Practice and procedure - Application to strike out claim brought by second plaintiff - Effect of second plaintiff's bankruptcy at time cause of action occurred - Turns on own facts -

Second plaintiff's claim struck out - Application against first plaintiff

Birkett v James [1978] AC 297

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541

Cabassi v Vila [1940] HCA 41; (1940) 64 CLR 130

Coe v Commonwealth [1979] HCA 68; (1979) 24 ALR 118

Coyne v Commercial Equity (1998) 20 WAR 109

Duke v Royalstar Pty Ltd [2001] WASCA 273

Gibbons v Duffell [1932] HCA 26; (1932) 47 CLR 520

Hughes v Gales (1995) 14 WAR 434

Jakovljevic v Doslov [2000] WASCA 131

Jingellic Minerals NL v Abigroup Ltd (1992) 7 WAR 566

Latrobe Country Credit v Smith (1998) VSCA 714

Lawrence v Lord Norreys [1890] All ER 858

Lewandowski v Lovell (1994) 11 WAR 124

Marrinan v Vibart [1962] 3 All ER 380

Re Morton (1996) 21 ACSR 497

Roy v Prior [1971] AC 470

Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323

Ulowski v Miller (1968) SASR 277

Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514

Watson v M'Ewan [1905] UKHL 1; [1905] AC 480

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

1 MASTER SANDERSON: This is the defendants' application seeking orders that the plaintiffs' action be struck out, or alternatively, seeking to strike out the plaintiffs' statement of claim filed 27 March 2002. On 6 June 2002 the defendants filed a minute of amended chamber summons, adding two extra grounds upon which it was said the plaintiffs' action ought be struck out. There being no objection on the part of the plaintiffs, I gave leave to amend the chamber summons. In its amended form the defendant sought by par 1(a) through to (d) to strike out the statement of claim because it did not disclose a cause of action, or alternatively, because it was not a proper pleading. By par (1)(e) the defendants sought to have the action dismissed for want of prosecution. By par 1(f) the defendants sought to strike out the claim on the grounds that:

"Any right of action against either or both Defendants which the Second Plaintiff acquired during the period 20 January 1992 to 22 July 1997 vested in the Second Plaintiff's trustee in bankruptcy, the Second Plaintiff having been bankrupt from 22 January 1992 to 22 July 1997."

2 Before dealing with the defendants' specific complaints it is appropriate to give a brief history of the action. This chronology is taken from the affidavit of Gerard James O'Hara, sworn 20 May 2002. There was no dispute by the plaintiffs that the chronology was accurate. The writ was issued on 26 July 1999. It was endorsed with a statement of claim. On 15 September 1999 an amended statement of claim was filed. On 14 December 1999 the plaintiffs produced a minute of proposed substituted statement of claim. A further minute of proposed substituted statement of claim was produced on 9 June 2000 and yet another minute was produced on 29 September 2000. There was then produced substituted statement of claim on 5 April 2001 and minutes of proposed statements of claim were produced on 21 May 2001, 1 August 2001 and 26 November 2001. The present consolidated statement of claim which was filed pursuant to the orders of Master Bredmeyer made on 8 March 2002 is then the 10th version of the statement of claim. Each time the statement of claim has been amended it has grown in length. It now runs to 115 paragraphs and is 69 pages long. No purpose would be served in detailing the circumstances in which various versions of the statement of claim were produced. Essentially the plaintiffs who appear in person claim that each time a version of the statement of claim was produced it was met with a series of lengthy objections from the defendants' solicitors. The plaintiffs say that many of the objections, if not all, were technical and pedantic, but they have, on each occasion, attempted to deal with the defendants' complaints so as to allow the matter to proceed without becoming bogged down in interlocutory applications. The defendants for their part maintain that, in some respects at least, amendment cannot cure the problems with the statement of claim - there is simply no cause of action available to the plaintiffs. In other respects they say that the pleading is so confused that they cannot comprehend the case they are expected to meet. The present list of objections to the pleading takes issue with virtually every paragraph of the substituted statement of claim, save the first six and the last eight. The defendants deny emphatically that they are conducting a war of attrition through strike-out applications. They say simply that they wish to have the case made against them properly formulated as is required by the Rules.

3 Difficulties are frequently encountered when litigants acting in person are faced with pleading complex causes of action. This difficulty was commented upon by Templeman J in Smith v McCusker QC [2000] WASCA 320 where his Honour said (at 212):

"... the delay is due in part to the respondents' persistent objection to the form of the Smiths' pleadings. That objection is being justified in the sense that a litigant is required to comply with the rules of pleading. However, the Court should, I think, approach matters involving litigants in person with a degree of flexibility. The power to dispense with pleadings illustrates that the rules of pleading are a means to an end, not an end in themselves."

4 This statement of principle is often difficult to put into practice. To what extent should a pleading which, if drawn by counsel, would undoubtedly be struck out, be allowed to stand when the litigant is acting in person? Why should the rights of the defendant be conditioned by whether or not a plaintiff is represented? To what extent should solicitors and counsel acting for a defendant be obliged to winkle out or assume the basis of an unrepresented plaintiff's cause of action? All these questions are difficult to answer and must inevitably depend upon the facts in each particular case. For present purposes it will be sufficient if I say that in approaching the defendants' application I have been mindful of the fact the plaintiffs are unrepresented and I have extended to them all reasonable indulgence.

5 It is convenient to begin by outlining the nature of the claims brought by the plaintiffs against the defendants. Paragraphs 1 and 2 of the consolidated statement of claim (which I will refer to as the statement of claim) identify the plaintiffs. Paragraphs 4 and 5 identify the defendants as police officers assigned to investigate matters relating to the affairs of the second plaintiff. Paragraph 6 pleads that as part of their investigations the first and second defendants were "in charge of, and directed, a number of other police officers in a series of searches conducted upon premises occupied by the Second Plaintiff". These premises are identified and defined as "the House", "the Stables", "the Storage Unit" and "the Farm". By par 7 it is pleaded that the first and second defendants "fraudulently obtained by way of sworn complaint in writing" a search warrant that resulted in a search of the storage unit. Reference is made in par 7 to the basis upon and the purposes for which the search warrant was obtained. As I have indicated, the defendants do not take issue with these first seven paragraphs.

6 Paragraphs 8 to 17 plead, in essence, that the search warrant referred to in par 7 was obtained "by fraud" and that seizure of certain property by the first and second defendants was wrongful. By par 17 it is pleaded that as a consequence of the fraud by the defendants and wrongful seizure of the second plaintiff's goods, the second plaintiff has suffered loss and damage. Paragraphs 7 through to 17 comprise one cause of action which I will refer to as "the first search warrant claim".

7 Paragraph 18 pleads that on 9 August 1993 the first and second defendants obtained a search warrant, defined in the pleading as "the second search warrant" and they alleged that this warrant was obtained fraudulently. Paragraphs 19 through to 31 deal with claims made with respect to this second search warrant and it is convenient to refer to these claims as "the second search warrant claims". The second search warrant claims do not mirror completely the first search warrant claims but there is a strong similarity between the two pleas.

8 Paragraph 32 pleads the issue of a third search warrant and pars 33 through to 45 detail how it is said the defendants infringed the second plaintiff's rights. Unlike the two earlier pleas, the third search warrant claim does not contain within pars 32 to 45 any specific claim for damages. However, it would appear that the cause of action is based upon conversion, trespass and perhaps breach of duty of care. This uncertainty as to what precisely the second plaintiff is claiming against the defendants is one area of complaint made by the defendants and it is a matter to which I will return later in these reasons.

9 Paragraph 46 pleads the issue of a fourth search warrant on 9 August 1993 and pars 47 through to 54 plead "the fourth search warrant claim". Again there is no specific plea of damage to be found within the plea of the fourth search warrant claim and again this is a matter of complaint by the defendants.

10 Paragraphs 55 through to 61 deal with the alleged seizure by the defendants of a pair of binoculars belonging to the second plaintiff. This is a straightforward plea of conversion. It is alleged that the binoculars were not taken pursuant to any search warrant and that they have never been returned to the second plaintiff.

11 By par 62 the plaintiffs plead the issue of a fifth search warrant on 12 August 1993. Again it is said that the issue of the search warrant was "fraudulently obtained" and that the warrant was "fraudulently executed". This claim (the fifth search warrant claim) is pleaded in pars 62 through to 72. It concerns a Porsche motor vehicle which, it is said, was improperly taken from the second plaintiff with the result that he has suffered loss and damage.

12 Paragraphs 73 and 74 plead a conspiracy between the first and second defendants and a third party ("the first conspiracy claim"). This claim relates to an alleged conspiracy to prevent the second plaintiff maintaining and pursuing an action by a company identified as Jucara Pty Ltd in the Supreme Court.

13 Paragraphs 75 through to 79 plead what is described as "the second conspiracy claim". The allegations in relation to this claim allege that the first and second defendants gave false evidence in two bail applications involving the second plaintiff, the first on 12 August 1993 and the second on 24 September 1993. There are other elements of the conspiracy pleaded but evidence given by the defendants in relation to the bail applications appear central to the second conspiracy claim.

14 Paragraphs 80 and 81 relate back to the first conspiracy, although what they add to the second plaintiff's claim is unclear. Paragraphs 82 and 83 relate to the second conspiracy. The purpose of par 83 is unclear. Paragraph 84 pleads loss and damage.

15 Hitherto, all the claims made have been made by the second plaintiff. They have in no way involved the first plaintiff. By par 85 it is pleaded that in February 1992 the first plaintiff, then a serving police officer, was given certain instructions by his superiors. This involved conducting investigations into the affairs of the second plaintiff. By par 87 it is pleaded that between August and November 1993 criminal proceedings were instituted against the first and second plaintiffs as a consequence of an investigation by the police internal affairs section. Paragraphs 88 through to 97 chart the course of the charges brought against the plaintiffs. In summary, after some to-ing and fro-ing, the Director of Public Prosecutions dropped the charges. Paragraphs 87 through to 98 do not contain within their terms any claim for damages.

16 Paragraphs 99 through to 105 deal with police internal charges against the first plaintiff. By par 106 it is pleaded that the first defendant "instigated and continued all of the criminal charges against the First and Second Plaintiffs and all of the police internal charges against the First Plaintiff". By par 107 it is pleaded that these charges were instituted and continued "without reasonable and probable cause". Paragraph 108 alleges the first defendant was "actuated by malice".

17 Paragraph 109 raises a different cause of action. It is said by the plaintiffs that consequent upon their being police officers, the defendants owed to the second plaintiff certain duties in relation to the "procuration and execution of search warrants". By par 110 it is alleged that the first defendant owed the first and second plaintiffs a duty of care in relation to the conduct of police investigations. By par 111 it is alleged that the first defendant breached this duty of care and as a consequence, the first plaintiff has suffered loss and damage. Paragraph 112 is a separate claim. There alleges misfeasance in public office - that is to say, it is said that the first defendant acted maliciously in discharge of his functions as a police officer. Thereafter there are generalised pleas of loss and damage.

18 Two points may be made about the present pleading. First, it is by no means incomprehensible. That is to say, the statement of claim in its present form provides a logical narrative. It may well be that certain words and phrases are used in an intemperate manner - for instance, the word "fraudulently" is liberally - and inappropriately - sprinkled throughout the pleading. While this frequently offends the rules of proper pleading, it does not render the pleading in and of itself confusing. In my view, the defendants know in broad terms (and I emphasise in broad terms) the case they have to meet.

19 Secondly, this is the third time I have considered in detail a statement of claim provided by the plaintiffs: see Noye v Gwilliam [2000] WASC 206 and Noye v Gwilliam [2001] WASC 58. In the second of these two decisions I dealt with objections to a version of the statement of claim filed 18 September 2000. I dealt with matters arising in relation to what are now the search warrant claims and determined that these matters could proceed. I also was prepared to allow the plaintiffs to proceed in relation to alleged conversion of the Porsche. I also dealt with claims relating to the prosecution of the plaintiffs and the allegations made against the defendants in that regard. While concluding that I had reservations about the form of the pleading, I was prepared to allow the action to proceed. The defendants' complaints in this application must be viewed against the background of this earlier decision.

20 It is convenient if I deal first with the attack the defendants make on the form of the pleading. I can illustrate the nature of the complaints by referring just to one paragraph of the statement of claim and the objection taken by the defendants. (I have selected a paragraph virtually at random, not because it is of itself a paragraph of significance, but rather to illustrate the point). Paragraph 18 of the statement of claim is in the following terms:

"On 9 August 1993 the First and Second Defendants fraudulently obtained by way of sworn complaint in writing made by the Second Defendant, a search warrant under Section 711 of the Criminal Code ('the second search warrant') in relation to the House for the alleged offence of 'conspiracy to steal', which was issued specifically to search for 'diamonds and documents'."

21 The defendants express their objection to this paragraph in their objections filed 20 June 2002 in the following way:

"Embarrassing. It is unclear how the sworn complaint was 'fraudulently obtained' and what is alleged to have been done by each of the defendants."

22 It must be said that there is some merit in the defendants' objections to the form of this paragraph. To plead fraud, without pleading material facts which can give rise to such conclusion, is improper and renders the claim liable to be struck out. However, taken in context, the defendants know the claim that they must meet. That is clear when par 18 is read with other paragraphs making up the complaint in relation to the second search warrant. In all the circumstances, and making every possible allowance for the fact that the plaintiffs are unrepresented, I am prepared to allow par 18 to stand. Equally, I see no purpose in examining in minute detail each and every detail of the statement of claim so as to provide a critique which might perhaps lead the plaintiffs to amend the statement of claim in a way that satisfies the rules of pleading. It is far better, in my view, to allow the plaintiffs to express their claims in terms which at least provide a logical narrative and to force the action on to a conclusion.

23 The defendants also complain that the proceedings are an abuse of process. This is married with their application to strike out the action for want of prosecution. The application to strike out for want of prosecution does not focus upon a long period of delay which is often the case in such applications. Rather, it is the failure of the plaintiffs to provide a workable statement of claim over a lengthy period. This, taken together with the shifting nature of the allegations made against the defendants, would, so the defendants say, justify the action being struck out.

24 This shifting nature of the plaintiffs' case can be illustrated by reference to the plaintiffs' claims of conspiracy. Tracing these claims through the various versions of the statement of claim is difficult. Nonetheless, it perhaps illustrates the nature of the defendants' complaint. What follows is largely drawn from the written submissions provided by the defendants. In my view it represents a fair and accurate account of the metamorphosis of the conspiracy claim.

25 The first reference to conspiracy appears at par 91(d) of the minute dated 9 June 2000. The conspiracy was not separate pleaded but included as an amendment to the particulars of malice. The plea was in the following terms:

"by conspiring with others so as to cause the Plaintiff to be detained in custody for a total time of 2 years 9 months and 10 days until the Plaintiff was sentenced to a term of imprisonment."

26 There was a substantive plea of conspiracy in the minute of statement of claim dated 29 September 2000. Paragraph 55 pleaded that the second defendant conspired with the first defendant during the period from 30 June 1993 to 10 August 1993. Paragraph 56 pleaded the overt acts of conspiracy as being the making of false statements to obtain search warrants and malicious execution of those warrants. The minute dated 5 April 2001 continued the plea of conspiracy. Paragraph 55 referred to the date of the conspiracy as being prior to 30 July 1993 and 10 August 1993. The parties to the conspiracy were said to be not only the defendants but also other unspecified individuals. The overt acts of conspiracy pleaded in the earlier par 56 remained essentially unchanged.

27 The defendants complained that any claim based in conspiracy as alleged was statute-barred. As a consequence of this objection, the second plaintiff amended the allegation to say that the conspiracy was not confined to July and August 1993 but extended until 20 November 1998. This plea is to be found in par 54 of the minute dated 21 May 2001.

28 The acts of conspiracy pleaded in par 55 of the minute dated 21 May 2001 did not repeat the overt acts referred to in par 56 of the statement of claim of 5 April 2001. A number of additional overt acts were pleaded. It was said that the defendants conspired with one Devenish, contrary to direct orders of their superior officer, to arrest the plaintiff on the morning of 10 August 1993, thus frustrating the second plaintiff's participation in civil proceedings involving the second plaintiff and Devenish which were to commence that morning in the Supreme Court. It is further said that the defendants conspired to charge the second plaintiff with two counts of conspiracy to steal where there was no evidence to support those charges; and is further said that the defendants conspired with two others to present false evidence and information in the course of the second plaintiff's bail application in the Perth Court of Petty Sessions in August 1993 and in the Supreme Court in September 1993. These are but three of the eight identified additional overt acts referred to by the plaintiffs.

29 The minute dated 1 August 2001 again alters the conspiracy plea. The date of the conspiracy has changed and a number of additional persons were said to have been involved in the conspiracy. The conspiracy is said to have terminated on 8 October 1998 as against 20 November 1998 in the earlier pleading.

30 There were other changes to the minute dated 1 August 2001. Paragraph 55(h) pleads as an overt act of conspiracy a further conspiracy. Whereas par 55(h) of the minute dated 21 May 2001 referred to two individuals as being the other parties to this conspiracy, par 55(h) of the minute dated 1 August 2001 refers not only to these two individuals but an additional three individuals.

31 The allegations of conspiracy in par 73 of the minute dated 27 March 2002 constitute yet another altered version. It is alleged that the search warrants were obtained and property search pursuant to a conspiracy hatched between 15 June 1992 and 10 August 1993. Paragraph 54 of the minute dated 26 November 2001 had alleged a much later commencement date - 30 July 1993 - and a much later finishing date - 8 October 1998. Further, whereas the minute dated 27 March 2002 alleges that the parties to the conspiracy were the defendants and Devenish, the minute dated 26 November 2001 included these three persons and another three individuals.

32 Paragraph 75 of the minute dated 27 March 2002 alleges a second conspiracy. This time the conspiracy is said to be between the defendants and five other named individuals. The date of that conspiracy had been alleged in par 54 of the minute dated 26 November 2001 to be during the period 30 July 1993 and 8 October 1998. The dates alleged in the latest minute are between 15 June 1992 and October 1993.

33 In the minute dated 1 August 2001 the second plaintiff alleges that the second defendant conspired with others to intimidate four named individuals to give false testimony and information. While the same allegation appears in the minute dated 26 November 2001, the plea is abandoned in the minute dated 27 March 2001.

34 I have set these matters out in somewhat tedious detail to illustrate the point made by the defendants. It must be said that it is a point of some substance. It is virtually impossible for the defendants to know precisely what allegations of conspiracy they must meet. Each version of the statement of claim varies the allegations made against them - sometimes only slightly, other times significantly. In all, it is difficult to resist the conclusion that the plaintiffs are making up the story as they go along and pleading whatever suits their purposes on a particular date.

35 However, having said all of that, I am not persuaded that it would be appropriate to strike out the action as an abuse of process. I need not repeat what I said about the difficulties encountered by litigants in person. In the end, it seems to me proper to allow the plaintiffs to put their claim in the way they have and take the action through to trial. So far as the defendants are concerned, they understand in broad terms the case they must meet.

36 That then leaves the defendants' application to strike out the action by the second plaintiff relying on the provisions of the Bankruptcy Act ("the Act"). The defendants argument is put in this way. Section 58(1) of the Act provides that after-acquired property of the bankrupt vests, as soon as it is acquired, in the trustee of the estate of the bankrupt. By s 5 of the Act, "property" is defined to mean (inter alia) "personal property of every description". That definition would include any chose in action or claim for damages in tort, to which the bankrupt is entitled. The expression "the property of the bankrupt" is relevantly defined by s 5 to mean:

"(i) the property divisible among the bankrupt's creditors; and

(ii) any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt ..."

37 The property which is divisible among the bankrupt's creditors is that referred to in s 116(1). It includes not just all property that belonged to or was vested in the bankrupt at the commencement of the bankruptcy, but also all property that has been or is acquired by the bankrupt after the commencement of the bankruptcy and before discharge. It is not just the property itself which is vested in the trustee, but also the capacity to exercise, and to take proceedings for all existing powers in, over or in respect of property which might otherwise have been exercised by the bankrupt. There can be no doubt that the property of a bankrupt which vests in the trustee includes the benefit of a chose in action, including an action for damages for tort: see Bride v Peat Marwick Mitchell [1989] WAR 383 per Malcolm CJ at 391.

38 It is not in dispute that the second plaintiff was bankrupt from 20 January 1992 until 22 July 1997. Any fair reading of the present statement of claim shows that facts which give rise to the pleaded causes of action occurred after the commencement date of the bankruptcy on 20 January 1992 and before discharge on 22 July 1997. The result then, pursuant to s 116 of the Act, is that any such causes of action which would have accrued to the second plaintiff during the period of his bankruptcy are vested in the trustee. Any such causes of action remain vested in the trustee, notwithstanding the second plaintiff's discharge from bankruptcy in July 1997: see Bride v Peat Marwick Mitchell (supra) at 393. The result, so the defendants argue, is that the second plaintiff does not have standing to bring the action in his own right - that right being vested in the trustee - and the action should therefore be dismissed.

39 Section 116(2)(g)(i) of the Act provides that any right of the bankrupt to recover damages or compensation "for personal injury or wrong done to the bankrupt" does not vest in the trustee. It is well settled that the exception in par (g) of the s 116(2) applies only to claims for damages for personal or other injury to the person. A claim resulting from a motor vehicle, for instance, would be covered by this section: see Bride v Peat Marwick Mitchell (supra) at 391. In Cox v Journeaux [1935] HCA 48; (1935) 52 CLR 713, Dixon J referred to the test as being (at 721):

"... whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property."

40 In Bride v Peat Marwick Mitchell (supra) dealing with s 116(2)(g)(i), Malcolm CJ approved of what was said by Lockhart J in Faulkner v Bluett [1981] FCA 3; (1981) 52 FLR 115 at 119:

"The common thread running through these cases is that where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee, notwithstanding that it may well have produced personal inconvenience to the bankrupt ... Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt, the right to sue remains with the bankrupt."

41 It is clear that the second plaintiff's claim in relation to the unlawful removal and detention of property constitutes a complaint which is directed towards the removal or detention of property which was not owned by the second plaintiff but by his trustee in bankruptcy. Any rights in relation to the removal or detention of that property vested in the trustee. The second plaintiff has no right of action. Even if it could be argued that conduct on the part of the defendants caused some personal inconvenience to the second plaintiff, it is nevertheless the case that the "primary and substantial right of action" is direct pecuniary loss and therefore the only right to sue has passed to the trustee. The fact that the claim of the second plaintiff is for direct pecuniary loss emerges from the particulars of loss and damage to be found in pars 17, 21(d), 31, 35, 36, 51, 55, 61 and 72 of the statement of claim. Further, in relation to the conspiracy claim relating to preventing the second plaintiff from furthering his Supreme Court action, it is still the pecuniary interests of the second plaintiff which were injured.

42 The defendants position on this issue was carefully reasoned both orally and in their written submissions. (Much of the above is taken straight from those written submissions). In my view the position put is irresistible. So far as I can see, there is nothing in the plaintiffs' claim made against the defendants which is in the nature of a claim for damages for personal injury. That being the case, there is no alternative but to strike out the second plaintiff's claim and enter judgment for the defendants.

43 During the course of his submissions the second plaintiff did make the point that even if ownership of all the property in his possession was vested in the trustee in bankruptcy, it was nonetheless the case that he was in possession of the property and that therefore entitled him to sue. With respect, that submission proceeds upon a misunderstanding of the nature of the rights vested in the trustee. The fact that the plaintiff sues for damages shows he is seeking to enforce a chose in action. That he cannot do. The chose in action is vested in the trustee and he has no right to proceed. That is the end of the matter.

44 For these reasons I would strike out the second plaintiff's action against the defendants and enter judgment for the defendants. The first plaintiff should be entitled to pursue his claims which, as I understand the statement of claim, are brought only against the first defendant. Clearly it will be necessary for the first plaintiff to substantially recast the statement of claim. I will hear the parties as to the precise form of orders.