Perera v Genworth Financial Mortgage Insurance Pty Ltd - [2019] NSWCA 10 - NSWCA 2019 case summary — Zoe

NSWNSWCA

Perera v Genworth Financial Mortgage Insurance Pty Ltd

[2019] NSWCA 10

Court of Appeal (NSW)|2019-02-07|Before: Basten JA, Macfarlan JA, Garling J

View original source

At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2019-02-07

Before

Basten JA, Macfarlan JA, Garling J

Source

Original judgment source is linked above.

Judgment (4 paragraphs)

[1]

Background

The claim for malicious prosecution related to proceedings commenced in 2008 by Genworth against a company associated with the applicant, known as Hodder Rook & Associates Pty Ltd ("Hodder Rook"). Genworth carried on business as a mortgage insurer; Hodder Rook undertook property valuations. The proceedings brought by Genworth alleged that eight valuations prepared for it by Hodder Rook were negligently undertaken with the result that Genworth suffered economic loss. With respect to some of the valuations, Hodder Rook held indemnity insurance. The proceedings with respect to those valuations were settled. Genworth pursued the proceedings in relation to some of the remaining valuations.
In 2011 Hodder Rook went into liquidation, being deregistered on 12 August 2017. However, the proceedings had been discontinued on 28 March 2017, on the application of Genworth. [2]

[2]

Dismissal of proceedings

The primary judge noted that there was a large question as to whether the tort of malicious prosecution extends to the commencement and carrying on of civil proceedings, as opposed to criminal proceedings. Nevertheless, he accepted that it would have been inappropriate to summarily dismiss the proceedings for malicious prosecution on that basis.
Accepting that the cause of action was available in relation to civil proceedings, he concluded that it was not available to Mr Perera, who had not at any stage been a party to the proceedings commenced by Genworth against Hodder Rook. He concluded that the applicant had "failed to demonstrate the existence in his favour of such a cause of action and it is inevitable that the proceedings as presently constituted must fail." [3] That being so, he determined that the proceedings should be dismissed on the basis that they were misconceived and disclosed no reasonable cause of action. [4]

[3]

Proposed appeal

The draft notice of appeal filed by the applicant included numerous grounds, which may be identified under two headings. First, the applicant alleged that the primary judge erred in his approach to a summary dismissal application. He alleged that the primary judge (a) failed to take exceptional caution before summarily dismissing the proceedings, (b) risked stifling the development of the law with respect to the tort of malicious prosecution and (c) identified no particular defect in the form of the pleading.
There is no substance in this challenge. If a necessary element of malicious prosecution proceedings is that the plaintiff was the defendant in the proceedings alleged to have been maliciously commenced, then this proceeding for malicious prosecution would, as the primary judge correctly noted, inevitably have failed. There would have been no error in dismissing them in those circumstances. [5] The standard of "exceptional caution" would be satisfied.
The application must turn on the second set of grounds, relating to the elements of the cause of action. The only relevant element was the first, being that relied upon by the trial judge. The first element of the cause of action in relation to criminal prosecutions is that the plaintiff was the defendant in the proceedings alleged to have been maliciously commenced. As no proceedings had been brought by Genworth against the applicant it followed that that element was not satisfied. It also followed that the second element (namely, that the proceedings had terminated favourably to the applicant) could also not have been satisfied.
The applicant sought to address that difficulty by submitting that, although not a named party in the proceedings challenging the valuations, the valuations had in fact been prepared by him personally and accordingly his reputation was at stake. Further, as the party conducting the proceedings on behalf of the corporate defendant, he was at risk of an adverse costs order. He then noted that in relation to prosecutors, the law recognised a category of "extended parties" who might be liable for malicious prosecution, even though they were not the party instituting the proceedings. The applicant referred, in this regard, to the decision of this Court in Sahade v Bischoff. [6] That case held that a person could be sued for malicious prosecution if he or she had taken "some positive conduct to maintain the prosecution, such as giving evidence in support of the prosecution, which was known to be false." [7] (Simply calling police to the scene of a fracas did not render the alleged victims prosecutors for the purposes of the tort.)
The focus on the real wrong-doer, against whom a claim of malicious prosecution may be brought, raises quite a different question from the proposed expansion of the class of persons who can claim damages for malicious prosecution. The expansion proposed by the applicant would give rise to difficulties with other elements of the cause of action for malicious prosecution, such as malice. As counsel for the respondent noted, the proposed expansion would effectively create a new tort.
The applicant sought to rely upon the decision of the Privy Council in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd. [8] That case upheld a claim for malicious prosecution with respect to a civil proceeding. The applicant submitted that the facts were on all fours with his claim because the plaintiff in the malicious prosecution proceeding was a Mr Paterson, a professional chartered surveyor, who operated through two companies. However, that was not to the point. The point of distinction which is presently critical, is that Mr Paterson was sued as a defendant in the earlier civil proceeding. While the case provided support for the proposition that malicious prosecution could arise from a civil proceeding, it provided no support for the proposition that a person could sue for malicious prosecution who had not been a defendant in the earlier proceeding.
Otherwise, the applicant accepted that there was no authority for the proposition that any extended category of defendants who might sue for malicious prosecution existed at law. There is, in other words, no case in which a person who has not been the subject of proceedings has successfully complained of malicious prosecution; nor as a matter of legal principle is there any reason to suppose that the tort (which is itself controversial in relation to civil proceedings) would be extended to cover such a case. The mere fact that a third person may suffer injury to reputation as a result of proceedings brought against a defendant, in circumstances in which the third person was not sued, will not found a cause of action by the third person for malicious prosecution.
Indeed, authority is clearly against the proposition proposed by the applicant. In A v State of New South Wales, [9] the High Court expressed the first element of the tort of malicious prosecution as being "that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant". As counsel for the respondent noted, while this statement appeared to leave open the possibility that the tort applied in relation to proceedings other than criminal proceedings, it nevertheless required that those proceedings have been brought against the plaintiff by the defendant.
Counsel for the respondent further noted that the majority in the United Kingdom Supreme Court in Willers v Joyce, [10] upholding a claim involving the alleged malicious prosecution of civil proceedings, did not suggest any variation in the elements of the tort. [11]
The contrary view is not reasonably arguable and, accordingly, there is no basis for asserting error on the part of the primary judge in dismissing the proceedings. The application for leave to appeal should be dismissed. The applicant must pay the respondent's costs in this Court.
The Court makes the following orders: 1. Dismiss the application for leave to appeal from the judgment and orders made in the Common Law Division on 10 April 2018. 2. Order that the applicant pay the respondent's costs in this Court.

Perera v Genworth Financial Mortgage Insurance Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (4 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (7)

Cited By (1)