Bhattacharya v Freedman

[2001] NSWSC 498

Supreme Court of NSW|2001-06-19|Before: Badgery-Parker AJ, Parker AJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2001-06-19

Before

Badgery-Parker AJ, Parker AJ

Catchwords

2000 NSWSC 957

Source

Original judgment source is linked above.

Catchwords

2000 NSWSC 957

Judgment (31 paragraphs)

[1]

BACKGROUND 1 The plaintiff's wife died on 15 November 1992. The plaintiff has always believed that she was poisoned; that there was a conspiracy to murder her; and a conspiracy to conceal the truth acts about her death. 2 The plaintiff instructed the defendant who is a solicitor to act on his behalf in relation to his wife's death and the conduct of those responsible. The plaintiff believes that the solicitor did not do what he was retained to do - both initially, and from time to time thereafter in relation to connected matters. 3 There is a dispute between the parties as to the precise scope of the original retainer, and in particular whether any action by the solicitor in pursuance of it was in the first place dependent upon the provision by the plaintiff of further information. 4 There is a dispute also as to whether subsequently the defendant's retainer was expanded to embrace other matters, including the detention of the plaintiff, to purportedly under the Mental Health Act, litigation to secure his release, an appeal in respect thereof made to the Court of Appeal, proceedings to compel the Coroner to hold an inquest, and an appeal in respect of that matter also. 5 From time to time the defendant has rendered bills of costs in respect of such actions as he has taken on the plaintiff's behalf and although some of the costs so billed have been paid, other amounts are outstanding. The outstanding costs have been assessed and the certificate of determination in respect thereof was filed by the defendant in the Local Court. Such filing of the certificate has the effect of the entry of judgment and in reliance thereupon, a bankruptcy notice has been issued. The plaintiff has made unsuccessful applications to set it aside.

[2]

[14]

APPEAL TO A SINGLE JUDGE 17 Within the time allowed by the rules, the appellant on 21 August 2000 filed a notice of appeal pursuant to Part 60 Rule 12, namely an appeal "To the court constituted by a single judge from whole of the written judgment of Master Malpass given on 27 July 2000". The document thus filed again very clearly reflects the fact that it was prepared by a person without legal training and without professional legal assistance. It is lengthy and discursive, and unfortunately displays a general misunderstanding of the nature of proceedings for damages in this court, the nature of the causes of action (if any) which may be available to him, and the nature of this appeal. It is a very detailed document and under the heading GROUNDS [ie of appeal] identifies twelve particular criticisms, not of the substance of the master's judgment but of the words and expressions used by the master in what was a full (and if I may say so with respect) a very fair and accurate summary of the factual background to the proceedings. I do not intend any criticism of Mr Bhattacharya when I make these observations about his notice of appeal. The skill of the trained pleader is not to be expected of a litigant in person. So long as the document filed by such adequately serves the purpose for which it is intended, the Court should extend a degree of latitude (see Rajski v Powell (1987) 11 NSWLR 522 at 524 per Kirby P). However, none of the criticisms of the Master's judgment advanced by the appellant in ground 1 is a matter of any relevance to this appeal. Even if every one of his criticisms could be made good, in the terms in which he asserts it, that would not serve to establish an error in the Master's decision. 18 The nature of such an appeal as this has been made clear in successive judgments of this Court and the Court of Appeal. The appeal is governed by section 75A of the Supreme Court Act 1970 and by subsection (5) it is provided that the appeal "shall be by way of re-hearing". The authorities establish that that is not the same as a hearing de novo. The matter proceeds on appeal upon the same material as was before the Master and "the Court shall not receive further evidence except on special grounds". In summary, the position upon such an appeal is that the Master's primary findings of fact are to be adopted unless it is demonstrated that they are flawed to such an extent as to attract review according to the principles laid down in Warren v Coombes (1979) 142 CLR 531 at 551-552. This is not a case where the Master has made crucial findings of fact which depended upon any assessment of the credibility of witnesses; for the most part the evidence is in documentary form and what is said in the affidavits is to be read in the light of what was said in the course of the cross examination. I am in as good position as was the Master to determine the questions of fact such as they are. I have considered the whole of the Master's judgment in the light of the voluminous material which was before him and I find no error in any matter of fact relevant to the decision to which he came or to the decision to which I should come. 19 The second ground of appeal asserts 12 specific errors of law. I do not propose to deal separately with any of them except those identified as (J) and (K). The others attribute to the Master decisions of law which the Master did not in fact make, nor had any occasion to make, in dealing with the motions which were before him. Some of the complaints appear to be meaningless. All of them reflect the same lack of understanding of the nature of legal proceedings as I have referred to earlier. Because the matters to which the complaints are directed were irrelevant to the Master's task, even if it could be shown that the Master has erred, in one or more of the respects asserted, no such error would invalidate his ultimate decision. The two matters which do require some attention, those identified as (J) and (K), appear to refer only to the Master's reasoning leading to the order for security for costs, and they are matters which I will refer to later.

[15]

REFUSAL OF SUMMARY RELIEF 20 The Master correctly, albeit briefly, directed himself as to the relevant law. In paragraph 10 of his judgment, he said - "The Court is faced with the extraordinary situation of both parties seeking summary relief. The Court has a discretionary power to grant such relief. The discretion is exercised having regard to the relevant circumstances of the particular case before the Court and so that justice is best served between the parties. The effect of the decided cases is to impose restriction on the exercise of the discretion (it is to be exercised only in what might be described as clear cases). The party seeking summary relief bears the onus of demonstrating an entitlement to it". 21 That brief but adequate of principle accurately stated the position in relation to a claim by a plaintiff for summary judgement pursuant to Part 13 Rule 2, which presumably was the intended basis of the plaintiff's application, and under Part 13 Rule 5 invoked by the defendant. The Master might perhaps have added, to make the position abundantly clear, a statement that summary relief should be refused unless the party seeking it is able to establish that there is no serious question to be tried. 22 The Master set out clearly and adequately his reasons for refusing the plaintiff's application in paragraph 12 of the judgment, which it is convenient to set out in full - "The material offered by the plaintiff even falls short of satisfying the formal matters required by the rules. The claim is founded on either breach of contract or breach of duty. It is rare that summary relief is granted in negligence cases. The court has always been loath to summarily intervene where questions of negligence are involved. The view has been taken that these can only really be satisfactorily resolved at trial where the court has the advantage of all the evidence. Where there is a claim for damages, the damages need to be assessed. This is not appropriate in a hearing for summary relief. On the material before the court, the plaintiff has failed to demonstrate either a clear case of liability or quantum in the sum of $1,000,000 or any other amount." 23 There is, of course, no challenge by Mr Bhattacharya to the Master's refusal of relief to the defendants, nor is that the subject of any appeal by the defendant. Nevertheless it is appropriate to note the Master's comment on the plaintiff's prospects of success in paragraph 13 of his judgment - "The material reveals that the plaintiff's case may have real difficulties. Whilst remaining doubt has prevented me from reaching the conclusion that it is clearly hopeless, the prospects of success seem to be at best very slender. Not only are there serious liability problems, there are real difficulties confronting the recovery of exemplary damages." 24 That finding was insufficient to justify the grant of summary relief to the defendant; but it was of particular relevance to the decision to grant the defendant's application for security for costs and I shall return to it in that context. 25 It is convenient to note for the sake of completeness that the master was well aware of the pleading deficiencies in the plaintiff's statement of claim, but took the view that he should not grant relief under Part 15 Rule 26, in view of the fact that the defendant had pleaded over.

[16]

SECURITY FOR COSTS 26 The Supreme Court Rules make very restricted provision in respect of security for costs and could not be invoked by the defendant in the present case. The defendant relied upon the court's inherent jurisdiction. 27 That there is an inherent power to order security for costs is now well established. It is exercised, as are the court's other inherent powers, to regulate its own practice and procedure in order to procure proper and effective administration of justice and to prevent abuse of process: Rajski v Computer Manufacture and Design Pty Ltd (1983) 2 NSWLR 122 (Court of Appeal) and at first instance (1982) 2 NSWLR 443 at 447-448 per Holland J. Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd 193 CLR 502. The master correctly summarised the relevant principles in the following brief statement - "The court has a discretion to make the orders sought. It is exercised having regard to the circumstances of the particular case before the court and so that justice is best served between the parties. The defendant bears the onus". 28 A number of cases, to some of which the master referred, have identified some particular aspects of the exercise of the relevant discretion. It is clear that the discretion should not be exercised so as to stultify litigation where the plaintiff is impecunious but has a case which he ought be permitted to pursue. The discretion is more readily exercised against a plaintiff whose impecuniosity is result of his own deliberate conduct, and particularly where it appears that the plaintiff has deliberately divested himself of his assets in order to protect them from adverse costs orders. In Morris v Hanley (unreported, Equity Division 25 August 2000; 2000 NSWSC 957; BC 200006146) Young J reviewed some of the relevant authorities in dealing with a submission that the previously understood "general rule… that poverty is no bar to a litigant" (Powell v Taylor (1885) 31 ChD 34, 38) should be replaced with a rule to the effect "that a defendant is entitled to obtain an order for security where a plaintiff is impecunious unless the plaintiff can demonstrate that he or she has suffered actual loss and damage and has a reasonably strong cause of action".

[29]

b that upon the facts found by the master, he could not properly have exercised his discretion as he did. 31 In relation to the finding that the appellant appears to be impecunious, the appellant raised a specific challenge, namely that it was an error so to find "when my cross demand for monetary claim against the Defendant is substantial". He did not otherwise suggest that the finding of impecuniosity was not open on the evidence. In my view, clearly it was. So too, having reviewed the evidence which was before the master (which I do not propose to take time to analyse in this judgment) I am satisfied that each of the findings of facts which the master made was open to him, and none should be overturned. 32 In relation to the question of impecuniosity, the submission that that finding is unjustified by reason of the potential value of the plaintiff's claim involves something in the nature of circularity. If the plaintiff's claim against the defendant is substantial and is successful, he would not become the subject of an adverse cost order in these proceedings; if his claim is indeed substantial and has good prospects of success, that would not bear upon the finding that he was impecunious, but would provide a sound reason for refusing to make an order for security notwithstanding his impecuniosity. 33 It is to be observed that although the Master found as a fact (as was clearly open on the evidence) that the appellant had divested himself of his house in 1992, the Master did not make a finding that he did so for the purpose of protecting that asset from adverse cost orders already in existence or which might subsequently be made. There was evidence before the Master as to the circumstances of the transfer, and although the Master did not expressly indicate acceptance of that evidence, the absence of a finding that the divesting was to protect the asset from adverse costs orders is consistent with the Master having accepted that evidence or at least not being satisfied that he should reject it. Nor should I. 34 The question then is whether upon the facts found by the Master but bringing into account also that he did not find that the divesting of assets was motivated by a desire to defeat adverse cost orders which might be made against him in the future, it was reasonably open to the Master to exercise his discretion as he did. 35 I am not prepared to find that the plaintiff's claim is not bona fide, in that it appears to me that, however wrong headed or even delusional he may be, the plaintiff genuinely believes that he has been wronged by the defendant and has an entitlement to damages against him. I do however accept the submission that the plaintiff's prospect of success in the action is very slender. Like Master Malpass, I am not prepared to say, having perused the material before me, that the case is hopeless. However, before the plaintiff can succeed, much will have to be done after the conclusion of the present interlocutory proceedings to put the case into a condition where it is fit to be tried. There are already outstanding costs orders in favour of the defendant; if this appeal is unsuccessful there will be another; and if the defendant is to make ready to defend the case, to prepare it for trial and then to conduct his defence at a trial, he will incur a great deal of expense with, it seems on the evidence, no prospect whatsoever of indemnification from the plaintiff if the plaintiff is ultimately unsuccessful in the litigation. 36 This is one case where the plaintiff's slight prospects of success must weigh very heavily indeed in the exercise of the discretion to order or not order security. I agree with Young J (Morris v Hanley supra at paragraph 29) that "The fact that the action will probably be stultified if any substantial order for security to costs is made is….. an extremely important factor against making an order for security for costs".

Bhattacharya v Freedman

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Catchwords

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Catchwords

Judgment (31 paragraphs)

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Cases Cited (5)