Riva NSW Pty Limited v Key Nominees Pty Limited

Judgment 1The first defendant has filed a Notice of Motion which was amended on 30 September 2013 seeking that the Statement of Claim filed on 13 September 2013 be struck out and that the plaintiff pay the first and second defendants' costs. 2The second defendant is not a party to the Notice of Motion. 3The essential facts are that in proceedings 2009/290947 the plaintiff sued the first defendant over monies which it said the first defendant had wrongly paid to the Australian Taxation Office over a transaction where interests associated with Angelo and Gustavo Ferella purchased property at Point Piper. 4Those proceedings slowly made their way through the Court system and were listed for hearing before Windeyer AJ on 23 and 24 May 2011. 5On 23 May an application was made for an adjournment which his Honour refused. The lawyer appearing on the application made it clear that his instructions were only to ask for an adjournment and he had no authority to appear in the proceedings if the adjournment were refused. 6Acting Justice Windeyer said in his first judgment of 23 May 2011 "I understand that if I refuse the adjournment then Mr Christie will leave the bar table and take no further part in the proceedings. The result of that will be that the matter will be called on, there will be no appearance, and the proceedings will be dismissed with costs". That happened. His Honour dismissed the proceedings, ordered the plaintiff to pay the costs of the defendant and then said "I note that this order does not give any additional entitlement to the defendant to retain the sum of $75,000, the subject of the claim in paragraphs 41 to 49 of the Amended Statement of Claim." 7Riva filed a Notice of Intention to Appeal but did not follow through with that. Instead it commenced a new suit seeking virtually the same orders. Pleadings were directed and on 13 September 2013 Riva as first plaintiff and Angelo and Gustavo Ferella as second plaintiffs and a company Agusta Pty Ltd as third plaintiff pleaded a case against both Key Nominees Pty Limited and one Chris Stomo. Chris Stomo, the second defendant, was a barrister appearing for the Ferella interests in earlier aspects of the case. Mr Stomo has made no application to strike out any proceedings and accordingly this Motion will only deal with the case against Key Nominees. 8The Statement of Claim is a rather peculiar document. The first nine pages consist of definitions. Unfortunately though, not just definitions but they include statements of fact. For instance when there is a definition of "Agusta" it is said that term means the third plaintiff but then continues to list the directors and the period for which they held office. Then there are "definitions" such as "Ferellas as Trustees" which is said to mean: (a) period(s) during; and/or (b) chose(s) in action in respect of, which, as applicable or as the context requires, the Ferellas were or are or acted or act as the trustees, trustees de son tort, constructive trustees or former trustees, of the CUT. 9"CUT" is defined as the abbreviation of the Cavalino Unit Trust. 10The Motion came on for hearing before me on 6 December 2013. Mr AE Maroya and Mr R Raffel, of counsel, appeared for the plaintiff/respondent and Mr RA Parsons, of counsel, for the first defendant/applicant. When the matter was called on, Mr Parsons made it clear that he was not just seeking that the Statement of Claim be struck out but rather that the whole proceedings be dismissed as an abuse of process. This to my mind considerably altered the case that I had to try. It was quite clear to me that the Statement of Claim at least as far as the first defendant is concerned (I say nothing about the second defendant) was embarrassing because it was virtually impossible to plead to it in its present form because one may need to plead not only to the numbered paragraphs but also to the Statement of Facts that accompanied many of the definitions. 11Accordingly, at the end of the oral hearing I gave leave to the plaintiff to have one last chance of amending the Statement of Claim by 4 March 2014 or else I indicated that if I was hearing the further debate on the Notice of Motion I would be tempted to dismiss the whole proceedings. However I reserved consideration of the further application to dismiss the proceedings as an abuse of process. 12The situation where a plaintiff comes to the barrier and then has the proceedings dismissed, but not dismissed on the merits, and then starts again are clearly covered by established procedures some of which now find themselves in s 91 of the Civil Procedure Act 2005 and in Part 12, Rule 10 of the Uniform Civil Procedure Rules 2005. That is that the Court may stay the second proceedings until the costs of the first proceedings are paid. 13However Mr Parsons says that is not good enough. He points to a number of decisions of superior courts in recent years which have made it quite clear that the ability to obtain costs for past problems is not now considered to be a full compensation for the disruption of life caused by Court proceedings and that it is often appropriate to make orders for dismissal rather than just orders for costs against a delinquent party: see eg AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75. 14Mr Parsons also put that the enactment of ss 56 to 60 of the Civil Procedure Act 2005 had changed, and changed deliberately, the way in which courts viewed litigants who did not come up to the mark. The overriding purpose of the Act and Rules is to facilitate the just, quick and cheap resolution of the real issues in the proceedings (s 56(1)) and s56(2) makes it encumbent on the Court to give effect to the overriding purpose when it exercises any power given to it under the Act or Rules. 15Although there have been individual judgments which say that even principles such as that in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 may now have to be reconsidered in the light of s 56 of the Act, there has not yet been any definitive rulings by the Court of Appeal as to how far ss 56 to 58 mean the reversal of previous attitudes to procedural default. Indeed, the same occurred in England where different panels of the English Court of Appeal took different views. 16Mr Maroya relied on the House of Lords decision in Birkett v James [1978] AC 297. In that case the House of Lords held that one should not dismiss an action for want of prosecution before the limitation period has expired except in the strongest of cases. Birkett v James has not had an enthusiastic reception in Australia. Decisions such as that of the High Court in Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 and Clark v State of New South Wales [2006] NSWSC 673; (2006) 66 NSWLR 640 and Andresakis & Skouteris v Alexus Holdings Pty Ltd [2006] NSWCA 294; (2006) 68 NSWLR 507 are examples. Australian courts take a more flexible approach than those in England. 17Mr Parsons took me through a number of cases where there had been an abuse of process and I will briefly deal with some of these. 18Counsel referred me to a number of recent authorities where courts have taken a more stern approach to litigants who have been forced to apply for an adjournment which has been refused at first instance but where there is little prejudice but there has been considerable delay on the part of the applicant: see eg Sali v SPC Ltd [1993] HCA 47; (1993) 116 ALR 625. It is of little value to cite a large number of authorities which come to the same view. 19Mr Maroya for the plaintiff points to s 91 of the Civil Procedure Act 2005 which provides that dismissal of proceedings does not, subject to the terms on which any order for dismissal is made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. He cites Day v Rogers [2011] NSWCA 124 at [81] and Jeray v Blue Mountains City Council (No 2) [2010] NSWCA 367; (2010) 180 LGERA 1 at 14 [76]. 20He also points out that a dismissal in the circumstances that occurred before Windeyer AJ does not give rise to any estoppel preventing fresh proceedings being instituted: see eg K R Handley, Spencer Bower, Turner and Handley The Doctrine of Res Judicata (Butterworths, 4th edn, 2009) at 19 [2.13]. I cannot see any answer to this point. 21Putting all these threads together, it seems to me that although the Statement of Claim is defective and there has been considerable delay on behalf of the plaintiff in having the matter ready for trial because of what happened in the first case, nonetheless where one has a provision such as s 91 of the Act and the provisions of Part 12 of the Rules the legislature contemplates that ordinarily the forcing of payment of costs of an earlier action is sufficient sanction against the sort of procedure being caused by the plaintiff. I do not consider that the additional facts in the instant case show that the plaintiff has stepped beyond that. 22Accordingly, I do not accept that this is a case where I should strike out the action against the first defendant. However the Statement of Claim is hopelessly defective but could possibly be cured by being put in proper form and in accordance with what I said at the end of the hearing I have given the plaintiff one further final chance to put its pleading in order. If that is not done by 4 March 2014 then the proceedings may well be dismissed. 23Although the applicant has failed in obtaining the ultimate order it sought, it has been basically successful on the Motion and the plaintiff should pay the costs of the Motion to date. Further costs reserved. 24I stand the matter over to 9.30 am on 4 March 2014. I am not too sure whether I will be sitting that day. If I am, the matter should be listed before me. If I am not, then it should be listed before the Duty Judge at whatever time that day the Duty Judge finds convenient.