Whether the Claims for Malicious Prosecution in the Sourian Proceedings should be Summarily Dismissed against the Defendants other than the State
131 It was submitted on behalf of each of the loss assessor, VACC and Caltex that the claims for malicious prosecution made against each of them in the second further amended statement of claim should be summarily dismissed, on the grounds that on examination of the second further amended statement of claim including the particulars furnished in it, or if not on examination of the second further amended statement of claim then by reference to incontrovertible evidence, it could be seen that Mr Sourian had no chance of establishing that the particular defendant had instituted or maintained any of the criminal prosecutions against Mr Sourian.
132 It was further submitted that the second further amended statement of claim represented a fourth attempt by Mr Sourian or his legal advisers to formulate claims for malicious prosecution and it should be inferred that the particulars furnished in the second further amended statement of claim were the best particulars that could be supplied and could not be improved upon, so that it would be futile to grant leave to Mr Sourian to file yet another statement of claim. It was also submitted that it should be inferred that in the voluminous affidavits Mr Sourian had made, with their many annexures, he had assembled all of the evidence available to him to establish his claims for malicious prosecution. There is considerable force in these further submissions.
133 So far as ANZ is concerned, it was submitted on behalf of ANZ that it had not been joined as a defendant in the original statement of claim, that leave had never been given to join it as a defendant, that on 29 June 1998 Carruthers AJ had made a declaration that ANZ had not been joined as a defendant in the proceedings and that on 18 September 1998 Master Harrison had dismissed Mr Sourian's notice of motion of 29 June 1998, in which he had sought an order giving leave to join ANZ as a defendant. Accordingly, although ANZ had been named as a defendant in the second further amended statement of claim filed by Mr Sourian, it had never been validly joined as a defendant. Consequently, the first question to be determined, so far as ANZ was concerned, was not whether the claims made against ANZ in the second further amended statement of claim should be summarily dismissed but whether any error had been shown in the 's discretionary decision to dismiss Mr Sourian's application of 29 June 1998 that leave be given to join ANZ as a defendant.
134 I accept all of these submissions made on behalf of ANZ. I also hold that no error has been established affecting the Master's discretionary decision not to give leave to join ANZ as a defendant in the proceedings. It is accordingly unnecessary for me to consider whether the claims for malicious prosecution made against ANZ should be summarily dismissed. However, out of more abundant caution I will consider this question.
135 I have already quoted pars14 and 18 of the second further amended statement of claim, in which it is alleged that all of the defendants "prosecuted" Mr Sourian and that all of the criminal proceedings against Mr Sourian were brought "at the instigation" of all of the defendants. However, it is not sufficient in a statement of claim alleging malicious prosecution for the plaintiff simply to allege that a defendant had "prosecuted" the plaintiff or that criminal proceedings had been brought "at the instigation" of the defendant. It is necessary, at least in the case of a defendant who did not formally institute the criminal proceedings against the plaintiff by laying an information, to plead the facts by reason of which it is alleged that the defendant had "prosecuted" the plaintiff or had "instigated" the prosecution of the plaintiff.
136 Certain particulars are appended to paragraph 18 of the second further amended statement of claim (which made the two allegations that the criminal proceedings against Mr Sourian were brought "without reasonable and probable cause" and "at the instigation" of the defendants or their agents) and it is desirable to set out these particulars in full. Separate particulars are furnished in relation to each of the six charges against the plaintiff.
" Particulars
(A) First Offence - Arson
(i) Information relevant to the innocence of the Plaintiff was withheld from the Court and Prosecutor by the First Defendant's police officers Peter Thomas and Carl Paget with the knowledge and encouragement by words and deeds of the Second Defendant and his servant or agent Edwin Middleton, and the Third Defendant by its servants or agents, the Second Defendant and also one Greg Frost and the Fourth Defendant by its servant or agent Nelson Chad (hereinafter the said persons are referred to as the said Defendants, their servants or agents), namely the evidence of a witness from MSS Alarms whose testimony would have shown that the Plaintiff was at home asleep when the fire alarm sounded at the Chatswood premises of Magic on 3 February 1988.
(ii) Information relevant to the innocence to the Plaintiff was withheld from the Court and the Prosecutor by the said Defendants, their servants or agents, or covered up by the said persons, namely evidence of forced entry by a typical burglar's lever or jemmy, in contravention of the Prosecution case that there was no forced entry to the premises, thereby pointing to the Plaintiff as the arsonist.
(iii) A report dated 16 February 1988 of Jeffrey Gudmann of Forensic Services Australia (NSW) Pty Limited in the possession of the said Defendants, their servants or agents consistent with the innocence of the Plaintiff was withheld from the Court or the Prosecutor by the said Defendants, their servants or agent.
(iv) Evidence was manufactured by the First and Fifth Defendants in that the indebtedness of Magic and the Plaintiff was inflated at the instigation of and to the knowledge of the said Peter Thomas and Carl Paget by one Paul Kelly, manager of the West Ryde branch of the Fifth Defendant, which branch was the branch of the Plaintiff and of the company Magic. In particular Kelly falsely and without authority of the Plaintiff or Magic opened a fully drawn advance account in the name of Magic stating its indebtedness at $205,000 with a view to suggesting the company was in financial trouble, when that was not the case, and by making that evidence available to the Court or to the Prosecutor.
(v) The said Defendants, their servants or agents withheld evidence of the value of the assets of Magic, namely real estate at 136-138 Victoria Road, Gladesville and 140 Victoria Road, Gladesville, and did not disclose or make available to the Court or to the Prosecutor at the hearing the material knowing it was relevant and helpful to the Plaintiff or did not take any reasonable steps to examine or check or investigate prices offered for the land shortly before the fire in November 1987, in contradiction of the Prosecution case.
(vi) The said Defendants, their servants or agents provided information to the Court or Prosecutor, whereby to the knowledge of the said Defendants, their servants or agents, it was suggested that premises owned or operated by the Plaintiff or Magic were open for business one day after the fire thereby assisting in giving a false impression that the Plaintiff had evil or suspicious motives, when it was known or suspected by the said persons that that was not the case, and when by checking with available witnesses the falseness of the aforesaid assertion and impression could have been made abundantly clear.
(vii) The First and Fifth Defendants made available to the Prosecutor and the Court a statement prepared by officers Thomas and Paget which statement was signed by the Fifth Defendant by its servant or agent Paul Kelly stating falsely that Magic owed the Fifth Defendant $700,000 when Kelly, Thomas and Paget knew that to be untrue and in making further statements therein regarding the bank records and ledgers of Magic to falsely represent an unfair and inaccurate financial picture of the company knowing that such statement would be used or likely to be used in the prosecution of the Plaintiff.
(viii) The said Defendants, their servant and agents falsely prepared evidence of financial difficulty of Magic through Edwin Middleton and through Nelson Chad knowing that the material would be used in the prosecution of the Plaintiff.
(B) Second Offence - Claim Form Matter
(i) The said Defendants, their servants or agents, knowing that the Prosecution case against the Plaintiff was that the claim of Magic prepared by or for him upon the Third Defendant for an indemnity in respect of the fire was fraudulent, and/or for an inflated amount withheld or arranged to be withheld stock sheets of Magic of a stock-take done shortly after the fire by Mr Bill Knock and Mr Campbell Anderson servants or agents of the Second Defendant, which stock sheets and stock-take report confirmed the accuracy of the figures assessed by the Plaintiff with respect to loss in the claim form.
(ii) Subsequent to the said charge being laid and maintained, in May 1989 to the knowledge of the said Defendants, their servants or agents, evidence became available for tender at the hearing to the knowledge of the Defendant, their servants or agents that the main witness for the Prosecution, one Valerie Bowden had stated on oath in related Federal Court proceedings that in addition to herself Mr Bill Knock had prepared spread sheets of the stock of Magic Australia Pty Limited, the effect of which was contrary to her evidence in the said Local Court, and whereby the Defendants by their servants or agents and in addition by Mr Bill Knock and Mr Campbell Anderson and Mr Frank Egan on behalf of the Second Defendant by omission did not draw such evidence to the attention of the Court and in so doing knowing of the relevance and of their duty to make the evidence available to the Court or the Prosecutor acted so as to maintain the prosecution against the Plaintiff.
(iii) Failure of the said Defendants, their servants or agents to investigate properly or at all the signature of the Plaintiff on the claim form so that the plaintiff was arrested and charged wrongfully.
(C) Third Offence - The Insurance Proposal Matter
(i) The First, Second and Third Defendants, by their servants or agents Messrs Paget, Thomas, Middleton, Frost by their conduct prior to the prosecution of the Plaintiff urged prosecution of the Plaintiff for failing to disclose certain information to the Third Defendant knowing that there was no obligation upon the Plaintiff under the policy or at all to the Third Defendant to disclose the said information, or alternatively knowing that there was no reasonable basis for the assertion of such obligation.
(ii) The Plaintiff repeats sub-paragraph A(i) to (iii), (v), (vi) and (viii).
(D) Fourth Offence - Misrepresentation Matter
(i) The proceedings were withdrawn against the Plaintiff before the Local Court for lack of evidence when the Defendants by their servants or agents knew or should have known before the prosecution commenced that there was no reasonable or probable cause for the prosecution.
(ii) The Plaintiff repeats sub-paragraph A(i) to (iii), (v), (vi) and (viii).
(E) Fifth Offence - Assault Matter
(i) To the knowledge of Thomas and Paget the insurance investigator employed by the Second Defendant namely Edwin Middleton requested the Plaintiff upon threat of prosecution to withdraw the insurance claim of Magic Australia upon the Third Defendant and presented a release of the Third Defendant.
After the Plaintiff refused to withdraw the claim or sign the release the said Edwin Middleton falsely alleged that the Plaintiff had assaulted him, whereby the Plaintiff was charged with assault when no such assault had been committed by him.
(iii) The plaintiff repeats sub-paragraph A(i), to (iii), (v), (vi) and (viii).
(F) Sixth Offence - Conspiracy Matter
(i) The First Defendant by police officers Thomas and Paget and the Second Defendant by one Edwin Middleton arranged for a statement to be prepared by one John McGowan a former employee of Magic to the effect that the Plaintiff had assaulted Mr McGowan when each of the said persons knew that that was not the case and thereafter made such a statement available to the Prosecution for prosecution and maintenance of a charge against the Plaintiff.
(ii) The Plaintiff repeats sub-paragraph A(i) to (iii), (v), (vi) and (viii)".
137 Before considering these particulars, it is desirable to set out parts of the statement of Detective Sergeant Thomas of 12 May 1988, parts of the report of Jeffrey C. Gudmann of Forensic Services Australia (NSW) Pty Limited of 16 February 1988 and parts of the statement of Mr Paul Kelly of 15 August 1988.
138 As I stated earlier in this judgment, on 12 May 1988 Detective Sergeant Thomas outlined to Mr Sourian the grounds on which he suspected that Mr Sourian was responsible for the fire at the Chatswood premises and also told Mr Sourian that, apart from a charge of arson, he would be charged with other offences. These parts of Detective Sergeant Thomas' statement were in the following terms:-
"16. I said, 'Firstly this fire is Arson. There is multiple seats of fire - flammable liquid was used to fuel the fire and there is no sign of forced entry. Do you care to say anything about that'. He said, 'Nothing'.
17. I said, 'Secondly you have a motive for the fire - you are heavily mortgaged, around $700,000.00 - and the Muffler Shop was not doing well. I am told you were taking about $2500.00 a week NOT the $13,000.00 you claim. Do you care to say anything about that.' He said, 'Nothing'.
18. I said, 'Thirdly you have the perfect opportunity to set the fire without being detected. I am told that you were at the Muffler Shop as late as 10.30pm this night. Do you care to say anything about that.'
He said, 'Nothing'.
19. I said, 'There are quite a number of further grounds - There is no forced entry - you activated the alarm when you depart the premises yet it is not set off until the fire is discovered. You would expect it would go off if an intruder entered the shop and set this fire. Do you care to say anything about that.'
He said, 'Nothing'.
20. I said, 'After your staff finishes for the day you shift a customers car - out of the Muffler Shop into the Service Station. When the staff leave they lock it in the Muffler Shop, they say where it should have been. Do you care to say anything about that'.
He said, 'Nothing'.
21. I said, 'I am informed that you have or had moved the majority of your stock and equipment from Chatswood to Gladesville Shop, immediately prior to the fire. Do you care to say anything about that.'
He said, 'Nothing'.
22. I said, 'It was convenient for you that your Gladesville Shop commenced trading the same day or the day after this fire. You could re-direct your customers to Gladesville. Do you care to say anything about that.'
He said, 'Nothing.'
23. I said, 'It will be my allegation that you set this fire with the intention of grossly defrauding your Insurance Co. The value of the stock allegedly lost by you and the damage occasioned has been grossly overstated. You say it amounts to $300,000.00, there-about. I am informed that $50,000.00 would pull it all up. That you wouldn't have more than about $20,000.00 stock all up. Do you care to say anything about that.'
He said, 'Nothing'.
24. I said 'I am told that you prepared your list of stock allegedly lost in this fire while you were seated in your office at Gladesville and while making reference to a suppliers manual. Do you care to say anything about that.'
He said, 'No but I have heard enough of this shit.'
25. I said, 'There is a number of other matters that I want to put to you concerning other allegations. I want you to understand that you don't have to say anything to me unless you want to about any of the matters but whatever you do say may later be used in evidence in court'.
26. I said, 'I intend to charge you with attempting to defraud your Insurance Company by submitting a false Declaration of Loss, in respect of this fire. Do you care to say anything about that.'.
He said, 'Do it'.
27. I said, 'I also intend to charge you with attempting to defraud the same Insurance Company in respect of a Claim made by you, for damage allegedly sustained or occasioned to a bending machine, owned by you. Do you know the one I mean.'
He said, 'I don't believe this, we will see about all this fucking shit.'
I said, 'Do you care to say anything about the bending machine.'
He said, 'No'.
28. I said, 'I also allege and I intend to charge you with a Fraud committed on the same Insurance Company when you completed your application for Insurance on the Muffler Shop on the 13 July, 1987 when you failed to disclose your criminal history and your driving record. Do you care to say anything about that.'
He said, 'I don't fucking believe this.'
I said, 'Do you care to say anything'.
He said, 'No'.
29. I said, 'I also intend to charge you with Assaulting Insurance Investigator Mr Ted Middleton, in your office on the 19 April, 1988 when you said the words to him 'when this is all over I will bury you.' Do you care to say anything about that.'
He said, 'No'.
30. I said, 'I also intend to charge you with arranging to have your former employee, John McGowan assaulted. He alleges that the assault happened at a time and place and with words said to him that can only mean that you were involved. Do you care to say anything about that.'
He said, 'Nothing to say at all - we will see about all this at a later time'".
139 It is apparent from Detective Sergeant Thomas' statement that, at least on the principal charge of arson, the present case is a very different case from Commonwealth Life Assurance v Brain and Martin v Watson. The grounds relied on by Detective Sergeant Thomas for deciding to charge Mr Sourian with arson depended on a number of pieces of information obviously supplied by a variety of informants and included inferences drawn by Detective Sergeant Thomas from information he had been supplied with, for example his inference that Mr Sourian had had a "perfect opportunity" to set the fire without being detected. The present case was not a case in which a single complainant provided information which constituted the whole of the prosecution case or which the police had no opportunity of checking or which virtually compelled the police to commence a prosecution. Nor was it a case in which Detective Sergeant Thomas, an experienced arson investigator, had no opportunity to exercise an independent discretion in deciding whether to bring a charge of arson.
140 Mr Gudmann conducted an examination of the premises on 10 and 11 February 1988. Mr Gudmann was not an employee of the insurer or of the loss assessor. He was the "manager" of a company Forensic Services Australia (NSW) Pty Limited, which had been engaged by the loss assessor to investigate and report on the fire. Parts of the report of 16 February 1988 were as follows:-
"1. A major seat of fire was located on the workshop side of the partition wall of a storage room in the north-western corner of the premises…
* * *
2. Further examination however, revealed the presence of at least four additional seats of ignition at independent locations within the western section of the premises…
* * *
3. A detailed examination of the debris at each of the identified seats of fire revealed no evidence of any natural or accidental sources of ignition, and similarly no evidence of incendiary or ignition devices.
* * *
4. ….These analyses revealed that the debris at Seats B and C contained gasoline residues, whereas kerosene residues were detected in the debris at Seats A and E, and in the paper products recovered from the office.
4. (the second paragraph numbered 4). The only evidence of forced entry damage detected was in association with the timber access door. However, the nature of this damage was considered consistent with forced entry by the fire brigade. This point, together with the security status of the premises at the time of their arrival, should be checked with the attending fire brigade members…"
141 In his submissions to me Mr Sourian did not dispute the accuracy of any part of Mr Gudmann's report. Mr Sourian did not dispute that the fire had been deliberately lit; he denied only that he was the person who had lit the fire. Mr Sourian did not dispute, and sought to take advantage of, Mr Gudmann's finding that there was no evidence of incendiary or ignition devices and his finding that there was some evidence of forced entry damage on the timber access door to the premises. It is true that Mr Gudmann considered that this damage was consistent with a forced entry by the fire brigade but he added that this matter should be checked with the fire brigade personnel who had attended the premises.
142 Pars4, 7 and 12 of Mr Kelly's statement were in the following terms:-
"4. From records held with the bank, I am able to state that as at 3 February 1988, Magic Australia Pty Limited maintained three accounts with the ANZ Bank, West Ryde.
1. Working Account - with an overdraft limit of $65,000
2. Loan Account - with a limit of $430,000
3. Loan Account - with a limit of $205,000
* * *
7. These borrowings totalling $700,000 were secured by:-
1. Second mortgage over Mr Jake Sourian's home at Artarmon (the First mortgage being to ANZ Savings Bank).
2. A First mortgage over vacant land at Thornleigh
3. A First mortgage over Magic Mufflers and adjoining property at 136-138 Victoria Road, Gladesville
4. A First mortgage over Mr Sourian's (Snr) home at Willoughby
5. An unlimited guarantee of Directors.
* * *
12. From time to time, the account (the working account) exceeded the arranged limit, however, we had adequate security and the Balance Sheet indicated the company was trading well. Consequently, we permitted these excesses and at no time contemplated returning cheques".
143 I will now examine the particulars appended to par18 of the second further amended statement of claim to determine whether Mr Sourian has any arguable case against any defendant (apart from the first defendant) that that defendant instituted or maintained any of the criminal prosecutions of Mr Sourian.
144 In a number of the particulars it is alleged that information was withheld from "the court and the prosecutor". I take "the court" to be a reference to the Local Court in which the committal proceedings were held or the District Court in which Mr Sourian was tried and I take "the prosecutor" to be a reference to the person who appeared for the prosecution in the Local Court or in the District Court. In my opinion, if information which may be relevant to the guilt or innocence of a criminal accused has been put in the possession of the police having the conduct of the prosecution, it is the responsibility of those police, and not of any person who provided the information to the police or anyone else, to ensure that the information is disclosed to the prosecutor. It then becomes the responsibility of the prosecutor to determine whether the evidence should be adduced in the court proceedings.
145 A - First Offence - Arson
146 (i) It is alleged that evidence of a witness from MSS Alarms that the plaintiff was at home asleep, when the fire alarm sounded, was withheld from the court and the prosecutor. It is alleged that this information was withheld by the police officers Thomas and Paget, who, as the pleading accepts, were in possession of the information. It is not alleged that the information was withheld by any of the second defendant, the third defendant, the fourth defendant or the fifth defendant. The only allegation made against these defendants is that the police officers withheld the information from the court and the prosecutor with the "encouragement" by words and deeds of the nominated servants and agents of these defendants. No particulars of the alleged words or deeds are furnished and I was not referred to any evidence of the alleged words or deeds. As stated above, it would be the responsibility of the police officer or officers having the conduct of the prosecution to bring possibly relevant evidence which was in their possession to the notice of the prosecutor.
147 (ii) It is alleged that evidence of forced entry by a lever was withheld from the court and the prosecutor by the defendants or covered up by the defendants. No further particulars are furnished in the second further amended statement of claim.
148 In his oral submissions at the hearing Mr Sourian pointed to the report from Mr Gudmann as containing evidence of forced entry to the premises.
149 It is not alleged in the second further amended statement of claim that the evidence of forced entry (identified by Mr Sourian as being Mr Gudmann's report) was withheld by the loss assessor or any of the other defendants from the police who were conducting the criminal investigation. On the contrary, the pleading implicitly accepts that the police were put in possession of the evidence of forced entry. It would have been the responsibility of the police having the conduct of the investigation, and not any of the second to fifth defendants, to ensure that Mr Gudmann's evidence was presented to the prosecutor.
150 In any event, Mr Gudmann's information that he had found some evidence of a forced entry to the premises was not withheld from the court at the committal proceedings. It would appear to be true that Mr Gudmann's report was not admitted into evidence at the committal proceedings. However, a copy of the report had been supplied to Mr Sourian's legal representatives (committal proceedings 4 April 1989 p3). At the committal hearing counsel for Mr Sourian objected to the report being tendered and objected to Mr Gudmann refreshing his memory by referring to the report, as distinct from his contemporaneous notes (committal proceedings 4 April 1989 pp3-4). When Mr Gudmann gave his oral evidence at the committal proceedings he gave evidence of observing damage to the timber door of the premises which could have been caused by a lever.
151 It became apparent in the course of Mr Sourian's submissions that his real complaints were:-
152 (a) That Detective Sergeant Thomas had not pursued, or had not pursued diligently enough, an enquiry to the fire brigade as to whether the damage consistent with a forced entry had been caused by members of the fire brigade.