On 30 October 2014, Luke John Mitchell filed a statement of claim in this Court naming Sharon Moore as defendant, and seeking relief in the form of a declaration that an asserted debt amounted to a charge on real property owned by Ms. Moore, pending repayment of a claimed amount of $318,776.22 plus interest.
On 11 December 2014 Ms. Moore filed a Notice of Motion seeking to have Mr. Mitchell's claim struck out as disclosing no reasonable cause of action, and as having a tendency to cause embarrassment.
[2]
A Brief History of the Facts Asserted in the Claim
(These facts are taken from the particulars to the plaintiff's claim. The defendant has not conceded the matters asserted by the plaintiff, and denies that she entered any agreement that gives rise to a charge against her property.)
Ms. Moore is the owner of a heritage listed rural property at Daruka in New South Wales ("the property"). Ms. Moore both resides at the property and operates a number of businesses therefrom.
In May 2012 Mr. Mitchell moved to the property to live with Ms. Moore in a de facto relationship.
In June of that year Mr. Mitchell asserts that he and Ms. Moore had the first of a number of similar conversations in which he agreed to loan monies to Ms. Moore on the basis that the loan monies would be repaid on demand, or at such time as Ms. Moore sold her property.
In the ensuing six or so months Mr. Mitchell claims that he advanced Ms. Moore a total of $87,850.50 in a series of payments, the largest of which was for the sum of $25,000 and the smallest $1,000.
In November 2012 the plaintiff asserts that he agreed with Ms. Moore that he would make payments on her behalf towards a credit card debt, with such payments repayable by Ms. Moore on demand, or at such time as she sold her Daruka property. The particulars relied upon by the plaintiff note that the parties agreed that the monies advanced in this way would, "pending repayment be a charge against the property".
A total amount of $96,336.15 is said to have been paid by Mr. Mitchell to Ms. Moore's benefit in this way in the period November 2012 to December 2013.
In April 2013 the plaintiff asserts that he agreed to loan further monies to the defendant to be used to fund renovations at the property, with such monies advanced on the same basis as other monies, that is, that the loan would be repayable on demand and, pending repayment, would be a charge on the property. A total of $62,156.24 was paid pursuant to this agreement.
In April 2013 the agreement between the plaintiff and defendant is said to have again been expanded, with Mr. Mitchell agreeing on the same terms to advance further funds, either to Ms. Moore directly or to her creditors, to assist her with the maintenance of horses kept at the property. A sum totalling $12,163.33 was advanced pursuant to this agreement.
Other amounts are said to have been advanced by the plaintiff to the defendant during the currency of their relationship, including amounts as large as $59,070, but they are not relied upon as going to the existence of the charge.
On 19 February 2014 Ms. Moore ended the relationship between her and the plaintiff. Mr. Mitchell asserts that, upon the termination of the relationship, the loan monies became due and payable and, in the absence of repayment, the debt constitutes a charge on the Daruka property.
[3]
The Defendant's Notice of Motion
In the Motion moved by the defendant Ms. Moore seeks the following orders.
1. An order pursuant to part 13, rule 13.4 of the Uniform Civil Procedure Rules that the proceedings be dismissed as disclosing no reasonable cause of action.
2. Further and in the alternative an order pursuant to part 14, rule 14.28 of the Uniform Civil Procedure Rules that the Statement of Claim herein be struck out as disclosing no reasonable cause of action.
3. Further and in the alternative an order pursuant to part 14, rule 14.28 of the Uniform Civil Procedure Rules that the Statement of Claim herein be struck out as having a tendency to cause embarrassment.
4. Indemnity Costs.
The defendant contends that the Statement of Claim represents no more than a vague and poorly particularised claim which cannot establish that a legal charge on the defendant's property exists, as no written agreement is referred to and, equally, cannot establish that an equitable charge exists, since there is nothing in the pleadings and particulars to give rise to a charge of that nature.
It is submitted for the defendant that she is left in the position of being able to do no more than make a general denial that she participated in any conversation with the plaintiff the terms of which give rise to a charge over her property.
The plaintiff relies upon Ms. Moore's denial of any conversation of the nature outlined by the plaintiff, a denial made in an affidavit sworn by her on 6 December 2014, to assert that the defendant must understand the nature of the case she has to meet, since she has denied it. It is contended for Mr. Mitchell that the pleadings specify the identity of the parties, the material facts of the relevant conversations, and each sum paid pursuant to the agreement, and that this is sufficient.
The plaintiff submits that, if there is any lack of specificity in the pleadings (which is not conceded), the proper way to address that is by a request for further and better particulars.
[4]
Consideration
A statement of claim must contain a statement in summary form of the material facts on which the party relies, but not the evidence by which the facts are to be proved. A fact is "material" if it is necessary for the purpose of formulating a complete cause of action.
Here, the plaintiff's statement of claim is expressed as containing the relief sought, followed by what is described as the "pleadings and particulars". Those facts asserted by the plaintiff are set out in this section of the document.
In determining the defendant's motion, it is useful to extract those sections of the particulars which set out the conversations said to give rise to the charge on the Daruka property. The whole of the relevant portions of the pleadings are set out below.
In June 2012 the first of a number of conversations occurred in which the Plaintiff agreed to loan money to the defendant on the basis that the Defendant would repay those amounts on demand and in any event on the sale by her of the said property.
In June 2012 the plaintiff agreed with the defendant that in consideration of the plaintiff paying amounts off the defendant's mortgage over the said property the plaintiff would acquire an interest in the property by way of charge for the amounts paid by him.
[……]
Further, in November 2012, by agreement with the defendant, the plaintiff agreed to loan to her money by making payments off her credit card […].
The defendant agreed with the plaintiff that she would repay on demand to the plaintiff those amounts [referred to above] and in any event when she sold the property and further that such amounts would pending repayment be a charge against the property.
[……]
Further, in April 2013 the plaintiff agreed to loan to the defendant various sums of money to enable the defendant to undertake renovations at the said property.
By agreement between the plaintiff and the defendant such moneys would be repayable on demand and pending repayment would be a charge on the property.
[……]
Further, in April 2013 the plaintiff and the defendant agreed that the plaintiff would loan to the defendant various sums of money repayable on demand for use by the defendant in relation to the maintenance and upkeep of her horses.
These extracts are the whole of the facts that the plaintiff pleads and relies upon to establish the terms and existence of a charge on the defendant's property.
The defendant relies upon rules 13.4(1)(b) and 14.28(1)(a) and (1)(b) of the Uniform Civil Procedure Rules 2005 ("UCPR") and argues that, because of the paucity and lack of specificity of the pleading, the claim should be dismissed or struck out.
Pursuant to r.13.4(1)(b) the Court may dismiss proceedings generally or in relation to the claim if no reasonable cause of action is disclosed.
Pursuant to r.14.28 the Court may order that the whole or any part of a pleading be struck out if the pleading discloses no reasonable cause of action (r.14.28(1)(a)), or if the pleading has a tendency to cause prejudice, embarrassment, or delay in the proceedings (r.14.28(1)(b)).
The power provided by these rules is discretionary.
What is required to be stated in pleadings is that they give all necessary particulars: rule 15.1 of the UCPR.
15.1
(1) Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet.
Having considered that requirement, and the pleadings relied upon by the defendant, I have concluded that, as pleaded, the statement of claim fails to identify a reasonable cause of action. What is pleaded by the plaintiff is a conclusion of law, not the material facts from which that conclusion is drawn.
Whilst there are sufficient particulars to permit the defendant to identify the amounts of money the plaintiff claims that she owes him, and the general circumstances in which the payments were made, the agreement or agreements pursuant to which the monies were advanced are not sufficiently identified, and the terms of the agreement or agreements are wholly absent. This latter information is critical to the defendant in meeting the claim, but also to the plaintiff in advancing it. It would also prevent confusion as to the basis of the claim.
An example of the confusion which can arise with pleadings of such a vague nature arises by reference in the pleadings to other amounts of money the plaintiff asserts that he advanced Ms. Moore, but which do not appear to be relevant to the charge over the property that the plaintiff claims exists. The pleadings refer to varying amounts, the largest being a sum of $59,070, but it is not clear what, if any, relevance to the plaintiff's case this sum has, or whether the defendant is to address this payment in some way in her defence. Its status is entirely unclear on the pleadings.
No particulars are provided as to the terms of the conversations asserted to have taken place in June 2012, November 2012 and April 2013. It is the terms of the conversations, said to constitute the agreement(s), which is critical. Conclusions drawn from facts which are not themselves anywhere set out in the pleadings are insufficient to meet the requirements of r.15.1 of the UCPR, or to enable the defendant to identify the case brought against her and be in a position to meet it.
Such matters are not matters which can or should be addressed by a request for further and better particulars: H 1976 Nominees Pty Ltd v Galli and Apex Quarries Ltd [1979] FCA 74; 40 FLR 242.
Since there is at least some basis upon which to conclude that the plaintiff has a triable case, I decline to dismiss the claim pursuant to r.13.4 and grant the relief sought by the defendant in her first prayer. The relief sought by Ms. Moore in the second prayer will be granted. It is unnecessary to consider the defendant's third prayer for relief.
There will be an order for costs in the defendant's favour, and I propose to order costs on an indemnity basis as sought by the defendant. Before the Court in evidence is a copy of correspondence sent by the defendant's legal representatives to the legal representatives for the plaintiff on 15 December 2014 referring to the inadequacy of the pleading, and inviting the plaintiff to reconsider the way in which the claim was pleaded. The letter also referred to the possibility of the current motion being moved. The plaintiff's solicitors, by correspondence of 23 January 2015, declined to reconsider the pleading, responding that the pleading was sufficient, and any shortfall could be met by a request for particulars
In those circumstances the defendant is entitled to receive indemnity costs.
[5]
Orders
The Court makes the following orders.
1. That the whole of the statement of claim be struck out.
2. That the plaintiff have leave to file and serve a further statement of claim on or before 25 March 2015.
3. That the plaintiff pay the defendant's costs of the proceedings including the costs of the motion on an indemnity basis.
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Decision last updated: 09 March 2015