Mutton v Baker & Anor

4 According to Dr Mutton, upon arrival, he was "escorted" to an interview room and "formally arrested". A recorded interview was conducted and Dr Mutton was questioned as to allegations he had stolen or improperly obtained monies by deception from Dr Baker. Dr Mutton was released without charge and no further action was brought.

(a) The "arrest" of Dr Mutton and the conduct of the record of interview by the police officer constituted a malicious prosecution in respect of which Dr Baker or the second defendant was the "prosecutor";

(b) In making what he says were false complaints to the police, Dr Baker interfered with Dr Mutton's trade or commerce by engaging in injurious falsehood.

6 Dr Mutton seeks damages, including aggravated and exemplary damages.

7 By Summons dated 13 August 2013, Dr Baker sought orders the proceeding be dismissed pursuant to Order 23.01; alternatively, Order 23.02 of the Rules. The basis of the Summons is that the Statement of Claim:

• does not disclose a cause of action;
• may prejudice, embarrass or delay the fair trial of the proceeding; or
• is otherwise an abuse of process of the Court.

**8 The law is clear that a court will not grant an order striking out a statement of claim unless it is patent from the pleadings or from extrinsic evidence that the claim is unsustainable in fact or law. The authorities refer to various phrases used to describe the basis upon which a pleading ought be summarily determined, including "so obviously untenable that it cannot possibly succeed", "so manifestly faulty that it does not admit of argument" and "plain and obvious".[1]

9 A proceeding will not be struck out where, by proper amendment, the plaintiff could raise a good cause of action.**

Malicious prosecution - the elements and authorities

**10 In order to sustain the tort of malicious prosecution, the plaintiff must prove the following:

(i) He was the subject of a criminal proceeding instituted by the defendants;

(ii) The criminal proceeding was resolved in his favour;

(iii) The defendants, in bringing the proceeding, acted maliciously;

(iv) The defendants did not have reasonable and probable cause to bring the proceeding.

11 The focus of this ruling, as it relates to the tort of malicious prosecution, is two-fold. Firstly, was a criminal proceeding brought against the plaintiff? Secondly, was that proceeding instituted by the defendants?

12 A proceeding need not be brought by a police officer,[2] although generally the police officer who effectively sets criminal proceedings in motion accepts responsibility or accountability for the prosecution.

13 In Amin v Bannerjee,[3] the Privy Council considered a claim for malicious prosecution. The case concerned an allegation arising out of a civil dispute, in which one party had failed to perform his obligations pursuant to an agreement. As a result, the respondents filed a complaint with a police magistrate in Calcutta pursuant to the provisions of the Code of Criminal Procedure (India). The charge was duly registered by a magistrate and recorded as "cheating" pursuant to the Indian Penal Code. Eventually, the magistrate held an inquiry in open court. The appellant attended with counsel. The respondent alleged the appellant had been cheating. After inquiry, the magistrate made an order which concluded there had been no cheating, and no criminal case had been made out. The complaint was dismissed. In a subsequent claim for malicious prosecution, the appellant alleged there was not the slightest justification for the filing of the criminal complaint. The question posed by the Privy Council was:**

"At what stage will criminal proceedings instituted falsely and maliciously before a Magistrate under the provisions of the Indian Code of Criminal Procedure lay the foundation for a suit for damages for malicious prosecution?"[4]

"... The foundation of the action lies in abuse of the process of the court by wrongfully setting the law in motion and it is designed to discourage the perversion of the machinery of justice for an improper purpose. ... the word 'prosecution' in the title of the action is not used in the technical sense which it bears in criminal law is shown by the fact that the action lies for the malicious prosecution of certain classes of civil proceedings, for instance falsely and maliciously presenting a petition in bankruptcy or a petition to wind up a company ...

...

To found an action for damages for malicious prosecution based on criminal proceedings the test is not whether the criminal proceedings have reached a stage at which they may be correctly described as a prosecution; the test is whether such proceedings have reached a stage at which damage to the plaintiff results. Their Lordships are not prepared to go as far as some of the Courts in India in saying that the mere presentation of a false complaint which first seeks to set the criminal law in motion will per se found an action for damages for malicious prosecution ... ."[5]

**15 The facts in the present case are significantly different. There was no complaint to a magistrate which led to an inquiry in a preliminary proceeding. Rather, there was simply a complaint to the police, which the police determined should warrant no further action.

16 Commercial Union Assurance Co of New Zealand Ltd v Lamont[6] concerned an allegation against Lamont by an employee of the appellant company that he had deliberately destroyed a building by fire, to enable to claim on a policy of insurance. He was prosecuted by the police upon charges of attempting to obtain money through false pretences. Lamont was discharged under the relevant provisions of the Crimes Act on the grounds there was no case to answer. He brought proceedings against the appellant for damages for malicious prosecution. The New Zealand Court of Appeal said:**

"As a general rule a prosecution will be considered to be brought when the information is laid and by the person who lays it. ... the police will generally be treated as the prosecutor and no action for malicious prosecution will lie against the person on whose information the police have acted. But in some cases the person who supplied the information to the police may be regarded as the prosecutor even though the information was not laid by him. A person may be regarded as the prosecutor if, inter alia, he puts the police in possession of information which virtually compels an officer to lay an information; if he deliberately deceives the police by the supply of false information in the absence of which the police would not have proceeded; or if he withholds information in the knowledge of which the police would not prosecute ...

On the application of these principles, I would be prepared to hold that the insurer in this case was not the prosecutor. ... While the jury thought, as the answer to the issue discloses, that Mr Pedersen [the insurance company officer] had been motivated by malice, the decision to prosecute was plainly that of the police and the police only and the prosecution was neither instituted nor procured by the insurer. What the insurer did was no more than that which would be expected of any insurer in the circumstances. Although, as mentioned, the jury thought that Mr Pedersen was motivated by malice, I do not think that on the evidence the note he made of his conversation with Mr Lamont can be said in any way to have influenced the police to a decision to prosecute ... ."[7]

17 In Martin v Watson,[8] the House of Lords determined that a suit in malicious prosecution lay in circumstances where a defendant made complaint to the police that the plaintiff had indecently exposed himself. The police officer arrested the plaintiff, who was interviewed at the police station, and bailed to appear at the Magistrates' Court. At the prosecution hearing, no evidence was called and the charge was summarily dismissed. The Court said:

"The mere fact that an individual has given information to the police which leads to the bringing of a prosecution does not make that individual the prosecutor."[9]

**18 The Court held that where a complaint which was falsely and maliciously given to the police, the circumstances of which were solely in the knowledge of the complainant, such that the police officer could not have exercised any independent discretion, the complainant, although not technically the prosecutor, could be said to be the person properly responsible for the bringing of the prosecution and actively instrumental in setting the law in motion. As such, that person could be sued for malicious prosecution.

19 Again, however, the facts in the present case are separate and distinct. Even assuming the information provided by Dr Baker was false and malicious, it is clear there was a discretion to the police officer not to bring a prosecution. In fact, no prosecution was brought. To that end, the Court process was not set in motion.

20 Dunshea v Ryan[10] was concerned with a solicitor who swore an affidavit that a witness in a trial had been duly served with a subpoena. The affidavit was false. An order was made by the Court that a warrant for the arrest of the witness be issued. He was brought before the Court and detained in custody for what was described as a long time, and compelled to find sureties to appear at trial. He remained in custody until subsequently discharged by the judge. The New South Wales Court of Appeal said:**

"I can see no difference between this case and an attorney going before a magistrate and laying a false information against a man and asking for a warrant for his arrest. In one case he lays the information before a magistrate and applies for a warrant, and in the other case he does the same thing before a Judge. ... where an attorney chooses to make an application for the arrest of a witness, and founds the application upon his own evidence, then if it is alleged that the application was malicious and the evidence false, an action will lie against the attorney for maliciously procuring the arrest."[11]

**21 In these, and a number of other cases relied upon by Mr Boas, for the plaintiff,[12] all, with the exception of Dunshea v Ryan, relate to actual prosecutions or proceedings in one form or another, brought in a criminal court and based upon false or malicious information provided by a complainant. In the present proceeding, the situation is significantly different. Information was provided by Dr Baker to the police, as a result of which the police officer did no more than interview Dr Mutton in order to properly investigate the complaint. The providing of information did not "compel" the police officer to bring a criminal proceeding. Quite the opposite, no charges were laid. Even if it could be said that Dr Mutton was "arrested", which would be a matter to be determined upon evidence at trial, that, in my view, would not be sufficient.

22 The tort of malicious prosecution is intended to address the abuse of process of the court where a proceeding is set in motion.[13] In the present case the actions of Dr Baker were to inform the police of an alleged crime and to leave it as a matter for the police to investigate. In exercising his discretion, Detective Wigfield, after interviewing Dr Mutton, took no further action.

23 I am not satisfied, firstly, that there was any criminal process or procedure set in train as a result of the complaint by Dr Mutton, nor am I satisfied that even if that was the case, that the prosecution was instigated, undertaken or compelled by Dr Baker. I am fortified in that view by reference in Fleming,[14] where the learned author said:**

"Merely supplying information, however incriminating, to the police on which they eventually decided to prosecute is not the equivalent of launching a prosecution; the critical decision not being his, 'the stone set rolling is simply a stone of suspicion'."

24 Further, according to Halsbury's Law of Australia[15]:

"A criminal prosecution will exist when a criminal charge is made before a judicial officer or tribunal. Mere arrest without a warrant does not involve the commencement of legal proceedings. Where a charge is made, by laying an information before a magistrate stating that the informant suspects and has reason to suspect another, by an indictment, or the signing of a charge sheet, proceedings have commenced.

It is not necessary that the processes of the court have been set in motion by a magistrate issuing a warrant of arrest or a summons to establish the commencement of proceedings. Sufficient prosecution to satisfy the requirements of the tort may be found where the proceedings have caused damage, or may be presumed to have caused damage, to the plaintiff."

25 It would be a matter for evidence at trial whether or not the information provided by Dr Baker was false and malicious, and further, as to whether there was in fact an arrest by the police officer. Were they the only matters to be satisfied, then the plaintiff's claim could not be dismissed as there would be a basis upon the evidence where the claim could be said to be made out. However, the situation is different where there was no prosecution launched, and the only action by Dr Baker was to report the alleged theft to the police who then determined not to prosecute. In my view, no action lies, nor could be said to lie in those circumstances. I am satisfied that there is no basis upon which the tort of malicious prosecution could be founded. Accordingly, I will order the relevant parts of the plaintiff's Statement of Claim be struck out.

Injurious falsehood - the elements and authorities

**26 The second cause of action alleged by the plaintiff is injurious falsehood. The action relates to a damaging falsehood which is said to interfere with a person's property or business, or even a prospective advantage of a non-commercial nature, as a result of which a person suffers actual loss.

27 The four elements are said to be:[16]

(a) A false statement concerning the plaintiff, his property or business;

(b) Publication of that statement to a third person;

28 The first three elements of the tort, that is whether a false statement has been made, whether it was been published to Detective Wigfield or others, and whether it was made with malice will all be matters to be the subject of proof at trial. As stated, there is no basis to dismiss a statement of claim where the elements could be established by evidence.

29 In relation to actual damage said to result, the Statement of Claim pleads:

• The plaintiff has suffered actual loss and/or special damage as a natural and probable result of the false statement;[17]

• General loss of business, including the plaintiff ceasing to receive work he had been receiving from Victoria Police;

• Financial loss from reduced motivation to work, including not working for two afternoons per week from the occurrence of the events and continuing;

• Sullying of the plaintiff's reputation, including to a number of named persons.[18]

30 Mr Boas submitted there were three heads under which damage could arise:

(a) Specific damage, such as actual calculated loss in relation to property or business;

(b) Reputational damage, such as the loss to the reputation of a person in business or commerce, such as would be likely to result in a loss; or

(c) Mental harm, including some psychological harm or disorder suffered as a result of an injurious statement.

31 In Williams v Smith,[19] the Supreme Court of Western Australia was concerned with a claim for injurious falsehood arising out of various statements made by the defendants as to alleged sexual abuse, said to be false and malicious. The Court made reference to Ratcliffe v Evans,[20] where Bowen LJ said that actual damage must be shown, that is damage which has actually occurred.

32 The Court further made reference to Fleming[21] where it was said the tort:**

"... is broad enough to encompass any damaging falsehood which interferes with prospective advantage, even of a noncommercial nature, as when a defendant falsely and maliciously wrote a letter to the plaintiff's fiancée, claiming that she was his own wife with the result that she thereby lost her marriage. ... ."

33 Further reference was made to Noye v Robbins,[22] where Heenan J discussed the width of the tort:

"... In these circumstances, I consider that I should approach this case on the basis that an action for damages for injurious falsehood will lie for false statements made maliciously against the plaintiff where the statements, because of their very nature, were likely to, and did, adversely affect the plaintiff in his reputation and standing as a police officer because, if they were true, they would reveal his unfitness to continue as a police officer and lead to his discharge or dismissal from the Police Force ...".[23]

34 Reference was further made to James v Faddoul,[24] where Price J said:

"In any event, the plaintiffs are entitled to have the opportunity at the hearing of their action to argue that damages may be awarded for injured feelings. Whilst in Bride v KMG Hungerfords (1991) 109 FLR 256 Murray J at 281 was of the opinion that no damages are available in respect of nonpecuniary harm or loss said to flow from an injurious falsehood, the issue was not determined in Palmer Bruyn. There is, as the parties have pointed out, authority to the contrary in the United Kingdom: see Joyce v Sengupta (1993) 1 WLR at 347-348."

"There is considerable force in the defendants' argument that the plaintiff cannot recover damages for injurious falsehood for mental harm resulting in pecuniary loss where the mental harm results from the republication to the plaintiff of a false statement by the person to whom the false statement was published by the defendant. However, I am not satisfied that the plaintiff's case is so clearly untenable that it should be summarily dismissed."[25]

**36 Having considered these matters, I am of the view there is sufficient merit in the argument of Mr Boas that the actual damage said to have resulted from an injurious statement may be considered in the categories to which he refers; that is, a special damage, damage in the nature of affect upon reputation, and possibly for mental harm. It will be a matter for eventual determination at trial as to whether Dr Mutton is able to claim damages falling into any of these categories.

37 I am thus satisfied there is a sufficient basis, upon the present pleading, for the proceeding to be brought, and the plaintiff's claim as to injurious falsehood will not be dismissed.**

**38 I am of the view, however, the plaintiff's Statement of Claim in its present form requires further pleading. Generally the document is rambling and in a narrative form. It is imprecise as to a number of elements of the tort which must be pleaded, and to enable the defendants to properly respond.

39 To that end, the Statement of Claim should be amended as follows:

(a) The precise statement said to have been made by the first defendant, or made by the first defendant on behalf of the second defendant, to Detective Wigfield, should be set out;

(b) The basis upon which it is said that that statement was false or malicious;

(c) The other persons to whom the injurious statement has been made or conveyed;

(d) A precise pleading as to how that statement published either to Detective Wigfield, or by him to some other person or persons, is said to affect Dr Mutton's reputation in trade or commerce;

(e) Precise details of the damage said to have occurred, either in the nature of special damages, damages as to reputation or mental harm.

40 Leave will be granted to Dr Mutton to amend his Statement of Claim providing the proposed amended pleading complies with these directions.

41 I shall hear from the parties further as to costs.

[1] See various authorities referred to in Williams - Civil Procedure Victoria - Order 23.01.15

[2] A v State of New South Wales [2007] HCA 10 at paragraph 36

[3] [1947] AC 322

[8] [1996] AC 74

[10] [1901] NSWStRp 70; (1901) 1 SR (NSW) 163

[12] Commonwealth Life Assurance Society Ltd v Brain [1935] HCA 30; (1935) 53 CLR 343 at 379 and Malz v Rosen [1966] 2 All ER 10

[13] Amin v Bannerjee (supra) at page 330

[14] The Law of Torts - John Fleming (9th edition) page 676

[15] Halsbury's Laws of Australia - Tort - Volume 45

[16] See Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69, per Gummow J at paragraph 404 and per Kirby J at paragraph 425

[18] The allegations as to damages referred to are contained in a Proposed Amended Statement of Claim provided to the Court at the time of hearing.

[19] [2012] WASC 371

[21] Fleming's The Law of Torts (10th ed) - Professor Deakin, and the authorities referred to therein.

[22] [2007] WASC 98

[24] [2007] NSWSC 821

[25] Williams v Smith (supra) at paragraph 39