Perera v Genworth Financial Mortgage Insurance Pty Ltd

Solicitors: Clyde & Co (Respondent) File Number(s): 2016/00018549 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: [2015] NSWSC 1357 Date of Decision: 18 September 2015 Before: Slattery J File Number(s): 2014/320843

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

1. MACFARLAN JA: I have had the advantage of reading the judgment of Leeming JA in draft. I agree with his Honour's reasons for judgment and proposed orders.
2. LEEMING JA: Mr Madura Perera brought proceedings against Genworth Financial Mortgage Insurance Pty Ltd in the Equity Division of the Supreme Court of New South Wales. By decision delivered promptly after the hearing the primary judge struck out the existing statement of claim and refused leave to file a proposed amended statement of claim: Perera v Genworth Financial Mortgage Insurance Pty Ltd t/a Genworth [2015] NSWSC 1357. Mr Perera appeals from those interlocutory orders pursuant to leave: Perera v Genworth Financial Mortgage Insurance Pty Ltd [2016] NSWCA 53. For the reasons which follow, I propose that his appeal be allowed in part, and that his claim in defamation be permitted to proceed, although not in its present form. I would not interfere with the orders of the primary judge dismissing Mr Perera's two claims in negligence, each of which is based on a novel duty of care.

Preliminary matters

1. Mr Perera seems not to be legally qualified. He drafted much or all of the pleadings himself, and appeared for himself before the primary judge. However, this Court has had the considerable benefit of submissions from Mr Christopher Withers and Mr Desmond Sweeney of counsel who appeared, pro bono, for Mr Perera.
2. The argument before the primary judge focussed upon a proposed amended statement of claim dated 25 August 2015. Mr Withers acknowledged, candidly and entirely properly, that that pleading could not proceed in its current form. Although leave has not been and will not be granted in respect of the proposed amended statement of claim, it will be convenient to refer to it as the "pleading".
3. The acknowledged inadequacy of the pleading gives rise to a threshold problem for the resolution of the appeal. Although Mr Perera's written and oral submissions seek to identify the allegations which are sought to be made, they fall short of formulating an amended pleading. It is thus common ground that there is no extant proposed pleading in respect of which it is contended that leave should be granted.
4. The practical way forward is to have regard not merely to the pleading itself but also to the matters on which, in his written and oral submissions, Mr Perera seeks to rely and to which Genworth's submissions in opposition were addressed. That accords with what occurred in the High Court and the Privy Council when counsel was permitted in similar circumstances to place an "oral gloss" upon the impugned count in the declaration in Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556; (1970) 122 CLR 628: see at 630 (coincidentally, that litigation also involved a novel duty of care). It also accords with the precepts in ss 56-60 of the Civil Procedure Act 2005 (NSW). The "real issues in the proceedings" extend at least to issues raised even if unclearly expressed: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [71]. One of the real issues dividing the parties in this litigation is whether Genworth owed the novel duties of care pleaded as elaborated and explained in the submissions of Mr Perera's counsel and disputed in Genworth's submissions. In taking that course, it is of some significance that there has already been a grant of leave. I would emphasise that the absence of an extant pleading which is claimed to be adequate would ordinarily be a powerful factor telling against the grant of leave to challenge an order striking out a pleading.
5. As will be seen in more detail below, Mr Perera's pleading contains three distinct causes of action: negligence occasioning economic loss, defamation and negligence occasioning psychiatric injury. Each cause of action is based on a different factual substratum, although they are related, and subject to one matter there would be no obstacle to their joinder in the same proceeding in accordance with UCPR r 6.18. However, s 21 of the Defamation Act 2005 (NSW) confers a right of election "in defamation proceedings" upon both the plaintiff and the defendant for a jury trial. On the other hand, s 85 of the Supreme Court Act 1970 (NSW) requires that proceedings, other than "proceedings in any Division for defamation", are "to be tried without a jury". Thus the general rule for non-defamation matters is that proceedings in any Division of the Supreme Court are to be tried without a jury: Maroubra Rugby League Football Club Inc v Malo (2007) 69 NSWLR 496; [2007] NSWCA 39 at [13]. Both sections are subject to the Court's power to order otherwise.
6. Neither party has made an election for a jury trial of the claim in defamation. However, if either party were so to elect, the fact that Mr Perera has chosen to join causes of action in negligence and defamation against the same defendant in the same proceeding would not of itself warrant an order displacing the presumptive effect of either s 21 of the Defamation Act or s 85 of the Supreme Court Act. Instead, this would be a case where, prima facie, the joinder of the causes of action was apt to embarrass, inconvenience or delay the conduct of the proceedings, so as to enliven the power to order separate trials: UCPR r 6.22. On the view which I have reached, this difficulty falls away because the claims in negligence should be dismissed.
7. One other matter should be mentioned at the outset. The primary judge did not merely strike out the pleading; his Honour dismissed the proceedings. That came about as follows. Mr Perera had been given many months, prior to the hearing before the primary judge, to amend, and on 27 March 2015 a judge made a referral to the pro bono panel pursuant to r 7.36. Mr Perera had advised another judge (on 12 August 2015) that "this is the amendment as advised by the barrister and prepared". It is understandable in those circumstances that the primary judge proceeded on the basis that no further opportunity to replead should be given, saying at [32]: "There is no point in allowing Mr Perera any more time to repair his pleadings. He has already had 9 months to seek pro bono assistance and to amend his Statement of Claim. His failure to develop a maintainable pleading within that time compels the conclusion that there is no point in giving him any further time. The proceedings should be struck out now."
8. In fresh evidence adduced in this Court, Mr Perera explained that, contrary to what he had conveyed to the primary judge, the other counsel had only had a limited involvement in making suggestions to the pleading. That evidence was unchallenged, is corroborated by the numerous grammatical and linguistic errors in the pleading, and should be accepted.
9. But in light of the different evidence now available in this Court, and the much more substantial assistance which Mr Perera has now received (which extends to a preparedness to draft an amended pleading), such an opportunity would not be futile, if error is otherwise shown in the decision of the primary judge.

Parties and overview of the factual background

1. Mr Perera is a valuer. His pleading alleges that he "is unrestricted under NSW Department of Fair Trading as per Valuers Act 2003 NSW" (the pleading predates the repeal of that Act by s 3(q) of the Regulatory Reform and Other Legislative Repeals Act 2015 (NSW)). Genworth is a mortgage insurer, which provides lenders mortgage insurance (LMI) to financial institutions which lend on security of real property mortgages. According to his pleading, Mr Perera formerly worked for, and later owned and controlled, Hodder Rook & Associates Pty Ltd, a company which provided professional valuation services, until it was wound up. More recently, Mr Perera provided valuations through another company, Valfirm Pty Ltd.
2. Genworth sued Hodder Rook for the allegedly negligent valuation of two properties, which, so it said, had led to it suffering loss by paying claims on LMI policies. The trial judge (Einstein J) recorded that the litigation originally extended to eight properties, including one at Bankstown. Genworth was successful at first instance in relation to the two valuations which were pressed: Genworth Financial Mortgage Insurance Pty Ltd v Hodder Rook & Associates Pty Ltd [2010] NSWSC 1043 and Hodder Rook was ordered to pay damages and costs. An appeal was allowed on the basis that Hodder Rook (which had been represented at trial and on appeal by its director Mr Perera) had been denied procedural fairness: [2011] NSWCA 279. The orders made at first instance were set aside. The reasons of the Court of Appeal record at [74] that it was told, after the conclusion of argument, that a winding up order had been made. For reasons which are not clear from the record, but which may reflect Hodder Rook's being wound up, there was no retrial and therefore there is no extant determination of whether any of Mr Perera's valuations were or were not performed negligently.
3. Central to the issues in the current litigation were the making of claims by Genworth concerning Mr Perera's expertise as a valuer. The first of those claims concerned a valuation of a property at Dutton St, Bankstown made by him on 18 March 2004. Genworth is said to have claimed, on 10 December 2008, that this valuation was negligently made. The second, which founded the alleged defamation, was a letter dated 13 December 2013 from Genworth to the Police Bank Ltd. That letter concerned Mr Perera's valuation of a property at Wildflower Circle in Jordan Springs in western Sydney, made by Mr Perera in his capacity as a director of Valfirm Pty Ltd. The third claim was based upon a conversation said to have taken place on 29 January 2014 between Mr Perera and the "Property Services Leader" of Genworth, in connection with the same Jordan Springs property, in which the latter is said to have threatened to sue Mr Perera personally.
4. The most convenient course is first to address the two claims in negligence, which give rise to similar considerations, and then turn to the defamation claim.

Negligence occasioning economic loss

1. It was common ground that the claim for negligence occasioning economic loss advanced in the pleading was a "novel" duty of care attracting the principles formulated in Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258.

Mr Perera's pleading

1. Mr Perera's pleading introduced this aspect of the dispute as follows: "Defendant is a mortgage insurer who relied on plaintff's valuation that was delivered to the defendant by banks to insure lenders against any losses due to loan defaults. Defendant among other business sue valuers for negligence to recover its losses due to loan defaults and deal with professional indemnity insurers of valuers. Plaintiff conducted the valuation of xxx Dutton Street, Bankstown in the state of New South Wales ("The Bankstown Property") on 18th March 2004. Defendant claimed that "The Bankstown Property" valuation was negligent. Defendant was negligent in making the claim."
2. The body of the pleading states that on "10 December 2008 and about defendant claimed that 'The Bankstown Property' valuation was negligent." The pleading continued: "18A. Defendant has a duty to the plaintiff to not to claim 'The Bankstown Property' valuation negligent. Defendant owed plaintiff a duty of care to ensure that any negligent claim made against a valuation conducted by plaintiff has merit as such claim become part of the plaintiff's history and has an adverse effect on plaintiff's career. 20. Subsequently on the 6 of September 2010, Defendant admitted that the negligent claim of 'The Bankstown Property' was an error. [particulars omitted] 21. Defendant also engage internal valuers and defendant should have made reasonable enquiries to find out whether the Bankstown valuation is negligent or not before making a negligent claim. Defendant breached the duty to the plaintiff by failing to take reasonable care. 22. Defendant's action resulted in economic loss to Plaintiff as the professional insurers refused to insure Plaintiff and/or any entity associated with Plaintiff due to 'The Bankstown Property' claim. Plaintiff's lost is a direct result of defendants breach of duty. 22A. Professional indemnity insurance is an integral part of a plaintiff's profession. Claim history determines whether a professional indemnity insurance policy is issued to the plaintiff or not. Refusal of previous insurance is another determinant of whether plaintiff can obtain professional indemnity insurance or not. 22B. Application for professional insurance policy require the plaintiff to disclose the claim history and any previous refusals. 22C. Due to "The Bankstown Property" valuation's negligent claim plaintiff is above the threshold of maximum number of claims acceptable by the professional insurers. 22D. Plaintiff suffered loss as a result of the defendant's breach of duty. On 14th March 2011, the Pl insurers refused insurance to plaintiff Due to the Bankstown claim that was in the plaintiff's claim log. Plaintiff continuously lost clients and work as a result of the insurance issue."
3. Mr Perera's pleading went on to allege that he continued to lose work from his clients and quantified substantial losses of hundreds of thousands of dollars to date and in the future.
4. (For completeness, it may be noted that the particulars provided to paragraph 20 of the proposed pleading scarcely, if at all, particularise the allegation; instead, they refer to a statement said to have been made by Einstein J during the course of the trial. However, Mr Perera submitted, without contradiction from Genworth, that the allegations in the statement of claim had to be taken at their highest, notwithstanding those particulars, and I proceed on that basis.)

The reasons of the primary judge

1. The primary judge regarded the matter of which Mr Perera complained as Genworth's commencing proceedings extending to the Bankstown Property in the Commercial List. The appeal was argued on the same basis. His Honour characterised Mr Perera's claim in negligence as based on a duty owed by a potential plaintiff to a potential defendant not to bring proceedings negligently. In other words, the issue was whether a person contemplating the commencement of legal proceedings owed a duty to take reasonable care for the economic interests of his, her or its contemplated adversaries in litigation.
2. The primary judge said that the posited duty appeared to be in tension with a citizen's right of free access to the courts, and would have a tendency to promote the re-litigation of suits and be contrary to the public interest in finality of litigation: at [10]. His Honour observed that the claim for negligently inflicted pure economic loss advanced in Mr Perera's pleading was one which Australian courts did not presently recognise, and added that it was "difficult to understand how the existing categories could be extended to cover such a duty, consistently with principle": at [12]. His Honour proceeded to consider four cases provided by Mr Perera: Business Computers International Ltd v Registrar of Companies [1988] Ch 229, Laferla v Birdon Sands Pty Ltd [2005] NTSC 12; (2005) Aust Tort Reports 81-876, Beach Club Port Douglas P/L v Page [2006] 1 Qd R 307; [2005] QCA 475 and Jain v Trent Strategic Health Authority [2009] AC 853; [2009] UKHL 4. His Honour stated that "[t]hose cases actually make clear that the law, both in Australia and in England, recognises no such duty of care" (at [13]), and reproduced passages in those judgments which were inconsistent with the posited duty of care. His Honour concluded his analysis of authority as follows at [17]: "[N]one of the authorities to which Mr Perera referred the Court assist his argument. No tortious duty of care is owed by one litigant to proceedings to another litigant in the proceedings as to the manner in which the litigation is conducted."
3. Finally, the primary judge addressed the fact that the plaintiff was Mr Perera, rather than the company owned and controlled by him which had been sued by Genworth, at [18]: "Equally, and for the same reasons expounded in the cases briefly referred to above, there could be no arguable duty of care owed by a litigant to an entity associated with an opposing litigant, such as is alleged here. It is difficult to see how a non-party such as Mr Perera could establish the necessary vulnerability to found the duty of care alleged."

Mr Perera's submissions on appeal

1. In this Court, Mr Perera's basic submission was that the admittedly novel duty of care alleged in the pleading ought not to have been dismissed in the absence of adequate findings of fact. Attention was drawn in particular to the allegations about it being part of Genworth's business to sue valuers in negligence to recover its losses, to the need for professional indemnity insurance in the valuation industry, and the effect that making a claim against a valuer had upon the availability of such insurance. Those three matters were said to take the matter outside the ordinary rule that litigants owe no duty to one another.
2. Mr Perera identified as the first error the primary judge's failure to mention that "exceptional caution" is required before exercising a power summarily to dismiss proceedings, although, very properly, he recognised that it ought not lightly to be assumed that the primary judge had not had regard to that basic principle. Secondly, he placed reliance upon the care that should be taken to avoid the risk of stifling the development of the law. Thirdly, Mr Perera acknowledged that the matters raised by the primary judge pointed against the existence of the duty of care. However, against those matters, he submitted that there were matters which tended to favour the existence of a duty and had not been considered by the primary judge.
3. At the forefront of Mr Perera's submission was the statement by Allsop P in Caltex Refineries (Qld) Pty Ltd v Stavar at [102]: "If, however, the posited duty is a novel one, the proper approach is to undertake a close analysis of the facts bearing on the relationship between the plaintiff and the putative tortfeasor by references to the 'salient features' or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury."
4. Allsop P then identified some 17 "salient features", many of which were highly factual, including "degree and nature of control able to be exercised by the defendant to avoid harm", "degree of vulnerability of the plaintiff to harm from the defendant's conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself" and "knowledge (either actual or constructive) by the defendant that the conduct will cause harm to the plaintiff". Mr Perera relied on each of those three matters, in support of the submission that the careful evaluation of features tending for and against the posited duty might not be conducted in a factual vacuum. Mr Withers put it thus: "there are issues that would be explored in a trial that won't be apparent from the statement of pleaded facts, for example, the degree of knowledge that the respondent had of what impact the making of a claim might have had on insurance, questions litigated about whether or what precautions need to be made or what precautions can be undertaken by a respondent order not to expose the plaintiff to a risk of harm, all those kinds of factual issues that are debated in a trial, once the content of the duty of care is debated and that sort of thing."
5. Mr Withers emphasised that, given the absence of factual findings, the issue for this Court was not whether the novel duty existed, but whether Mr Perera's claim should have been permitted to go to trial.
6. In substance, there were three elements of Mr Perera's submissions: 1. First, that the primary judge had not in terms applied a test of "exceptional caution". 2. Secondly, that the primary judge had chosen to determine whether the duty of care existed, rather than permitting the claim to proceed to trial. 3. Thirdly, that the primary judge had concluded that there could be no duty owed by Genworth as alleged by Mr Perera. I shall address each element in turn.

The test applied by the primary judge

1. I would reject the first aspect of Mr Perera's complaint, based on the alleged failure expressly to identify the cautious approach to summary dismissal. There are of course a variety of formulations of the applicable test where a defendant applies for the summary intervention of the court to prevent a plaintiff's case being determined in the usual way at trial. Barwick CJ collected some in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129: "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action" and "be manifest that to allow [the pleadings] to stand would involve useless expense". In part that variety stems from whether the application is made in the court's inherent jurisdiction or under the rules (see Dixon J's analysis in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91-92), which may in turn affect the material available to the court. In part it turns on differences in the rules of different courts, and in particular on the relaxation of the test which has occurred in some courts: see Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [56]. But for present purposes, two matters are clear. One is that common to all the various formulations is the need for "exceptional caution", as was explained in Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] and Spencer at [53]-[55]. The other is that the inquiry is as to the demonstrated certainty of the outcome of the litigation, as opposed to its prospects of success.
2. The gravamen of the reasons of the primary judge is that his Honour adopted an appropriately cautious approach, and one that was directed to the impossibility of Mr Perera succeeding on this cause of action. It does not matter that the primary judge did not in terms refer to the (familiar) authorities which Genworth's application invoked. The question is one of substance rather than form. The primary judge's reasons were directed to whether Mr Perera's allegations were bad in law, determining the question of law as to the existence of a duty in light of principle and appellate authority. Because his Honour determined the issue on the basis of the absence of duty owed by one litigant to another, the result was not dependent upon the factual matters alleged. The first basis on which error is alleged is not established.

Was there error in not letting the matter proceed to trial?

1. Contrary to the way in which Mr Perera's submission was put from time to time, the fact that a novel duty of care has been alleged does not of itself mean that the case should go to trial for determination of facts. Were that so, novelty would immunise a pleading from summary dismissal. As Mr Perera recognised in the course of argument (notably, by reference to the third proposed cause of action), there are degrees of novelty.
2. It is true that in New South Wales v Spearpoint [2009] NSWCA 233 at [26], Allsop ACJ (with whom Beazley JA agreed) said that: "It is often, though not always, inappropriate to dismiss summarily a claim [alleging a novel duty of care] on the pleadings, at least [where the parties] stand at an early stage in litigation."
3. However, as that statement envisaged in terms, novel duties of care are from time to time upheld or rejected in advance of trial. Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 and (1970) 122 CLR 628 was one such case, determined on a demurrer to a count in Mr Evatt's declaration under the pre-Judicature mode of common law pleading. The question was a narrow one: whether the facts alleged in the count were themselves sufficient to give rise to a duty of care. It was common ground that "if in order to establish a duty of care owed by the Company to Mr Evatt it will be necessary to establish ... facts in addition to those set out ..., the company's demurrer should succeed": see at 631-632 in the judgment of Lords Hodson, Guest and Diplock.
4. Under the modern pleading rules, the question arising on an application such as that brought by Genworth is different and not necessarily so stringent. It is "whether it would be open to the plaintiffs upon the pleading to prove facts at trial which would constitute a cause of action": Mutual Life & Citizens' Assurance Co Ltd v Evatt at 631; Wickstead v Browne (1992) 30 NSWLR 1 at 16. That tends to support the approach stated in New South Wales v Spearpoint.
5. But even so, there are cases where novel duties of care have been summarily dismissed. Precisely this point was made in Agar v Hyde (2000) 201 CLR 553; [2000] HCA 41 at [64] by Gaudron, McHugh, Gummow and Hayne JJ, referring to Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241; [1997] HCA 8. Another such case is Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59, to which I shall return below. A more recent example is The Beach Club Port Douglas Pty Ltd v Page [2006] 1 Qd R 307; [2005] QCA 475 at [23], where McPherson JA said: "It was submitted that the plaintiff's action in negligence should be permitted to go to trial so that the matter in issue can be determined with the full benefit of the 'flavour' that would be imported by findings of fact. Striking it out now would, it was said, prematurely stultify the development of the law. ... But this is not a case in which the facts are, on this application, in any doubt. For present purposes they are, and have been assumed to be, as alleged in the statement of claim."
6. Mr Withers grappled with this decision in his oral submissions in chief, and suggested that it was "a little difficult to reconcile" with the approach taken by this Court in Caltex Refineries (Qld) Pty Ltd v Stavar. What has already been said demonstrates that the facts against which the application is to be assessed are not necessarily confined to those alleged in the pleading, but extend to those which the pleading would permit the plaintiff to adduce at trial. It is true that the proposition in the terms formulated by McPherson JA coincides with the potentially more stringent test appropriate to the pre-Judicature mode of pleading at common law. But his Honour's formulation probably reflects the way the matter was argued.
7. It remains the case, as is plain from the principle formulated in New South Wales v Spearpoint itself, and all of the decisions referred to in the previous two paragraphs, that there are cases when summary dismissal of a novel duty of care is available. In the present case, the primary judge regarded Mr Perera's concededly novel duty of care as being contrary to principle and appellate authority. None of the decisions which had been cited to him was binding, but his Honour evidently and appropriately accorded those decisions considerable weight, being decisions on a pure question of common law: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [135]. No aspect of his Honour's reasoning turned upon any issue of fact which might have been illuminated if the matter had gone to trial. I see no error in his Honour taking that course. This was a case where it was open to the trial judge to resolve the underlying issue of law as a matter of principle and authority. Indeed, it is difficult to see how otherwise there would have been compliance with the obligation to seek to give effect to the overriding purpose to facilitate the just, quick and cheap resolution of the proceedings imposed by s 56 of the Civil Procedure Act 2005 (NSW).

Can the asserted novel duty of care exist?

1. The starting point is that whether or not a particular duty of care should be recognised in a novel category of case is determined on the understanding that "there are policies at work in the law which can be identified and applied to novel problems, but the law of tort develops by reference to principles, which must be capable of general application": Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59 at [49]; Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 (2014) 254 CLR 185; [2014] HCA 36 at [169]. Those principles give a measure of coherence to the law as a whole, and they permit a court to identify, with the requisite confidence required for summary dismissal, cases where no duty of care will lie.
2. Secondly, a defendant does not owe a duty to take reasonable care in relation to acts or omissions merely because they may foreseeably cause harm to a plaintiff. As the unanimous judgment of the High Court in Sullivan v Moody stated at [42]: "But the fact that it is foreseeable, in the sense of being a real and not far-fetched possibility, that a careless act or omission on the part of one person may cause harm to another does not mean that the first person is subject to a legal liability to compensate the second by way of damages for negligence if there is such carelessness, and harm results. If it were otherwise, at least two consequences would follow. First, the law would subject citizens to an intolerable burden of potential liability, and constrain their freedom of action in a gross manner. Secondly, the tort of negligence would subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms. A defendant will only be liable, in negligence, for failure to take reasonable care to prevent a certain kind of foreseeable harm to a plaintiff, in circumstances where the law imposes a duty to take such care."
3. Thus, no differently from "property", negligence is not "a monolithic notion of standard content and invariable intensity" (cf Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 at [19]). The law of negligence is more nuanced.
4. What is more, the passage from Sullivan v Moody reproduced above reflects the fact that the law of negligence is but one part of the Australian legal system, and is not to be extended so as to obliterate or undercut other principles, which may serve other important values. The passage echoes what had been pithily said by Gaudron and McHugh JJ in Breen v Williams (1996) 186 CLR 71 at 115: "Any changes in legal doctrine, brought about by judicial creativity, must 'fit' within the body of accepted rules and principles."
5. Thirdly, a novel duty of care may be ruled out for a number of reasons. One is because the novel duty misapprehends the nature of legal and equitable property. An example is the absence (in this country) of a duty of care on the part of a mortgagee exercising a power of sale: Coroneo v Australian Provincial Assurance Association Ltd (1935) 35 SR (NSW) 391 (coincidentally, another example of the plaintiff's action being dismissed without going to trial). The equitable owner's rights are equitable, because, as Jordan CJ said in Coroneo at 394, the power of sale in a legal mortgage is not a common law power. A mortgagee owes no duty at common law to exercise care before disposing of property which, in law, is owned by him or her. That is one form of legal incoherence.
6. It is also possible for a novel tortious duty to be rejected because it "subverts" or "cuts across" (to use the language in Sullivan v Moody at [42] and [53]) other principles by wholly or partly overlapping or subsuming them. Some caution is required if that is the extent of the conflict, because the nature of the common law is that it is replete with overlapping causes of action: see Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732; [2016] NSWCA 81 at [48]-[51]. The overlap (in this country) between battery and negligence is but one example: see Croucher v Cachia [2016] NSWCA 132 at [22]-[26]. As was there observed, it would be profoundly anhistoric to confine torts so that they ceased to overlap. That observation was not novel. The reviewer of the first edition of Percy Winfield's The Province of the Law of Tort (1931, Cambridge University Press), who later succeeded Sir Frederick Pollock as the editor of the Law of Torts, said that "We must not try to force our grossly unscientific system into a Procrustean bed of juristic categories": P Landon, "The Province of the Law of Tort" (1931) 8 Bell Yard 19 at 21, cited in P Mitchell, A History of Tort Law 1900-1950 (2015, Cambridge University Press), p 26. Some instances of overlap are relatively modern. In 1938, the English Court of Appeal regarded it as settled that a solicitor owed no duty of care to his or her client in tort: Groom v Crocker [1939] 1 KB 194 at 205 and 222. That is no longer the law, as was explained in Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6 at [44]-[48]. It was in that context that Lord Goff observed, not without a measure of understatement, that "the common law is not antipathetic to concurrent liability": Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 193.
7. A more powerful example of legal incoherence obtains where a novel tortious duty of care does not merely overlap with other duties, but goes further and "subverts" or "cuts across" well established defences or immunities: see CAL No 14 Pty Ltd v Motor Accidents Insurance Board (2009) 239 CLR 390; [2009] HCA 47 at [39]-[40] and [42]. An example may be seen in the reasoning in Tame v New South Wales (2002) 211 CLR 317; [2002] HCA 35 at [28], [58], [122]-[123] and [323]-[325], rejecting a duty of care in relation to an erroneous report prepared by a police officer in part because such a duty would undercut established defences in the law of defamation. In such cases, the legal incoherence is greater, because acceptance of the plaintiff's submission would not only expand the scope of negligence, but would also distort other areas of the law, which may be well-settled and some distance from the tort of negligence.
8. The point which is presently relevant is that there are cases in which it may not be necessary to make precise findings of fact in respect of the "salient features" identified in Stavar, because the conclusion can confidently be reached that the posited duty does not "fit" the existing body of law.
9. The primary judge was in my view correct to conclude that the duty of care alleged by Mr Perera was bad in law, and not only for the reasons his Honour gave. The difficulties with acceptance of the duty of care for which Mr Perera contends are as follows.
10. First, there is a lack of coherence with well-established torts based on misuse of legal process, which require an improper or collateral purpose as an element. Malicious prosecution requires malice as well as absence of reasonable and probable cause: A v State of New South Wales (2007) 230 CLR 500; [2007] HCA 10 at [1]; Kable v State of New South Wales [2012] NSWCA 243; (2012) 293 ALR 719 at [105]-[114]. Thus Mr Perera's duty would tend to subsume this well-established tort.
11. The tort of abuse of process is of more recent origin, and does not require want of reasonable and probable cause: Williams v Spautz (1992) 174 CLR 509 at 523. However, it is essential that "the party who has instituted proceedings has done so for a purpose or to effect an object beyond that which the legal process offers": Williams v Spautz at 523. The judgment of Mason CJ, Dawson, Toohey and McHugh JJ added at 525, by reference to the advice given by the Privy Council in King v Henderson [1898] AC 720 at 731, that: "the existence of an unworthy or reprehensible motive for bringing the action was not enough and that it must appear that the purpose sought to be effected by the litigant in bringing the proceedings was not within its scope and was improper."
12. Once again, this is a narrow test, much narrower than, and inconsistent with, the duty posited in the pleading. Mr Perera's pleading is squarely based on negligence, and falls far short of alleging that Genworth's allegation that the Bankstown valuation was negligent was made for an improper or collateral purpose. Indeed, this portion of the pleading is to be contrasted with Mr Perera's subsequent allegation of intentional harm (see paragraph 26, reproduced below when dealing with the claim in defamation). Accordingly, it would not be permissible for Mr Perera to obtain relief on his claim in negligence based on an improper purpose: Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 at 287. Nor would it be open to prove an improper purpose, whether by documentary or testimonial evidence; such evidence would not be relevant to an issue. As Gleeson CJ said in Goldsmith v Sandilands [2002] HCA 31; 76 ALJR 1024 at [2], "The primary rule of evidence is that a court will receive, and will only receive, evidence that is relevant to the issues as defined by the pleadings." There is a world of difference between commencing litigation negligently, and doing so with an improper purpose. Lord Toulson JSC recently observed in Willers v Joyce [2016] UKSC 43; [2016] 3 WLR 477 at [49] that: "The distinction between careless and intentional conduct is a familiar feature of parts of the common law, reflected in Oliver Wendell Holmes, Jr's often quoted saying, 'Even a dog distinguishes between being stumbled over and being kicked' (The Common Law, 1909, lecture 1)."
13. Thus, if the duty alleged by Mr Perera be good law, it would tend to outflank the settled position as to malicious prosecution and abuse of process. Against this, it might be said that much of the history of negligence in the last century has been one of steady advance, even amounting to an "imperial march": Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6 at [48], recurringly outflanking earlier special rules governing liability (one example is the abrogation of the ignis suus rule and Rylands v Fletcher liability in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520). But the duty for which Mr Perera contends would constitute a very large break with the existing body of law, having regard to the inherent inconsistency between the presently settled requirement of an actual intention, as opposed to a want of due care, in commencing litigation.
14. Secondly, I turn to the principal matter relied on by the primary judge. There is a well recognised general rule that a litigant owes no duty of care to another litigant in the conduct of civil litigation. In the United Kingdom, see Customs and Excise Comrs v Barclays Bank plc [2007] 1 AC 181; [2006] UKHL 28, and Jain v Trent Strategic Health Authority [2009] AC 853; [2009] UKHL 4. In the latter appeal, Lord Scott said at [35]: "[W]here the preparation for, or the commencement or conduct of, judicial proceedings before a court, or of quasi-judicial proceedings before a tribunal such as a registered homes tribunal, has the potential to cause damage to a party to the proceedings, whether personal damage such as psychiatric injury or economic damage as in the present case, a remedy for the damage cannot be obtained via the imposition on the opposing party of a common law duty of care. The protection of parties to litigation from damage caused to them by the litigation or by orders made in the course of the litigation must depend upon the control of the litigation by the court or tribunal in charge of it and the rules and procedures under which the litigation is conducted."
15. More recently, Lord Neuberger PSC referred to this as a "general rule": Willers v Joyce at [157]. In this country, McPherson JA (with the agreement of Jerrard JA and Chesterman J) summarised the line of authority in The Beach Club Port Douglas Pty Ltd v Page at [17]-[20]. The proposition formulated and applied by his Honour at [19] was: "[A]part from remedies conferred by statute or by the common law in the form of malicious prosecution or collateral abuse of process, no duty of care in negligence is owed by one litigant or his solicitor for the negligent conduct of litigation that causes loss to the plaintiff."
16. That statement of principle, with which I respectfully agree, is inconsistent with the duty for which Mr Perera contends. True it is that a general rule may be subject to exceptions, but the fact-based nature of the exception to which Mr Perera pointed does not accord with the principles of general application on which the Australian legal system is based.
17. Thirdly, one reason why the law has insisted on an improper or collateral purpose is that open access to justice has long been regarded as an important civil right. In de Medina v Grove (1847) 10 QB 172, Wilde CJ (with whom Maule J, Cresswell J, Williams J, Parke B and Rolfe B agreed) began: "The law allows every person to employ its process for the purpose of trying his rights, without subjecting him to any liability, unless he acts maliciously and without probable cause."
18. Recent examples of the high regard placed upon unfettered access to the courts may be seen in Patsalis v State of New South Wales (2012) 81 NSWLR 742; [2012] NSWCA 307 at [56] and Potier v Attorney General in and for the State of New South Wales (2015) 89 NSWLR 284; [2015] NSWCA 129 at [17] and [48].
19. Fourthly, the posited duty sits ill with the reasoning in Jamieson v The Queen (1993) 177 CLR 574, to which Simpson JA has directed my attention. Although a criminal case, the reasoning refers in general terms to longstanding immunity of litigants and witnesses in respect of steps taken in civil litigation even where false testimony is given (see at 582, 583, 594 and 595). In particular, at 595, Gaudron J referred to the rationale for the privilege enjoyed in respect of the instigation of proceedings: "Resort to the courts for the orderly resolution of disputes between citizens, or between citizens and government, would be greatly put at risk if witnesses were to be subject to restraints with respect to their evidence, other than those which serve to protect the integrity of the judicial process. It would be put at even greater risk if litigants were not similarly privileged in respect of the instigation of proceedings. Of course, there are also restraints in that regard. The somewhat different position of litigants, vis-a-vis witnesses, can be seen from the nature of the restraints which affect them. Litigants are affected not only by the restraints effected by the laws relating to perjury, contempt and perverting the course of justice which ensure the integrity of the judicial process but, as well, by those designed to ensure that proceedings serve the ends of justice. Thus, liability attaches to them for malicious prosecution and for abuse of process; and they are subject to restraints which may be imposed by the courts with respect to proceedings which are vexatious or oppressive; or, those which may be imposed on litigants who habitually instigate proceedings of that kind. The different position of litigants, vis-a-vis witnesses, explains the fact that civil liability attaches to them for instigating proceedings which amount to malicious prosecution or abuse of process."
20. That rationale is inconsistent with a duty of care for negligently commencing civil litigation.
21. If no duty be owed by Genworth to Hodder Rook, the company it sued in 2008, I cannot see how a duty could have been owed to Mr Perera personally. The position is a fortiori. All of the considerations pointed to above apply.
22. For those reasons, there was no error in dismissing this cause of action summarily.

Negligence occasioning psychiatric injury

1. This aspect of the proposed pleading is found in the following five paragraphs: "27. Property Services Leader of defendant on Wednesday, 29th January 2014 made a phone call to Valfirm Pty Ltd that appeared as a miss call in the call registry. Plaintiff rang the missed number and spoke to Property Services Leader of defendant. During this conversation, the Property Services Leader threatened to sue Plaintiff personally. Defendant's actions resulted in a nervous shock that lead to psychiatric injury to the plaintiff. 27A. Defendant was aware of the previous case where Plaintiff's valuations were disputed and the final outcome that led to Plaintiff's predicament. Defendant owed plaintiff a duty of care. Defendant has a duty of care to not injure Plaintiff by threatening to sue personally. 27B. Defendant ought to have foreseen that plaintiff who has a history of a law suit might in the circumstances where a threat is made to sue personally will suffer a recognised psychiatric illness, if reasonable care were not taken. 27C. There is a pre-existing relationship between the plaintiff and the defendant. 28. On the night of 29th January 2014 and in the early morning of 30th January 2014, the plaintiff attempted suicide. Plaintiff was at this stage suffering from nervous shock. On the night of 30th January 2014 and in the early morning of 31st January 2014, the plaintiff made the second suicide attempt."
2. Thereafter particulars of the consequences of the alleged attempted suicide and Mr Perera's subsequent treatment are given. Mr Withers identified the essence of the cause of action to be derived from this section of the proposed pleading as being negligent "to make a threat to sue somebody personally without exercising reasonable care in advance."
3. The primary judge addressed this aspect of the pleading in two ways. First, he considered that "Mr Perera has failed to plead in any adequate form the basis upon which the defendant Genworth itself is responsible for the conversation between its property services leader and the plaintiff" (at [29]). Secondly, his Honour did not see how a duty of care not to threaten to sue could arise, which his Honour regarded as having similar problems to the first pleaded course of action.
4. If the only deficiency were that first identified by the primary judge, I would resolve this aspect of the appeal differently. The conversation was between Mr Perera and the man who was alleged to be the "Property Services Leader of Defendant". It is at least implicit in the pleading that the alleged conversation occurred in the course of that man's duties, following up the matters of which Genworth had complained in its 13 December 2013 letter (as to which see below). It is tolerably plain that Mr Perera contends that the statements made by Genworth's employee or officer are to be attributed to it for the purpose of the law of negligence. That is a matter which would be open on the pleading for Mr Perera to prove in the event that it were put in issue by Genworth.
5. However, taking the factual allegations at their highest, no error is disclosed in the reasoning of the primary judge to the effect that no such duty is known to the law.
6. A person may of course be liable for personal injury but not economic loss. That is because "the law values the physical integrity of a person at a level well above the interests of commerce. The former is protected by the law even when, in similar circumstances, the latter is not": Fangrove Pty Ltd v Tod Group Holdings Pty Ltd [1999] 2 Qd R 236; [1998] QCA 404 at [19]-[20]. Even so, in light of what has already been said, I can be concise, especially since Mr Withers conceded, properly, that this third cause of action "is more novel than the first economic loss claim".
7. The essential point is that if a threat to sue caused psychiatric injury, then it would necessarily follow that actually suing (ie filing and serving an originating process) would do so as well. Consequently, the important considerations referred to above concerning the entitlement of individuals to act in their own economic self-interest, and for there to be open access to the courts, apply to this posited duty. It may be noted that Lord Scott in the passage from Jain extracted above referred to psychiatric injury in terms.
8. That is sufficient to reject the existence of the duty of care for which Mr Perera contends, but it may be noted that there are other matters standing in the way of acceptance of this cause of action. A person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable: Civil Liability Act 2002 (NSW), s 5B(1)(a). How is it said that psychiatric injury was a reasonably foreseeable consequence of a threat to sue personally? I am conscious that it is alleged that "there is a pre-existing relationship between the plaintiff and the defendant". But the pleading is silent as to what features of the relationship could give rise to the requisite foreseeability of psychiatric injury. If those features had that consequence, then they must be material, and therefore required to be pleaded: UCPR r 14.7. But they were neither alleged in the pleading nor elaborated in the written or oral submissions. Moreover, how is it said that there was a failure to take reasonable care? I proceed on the assumption that when Mr Perera spoke concerning what Genworth regarded as the deficiencies in his valuation, he was told that he might be sued personally. But I do not understand what Mr Perera alleges Genworth should have done in order to have discharged its duty to exercise reasonable care before making such a threat. Once again, neither the pleading nor the submissions made on behalf of Mr Perera shed any light on this.
9. I would dismiss this aspect of Mr Perera's appeal.

Defamation

1. Mr Perera's proposed pleading reproduces the entirety of a letter dated 13 December 2013 from Genworth to the Police Bank which he contends is defamatory. The letter appears to be based on a standard form template. It identifies the bank's LMI proposal and the borrower, and then states "we require the following items to continue processing and to provide a decision on the proposal". Then, below the heading "More Information" and the sub-heading "Security" and after a reference to the subject property, the following text appears: "Our in-house valuers have advised the following: Recommendation from our in-house valuers that you obtain a new valuer to complete a new report for their customer Issues with the Report are: 1/ This is a TBE - there is no tender price/check cost and no commentary about the contract 2/ Risk ratings for improvements should be identified as 3 as per API Property Pro Guideline 3/ All 3 Risking Ratings need comments as per API Guidelines - this has no comments 4/ Is this a purchase its unclear as there is no detail on the sale recorded? 5/ The additional comments - second paragraph - makes no sense. 6/ The sales are all noted as superior and provide marginal assistance in understanding the subjects assessed value. All the sales are much larger in size and not comparable. Please provide a new report or if no new report obtained, the above needs to be addressed and new amended report provided, which will need to go back to our in house valuer."
2. The pleading alleged that "plaintiff conduct valuations for Police Bank on regular basis". After referring to the letter, the pleading continued: "25. The letter states/implies that the Plaintiff is incompetent and recommended to be changed. Letter carry an imputation that '2) Risk Ratings for improvements should be identified as 3 as per API Property Pro Guidelines' implying that the Plaintiff is incorrect and implying that Plaintiff should not carry out valuations for Police Bank. 26. Defendant published this letter in order to harm the reputation of the plaintiff. 26A. '2) Risk Ratings for improvements should be identified as 3 as per API Pro Guidelines' is incorrect. Stating that a certain guideline that valuer fail to follow implies incompetence of the valuer. This implied meaning is known to financial industry lending workers."
3. The entirety of the reasons of the primary judge dealing with this aspect of the pleading were as follows: "23. UCPR, r 14.30 requires a Statement of Claim seeking relief in respect of the publication of defamatory matter to specify each imputation on which the plaintiff relies and to allege that the imputation was defamatory: r 14.30(2). Mr Perera does identify an imputation (in [25]), namely that he 'is incorrect' and that he 'should not carry out valuations for Police Bank'. But the pleading does not allege that those imputations are defamatory of the plaintiff as is required by the rule. 24. But the alleged defamatory matter also does not anywhere identify the plaintiff. The Amended Statement of Claim sets out the whole letter. Because it does not refer to Mr Perera, the pleading must comply with UCPR, r 15.19(1)(d) and give particulars of identification of the plaintiff, together with the identity by reference to names and addresses of or a class of persons to whom any such particulars of identification were known. No indication is given anywhere in the pleading as to who would identify the plaintiff as the person defamed in the defamatory matter." 25. This pleading is therefore embarrassing and should be struck out. Insofar as it pleads an action in defamation the Amended Statement of Claim will be struck out under UCPR, r 14.28(1)(a) and (b). 26. But were it to be put to a contest the Court has grave doubts as to whether the alleged imputation pleaded even arises from the parts of the defamatory matter to which it is said to give rise: r 15.19(1)(e). Simply because the 13 December 2013 letter requires other facts to be identified in a future valuation, does not readily imply either that Mr Perera should not carry out valuations for Police Bank, or that he is incompetent. But the Court does not have to decide this issue.
4. A plaintiff is required to specify the imputations on which he or she relies: UCPR r 14.30(2)(a), in order to avoid confusion at the pleading stage or the trial, in accordance with what was said in Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137-138 and more recently in Fairfax Media Publications Pty Ltd v King [2015] NSWCA 172 at [21]-[26]. Understandably, the primary judge had some difficulty in identifying the imputations in the pleading.
5. Mr Perera's written submissions in this Court identified the following five imputations: 1. the appellant is incompetent; 2. the appellant was incorrect in allocating the risk rating as required by the API Property Pro Guidelines; 3. the appellant should not carry out valuations (presumably by reason of those matters in that the valuation was not in accordance with the Guidelines or was negligent); 4. the valuer had failed to follow the API Property Pro Guidelines; 5. the failure to follow that Guideline "implies incompetence of the valuer".
6. The primary judge referred to three deficiencies in this part of the pleading. The first was that the imputations were not alleged to be defamatory, contrary to UCPR r 14.30(2)(b). This alone would not be sufficient to deny an opportunity to replead, having regard to the fact that this section of the pleading is headed "Defamation" and the content of the imputations identified in both the pleading, and, more precisely, in the written submissions. It was not a matter of which Genworth complained in its request for particulars (see below) or in its written submissions before the primary judge. Ms Holmes, who appeared for Genworth before the primary judge and in this Court, said that "I certainly don't want to make too much of a point of this at all". That was, with respect, an appropriate course to take in the circumstances.
7. The second matter relied upon by the primary judge was the failure to give particulars of identification, contrary to UCPR r 15.19(1)(d). Because Genworth's letter did not specifically name Mr Perera in terms, identification is an additional issue, which may be established by extrinsic facts as to which he is required to provide particulars: Turner v Bulletin Newspaper Company Pty Ltd (1974) 131 CLR 69 at 80. Mr Perera did not do this. Even so, that failure is, with respect, also an insufficient basis to refuse leave to amend, for two essential reasons. The first is that it was unjust, in that it was not a point taken by Genworth or raised by the Court. The second is that it is a point which is readily remedied. 1. First, Genworth sent, promptly after proceedings were commenced a lengthy letter of seven single‑spaced pages making no fewer than 54 requests for particulars, many of which contained sub‑paragraphs and sub‑sub‑paragraphs, and included complaints concerning non‑compliance with rr 15.19(1)(c) and 15.19(1)(e). Despite the length and the detail of its request, Genworth made no complaint in relation to any non‑compliance with r 15.19(1)(d). Moreover, the written submissions before the primary judge supplied by Genworth made no additional complaint in this regard, and Genworth's oral submissions before the primary judge did not, so far as the transcript records, take any point about 15.19(1)(d) explicitly. Although the request for particulars was made in relation to the original statement of claim, insofar as the pleading before the primary judge dealt with the claim in defamation, there was no material difference in relation to the question of identity. Thus, so far as the record reveals, at no stage prior to the delivery of judgment was this default brought to Mr Perera's attention. 2. Secondly, it may readily be inferred that the reason for those omissions was that Genworth did not consider that identification would be in issue in this litigation. After all, it was Police Bank that had retained Mr Perera's company to obtain a valuation in support of its LMI application and Genworth was telling Police Bank of its recommendation that "you obtain a new valuer" in respect of the particular valuation which he had provided. The letter was on its face directed to a written valuation which was in the possession of the recipient, who had regularly retained Mr Perera's company to conduct LMI valuations. Indeed, the premise of the letter was that the recipient knew that it was Mr Perera who should, in Genworth's view, be replaced. All this was confirmed by an email, in evidence before the primary judge, from the Police Bank employee to whom the letter was addressed: "Hi Madura I have attached information required by Genworth. Can you please re-do your report to include their requirements and re-email to me. Not sure if I sent you a copy of the Sale Contract showing P/Price as $499900, if I didn't and you need it please let me know. We will be requesting a further valuation on completion. [There] is no progress payments involved as per contract, all money is due when dwelling is completed. Please let me know if I can assist you with anything. Look forward to new report." In short, no one at the time seems to have had any doubt as to the identity of the valuer.
8. The point now having been raised, it will be necessary if the claim is to proceed for Mr Perera to specify the basis on which he maintains that he was identified by the letter. It is not the function of this Court to do so. However, enough has been said above to demonstrate that this was not a sound basis to refuse Mr Perera leave to address this belatedly raised objection.
9. The third and final matter mentioned by the primary judge, although expressly not determined by him, was his Honour's "grave doubts" as to whether the alleged imputation arose from the defamatory matter. By its notice of contention, Genworth seeks to sustain this aspect of the judgment of the primary judge "on the ground that to the extent the [pleading] adequately pleads a defamatory imputation, that imputation is not capable of arising from the alleged defamatory matter." The notice of contention was filed prior to the submissions filed by counsel for Mr Perera, and therefore is to be addressed in light of the particular imputations relied on in those submissions.
10. It is sufficient to say that it would be open to a jury to conclude that the letter contains an imputation that Mr Perera was incompetent as a valuer. That is supported by the recommendation that "you obtain a new valuer" and the number and nature of the issues with the existing report, which included a complaint that all of the comparable sales were superior to the property being valued and therefore provided "marginal assistance" in understanding the assessed value, a complaint that the additional comments in the second paragraph of the valuation "makes no sense", and a failure to comply with API Guidelines. This was not a letter which merely identified some issues in Mr Perera's valuation which needed to be resolved in order for the LMI proposal to be determined. The complaints were numerous and basal, so much so that the advice from Genworth commenced and concluded with a recommendation that a new valuation be obtained.
11. Genworth's response to this was as follows: "The first problem with the incompetence suggestion is it's too imprecise. Incompetent at what? An incompetent valuer, incompetent at writing reports, incompetent person? We just don't know. I mean, incompetence alone is insufficiently precise. What evidence would be adduced in response to an allegation of incompetence?"
12. That response is, with respect, far too technical. The criticisms reflect the fact that, as Gleeson CJ once said, almost any attribution of an act or condition to a person is capable of both further refinement and further generalisation: Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 137. That does not mean that it is deficient. The question is one involving practical justice.
13. In the present case, it is plain that the imputation is incompetence as a valuer. In Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68; [2001] Aust Torts Rep 81-610 at [37], Spigelman CJ referred with approval to the statement in para [2.7] of the 9th edition of Gatley on Libel and Slander (London, 1998): "To say of a person carrying on any trade or profession, or holding any office, that he is incompetent at it, may not even lower him in the estimation of others, but the words will be defamatory because of the injury to his reputation in his trade, profession or office." and continued at [44]-[45]: "The 'act or condition' attributed to the plaintiff (see eg Drummoyne Municipal Council v Australian Broadcasting Corporation (1990) 21 NSWLR 135 at 136-137), was that of incompetence by the conduct specified. The defamatory sting is in the word 'incompetent'."
14. In my view, none of those matters suffices to refuse leave to supply an amended pleading articulating the action in defamation.
15. In circumstances where the pleading in its present form is concededly defective, but Mr Perera has not provided a draft proposed amended pleading, it is not appropriate to do more than deal with the first imputation (which may well be the most significant one), namely, that Mr Perera was incompetent as a valuer. To be clear, I am not expressing a view one way or the other as to whether the other imputations identified in Mr Perera's written submissions arise from the letter. Nor am I expressing a view as to whether they are all substantially different (as required by r 14.30(3)). My conclusion is that there was error by the primary judge in striking out and refusing leave to replead the defamation part of the pleading, and that Mr Perera should be given an opportunity to plead a claim extending at least to the imputation that he was incompetent as a valuer. It is not necessary to say more, and in light of the fact that the pleading will in any event be amended, it is inappropriate to do so.
16. For completeness, I note the possibility of a defence of qualified privilege, which, indeed, is stated in Mr Perera's pleading as an issue likely to arise. But Genworth having elected to move to strike out the pleading, this does not arise, and was not relied on by it, although it was raised in argument with Mr Perera during the hearing of the appeal.

Conclusion and orders

1. For those reasons, I propose that Mr Perera's appeal be allowed in part. Mr Perera's success is confined to his claim in defamation against Genworth. It is common ground that further attention needs to be given to that aspect of the pleading. Mr Perera accepted that it was prima facie appropriate for the defamation claim, if permitted to proceed, to be determined separately and in the Defamation List in the District Court. Genworth did not demur to this.
2. There seems to be no utility in this Court determining any dispute as to the adequacy of such amended pleading as Mr Perera sees fit to supply, if he wishes to continue confined to the claim in defamation. The efficient and appropriate course is for further steps being taken in the specialist list for such matters. There is power to remit a proceeding in the Supreme Court to the District Court, including on the Court's own motion: see Civil Procedure Act, s 146 read with s 86(3); see for example Bodenstein v Hope Street Urban Compassion [2014] NSWSC 174. This Court hearing and determining Mr Perera's appeal has the powers conferred by those sections: see Supreme Court Act 1970 (NSW), s 44. The orders I propose will transfer the proceedings to the District Court and permit Mr Perera, within the next eight weeks, to serve a proposed further amended pleading.
3. In light of the partial success of each party, I propose that there be no order as to the costs of the appeal, with the intention that each party bear his and its costs. Although there were three causes of action pleaded, Mr Perera came close to accepting that his claim for negligent infliction of psychiatric injury would necessarily fail if his claim for negligent infliction of economic loss failed. In substance, this was a case where each party succeeded on one of two major issues raised for determination.
4. The discretion as to costs at first instance also falls to be re-exercised. The primary judge rightly dismissed Mr Perera's claims in negligence, and rightly refused leave to amend the claim in defamation in the form pleaded, but erred in dismissing that claim. In those circumstances, a broadbrush approach is warranted, for a costs order which was framed in terms of issues would involve complexity and be conducive to further disputation: see Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219. I propose that Mr Perera pay 75% of Genworth's costs of its notice of motion.
5. Because the proceedings will continue in another court, they have not concluded for the purposes of UCPR r 42.7(2), and so, unless the Court orders otherwise, the costs are not presently payable. The principles governing the exercise of that discretion were considered by Barrett J in Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432, in terms which have regularly been applied, including in Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31. Barrett J identified three factors: where there had been a determination of a separately identifiable matter, where there had been unreasonable conduct, and where there is still some considerable distance to go in the proceedings. The first and third factors are present here. The questions posed by the novel tortious duties of care were discrete, and represented (by far) the greatest component of the damages sought by Mr Perera. Those issues will play no part in the remainder of the litigation. The large majority of the costs reflected in the partial costs order I have proposed will represent costs attributable to Genworth's success in having the claims in negligence dismissed. Further, given that amendment is concededly required to the pleading insofar as it makes a claim in defamation, and there has to date been no defence, this is a case where the hearing is still at some time in the future. Those considerations amount to a sufficient reason, in the interests of justice, to depart from the general rule in UCPR r 42.7. I propose that the costs be payable forthwith.
6. Neither party made submissions on the precise orders as to costs which I have proposed, which reflect an intermediate outcome between the submissions advanced by them at the hearing. However, the possibility that the appeal might be allowed in respect of the defamation claim, but otherwise dismissed, was one which was readily foreseeable, and in respect of which they had the opportunity to make oral and written submissions contingently. It is desirable to avoid the time and expense of a further judgment on the costs of what is, after all, an interlocutory appeal, if that may be achieved fairly. In any event, either party is at liberty to apply, by notice of motion filed within the 14 days specified by UCPR r 36.16 if he or it wishes to contend for some different order.
7. I propose the following orders:
8. Appeal allowed in part.
9. Set aside the orders made on 18 September 2015, and in lieu thereof, order as follows: 1. Dismiss the proceedings insofar as they are based on allegations of negligence (namely, the claims pleaded under the headings "Economic loss" and "Personal injury"); 2. Grant leave to Mr Perera within eight weeks to file and serve a Further Amended Statement of Claim confined to the allegation that he was defamed by the publication of a letter dated 13 December 2013, such leave being without prejudice to Genworth's right to object to all or part of it, if it sees fit to do so; 3. Transfer the proceedings to the District Court of New South Wales, with a view to their being placed in the Defamation List; 4. Mr Perera to pay forthwith 75% of Genworth's costs of its notice of motion filed 30 January 2015.
10. No order as to the costs of the appeal (including the application for leave to appeal) with the intention that the parties bear their own costs of the appeal.
11. SIMPSON JA: I have read in draft the judgment of Leeming JA. I agree with the orders proposed by his Honour and with his reasons therefor. I add only the following brief observations.

The claim in economic loss

1. In my opinion, a complete answer to Mr Perera's proposition is to be found in Jamieson v The Queen; Brugmans v The Queen (1993) 177 CLR 574; [1993] HCA 48. (Neither party referred the Court to Jamieson, and the following observations are therefore made without the benefit of argument on that authority.) That was a case in which the appellants were prosecuted criminally for offences of attempting dishonestly to obtain money by deception. The offences were said to have been committed by the appellants by their service on the Government Insurance Office of statements of claim claiming damages for personal injury arising out of a motor vehicle accident. The prosecution alleged that the facts pleaded in the statement of claim were false, and fraudulently so. By majority (Deane and Dawson JJ in a joint judgment, Gaudron J agreeing in a separate judgment, Toohey and McHugh JJ dissenting), the High Court ordered that each indictment be quashed. In doing so, it invoked a (then) more than 200 year old principle stated by Lord Mansfield in R v Skinner (1772) Lofft 54, at p 56 [98 ER 529, at p 530] in the following terms: "… neither party, witness, counsel, jury or Judge can be put to answer, civilly or criminally, for words spoken in office."
2. Deane and Dawson JJ (at p 583) clarified that the words "spoken in office" (when applied to a party to litigation or his or her lawyers) encompass: "… anything said ... in the ordinary course of any proceeding in a court of justice" and, specifically, attaching to words written in the pleadings that are filed and served.
3. The headnote to the Commonwealth Law Reports extracts the following propositions from the majority judgments (at pp 574-575): "… the indictment should be quashed … on the ground that because of the prima facie immunity from criminal prosecution in respect of words used by a person, including a party, in the ordinary course of judicial proceedings, the mere service of an unverified statement of claim containing a false material assertion cannot of itself constitute the actus reus of the offence of attempting to obtain money by deception …" and: "The mere service upon a defendant of an unverified statement of claim does not, at least in so far as criminal responsibility is concerned, constitute an express or implied positive representation by the plaintiff that the individual allegations of fact or of law which it contains are true and correct." (italics added)
4. The headnote might give the impression that the Court confined its endorsement of the principle to cases of criminal liability. Such an impression would be incorrect. The emphasis on the applicability of Lord Mansfield's principle to criminal liability can be attributed to the particular circumstances of the cases in which the question arose. However, a reading of the judgments demonstrates that the principle goes well beyond attempts to use pleadings as a basis for criminal liability, and applies equally to attempts to use pleadings as a foundation for civil liability.
5. While, in both majority judgments, reference is made to recognised exceptions in criminal law (perjury, contempt, perverting the course of justice) and, in the judgment of Gaudron J, to recognised exceptions in civil law (malicious prosecution, abuse of process), there is no suggestion that the principle applies other than in an undifferentiated way to both civil and criminal proceedings. Deane and Dawson JJ expressly endorsed Lord Mansfield's statement (as qualified by the recognised criminal exceptions) as "valid as a general statement of common law principle" (p 582).
6. In my opinion the majority judgments in Jamieson speak conclusively against the existence of the novel duty of care proposed by (or on behalf of) Mr Perera.

Amendments 17 February 2017 - [68] - third sentence, added "a" before "reasonably foreseeable consequence" [76(1)] - changed "requesting no fewer than 54 requests" to "making no fewer than 54 requests". [90] - changed "where is still" to "where there is still" 22 September 2017 - [7] - "League" inserted into case name: Maroubra Rugby Football Club Inc v Malo (2007) 69 NSWLR 496; [2007] NSWCA 39. [12] - "Who" replaced with "which". [48] - Dash added between "well" and "established". [48] - Kable ALR citation corrected. [75] - "Re-plead" replaced with "replead". [75] - Punctuation added in second sentence. [88] - "Negligence" replaced with "negligent". [92] - "to" inserted before "all or part of". 16 October 2017 - [96] - "Report" replaced with "Reports" [96] - "(at pp 574-575)" inserted after "judgments" 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: 16 October 2017