Nyoni v Shire of Kellerberrin

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 316 of 2010

JUDGE: SIOPIS J DATE: 21 december 2012 PLACE: PERTH

REASONS FOR JUDGMENT 1 There are two applications before the Court to strike out the applicant's substituted statement of claim. The first application is brought by the first respondent (the Shire) and the second application brought by the second, third and fourth respondents. 2 It is necessary to set out some of the background to the bringing of these applications. The applicant commenced this proceeding on 28 October 2010 by filing an application accompanied by an affidavit. The application referred to the Trade Practices Act 1974 (Cth) as this Court's jurisdictional basis to hear and determine the application. The claims made in the application included, amongst other claims, claims for damages against each of the respondents for defamation, loss of future earnings, fraud and discrimination. 3 At the time that the applicant commenced the proceeding he was not represented. However, at some time thereafter the applicant obtained legal representation. On 28 February 2011, the parties (including the applicant by his then legal representative) submitted to the Court a minute of consent orders which provided for the matter to proceed on pleadings and for the applicant to file and serve a statement of claim. On 28 February 2011, the Court made orders in terms of the minute of consent orders. 4 However, between the time of the making of those orders and by the time the applicant eventually filed and served the statement of claim, he had ceased to be legally represented. The absence of legal assistance in the drafting of the statement of claim was reflected in the content of the document which the applicant filed and served on the respondents. The respondents wrote to the applicant objecting to the terms of the statement of claim which the applicant had filed and served. 5 In response to the respondents' criticisms of the statement of claim, the applicant, still self-represented, filed an amended statement of claim on 30 May 2011 purporting to remedy the complaints. 6 The amended statement of claim, however, did not satisfy the respondents. The respondents filed an application to strike out the originating application on the grounds that the Court had no jurisdiction to hear and determine the originating application; and, in any event, to dismiss summarily the originating application and, in the further alternative, to strike out the amended statement of claim. 7 Following a contested hearing, I found that the Court did have jurisdiction to hear and determine the application. Further, I found that there appeared to be a sufficient foundation to some of the claims made by the applicant, to preclude the whole of the application being summarily dismissed. However, I did strike out the entire amended statement of claim on the grounds that it was plainly embarrassing, and in respect of several causes of action did not disclose any reasonable cause of action. 8 I also stated that I would issue a referral certificate for pro bono assistance and gave the applicant leave to file and serve a re-amended statement of claim (Nyoni v Shire of Kellerberrin [2011] FCA 1299 (Nyoni (No 1)). Pro bono counsel were subsequently appointed by the Court, to act on behalf of the applicant in the proceeding. 9 The applicant, whilst represented by pro bono counsel, then filed and served, on 14 February 2012, a substituted statement of claim. The substituted statement of claim omitted a considerable number of the claims and allegations which the applicant had made in the amended statement of claim. Among the claims omitted from the substituted statement of claim, were the claims the applicant originally made against the fourth respondent. There followed correspondence between the legal representative of the fourth respondent and pro bono counsel in relation to whether the claim against the fourth respondent should, therefore, be discontinued, and whether an amended originating application should be filed to reflect the abbreviated claims made in the substituted statement of claim. 10 A minute of proposed consent orders which provided that the applicant discontinue his claims against the fourth respondent and that he pay the fourth respondent's costs was signed by pro bono counsel and by the solicitors representing the fourth respondent. Also, by 8 March 2012, pro bono counsel and the solicitors for both sets of respondents had signed a minute of proposed consent orders which sought orders that the applicant have leave to file a further amended originating application by 4:00 pm on Friday, 9 March 2012. 11 At approximately 8:35 am on 9 March 2012, pro bono counsel, on behalf of the applicant, filed, by electronic filing with the Court, both minutes of proposed consent orders referred to in the preceding paragraph. Pro bono counsel also filed at the same time the further amended originating application referred to in one of the minutes. This document made changes to the originating application which had originally been drafted and signed by the applicant. In particular, it deleted the claims which the applicant had made for damages against each of the respondents for defamation, loss of future earnings, fraud and discrimination and sought relief by reference expressly to the Trade Practices Act, and the Fair Trading Act 1987 (WA). 12 At sometime between 10:00 am and 11:00 am on 9 March 2012, the applicant advised pro bono counsel by telephone that he was forthwith terminating their authority to continue to represent him. Later that day at 3:05 pm, the applicant faxed a notice to the Court withdrawing the instructions from pro bono counsel and stating that he would henceforth act on his own behalf. 13 On Monday, 12 March 2012, I signed the two minutes of consent orders which had been filed by pro bono counsel. At the time that I signed those two minutes I was unaware that the applicant had filed with the Court on the preceding Friday afternoon, a notice that he had withdrawn instructions from pro bono counsel, because that document had not been brought to my attention. 14 The applicant then filed an interlocutory application seeking leave to file and serve a "new" originating application and statement of claim and seeking to set aside the orders I made by consent on 12 March 2012. 15 At a hearing on 22 March 2012, I ordered that the applicant serve an amended originating application and amended statement of claim by 20 April 2012. I made no orders in relation to the application to set aside the consent orders I had made on 12 March 2012. 16 In the amended originating application and amended statement of claim (called the substituted statement of claim) which the applicant filed on 20 April 2012, the applicant reinstated a number of allegations and claims which had previously found expression in his original originating application and his earlier statements of claim, but which had been omitted from the amended originating application and substituted statement of claim filed by pro bono counsel. Further, included among the respondents named in the applicant's amended originating application and substituted statement of claim is the fourth respondent, and a number of claims against the fourth respondent are again pleaded in these amended documents. 17 The respondents objected to the substituted statement of claim which the applicant filed on 20 April 2012. I will refer henceforth to that "substituted statement of claim" as the statement of claim. The respondents brought an application to strike out the whole of the statement of claim, alternatively, a number of specific paragraphs from the statement of claim. 18 The nature of the claims which the applicant has sought to reintroduce into the originating application and statement of claim, and the arguments made by the respondents in opposition thereto, means that it is necessary to address the question of whether the consent orders that I made on 12 March 2012 should be set aside. 19 I invited written submissions from the parties on these questions and will deal with this question after I have considered the objections to the statement of claim.

The matters pleaded at paras 9, 10 to 20, 62, 65 and 67 20 I now deal with matters pleaded at paras 9, 10 to 20, 62, 65 and the last two subparagraphs of para 67, including the second and third set of particulars in that paragraph, of the statement of claim. 21 In paras 9.2 to 9.4, the applicant pleaded allegations regarding the fourth respondent which are embarrassing and are, therefore, struck out. 22 The gravamen of the allegations made in paras 10 to 20 and the related paragraphs referred to above, is that the Shire and the fourth respondent misappropriated public funds. The applicant pleaded that the impugned conduct deprived the applicant of "asserting property rights, such as seeking remedies for trespass, detinue and conversion" and the pleading refers to causes of action in fraud, and misleading or deceptive conduct. 23 These paragraphs do not disclose a coherent pleading of material facts comprising the essential elements of each of the causes of action which are referred to by the applicant. These paragraphs do not disclose a reasonable cause of action in respect of any of the claims mentioned, nor do they comply with the rules of pleading and are generally speaking incomprehensible, and, therefore, embarrassing. 24 Of particular concern, is the fact that a serious allegation of fraud is made by the applicant, without the necessary foundation. Allegations to this effect were part of the statement of claim which I previously struck out. Also, I struck out passages from the applicant's affidavit which made similar allegations of fraudulent conduct by members of the Shire Council on the grounds that the statements contained therein were scandalous. However, notwithstanding these matters, the applicant has again sought to reintroduce the claims. 25 It follows that paras 10 to 20, 62, 65 and the last two subparagraphs of para 67, including the second and third set of particulars in that paragraph, will be struck out. There will be no leave given to the applicant to pursue these claims further.

The matters pleaded at paras 20 to 30, 34, 35 and 36 26 I now deal with the matters pleaded at paras 20 to 30, 34, 35 and 36. 27 These paragraphs attempt to plead a number of causes of action based on the allegation that the Shire and the fourth respondent on 14 October 2007 directed Mr Robert Bateman, an inspector in the Department of Health to enter the applicant's pharmacy without the applicant's authority and, inter alia, "fabricate [sic] charges during his trespass that were never proven". 28 Founded on that allegation, the applicant then appears to make claims of negligence, defamation, misleading or deceptive conduct, misfeasance in public office, racial discrimination and trespass against the Shire and the fourth respondent. 29 These paragraphs, also, do not disclose a coherent pleading of material facts comprising the essential elements of each of the causes of action which are referred to in the preceding paragraph. Further, the paragraphs are embarrassing. 30 Accordingly, paras 20 to 30, 34, 35 and 36 are struck out. 31 There will be no leave for the applicant to continue to pursue further any of the claims referred to, based on the allegations pleaded in these paragraphs, other than the claim in trespass. 32 As to the claim in trespass, depending upon a clarification of the case that the applicant seeks to make as to the involvement of one or more of the respondents in the alleged trespass, it may be possible that the applicant will be able to advance a viable claim that one or more of the respondents are liable in trespass. 33 I will not, therefore, make any order at this time precluding the applicant from advancing a claim in trespass based on the allegations alleged. Nor, however, will I give the applicant leave to replead a claim founded on these allegations, because I am of the view that such a step will not assist the progress of this matter. In fact, further progress of this matter would, in my view, be inhibited by continuing to conduct the case on the basis of pleadings (Salim v Loh [2005] FCA 372 (Salim)). 34 Rather, I will vacate the order made on 28 February 2011 that this matter proceed on pleadings and direct that the matter proceed by way of the production by each of the parties of a statement of facts, issues and contentions with the intention of establishing before trial a clear statement of the causes of action which may be advanced at trial, the issues to which those causes of action give rise, and the facts and contentions relied on in support of the position contended for by each party. 35 I will, also, direct that the parties attend a case management conference for the purpose of commencing that process. As a means of determining whether the applicant will be entitled to pursue further the claim in trespass, I intend to require the applicant, as part of the process of settling causes of action and issues for trial, to file a document in the nature of particulars, which identifies the facts on which he relies on to demonstrate the respondents' involvement in the alleged trespass. A decision will then be made as to whether the applicant will be permitted to advance the trespass claim at trial. 36 In adopting this course, I am mindful of the observations of the Full Court in Manolakis v Carter [2008] FCAFC 183 at [10].

The matters pleaded at paras 31 to 33 37 In para 31 and para 32, the applicant pleaded that after October 2007, the fourth respondent and or the Shire "colluded" with several named persons, the Shire doctor and the Dryandra Nursing Home, to engage rival pharmacies in the towns of Northam and Merredin to provide pharmaceutical services in and for Kellerberrin. The applicant pleaded that "since then" all new prescriptions and pharmaceutical services have been "channelled" to those rival pharmacies and the local hospital thereby depriving the applicant of business in breach of the "Pharmacy Act 1964". 38 In para 33, the applicant pleaded that the channelling of the pharmaceutical services away from his business was intentional and deliberate and had caused loss of earnings and damage to the applicant's business. 39 For the following reasons, these paragraphs should be struck out because they do not disclose a reasonable cause of action, and are embarrassing. 40 The reference by the applicant to the collusion between the Shire and other persons and institutions named suggests that the applicant may be seeking to allege a conspiracy to cause economic harm to the applicant. Alternatively, the reference to the breach of the "Pharmacy Act 1964" may indicate that the applicant is seeking to invoke a claim of a conspiracy to harm the applicant by unlawful means. 41 Conspiracy, like fraud, must be clearly and specifically pleaded. An applicant alleging conspiracy must plead the agreement between the conspirators and that the alleged conspirators acted pursuant to the agreement with the intention of harming the applicant. Further, like fraud, a claim in conspiracy is not to be lightly made (Hughes v Western Australian Cricket Association (Inc) (1988) 19 FCR 10 at 55). 42 The pleading in paras 31 to 33 does not comply with the requirements for pleading conspiracy. There is a failure to plead the fact of a conspiratorial agreement, and that the conspirators acted pursuant thereto. 43 Further, the applicant has not referred to the provisions of the "Pharmacy Act 1964" which the applicant alleges renders unlawful, the use of the named rival pharmacies to provide pharmaceutical services in Kellerberrin. 44 It is possible that the applicant was, also, seeking to plead that the fourth respondent and or the Shire had intentionally interfered with the applicant's business by unlawful means. 45 In the case of Qantas Airways Ltd v Transport Workers' Union of Australia (2011) 280 ALR 503 at [422]-[435], Moore J examined the authorities in Australia for the purpose of determining whether Australian common law recognises the tort of interfering with trade or business by unlawful means and came to the conclusion that the High Court of Australia had not yet recognised the existence of such a tort as part of the common law in Australia. Moore J declined to accept that a first instance judge could act on the basis that this tort existed as part of the common law in Australia. 46 In those circumstances, paras 31 to 33 should be struck out. There will be no leave to the applicant to pursue further the allegations made in paras 31 to 33, and any causes of action based upon them.

The matters pleaded at paras 37 to 40 and 66 47 In paras 37 to 40 and 66, the applicant appears to plead causes of action based on two courses of conduct allegedly engaged in by the fourth respondent and or the Shire. 48 The first alleged course of conduct pleaded is that the fourth respondent and or the Shire incited members of the public to make complaints against the applicant "all of which were later found to be untrue and or vexatious and or frivolous and unfounded". 49 In paras 37.3 to 37.8, the applicant identifies the occasions on which the impugned conduct occurred by reference to the persons who incited the making of the complaints, the persons who made the complaints and, the dates on which the acts of incitement occurred. 50 However, albeit that the applicant has identified these matters, the words comprising each of the complaints are not pleaded. Accordingly, insofar as the applicant is seeking to bring a claim in defamation based upon the content of the complaints, the pleading of such a cause of action is fatally defective. 51 In addition, the applicant pleaded, in para 39 and para 40, that the conduct in para 37 (which would include the incitement to make the complaints) was misleading or deceptive, or likely to mislead or deceive, and that the conduct was in trade or commerce. 52 Those paragraphs are plainly pleaded in support of a cause of action under either the Trade Practices Act or the Fair Trading Act, or both. However, the pleading of such causes of action are defective. This is because the misleading element of the conduct has not been identified. Nor has the causal link between the misleading or deceptive conduct and the applicant's loss and damage been pleaded. 53 Also, insofar as the applicant may be seeking to rely only on the fact of the incitement of the complaints as comprising an independent cause of action, the applicant did not identify any recognised cause of action. 54 Accordingly, no reasonable cause of action in relation to the first alleged course of conduct has been pleaded. The pleading is also embarrassing. 55 The second alleged course of conduct which the applicant has pleaded is that the fourth respondent and/or the Shire, in collusion with others, made statements which were damaging to the reputation of the applicant and to the applicant's business. 56 In para 37.1, the applicant pleaded the content of the statements which the applicant said were defamatory and which were made with the intention of causing loss to his business. The applicant also relies on this conduct to plead, in para 39 and para 40, that the conduct was misleading or deceptive, and that it misled or deceived the customers of his business. 57 However, the difficulty is that the pleading is obscure as to the basis upon which the respondents are said to be liable for the making of the impugned statements. The applicant has rolled up a plea that one or more of the respondents actually made the statements, with a plea that suggests that others made the impugned statements in collusion with respondents. The pleading lacks detail as to when, where and by whom the impugned statements were made. 58 By reason of this circumstance, the pleading of the second alleged course of conduct, and of the attendant causes of action of defamation and injurious falsehood, is embarrassing. 59 Accordingly, paras 37 to 40 and 66 (including the particulars) are struck out. 60 There will be no leave given to the applicant to pursue a claim based on the allegations comprising the first alleged course of conduct identified above. 61 However, it is possible to detect from the pleading in relation to the second alleged course of conduct, that, depending upon a clarification of the applicant's case as to who made the impugned statements, and as to the involvement of one or more of the respondents in making the statements, the applicant may possibly be able to advance a claim in injurious falsehood, defamation or misleading or deceptive conduct. 62 I will not, therefore, make any order at this time precluding the applicant from advancing a claim based on those allegations. However, as already mentioned, I will not give the applicant leave to replead a claim founded on these allegations, because I am of the view that such a step will not assist the progress of this proceeding. The same considerations referred to in [33] to [35] above will apply mutatis mutandis in relation to this potential claim. 63 Therefore, the question of whether the applicant will ultimately be permitted to advance a claim based upon the second alleged course of conduct will depend upon the particulars of the facts and matters provided by the applicant during the course of the case management process directed towards the settlement of a statement of causes of action and issues for trial to which I have referred in [34] above. Accordingly, it may well be that in the event that the applicant is not able to demonstrate a basis upon which the claims in defamation, injurious falsehood or misleading or deceptive conduct against any one or more of the respondents can be arguably sustained, that the applicant will be precluded from advancing that claim at trial.

The matters pleaded at para 44 and para 46 64 The applicant also sought by para 44 and para 46 of the statement of claim to reintroduce a claim of defamation against the Shire. 65 In para 44, the allegedly defamatory words are pleaded, being statements made in the minutes of a meeting of the Shire Council which were published on the internet. In para 46, the applicant alleged that the words were defamatory. 66 The Shire contended that the claim in defamation should be struck out because the applicant has abandoned the claim in defamation, and any claim in defamation now made is statute barred. The Shire said that the applicant had abandoned the claim by filing the further amended originating application pursuant to the consent order of 12 March 2012 which gave the applicant leave to file the further amended originating application. As I have mentioned before, the further amended originating application deleted a number of claims which had been originally made by the applicant, one of which was a claim for defamation. 67 It is in this context that the question arises as to whether the consent order giving the applicant leave to file the further amended originating application should be set aside. Rule 39.05(c) of the Federal Court Rules 2011 (the Rules) permits the Court to set aside or vary interlocutory orders. The Court will exercise that power in circumstances where it is in the interests of justice to do so. In my view, this is such a case. First, the consent order was made at a time when, unbeknown to me, the applicant had withdrawn the authority of the pro bono counsel who had filed the consent minute, to represent him. (That fact in itself, may be sufficient to permit the consent order to be set aside under r 39.05(h) of the Rules known as "the slip rule".) Secondly, the applicant has on the face of it pleaded in paras 44 to 46 a potentially viable claim in defamation against the Shire. Thirdly, the applicant's complaint regarding the publication of the impugned statements in the minutes of the Shire Council is not a new allegation. (See, Nyoni (No 1).) Further, as I have previously mentioned, it is possible that the applicant may also have a viable claim in defamation or injurious falsehood against the other respondents. 68 Accordingly, I will order that the consent order made on 12 March 2012 which gave the applicant leave to file a further amended originating application be set aside. 69 The Shire also complained that the defamation pleading in para 44 and para 46 was embarrassing in that the defamatory imputations were not pleaded. The defamatory imputation of the words pleaded in para 44 are obvious and the words pleaded in those paragraphs together with the pleading in paras 46.1, 46.2 and 46.3 are sufficient to make out a potentially viable claim in defamation against the Shire. However, the words pleaded in paras 46.4, 46.5 and 46.6 are embarrassing and are struck out. 70 It follows that a very substantial number of paragraphs of the statement of claim have been struck out. 71 Further, all the claims in the prayer for relief, based on the paragraphs which have been struck out, are also struck out. 72 As I have already indicated, I have revoked the Court's order that the matter proceed on pleadings. Those parts of the statement of claim which have not been struck out will stand as the initial statement of facts matters and contentions by the applicant. (See, Salim.) However, as I have mentioned, the applicant will be given an opportunity to supplement that document during the course of the case management process to which I have also referred.

Discontinuance against the fourth respondent 73 The next question is whether the consent orders made on 12 March 2012 that the application against the fourth respondent be discontinued, should be set aside under r 39.05 of the Rules. 74 In my view, for the following reasons, the setting aside of that consent order would not be effective to set aside the discontinuance of the proceeding against the fourth respondent. 75 First, the minute of consent orders was filed by pro bono counsel at the time that pro bono counsel was still authorised to act on behalf the applicant. Secondly, at the time that the minute was filed pleadings had not yet closed. In those circumstances, r 26.12(1) and r 26.12(2)(a)(ii) of the Rules applied. Those rules do not require that there be any order made by the Court before the discontinuance is effective. Rule 26.12(2)(a)(ii) of the Rules contemplates that discontinuance will be effected by the unilateral act of the discontinuing party. Thus, once the minute of consent orders evidencing the intention of the applicant to discontinue the proceeding against the fourth respondent, had been filed by pro bono counsel acting within her ostensible authority, the discontinuance would have taken effect, without the need for any intervention of the Court. It does not matter that the document filed is not in the precise form set out in Form 48 (referred to in r 26.12(1)) and that it contemplated Court intervention. What is relevant is that the document which is filed manifests an intention to discontinue the proceeding (Christodoulou v Disney Enterprises Inc (2006) 156 FCR 369. This is what the document filed by pro bono counsel did. 76 It follows, that the making of the consent order discontinuing the proceeding against the fourth respondent on 12 March 2012, was in fact a redundant exercise. 77 However, that does not conclude the question of whether to set aside the discontinuance of the proceeding against the fourth respondent. The Court has a power to set aside a discontinuance of a proceeding where it is in the interests of justice to do so (Kogolo v State of Western Australia [2011] FCA 1481). Insofar as the applicant has purported to plead a case against the fourth respondent, that pleading has been struck out. Accordingly, at this stage, the applicant has failed to demonstrate that he has a claim against the fourth respondent. It follows that it would serve no purpose to set aside the discontinuance of the proceeding against the fourth respondent. Accordingly, the interests of justice would not be advanced by making such an order. 78 However, as I have mentioned, the applicant will have an opportunity to particularise the basis of his alleged claims in respect of the matters referred to in [55] and [57] above. I will, therefore, defer the question of whether to set aside the discontinuance of the proceeding against the fourth respondent until the applicant has particularised his alleged claims in respect of those matters. In the meanwhile, I will relieve the applicant from having to pay the fourth respondent's costs attendant upon the discontinuance until that question is dealt with.

Costs 79 The respondents have been substantially successful in their applications to strike out the statement of claim. The respondents will have 21 days to file written submissions on the question of costs. The applicant will have 21 days, thereafter, to file written submissions in response. Each party's written submissions is not to exceed four pages. I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.