Brennand and Naughton v Hartung and Best Practice Education Group Limited t/as Blue Gum Community School [2012] ACTSC 150

Supreme Court of the ACT|2012-09-28

1. The defendants' costs of their application in proceeding dated 18 July 2012 be paid by the plaintiffs.

2. The defendants' costs of the application by the plaintiffs for extension of time under the Administrative Decisions (Judicial Review) Act 1989 be paid by the plaintiffs.

3. The statement of claim filed by the plaintiffs on 7 September 2012 be struck out.

4. The plaintiffs have leave to file and serve an amended statement of claim by 19 October 2012.

5. The defendants have liberty to apply on three days' notice in relation to the amended statement of claim.

6. The application in proceeding by the defendants dated 28 August 2012 be dismissed with costs.

7. The defendants' application in proceeding dated 18 September 2012 be dismissed with costs.

On 10 August 2012 I published reasons for making a number of interlocutory orders in this action. I need not repeat the summary there set out of the basis of the claim by the plaintiffs. I ordered, inter alia, that the action continue as if it had been commenced by originating claim, and that the plaintiffs file and serve a statement of claim. They did so on 7 September 2012.
I made no order at that time as to costs and said that I would hear submissions from the parties before doing so.
On 29 August the solicitors for the defendant filed an application in proceeding seeking orders that the plaintiffs pay the defendants' costs of the proceeding on an indemnity basis, and a further order that the plaintiffs pay the defendants' costs of the interlocutory application. This application in proceeding was made returnable for 14 September. When publishing my reasons I had already directed that the matter be listed for further directions on that date. It was accordingly unnecessary for the defendants to prepare, file and serve a further application in proceeding. There was, in addition, no basis for the making of an order for payment of the entire costs of the proceeding. The costs to be dealt with were only the costs of the interlocutory matters which I disposed of on 10 August.
On 12 September, the solicitors for the defendants filed another application in proceeding, seeking an order that the statement of claim be struck out. Both of these applications were listed before me on 14 September when they were adjourned to 21 September.
On 19 September the solicitor for the defendants filed yet another application in proceeding, asking for summary judgment in respect of the claim by the plaintiffs for damages for defamation, one of the counts in the statement of claim. They sought an abridgment of time to enable this application to be heard on 21 September. There is no issue about the abridgement, and I heard the applications on that date.
The determination of the applications requires a detailed consideration of the statement of claim, which I set out, correcting a number of typographical errors which emerged during submissions:

The plaintiffs claim damages for breach of contract, negligence and defamation. Details of the claim are as follows:

The second defendant is a body corporate capable of suing and being sued in its corporate name and style.
The second defendant operates a non-denominational, co-educational preschool, primary school and middle/high school through to Year 10.
The first defendant is the second defendant's executive director.
On 7 June 2010, the plaintiffs lodged an application for their daughter (date of birth 2 March 2006) to attend the Blue Gum Community School.
During 2011, the plaintiffs purchased a house in Watson in anticipation of their daughter attending the Blue Gum Community School.
On 1 July 2011, the defendants contacted the plaintiffs and advised that a place was available for their daughter in Year 1/ 2 commencing Term 3 on 25 July 2011 and that they should attend the school to complete an enrolment form.
On about 4 July 2011, the plaintiffs attended the Blue Gum Community School ("the school") and spoke with the first defendant, making arrangements for their daughter to attend the school.
From 4 to 7 July 2011, the plaintiffs' daughter attended the school.
On 7 July 2011 the plaintiffs submitted an enrolment form to the second defendant.
On about 11 July 2011, the first defendant met and spoke with another parent, Felicity Lewer, with a child attending the Blue Gum Community School and explained to her that "if there was a court order in place, this could make enrolment in a small community school such as [the second defendant] unworkable".
On 11 July 2011, the ACT Magistrates Court notified the second plaintiff and the first defendant that an interim personal protection order had been granted against the second plaintiff for the protection of Felicity Lewer.
On 12 July 2011, the first defendant notified the plaintiffs that she had become aware of "serious matters which made it impossible for [their] family to join the school community at Blue Gum", and withdrew the place at the school which had been offered to their daughter.
The second plaintiff subsequently engaged solicitors for the purpose of responding to and defending Ms Lewer's application for personal protection orders.
On 8 September 2011, the ACT Magistrates Court discontinued the application for a personal protection order made by Felicity Lewer on 11 July 2011, and discharged the interim orders dated 12 August 2011, and made undertakings "by consent and without admissions".
The plaintiffs' application for their daughter to attend the Blue Gum Community School was accepted by the Defendants on 1 July 2011, but the defendants breached the contract on 12 July 2011.
- (a) The plaintiffs claim specific performance of the contract for their daughter to attend the Blue Gum Community School.
The defendants owed a duty to the plaintiffs to afford them natural justice in relation to any decision affecting their rights or legitimate expectation, and the defendants negligently breached that duty.

(a) The first defendant provided unfair and biased advice to Felicity Lewer on or about 11 July 2011, which prejudiced the plaintiffs.

(b) The first defendant failed to advise the plaintiffs of the allegations and claims made by Felicity Lewer on about 11 July 2011, and failed to give the plaintiffs an opportunity to comment or respond to those allegations and claims, before advising Ms Lewer that the enrolment of the plaintiffs' daughter at the Blue Gum Community School would be unworkable if there was a court order in place against the second plaintiff.

(c) The first defendant unfairly and improperly excluded the plaintiffs' daughter from attending the Blue Gum Community School on 12 July 2011.

(d) The first defendant failed to notify the plaintiff of the reasons for her decision notified on 12 July 2011.

(e) The defendants failed to provide the plaintiffs with an avenue for making a complaint or seeking review of the first defendant's decision notified on 12 July 2011.

(f) The plaintiffs claim the following damages which were caused by the defendants' negligence as per (a) to (e) above:

(i) Economic losses -

Solicitor's costs for defending/ settling PPO $1,974

(a) The first defendant advised Felicity Lewer on about 11 July 2011, words to the effect that "if there was a Court Order in place [against the second plaintiff], this could make enrolment in a small community school . . . unworkable".

(b) The first defendant published her letter dated 7 October 2011 to the Human Rights Commission, which attached the discharged interim court orders, and included a statement that "the Naughton family is very aware of the attached court order that had been made in relation to Jon Naughton, which effectively made Emily's enrolment unworkable".

(c) The first defendant published her letter dated 28 November 2011 to the second plaintiff's solicitor to the ACT Department of Education, which included a statement that "the police were recently called by Ms Lewer following a perceived breach by Emily's family of the agreement made in court".

(d) The first defendant published her letter dated 28 November 2011 to the second plaintiff's solicitor, to the ACT Department of Education, in which she implied that the second plaintiff was a danger to the "physical safety and emotional wellbeing of [the School's] enrolled families and their children".

(e) The first defendant published her letter dated 28 December 2011 to the second plaintiff's solicitor, to the ACT Department of Education, which included a statement that "a parent had [come] to see [the first defendant] in a very distressed state, stating she is concerned for the personal safety of herself and her child" in circumstances that implied that the second defendant posed a risk to the personal safety of the parent and her child.

(f) The first plaintiff claims damages pursuant to s 139(F) of the Civil Law (Wrongs) Act 2002.

(g) The second plaintiff claims damages pursuant to s 139(F) of the Civil Law (Wrongs) Act 2002.

As to the costs of the applications which I determined on 10 August 2012, counsel for the plaintiffs submits that I should not make any order against her clients, but that if I do, I should order that the costs not be recoverable until final orders are made in the action.
Senior counsel for the defendants submits that the defendants should have an order for those costs against the plaintiffs on an indemnity basis.
I do not propose to canvass the submissions on each side in detail. It is sufficient to say that nothing advanced on behalf of the plaintiffs persuades me that the usual position should not obtain, that is, that the costs of those applications should follow the event. At the same time, nothing advanced by senior counsel for the defendants persuades me that those costs should be assessable on a more favourable basis than the usual party-and-party basis.
Counsel for the plaintiffs put forward no compelling reason why such costs as are ordered should not be payable immediately. The evidence is that the solicitors for the defendants have billed their clients for those costs, and that the defendants have paid them. The defendants are a company limited by guarantee conducting a small community school, and the principal of the school. There is a suggestion in the evidence that the school may be in some financial difficulty. The defendants are far removed from such institutional defendants as banks, insurance companies and government bodies in respect of which postponement orders as to recovery of costs have been made from time to time.
There is no evidence that either of the plaintiffs is suffering from financial hardship, and their counsel's submission as to postponement was not based on any such consideration.
The plaintiffs will accordingly be ordered to pay the defendants' costs of the application in proceeding of the defendants dated 18 July 2012, and of the application by the first plaintiff for an extension of time to apply for review under the Administrative Decisions (Judicial Review) Act 1989.
As to the application by the defendants to have the statement of claim struck out, counsel for the plaintiff concedes that there are some mistakes in the document which need to be corrected, and further informs the court that she expects that the pleadings in relation to the defamation count will require amendment after discovery has taken place.
I pointed out to counsel for the plaintiff the circular nature of this approach, in circumstances where discovery will generally not be ordered until the pleadings are closed and the issues for trial identified. Counsel foreshadowed in general terms the possibility of an application for discovery prior to the close of pleadings. This would be an unusual order but I do not dare say that it could never be justified.
The pleadings seem to me to have a number of defects over and above the superficial errors as to parties, dates and other minor matters.
The causes of action pleaded are breach of contract, negligence and defamation. As to contract, the contract sued upon is not described or explained in adequate detail for the defendants to plead to it, or for the court to understand the case for the plaintiffs. If this count is to be pursued it will be necessary for the plaintiffs to be specific as to whether the contract is express or implied, oral or written, with any written portions clearly identified, times and places of the making of the contract, and by whom on behalf of each of the parties. Unless the entire contract is contained in a single document such as a deed, which I apprehend not to be the position here, the terms of the contract should be pleaded in detail.
I adopt and repeat what fell from Refshauge J in Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20 at paragraphs 24 to 35, as to the importance and function of pleadings. The manner in which the contract count has been pleaded is inadequate and will have to be amended if the plaintiffs are to pursue this count.
The negligence count is an unusual one and in the circumstances also requires amendment if it is to proceed. There is no claim for bodily injury to either plaintiff, or physical damage to their property. The claim is one for damages for economic loss and for pure mental harm. Claims for pure mental harm are governed by Part 3.2 of the Civil Law (Wrongs) Act 2002, and are effectively limited to claims for recognised psychiatric illness: s 35. No such illness of the part on either plaintiff is pleaded.
The provisions to be applied by a court in determining whether a defendant was negligent are set out in Chapter 4 of the Civil Law (Wrongs) Act 2002. There are recognised relationships out of which negligence claims come before the court with such frequency that the Court Procedures Rules 2006 makes specific provision for them. The relationships include those of employer to employee, motorist to fellow road-user, and occupier of premises to entrant, in the context of claims for personal injury. In circumstances where there is no such familiar relationship between the parties a plaintiff will need to set out in the statement of claim the facts which will be relied upon to establish the relationship giving rise to the duty of care.
In the statement of claim presently under consideration, the plaintiffs have not pleaded that the defendants, or either of them, owed them a duty breach of which might cause them economic loss or mental harm. What it alleges is a duty to afford them natural justice in relation to any decisions affecting their rights or legitimate expectations. This is terminology more familiar in the administrative law context. Paragraph 16 of the statement of claim does not contain enough information to form the basis of a determination by a court that the relationship between the defendants and the plaintiffs was such as to give rise to a duty of care, or that the claim falls within one of the recognised categories of negligence. If the negligence claim is to be pursued it should be pleaded fully so as to deal with those issues adequately, for the dual purposes of informing the defendants of the case they are to meet, and enabling the court to understand the nature of the claim made.
Clause 17 of the statement of claim sets out the defamation counts. The defamation claims are made against the first defendant only, and arise from an unidentified communication to Ms Lewer, a letter to the ACT Human Rights Commission and letters to the ACT Department of Education. In relation to each communication the pleading extracts a single sentence from the letter. The extracts are quiet inadequate to enable a person reading the statement of claim, and unfamiliar otherwise with the background, to understand what is alleged to have been said, and how it is alleged to have been defamatory. Generally in the case of a letter said to have been defamatory, a plaintiff will be expected to plead the whole letter (not necessarily in the body of the statement of claim but perhaps by annexure). The plaintiff will also be expected to set out clearly the implications said to arise from the words used. Where there are two plaintiffs, the imputations claimed may need to be set out separately in relation to each plaintiff unless there is clearly no basis for differentiation between them.
Senior counsel for the defendants submits that the plaintiffs cannot succeed on any of these claims and that summary judgment should be entered for the defendants. The principles to be applied on such an application were set out by Jagot J in Galovac Pty Ltd v Australian Capital Territory [2010] ACTSC 132 at paragraph 5. I am not at this point satisfied that the plaintiff's claims are hopeless or that all of them must inevitably fail. I propose to allow the plaintiffs a further opportunity to get the statement of claim in order. I do not rule out the possibility that it will become apparent when the plaintiffs' claims are properly pleaded that one or more of the counts will be exposed as incapable of succeeding. That point has not been reached and may not be.
I propose to allow the plaintiffs a further 21 days to file and serve an amended statement of claim, following which the defendants will be at liberty to apply on three days' notice if so advised for any further orders about the statement of claim before being required to plead to it.
The challenge by the defendants to the statement of claim was justified. The plaintiffs will have an order for the costs of their application dated 12 September 2012. I am not satisfied that they have made out a case for those costs being assessed on anything other than the usual basis.
As to the application in proceeding by the defendants dated 28 August 2012, I take the view that that application was unnecessary. That application will be dismissed with costs.
The application in proceeding of the defendants dated 18 September 2012 has been unsuccessful, and a separate application was in any event unnecessary. There was no reason why the defendants, if so advised, could not have sought summary judgment in the application of 12 September. The application in proceeding dated 18 September 2012 will also be dismissed with costs.
The plaintiffs have thus far not been represented by a solicitor, but have been represented on the hearing of the applications by counsel, who has been engaged in some correspondence on their behalf with their solicitors. I have no doubt that they have saved some money by not engaging a solicitor, but they have, it seems to me, placed themselves in a position of some disadvantage by their decision not to impose a solicitor between themselves and their barrister. If they are to proceed with this action, particularly if it is to proceed to hearing, they would be acting prudently by engaging a solicitor or firm of solicitors.

I certify that the preceding twenty seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Solicitors for the defendants: Meyer Vandenberg Lawyers

Decisions (Judicial Review) Act 1989

Law (Wrongs) Act 2002

Procedures Rules 2006

Decisions (Judicial Review) Act 1989

Law (Wrongs) Act 2002

Procedures Rules 2006

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