(2008) 73 NSWLR 653
Ingot Capital Investments v Macquarie Equity Capital Markets [2004] NSWSC 1136
Jarvis v Swans Tours Ltd [1973] QB 233
1 All ER 71
JWH Turner & Co Ltd v O'Riordan (1923) 40 WN (NSW) 64
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
118 ER 749
Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133
Mann v Cahill [1999] ACTSC 7
Source
Original judgment source is linked above.
Catchwords
(2008) 73 NSWLR 653
Ingot Capital Investments v Macquarie Equity Capital Markets [2004] NSWSC 1136
Jarvis v Swans Tours Ltd [1973] QB 2331 All ER 71
JWH Turner & Co Ltd v O'Riordan (1923) 40 WN (NSW) 64
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189118 ER 749
Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133
Mann v Cahill [1999] ACTSC 7
Judgment (5 paragraphs)
[1]
iary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125,
Gibson v Parkes District Hospital and Anor (1991) 26 NSWLR 9
Gunns Ltd v Marr [2005] VSC 251
Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84
Harvey v Jacob (1817) 106 ER 59
Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (1979) 4 ACLR 492
Hill v Hart-Davis (1884) 26 Ch D 470
Hughes v Western Australian Cricket Assn Inc (1986) 69 ALR 660
Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2008] NSWCA 206; (2008) 73 NSWLR 653
Ingot Capital Investments v Macquarie Equity Capital Markets [2004] NSWSC 1136
Jarvis v Swans Tours Ltd [1973] QB 233; 1 All ER 71
JWH Turner & Co Ltd v O'Riordan (1923) 40 WN (NSW) 64
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; 13 ALC 437
Leybourne v Permanent Custodians Ltd [2010] NSWCA 78
Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635
Lumley v Gye (1853) 2 El & Bl 216; 118 ER 749
Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133
Mann v Cahill [1999] ACTSC 7; (1999) 149 FLR 298
Massey v Allen (1879) 12 ChD 807
McKernan v Fraser (1931) 46 CLR 343
Meltglow
Mills v Central Sydney Area Health Service [2002] NSWSC 728
National Australia Bank Ltd v Rusu [1999] NSWSC 539
Newtons Travel Services Pty Ltd v Ansett Transport Industries (Operations) Pty Ltd (1982) 7 ACLR 556
Northam v Favelle Favco Holdings (unreported, NSWSC, 7 March 1995)
NWR FM t/a North West Radio v Broadcasting Commission of Ireland & Anor [2004] IEHC 109
O'Keefe v Seafresh Holdings Pty Ltd [2009] NSWSC 1090
Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72
Rajski v Scitec Corporation Pty Ltd (unreported, NSWCA, 16 June 1986)
Ratcliffe v Evans [1892] 2 QB 524
Re Parton; Townsend v Parton (1882) 30 WR 287
Republic of Peru v Peruvian Guano Co (1887) 36 Ch D 489
Rubenstein v Truth and Sportsman Limited [1960] VR 473
Shelton v National Roads & Motorists Assn Ltd [2004] FCA 1393; (2004) 51 ACSR 278
Soden v Kowalski [2011] FCA 318
Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114
State of New South Wales v McCloy Hutcherson Pty Ltd (1993) 116 ALR 363
The Ophelia [1916] 2 AC 206
Thorp v Holdsworth (1876) 3 Ch D 637
Travel Compensation Fund v Blair [2003] NSWSC 720
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wilkinson v Downton [1897] 2 QB 57
Williams v Hursey (1959) 103 CLR 30
Worthington & Co Ltd v Belton (1902) 18 TLR 438
Texts Cited: Balkin & Davis, Law of Torts (4th edn)
Encyclopaedic Australian Legal Dictionary
Heydon, Economic Torts
Ritchie's Uniform Civil Procedure
The Laws of Australia (2nd edn)
Category: Procedural and other rulings
Parties: Peter Szanto (Plaintiff)
Mark Jason Bainton (First Defendant)
Claire Louise Bainton (Second Defendant)
Troy Douglas (Third Defendant)
Nicholas Schmidt aka Nick Levy-Schmidt (Fourth Defendant)
Representation: Counsel
J Emmett (First & Second Defendants)
Solicitors
Peter Szanto (Plaintiff) (self represented)
Chapman & Chapman (First & Second Defendants)
No appearance for Third & Fourth Defendants
File Number(s): 10/414171
[2]
Judgment
1HER HONOUR: Listed for hearing before me on 12 August 2011 was an application brought by notice of motion dated 11 May 2011 by the first and second defendants (Mr Mark Bainton and Ms Claire Bainton respectively), broadly seeking two kinds of relief: first, the provision of security for costs by the plaintiff (Mr Peter Szanto) (in the sum of $55,000 inclusive of GST) and, secondly, for the striking out in whole or in part of the plaintiff's First Amended Statement of Claim.
2Although the notice of motion also seeks an order that the claim be dismissed pursuant to Rule 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) as vexatious and embarrassing, when the matter came before me on 12 August 2011 I was informed by Counsel appearing for Mr Bainton (Mr Emmett) that he was not pressing this relief on the present hearing and sought that this part of the notice of motion be stood over (pending the re-pleading by Mr Szanto of his claim, assuming leave to do so were to be given, and the provision of security for costs, assuming that were to be ordered). This was submitted to be the appropriate course on the basis, as I understood it, that the application for relief under Rule 14.28 would be pressed at a later stage if any further amended pleading were to suffer from the same perceived deficiencies as the present pleading.
3Prior to the hearing of that notice of motion, I heard an application by Mr Szanto (brought by a document entitled Notice of Emergency Motion filed on 8 August 2011) to vacate the hearing on 12 August due, principally, to the non-compliance by the first and second defendants with an order made on 25 May 2011 by Registrar Walton that they file and serve affidavits in support of the motion by 6 July 2011. In that regard, there is no issue as to compliance with the order that there be service of any such affidavits on the specified date. Rather, Mr Szanto took issue with the fact that the affidavit sworn by Mr Bainton's solicitor (Mr John Chapman) on 6 July 2011 was not physically filed in the Registry on that date (that being due to the refusal of the Registry to accept the affidavit when it was sought to be filed on that day).
4Mr Szanto, who is self-represented and currently residing in Los Angeles in the United States of America, applied for leave to attend the hearing on 12 August 2011 by telephone link. I granted that leave, over the objection of the first and second defendants, on the basis that it was made clear by my Associate to Mr Szanto that if his motion to vacate the hearing were to be unsuccessful then I would then proceed to deal with the motion listed for hearing on 12 August 2011 (with the obvious consequence that he would be in attendance only by telephone link for that hearing). I should also add that there has been no appearance in the proceedings to date by either of the third or fourth defendants (and it is unclear to me whether they have been served with the originating process).
5For the reasons given orally on 12 August 2011, I dismissed the motion to vacate the hearing of Mr Bainton's security for costs/strike out applications. Mr Szanto then objected to me proceeding to hear those applications on the grounds of procedural fairness, having regard to the fact that he was self-represented and not physically in court for the hearing - the latter being said to be due to his confusion as to the procedures in this Court and in particular as to the fact that leave might be granted for the filing in court of the affidavit on which Mr Bainton relied in support of his application (namely, Mr Chapman's 6 July 2011 affidavit). (As to Mr Szanto's stated confusion in relation to the procedures applicable in this division of the Court for the filing of affidavits, he had been put on notice by Mr Chapman by email of 3 August 2011 of the applicable practice note in that regard.)
6As to Mr Szanto's status as a self-represented litigant, he referred me to the Court of Appeal decision in Leybourne v Permanent Custodians Ltd [2010] NSWCA 78, where the Court of Appeal considered an appeal in which one of the grounds (unsuccessfully) raised was denial of procedural fairness (the appellant, a practising solicitor though not with expertise in the area of conveyancing or civil litigation, being self-represented), holding that there had not been a failure to afford procedural fairness appropriate to the appellant's position and that the ground should not have been raised. In that regard, Mr Szanto's position is not that of someone completely unfamiliar with legal systems. He deposes in his affidavit of 20 June 2011, for example, to having been a court officer in several US states [9], to having served as a clerk in the United States Federal Court [10], to having had legal training in the UK and Canada [11], to having done legal research and analysis for numerous judges and justices [12] and to having "read and heard hundreds of cases" [13]. He thereby asserts a familiarity and level of knowledge of court procedure and the law beyond that of a person with no legal training or court experience (on which he relies to ask the Court to accept that his claim is not frivolous or without merit).
7The duty to afford procedural fairness is not, of course, one limited to self-represented litigants. Furthermore, the practice of the Court in giving assistance to unrepresented litigants (recognised in Rajski v Scitec Corporation Pty Ltd (unreported, NSWCA, 16 June 1986), cited in National Australia Bank Ltd v Rusu [1999] NSWSC 539) is not one that should deprive the other party of its entitlements. In Rajski , Samuels JA said:
In my view, the advice and assistance which a litigant in person ought to receive from the Court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage which he or she will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which our adversary procedure offers to the unwary and the untutored. But the Court should be astute to see that it does not extend its auxiliary role so as to confer upon a litigant in person a positive advantage over the represented opponent. ... At all events the absence of legal representation on one side ought not to induce the Court to deprive the other side of one jot of its lawful entitlement. It may ad weight on the unrepresented party's side of the scale; it must not lighten the other.
8I was not satisfied that Mr Szanto's status as a self-represented litigant should preclude me proceeding to hear a motion that had been set down quite some time before (on a date that then suited Mr Szanto's convenience).
9As to the predicament that Mr Szanto said he faced by not being physically in the court during the hearing (which was that he was unable to satisfy himself as to what physically had been filed in court), not only was that a matter wholly of his own making (and an election made in the knowledge that if his own motion to vacate were to be unsuccessful then the matter might well proceed) but in any event the affidavit filed in Court (together with an affidavit of Mr John Chapman dated 11 August 2011 responding to Mr Szanto's motion to vacate) had been forwarded to Mr Szanto and he confirmed that he had copies of that material before him during the course of the telephone hearing. Therefore, I was not satisfied that there was any procedural unfairness to Mr Szanto in dealing with the security for costs/strike out application with Mr Szanto's attendance being by telephone link. (I should also add that in the course of the hearing of the application, Mr Emmett was careful to put squarely to the Court arguments that he anticipated that Mr Szanto might raise or that might otherwise be against his client's interests to ensure that there was a balanced picture of the parties' respective positions.)
10On the hearing of the substantive motion, Mr Emmett relied on three affidavits sworn by Mr Chapman (of 11 May, 6 July and 11 August 2011); Mr Szanto relied on a document entitled "Plaintiff's Response and Objection to Motion to Provide Security", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 18 May 2011; a document entitled "Plaintiff's Evidence in Reply to John Chapman's Affidavit Regarding Motion on May 11, 2011", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 18 July 2011; and a document entitled "Plaintiff's First Amended Response and Objection to Motion to Provide Security", as part of which there was an affidavit sworn and affirmed by Mr Szanto on 20 June 2011.
11Mr Emmett objected to the reading of Mr Szanto's affidavits on the basis that he had been required for cross-examination and it was said that any cross-examination over the telephone would be prejudicial to the defendants because the Court would not have the benefit of observing Mr Szanto's demeanour and because he would not be able to put documents physically before Mr Szanto. From my review of Mr Szanto's affidavits, it appeared to me that they largely comprised assertions or submissions by Mr Szanto and I therefore indicated that I would read the affidavits as assertions by him (with such weight as they might bear having regard to the fact that they were untested).
12Written submissions had been served on behalf of the first and second defendants and for his part Mr Szanto relied upon the written material (in the form of memoranda to which affidavits were appended) that had been filed in response to the application. I heard oral submissions from both Mr Emmett and Mr Szanto and reserved my decision. I have considered the evidence and the submissions and now publish my reasons for the decision to which I have come on the security for costs/strike out application.
13In summary, I consider that security for costs should be provided (and consequential orders made in relation thereto) and that the First Amended Statement of Claim should be struck out with leave to replead certain particular causes of action (subject to the provision of security and to compliance with an earlier undertaking proffered by Mr Szanto to the Court). Before setting out my reasons, I summarise briefly the factual background to the dispute that has arisen between the parties.
[3]
Factual Background
14These proceedings were commenced by Mr Szanto on 14 December 2010 seeking an order for the extension of a caveat that he had lodged over property in Woolloomooloo, the registered proprietors of which are the first and second defendants. That caveat claimed an interest in the property described as follows: "Option to purchase, without recourse, property described herein." White J heard the application for an extension of the caveat in the duty list on 2 March 2011 and dismissed the application for reasons published on 12 April 2011 ( Bainton v Szanto [2011] NSWSC 278).
15The interest claimed by Mr Szanto follows the entry by the registered proprietors of the Woolloomooloo property into a Put and Call Option Deed on or around 10 March 2010 with the third defendant (Mr Troy Douglas), who was at that time the tenant under a residential tenancy agreement to which reference was made in the Deed. Under the Deed an option to purchase the Woolloomooloo property was granted to Mr Douglas or his nominee. On 30 March 2010, Mr Douglas entered into an agreement with Mr Szanto pursuant to which Mr Douglas irrevocably appointed Mr Szanto his nominee for the purposes of the Put and Call Option Deed. Under the Deed a fee of $20,000 was payable on execution of the deed and a further fee of $10,000 was payable on the exercise of the option (to be offset as against the purchase price but forfeited if the contract did not complete).
16On 30 June 2010, into a contract for the sale of the property was entered into between the Baintons as vendor and Mr Szanto as purchaser for sale of the property at a price of $815,000. There was no deposit provided for under the contract for sale (but the Baintons had received fees totalling $30,000 that were to be applied to the purchase price if the contract were completed as set out above).
17I was taken to various provisions of the Contract for Sale (a copy of which had been exhibited to Mr Szanto's affidavit and which was admitted into evidence by White J on the March 2011 application, together with the nomination agreement, on the basis of Mr Szanto's undertaking to the Court to submit those documents to the Commissioner for State Revenue).
18Special condition 35.1.2 of the Contract for Sale provided that the purchaser would not make any objection, requisition or claim for compensation, nor rescind, terminate or delay completion because of various matters, including the condition or state of repair of the property; the suitability of the property for any use; any matter disclosed in any sewerage service diagram; the presence of any sewer, drain, manhole or vent on the property; any rainwater downpipe being connected to the sewer; the state of repair or condition of any service to or on the property (including drainage, stormwater and sewerage); and the nature, location, availability or non-availability of any such service. Special condition 35.2 of the Contract for Sale provided that the purchaser "accepts the property and improvements in their present state of repair and subject to any latent or patent defects or any infestation or dilapidation. The purchaser shall not call upon the vendor to carry out any repairs whatsoever in relation to the property, improvements and or inclusions".
19Special condition 41 contained a disclosure by the vendor and an acknowledgement by the purchaser that the drainage diagram attached to the contract was the only diagram available from Sydney Water in the normal course of administration and provided that the purchaser "shall not make an objection, requisition, claim for compensation, rescind, delay completion nor require the vendor to do any work to the property in relation to matters disclosed or any non-disclosure in the drainage diagram".
20There appears to be a factual dispute as to the occupancy of the property during the period at or around the time of entry into the contract for sale. Mr Douglas had been the tenant under the initial lease. At some stage there were two other persons in occupation of the property (described variously by Mr Szanto to White J as his tenants and in his pleading as his guests - see [26] of his Honour's judgment).
21There was no lease agreement (as such) between Mr Szanto and the Baintons. However, the Contract for Sale was drafted as if the purchaser named therein (Mr Szanto) was the tenant. Mr Szanto asserts that he was a tenant of the property in reliance on the sale contract provisions (and both before White J and before me he asserted that the property was subject to the protected tenancy legislation of the Landlord and Tenant (Amendment) Act 1948 (NSW), though the factual basis for this latter contention was unclear and, as White J noted, there had been no evidence that the legislation applied to these premises). White J, in his April judgment considered that there was a serious question to be tried as to the contention that Mr Szanto was a tenant of the premises as at the relevant time (to which I will refer shortly).
22Completion of the contract was due on 8 September 2010. Prior to that a problem apparently arose in relation to flooding on the property. The cause of the flooding, I am told, has not been finally determined but in any event that is not relevant to the current application. What is relevant is that Mr Szanto claims (and Mr Bainton denies) that Mr Bainton knew that the land was prone to flooding. Completion did not occur on 8 September 2010 and a notice to complete was issued on 10 September 2010, under which completion was required by 27 September 2010. Completion again did not occur on 27 September 2010.
23Mr Bainton took steps towards the end of 2010 to retake possession of the premises. He commenced proceedings in the Consumer, Trader and Tenancy Tribunal on 28 September 2010 against both Mr Douglas and Mr Szanto, seeking an order for payment of rent arrears, an order ending the "Tenancy Agreement" and an order for possession due to the rent arrears. At that stage the contract for sale had not been terminated. (Also at that stage it appears that Mr Szanto was represented by solicitors, a fact I note because the Tribunal order of 14 October 2010 seems to have been issued to Mr Szanto care of his lawyers' address.)
24The Tribunal on 14 October 2010 dismissed the application for want of jurisdiction on the basis that there had been "no termination notice". Mr Emmett submits, correctly at least insofar as the record of the Tribunal's orders discloses, that there was no determination on the merits but simply a dismissal of the application on a jurisdictional ground.
25Mr Szanto places reliance on the CTTT determination in a number of respects. Mr Szanto contends that Mr Bainton has, in effect, made an election to proceed in the Tribunal and, having done so, has waived and/or cannot now pursue claims he might have in this Court. Further, if I understand his submission correctly in this regard, he contends that the present proceedings are an impermissible attempt to revisit the Tribunal's ruling on the issue. (Neither of those propositions is tenable.) Thirdly, he maintains that the consequence of the Tribunal's order is that there could be no further application for possession of the premises within a 12 month period and hence, as I understand it, that the retaking of possession was wrongful (relying on s 68 Landlord and Tenant (Amendment) Act , which could only be applicable if these were prescribed premises - as to which there is no evidence - an issue to which Mr Szanto's attention was drawn when the matter was before White J). Fourthly, Mr Szanto maintains that the conclusion to be drawn from the history of the respective proceedings is that the real plaintiff in the present proceedings is Mr Bainton (a matter he raises in resisting the security for costs application and to which I refer later). Finally, he asserts that Mr Bainton intentionally misspelled his name on the Tribunal application in an attempt to prevent Mr Szanto becoming aware of the proceedings (something that he raises as a discretionary ground as I understand it). However, the allegation of intentional misspelling relies on an inference drawn from the fact that Mr Bainton had in his possession a contract in which Mr Szanto's name was correctly spelt and, in any evident, the document before me that was misspelt had emanated from the Tribunal. I draw no inference of any intentional misspelling or attempt at concealment of the Tribunal proceedings.
26A notice of termination was prepared by the solicitors acting for the vendor and said to have been sent to Mr Szanto on 26 October 2010, although there is a dispute as to when Mr Szanto received that notice of termination. White J noted that Mr Szanto had admitted receipt of a copy of the notice of termination on 2 February 2011 (see [28]).
27It is Mr Bainton's position that he did not wrongfully retake possession but, rather, that during November 2010 the two then occupants of the premises voluntarily vacated the premises and handed back the keys. However, there does not seem to be a dispute that possession of the premises was retaken around that time (voluntarily or otherwise) and the locks were changed. There were on the premises at that time various items of personal property. Mr Szanto asserts that they were his and were worth $75,000 (together with some items of sentimental value). That is the subject of dispute. Mr Bainton claims that they were worth very little. The possessions were sold for $800 (according to Mr Bainton, with Mr Szanto's authorisation; according to Mr Szanto, without his consent) and the moneys have been placed (without Mr Szanto's consent) in Mr Chapman's trust account pending the hearing of the dispute. (Mr Szanto criticises this conduct and submits both that it amounts to unjust enrichment and that Mr Chapman should have availed himself of the interpleader procedure to pay the money held in his trust account into Court. In that regard I see little point in requiring the moneys to be paid into Court when Mr Chapman is holding them in trust pending the outcome of these proceedings.)
28Mr Szanto lodged a caveat on the title and Mr Bainton then issued a lapsing notice. That led to the commencement of the present proceedings. The matter initially came before McDougall J in the duty list in December 2010 (on which occasion his Honour extended the operation of the caveat for a limited period and at which time Mr Bainton foreshadowed an application for security for costs). There was then an interlocutory application before Hall J in January 2011 a dispute as to the discovery sought by Mr Szanto (he then espousing the need for a "US style propounded discovery"), followed by the interlocutory application before White J on 2 March 2011 in relation to the extension of the caveat (misdescribed by Mr Szanto during the submissions before me, though I do not suggest this was intentional, as a summary dismissal or summary judgment application).
29In the course of his Honour's judgment dismissing the application for an extension of the caveat, his Honour made certain findings as to the existence or otherwise of a serious question to be tried on particular issues. Relevantly, his Honour said at paras [23] and [45] respectively:
[23] There is a serious question to be tried as to whether or not there was an illegal sewer connection which caused or contributed to flooding on the property, and if so, what knowledge the defendants had of hat matter. There is also a serious question to be tried as to whether the adjoining owners are entitled to an easement to drain sewerage through pipes on the subject land to the sewer which has been omitted from the register.
[45] I do not consider that there is a serious question to be tried that the defendants were not entitled to terminate the contract. While the plaintiff disputed that the conveyancer had served the notice of termination, it is clear that he became aware that the defendants asserted they had terminated the contract. He does not point to any conduct of the defendants whereby they might arguably have affirmed the contract. (my emphasis)
30Mr Szanto places weight on the matters set out in paragraph [35] of his Honour's judgment, which he says goes to the heart of his contention that he survived a summary judgment application:
[35] The defendants also submitted that the plaintiff had not shown that there was a serious question to be tried that the contract for sale was still on foot and therefore had not shown an arguable proprietary interest that would support a caveat. The defendants contend that they were entitled to terminate the contract when the plaintiff failed to complete after time had been made essential. Whether time had become essential so as to justify termination for the plaintiff's failure to complete depends on whether the defendants were entitled to serve a notice to complete. The issue on the trial of a claim for specific performance [although his Honour later noted that no such claim had at that stage been made - according to Mr Szanto on that occasion by oversight] would be whether the defendants were no themselves ready, willing and able to complete because they were not able to provide good title to the plaintiff by reason of an illegal sewer connection or an omitted easement. The proneness of the property to flooding would not preclude the valid service of a notice to complete if it were a mere defect in quality, albeit that if there had been fraudulent concealment of the defect, the purchaser might be entitled to damages or be entitled to rescind (P Butt, The Standard Contract for Sale of Land in New South Wales, 2 nd ed (1998) at [0.13]). However, if there were a defect in title, then subject to the effect of specific contractual provisions referred to below, the vendors would not have been entitled to serve the notice to complete as they would not have been able to provide a clear title . (my emphasis)
31At [37], his Honour again noted that there was a serious question to be tried as to the nature of the problem and the extent of the defendants' knowledge, referring to authority for the proposition that if there is a defect in title of which the vendor is aware the vendor cannot rely on special conditions precluding the purchaser from taking objection in respect of such defects unless there had been full and frank disclosure of the defects and to cases that have considered the consequence of non-disclosure.
32On 29 April 2011, Mr Szanto filed the First Amended Statement of Claim. He raises various claims and seeks relief identified as restoration to possession of real property; specific performance and transfer of the Woolloomooloo property; $2 million for "expectation damages for breach of contract"; an award (unquantified) for "emotional injury"; an award "of constructive title to real property"; $75,000 compensation for "expropriation for personal property" and $10 million for punitive and exemplary damages.
33He cited various cases in argument before me both in relation to the claims he made and the security for costs application (including Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd; Jeffery & Katauskas Pty Ltd v Rickard Constructions Pty Ltd (subject to Deed of Company Arrangement) (2009) 239 CLR 75; Lumbers v Cook; Devenish v Jewel Food Stores Pty Ltd (1990) 94 ALR 664 at [666]; Farrer v Lacy Hartland & Co (1885) 28 Ch D 482 at [485]; Kardynal v Dodek (1978) VR 414). I think it fair to say (and this was, in effect, indicated to be the case by Mr Szanto in his submissions) that Mr Szanto appears to have drafted his claims by reference to causes of action that he considers, as a result of his researches, address his version of understanding of the facts without necessarily having a clear understanding in each case of the legal principles espoused in those cases or what needs to be established to sustain such a claim (the clearest example being the assertion that the protective landlord and tenant legislation applied to preclude any termination of his tenancy arrangement at the relevant time). He described himself as "more of a scribe than an author". However, that has given rise to difficulty in the manner and content of the pleading, to which I refer later.
34Mr Szanto objected to Mr Emmett's opening submissions before me in which he outlined the factual background to the dispute as an attempt to revisit or undermine White J's judgment. However, as I explained, the opening submissions in this regard were necessary for me to understand the background to the present application. Mr Emmett made it very clear that Mr Bainton did not, for the purposes of the present application, cavil with any of his Honour's judgment or reasoning (and indeed he urged me to follow various of the findings his Honour had made as to the lack of any serious question to be tried on issues such as those relating to Mr Szanto's present claim for specific performance of the contract of sale). Mr Szanto, in his oral submissions, also took me to various matters he considered relevant in explaining the background to the present dispute.
35Insofar as Mr Szanto places weight on the conclusions drawn by White J in [35] and [37], it must be noted that what his Honour ultimately concluded (by reference to general condition 7 of the contract as amended by special condition 30.3) was (as set out in [45]) that there was not a serious question to be tried that the defendants were not entitled to terminate the contract. That, as Mr Emmett submits in the context of the present strike out application, is inconsistent with there being an arguable case that the contract remains on foot or is specifically enforceable.
36I note that when the matter came before White J in March this year, objection was taken by Mr Emmett to the admission into evidence of the option nomination agreement and the contract of sale as both were unstamped. Mr Szanto informed his Honour on that occasion that he had talked with the revenue officer and "their position was that so long as the matter was before the Court the payment was stayed". White J very clearly corrected any misapprehension Mr Szanto may have had in that regard and drew Mr Szanto's attention to s 304 of the Duties Act 1997 (NSW) (which renders an unstamped document on which duty is payable inadmissible in evidence unless either the duty is paid or an undertaking is given by the person tendering the document to submit the document for duty - in other words, to pay the duty). His Honour was given an undertaking by Mr Szanto, which his Honour confirmed in the transcript at T 5.38 was to the following effect:
The usual undertaking is by the person liable given to the Court by a party in relation to the instrument referred to s 304(2) of the Duties Act is an undertaking the party will within time satisfy the Court to transfer the instrument to the State Commission of Revenue.
37White J specified 7 days as the period by which the instruments in question were to be transmitted to the Commissioner of State Revenue.
38When the matter was before me, Mr Emmett called on a notice to produce that had been served on Mr Szanto for the production of the original contract and nomination agreement. Mr Szanto (in Los Angeles) clearly was unable physically to produce any documents in answer to the call (and objected in any event to the notice to produce on the ground that it required production of his passport) but confirmed that the original documents had not been stamped.
39Mr Szanto told me that he had spoken with the stamp duties office and that his understanding was that he was not required to stamp them (referring to a s 66 Conveyancing Act notice - which might or might not have been a reference to the situation where a cooling off notice is given in relation to one or both of such documents). Mr Szanto, perhaps somewhat ironically given the submissions made by him as to the failure of the defendants to comply with Court orders, seems to be in the position where he has not himself complied with an undertaking given to the Court. He said words to the effect that he considered it was not necessary to stamp the document unless he succeeded in his claim for specific performance. That, however, is not to the point. Mr Szanto was made aware of the need for the documents to be submitted for stamping and he gave an undertaking to do so. It seems to me that it is incumbent on Mr Szanto to honour the undertaking he gave to White J and on the basis of which the documents that would otherwise not have been admissible in evidence were admitted. I was urged by Mr Emmett to take this into consideration as a discretionary matter.
40For completeness, I note that there remains a live dispute between the parties as to the adequacy of the discovery provided by Mr Bainton. Mr Szanto contends that when he attended at the Tribunal he was shown various documents going to the flooding issue, that he says have not been produced in the course of discovery. Whatever the rights and wrongs of this issue, I am not in a position to determine the adequacy of discovery on the present application. Mr Emmett noted that an affidavit verifying discovery had been served and submitted that it was not appropriate for me at this stage to seek to go beyond that affidavit. There is also a dispute (to which I will refer shortly) as to the circumstances in which a subpoena was issued to the Department of Immigration seeking the production of immigration records relating to Mr Szanto's entry into and exit from Australia over the relevant period (which Mr Szanto complains is an infringement on his privacy and of which he says he should have been given notice prior to its issue) and as to a notice to produce calling for documents (in particular his passport) that Mr Szanto says he is precluded by American law from producing.
41I turn then to the two issues now to be determined.
[4]
(i) Security for costs
42Rule 42.21 of the Uniform Civil Procedure Rules 2005 provides, inter alia, that if, in any proceedings, it appears to the court on the application of a defendant that a plaintiff is ordinarily resident outside New South Wales, then the Court may order the plaintiff to give such security as the Court thinks fit, in such manner as the Court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given. Security for costs is to be given in such manner, at such time and on such terms (if any) as the Court may by order direct. If the plaintiff fails to comply with an order under this rule, the Court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed.
43The first factual issue that arises is as to whether it appears to the Court that Mr Szanto is ordinarily resident outside Australia. Mr Szanto certainly concedes that he is presently resident outside Australia. He maintains that this is because he was wrongly ejected from the Woolloomooloo premises.
44Mr Chapman's 11 August affidavit annexed copies of the documents obtained under subpoena from the Department of Immigration (which show that during the period from 30 January 2009 and 1 March 2011, Mr Szanto entered the country on 7 occasions and that on each occasion he noted his place of residence as the United States of America and his purpose in the country as either a holiday or visiting friends or relatives). Mr Emmett submits that either Mr Szanto was making a false declaration at that time or he is falsely asserting now that he was ordinarily resident in Australia. Mr Szanto objects as to the evidentiary foundation for this evidence - he objects to it as hearsay (although hearsay is permissible on an interlocutory application, as White J pointed out to him in the March proceedings); as lacking evidentiary foundation (since he says that the covering letter makes the qualification that not all records had been found - which seems to me to be an inaccurate summary of the effect of the letter with which the Department produced the documents under subpoena); and that it is inconsistent with the facts (since he says that the subpoena was only served on the address in Sydney and that it cannot be inferred that it covered all records of entry across the country).
45The Department of Immigration is a national department. I see no reason to read the letter with which the documents were produced on subpoena as limited to documents held in the Sydney office of the department. Nor do I read the letter as indicating the existence of other records.
46While I do not draw any inference from what Mr Szanto now says have been mistakes when he completed his immigration forms, it seems to me unarguable that Mr Szanto presently resides outside Australia and that at the relevant times his residence in Australia was for limited periods only. I find that his ordinary residence at the moment (and for some time) is and has been outside New South Wales. The fact that this may be due to the disputed exclusion of Mr Szanto from the premises is a matter I will take into account when weighing the factors for and against the making of an order for security for costs. I turn then to those factors.
47At the outset I note that it is recognised that the fundamental purpose of the power to order security for costs is to secure justice between the parties. Ritchie's commentary to the Uniform Civil Rules notes that this is done "principally by ensuring that unsuccessful proceedings do not occasion injustice to defendants". Further, it was made clear in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; 13 ALC 437 that one does not approach an application for security for costs with any predisposition in favour of the award of security and that the discretion to order security for costs is unfettered and should be exercised having regard to all the circumstances of the case. The court has a wide discretion in relation to security for costs and each case depends upon its own circumstances.
48The principles to be taken into account on applications for security for costs were set out by Beazley JA in Meltglow . Those principles include the following factors: the promptness with which the application is brought; the strength and bona fides of the plaintiff's case (including whether a costs order is likely to be made at the conclusion of the litigation); whether the plaintiff's impecuniosity has been caused by the defendant's conduct the subject of the claim; whether the application for security is being used to deny an impecunious plaintiff the right to litigate; whether there are any persons standing behind the plaintiff who are likely to benefit and who are willing to provide security; whether the persons standing behind the plaintiff have offered any undertaking for the costs; whether the plaintiff is in substance a plaintiff; and the public interest if any in the litigation.
49Of those factors, there is no suggestion that any persons are standing behind Mr Szanto or might be expected to offer any undertaking for the costs and I do not consider them further. As to the remaining factors of relevance to the present application, I note as follows:
Promptness/delay
50Mr Szanto submits that security should not be ordered due to the delay of Mr Bainton in making the present application. The very first of the guidelines raised by Beazley JA in Meltglow related to the question of delay. Her Honour noted that applications of this kind should be brought promptly. However, delay is not an automatic bar to the making of the order for security for costs ( Commonwealth v Cable Water Skiing (Aust) Ltd (1994) 14 ACSR 760), the relevant question being the length of the delay and the reasons for it (consideration also being given to what has taken place in the interim).
51In relation to the question of delay, the promptness with which a party acts to seek security is relevant because it is said that a plaintiff is entitled to know its position in relation to the security at the outset and before it embarks to any real extent to its litigation (and before it is allowed to commit substantial sums of money towards litigating its claim). In this regard, I refer to what was said by Moffitt P in Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301 and I also note what was said by French J (as his Honour then was) in Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 to the effect that the further a plaintiff has proceeded in an action, and the greater the costs it has been allowed to incur without steps being taken to apply for an order for security for costs, the more difficult it will be to persuade the court that such an order is not, in the circumstances, unfair or oppressive.
52However, as was apparent from Mr Szanto's complaints as to what he referred to as the 'methodology' of the defendants' process in relation to this litigation, the litigation is still at an early stage. The notice of motion for security was filed on 11 May 2011, before the defence was due to be filed on the timetable put in place by White J. Not only has no defence yet been filed (a matter with which Mr Szanto takes issue) but the result of a successful application on the second part of this application would mean that the claim is yet to be properly pleaded by Mr Szanto. It cannot be said that this is a case where the litigation has been embarked upon to such an extent that the claim for security should be dismissed on that basis.
53Mr Szanto's summons in these proceedings was filed on 14 December 2010; the application for security for costs was foreshadowed by Mr Chapman when the matter first came before the Court (on which occasion McDougall J explained to Mr Szanto that the position taken by Mr Bainton in relation to the orders then made was not to be taken as waiving any right to apply for security for costs and the transcript records Mr Szanto saying that he understood this). Mr Emmett notes that Mr Bainton's intention to seek security for costs was foreshadowed again in two emails of 5 January 2011 and 7 January 2011 (those being annexed to Mr Chapman's affidavit of 11 May 2011 at [11]-[12]). Mr Szanto denies having received those emails (and explained in submissions the 'funny phenomenon' that international email servers noted when an email was received the day before it was sent). I find it unnecessary to determine this factual dispute because (even assuming that Mr Szanto is correct and that he did not receive the emails in question) Mr Szanto had earlier been put on notice that the defendants reserved their position in relation to a potential security for costs application and that they had consented to orders in relation to the conduct of the proceedings without waiving any right to make such a claim.
54I consider that even in the absence of notice to Mr Szanto (after the matter had earlier been raised before McDougall J) of an intention to seek security for costs, there has not been such a delay as would disentitle Mr Bainton to an order for security for costs.
The Plaintiff's First Amended Statement of Claim be struck out.
The Plaintiff provide security for the costs of the First and Second Defendants by paying the sum of $55,000 (inclusive of GST) into Court within six weeks of the date of this order.
The proceedings against the First and Second Defendants be stayed until security for costs is provided in accordance with order 2.
If security for costs is not provided in accordance with order 2 within six weeks of the date of this order, the proceedings be dismissed as against the First and Second Defendants with costs.
Subject to satisfaction by the Plaintiff of both of the following conditions within six weeks of the date of this order:
(i) provision of the security for costs in accordance with order 2; and
(ii) service by the Plaintiff on the First and Second Defendants' solicitors of an affidavit that evidences compliance by the Plaintiff with the undertaking proffered by the Plaintiff to White J on 2 March 2011 (as recorded at T 5.38 of the transcript of the hearing on that day before his Honour) and that evidences either the payment of duty on the documents the subject of that undertaking or a ruling by the Commissioner of State Revenue or his delegate that duty is not payable on the said documents;
leave be granted to the Plaintiff to file and serve within eight weeks of the date of this order a Further Amended Statement of Claim, such pleading to be limited to causes of action for breach of tenancy, conversion, misleading or deceptive conduct, fraud, trespass, conspiracy and/or the tort of intentional interference with contract.
The balance of the Notice of Motion dated 11 May 2011 (namely, the application for the relief claimed in prayer 3 of that motion) be stood over to the Registrar's List on Monday 10 October 2011 (that being a date after any Further Amended Statement of Claim will have been filed in accordance with the leave granted in 5 above).
The Plaintiff pay the First and Second Defendants' costs of the application heard on 12 August 2011.
Liberty to apply on three business days' notice.
[5]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 01 September 2011
Strength and bona fides of claim
55The second factor referred to in Meltglow is the strength and bona fides of the case. As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success ( Meltglow ; Bryan E Fencott ) without attempting a more detailed assessment of the prospects of success ( Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 at [37]-[39]).
56In this regard, Mr Emmett accepted, for the purposes of the present application, that the First Amended Statement of Claim contains some allegations that (if the factual basis therefor were to be established), would give rise to arguable causes of action (those identified as being as to the alleged infringement of Mr Szanto's claimed tenancy rights; the allegation of deliberate non-disclosure of matters in relation to the flooding issue; and the claim for conversion). Beyond those three areas, it is alleged that the claims made by Mr Szanto in his pleading are on the face of the pleading untenable (and even in relation to those three areas it is submitted that the case as pleaded has been improperly pleaded).
57(As to the bona fides of Mr Szanto in making these claims, Mr Emmett had indicated in his written submissions that it would be submitted that these claims were not made in good faith but accepted that such a submission should only be made after giving Mr Szanto an opportunity to respond to the suggestion (referring to Browne v Dunn (1893) 6 R 67; (1893) 6 R 67 HL). As it was, for the reasons adverted to earlier, Mr Szanto was not cross-examined at the hearing on 12 August 2011 and I make no finding as to any lack of good faith in the making of the claims.)
58Mr Szanto submits, in effect, that the claims are meritorious and that (having, as he incorrectly says he has, survived a summary dismissal application) it is clear that they have sufficient prospects to satisfy this factor. For the reasons I set out in the second part of this judgment, I consider that there is not (on the face of the pleading) an arguable case for the bulk of the claims asserted.
59For the purposes of the security for costs application, I accept that there are arguable causes of action at least in relation to the three areas identified above. I make no comment as to the prospects of success of those claims. Suffice to note that they are hotly disputed and success on the claims is not inevitable.
Whether the plaintiff's impecuniosity has been caused by the defendant
60The third factor is as to whether, in the case of an impecunious plaintiff, the plaintiff's lack of funds has been caused or contributed to by the conduct of the defendant (see for example Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd , (1977) 3 ACLR 133; O'Keefe v Seafresh Holdings Pty Ltd [2009] NSWSC 1090) or has arisen from other circumstances ( Newtons Travel Services Pty Ltd v Ansett Transport Industries (Operations) Pty Ltd (1982) 7 ACLR 556; Amalgamated Mining Services Pty Ltd v Warman International Ltd (1988) 19 FCR 324; 88 ALR 63).
61Here, the application for security is not based on the impecuniosity of Mr Szanto (rather, it is based on his ordinary residence out of the jurisdiction). However, to the extent that this factor is relevant, Mr Emmett points to evidence from Mr Szanto himself to the effect that he is not impecunious, namely his evidence before White J that he had sufficient assets to purchase the Woolloomooloo property (for a price, allowing for the $30,000 credit) well in excess of the borrowing he said he had arranged), referred to in para [34] of White J's judgment; as well as the pleading by Mr Szanto in the First Amended Statement of Claim as to his involvement in two projects in Los Angeles and Miami that had made gross profits of $2 million and $2.25 million respectively (at [80]). As to the last point, the allegation made in the pleading seems to me to be ambiguous insofar as it is not clear what if any portion of the profits from these projects was to Mr Szanto's personal account. Further, I note that Mr Szanto describes himself in his affidavits as not currently employed. Nevertheless, I accept that the evidence does not suggest that Mr Szanto is impecunious to the extent that he asserted before White J his ability to fund a substantial portion of the purchase price himself. I further accept that there seems to be no basis for suggesting that any impecuniosity has been caused by Mr Bainton's conduct in terminating or purporting to terminate any tenancy arrangement and/or the contract for sale of the property in question.
Whether the application is being used to deny an impecunious litigant the ability to litigate
62Mr Emmett submits that this factor is irrelevant because Mr Szanto is not impecunious and says that, in any event, this application is not being used for that purpose (but, rather, has been brought in circumstances where there is little real prospect of Mr Bainton enforcing a costs judgment against Mr Szanto as an overseas resident in the event that such an order were to be made in Mr Bainton's favour). This, however, is one of the main bases on which Mr Szanto resists the application - namely that it is an attempt to stultify the litigation.
63The onus of establishing that making of a security for costs order would unduly stultify the plaintiff's ability to pursue proceedings rests on the party asserting it ( Bell Wholesale Co Ltd v Gates Export Corporation [1984] FCA 34; (1984) 2 FCR 1 at [4]) and in the absence of the court being satisfied that the order will have such an effect, such an order may be made ( Dae Boong International Co Pty Ltd v Gray [2009] NSWCA 11). I am not satisfied that the purpose or effect of the making of the order in this case would stultify the proceedings.
Whether the plaintiff is in substance a plaintiff
64Mr Szanto also relies on this as a factor tending against security being ordered on the basis that he submits that he is not in substance a plaintiff, having only commenced these proceedings because it was incumbent on him to do so in order to avoid the caveat lapsing in accordance with the lapsing notice served by the Baintons. He submits that in substance Mr Bainton is the plaintiff (and relies on the fact that Mr Bainton chose to commence the Tribunal proceedings and is bound by the election to proceed in that jurisdiction).
65The cases in which a plaintiff is treated as not, in substance, a plaintiff in the context of an application of this kind include those where the plaintiff's proceedings are a defence against "self help" measures taken by the defendant (such as considered in Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (1979) 4 ACLR 492). That is not the case here. Mr Szanto has invoked the jurisdiction of the Court and has sought relief from the Court in his capacity as a plaintiff.
66I do not consider that the fact that proceedings were earlier commenced in the Tribunal affects that conclusion (nor do I consider that by commencing proceedings there any election has been made not to pursue alternative courses of action such as the issue of a lapsing notice). Further, even if it could be said that the application to extend the caveat was in the nature of a defence against the action by the defendants to retake possession, the claims now sought to be brought by Mr Szanto (even if limited to the ones that Mr Emmett concedes might constitute arguable causes of action) go well beyond a defence against eviction.
Other discretionary matters
67Both parties rely on matters going to the exercise of discretion on this application.
68Mr Emmett refers to the manner in which Mr Szanto has to date conducted this litigation, submitting that (in the pleadings and in his affidavits), Mr Szanto has made very serious accusations (it is said with little or no justification) and has taken procedural points that are productive of costs (such as asserting that Mr Bainton be denied security for costs by reason of delay, asking the Registrar to give judgment in his favour because Mr Bainton was three business days late in seeking an extension of time to file a defence, and writing to the Registrar seeking summary dismissal of the present notice of motion because Mr Bainton's reply affidavit, while served in time, was not filed with the Registry by 6 July 2011). It seems to me that there is force in that submission, having regard to the material that was put before me on the present application.
69Mr Szanto, conversely, raises as a consideration the manner in which he says the defendants (the Baintons) have defended the proceedings to date. He says that the defendants have been dilatory and alleges that their conduct has been designed to make the matter more difficult for him. I do not accept that the insistence of the defendant on the provision of a pleading in proper form (or the application for security for costs) can be dismissed as simply seeking to make prosecution of the proceedings more difficult for Mr Szanto.
70Next there is the consideration as to the ability to enforce a costs order were one to be made in the defendants' favour. Mr Emmett emphasises that the claim which has been brought is against a private individual by a party whose assets are not within the jurisdiction to satisfy an adverse costs order.
71Insofar as the likelihood of a costs order being made at the conclusion of proceedings is concerned, it must be assumed that in the ordinary course if Mr Szanto were to be unsuccessful in his claims then costs would ordinarily follow the event in accordance with Rule 42. Mr Emmett submits that although ordinarily the Court would be reluctant to order security against a non-resident plaintiff if any final costs orders could be enforced as readily as if they were orders against a resident (referring to Connop v Varena [1984] 1 NSWLR 71), the position in the present case is that since the United States of America is not a party to any reciprocal arrangement with Australia for the enforcement of judgments (referring to the Foreign Judgments Regulation 1992 (Cth)), there can be no confidence that there is any real prospect that final costs orders could be enforced against Mr Szanto.
72Mr Szanto submits that this is not the case and that the existence of the Australia-United States Free Trade Agreement means that if a costs order were to be made against him, a charge could be placed on his house in the United States in order to secure payment of that costs order. I can see no basis for that submission.
73The Australia-United States Free Trade Agreement (AUSFTA) entered into force on 1 January 2005. It is a comprehensive agreement that covers goods, services, investment, financial services, government procurement, standards and technical regulations, telecommunications, competition-related matters, electronic commerce, intellectual property rights, labour and the environment (Australian Government, Department of Foreign Affairs and Trade, Australia-United States Free Trade Agreement ). The AUSFTA governs the importing and exporting of goods and services between the United States and Australia and sets out the rules for determining which goods are 'originating' from both countries and therefore are eligible for preferential tariff treatment. The terms of the AUSFTA do not appear to have any bearing on the enforcement in the United States of costs orders made in this jurisdiction and hence are of no assistance in determining whether or not security for costs should be ordered to be provided by Mr Szanto in these proceedings.
74Mr Szanto also says that there is presently some $100,000 or more that the defendants in effect have of his money that can be used for security. However, even apart from the fact that this amount includes a notional amount for the value of the goods disposed of by Mr Bainton (well in excess of the amount he has received from the sale of those goods), and an amount which is not (under the terms of the relevant contract) recoverable even if the sale does not complete), the purpose of a security for costs order is to protect against the risk that a favourable costs order may not be able to be enforced (hence it assumes that there will be success in the defence of some or all of Mr Szanto's claims, in which case the position would be that there would be no obligation to return any or all of the said amount but Mr Szanto would have a liability for costs. Therefore, I see no logic in this submission.
75Mr Szanto further relies on the public interest he says there is in his claim. The public interest nature of the litigation is a matter that may be taken into consideration on an application of this kind ( Byron Shire Business for the Future Inc v Byron Shire Council and Holiday Villages (Byron Bay) Pty Ltd (1994) 83 LGERA 59; Meltglow ). However, I am by no means persuaded that there is a public interest in the present litigation.
76Mr Szanto has identified the public interest in various ways, including: first, that he is a non-citizen (interested in making application for residency here) and a Hungarian refugee, and has allegedly been deprived of his rights by a citizen with superior knowledge of the law over a 'relatively minor' amount (as it was put in his oral submissions); second, as being that it "puts to definitive examination the issue whether Australia is a nation constituted upon the equitable administration and application of law - OR - whether Australian citizens may do as they please - in defiance and disregard of law - so as to expropriate the personal property and real property rights of non-citizens - and, in particular, the plaintiff herein" (as it was put in his First Amended Response memorandum); and, third, as to "whether an immigrant will be accorded the same rights as citizens in real property dealings" (as it was put in his initial Response and Objection to the Motion to provide Security, which went on to pose questions such as whether in this country "equality [is] merely an illusory jingoistic phantom - spoken of, but unreal" and whether "the pertinent law and equity will be applied consistently to all persons in Australia").
77I am not satisfied that Mr Szanto's stated position as a refugee from the Hungarian revolution or his intent to apply for citizenship elevates his claim in these proceedings to one of public interest. Nor am I satisfied that the question of equality of treatment of citizens and immigrants is one that arises on the pleadings in these proceedings. Therefore, I do not consider that this factor applies as a factor that tends against the provision of security for costs in this case.
Mr Szanto's submissions
78I have referred above to various of the submissions that were made by Mr Szanto on the application before me (and I note that to some extent the submissions made by Mr Szanto on Mr Bainton's application overlapped with the submissions made on his earlier application to vacate the hearing of Mr Bainton's application). However, for completeness I summarise below the submissions that Mr Szanto made.
79The principal grounds on which he resisted the security for costs application were as follows (not necessarily in the order in which they were addressed by Mr Szanto):
(i) he maintains that he was residing in Australia "a great deal of the time"; he objects to reliance on documents obtained under the subpoena to the Department of Immigration on the basis that he was not first given notice of the intention to issue the subpoena (though I note that no such notice is required under the Rules); he says that it contravened his right to privacy (though I note that this would not be basis to resist an order for production of such documents even if it might provide a basis for restrictions on access or publication of documents in appropriate cases); he says that notice of the issue of the subpoena was not given to him within a reasonably practicable time under the Rules (though there was an explanation of this, notice was given to Mr Szanto before the return date of the subpoena and I am not satisfied that any prejudice was suffered thereby); he asserts that the search for records was not exhaustive and not-Australia wide (though there is no evidence to support the latter assertion and the former does not accord with my reading of the Department's response); and that the immigration records are inconsistent with the facts (although there is no evidence of those facts, i.e. of his entry to the country on other occasions at different points of entry to Sydney);
(ii) he says that the plaintiff in these proceedings is effectively Mr Bainton since it was Mr Bainton who commenced the Tribunal proceedings and that 'hints and foreshadows' the contemplated jurisdiction in this Court; Mr Szanto submits (and I have considered this above) that the only reason he is the plaintiff in the present proceedings is because it was incumbent on him to protect his rights but that he did not initiate the action in the first place;
(iii) he says that the non-production on discovery of the documents shown to him in the Tribunal proceedings indicates the problem with the property and refers to paras [23] and [35] of White J's judgment in that regard (but as already noted the adequacy of discovery is not a matter presently before me);
(iv) he submits that he has established a meritorious claim in the hearing before White J (I have referred above to the relevant findings of his Honour - what his Honour determined was as to the existence or otherwise of serious questions to be tried on the issues before him and Mr Emmett does not cavil with those findings for the purposes of the present application);
(v) he says that the application has not been made in a timely fashion; it is submitted that there was no need for the defendants to wait until May to lodge this application and says that this is a "dilatory tactic"; it is further submitted that since the defendant has put on a 'full demurrer' on the present application he could have done this 'at any time'; (I have already indicated that I do not accept that the delay in this case is sufficient to warrant a refusal of the application for security for costs);
(vi) he emphasises the public interest nature of the claim in these proceedings (which submission I have addressed above), namely that he is a person who is intending to live in this country and to apply for citizenship and the issue is whether citizens of this country 'armed with the law and procedure can simply eject' him while there is a dispute over 'a relatively minor thing'; and
(vii) he submits that the defendants should not be permitted to shut down this litigation when he has spent a quarter of a million dollars on this 'project' (described by White J as that of renovation of the property into an executive hotel with related conference facilities) and says that the defendants have had the benefit of the $30,000 fee; have disposed of the $75,000 worth of his chattels that he says were in the property; and have received $45,000 in rent; (I note, however, that there is no evidence that if Mr Szanto is required to provide security he will be unable to pursue any legitimate claims that he has in these proceedings and hence that the litigation will be 'shut down').
80Mr Szanto took umbrage with the suggestion that he had been dishonest. This submission focussed on three matters raised in Mr Emmett's submissions. First, as to the immigration entry cards (which Mr Emmett submitted showed that Mr Szanto had either been dishonest when submitting those forms or was now being dishonest in relation to his residency). Second, in relation to the portion of transcript of the proceedings before McDougall J late last year (namely, as to his knowledge of the foreshadowed security for costs application and acceptance of the position at that stage that the defendants were on record as not waiving an entitlement later to seek security. Third, in relation to the factual dispute as to whether the emails foreshadowing the present application had been received by him.
81It is not necessary for me to make any findings as to Mr Szanto's honesty for the purposes of the present application and I do not do so.
82Mr Szanto also submitted that the contract, if rescinded, would lead to the return of the $30,000 to him (though that sum was paid under a different contract from the contract for sale, that being a contract to which he was not a party and in respect of which there is no claim for rescission); says that he has a claim in unjust enrichment for the rent received over the period since Mr Bainton retook possession (quantified at $45,000), though this is predicated as I understand it on the assumption that the contract is not rescinded; and a claim for $75,000 for what he says was the wrongful disposal of his goods and chattels. As I understand it, this submission was in effect to suggest that Mr Bainton could treat those amounts as security for the costs of the proceedings - if so, the flaw in this reasoning is that security is ordered against the possibility that a costs order will be made in the applicant's favour, which would presuppose that Mr Bainton was in any event entitled to retain or not required to account for the sums in question.
83Mr Szanto maintains that his best defence to the present application is that his claim will be successful. While I accept that a relevant consideration is an assessment of the prospects of success, on an application such as the present I can do no more than assess whether there is an arguable case and the strength or weakness of that case as appears from the pleading itself and relevant evidence adduced in that regard. I cannot test the opposing factual contentions.
84Therefore, while I am satisfied that on the pleaded case there are various causes of action that are unsustainable as a matter of law and others in respect of which, if the facts are established, a sustainable cause of action may lie, I cannot determine at this stage that Mr Szanto's claims or any of them will succeed at the end of a contested hearing on the facts.
85Mr Szanto complains as to the 'methodology' or tactics of the defendants (asserting that they are 'playing fast and loose with the rules') and alleges that they are seeking to delay the proceedings. I am of the view that the complaints made as to the pleading are well founded and in that regard I do not accept that the desire of the defendants to be provided with a proper pleading to which they will be required to respond can be criticised as no more than a delaying tactic. Similarly, I do not accept that a defendant's concern to be protected against the risk that a favourable costs order will not be able to be enforced out of the jurisdiction is a 'delaying tactic'.
86Mr Szanto took great issue (and in very emotive terms) with the failure of the defendants to comply with orders of this Court - the order by Registrar Walton that the affidavit be filed by 6 July 2011 and the order by White J that the defence be filed by the time specified.
87As to the first, the explanation for the failure to comply with the Registrar's orders demonstrates no intentional disobedience of the orders of this Court. The defendants cannot be criticised for the fact that the Registry refused to accept the affidavit for filing. No prejudice can have been suffered (since Mr Szanto was served on that very day with the affidavit). Mr Szanto's concern that the Court of Appeal (on the assumption that the matter proceeds to that level) will not know what has been filed seems to me to be irrelevant to the issues before me (and, in any event, there is now a filed copy of the affidavit to which the Court of Appeal will, if necessary, be able to have regard).
88As to the second, Mr Emmett apologised to the Registrar and to the Court for the fact that the defendants had not listed the matter to seek a variation of his Honour's order as to the filing of a defence (made in the duty list and without any submissions as to the procedural steps that the defendants might then seek to take) but notes that the matter was raised with the Registrar some 3 business days after the defence was due and the Registrar granted an extension in that regard (until further order) after being apprised of the present strike-out application. That seems to me to dispose of the issue.
89It is hardly consistent with the statutory objectives of s 56 of the Civil Procedure Act 2005 (NSW) for the defendants to be required to plead to a statement of claim that they maintain (and that I am satisfied) is an embarrassing pleading and that should be struck out.
90I think there is force in the submission by the defendants that Mr Szanto has taken technical objections that of themselves are likely, or have led, to increased costs in the proceedings. Mr Szanto explains this on the basis of his lack of knowledge of the law in New South Wales and his confusion as to the practice of this Court (though in a different context referring in oral submissions to his experience in a number of courthouses). Nevertheless, at least in relation to the issue he had raised in relation to the filing of the affidavit, he was put on notice by the defendants' solicitors as to the practice in this division and he appears to have chosen either not to accept that information or to back his own strongly held view as to the outcome of his motion to vacate.
Conclusion
91Balancing the above factors to which consideration must be given on an application of this kind, as set out above, and taking into account the discretionary matters raised on both sides, I consider that the application for security for costs should be granted.
92I am satisfied that Mr Szanto is currently resident in the United States of America. I am not satisfied that it is his eviction from the Woolloomooloo property that has caused Mr Szanto not to be resident in Australia (there being nothing to suggest that he could not have resided elsewhere in New South Wales had he wished to do so while his claim was being pursued).
93The claims Mr Szanto has made are, on the face of the pleading, largely untenable as a matter of law (as will be discussed shortly) and in any event the pleading is drawn as a series of (apparently interrelated) assertions in emotive and intemperate language. Any causes of action that as a matter of law Mr Szanto may have, if the facts he asserts are ultimately established, will need to be properly pleaded and their prospects of success cannot presently be determined (some at least being dependent on which of conflicting versions of the evidence will be accepted).
94I am not satisfied that the delay in seeking security is such as should now as a matter of fairness deprive Mr Bainton of an order for security and I consider that in circumstances where the enforcement of costs orders against Mr Szanto in the United States will at the very least be problematic because of the lack of a mechanism for reciprocal enforcement of such orders, it is appropriate that security should be ordered. The question then is as to quantum.
Quantum
95Mr Chapman has estimated that Mr Bainton's likely costs of defending Mr Szanto's claim will be in the order of $66,900 plus GST, of which he estimates 75% would be recovered on a party/party basis (see his affidavit of 11 May 2011 at [18]). He has made that estimate based on certain assumptions as to the time likely to be taken in the proceedings (in preparation of pleadings, discovery, preparation of evidence and for the trial), which of necessity must at this stage be relatively broadbrush (given that the pleadings have not yet closed). He estimates preparation for trial of 5 days for each of he and Counsel and a hearing of 4 days. While that has given me some pause, I consider it likely that there will be additional time involved in any hearing of the proceedings if Mr Szanto remains as a self-represented litigant (bearing in mind the time that was taken on the present application before me and the time that the matter seems to have occupied before White J on an interlocutory basis also). On balance it does not seem to me that Mr Chapman's estimate is excessive and it was not challenged by Mr Szanto.
96Mr Szanto notes that this estimate has not been taxed (which I assume to be a reference to the costs assessment procedure). That goes without saying since there can be no invocation of the costs assessment procedures at least until costs have been incurred. Nevertheless, there is evidence as to what the actual costs of the proceedings up to March 2011 have been (in the order of $10,000) and it does not seem to me that the costs of a final hearing would be comparatively less on a daily basis.
97Mr Emmett submits that the appropriate amount for which the Court should order security is $50,000 plus GST but indicated that if I were to be so minded account could be taken of the $800 currently held in Mr Chapman's trust account in relation to the sale of the personal possessions (so as to allow for an order for security for $54,200).
98The court may act on the basis of a general estimate ( Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 134 ALR 187) of the likely costs and I accept (as not unreasonable) Mr Chapman's estimate of the costs likely to be incurred. I also note that the costs already incurred and for which an order adverse to Mr Szanto has been made are unpaid (admittedly not yet assessed).
99The court does not by this mechanism seek to provide a complete indemnity for costs ( Bryan E Fencott; Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at [175]) rather what is to be provided is sufficient security in the circumstances. I have given some consideration to whether a lesser sum should be ordered to cover costs up to an earlier point than hearing (it being the case that security might be ordered in stages, say up to the close of pleadings or discovery or up to the close of preparation for the hearing). However, it seems to me that this will simply invite the prospect of further interlocutory applications if and when the pleadings are satisfactorily amended and the case proceeds. It does not seem to me that such a course is consistent with the just, quick and cheap disposition of the real issues in this case particularly where the quantum of the security sought is relatively low and where I am not satisfied that an order of this kind will preclude Mr Szanto from pressing his claims.
100I have also given consideration as to whether the estimated reduction of 25% to reflect the likely party/party costs is likely to be accurate (or whether some other discount should be applied). Having regard to the hourly rate charged by Mr Chapman ($250), I consider that the discount he expects would be applied on an assessment of costs to achieve a party/party costs position is not unreasonable.
101I also note that even though there is power to award security for costs already incurred (If the application is made promptly) ( Brocklebank & Co v The King's Lynn Steamship Co (1878) 3 CPD 365; Massey v Allen (1879) 12 Ch D 807; JWH Turner & Co Ltd v O'Riordan (1923) 40 WN (NSW) 64; Harvey v Jacob (1817) 106 ER 59; Bryan E Fencott ), no such application has here been made. Relevant matters to be taken into account on a security for costs application can include the nature of the acts done during the intervening period and whether security is sought both for future costs and those which have already been incurred ( Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1985) 1 NSWLR 114.)
102Whatever the outcome of the security for costs application, Mr Bainton has no security for his past costs, which are already the subject of an order in his favour (and which Mr Chapman has noted are on a solicitor/client basis $10,970 plus GST). Further, any costs of the application on 12 August 2011, which may be ordered against Mr Szanto will be similarly unsecured.
103Therefore, balancing those factors I propose to order the sum to be paid by way of security for costs in the amount claimed for future costs without deduction for the small amount presently held in the solicitors' trust account, namely that security be provided, including GST, at $55,000, such sum to be paid into Court within 6 weeks. I will stay the proceedings until such payment is made. If the sum is not paid into Court within 6 weeks then the proceedings will be dismissed.
104I turn then to the second part of the present application - the strike out application.
(ii) Strike out application
105Rule 14.28 of the Uniform Civil Procedure Rules provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court.
106In that regard, Mr Emmett raises a series of complaints as to the present pleading, noting at the outset that under the rules a pleading must be as brief as the nature of the case allows (Rule 14.8). Those complaints fall within two broad categories: complaints as to the embarrassing nature of the pleading as a whole and complaints that in relation to particular parts of the pleading no arguable cause of action is disclosed by the facts as pleaded.
Embarrassing nature of the pleading
107What is meant by an embarrassing pleading in the context of an application such as the present relates, in essence, to whether the pleading can serve the function of a pleading under the Rules - namely, in succinct fashion, to put the defendant properly on notice of the real substance of the claim made against it and to know what case it is that the defendant has to meet. Thus a pleading is embarrassing if it is unintelligible, ambiguous, or so imprecise in its identification of material factual allegations as to deprive the opposing party of proper notice of the real substance of the claim or defence ( Gunns Ltd v Marr [2005] VSC 251 at [14]-[15]) or if it contains inconsistent, confusing or irrelevant allegations ( Shelton v National Roads & Motorists Assn Ltd [2004] FCA 1393; (2004) 51 ACSR 278; at [18]).
108As Mr Emmett notes, an embarrassing pleading in the above sense may be struck out even if it contains material factual allegations sufficient to constitute a cause of action ( Northam v Favelle Favco Holdings (unreported, NSWSC, 7 March 1995) at pp 5-6).
109Mr Szanto's pleading commences with a series of what seem to be introductory paragraphs ([1]-[119] setting out assertions as to the factual background), not all of which seem immediately to be relevant to the causes of action pleaded. By way of example, I note the following paragraphs: [4], which pleads that Mr Szanto was privileged legally to be in this country on the basis of Commonwealth resolutions allowing refugees of the Hungarian Revolution of 1956, political asylum and landed-immigrant permanent residency in all Commonwealth nations; [24] which pleads that lack of kosher facilities are a significant impediment to some travellers and a renovated and redeveloped property would make significant efforts to satisfy this under-served need (perhaps relied on to establish the value of the intellectual property said to have been expropriated, although this is hard to discern); and [34] and [35] which plead the "unbearable harassment" by the defendants of the two occupants of the premises in late 2010 described as the plaintiff's guests, as a result of which it is alleged that the friendship "has become severally strained" and then that it has been "destroyed by mendacious comments and actions of defendants).
110The pleading then enumerates 17 particular causes of action.
111Mr Emmett notes that the claims are said to be made against all of the defendants both jointly and severally (at [5]) (a problematic pleading given that the third and fourth defendants are identified as business acquaintances of the plaintiff who it is said were the tenants of the property but had represented that they were (with the Baintons) the legal owners of the property and had represented that they had the right to negotiate the rental and sale of the property). It by no means clear how (as appears to be pleaded) all of the causes of action are claims that could on the facts alleged be pleaded against the third and fourth defendants (such as, for example, the expropriation claim, the common money count claim, the conversion claim or the slander of title claim, to name but a few).
112It can hardly be disputed that the pleading is in emotive and intemperate terms (Mr Szanto himself concedes that he might have been able to 'tone it down' but submits that this would be a waste of time, referring to a 'general trend or acceptance of liberal pleading').
113In his pleading Mr Szanto has provided editorial comment in relation to a vast number of the allegations, for example by describing conduct variously as "despicable" ([74], [110], [111] and [333]); as "despicable, vile and heinous" ([102]); as "barbaric" ([110]); as "reprehensible" ([186]); as "outrageous" ([203]); as "shameful" ([259]); and as "an abomination to the standards of justice and fairness practised in this Court as well as throughout Australia and the civilized world" ([190]). He has referred ([245] to [246] of alleged plans as "nefarious", "grotesque" and "sinister" and to the alleged tactics of the defendants as "bushwhacking and terroristic".
114Some paragraphs of the pleading are left up in the air, such as [116] which simply reads "And without any due process of law whatsoever" (presumably referring back to one or more of the preceding paragraphs in which it is alleged that the defendants have retaken the property solely to pursue the rehabilitation and conversion project for their own account ([113] and to obtain profits from the property without taking into account the defendant and his son's intellectual efforts and expenditures in furtherance of the property's rehabilitation project ([114]). Another example of this is at [192] which pleads "And a mockery of justice which should be applicable to all", following a series of allegations in relation to the cause of action for unlawful ejectment.
115Mr Szanto makes sweeping allegations (the relevance of which to one or more causes of action is left largely, if not wholly, unstated) as to matters such as that Mr Bainton has been "free to distort facts" since 24 October 2010 ([190]). He has alleged that certain conduct (in [98]) is a "most disgraceful fact - unheard of in a civilized society" and in [93] that there was expropriation "as though there were no law whatsoever in NSW". Reference is made to the "Nazi era" in [109] (in the context of an allegation that something was told to the defendants, though the relevance of that to the pleaded causes of action is not apparent):
During the height of plaintiff's rage against defendants, plaintiff told defendants - and all of them - that their actions were on the order of fascist swine and the scenario was reminiscent of the Nazi era: reprehensible and beyond the pale of allowable behaviour in our civilized society!! (punctuation as per pleading)
and an analogy is pleaded to the "USA thanking the Taliban for facilitating urban renewal by the dastardly destruction of the World Trade Centre" ([295]). It is alleged (in the perjury cause of action) that all of the defendants have harmed the plaintiff "by supporting and ratifying these false remarks" ([296]), those being the alleged false statements by Mr Bainton under oath that Mr Szanto "allowed him to dispose of plaintiff's personal property".
116Similarly emotive terms are used to describe the distress that Mr Szanto alleges was (and I assume he asserts intentionally) caused to him (at [97] in the allegation that the defendants took steps "to cause the most grizzly of emotional distress" to him). In [141] Mr Szanto pleads to "the torment and anguish plaguing" his mind and at [96] that the defendants "furthered their humiliation" of Szanto by selling goods on eBay.
117Complaint is made as to allegations that are said to be irrelevant or not capable of being material facts (including [4], [6], [13], [22] to [25], [29] to [31], [34] to [42], [44], [55] to [62], [66] to [69], [73], [77] to [80], [82] to [84], [89], [99] to [101], [109], [112] [127], [132], [134] to [135], [144] and [203]) or where the relevance is unclear (said to be exacerbated by the fact that at the beginning of each of the 17 causes of action the pleading "incorporates" every preceding paragraph (reference being made in this regard to [120], [163], [172], [183], [196], [202], [225], [236], [264], [270], [279], [290], [298], [307], [315], [318] and, [324].
118Mr Emmett points to other aspects of the pleading that are said to make little sense or have a tendency to confuse, including: the allegation in [5] that the claims are made against all defendants jointly and severally; the allegation in [8] that Mr Szanto is "the caveator (caveat currently discharged)"; the allegations in [46] to [53] about the supposed drainage defects; the allegation in [75], [76] and [149] that the Tribunal affirmed Mr Szanto's right to occupy and/or possess the property (the Tribunal having done nothing more than dismiss on jurisdictional grounds the application for an order for possession); the allegation as to the furtherance of humiliation to which I have referred above; the allegations of harassment in [137] to [140] (in the context of the pleading of a cause of action for breach of contract by an alleged failure to deliver clear title to the property); the allegation of conversion in [152] (again in the context of the pleading of a cause of action section of the pleading dealing with an alleged breach of contract by an alleged failure to deliver clear title to the property); the allegation in [155] that White J "certified" that the defendants were not themselves ready, willing and able to complete (when it appears that what White J did was to confirm that this would be a question to be tried in any claim for specific performance - Szanto v Bainton [2011] NSWSC 278 at [35]); the allegation in [166] that White J said that there is "legal and equitable likelihood" that the defendants cannot deliver good title; the allegations in [205] to [217] as to what is normal or not normal conduct in the course of a dispute; the allegation in [258] of "a disgraceful 'ah-ha' moment" (whatever that might mean) in connection with the death of Mr Szanto's son; and the allegation that (unspecified) tenancy legislation which "considers" Mr Szanto is "still the rightful occupant".
119Insofar as the pleading refers to appearances or suspicions (examples of which were given as being [36] to [38], [40], [42], [48], [58] to [60], [62] to [64], [144]; it is submitted that the appearance or suspicion of something cannot be a material fact (and that it should be inferred that Mr Szanto does not have a sufficient basis for alleging the suspected fact to be true).
120Stopping there, it seems to me that there is no doubt that the pleading is, as a whole, embarrassing and that this is not a case where offending parts of the pleading could simply be struck out leaving a viable and non-embarrassing pleading. Any attempt to plead to matters such as the Taliban analogy or the "ah-ha" moment, for example, would be of little assistance in defining the issues in the case.
121However liberal or informal Mr Szanto thinks the manner of permissible pleading in the modern day to be, it does not permit the replacement or conversion of a succinct pleading of material facts into an emotional diatribe.
122The function of a pleading is to inform the opposing party of the material facts on which the claimed relief is sought. As Jessel MR said in Thorp v Holdsworth (1876) 3 Ch D 637 at [639], pleadings are designed to define the issue and to give the other party fair notice of the case that has to be met:
The whole object of pleadings is to bring the parties to an issue, and the meaning of the rules ... was to prevent the issue being enlarged, which would prevent either party from knowing when the cause came on for trial, what the real point to be discussed and decided was. In fact, the whole meaning of the system is to narrow the parties to definite issues, and thereby to diminish expense and delay, especially as regards to the amount of testimony required on either side at the hearing.
123The requirement that the pleading encompass the material facts was emphasised (albeit in the context of considering the role of particulars) by Scott LJ in Bruce v Odhams Press Limited [1936] 1 KB 697 at [712] - [713]:
The cardinal provision in r. 4 is that the statement of claim must state the material facts. The word "material" means necessary for the purpose of formulating a complete cause of action ; and if any one "material" fact is omitted, the statement of claim is bad; it is "demurrable" in the old phraseology, and in the new is liable to be "struck out" under Order XXV, r. 4: see Philipps v. Philipps 4 QBD 127; or "a further and better statement of claim" may be ordered under Order XIX, r. 7. (my emphasis)
124Again in Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 at [75] - [76], Scott LJ referred to the requirement that all material facts constituting the cause of action be plainly stated in the pleading as "the plainest and most fundamental of all the rules of pleading". That has not changed.
125The relevant principles relating to pleading were summarised by the High Court in Dare v Pulham (1982) 148 CLR 658 at [664] as follows:
Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it ... they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial ... and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court.
126Einstein J in Travel Compensation Fund v Blair [2003] NSWSC 720 at [29] - [30] said:
Of course an applicant for leave to amend must satisfy the court that an arguable case has been properly pleaded. It may be taken as a given that "the plainest and most fundamental of all the rules of pleading" is that "all the material facts constituting the cause of action ought already to have been plainly stated in the pleading itself". [ Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 at 75; see also H 1976 Nominees Pty Limited v Galli (1979) 40 FLR 242 at 246-7]
127The consequence of a failure to do so (or, as in this case, a failure to do so in a non-embarrassing way) was emphasised In Rubenstein v Truth and Sportsman Limited [1960] VR 473 at [476], where Adam J stated:
Where, as in the present case, there has been a clear infringement of the rule as to stating all material facts and not merely a failure to give sufficient particulars of facts which have been pleaded (a distinction made clear by Scott, LJ, in Bruce v Odhams Press Ltd , [1936] 1 KB 697, at pp. 712-13; [1936] 1 All ER 287) the preferable course, I consider, in the interests of proper pleading is to strike out the offending pleading, with liberty to amend, rather than to order particulars.
128In the Court of Appeal in Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2008] NSWCA 206; (2008) 73 NSWLR 653, Ipp JA noted what had been said in Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279; 92 ALR 53 by Mason CJ and Gaudron J (at CLR [286-7]; ALR [58-9]) as to the function of pleadings:
The function of pleadings is to state with sufficient clarity the case that must be met: In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.
129Lander J in Arthur Young v Tieco International (1995) 182 LSJS 367 at [ 370] (approved by McDougall J in Ingot Equity Capital Markets v Macquarie Capital Investments [2004] NSWSC 1136 at [46]), said the following in the context of a consideration as to the adequacy of pleadings:
Whether the material facts and whether sufficient particulars have been pleaded must depend upon the cause of action, the complexities of the case and the whole of the circumstances of the case. None of those matters can be considered in isolation any more than each of the paragraphs of the pleading can be considered in isolation.
When the Court considers a pleading it will not consider the pleading with the same degree of scrutiny which the courts are required to give to an Act of Parliament. With the complexities of modern litigation, a pleader can usually point to some deficiency in the opponent's pleadings. One can usually, if one approaches the matter with a critical eye, identify some failing in a pleading. But that is not the approach that in this age ought to be adopted. A court would not sit down in the manner of a nineteenth century pleader seeking to find an error capable of sending a party away to re-plead his claim or defence. Such a technical approach is inconsistent with modern litigation and inconsistent with the court's function which is to try to arrive at a just result. A successful result, if arrived at, after too great an expense may not be considered by even the successful party to be a just result. A court ought to approach a consideration of the adequacy of a pleading seeking to answer the ultimate question; does the pleading give fair notice of the case to be made against the other party at trial, thereby minimising the risk of injustice resulting from surprise. (my emphasis)
130The above principles are reflected in the Uniform Civil Procedure Rules (see Rules 14.7 and 15.1). Rule 14.8 requires a pleading to be brief as the nature of the case allows. A pleading that is not precise, concise, clear and definite may be struck out ( Re Parton; Townsend v Parton (1882) 30 WR 287; Hill v Hart-Davis (1884) 26 Ch D 470).
131The comment sometimes made that a more liberal approach to pleading is now adopted must be seen in the context of comments made (as in Ritchie's at [14.7]) that the circumstance that the material facts are stated at great length will not ordinarily justify the striking out of the statement of claim or that a pleading should not be struck out merely because it includes allegations of non-material facts. I accept that a more discretionary approach to the requirement for proper pleading may be appropriate where (as here) the plaintiff is a litigant in person ( Mann v Cahill [1999] ACTSC 7; (1999) 149 FLR 298). However, whatever the status of the particular plaintiff, if the pleading as a whole is such as to embarrass the defendant and/or contains inconsistent, confusing or irrelevant allegations, to such an extent that the defendant is not able to appreciate the precise nature of the plaintiff's case, the pleading should be struck out ( Davy v Garrett (1877) 7 Ch D 473 at [488]; Shelton v National Roads ).
132In Soden v Kowalski [2011] FCA 318, in the context of an application to have a respondent declared a 'vexatious litigant', Stone J quoted (at [168]) the reasons of the Federal Magistrate who had earlier struck out the respondent's statement of claim:
The Applicant's Amended Statement of Claim comprises twenty-two pages of condensed typing divided into 106 paragraphs. The pleading is a rambling and convoluted diatribe on the alleged misconduct of the Applicant's former solicitors, the Respondents. There has been no attempt by the Applicant to concisely and precisely plead his case. There has been no attempt by the Applicant to confine the pleading to the material facts necessary to establish the causes of action but instead includes much material that is, at best, evidence by which facts might be proved or, at worst, totally irrelevant.
133Much the same comment could be made in the present case. I am firmly of the view that the pleading in its present form is embarrassing and should be struck out. There is sufficient imprecision and ambiguity (let alone the plethora of seemingly irrelevant allegations and inflammatory allegations) to make it inadequate to put the defendants on notice of the case they have to meet and embarrassing to respond to in any meaningful way. The question then is as to the extent of any leave to replead. I consider that in the context of the second category of complaint made as to the present pleading.
Does the pleading disclose any arguable causes of action?
134As to the particular causes of action that are pleaded, it is conceded for the purposes of the strike out application (and I hasten to add, so that Mr Szanto is left in no doubt, without any admission by the defendants as to the alleged facts or that they give rise to the claims for relief sought by Mr Szanto) that there are pleadable causes of action in relation to the fourth, fifth, tenth and sixteenth causes of action (as outlined below). It is submitted that the balance of the claims are untenable on the facts as alleged.
135If, on an examination of the pleadings, there is no possibility of the facts pleaded giving rise to a good cause of action then the cause of action may be struck out ( Dey v Victorian Railway Cmrs (1949) 78 CLR 62 at [90]). In the well-known passage in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, Barwick CJ stated (at [129]):
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.'
136If the pleading defect can be cured by amendment, then the court ought grant leave to amend rather than exercise the power to strike out ( Republic of Peru v Peruvian Guano Co (1887) 36 Ch D 489 at [496]; Worthington & Co Ltd v Belton (1902) 18 TLR 438 at [439]; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at [536]). (It is noted in Ritchie's that this discretionary approach is particularly appropriate where the plaintiff is a litigant in person referring to Mann v Cahill ).
137On a strike out application such as this, the General Steel test is to be applied ( General Steel Industries at [130]), namely, it must be established that the case of the plaintiff is so untenable that it cannot possibly succeed (and see Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 at [944-5], where it was said that the power to strike out should be exercised only in plain and obvious cases as it precludes the court from an interim enquiry about the real merits of the plaintiff's case).
138Considerations of efficiency are relevant to the exercise of the discretion to strike out the pleading (see ss 57(1)(c) and 60 of the Civil Procedure Act ).
139The 17 pleaded causes of action are as follows:
First cause of action - Breach of contract (commencing at [120])
140Mr Szanto alleges a breach of "contracts" (plural) but it seems that the only contract alleged to have been breached is that for the sale of land (an integral and fundamental part of which is alleged to be the right of possession of the property beginning in March 2010). The breach alleged is the failure of the Baintons to perform the contract as agreed and to deliver "good, merchantable and clear title" to the Woolloomooloo property ([153])]. (It may be that the alleged actions said to give rise to that breach go beyond failure to deliver title and extend to some of the actions pleaded in the preceding paragraphs (such as the alleged harassment and unconscionable phone contact of the plaintiff in [142]; the alleged action of having "intentionally slandered" the plaintiff's equitable ownership [146]; the "conscious disregard of dealing professionally" with the sewer problem [144] and the like). If so, then to the extent that there is uncertainty in this regard it highlights the embarrassing nature of the pleading.)
141White J (at [45]) found that that there was no serious question to be tried that the Baintons were not entitled to terminate the contract, noting the difference between a defect in quality and a defect in title.
142The defect in question relates to the assertion that the property was (to the knowledge of the Baintons) prone to flooding. If this were simply a defect in quality, then it would not preclude the service of a valid notice to complete (although Mr Emmett concedes that if there were fraudulent concealment as to such a defect, this might give rise to a right to damages). If this were a defect in title, then (as noted by White J observed at [37]) if the vendor was aware of the defect in title and failed to disclose the defect, then the vendor might not be able to rely on the special conditions that precluded the purchaser from taking objections in respect of that defect and, if so, then the vendor might have been precluded from serving a valid notice to complete.
143Mr Emmett refers to [42] of his Honour's judgment in which his Honour noted that, in order to be a defect in title, it would be necessary to establish the presence of the Sydney Water Corporation's sewer on the land, or an undisclosed easement. Mr Emmett points out that Mr Szanto has not alleged (and has pleaded no basis for alleging) that the Baintons were aware of the location of the sewer or of any easement.
144In any event, Mr Emmett points out that even if this were a defect in title (and the vendor was, by reason of an awareness of the defect, precluded from serving a valid notice to complete), the contract nevertheless reserved to the vendor an independent right to rescind by reference to the standard form general condition 7 (as amended by special condition 30.3). This arises because under the contract Mr Szanto could only make a claim by serving the vendor with a statement of the amount claimed and, if such a claim were made before completion, the vendor would be entitled to rescind the contract if the claim exceeded one dollar. (The present claim clearly exceeds one dollar.) Mr Szanto says that he informed his Honour that notice under this condition was given orally. White J addressed that argument at [41] of his Honour's judgment.
145Whether or not the alleged defect is a defect going to title, the vendor would have been entitled to rescind the contract in the face of a claim of the kind now made. If so, there can be no arguable claim that Mr Bainton breached the contract by failing to transfer title to the property. Leave should not in my view be given to plead what is not a tenable claim.
Second cause of action - Specific performance (commencing at [163])
146The second cause of action calls for delivery of good and merchantable title to the property and is predicated on an entitlement by Mr Szanto to enforce the sale contract. As there is no serious question to be tried that the vendor would not have been entitled in the circumstances to rescind the sale contract, there can be no arguable claim for specific performance. Leave to replead this cause of action is also inappropriate.
Third cause of action - Slander of title (commencing from [172])
147This claim relates to the alleged intentional disparagement and slander of the plaintiff's equitable ownership of the property by the defendants falsely stating that Mr Szanto was not the owner of the property ([173]). The entity to which those remarks are alleged to have been made is the Tribunal ([174]). The reputation of Mr Szanto is said to have been harmed and impugned and the damage alleged to have been suffered is that he was "humiliated, belittled, embarrassed before and in the minds, esteem and stature of friends who resided at" the property as his "guests" "as well as others who have heard the false fact related by the defendants regarding the plaintiff's disparaged and mocked ownership of the property". (In relation to the latter, it is not clear whether it is suggested that these persons were even present at the Tribunal in order to hear the offending statements being made.)
148Insofar as Mr Szanto refers to the cause of action "slander of title", Mr Emmett notes that there is no such cause of action as "slander of title" known to the law of New South Wales. Mr Szanto might be referring to the intentional, common law tort of slander of title that exists in some States in the United States of America. This cause of action, as I understand it, generally involves a claim in relation to real property in which one party falsely claims to own another party's property; alternatively, it involves casting aspersion on someone else's property, business or goods.
149In Hall-Gibbs Mercantile Agency Ltd v Dun (1910) 12 CLR 84, "slander of title" was said to refer to a false and malicious statement, whether by spoken words or in writing, with reference to a person's title to some right of property, which is disparaging of his or her title to that right of property. In most Australian jurisdictions, including New South Wales, both slander and libel now come under the general tort of defamation and are actionable without proof of damage (see Defamation Act s 8).
150However, if what is intended by this cause of action is a claim in defamation, then there is no arguable action in defamation in circumstances where the remarks are alleged to have been made to the Tribunal ([174]). There is a defence of absolute privilege (s 27(1) of the Defamation Act 2005 (NSW)) if the defendant proves that the publication was on an occasion of absolute privilege.
151Further, it is submitted by Mr Emmett that, where what was alleged to have been said was an assertion of ownership, this could not, even if wholly unfounded, damage a person's reputation in the eyes of reasonable persons. I agree.
152The only other cause of action that might perhaps have been contemplated by this part of the pleading could be the tort of injurious or malicious falsehood. A definition of the tort was provided by Bowen LJ in Ratcliffe v Evans [1892] 2 QB 524 (at [527] - [528]):
That an action will lie for written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage, is established law. Such an action is not one of libel or of slander, but an action on the case for damage wilfully and intentionally done without just occasion or excuse, analogous to an action for slander of title. To support it, actual damage must be shewn, for it is an action which only lies in respect of such damage as has actually occurred.
153This definition has been accepted in Australia (see, among others, Hall-Gibbs Mercantile Agency Ltd v Dun ). However, the enactment of various statutory provisions in the States and Territories and at a federal level dealing with misleading and deceptive statements has meant that the common law action of injurious or malicious falsehood has lost its common use. The tort may still be of relevance where the said statements do not arise from conduct "in trade or commerce"; and there is an element of malice giving rise to a right to seek aggravated or exemplary damages.
154That said, it is not appropriate to grant leave to plead a cause of action not presently pleaded where the facts for which do not seem to arise on the current pleading.
Fourth cause of action - Unlawful ejectment (commencing from [183])
155This claim relates to the alleged forcible ejectment of Mr Szanto, which is alleged (among other things) to be in contempt of orders made by the Tribunal (although the only order there made was the dismissal of the proceedings for want of jurisdiction).
156Mr Szanto refers to the cause of action as that of "unlawful ejectment". Historically, this cause of action developed as `trespass in ejectment', which enabled a leaseholder to recover land from all comers and which prevented any other person from denying the leaseholder's estate in the land, or that it was held in tenure ( Encyclopaedic Australian Legal Dictionary). As Mr Emmett points out in his submissions (at [65]), the writ of ejectment has been abolished and replaced in all Australian jurisdictions. In New South Wales, it was abolished by s 79 of the Supreme Court Act 1970 (NSW). Section 20 of the Civil Liability Act 2005 (NSW) also states as follows:
A claim for judgment for possession of land takes the place of a claim in an action for ejectment that could have been brought under the practice of the Supreme Court as it was immediately before 1 July 1972
157It is accepted by Mr Emmett that unlawful interference by a registered proprietor with a person's right of possession may be a breach of a tenancy agreement or may amount to trespass (and hence Mr Emmett identifies this as one of the three areas where an arguable cause of action on the basis of the facts alleged by Mr Szanto might be able to be made).
158The alleged act of "ejectment" (or exclusion) is the changing of locks (said to have occurred on 24 October 2010 at [90]) and the subsequent resumption of possession by Mr Bainton ([184]).
159Mr Szanto's claim to an entitlement to occupy the premises was put before White J as being on the basis of special condition 39 of the contract of sale. This was (and is, as I understand it) disputed by Mr Bainton but for the purposes of this application it is accepted that White J found that there was a serious question to be tried on this issue.
160Assuming an entitlement to occupy the property pursuant to special condition 39, Mr Emmett notes that special condition 39.2 provides that the residential tenancy will terminate on the earlier of completion or termination of the contract of sale. It is accepted that as at 24 October 2010, though Mr Bainton asserts that a right of termination of the contract had arisen, the vendor had not exercised the right of termination. There is a factual dispute (referred to earlier) as to when a notice of termination was sent. Mr Bainton contends that the right was exercised shortly after 26 October 2010, when a notice of termination was sent to Mr Szanto's previous lawyers (as referred to in White J's judgment at [28]). Mr Szanto disputes receipt of that notice of termination, but accepts that he received notice at least by 2 February 2011.
161Therefore, Mr Emmett accepts that if the facts alleged by Mr Szanto were to be accepted, there may be an argument that (assuming Mr Szanto had the right under the contract of sale to occupy the premises as tenant) the tenancy did not terminate until 2 February 2011.
162For completeness, I note that Mr Bainton disputes the facts that would make good any such claim on the basis that he says that Mr Szanto was not personally in possession of the property but had given possession to agents or sub-tenants and that those persons told Mr Bainton that they were vacating the property on 2 November 2011. Mr Bainton says that he collected the keys from those persons on 3 November 2011 and denies any act of exclusion earlier or later. (Mr Bainton also denies that Mr Szanto ever resided in the property himself.)
163If Mr Szanto's agents or sub-tenants gave Mr Bainton vacant possession of the property, then Mr Szanto's claim that he was excluded from the property would fail. Moreover, Mr Bainton also argues that any alleged act of exclusion by him after he acquired a right to terminate should be seen as an unequivocal election to terminate the contract, thereby bringing the tenancy to an end. Those, however, are matters that must be determined at any final hearing of a claim for breach of the alleged tenancy agreement or for trespass (the sixteenth cause of action), as the case may be.
Fifth cause of action - Expropriation of personal property/conversion (commencing from [196])
164This claim relates to the disposal of Mr Szanto's "personal property, books, papers and appliances, etc" in the property "in conjunction with ouster and ejectment" ([197]). Mr Szanto alleges that they were his possessions and worth $75,000 (and that they included photographs of priceless significance to him). Mr Bainton says that the items on the premises were mostly rubbish, that he does not know who owned them, that he endeavoured to make them available to Mr Szanto and that he corresponded with Mr Szanto about them. It is admitted that some furniture was sold for $800 (this being the amount presently held in trust in Mr Chapman's trust account). Mr Emmett submits that the disposition of the goods was with Mr Szanto's authorisation (Mr Szanto disputes that this is the case.) Mr Chapman's 6 July affidavit disposes to Mr Bainton's willingness to make that amount available to Mr Szanto (Mr Szanto maintains that Mr Chapman should have interpleaded and paid this amount into court). Nevertheless, Mr Emmett accepts that if Mr Szanto's version of events were true (which is disputed), then an arguable claim for conversion could be pleaded.
Sixth cause of action - Intentional infliction of emotional distress/psychic injury (commencing [202])
165This part of the pleading alleges that the conduct of the defendants was contrary to the "normal" conduct of parties who contract together. It relates to the alleged forcible repossession of the property and disposal of Mr Szanto's personal possessions (alleged to have been actions that were "not normal" and that the defendants "knew to a reasonable certainty that their actions would cause harm, injury and mental distress" to Mr Szanto). It is alleged that the actions caused Mr Szanto "psychological injury, emotional distress and mental anguish of an extreme and outrageous nature" [223] and compensation is sought by way of an award of damages to make Mr Szanto "whole from defendants' intentional barbaric and dastardly actions" ([224]).
166Mr Emmett concedes that there is an argument that the common law might recognise a tort of intentional infliction of emotional distress or psychiatric injury (referring to Wilkinson v Downton [1897] 2 QB 57), assuming that this is what is meant by "psychic" injury, but submits that the facts alleged in the pleading could not amount to such a tort. (There are also limited circumstances where damage may be available for emotional distress as a result of a breach of contract but it is difficult to see the facts as pleaded giving rise to such a claim in this case ( Jarvis v Swans Tours Ltd [1973] QB 233; 1 All ER 71))
167It is noted that in order to constitute such a tort it must be established that the defendant intended to violate the plaintiff's interest in remaining free from physical harm and that an intention to do an act the consequence of which is physical harm is not enough (referring to Balkin & Davis, Law of Torts (4th edn) at [3.22]). Mr Emmett submits, and I agree, that the mere insistence on (or assertion of) legal rights, even if mistaken, could not justify an allegation of such a tort. Mr Emmett notes that there is no basis set out in the pleading for alleging that Mr Bainton's conduct was malicious or engaged in with the intention of inflicting psychiatric injury and he submits that if there is some basis for making such a serious allegation then it needs to be clearly pleaded and adequately particularised. I agree.
168It is also noted that there is no particularisation in the pleading of what constitutes the alleged "psychological injury, emotional distress and mental anguish of an extreme and outrageous nature".
Seventh cause of action - Tortious interference with business advantage (commencing from [225])
169This part of the pleading relates to Mr Szanto's "business and redevelopment plan" for the Woollomooloo property, alleged to have been "envied and savoured" by all of the defendants for their own ([227]). The allegation is that the defendants formulated plans of their own to "stymie, thwart and derail" the plaintiff's efforts at redevelopment ([228]), contriving the eviction of the plaintiff and improperly seizing (unidentified) "plans and papers" and "diaries, plans, blueprints, mathematical calculations and essential notes, digital files, aids and tools" necessary for the redevelopment of the property ([232]-[233]). It includes the allegation that the plan "went awry" when the Tribunal member saw the plan "for the illegal, improper and impermissible sham action it was" ([230]) (though, as noted, the only basis for the Tribunal's dismissal of the proceeding was a jurisdictional ruling).
170Mr Szanto might be referring to the intentional tort of interference with contractual or business relations that exists in some States in the United States of America. This tort is broadly divided into two categories, one specific to contractual relationships and the other specific to business activities or relationships. However, as Mr Emmett notes, there is no cause of action known to the law of New South Wales as tortious interference with business advantage.
171There is a (perhaps not dissimilar, at least in one sense) cause of action available in this jurisdiction, namely the (intentional) economic tort of inducing breach of contract or interference with contract (either for intentionally inducing a party to a contract to breach the contract - generally referred to as "direct interference" - or for intentionally bringing about a state of affairs under which a party to a contract is rendered incapable of performing it - generally referred to as "indirect interference"). Such a cause of action stems in its modern form from Lumley v Gye (1853) 2 El & Bl 216; 118 ER 749, in which it was held that a party to a contract had an action in tort against a third party who persuaded the other party to the contract to breach it (see Heydon, Economic Torts p 25). However, the facts pleaded in this section of the pleading do not seem apposite to give rise to a cause of action for intentional direct or indirect interference in the performance of the contract of sale.
172If a claim in tort for interference of the kind that would sustain an economic tort claim is intended by Mr Szanto's seventh cause of action then it would need to be properly pleaded. As it is, it is difficult to see that the facts as alleged could give rise to such a cause of action.
Eighth cause of action - Expropriation of intellectual property/theft of trade secrets (commencing from [236])
173The intellectual property said to have been expropriated seems to be identified as the methodology of putting together a viable redevelopment, being the plaintiff's ideas deriving from his own thoughts, energy and merit and ideas (at [239]) and as the "quantum of his ideas, thoughts and efforts at redeveloping and modernizing" the property ([255]). Mr Szanto likens his claim for expropriation of intellectual efforts and theft of trade secrets (although those trade secrets are not identified) as "similar for torts for actions for plagiarism as well as causes of action for interference with contractual rights" ([244]). He alleges that the intentional actions of the defendants have deprived him of his "ownership rights", alleging that his thoughts and ideas for the property redevelopment are his personal property ([260]). Mr Szanto alleges that the value of the "ideas stolen from him" was at least $2.5 million ([263]).
174As Mr Emmett notes, there is no intellectual property in an idea and Mr Szanto makes no claim based on a patentable invention or a work in which copyright subsists.
175Mr Emmett accepts that some plans or proposals are capable of protection as confidential information, especially if they are in the nature of a trade secret, but maintains that the facts pleaded by Mr Szanto could not amount to confidential information or a trade secret (since the plan, as pleaded, is nothing more than a series of ideas for development of the property).
176Further, it is submitted that even if there were confidential information capable of protection comprised in the plan referred to in the pleading, the only remedy that could be sought (on the facts as pleaded) could only be an injunction, account of profits or (possibly) damages in respect of any attempt by Mr Bainton to communicate or use that confidential information, noting that there is no allegation that Mr Bainton has taken any steps to use any particular information.
177As I understand it, what Mr Szanto asserts is that there is intellectual property comprised in the renovations or works undertaken to the property during the period in which the contract for sale was on foot and that Mr Bainton has taken the benefits of those renovations/work and hence the intellectual property comprised therein. Any work carried out to the property prior to acquisition of legal title to the property must have been at Mr Szanto's own risk. I do not see that the facts alleged give rise to any cause of action and do not give leave to replead this cause of action.
Ninth cause of action - Civil conspiracy (commencing from [264])
178As Mr Emmett points out, it is unclear whether what is here sought to be alleged is a conspiracy by lawful means or a conspiracy by unlawful means. The pleading alleges that the defendants "planned and schemed together to deprive plaintiff of rights and property" ([265]) and "conspired together to form a common plan of deception and deprivation of plaintiff's rights and property ([266]). The allegation is that the defendants colluded to convert the plaintiff's ideas and personal property to their own ([267]) and distributed amongst themselves the plaintiff's personal property ([268]). (It is not clear if the latter allegation includes some form of distribution of the plaintiff's ideas between the defendants.) The alleged damages are not quantified.
179If the former (a conspiracy by lawful means), then Mr Emmett submits that the claim must fail because Mr Szanto's allegation is that the defendants were actuated by self-interest, whereas for a conspiracy to injure by lawful means is it necessary to prove that "the sole, the true, the dominating or main purpose" of the conspiracy was to injure the plaintiff (citing McKernan v Fraser (1931) 46 CLR 343 at [354]).
180If the latter (a conspiracy to injure by unlawful means), then the elements of such a conspiracy to injure by unlawful means are an agreement or combination between two or more persons to engage in conduct amounting to "unlawful means'' with the intention of injuring the plaintiff; as a result of which the plaintiff suffers loss ( Fatimi Pty Ltd v Bryant (2004) 59 NSWLR 678 at [13], [17], [27] (per Handley JA, with whom McColl JA agreed), and at [44] and [70] (per Giles JA); Balkin and Davis The Law of Torts at [21.43]; Vout (ed) Torts, The Laws of Australia (2nd edn) at [33.8.1220].) In this kind of conspiracy, the requirement that the defendant intend to injure the plaintiff will be satisfied "if the conspiracy and the unlawful means were aimed at or directed at the plaintiff... If the conspiracy and the unlawful means were aimed at the plaintiff damage to the plaintiff that was foreseen or foreseeable or was necessarily caused in carrying out the conspiracy will satisfy the requirements for this branch of the tort" ( Fatimi at [13] (per Handley JA (quoting Fullagar J in Williams v Hursey (1959) 103 CLR 30 at [78]) with whom McColl JA agreed). Thus, while there must still be an intention to injure the plaintiff, that does not need to be the defendant's predominant motive where the alleged conspiracy is to injure by unlawful means ( Fatimi at [17]-[18]).
181In Fatimi at [27], Handley JA observed that "there is no requirement in the common law of Australia that the unlawful means for the purpose of this branch of the law of conspiracy must itself be tortious". In Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169; (2004) ATPR 42-013 a broad view was taken of what constitutes "unlawful means" for the purposes of this tort (per Kiefel and Jacobson JJ at [16]):
The intimidation of an employer, inducing a breach of contract and the breach of statutes dealing with restrictive trade practices, has been held to involve the use of unlawful means ...J D Heydon in Economic Torts, 2 nd edn, Sweet & Maxwell, London, 1978 at pp 67-69 goes further. In addition to crimes and torts the learned author lists defamation, trespass, breach of the rules of natural justice, abuse of confidential information and misstatements as unlawful means. It is said that the unlawful means may be constituted by actions which are improper although not actionable in themselves (at 70). Clerk and Lindsell on Torts, 18th edn, gen ed AM Dugdale, Sweet & Maxwell, London, 2000 at [24-77] states that the general approach appears to be that a person is using unlawful means if they are doing an act which they are not at liberty to commit.
182It seems to me possible that an arguable claim for conspiracy of this kind could be pleaded arising out of the facts asserted by Mr Szanto (though it has not yet been properly pleaded, not least because the facts necessary to establish each of the elements of the cause of action have not been identified in the pleading).
183Mr Emmett notes that the section of the First Amended Statement of Claim which pleads the conspiracy does not identify any particular tort or crime (or, for that matter, wrongful conduct) is relied upon as amounting to the alleged unlawful means (other than to refer to the deprivation of Mr Szanto's rights and property and the conversion of Mr Szanto's ideas and personal property). Insofar as the complaint is based on the "conversion of ideas", Mr Emmett notes that there is no claim for tort in respect of a "conversion of ideas". He accepts that it may be possible to allege a conspiracy that involves trespass or the conversion of personal property but submits that such an allegation ultimately rises no higher than the allegation (already made) that the defendants are joint tortfeasors in respect of any such torts (referring to Balkin & Davis, Law of Torts at [21.52]).
184I note in this regard that in Australian Wool Innovation Ltd v Newkirk [2005] FCA 290, Hely J said that "Like fraud, conspiracy is not an allegation that should lightly be made", citing Toohey J in Hughes v Western Australian Cricket Assn Inc (1986) 69 ALR 660 at [700]. His Honour went on, in the course of explaining the elements required to establish either form of conspiracy, to observe that "It is not open to a party to plead as an alternative to a substantive cause of action already pleaded the tort of conspiracy to commit the substantive wrong".
185There has, however, been some debate about the principle that a plaintiff could not sue both for a conspiracy to commit a tort and for the tort itself (see Beazley J, as her Honour then was, in State of New South Wales v McCloy Hutcherson Pty Ltd (1993) 116 ALR 363 and th e authorities referred to in Balkin and Davis Law of Torts at [21.51], including the decision of the High Court in Williams v Hursey ). Given that there is room for debate on this issue it would not be appropriate to determine on a strike-out application such as this whether Mr Szanto could (if the facts to sustain a conspiracy claim were properly pleaded and ultimately established) maintain a claim both in conspiracy to injure by means of the commission of a tort and a claim based on the underlying tort.
186It is also noted by Mr Emmett that there is no allegation about the nature of the conspiracy or what was agreed between the defendants other than the assertion in [265], that the defendants "planned and schemed together". I accept the force of the criticism of the pleading in this regard. It is incumbent on Mr Szanto (when making a serious allegation of this kind) to plead with the precision the facts on which he relies for the allegation that the defendants ""planned and schemed together". In any repleaded claim it would be necessary for Mr Szanto to address this issue as well.
Tenth cause of action - Fraud (commencing from [270])
187This is recognised by Mr Szanto to be an allegation of fraud. He pleads the intentional deception by the defendants to obtain an unfair and dishonest advantage by taking his personal property, equity in the property, and ideas and trade secrets without proper compensation ([271]), the most egregious of which actions being said to be "failing to deal forthrightly with a relatively minor sewerage problem" ([272]). Mr Szanto makes allegations as to a (non-exhaustive) list of intentional misrepresentations of material fact regarding the condition of the property and the course of dealing between the parties ([274]) interspersed with which are comments such as "the truth being that they [the defendants] often entered [the property] under imitimidatory [sic] pretext and frightened plaintiff's guests".
188The damages said to have resulted from the alleged conduct are pleaded as breach of the contract of sale, unlawful ejectment from the physical possession of the property, expropriation of his personal property "and many others" ([278]).
189While the factual basis for this allegation is disputed, Mr Emmett accepts that a pleadable cause of action (for misleading/deceptive conduct) might be able to be formulated if Mr Szanto's version of events were to be accepted as to the existence of a defect in the sewerage pipes and that Mr Bainton knew about the proneness to flooding and failed to disclose it. He also accepts that it is possible that an allegation of fraud could be made but only if there were to be adequate particulars of the basis for such a serious allegation. (Mr Emmett submits that the damages for such an action could rise no higher than Mr Szanto's costs of the transaction (if any could be proved to be directly attributable to the nondisclosure).)
190I should emphasise again that allegations of fraud (as are allegations of conspiracy) are serious allegations, not lightly to be made, and they allegations that must be clearly pleaded and properly particularised ( Banque Commerciale ). The present pleading in no way meets the requirements for the pleading of such serious allegations and cannot be permitted to stand in its present form. The defendants are entitled to know the precise factual basis on which it is alleged that they have acted fraudulently or dishonestly or with a deliberate intention to mislead and deceive (which itself amounts to an allegation of fraud) and the precise factual basis on which it is contended that they have conspired to cause harm or to injure Mr Szanto. Liberal notions of pleading do not obviate the necessity for the proper pleading of such allegations.
Eleventh cause of action - Fraudulent concealment (commencing from [279])
191Mr Szanto asserts fraudulent concealment in relation to the "sewerage and plumbing overburdens and similar problems" at the property ([280]) and the intentional concealment of their "guilty knowledge (scienter) of plumbing problems ([284]). There is an allegation of an admission by Mr Bainton in this regard (although it is not clear whether what is alleged is admission of the problem or of its intentional concealment). It is alleged that the material nature of any sewerage problem demanded complete disclosure ([286]) and that the defendants were bound to disclose any matters potentially affecting the property's values and proper operation of essential services ([287]). Mr Szanto alleges that he "justifiably relied" on the defendants' (unidentified) representations ([288]). The harm alleged to have been suffered is said to be "in an amount to be shown by proof".
192As Mr Emmett notes, there is no separate cause of action for fraudulent concealment as such. A cause of action based on a knowing failure to disclose the alleged proneness of the property to flooding would be subsumed in any pleadable cause of action for misleading or deceptive conduct or for fraud and would, as noted above, have to be properly pleaded.
Twelfth cause of action - Perjury and subornation of perjury (commencing from [290]
193Mr Szanto alleges that Mr Bainton has given false evidence under oath to the effect that Mr Szanto had allowed him to dispose of his personal property. If so, that would be a matter for referral to the appropriate authority. As Mr Emmett notes, there is no civil right to damages for perjury or subornation of perjury. (The giving of evidence in court proceeding, including by way of affidavit, is subject to the principle of witness immunity and cannot found any private cause of action, including an allegation of conspiracy - Commonwealth v Griffiths (2007) 70 NSWLR 268 at [41]-[46]; Cabassi v Vila (1940) 64 CLR 130 at [141].)
194The pleading further alleges that all of the defendants have harmed the plaintiff "by supporting and ratifying these false remarks". No particulars of this allegation are given. The plaintiff is said to have been damaged thereby in an amount to be shown by proof.
195No cause of action for civil damages can be sustained on the facts as pleaded and leave to replead this cause of action will not be granted.
Thirteenth cause of action - Spoliation of evidence (commencing from [298])
196Mr Szanto alleges that the sale of his personal property (without his consent) was done "among other things to make proof in this case even more arduous" for him ([302]) and was an effort "merely to thwart and hinder the process of this Court" ([303])].
197As pleaded, it does not appear to relate to the allegations made during the course of the hearing before me as to the non-production of documents that Mr Szanto says were shown to him by Mr Bainton at the Tribunal in relation to the flooding problem, as to which there is a factual dispute. Rather, the allegation is that Mr Bainton's actions in selling the personal property have intentionally removed evidence in this case and amounts to spoliation of evidence ([304]). (In this regard, Mr Szanto appears to be under the misapprehension that proceedings of the kind he has brought would be heard before a jury as he asks for the Court to instruct the jurors as to a presumption arising from the alleged spoliation of evidence - [306]).
198As Mr Emmett notes, there is no such tort as spoliation of evidence known to the law of New South Wales ( British American Tobacco v Cowell (2002) 7 VR 524 at [164] per Phillips, Batt and Buchanan JJA). Mr Emmett accepts that it would be open to Mr Szanto to raise at trial an allegation of deliberate destruction of evidence in the context of seeking to rely on any evidentiary presumption that follows from the deliberate destruction of evidence (if proved) but this does not constitute a separate cause of action.
199Mr Szanto may be referring to the maxim omnia praesumuntur contra spoliatorem translated (perhaps imprecisely) as "all things are presumed against the wrongdoer (per Mozley and Whitley's Law Dictionary as cited in NWR FM t/a North West Radio v Broadcasting Commission of Ireland & Anor [2004] IEHC 109). The High Court in Allen v Tobias (1958) 98 CLR 367 at [375], adopted the statement of the maxim given in The Ophelia [1916] 2 AC 206:
If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case.
200Alternatively, Mr Szanto may be referring to the tort of spoliation of evidence that exists in some States in the United States of America and in Canada ( Clark v State of New South Wales [2006] NSWSC 673 per Johnson J at [75]) that relates to the intentional or negligent withholding, hiding, altering, or destroying of evidence relevant to a legal proceeding.
201In Mills v Central Sydney Area Health Service [2002] NSWSC 728, Harrison M (as her Honour then was) provides a useful summary of the history of the tort of spoliation of evidence in other jurisdictions and where it sits within Australian law (see [56] - [100]). Her Honour refers to the decision of Badgery-Parker J in Gibson v Parkes District Hospital and Anor (1991) 26 NSWLR 9 for the proposition that mere novelty of a cause of action alleged is not a basis for striking it out:
The common law has always shown itself capable of developing causes of action where justice so demands, whether by the creation of new torts or the extension of well-established principles to new types of fact situation. As has been noted earlier, novelty is not of itself a barrier to a proposed claim (at [23])
202In Gibson , Badgery-Parker J (in the context of considering a pleading that alleged a cause of action involving a duty to act in good faith) quoted the statement of McLaughlin M (as his Honour then was) at first instance:
What is being alleged is a separate tort. It is a basic principle of the law that the categories of tort are not closed and that they cannot be considered to be closed. Even if there has not been any decided case in New South Wales expressly dealing with a tort of the nature alleged in the amended statement of claim, that of itself would not preclude the plaintiff from claiming that she is entitled to damages for conduct of the nature alleged in that pleading.
203In Mills, her Honour notes that Australian courts could (notwithstanding the absence of a tortuous claim in this regard) provide relief for spoliation of evidence, though mainly in the form of striking out the defence. Her Honour outlines at [97] that:
Australian courts may remedy spoliation of evidence in a number of ways. As previously discussed, the spoliation may give rise to an evidentiary presumption against the spoliator. Alternately, the court has an express power in all Australian jurisdictions, provided by the relevant court rules, to order that a defence be struck out where a defendant fails to comply with an order for discovery, production or inspection or refuses to answer interrogatories. In NSW, the powers of the court as regards discovery are found in Pt23, and as regards interrogatories are found in Pt24 of the Supreme Court Rules 1970. In NSW, the order may state that judgment will be entered against the plaintiff: Pt24 r9(1)(b). In addition, the New South Wales Supreme Court has the power to make whatever order it thinks is appropriate where a party has defaulted: SCR Pt23, Pt24 r9(1).
204As Mr Emmett notes, in the present circumstances any allegation as to destruction of evidence would at best give rise to an evidentiary presumption, not a claim in tort. Further, it would seem to be a novel application of the maxim for it to apply in relation to the very goods the subject of the claim in conversion (since that would suggest that a presumption of this kind would apply whenever there was a conversion of goods by way of a wrongful sale - a proposition for which I was not taken to any authority). Given that, at the most, this allegation might give rise to an evidentiary presumption, and there is no cause of action for spoliation of evidence, any leave to replead should not extend to this cause of action.
Fourteenth cause of action - Common counts (commencing from [307])
205Mr Szanto claims restitution on a common count for money and received by the defendants in connection with the purchase of the property by reference to the sum of $30,000 paid pursuant to clause 1 of the Put and Call Option Deed (in amounts of $20,000 at the time of execution of the deed and $10,000 upon exercise of the option). Clause 3 provided that if completion of the sale was effected in terms of the contract then the sum of $30,000 was to be credited towards the purchase price payable for the property but that if either the put or call option was exercised but the sale was not completed, then both amounts paid would be forfeited to the vendor. Mr Szanto alleges that "the tender of these monies never contemplated that defendants would unjustifiably breach the parties contract". A claim of unjust enrichment by the retention of "these ill gotten sums" is maintained ([314]).
206On the facts as pleaded, a cause of action for moneys had and received in respect of the $30,000 would not arise. If there has been a breach of contract then damages would be recoverable in accordance with ordinary principles of contract. Similarly, if moneys were paid under a contract that was rescinded (say, for misleading and deceptive conduct in relation to the circumstances in which it was entered) then that relief would be sought under the action on which rescission of the contract was claimed. (In this regard, Mr Szanto's difficulty would seem to be that the fees paid under the option agreement were paid under a contract to which he was not a party and, insofar as he accuses Mr Douglas of all of the wrongful conduct of which Mr Bainton is accused, it could hardly be said that there had been any actionable non-disclosure vis a vis Mr Douglas so as to give him a basis for rescission of the contract.)
207A more general claim of unjust enrichment is not pleaded and does no seem to arise on the facts. It should be noted that in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, their Honours Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ stated (at [150]) that whether enrichment is unjust "is not determined by reference to a subjective evaluation of what is unfair or unconscionable: recovery rather depends on the existence of a qualifying or vitiating factor falling into some particular category". In Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, which authority was cited by Mr Szanto on the application before me, Gummow, Hayne, Crennan and Kiefel JJ noted that that unjust enrichment is not a principle which can be taken as a sufficient premise for direct application in particular cases (rather, it is identified as a legal concept unifying a variety of distinct categories of case).
Fifteenth cause of action - Quantum meruit (commencing from [315])
208This cause of action refers to the "works of improvement" performed at the property (to which I have referred above). It is alleged that in order to avoid the unjust enrichment of the defendants as to those improvements, there should be an award of an amount in quantum meruit for the plaintiff's labour and other ideas ([317]).
209The performance of work on the property would not of itself be sufficient to give rise to a claim for quantum meruit. Mr Emmett notes that there is no suggestion in the pleading that Mr Bainton expressly or impliedly requested that the labour be performed. He submits that, in the absence of agreement to the contrary, any labour expended by a tenant that improves the value of real property inures to the benefit of the landlord. I agree that the facts as presently pleaded do not give rise to an arguable cause of action in quantum meruit.
Sixteenth cause of action - Trespass (commencing from [318])
210The alleged trespass is the entry onto the land without Mr Szanto's permission or consent "at various times between March 2010 and October 2010. It is alleged that this amounts to a continuing trespass "because tenancy legislation considers plaintiff still the rightful occupant". The alleged "unprivileged entries" are said to have caused harm and injury o the plaintiff's feelings of privacy and well-being ([321]) and to have caused damage to the extent and duration of the plaintiff's estate in the property ([322]).
211Mr Emmett contends that this claim can rise no higher than the potential claim for breach of a tenancy agreement (the fourth cause of action) and submits that it should be dealt with in the same way. I agree.
Seventeenth cause of action - Abuse of judicial process (commencing from [324])
212This cause of action is predicated on the commencement by Mr Bainton of the proceedings in the Tribunal. It is alleged that at the time the defendants (this being used to encompass all the defendants jointly and severally as pleaded in [5] although it is clear that the third and fourth defendants brought no such proceedings in the Tribunal) brought the proceedings in the Tribunal they knew that the action was a sham. It is alleged that the action "abused the legal and judicial process of NSW" and that Mr Szanto was injured thereby (although his alleged damage is left as a matter to be shown by proof).
213Mr Emmett notes that there is no independent tort of abuse of judicial process known to the law of New South Wales but submits that in any event the mere commencement of proceedings (even if misconceived), cannot give rise to a civil claim for damages. I agree.
Exemplary Damages
214From [331] - [335], Mr Szanto sets out his claim for exemplary damages (in the sum of $10 million) for oppression, fraud or malice. The oppression identified is "despicable conduct which subjected plaintiff to cruel and unjust hardship in conscious disregard of plaintiff's rights"; the fraud is alleged to be the "intentional misrepresentation, deceit and [intentional] concealment of material facts known to the defendants" in relation to the plumbing defects which it is alleged the defendants knew would cause title to the property to be defective; the malice is identified as the conduct intended to case injury to the plaintiff "and was despicable conduct which was carried on by the defendants with a wilful and conscious disregard of the rights of the plaintiff".
215Exemplary damages may, as a matter of law, be granted in an appropriate case for tortious claims but the current state of the law is that they are not awarded for breach of contract ( Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR). In any event, the claim for exemplary damages of such a magnitude highlights the need for a proper pleading of the very serious allegations on which it is based (fraud, deceit, intentional misrepresentation and concealment).
Conclusion on strike out application
216Mr Bainton accepts that the Court should only strike out a pleading in plain and obvious cases (Mr Emmett referring in this regard to Brimson ) but it is submitted that the present is such a case and that leave to replead should be limited to causes of action for breach of a tenancy agreement, conversion, misleading or deceptive conduct, fraud and trespass. I agree. To those I would, however, add any cause of action that may properly be able to be pleaded for the tort of interference with contract or conspiracy. I do not express any view as to the prospects of such causes of action nor should I be taken as encouraging Mr Szanto to bring them. However, if they are what is intended by the seventh and ninth causes of action, and if Mr Szanto is able properly to plead facts that if established would sustain such a claim, then I consider that it is appropriate that he be given a further opportunity to do so.
217In giving leave to replead limited to causes of action within the parameters of the above, I consider that it is incumbent on me, as Mr Szanto is a self represented litigant, to draw to his attention that the standard of proof required for serious allegations of fraud or conspiracy or the like is the Briginshaw v Briginshaw (1938) 60 CLR 336 standard, namely that there must be clear evidence before findings which would have serious consequences or serve to brand a party with moral turpitude or infamy will be made and that, as noted earlier, there may be adverse costs consequences (beyond the usual order as to costs) for allegations of this kind that are found to have been made without any reasonable foundation ( Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397). In so doing, I do not express any view as to the merits of claims that may be pleaded in accordance with the leave I propose to give for the repleading of Mr Szanto's claims. I simply wish to ensure that Mr Szanto is aware that serious allegations should not lightly be made and that it should not be assumed that they could be made with impunity on his part.
Adjournment of application to strike out pursuant to Rule 14.28.
218Finally, as to the application to stand over the application contained in prayer 3 of Mr Bainton's notice of motion, I consider it consistent with the just, quick and cheap resolution of the real issues in the proceedings to defer consideration of this part of the application until the final version of the pleading is before the Court. Accordingly, I accede to that application.
Orders
219Before turning to the final orders to be made, I note that leave to replead may be granted on conditions. Those conditions should in my view encompass compliance with the undertaking given by Mr Szanto to White J in March this year. That undertaking was the basis on which his Honour admitted into evidence the instruments on which Mr Szanto relied to support his caveat on the property and on which he relies now (not only to found the claims made in the First Amended Statement of Claim now being struck out, but also at least some of the claims for which leave will be given for him to replead - including those based on an entitlement to occupy the property derived from entry into the contract for sale). I have noted Mr Szanto's apology as to any misunderstanding in respect of what was required for compliance with that undertaking. Nevertheless, it remains incumbent on him to honour that undertaking and that can only be done if the documents are submitted to the Commissioner for State Revenue for assessment of any duty payable on the documents (which may include any penalty for lateness) and, if the documents are liable for duty, then for the stamping of those documents. What view the Office of State Revenue takes as to the liability of the documents for duty is a matter for it. However, as a condition of the leave I propose to grant, I will require affidavit evidence to be served by Mr Szanto (at the time of the filing of any further amended pleading) as to the submission of the documents for stamping and as to the stamping of the documents (or a determination to the contrary of the OSR, namely that that the document or documents is or are not liable for duty).
220I make the following orders: