Plaintiff v Defendant

Supreme Court of Victoria|2009-10-13|Before: Vickery J

The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent a Plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.

In Burton v. Shire of Bairnsdale [1908] HCA 57; (1908) 7 CLR 76, at p. 92, O'Connor J. said: 'Prima facie every litigant has a right to have matters of law as well as of fact decided according to the ordinary rules of procedure, which give him full time and opportunity for the presentation of his case to the ordinary tribunals and the inherent jurisdiction of the court to protect its process from abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious will never be exercised unless the Plaintiff's claim is so obviously untenable that it cannot possibly succeed.' , J. made some observations which may be applied to the present case. 'It is my opinion' he said 'that the Full Court were led, by a very natural process I admit, to take a wrong attitude. They dealt with the matter as if they were deciding it on the merits whereas they had merely to decide whether there was anything in fact or in law that was fairly triable or arguable.' Then his Honour said, 'It is surely absurd to argue for days as to a Plaintiff's case being arguable.''It cannot be doubted', said Lord in , at p. 219, 'that the court has an inherent jurisdiction to dismiss an action which is an abuse of the process of the court. It is a jurisdiction which ought to be very sparingly exercised and only in very exceptional cases.'

14 Further, in General Steel Industries Inc v Commissioner for Railways (NSW)[8] Barwick CJ said:

The Plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.

I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r. 18 were the suggested source of authority to deal summarily with the claim in question.

It is sufficient for me to say that these cases uniformly adhere to the view that the Plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action-- if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal -- is clearly demonstrated. The test to be applied has been variously expressed; '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'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense.'

At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'.

As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same.

15 The Chief Justice then said, after referring to the remarks of Dixon J to which I have earlier referred in Dey v Victorian Railways Commissioners:[9]

... in my opinion great care must be exercised to ensure that under the guide of achieving expeditious finality a Plaintiff is not improperly deprived of this opportunity for the trial of his case by an appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where an argument is unnecessary to evoke the futility of the Plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the Plaintiff is so clearly untenable that it cannot possibly succeed.

16 As Cross J also pointed out in Brimson:[10] "If it is transparently clear that the Plaintiff has no reasonable cause of action then the rule may be invoked".

17 Finally, as Ormiston JA said in State Electricity Commission of Victoria v Rabel:[11]

Essentially however it has not mattered greatly which words have been used because the test to be applied has been universally expressed in terms that in order to dismiss summarily an action at a preliminary stage it must be "very clear indeed" that the action is "absolutely hopeless"......or, "so clearly untenable that it cannot possibly succeed".[12]

18 As to the question of onus on an application seeking relief pursuant to r. 23.01 and the court's inherent jurisdiction, an applicant bears the onus of establishing the grounds and that relief should be granted. This is mirrored in an application made under r 23.03 where the Defendant carries the burden of showing that there is no triable issue.[13]

19 The Defendant, in an application pursuant to r. 23.03, would only be entitled to a judgment if it is able to establish that, after a full hearing at trial, the court would inevitably find for the Defendant.[14] However, ultimately it is for the court to be satisfied whether the grounds in the rule have been established and whether it is in the interests of justice that the relief sought should be granted.

20 The circumstances of this case are unusual. The claims which are the subject of this application appear in the Plaintiff's further amended statement of claim dated 7 May 2007. Relief is sought pursuant to r. 23.01 in respect of two groups of claims. First, after hours and night shift work claims amounting to $127,391 and second, lay date claims amounting to $17,160. The claims in both instances related to work allegedly performed by a safety officer and/or a site manager engaged on the project by the Plaintiff company.

21 The Plaintiff claims that these sums are due to it under the construction contract because it had either not claimed for those items during the construction project, or if it did make a claim in respect of those items, it did not do so at the correct rate. These expenses are said by the Plaintiff to have been left out of previous claims made against the Defendant due to an internal administrative oversight in its finance department.

22 On the other hand the Defendant's position is that all of the amounts of the after hours and nightshift work and lay day allowances were claimed, certified for payment, and in fact were paid. Consequently no portion of the amounts claimed in the proceedings for these items is payable.

23 In a letter written by the solicitors for the Defendant to the solicitors for the Plaintiff dated 2 February 2009, it was said on behalf of the Defendant:

Our client is open to any suggestions for narrowing the matters in dispute between the parties and your client's after hours work/lay day claim as a discrete claim would appear to be a matter which is capable of speedy resolution. This component constitutes more than 35 per cent of your client's total claim. Hence we seek production of the evidence to substantiate the claims in relation to Attachment 7 and 8 to your client's 10 April 2006 letter which your client uses as the basis for particularising its claim for after hours costs and lay day claims. We reiterate that our client is entitled to know the evidence relied upon by your client so that it is not taken by surprise. Again we ask that you client provide copies of working papers or original documents on which this spreadsheet, Attachment 7, was prepared in order to allow our client to understand the evidence relied upon.

This is but one of a number of letters written to the Plaintiff seeking its evidence on the contentious claims the subject of this application.

24 The requests for evidence were made in the context of orders made by the court. By an order made 28 September 2007 the parties were ordered to exchange lay witness statements by 8 February 2008. The parties were to exchange lay witness statements by 7 March 2008 and expert witness statements by 10 April 2008.

25 The Plaintiff purported to comply with the orders of the court and filed its witness statements, including a principal witness statement of Mr Frank Nadinic dated 9 May 2008. This witness statement included voluminous attachments.

26 The Defendant says in essence that, on the material provided thus far, which ought to be the entirety of the Plaintiff's evidence, it has not made out and cannot make out its claims on the after hours and nightshift work claims and the lay day claims. I agree with this submission. The witness statement of Mr Nadinic and the extensive material provided in support of it, together with the other witness statements filed by the Plaintiff to date, do not establish the following essentials for the after hours and nightshift claims:

(a) the contractual entitlement or an entitlement founded in quantum meruit for the claims which are made;

(b) when and by whom the relevant work was done and what work was actually done;

(c) the hours worked in each case and the rate which the Plaintiff was entitled to charge for that work or a reasonable rate which the Plaintiff was entitled to charge for such work; and

(d) the quantum of the work which was not paid for by the Defendant and the sum in each case which remains unpaid.

27 I am satisfied on the evidence provided by the Plaintiff's witness statements filed to date, and if this remained the state of the Plaintiff's evidence, it could not possibly succeed on its after hours and nightshift work claims. Further I am not satisfied that such evidence as has been provided is in admissible form. Similar considerations apply to the lay day claims.

28 It would be therefore an abuse of process of the court to proceed with those claims in these circumstances.

29 That is not to say that I am satisfied that I should give judgment at this point in the proceeding in favour of the Defendant in respect of the after hours and nightshift work claims and the lay day claims made against it as it seeks. To take this step would bar the Plaintiff from prosecuting these elements of its claims at trial and would not be in the interests of justice. I am mindful too of the caution with which the court should approach an application for summary dismissal of a claim.

30 However in my view it is appropriate to stay the further prosecution of the after hours and nightshift work claims and the lay day claims until the Plaintiff files and serves further witness statements and any necessary accompanying material upon which it intends to rely at trial which establishes a prima facie case on those claims founded upon admissible evidence.

31 As to costs, by its summons dated 13 February 2009 the defendant sought judgment in its favour in respect of the after hours and nightshift claims and the lay day claims. It sought in the alternative that those claims be struck out or amended. The defendant has not succeeded in those applications. Nevertheless it has not lost this application, having been successful in achieving orders for a stay which are to its advantage. I will order that the plaintiff pay the defendant's costs of its summons dated 13 February 2009 limited to two thirds of those costs.

32 Accordingly I propose to make the following orders:

1. The after hours and night shift work claim, and the lay day claim pleaded in paragraphs 32 - 33 inclusive of the further amended statement of claim dated 7 May 2007 (which are particularised by reference to the Plaintiff's letter to Gray Puksand dated 10 April 2006 as item 5 - Attachment No. 7 and item 6 - Attachment No. 8) be stayed.

2. The Plaintiff file and serve any further affidavit material in support of these claims by 4.00pm, 27 November 2009.

3. Thereafter the Plaintiff may make application to remove the stay as set out in Order 1

4. The Plaintiff pay two thirds of the Defendant's costs of this application to be taxed in default of agreement.

[2] Supra at [9] per Gleeson CJ and Gummow, Hayne and Crennan JJ.

[3] [1982] 2 NSWLR 937 at pp.943 to 946.

[13] See in this regard Wixtead v Brown (1992) NSWLR 1 at p.11.

[14] See Campbellfield v Kalpinis [2004] VSCA 104.

Court (General Civil Procedure) Rules 2005

Supreme Court (General Civil Procedure) Rules 1996

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