These proceedings were commenced in the Equity Division in June 2019. The dispute arises out of assertions by Ms Norman and Mr Berry that a scheme some years ago, advertised by a combination of individuals involving the purchase of a property and a kind of cooperative ownership of that property fell apart and losses were incurred.
In that context, both Ms Norman and Mr Berry say that they deposited into the trust account of the defendant solicitor, Mr Wall, $120,000 and $80,000 respectively. They say that the money was never returned to them, never accounted for despite requests and that Mr Wall as a result, breached his fiduciary and other duties to them.
The proceedings were dealt with twice in the Equity Division Property List by Darke J. The proceedings were then referred to the Common Law Division Professional Negligence List for further management, limited to a potential action against Mr Wall. The other initially named defendants were removed by consent.
The encouragement to draft an appropriately circumscribed statement of claim did not result in a satisfactory iteration of the statement of claim despite three attempts.
The proceedings were first listed before me on 21 February 2020 and I formed the view, as set out Norman v Wall [2020] NSWSC 129, that Ms Norman needed legal assistance. I referred her to the Pro Bono Scheme. I also provided a generous timetable within which to prepare, and file and serve an amended statement of claim, appropriately limited to professional negligence and/or breach of trust and/or breach of fiduciary duty.
The matter returned to me on 27 July 2020. Contrary to the timetable that required any further amended statement of claim be served by mid May 2020, a proposed Further Amended Statement of Claim was served, over 2 months late, at 5:49pm on 26 July 2020.
In Norman v Wall (No. 2) [2020] NSWSC 997, I set out my reasons for refusing leave to file and rely upon that document. I also made an order of the Court's own motion, pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), dismissing the proceedings for want of due despatch given the one year delay and the fact that the fourth iteration was no closer to a pleading that was appropriate.
When dealing with another aspect of the proceedings, I reflected on the fact that the plaintiffs had still not had the benefit of legal representation and that before dismissing the proceedings generally, I ought to consider a middle ground, that is, whether the vice of the pleading as drafted could be dealt with by striking out those parts of the statement of claim that were extraneous to the causes of action available, and granting leave for an amended statement of claim to be filed, strictly limited to a case against Wrothwell Wall only in professional negligence, and/or breach of trust and/or breach of fiduciary duty.
Rule 14.28 of the UCPR provides for this:
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 defence 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).
I have set aside the dismissal order for the reasons set out in Norman v Wall (No. 3) [2020] NSWSC 998 and heard submissions from counsel for the defendant, Mr Raftery, as to first, whether I should allow the claim to proceed with a modified version of the statement of claim, second, what parts of the proposed amended statement of claim ought to be struck out pursuant to r 14.28 and the extent to which the defendant is able to plead a response to those remaining pleadings of the case confined to professional negligence and/or breach of trust and/or breach of fiduciary duty.
For the reasons that follow I concluded that it is consistent with the interests of justice to apply r 14.28 despite the absence of a formal application by the plaintiffs. I note that they still do not have legal representation and cannot be expected to know or understand the availability of this rule. I consider that to proceed this way is consistent with the obligations of the Court to foster timely and cost effective resolution of the dispute, and to facilitate the just, quick and cheap resolution of the real issues in dispute in the proceedings.
[2]
The case available to the plaintiffs
There are within the prolix current draft Amended Statement of Claim a series of material facts that arguably can form an adequate basis for the case sought to be made.
As noted at [10]-[13] of Norman v Wall (No. 3) [2020] NSWSC 998, these material facts, or something like them, were set out in each of the three previous iterations of the statement of claim.
There is no doubt in my mind that from the beginning, Ms Norman and Mr Berry claimed that Mr Wall had mis-deployed or misused and not accounted for the large sums of money that they had deposited into his trust account.
I acknowledge that there are large tracts of material in the current iteration that have no relevance at all to such a case. The plaintiffs were encouraged to remove that material by Darke J on two occasions in 2019 and by me in February 2020. Either the encouragement was not heeded or, more likely, in my view, not fully understood.
Oral submissions were provided by Mr Raftery at the request of the Court to identify specific objections to individual paragraphs of the proposed statement of claim. General submissions were also made regarding whether and to what extent I should proceed this way.
Mr Raftery's primary position was that the case was not sufficiently articulated in the draft, and the nature and content of the duty of care claimed to be owed by Mr Wall to Ms Norman and Mr Berry was not properly identified. He submitted that it remains unclear whether the plaintiffs were asserting that Mr Wall had been retained by them as their solicitor. He submitted that this failure was fatal, and even if it was not, the pleadings were too diffuse, confused and non-specific to allow the case to proceed.
These are reasonable submissions to make and I have carefully considered them.
It seems to me that the nature of the legal relationship and therefore the nature and content of the duty of care is a matter for legal debate. The arguable parameters of the duty of care can be sufficiently identified by the asserted material facts. Certainly the elements of a claim for breach of fiduciary duty and breach of trust are sufficiently identified by the facts asserted regarding the payment to the defendant of the identified large sums of money for deposit into his trust account.
Mr Raftery referred me to the very instructive decision Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46. In that case the High Court considered (in the context of dealing with a dispute about discovery) the role of case management, emphasising the fact that the Civil Procedure Act 2005 (NSW) may "require a more robust and proactive approach" on the part of the Court and emphasising the primacy of the role of the dictates of justice:
"[51] In Aon Risk Services Australia Ltd v Australian National University, it was pointed out that case management is an accepted aspect of the system of civil justice administered by the courts in Australia. It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants. The decision in Aon Risk Services Australia Ltd v Australian National University was concerned with the Court Procedures Rules 2006 (ACT) as they applied to amendments to pleadings. However, the decision confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice.
[52] Unsurprisingly, the case management rules with which the Court was concerned in Aon Risk Services Australia Ltd v Australian National University had essentially the same object as those stated in the CPA. The overriding purpose of the CPA and the rules of court provided for by the UCPR, as stated in s 56(1) of the CPA, is "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings." In order to achieve that purpose, s 56(2) provides that the court:
'must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.'
A duty is also imposed upon a party to civil proceedings. Section 56(3) provides that:
'A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court.'
Section 56(4) requires that lawyers representing a party to civil proceedings (or any person with a relevant interest in the proceedings) must not, by their conduct, put a party in breach of this duty.
[53] Section 57 relevantly provides, with respect to case management by the court, that:
(1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects:
(a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
[54] Section 58 provides in relevant part:
(1) In deciding:
(a) whether to make any order or direction for the management of proceedings, including:
(i) any order for the amendment of a document, and
…
(iii) any other order of a procedural nature, and
(iv) any direction under Division 2, and
(b) the terms in which any such order or direction is to be made,
the court must seek to act in accordance with the dictates of
justice.
Sub-section (2) of s 58 goes on to provide that for the purposes of determining what the dictates of justice are in a particular case, the court must have regard to the provisions of ss 56 and 57 and may have regard to a number of other matters, to the extent it considers them to be relevant. Amongst these matters is the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction made in the process of case management.
[55] Section 59 provides:
In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.
The CPA provides some broad powers to the court to enable it to fulfil its duties with respect to the management of proceedings. Sections 56 to 59 appear in Pt 6 of Div 1 ("Guiding principles") of the CPA. Division 2 of Pt 6 is entitled "Powers of court to give directions". Section 61(1) provides generally that:
The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings.
Sub-section (2) goes on to provide that the court may, inter alia, direct the parties to take specified steps and give such other directions with respect to the conduct of the proceedings as it considers appropriate.
[56] The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose.
[57] That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the CPA can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the CPA assume that its purpose, to a large extent, will coincide with the dictates of justice".
Mr Raftery argued in effect that a "robust and proactive approach" required the Court to dismiss the proceedings and not to undergo a striking out exercise.
Reliance was also placed on the comments of the Court of Appeal in Dickens v State of New South Wales [2018] NSWCA 222 ("Dickens") at [8]-[12], where the Court set out Adamson J's reasoning for dismissing proceedings on the defendant's application in a case where r 14.28 had already been deployed, and a chance already given to the self-represented plaintiff to re-plead his case.
Her Honour concluded in that case that there was not any significant prospect that the plaintiff would be able to produce "a better version of the current pleading" if given the opportunity to do so:
"[11]…In deciding that Mr Dickens should not be afforded that opportunity, her Honour referred, inter alia, to the following observations of Nettle and Osborn JJA in Karam v Palmone Shoes Pty Ltd [2012] VSCA 97 at [36]:
'[A] self-represented litigant cannot be allowed forever to stand behind the shield of his own ignorance; especially when it continues to subject other parties to cost and inconvenience and to add pointlessly to the load on the court's already limited resources. There comes a point at which a self-represented litigant must be required to take responsibility for his choices …'
[12] For these reasons, her Honour concluded that the proceedings should be dismissed on the ground of "want of due despatch pursuant to r 12.7. For the following reasons, her Honour also considered at [46] that they should be dismissed on the additional basis that they were an abuse of process under r 13.4:
' … By repeatedly filing pleadings which do not comply with the UCPR, the plaintiff is abusing the processes of the Court. In effect, the plaintiff is demanding that the Court and the defendant work out his causes of action for him and endeavouring to cast an onus on the defendant to prove that there is nothing in the morass of inconsistent allegations that might ground a cause of action which might afford him no relief. It is no part of the Court's function to provide a litigant with legal advice. Nor is the Court to 'settle' a defective pleading so as to remove the dross to expose and craft the allegations which might amount to a reasonable cause of action. In effect, the plaintiff is seeking to have the Court require the first defendant to plead to a claim which, because of its form, is not susceptible of a proper response in a defence.'"
I completely agree with her Honour's approach as well as the Victorian Court of Appeal's observations which her Honour cites regarding the position of a self-represented litigant and the potential for there to be abuse of the processes of the Court. Here however there is, and continues to be, in each iteration of the statement of claim, material facts that could ground a potential case against Mr Wall. Those material facts are "severable" from the other irrelevant material which occupies most of the statements of claim provided so far.
As pointed out by the Court of Appeal at [13] in Dickens, whether to allow a further attempt is a discretionary decision. The attempts by the plaintiffs to amend their pleading have been late, misguided and unfocussed. They lost the potential benefit of a referral to the Pro Bono Scheme by claiming in June 2020 that the proceedings would be transferred to the High Court.
In my view, however, the dictates of justice require one last chance.
I grant leave to the plaintiffs to file and serve a further amended statement of claim, limited to a case in negligence, and/or breach of fiduciary duty and/or breach of trust against Mr Wall.
If a statement of claim in acceptable rule compliant form is not filed and served by 5:00pm on 28 August 2020, the claim is dismissed, with costs.
If proceedings are not automatically dismissed, as a result of the above order, I will list the matter before me at 9:30am on Thursday 1 September 2020 at which time I will set a timetable for the ongoing management of the matter and/or to hear any application the defendant wishes to make.
[3]
ORDERS
I make orders as follows:
1. The plaintiffs have leave to file a further amended statement of claim limited to a case in professional negligence, breach of fiduciary duty and breach of trust against Wrothwell Wall, that FASOC to be filed and served by 5:00pm on 28 August 2020.
2. If no FASOC is filed and served by the time specified in order 1, the proceedings are dismissed with the plaintiffs to pay the defendant's costs of the proceedings.
3. If not dismissed, the matter is listed before Lonergan J on Thursday 1 September 2020 at 9:30am with a view to setting a timetable for the further conduct of the proceedings and/or for the hearing of any application by the defendant.
4. I reserve the question of costs should the FASOC be filed in time.
[4]
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: 17 August 2020