Martin v Ross

Supreme Court of NSW|2023-09-15|Before: Chen J

L. Martin (Plaintiff) A. Rogers (First Defendant)

L. Martin (Plaintiff) Legal One Services Pty Limited (First defendant) File Number(s): 2022/295916

JUDGMENT

By notice of motion dated 7 June 2023 the first defendant seeks that the statement of claim be dismissed in whole or in part with respect to the first defendant pursuant to UCPR 13.4 or the statement of claim be struck out in whole or in part with respect to the first defendant pursuant to UCPR 14.28.
The plaintiff is Lynette Martin. The first defendant is Julia Mary Ross. The second defendant is Karen Lynne Wilson. The second to the seventh defendants no longer have any involvement in these proceedings.

The pleadings in the statement of claim

By statement of claim filed on 5 October 2022 the plaintiff brings proceedings against the first defendant and six other defendants.
The relief claimed in the statement of claim ('SOC') is as follows: "1. Compensation for the reduction in my above average income for the first time in my life to live in penury on a government pension and ultimately in public housing. 2. Compensation for my loss of my ability to work and live a normal happy life for over 26 years. 3. Compensation for future and past pain and suffering for over 26 years and for continuing and increasing pain and mental stress until I die. Amount of claim $50,000,000 - Fifty million dollars. Interest Included Filing fees $3,000 - Three thousand dollars Service fees $1,000 - One thousand dollars TOTAL $50,004,000 - Fifty million and four thousand dollars."
The statement of claim pleads in part: "2. The cause of my action is the formation by Julia Mary Ross of a company with the same name as the Company I worked for when I was injured. 3. This company i.e., Julia Ross Personnel ACN 088 341 164 was established by Julia Ross in order to avoid the payment to me of my workers compensation entitlements." 4. The Directors of Julia Ross Personnel ACN 003 758 709 between 2000 and 2004 allowed the foregoing fraud to take place and failed to exercise due diligence in the protection of my workers compensation entitlements and my legal rights as an injured worker… 5… 6. On the 1 February 2000 Julia Mary Ross commenced a fraud against me by presenting the newly formed Company i.e., Julia Ross Personnel 088 341 164 as the second defendant in my New South Wales District Court common law case against her company. 7… 8. [A] company search would have revealed that the company named Julia Ross Personnel ACN 088 341 164 was not the company who employed me when I was injured in July 1996."
The allegations in the statement of claim are extensive and not completely clear. However, reduced to their essence, as against the first defendant they appear to be as follows:
That in 1996 the plaintiff was employed by a company named Julia Ross Personnel Pty Ltd (ACN 003 758 709) to work as a bookkeeper for a company named Gow Gates Insurance Brokers.
After completing that assignment, the plaintiff was asked by Gow Gates Insurance Brokers to do some archiving work which involved lifting heavy files for two days.
On 4 July 1996, the plaintiff was injured performing those duties for Gow Gates Insurance Brokers, she has been unable to work since.
Thereafter, the first plaintiff formed, for the purpose of avoiding payment to the plaintiff of the plaintiff's workers compensation entitlements, another company with the same name as Julia Ross Pty Ltd ('ACN 709'), being Julia Ross Personnel Pty Ltd (ACN 088 341 164) ('ACN 164').
That between 2000 and 2004 the directors of JR Pty Ltd No. 1 allowed "the fraud" to take place and failed to protect the plaintiff's workers compensation entitlements and her legal rights as an injured worker.
On 1 February 2000 the first plaintiff commenced a fraud, by presenting CAN 164 as the second defendant in the plaintiff's NSW District Court common law case against "her company".

Summary of Chen J's reasons in Martin (No. 2)

I gratefully acknowledge and adopt what Chen J stated in Martin (No 2), so far as they relate to the first defendant. I have also included some of my own findings and comments that related to findings and other issues that were aired at the hearing before me.
So far as can be discerned from the statement of claim, the 'complaints' and allegations of the plaintiff against the first defendant appear to be as follows:
The directors of Julia Ross "between 2000 and 2004" allowed fraud "to take place and failed to exercise due diligence in the protection of workers compensation entitlements and my legal rights as an injured worker": SOC [4].
The plaintiff then sets out - described by the plaintiff as "the prelude to fraud by Julia Mary Ross" - the various events giving rise to her injury to her lower back in July 1996, the claims that were brought in consequence of that injury in the District Court, and later in the Compensation Court: SOC, [6]-27. Specifically, it is said that had "any party to the proceedings in the District Court … carried out an ASIC search", the plaintiff "would have been awarded the case": SOC [13].
The plaintiff discovered "a major fraud" against her, alleging that the proceedings in the Compensation Court - that resulted in a settlement on 11 September 2003 - were taken without notice to her, and in her absence: SOC [31].
It was the plaintiff's "opinion that the fraudulent actions against [the plaintiff] by Julia Ross was financially motivated by her to conceal my personal injury claim against her company before and in the period when she was promoting the company shares to the public": SOC [41].
The plaintiff says that she has been "completely cheated and abused by the fraudulent actions of Julia Mary Ross". So far as the Julia Ross defendants are concerned, the allegations centre upon the plaintiff's allegations:
That a different entity - ACN 709 - became the defendant to the District Court proceedings, which the plaintiff alleged was a "fraud" against her: SOC [6].
Had any party to the proceedings in the District Court carried out an ASIC search, the plaintiff "would have been awarded the case": SOC [13]. The ASIC searches can be found at Tabs 4-5 (Ex 1).
She discovered a "major fraud" had been committed in that the proceedings had been taken in the Compensation Court without notice to her and in her absence, proceedings that were ultimately resolved "to the illegal [709]": SOC [31].
The motivation for the fraudulent actions was to conceal the plaintiff's personal injury claim against Julia Ross: SOC [41].

The law

The plaintiff relies upon Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') rules 13.4 and 14.28. They read: 13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings- (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1). … 14.28 Circumstances in which court may strike out pleadings (1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading - (a) discloses no reasonable cause of action… or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. (2) The court may receive evidence on the hearing of an application for an order under subrule (1).
Recently in Colombini v De Berigny [2021] NSWSC 374, Ward CJ in Eq at [44] stated: "The principles on a summary dismissal application are well known. There is a high threshold to be satisfied. The test generally applied on applications for summary disposal of part or all of proceedings is that set out in General Steel Industries Inc v Cmr for Railways (1964) 112 CLR 125; [1964] HCA 69 at 128 -9 (General Steel). It is necessary for there be a very clear case before proceedings will be summarily dismissed (General Steel at 129; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 (Dey) at 91). As Dixon J (as his Honour then was) noted in Dey at 91, "once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."
For the purposes of this application only I will take the plaintiff's case at its highest. Rule 13.4 is principally concerned with whether there is any case that is capable of going to trial, rule 14.28 is more directed to the form of the pleading. The first defendant submitted that the plaintiff claims against her are an abuse of process. In oral submissions, the counsel for first defendant, submitted that the plaintiff's claims were scandalous.

Collateral attack on judgments

The first hurdle which the plaintiff must confront is that her claim against the first defendant represents an impermissible collateral attack on a judgment or judgments which themselves remain in place (Reichel v Magrath (1889) HL (1889) 14 App Cas 665 ('Reichel'); Hollington v Hewthorn [1943] KB 587; Hunter v Chief Constable of the West Midlands Police (1982) HL [1982] AC 529 ('Hunter'); Somasundaram v M Julius Melchior & Co [1988] 1 WLR 1394 ('Somasundaram').
In oral submissions, counsel for the first defendant explained that the plaintiff says that proceedings in the Compensation Court and the District Court were conducted fraudulently. In one way another, they are determinations, one by consent in the Compensation Court and the other by a judgment in the District Court. These current proceedings represent a collateral attack on the correctness of those decisions (T18-25-32).
The plaintiff is not entitled to lodge such an attack in proceedings such as the present. However, were she able to surmount that obstacle, her claim is in any event hopeless.

The law on collateral attack

Lord Halsbury L.C. notably said at page 668 of Reichel: "…I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again."
In Hunter, Lord Diplock, with whose speech the other Law Lords agreed, said at pp 541-542: "The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made. The proper method of attacking the decision by Bridge J. in the murder trial that Hunter was not assaulted by the police before his oral confession was obtained would have been to make the contention that the judge's ruling that the confession was admissible had been erroneous a ground of his appeal against his conviction to the Criminal Division of the Court of Appeal. This Hunter did not do. Had he or any of his fellow murderers done so, application could have been made on that appeal to tender to the court as 'fresh evidence' all material upon which Hunter would now seek to rely in his civil action against the police for damages for assault, if it were allowed to continue. But since, quite apart from the tenuous character of such evidence, it is not now seriously disputed that it was available to the defendants at the time of the murder trial itself and could have been adduced then had those who were acting for him or any of the other Birmingham Bombers at the trial thought that to do so would help their case, any application for its admission on the appeal to the Court of Appeal (Criminal Division) would have been doomed to failure. My Lords, collateral attack upon a final decision of a court of competent jurisdiction may take a variety of forms. It is not surprising that no reported case is to be found in which the facts present a precise parallel with those of the instant case. But the principle applicable is, in my view, simply and clearly stated in those passages from the judgment of A. L. Smith L.J. in Stephenson v. Garnett [1898] 1 Q.B. 677, 680-681 and the speech of Lord Halsbury L.C. in Reichel v. Magrath (1889) 14 App.Cas. 665, 668 which are cited by Goff L.J. in his judgment in the instant case. I need only repeat an extract from the passage which he cites from the judgment of A. L. Smith L.J.: '… the court ought to be slow to strike out a statement of claim or defence, and to dismiss an action as frivolous and vexatious, yet it ought to do so when, as here, it has been shewn that the identical question sought to be raised has been already decided by a competent court.' The passage from Lord Halsbury's speech deserves repetition here in full: '… I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again.'"
In Somasundaram, May, Stocker and Stuart-Smith LJJ reconcile Saif Ali v Sydney Mitchell & Co [1980] A.C. 198 with Hunter by stating at 1399-1400: "It is perfectly possible to reconcile the two decisions on the basis that even if a barrister is not immune from suit, where there has in fact been a decision on the merits by a court of competent jurisdiction public policy requires that that decision should not be impugned either directly or indirectly. Moreover we find it impossible to accept that Lord Diplock overlooked the implications of the decision in Saif Ali's case. Not only was the case cited in argument in Hunter v. Chief Constable of the West Midlands Police [1982] A.C. 529 but a passage from the speech of Lord Diplock in Saif Ali's case was cited by Goff L.J. in the Court of Appeal in McIlkenny v. Chief Constable of the West Midlands [1980] Q.B. 283, 337 on the abuse of the powers of the court. Goff L.J.'s judgment was approved on appeal in the House of Lords: see per Lord Diplock [1982] A.C. 529, 545. The passages from Lord Diplock's speech in Saif Ali v. Sydney Mitchell & Co. [1980] A.C. 198 cited by Goff L.J. p. 222: "Under the English system of administration of justice, the appropriate method of correcting a wrong decision of a court of justice reached after a contested hearing is by appeal against the judgment to a superior court. This is not based solely on technical doctrines of res judicata but upon principles of public policy, which also discourage collateral attack on the correctness of a subsisting judgment of a court of trial upon a contested issue by retrial of the same issue, either directly or indirectly in a court of co-ordinate jurisdiction." And again at p. 223: "My Lords, it seems to me that to require a court of co-ordinate jurisdiction to try the question whether another court reached a wrong decision and, if so, to inquire into the causes of its doing so, is calculated to bring the administration of justice into disrepute."
The plaintiff is not entitled to lodge such an attack in proceedings such as the present. However, were she able to surmount that obstacle, her claim is in any event hopeless.

The plaintiff's case is without hope

The plaintiff's case appears to make two separate allegations of fraud against the first defendant.
The first allegation is that ACN 709 was set up for the purpose of the fraud.
That allegation may be ignored. The mere setting up of a company cannot, of itself, be a fraud, no matter what the intent behind the setting up may have been.
The second allegation is that, on 1 February 2000, the first defendant commenced a fraud by "presenting" ACN 709 as the second defendant in her District Court proceedings. It is hard to know with any precision what that means but the short answer is that a defendant cannot, by its own actions, replace an existing defendant. Put simply, it is the plaintiff that identifies the defendants to the proceedings.
Moreover, at a factual level, it is clear that ACN 709 did not hold itself out as the plaintiff's employer.
To the contrary, on the pleadings, the allegation of employment was "not admitted" by the second defendant. If ACN 709 had, by some way become a party to the proceedings, it did not allege that it was the plaintiff's employer.
In any event, no matter who the employer was, the plaintiff lost her case in the District Court on the facts. In its judgment, the District Court judge held that she had not established any injury to her caused by her employer, the first defendant. The Court held: "the evidence failed to establish that the boxes were heavy…The Plaintiff has therefore failed on the balance of probabilities to establish the first fundamentals of her case. She is not shown she sustained severe injury, if in fact she did, by virtue of 'lifting heavy boxes'".
Separately from the District Court proceedings the statement of claim makes reference to workers compensation proceedings but in a way which is opaque.
The allegation appears to be that the directors of ACN 709, including it would seem the first defendant, owed an indeterminate duty to the plaintiff to ensure that ACN 709 was sued in workers compensation proceedings rather than ACN 164.
Whatever other duties they may have had as directors of ACN 164, the directors did not have a duty of any description to ensure that ACN 164 was sued and that another company (ACN 164) was not.

The plaintiff's submissions

As best I can understand, the plaintiff's submissions can be summarised as follows: 1. She re-asserts that the company she was employed by was not ACN 709, but rather ACN 164. 2. The "empty" company (ACN 709) was established by the first defendant and was done so to avoid liability for worker's compensation entitlements; 3. The company that appeared as the first defendant was not the company that employed her so the proceedings that took place are now null and void; 4. she addresses the first defendant's financial wellbeing and prosperity, which does not seem relevant in the case or the context of the claims against the first defendant; 5. does not believe that her case should be struck out by the court; 6. asserts that XXX, the first defendant's solicitor lied to the Court registrar regarding not having the plaintiff's correct email. The first defendant's solicitor had in fact emailed her on 12 May 2023. However, I interpose here to note that there is no proof of this email, nor the documents attached; 7. the defendant Ms Julia Ross misled Government Super funds as well as several banks, but does not base the allegation on any evidence; and 8. has submitted a document responding to a cost assessment application in the Supreme Court. It is difficult to ascertain the relevant points and meaning of the document. To the best of my ability, the plaintiff denies being liable for any costs due to the alleged fraud that was perpetrated against her. I think that she argues that the solicitors for the first defendant did not act for the correct defendant and are therefore compliant to the fraud. 9. The plaintiff submitted that the defendant and her legal counsel were able to conceal the illegality of the "dummy" company [ACN 709] that was named as the company of the first defendant in the proceedings [in both the Compensation and District Courts].

The proceedings in the Compensation Court

I will now briefly summarise the plaintiff's prior proceedings in the Compensation Court and the District Court in relation to the plaintiff's allegations and provide my views on them.
On 11 September, the plaintiff recovered workers compensation. An award of compensation was made in her favour, by consent in the sum of $9,400. On 11 September 2003, the application for determination identified the plaintiff's employer as Julia Ross Personnel. The 'Wage Schedule' dated 6 June 2002 filed by the plaintiff's solicitor, and the answer of the employer also identified the plaintiff's employer as Julia Ross Personnel Pty Ltd.
In the hearing before me, the plaintiff referred to an entry in a bill of costs. The plaintiff said that she only became aware of this document after Schmidt AJ handed down her judgment. The plaintiff said that this is proof that the wrong defendant was named in the proceedings.
The award of compensation was made against 'Julia Ross Personnel' [ACN 709]. The plaintiff admitted that she did in fact receive those funds from her solicitor, but did not know what it was for and had to repay $7,000 to Medicare.
In this Court, the plaintiff alleges that she did not know anything about these proceedings in the compensation court until after they had been finalised.
The plaintiff has not appealed or challenged the award, nor has she taken any steps to set it aside. The same can be said in reflection to the latter District Court proceedings.
Schmidt AJ found, contrary to what the plaintiff alleges, that the plaintiff had knowledge of the proceedings brought in the Compensation Court at 23-(7).
As before Chen J and this Court, the plaintiff also argued that she was unaware of the hearing that was conducted in the Compensation Court in 2003, and it was resolved without her knowledge and consent.
The plaintiff alleges that her lawyers commenced proceedings against the first defendant in the District Court in 1998: SOC [20]. That is, on the plaintiff's case, the proceedings were commenced against the correctly named employer (ACN 164). Apparently, the District Court's amended statement of claim to Julia Ross Personnel Pty Limited (ACN 709). To my mind, it is the plaintiff who identifies the defendant in the SOC as Julia Mary Ross.
The plaintiff failed in her claim in the District Court, essentially because she did not prove negligence - not because of anything to do with the name or identity of her employer. The reasons for judgment correctly identify the plaintiff's employer.
The plaintiff did not appeal the decision, and judgment entered in favour of the defendants.

The District Court proceedings

The plaintiff said that the wrong defendant had been joined to the District Court proceedings - notwithstanding what was alleged in the statement of claim, par 20 and notwithstanding that the amended statement of claim correctly identified her employer and to the Compensation Court proceedings, and that ASIC searches demonstrated as much. This had the effect, so the plaintiff argued, of denying the plaintiff her proper entitlement to either damages or compensation, or both.
I agree with the views of Chen J that the issue concerning the potential wrongly named defendant is inconsequential. This is for the following reasons:
First, there was no issue in the District Court proceedings about whether the plaintiff had correctly identified and had sued her employer. The proceedings were commenced against the correctly named employer. Further, a review of the reasons for judgment of the District Court judge show that no issue was raised about the employer's "identity". In any event, again as I have earlier noted, the plaintiff's claim did not fail on the basis that the plaintiff had erroneously sued an entity that was not her employer: it failed on the ground that the plaintiff had not persuaded the judge that the boxes that she was lifting when injured were unreasonably heavy.
Secondly, in connection with the Compensation Court proceedings, the plaintiff in fact recovered an award of compensation against the entity which was accepted to be her employer - albeit, by that time, its name had changed to Julia Ross Recruitment Ltd [ACN 709]. Again as with the District Court proceedings, nothing turned upon this - evident by the fact that the plaintiff recovered compensation.
Thirdly, even if there was a measure of confusion about the precise name of the plaintiff's employer that arose in consequence of changes to the corporate structure of Julia Ross, at all times there remained a statutory insurer - Allianz - that was conducting the claim on behalf of Julia Ross. That insurer was, ultimately, the entity that had the liability (if any) to the plaintiff in connection with her claims against Julia Ross arising out of the July 1996 accident. Separately, that insurer was directly liable to the plaintiff for any compensation or damages that she was entitled to, and it paid the compensation that she was awarded in September 2003. Thus, any change in the corporate structure (including renaming) of Julia Ross was incapable of overriding the statutory directive in ss 155 and 159(2)(a) of the Workers Compensation Act 1987 (NSW) - namely, for there to be a policy covering the liability of Julia Ross under the Workers Compensation Act 1987 (NSW), and for any liability independently of it, and for such policy to make the insurer (in addition to the employer) directly liable to the worker.
The plaintiff again alleges that she has been denied her proper entitlement to damages and/or compensation, and the plaintiff levels a series of grave allegations against the director defendants - essentially that they engaged in a fraud, some 20 or so years ago, to deny the plaintiff her just entitlements for the injury and loss and damage that she suffered in the July 1996 incident. In the face of the disposition of the District Court proceedings - and why it failed - and the outcome in the Compensation Court proceedings - and the fact that the plaintiff recovered compensation - it is impossible to see how there could be any basis for such claims. That is particularly where the claims were conducted by the statutory insurer for Julia Ross (and the lawyers they had appointed), and not Julia Ross itself.
I also agree with Chen J that there is no basis for (nor a shred of evidence to support) the allegations made against the first defendant, nor any step in the chain necessary to do so. Chen J stated nor is there likely to be: it is "possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance": Ugur v Attorney-General for NSW [2019] NSWCA 86 at [117] citing Three Rivers District Council v Bank of England [No 3] [2003] 2 AC 1; [2001] UKHL 16 at [95].
If, as the plaintiff alleges, there was a defect in the naming of the defendant in the District Court then that occasioned the plaintiff no loss whatsoever. That is because, as I have already noted, the plaintiff's claim failed because she failed to persuade the District Court judge that the files that she lifted were unreasonably heavy: the claim did not fail because of the joinder of the wrong defendant, or some other technicality related to the joinder of the entity named as the plaintiff's employer in the District Court proceedings. The plaintiff claimed that the company named as the defendant in the District Court proceedings was "empty". Even if this assertion was correct, it is of no relevance because the plaintiff did not receive any award of damages. Hence, whatever entity was named, it was not required to pay anything. The same point may be made in connection with the proceedings in the Compensation Court: where in fact the plaintiff secured an award of compensation in her favour, albeit a paltry sum of $9,400 of which she says that she had to pay $7,000 from that amount to Medicare.
In relation to the plaintiff's grievances that are anchored in her lack of awareness of the hearing in the Compensation Court in September 2003, and her related allegation that they were resolved without her knowledge or consent, it is inconceivable that these matters could be legally attributed to the directors of the plaintiff's employer when, as I have earlier pointed out, the employer was represented by solicitors appointed by the statutory workers compensation insurer.
Additionally, the "fraud" allegations and the issue with the identity of the first defendant are without substance and disclose no reasonable cause of action.
The proceedings are to be dismissed, as they constitute an abuse of process. The pleadings are such that they disclose no reasonable cause of action. There is no utility in granting the plaintiff an opportunity to replead in accordance with rule 14.28, as the claim is futile, and she has already litigated the same subject matter on a number of proceedings in this Court and failed.

Result

These proceedings against the first defendant be dismissed.

Costs

Normally, costs follow the event. The plaintiff has been unsuccessful. The appropriate order is the plaintiff should pay the first defendant's costs of the proceedings against it (including the costs of the notice of motion filed on 7 June 2023).
THE COURT ORDERS THAT: 1. These proceedings be dismissed as against the first defendant. 2. The plaintiff is to pay the first defendant's costs of the proceedings against it including the costs of the notice motion filed on 7 June 2023.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2023

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (7)

Cited By (1)