in bankruptcy on the making of the sequestration order against him. 25 From that summary, it is apparent that each of the claims was summarily dismissed on a variety of independently sufficient grounds. That presents a formidable obstacle to Mr Batterham, because in respect of each respondent he has to show sufficient doubt in respect of each independent ground for dismissal such that the proceeding against the particular respondent might be regarded as sufficiently viable to justify leave to appeal being granted. 26 Mr Batterham's draft notice of appeal, and the submissions that he has filed in support of it, essentially re-argue the case that was before the primary judge. The draft notice does not state, "briefly but specifically", the grounds relied on in support of the prospective appeal as required by r 36.01(2)(c) of the Federal Court Rules 2011 (Cth). I have nevertheless carefully considered what has been submitted. For the reasons that follow, I am not satisfied that the judgment of the primary judge is attended by sufficient doubt so as to warrant leave to appeal being granted.

The claims are statute-barred 27 As mentioned, the claims against each of the respondents were dismissed on a number of independent grounds. Only one of these has to be attended by insufficient doubt for leave to appeal to be refused. I am satisfied that all the claims are statute-barred and that there is insufficient prospect of another court coming to a different conclusion on that point such as to warrant leave to appeal being granted. It is therefore unnecessary to deal with Mr Batterham's proposed challenges to the other grounds on which the claims were summarily dismissed, although having looked at them I am not satisfied that they have any merit. 28 By s 236(2), a claim for damages under s 236 of the ACL must be brought within 6 years after the date on which the cause of action accrued. The proceeding before the primary judge was commenced on 5 August 2021. The result is that Mr Batterham's causes of action, all of which are expressed as relying on s 236 of the ACL, had to have accrued on or after 4 August 2015 so as to not be statute-barred. 29 I pause here to note that the claim asserted against Clayton Utz could only be under the provisions of the Trade Practices Act 1974 (Cth) (TPA) and not under the ACL as the conduct of Clayton Utz complained of occurred in December 2007 at the latest. Putting to one side the issue that the equivalent provisions of the TPA applied only to corporations, which in turn raises a question as to the availability of federal jurisdiction, the action against Clayton Utz for breach of those provisions would be a claim for damages under s 82 of the TPA and not under s 236 of the ACL: see item 7 of Sch 7 of the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 (Cth). By s 82(2) of the TPA, the same six-year limitation applies. 30 The foundation for the loss Mr Batterham claimed as having been suffered in relation to the ZCL shares is described at PJ[196]. The date on which the diminution in the value of the ZCL shares crystallised was 4 July 2011, being the date of the Settlement Deed. There was no error in the finding to this effect at PJ[197], which is in any event not challenged in the draft notice of appeal. Any cause of action arising from that loss accrued on 4 July 2011. It was therefore statute-barred approximately four years before the proceeding was commenced. That is true of the claims against each of the respondents. 31 In relation to any alleged loss relating to Mr Batterham's bankruptcy, including the loss of future income as a promoter of private equity opportunities and any stress and anxiety, it is not at all clear whether such losses would arise from separate causes of action against each of the respondents. Insofar as they do, those causes of action would have accrued on the date of the making of the sequestration order, being 13 November 2014. Accordingly, any claim for such loss was also statute-barred at the time the proceeding was commenced: see PJ[200]-[201]. 32 It is no answer for Mr Batterham to rely upon an asserted loss allegedly "realised" on 6 November 2017 (being the date on which Slattery J dismissed the Supreme Court proceedings for want of due dispatch - see PJ[53]). This is apparently the point made in the draft notice of appeal at [24]. Where the incurring of damage is an essential element of a cause of action, as it is here in an action under s 236(1) of the ACL, the suffering of some damage (the other elements of the cause of action having already occurred) will, in general, start time running. That is when the action accrues. The running of time is not suspended until all the alleged damage which will be suffered has ceased to flow, nor does further damage constitute a fresh cause of action. See Jobbins v Capel Court Corp Ltd [1989] FCA 801; 25 FCR 226 at 228 per Davies, Burchett and Hill JJ. 33 In short, each of the discernible causes of action accrued more than six years before the proceeding was commenced. That is what the primary judge concluded, and Mr Batterham has not established any particular doubt as to the soundness of that conclusion. 34 Summary judgment may be entered or a statement of claim may be summarily dismissed because the causes of action or time-barred "in the clearest of cases": Wardley Australia Ltd v State of Western Australia [1992] HCA 55; 175 CLR 514 at 533 per Mason CJ, Dawson, Gaudron and McHugh JJ. I accept that this is such a case. There is no claim articulated by Mr Batterham which is not statute-barred. In those circumstances, there was no error in the primary judge summarily dismissing the claims brought by Mr Batterham against the respondents. 35 On that basis, I am satisfied that the primary judgment is not attended with sufficient doubt to warrant the grant of leave to appeal.

Disposition 36 The application for leave to appeal must be refused with costs I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.