Dunstan v Highman and Ors [2010] ACTSC 133

3. The circumstances in which Mr Dunstan ceased to work for the ATO have given rise to numerous proceedings, including the prosecution and conviction of Mr Dunstan for sending 22 letter bombs to various people apparently connected with those circumstances (including the first, second and fifth defendants to these proceedings). Mr Dunstan's various claims in the earlier proceedings have not been substantiated. Those proceedings, in consequence, have all been dismissed. This is the background against which the present proceedings are brought

4. The defendants to the present proceedings contend that summary judgment should be granted against Mr Dunstan under r 1147 of the Court Procedure Rules 2006 (ACT). The grounds on which the defendants rely for summary judgment are that the proceedings: - (i) in whole or part are statute barred by expiry of the limitation period, (ii) are precluded from being maintained by reason of Anshun estoppel (Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589), and (iii) are vexatious and frivolous.

5. If established, the grounds on which the defendants rely enable summary judgment to be entered against Mr Dunstan. Rule 1147(2) provides that:

The court may give judgment for the defendant against the plaintiff for the plaintiff's claim for relief (or part of it) if satisfied -

(a) that the claim (or part of it) is frivolous or vexatious; or

(b) that there is a good defence to the claim (or part of it) on the merits; or

(c) that the proceeding should be finally disposed of summarily or without pleadings.

1. In Galovac Pty Limited v Australian Capital Territory [2010] ACTSC 132 at [5], I

identified the principles applicable to summary judgments as follows:

(1) The party seeking summary judgment faces a "very high threshold" (Financial Integrity Group Pty Limited v Farmer [2009] ACTSC 143 at 12).

(2) The lack of a cause of action must be "clearly demonstrated" (General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129).

(3) The procedure calls for "exceptional caution" (General Steel at 129).

(4) The necessity for argument, even extensive argument, is no bar.

However, as soon as it appears that there is a "real question" to be determined on which relief depends, the summary judgment procedure is not available (General Steel at 130 citing Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91).

(5) Mere implausibility of the claim or improbability of success is insufficient; there must clearly be no real question to be tried in the sense that the claim is bound to fail (Seven Network Ltd v News Ltd (No 4) (2005) 214 ALR 686; [2005] FCA 244 at [14] citing Lonrho Pic v Fayed (No 2) [1992] 1 WLR 1 (Ch D) at 5; [1991] 4 AllER 961 at 965).

(6) The application is to be assessed on the assumption that every fact pleaded by the plaintiff is true (West v State of New South Wales [2007] ACTSC 43 at [9]).

(7) The application must be determined on the substance, not the mere form or expression, of the claim (Financial Integrity Group at [15]).

1. The defendants in the present proceedings took issue with (6) above, citing Financial Integrity Group Pty Ltd v Scott Farmer and Bravium Pty Ltd [2009] ACTSC 143 as authority for the proposition that an affidavit stating facts contrary to part of Mr Dunstan's pleading should be taken into account.
2. In Financial Integrity Group at [17]-[18], Refshauge J merely rejected a submission that the principle identified in (6) above made inadmissible evidence in support of the application. At [19], Refshauge J cautioned that the admissibility of evidence to support a defendant's application for summary judgment:

. . . is not designed to encourage, or perhaps even permit, the court to adjudicate on matters of fact... The courts have made it clear that it is inappropriate to proceed to summary judgment where there is a conflict on matters of fact.

1. With these principles in mind, consideration may be given to Mr Dunstan's claim. The claim is for damages. The pleaded causes of action are misfeasance in public office, breach of contract, conspiracy, defamation and inducing breach of contract. The essence of the pleaded facts are as follows:

(1) Mr Dunstan and the first to fifth defendants were employed by the sixth defendant, the Commonwealth, at the ATO.

(2) On 4 June 1997 the third defendant, acting on the basis of accusations by the second defendant, suspended Mr Dunstan pending an investigation under the then in force Public Service Act 1922 (Cth) (now repealed and replaced by the Public Service Act 1999 (Cth)).

(3) The first defendant was the authorised officer for the investigation under s 61(2) of the Public Service Act 1922.

(4) On 29 July 1997 the first defendant prepared and sent a written decision to the third defendant and a subordinate of the fourth defendant deciding not to pursue disciplinary action against Mr Dunstan. However, this decision was not given to Mr Dunstan.

(5) Instead, the third, fourth and fifth defendants considered methods by which Mr Dunstan's employment could be terminated, including a recommendation by the fourth defendant that the first defendant reconsider the decision of 29 July 1997.

(6) The first defendant thereafter (on 13 October 1997) forwarded to Mr Dunstan a notice of charge under s 61 of the Public Service Act 1922.

(7) By dealing with the disciplinary matter and seeking to have Mr Dunstan's employment terminated other than in accordance with the Public Service Act1922:

• the first to fifth defendants committed the tort of misfeasance in public office,

• the first, third, fourth and fifth defendants committed the tort of conspiracy,

• the first to fifth defendants induced the sixth defendant to breach Mr Dunstan's contract of employment,

• the sixth defendant breached Mr Dunstan's contract of employment, and

• the second defendant defamed Mr Dunstan, by reason of which Mr Dunstan suffered loss.

1. The defendants' first answer to Mr Dunstan's claims is that they arise from events in 1997 and thus the limitation period of six years for the claims, other than defamation which has a one year limitation period, has expired (ss 11 and 21B of the Limitation Act 1985 (ACT)).
2. Mr Dunstan concedes that his claims would be statute barred but for the operation of s 33 of the Limitation Act. Section 33 provides that if a fact relevant to a cause of action is deliberately concealed then, in effect, the limitation period begins from when the person first discovers, or may with reasonable diligence discover, the concealment.
3. According to Mr Dunstan's statement of claim:

(1) Mr Dunstan never received a copy of the decision of 29 July 1997 not to pursue disciplinary action against him.

(2) The first defendant gave evidence on 25 July 2007 in proceedings and denied the existence of the decision dated 29 July 1997 or that he had prepared any other document to similar effect.

(3) Mr Dunstan obtained a copy of the decision of 29 July 1997 on or shortly after 17 May 2009.

(4) The existence of the written decision of 29 July 1997 was deliberately concealed. Hence, the limitation period did not commence until 17 May 2009 or shortly thereafter.

1. It is true that, insofar as Mr Dunstan pleads proposition (4) above, he asserts a legal conclusion, rather than a fact. On an application for summary judgment, there is no bar to the resolution of disputed questions of law, in contrast to disputed questions of fact.
2. The defendants' essential submission is that the document of 29 July 2007 is not a decision at all and thus can have no legal significance. The difficulty with this submission is that it cannot be resolved on a summary judgment application. It appears that Mr Dunstan's case is that, a decision having been made on 29 July 1997, the disciplinary process under the Public Service Act 1922 was exhausted. The first defendant was thus functus officio. The disciplinary action taken against Mr Dunstan thereafter was outside the scope of the Public Service Act 1922 and thereby unlawful, giving rise to the various causes of action identified.
3. Whether these arguments have substance depends on the provisions of the Public Service Act 1922 (s 61(2) in particular), and the facts as found. It is not sufficient, as the defendants appeared to assume, to invite examination of the document of 29 July 1997 and a conclusion that the document does not constitute a decision for the purpose of s 61(2). The inappropriateness of attempting to deal with such an issue in a summary judgment application is also disclosed by the fact that the defendants' submissions did not touch upon the potential relevance of the doctrine of functus officio, in particular, whether it could apply to a decision under s 61(2) of the Public

Service Act 1922, even assuming the 29 July 1997 document embodies any such decision.

4. Nor do the defendants' references to the decision of Besanko J in Dunstan v Orr (2008) 171 IR 135; [2008] FCA 31 at [80]- [81] assist their application for summary judgment on this ground. Those paragraphs do not refer to the document of 29 July 1997 said to constitute the decision not to take disciplinary action against Mr Dunstan. They refer to legal advice to the effect that there was no basis to do so and a decision to obtain further advice which, as Besanko J said, the ATO officers were free to do. There is no suggestion in these paragraphs, or in the balance of Besanko J's reasons for judgment, that Mr Dunstan knew of the 29 July 1997 document.
5. For the purposes of this application for summary judgment Mr Dunstan's claim that s 33 of the Limitation Act applies is at least arguable (in the sense that it is not clearly hopeless or doomed to fail). That is sufficient to preclude summary judgment against Mr Dunstan on the whole of his claim.
6. In a supplementary written submission the defendants contend, in the alternative, that s 33 can have no application to Mr Dunstan's defamation claim. The defamation, however, is claimed in part to have occurred by reason of the correspondence on 15 August 1997 said to found the other causes of action. The relationship between these causes of action and the defamation claim is not sufficiently clear to enable any firm conclusion to be reached that s 33 is incapable of applying to the defamation claim.
7. For these reasons, the statement of claim is not amenable to summary dismissal in whole or part on the ground that the claims therein are statute barred. The limitation period issues cannot be determined in isolation from disputed questions of fact.
8. The defendants' second argument is Anshun estoppel said to anse from the proceedings leading to Besanko J's decision in Dunstan v Orr.
9. An Anshun estoppel may arise where a party unreasonably fails to bring forward a matter in one action and then seeks to do so in a later action. The touchstone of unreasonableness depends on whether the matter is sufficiently closely related to the first action that it could and should have been raised therein.
10. The defendants' submissions in support of an Anshun estoppel gave insufficient weight to the fact that the essence of the present proceedings is the document of 29 July 1997 alleged to have been concealed from Mr Dunstan. All of the causes of action (except, perhaps, the alleged defamation) depend upon the 29 July 1997 document constituting a decision for the purposes of s 1(2) of the Public Service Act 1922, rendering subsequent disciplinary action against Mr Dunstan outside the scope of that Act.
11. It cannot have been unreasonable of Mr Dunstan not to have made these claims in the proceedings before Besanko J if, as he pleads to be so, the 29 July 1997 document was deliberately concealed from him until 17 May 2009. The proceedings before Besanko J concerned the validity of three other alleged decisions. It is clear from Besanko J's reasons for judgment that the status and legal consequences of the 29 July 1997 document were not in issue in those proceedings. Yet the document is the essence of the present proceedings. Mr Dunstan alleges a deliberate concealment of the document. If that disputed question of fact is resolved in Mr Dunstan's favour, he would have been improperly denied the opportunity to litigate issues relating to the 29 July 1997 document before Besanko J and this Court. It necessarily follows that it cannot be found, in this summary judgment application, that Mr Dunstan acted unreasonably by not raising the present claims before Besanko J.
12. Nor can it be said that the claims in the present proceedings are vexatious or frivolous in the sense of disclosing no triable issue. The fact that Mr Dunstan has failed in many other proceedings arising from the same factual substratum is not to the point. The defendants did not raise any estoppel argument other than that of Anshun estoppel based on the proceedings before Besanko J. It follows that they can only sustain their vexatious and frivolous ground if the statement of claim, in substance, is bound to fail. If not bound to fail, the present proceedings cannot involve an abuse of process irrespective of Mr Dunstan's lack of success in earlier litigation.
13. It cannot be concluded, however, that Mr Dunstan's claims are bound to fail. The claims may well face factual and legal difficulties. For example, even if the 29 July 1997 document constituted a decision under s 61(2) of the Public Service Act 1922, there must be a real question whether the first defendant was thereby rendered functus officio. Even if functus officio it is not clear why the process could not have been re­ commenced at any time. Be that as it may, these are matters for argument and resolution as part and parcel of the proceedings overall. They are not amenable to resolution on this application for summary judgment. If, as Mr Dunstan contends, the first defendant was functus officio, then it is at least arguable that the disciplinary action taken thereafter was outside the scope of the Public Service Act 1922. If that is so, the various causes of action are not necessarily hopeless or

doomed to fail. As such, the summary judgment procedure is not available.

14. The remaining issue is security for costs.
15. Rule 1900(1) provides that the court may order a plaintiff "to give the security it considers appropriate for the defendant's costs of the proceedings". Rule 1901 specifies that this power may be exercised only if the court is satisfied as to one or other of the conditions in (a)-(h). In this case, the defendants rely on r 1901(h), "the justice of the case requires the order to be made".
16. The defendants contend that justice requires the order to be made in this case on the grounds set out in the affidavit of Robert Swinburne, their solicitor. According to Mr Swinburne, Mr Dunstan is the subject of a number of substantial unsatisfied costs orders arising from judgments against him and in favour of persons including one or more of the defendants (the judgments include Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916, Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 191, Dunstan v Human Rights and Equal Opportunity Commission [2007] FCA 1326, Dunstan v Comcare [2007] FCA 504 and Dunstan v Holland [2008] FCA 1450).
17. Mr Swinburne's affidavit also sets out the basis for his concern that Mr Dunstan will not be able to satisfy any costs order against him in the present proceedings. Mr Dunstan did not dispute this evidence. Accordingly, it may be inferred that Mr Swinburne's concern about Mr Dunstan's inability to satisfy any costs order is well founded.
18. Mr Swinburne's affidavit also sets out material founding a concern that Mr Dunstan has evinced a determination to continue litigation about the circumstances of his ceasing to work for the ATO, regardless often outcomes and merits of his claims. In circumstances where the outstanding quantified costs orders against Mr Dunstan amount to $307,245 and the unquantified costs orders are numerous, the defendants seek an order for security for costs in the amount of $100,000.
19. The principles applicable to the making of orders for security, particularly against an individual plaintiff in an action for damages, expose the difficulties which the defendants' application confronts.
20. There is undoubtedly power to make such an order (Twining v Curtis [2010] ACTSC 115 at [15]). In the present case, it may be inferred that the effect of the making of the order will be to stifle the proceedings. Mr Dunstan's claims, while not strong, cannot be dismissed as hopeless or bound to fail. Nor can it be said that, in the circumstances as pleaded at least, the claims are brought other than in good faith. For example, insofar as can be ascertained from Mr Swinburne's affidavit the document of 29 July 1997 was the subject of a claim for privilege in earlier proceedings, although an earlier draft of 11 July 1997 was produced. The terms of this draft are not apparent. For present purposes, it is sufficient to say that Mr Swinburne's affidavit does not indicate that, contrary to the statement of claim, the 29 July 1997 document was provided to Mr Dunstan at any time before 25 May 2009.
21. Against this background, the strength of the general rule that poverty is no bar to access to justice is an important consideration. This general rule is described as follows in Halsbury's Laws of Australia (LexisNexis Butterworths) Vol 20, 325 Practice and Procedure "Costs" at [325-9670] (excluding footnotes):

The impecuniosity of the plaintiff The general rule is that poverty is no bar to a litigant, and so the bankruptcy or other impecuniosity of the plaintiff who has brought what appears to be a bona fide claim is not a sufficient reason in itself for ordering security for costs. In such a case a defendant may be forced to accept the risk that, if successful, an order for costs will be fruitless. Were the court routinely to order security for costs on the ground of impecuniosity, access to justice would be frustrated for it would deny the impecunious the opportunity to secure their legal rights. The impecuniosity of the plaintiff nonetheless remains relevant to the exercise of the court's discretion as a factor to be weighed in all the circumstances of the case.

1. Halsbury's Laws of Australia continues at [325-9690] (excluding footnotes):

Security stifles the action Consistent with the principle that poverty is no bar to a litigant, a court will be reticent to make an order for security for costs where its effect would be to shut out the plaintiff from proceeding with a claim that is bona fide and not obviously frivolous or vexatious. In assessing whether the order will stifle a proceeding that should, in the interests of justice, be determined on its merits, the court may need to inquire into a variety of matters, including:

(1) the relative position of the parties (in particular, whether the plaintiff is in a significantly weaker financial or bargaining position than the defendant);

(2) whether the plaintiff will in fact be prevented from proceeding if security for costs is ordered;

(3) the importance of the legal issues raised by the proceedings;

(4) the timing of the application for security; and

1. As noted, I infer that the making of the order sought will stifle the proceedings. While the proceedings do not raise issues of general importance, they are not unarguable. The defendants, including the Commonwealth, have common representation. It may be inferred that all of the defendants have access to the resources of the Commonwealth in their defence of the proceedings. Weighing up all these factors I consider that this is not a case where an order for security for costs is required in the interests of justice. To the contrary, an order for security would have the effect of denying to an impecunious individual plaintiff access to the courts on a claim for damages which is not manifestly hopeless or doomed to fail.

1. For these reasons, the application filed on 30 July 2010 must be dismissed with costs.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Jagot.