POPOVIC & ORS v TANASIJEVIC & ORS

Supreme Court of SA|1999-08-11|Before: Olsson J, Mansfield J, Lander J

1 OLSSON J On 9 August 1999 I published written reasons for an order, which I then made, dismissing an application by the defendants for summary judgment.

2 I held that such application, made in the course of the trial at the close of the plaintiffs' case, was incompetent or, alternatively, inappropriate.

4 Upon dismissal of the primary application Mr Ross-Smith sought to press the alternate prayer for relief. An issue immediately arose as to whether it was proper or appropriate for the Court to entertain it in the circumstances.

5 The present application derives from the same set of circumstances as those summarised in the first reasons (Popovic & Ors v Tanasijevic & Ors [1999] SASC 330). Indeed, it seeks to ventilate what are essentially the same merit issues as are therein adverted to. I will, therefore, not retraverse the ground already covered in those reasons beyond the degree necessary to render the present reasons comprehensible.

6 It is to be recalled that, reduced to the most simplistic description, the plaintiffs' case seeks to advance three major claims to relief.

7 First, it seeks a variety of declarations, pursuant to the jurisdiction vested in the Court by s 31 of the Supreme Court Act 1935, designed, in effect, to clarify the proper lawful composition of the Committee of Management and the general membership of the Serbian Community Welfare Association ("SCWA"). Moreover, it seeks to establish that the original Constitution and Rules of the SCWA, bearing on its membership, have never lawfully been amended. Major issues in that context are whether certain alleged general meetings were ever lawfully convened and/or conducted, so as to give rise to valid relevant resolutions of members, or actually convened or held at all.

8 Second, it seeks orders for the rectification of the original Constitution and Rules, on the basis that it is said that the solicitor who drafted them did not carry into effect the instructions which were given to her.

9 Finally, it asks for relief, pursuant to s 61 of the Associations Incorporation Act, 1985, on the ground that the affairs of the SCWA have been conducted in a manner that is oppressive or unfairly discriminatory against a member or members, or in a manner that is contrary to the interests of the members as a whole. In that regard particular reliance is placed on s 61(7) of the Associations Incorporation Act, which stipulates that:-

"(7) For the purposes of an application under this section, a breach of the rules of an incorporated association by the committee of the association may be regarded as constituting action that is oppressive to members of the association."

10 Subsidiary issues also arise in relation to the alleged conduct of the defendant Tanasijevic and whether he is liable to pay any moneys to the SCWA.

11 In the course of their case the plaintiffs have set out to demonstrate that the financial affairs of the association have been managed in a most undesirable fashion. It is also alleged that the general conduct of its affairs has been dominated by the defendant Tanasijevic to the exclusion of the views of other committee members. Further they have attempted to establish that false minutes of alleged meetings of members to amend the Constitution and Rules have been brought into existence; no relevant duly convened meetings for such a purpose have been held; and persons have been admitted to membership and permitted to attend and vote at meetings in contravention of the true rules. There are other issues as well, but it is neither necessary nor appropriate to go into them at this time.

12 Having regard to the historical sequence of events said to have taken place, the three plaintiffs have, perforce, pitched their contentions in various alternative fashions. They rely on varying alternative bases of standing to bring the proceedings. This is, of course, permissible pursuant to SCR 26 and SCR 46.09(2). (See, for example, Bagot v Easton [1877] 7 Ch D 1.)

13 Questions arise as to whether the several plaintiffs were, at relevant times, members of the SCWA, or otherwise had such a relationship with it, or the subject matter of the proceedings, as to entitle them to institute and prosecute those proceedings (cf Walsh & Ors v Motor Fuel Licensing Board (1991) 162 LSJS 337 and the authorities therein cited). Specific questions also arise, apropos the third plaintiff, having regard to the provisions of its Constitution and Rules and the evidence related to the manner in which it joined as a party in the action.

14 The personal defendants are persons who claim to have been members of the committee of management of the SCWA at relevant times. The SCWA itself has also been joined as a defendant.

15 As I pointed out in the first reasons the defendants indicated that they challenged the locus standi of the plaintiffs to bring the present proceedings, at an early stage. The locus standi of the second and third plaintiffs was challenged in the first defence filed and a similar challenge was mounted against the first plaintiff at a later time, but well prior to trial.

16 I recited in the first reasons that an unsuccessful application for summary judgment, based on asserted locus standi, was mounted by the defendants against the second and third defendants as early as 25 February 1998.

17 By trial it was abundantly clear that the defendants were asserting, in effect, that the action was incompetent and had to fail because of a lack of standing to prosecute it. This was not an issue which merely arose, either wholly or in part, at trial or came to light, for example, by reason of the manner in which the evidence developed. That is not to say that some evidence, both documentary and orals, relevant to the question did not come before the court in the course of the plaintiffs' case. However, it could scarcely be suggested that such material was either unexpected or unavailable to the defendants prior to trial.

18 No steps were taken by the defendants to seek to invoke the inherent jurisdiction of the Court to dismiss or stay the plaintiffs' claims as an abuse of process prior to the present time.

19 The question of whether it was proper to entertain an application of that type at this stage was argued before me by counsel at some length. At times (and perhaps, to some degree, of necessity) submissions tended to drift into the actual merits of the application. However, whilst those areas of considertion may be relevant for illustrative purposes, it is important that I do not succumb to the temptation to embark upon a final discussion of them, absent full argument on both sides. I, too, only take them into account as indicative of what, potentially, is in issue.

20 In urging me to enter upon a consideration of the merits of the application, Mr Ross-Smith declaimed that, so clear was the situation that the plaintiffs could not, on any view, succeed in their claims, such claims had to be seen as vexatious. The circumstances rendered it proper that his clients have the opportunity of attempting to dispose of them summarily at this point.

21 He directed my attention to a series of well known authorities. It is to be noted that most of these are the product of strike out applications.

22 In Dey v Victorian Railways Commissioner (1948-1949) 78 CLR 62 at 109, Williams J commented:-

"... It seems to me therefore that his Honour must have relied on the inherent jurisdiction of the court to strike out or stay an action which is shown to be frivolous or vexatious or an abuse of its process. This jurisdiction is not confined to cases where the abuse is manifest from the pleadings, the application may be supported by affidavits, and the jurisdiction may be exercised where the facts proved raise a complete legal bar to the action so that the action is vexatious in that it must fail."

23 In General Steel Industries Inc v Commissioner for Railways (NSW) & Ors [1964] HCA 69; (1964) 112 CLR 125 at 129, it was the view of Barwick CJ that the test to be applied was essentially the same, irrespective of whether what was in contemplation was either a strike out application under the SCR, or an attempted resort to the inherent jurisdiction of the Court.

24 In Apostolidis v Commonwealth Bank of Australia (SASC, Full Court, 11 September 1992, unreported), a locus standi case, I summarised what fell from Barwick CJ by saying that the grant of a summary remedy based on the proposition that a cause of action cannot succeed is only warranted in a clear case and upon exercising due caution. It must be patent that, on any reasonable view, the purported cause of action is, on the face of it, unarguable and plainly untenable and that to permit the claim to proceed would be futile and vexatious to the other parties.

25 This approach is reflected in the ruling which I gave in the State Bank Case Ruling (SASC, Olsson J, 27 March 1997, unreported). That ruling referred to an article written by the former Master Jacob The Inherent Jurisdiction of the Court (1970) 23 CLP 23. As to this I said:-

"Without attempting to be fully exhaustive, he postulates the categories of proceedings susceptible of categorisation as an abuse as including any one or more of the following -

(a) proceedings which involve a deception on the court, or are fictitious or constitute a mere sham;

(b) proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way;

(d) multiple or successive proceedings which cause or are likely to cause improper vexation or oppression."

26 In my view this is a fair summation of the situation.

27 Although the main focus must necessarily be on the key pleadings between the parties it is open to the Court, under the inherent power, to inform itself, to the degree appropriate and necessary to place those pleadings in a proper context, by the reception of evidence. (Remmington v Scoles [1897] 2 Ch 1; Dey v Victorian Railways Commissioner (supra) at 109.) That evidence may only be resorted to in order to disclose circumstances indicating the existence of an abuse of process, but not the general untruth of the relevant pleadings (Remmington v Scoles (supra) at 4).

28 If, on an examination of the issues, it is fairly arguable that there remains a question to be tried, then it simply cannot be maintained that an abuse has occurred. (See the authorities adverted to in K C Park Safe (SA) Pty Ltd & Ors v Adelaide Terrace Investments Pty Ltd (FCA, Mansfield J, 17 September 1998, unreported.) Moreover, as a matter of common sense and logic, there is one important parallel with a summary judgment application. It is generally quite inappropriate to dispose of an action summarily in circumstances which call upon the court to decide complex questions of law or fact (cf Kilpatrick Green Pty Ltd v Kockums Industries Pty Ltd & Anor (SASC, Lander J, 29 April 1997, unreported) ).

29 I have dwelt on those principles at some length, not because they directly fall to be applied at the present time, but because they form an important backdrop which serves to illustrate that resort is, usually, only to be had to the inherent jurisdiction on an interlocutory basis prior to trial. As Mr Sallis, of counsel for the plaintiffs suggested, to delay such an application, in relation to a point which is obvious at an early stage, until mid trial, is to run the risk that an attempted resort to the inherent jurisdiction during trial will, itself, be characterised as an abuse of process. It would constitute an unwarranted disruption to the orderly flow of the trial already embarked on, absent some unexpected and unanticipated development in the course of the trial itself.

30 It is therefore scarcely surprising that one searches almost in vain for published examples of successful applications of that type.

31 I had occasion to reflect upon this type of situation in Telfer & Anor v The Flinders Ranges Council & Ors [1999] SASC 42 ("Telfer").

32 In that action, at the conclusion of the case against the third party, counsel for the third party sought to invoke the inherent jurisdiction of the court to dismiss the claim against it. The basis of that application was what was said to be an evidentiary hiatus, which existed as to essential elements of certain causes of action.

33 The third party in Telfer relied on the approach of von Doussa J in Barnes & Ors v Ranger Uranium Mines Pty Ltd [1993] FCA 411; (1993) 44 FCR 331 ("Barnes").

"Be that as it may, there is a more important issue, which bears on the essential merits of the application, regardless of SCR 67.01(6) considerations.

In considering an exercise of the inherent discretion of the court to control abuse of its process (which is what this application seeks to invoke) an important consideration is the true nature of the application and what it seeks to achieve.

As I have said it is, in substance, of the nature of a partial no case to answer submission. Moreover, it is also a far cry from the practical situation in which von Doussa J was confronted in Barnes.

There it was patent that the whole action was foredoomed to failure because, on the admitted facts, no damage or loss could possibly be proved. It would have been a patently fruitless exercise to continue the trial. By way of contrast, the present application cannot possibly operate to negate the overall causes of action in negligence or under the relevant statutory provisions."

"The reality of the situation is that, as I have already suggested, the third party is simply seeking to clothe what is, in truth, a no case submission in the garment of "inherent jurisdiction" to avoid the potential consequence of having to face an evidentiary election as to the whole of its case, or, at the very least, as to the whole issue of negligence. (See Perry J in Residues Treatment at 74.)

The present application must be seen as akin to a no case submission as to its substance and it must be considered in that light.

... The essential notion of a no case submission is that, apropos the relevant cause of action, the applicant party, in effect, submits that it is entitled to judgment on the relevant cause or causes of action as the case stands. (See Tozer Demsley & Millbourn (A/Asia) Pty Ltd v Collier's Interstate Transport Service Ltd [1956] HCA 6; (1955-1956) 94 CLR 384 at 401.) ... "

36 In the instant case there are two features which are of importance for present purposes:

(1) This is a very belated application which, unlike the developing situation in Telfer founded on an alleged evidentiary lacuna, is the product of a legal and factual situation necessarily apparent to the defendants long before trial. Moreover, on the arguments sought to be advanced by Mr Ross-Smith, the very pith and substance of his submissions is that the plaintiffs were never going to be in a position to cure their lack of standing by any evidence which they could have called.

(2) The detailed argument will necessarily occupy a considerable time because it will need to span quite complex issues of fact and law which, prima facie, are by no means as clear cut, as to their resolution, as Mr Ross-Smith would have me accept. It will have the effect of disrupting the orderly trial process in a most counter productive fashion. If the application fails it will delay and add appreciably to the costs of the litigation.

37 On an objective appraisal of the unfolding circumstances related to this litigation, I find it impossible to escape the conclusion that, as in Telfer, the present application is, in reality, an attempt to develop what is tantamount to a no case submission. Its objective is to avoid the consequence of having to face a possible evidentiary election.

38 Whilst I firmly resist the temptation to embark on any detailed, premature analysis of submissions which Mr Ross-Smith has foreshadowed and foreclose his contentions as to them, these points are patent:-

(1) there may well be complex and difficult points of law and matters of fact arising; and

(2) there may well be a need, potentially, to review evidence twice, in a most undesirable manner, dependent on any conclusion come to.

39 I arrive at no final conclusions as to either of those aspects, but it is painfully apparent that this is a far cry from the quite clear cut situation which was before von Doussa J in Barnes.

40 At the end of the day I am firmly of the view that it is quite inappropriate to entertain this belated application.

41 I agree with Mr Sallis that, in substance, the bringing of it in the relevant circumstances is, itself, an abuse of process. It plainly has, as a collateral purpose, the aim of seeking to avoid having to face up to the consequences making a no case submission. It dresses up what is, in reality, such a submission, in the guise of an invocation of the inherent jurisdiction of the court to deal with abuses of process.

42 I therefore decline to entertain the alternative prayer for relief.

Supreme Court Act 1935s 31

Associations Incorporation Act 1985s 61

Supreme Court Act 1935s 31

Associations Incorporation Act 1985s 61

At a glance

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Judgment (59 paragraphs)

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