POPOVIC & ORS v TANASIJEVIC & ORS No. SCGRG-96-279 Judgment No. S330 [1999] SASC 330

At a later stage the SCWA became involved in the acquisition of land at Pennington. With the aid of substantial federal grants, it was involved in the development and operation of an aged care facility on the land. This was known as the Pennington Aged Care Village.

In the present action, which was initiated in 1996, the plaintiffs have asserted that there have been irregularities and/or oppressive behaviour in the administration of the affairs of the SCWA. Questions have also arisen as to who are the lawful members of the corporate body and its Committee of Management and other related matters. Certain financial dealings by the defendant Tanasijevic with the SCWA are in issue.

The key issues arising on the pleadings depend for their resolution, in large measure, on a determination of what in law, at relevant times, was the content of Constitution and Rules of the SCWA. In that context the plaintiffs seek to impugn certain purported amendments of the Constitution and Rules which, inter alia, touch on membership eligibility.

The proceedings, inter alia, seek both declaratory relief under the Supreme Court Act, 1935 and specific orders pursuant to s 61 of the Associations Incorporation Act, 1985 based on conduct of some or all of the defendants said to have been oppressive or unreasonable.

Following the institution of the proceedings, there were extensive interlocutory processes prior to trial, necessitating numerous appearances before Masters, during a period extending from 27 March 1996 up to 10 November 1998.

There were also two separate and extensive forays before Judges of this Court, as a consequence of which a caretaker committee of the SCWA was installed pending the outcome of the litigation. Injunctive relief was granted against the defendants.

The voluminous pleadings have been revised on several occasions, so that I presently have before me a third further amended statement of claim and a third amended defence and counterclaim.

It is to be noted that, at an early stage of the action, issue was joined in the pleadings as to the locus standi of at least two of the three plaintiffs to initiate and prosecute the proceedings.

Indeed, on 25 February 1998, the defendants filed an application for summary judgment, pursuant to SCR 25.04, against the second and third plaintiffs. This was based on the ground that neither had "any standing to apply for the relief pleaded in the" statement of claim in the form in which it then stood.

This application came before a Master on 3 June 1988. He dismissed it, merely saying:-

"Having considered some of the complaints made by the defendants, I doubt whether there is justification for striking out. Rather, I think that there may be room for further particulars ... "

On 12 August 1998 another Master gave leave to the plaintiffs to further amend the statement of claim as to locus standi and other matters. They did so. The form of pleading currently relied upon appears at paragraph 27 of the statement of claim. The defendants have, at all material times, joined issue on this question.

Having progressed, somewhat painfully, through all case flow management processes envisaged by the Supreme Court Rules, the matter was referred for trial on 12 August 1998. No further attempt was made at that stage to invoke SCR 25.04, or otherwise strike out the statement of claim, which particularised the basis on which the several plaintiffs asserted locus standi.

The present trial commenced before me on 5 May 1999. Its length far eclipsed the estimate originally given to the Court, as a consequence of which, at one point, it had to be adjourned over for a lengthy period before it could be resumed. Eventually, on day 24 of the trial, the plaintiffs closed their case.

Mr Ross-Smith, of counsel for the defendants, then made application, pursuant to SCR 25.04, for summary judgment against the plaintiffs on the express basis that none of them had established that they had locus standi to bring their claim. This application, which had been reduced to writing and filed, contained an alternative claim that the plaintiffs' action be dismissed as an abuse of process, substantially on the same basis as was relied on in relation to the summary judgment claim.

It was also foreshadowed by Mr Ross-Smith that, if he failed on the two prongs of his written application, he would then seek to make an oral submission of no case to answer as to all three plaintiffs - again, by reason of their alleged lack of standing.

At the outset I raised the issue as to whether, in all of the circumstances, the defendants had properly enlivened the power conferred by SCR 25.04 or, if they had, it was an appropriate exercise of discretion to entertain it in the circumstances in which it was sought to be prosecuted. Counsel argued this aspect as a preliminary question.

In view of both the particular and general importance of the question I reserved my decision on the matters debated. These reasons are confined to my conclusions concerning them.

In its current form SCR 25.04 reads as follows:-

"25.04 (1) Where a defendant wishes to obtain summary judgment in an action or for any part thereof he shall: (a) file his defence or affidavit in answer to the plaintiff's affidavit; (b) make an application for summary judgment in the action; (c) file an affidavit showing why the plaintiff's claim cannot succeed or cannot succeed in this Court as the case may be on any possible view of the facts or the law. (2) On the hearing of the application the Court may if it is satisfied that the defendant's contentions are correct enter judgment for the defendant, stay the action or make any other order which the justice of the case may require or treat the application as an application for directions."

The very content and mode of expression of the rule implies that an application pursuant to it is to be prosecuted prior to trial. A written application is contemplated, a defence must first be filed, and an affidavit is to be sworn showing why, it is said, the plaintiff's claim cannot succeed "on any possible view of the facts and the law". Moreover, on the hearing of the application, the Court may either enter a judgment, make a stay or other appropriate order, or treat the application as one for directions.

All of this is apposite to an interlocutory application, but quite inapposite to a situation in which a trial is in progress.

True it is that the SCR 25.04 is silent as to time, but its intendment falls to be gleaned from its content, context and historical evolution.

This provision is to be found with companion rules which confer on a plaintiff a right to seek summary judgment against a defendant or some other form of immediate relief.

SCR 25, in the general form in which its sub rules are expressed, is of relatively recent vintage, at least in comparative terms. As is pointed out in Aronson, Hunter and Weinberg Litigation: Evidence and Procedures, 4th Edn, all relevant Australian jurisdictions now contain express provisions related to the control of what are described as undefended, hopeless and slow moving cases. However, their content and modes of expression are by no means in pari materia. Caution must be exercised in reviewing them.

Be that as it may, SCR 25 derived from earlier provisions of the Supreme Court Rules, 1947 and their English counterparts - to the extent that such counterparts existed. In fact the English Rules did not contain any provisions similar to our Order 10.

It is clear that, historically, the Court had no power to enter any form of summary judgment, absent an express enabling power conferred by Rules of Court. (C E Health plc v Ceram Holding Co [1989] 1 All ER 203.)

As was recognised by Neill LJ in that case, the initial response of the Courts to the lack of such an inherent power was the erection of Order 14, which authorised a plaintiff to seek summary judgment against a defendant who had entered an appearance but had no demonstrably meritorious defence. In both England and South Australia the right to seek summary judgment was originally confined to cases initiated by specially endorsed writs. (See the South Australian Order 14, Rule 1.) In such a case the onus was on the defendant to satisfy the Court that he had a good defence on the merits, or that there were "facts as may be deemed sufficient to entitle him to defend the action generally". As time passed the scope of this right was widened beyond that class of claim.

In South Australia Order 14 was complemented by Order 10 Rule 1, which entitled either party, after issue of the writ, to apply for the disposal of an action, or a claim to relief within it, summarily, by summons for immediate relief.

These Rules envisaged that both of the foregoing types of matter would be disposed of in chambers.

In Brinks Ltd v Abu-Saleh & Ors (No 1) [1995] 4 All ER 65 Jacob J made the point at 68 that, although delay in making an Order 14 application may be a highly relevant consideration in some scenarios, there is no impediment to bringing such an application quite close to trial, if this would have the effect of saving costs.

Nevertheless, it is clear that both the Order 10 and Order 14 procedures in South Australia were intended to be processes only to be availed of pre-trial. Their actual purpose was, in fact, to circumvent the need for a trial, in appropriate cases.

When the present rules were brought into being in 1987 (in the form in which they then stood) SCR 25 was a completely new provision. In essence it sought to replace the pre-existing Order 10 and Order 14 provisions with a new, composite, simplified set of provisions encompassing the core concepts of both. Specifically, it subsumed the former "immediate relief" provision in favour of a defendant into the new SCR 25.04.

It seems to me to be beyond question that the intention of SCR 25, like the rules which it superseded, was to set in place a process by means of which a relevant party could have vexatious and patently unmeritorious processes disposed of summarily, prior to and without the delay and expense of a full trial. The whole purpose was, in fact, to avoid the necessity of a trial.

When the rule is read against its historical background, its scope and purpose are abundantly clear. The reason why SCR 25.04 specifically requires the filing of a defence, written application and supporting affidavit is that it is focusing on an interlocutory process pre-trial. Such requirements are quite inconsistent with, and inappropriate to, a situation arising in the course of a trial. By that stage a defence has, necessarily, been filed and all evidence relevant to an application of this type would (at least in most cases) already be before the court, in either documentary, exhibit form, or by way of oral testimony. Moreover, the filing of a formal interlocutory application of the type in question would normally be quite unnecessary.

It is also important to give due consideration to what is said in sub paragraph (2) of the rule. Inter alia, this speaks of staying the action or making any other order which the justice of the case may require, or treating the application as an application for directions. Once again these possible approaches are not apt or pertinent in relation to an issue arising in mid trial.

Mr Ross-Smith sought to glean some comfort from the phrase "which the justice of the case may require" and contended that this envisaged the possibility, in the course of a trial, of making any order warranted by the state of the evidence. Such an argument cannot withstand close scrutiny.

It is plain that the phrase is intended to be read ejusdem generis with the phrase "stay the action". In other words it is not used as expanding the potential scope of operation of the rule. Rather, it is intended to confer a power to adopt flexible approaches in formulating orders appropriate to specific circumstances, and to deal with the specific situations addressed at the time at which an application is properly prosecuted under SCR 25.04. That is, it bears on the nature of relief which may be granted and not the circumstances in which the application may be made.

Save for one decision, to which I shall shortly come, counsel have been totally unable to direct my attention to any published authority arising from a defendant's application for summary judgment made after commencement of a trial.

The leading authority touching on SCR 25.04 in this State is Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572, which cited with approval what had earlier fallen from me in Royal Australia Finance Ltd v Xenophone Corporation Pty Ltd & Ors (SASC, Olsson J, 22 July 1992, unreported). It was said there that the jurisdiction must be exercised sparingly and where it is demonstrated that there is no serious question to be tried. The defendant must show that the plaintiff's claim cannot succeed on any possible view of the facts or law, that is, there is no real question to be tried. (See also Webster and Anor v Lampard [1993] HCA 57; (1993) 116 ALR 545 at 548.)

It must be accepted that these authorities all arose in the actual context of interlocutory applications made prior to trial. However, the very mode of formulation of the test to be applied adds considerable force to the point that SCR 25.04 is not concerning itself with events developing after commencement of the trial of the case. It is erecting a means, in proper cases, of avoiding the necessity for an expensive trial process.

True it is that Mr Ross-Smith is able to point to the, as yet, unreported decision of Crispin J in Stanley Stergiou and Ors v Citibank Savings Ltd (ACTSC, Crispin J, 16 December 1998, unreported).

This was the outcome of an application made pursuant to Order 17 Rule 1 of the Rules of the Supreme Court of the Australian Capital Territory, which is expressed as follows:-

(1) Within 10 days after entering an appearance to an originating application, or at any later time by leave of the Court, a defendant may apply to the Court for summary judgment. (2) On an application under this rule, the Court may make an order under subrule (3) if satisfied that - (a) the action is frivolous or vexatious; (b) there is a good defence to the action on the merits; or (c) the action should be finally disposed of summarily, or without pleadings. (3) ... "

The plaintiff in that case was a litigant in person. The claim proceeded to trial. In the course of the trial, when it became apparent that the matter could not be completed within the time allocated to it and would have to be stood over, the defendant sought leave to prosecute an application for summary judgment.

The litigation had a somewhat lengthy and complex history. However, the Order 17 application was based on the contention that the amended statement of claim, read in light of the evidence to date, simply did not, even on its most favourable construction, disclose any viable cause of action against the defendant. Crispin J held that such a contention was well founded. He was disposed to grant leave to bring the application at such a late stage because, as he put it:-

"... No date has been allocated for the resumption of the trial and the grant of leave would not give rise to any delay. Nor has it been suggested that any other prejudice might be caused by now permitting the defendant to pursue the application for summary judgment. On the other hand, should the case proceed to finality at trial it would involve calling a great deal of evidence including expert medical evidence as to the psychological harm allegedly caused the first to the fifth plaintiffs and the loss of profits allegedly suffered by the sixth to the eleventh plaintiffs. The considerable expense thereby incurred would be wasted if the claims were subsequently held to have been untenable. The arguments advanced on behalf of the defendant are all capable of being resolved by reference to the nature of the causes of action pleaded in the Amended Statement of Claim. In the circumstances, I think it is appropriate to grant leave for the application for summary judgment to be made even at this late stage of the proceedings."

Having granted leave and discussed the substance of the defence submissions, Crispin J entered summary judgment as sought.

In my opinion this decision is of no relevance or assistance for present purposes.

The relevant application was prosecuted pursuant to the provisions of a rule which was expressed quite differently from SCR 25.04 and which expressly empowered the Court, in unqualified terms, to grant leave to make it at any time during the course of the action. SCR 25.04 does not erect a parallel situation.

In the foregoing circumstances I have no hesitation in concluding that SCR 25.04 does not authorise the making of the instant application and that it is misconceived.

Even if I am incorrect in that conclusion I would not, in the exercise of my discretion, entertain the application at this time. To do so would be to establish a potentially mischievous precedent and tend to promote undue disruption of normal trial processes.

Stripped to the fundamentals, the present initiative of the defendants is no more and no less than an attempt to make what is tantamount to a submission of "no case to answer" in a manner which seeks to avoid the possibility that they may be called upon to elect to call no evidence. (As to which see Copper Industries Pty Ltd (In Liq) v Hill & Hill (1975) 12 SASR 292, Residues Treatment & Trading Co Ltd and Anor v Southern Resources Ltd and Ors [1989] SASC 1397; (1989) 52 SASR 54 and the numerous other authorities adverted to in Lunn Civil Procedure South Australia at note R 75.00.20.)

Moreover, it must firmly be borne in mind that, as I have demonstrated, the issue of locus standi was raised at a quite early stage of the action. It was ventilated before Master Kelly in some detail in 1998. Since then little, if anything, has changed or emerged as to this aspect of the case, particularly as to relevant evidentiary aspects.

There is simply no good reason why the defendants could not have promoted the present issue, either at first instance or on appeal, long before the actual trial commenced.

In those circumstances there is much to be said for the proposition that waiting until the present time to attempt to bring the application is tantamount to an abuse of process. The substance and thrust of the pleadings has long since been clear, and the factual and documentary material upon which the defendants seek to rely has been readily available.

I therefore dismiss the application for summary judgment as incompetent, or, alternatively, inappropriate.

That leaves for consideration the alternative application that the plaintiffs' claim be dismissed as an abuse of process. I will now hear counsel as to the issues arising in relation to this, including submissions as to whether it is appropriate to entertain it at this juncture.

In this regard I merely point out that one feature which will necessarily arise for consideration is that which I recently identified in Telfer & Anor v Flinders Ranges Council & Ors (SASC, Olsson J, 15 February 1999, unreported). I made the point there that what is, in substance, a "no case" application cannot be dressed up as an abuse of process argument point, to avoid consideration of the possibility of a defendant being put to an election about calling no evidence.

In the case at bar, counsel will also need to address this aspect as a preliminary area of consideration.