Udowenko and Ors v Chief Executive Officer and Board of Directors of St George Bank - A Division of Westpac Banking Corporation and Ors - [2011] NSWSC 867 - NSWSC 2011 case summary

Supreme Court of NSW|2011-07-29|Before: Johnson J, Davies J

Judgment 1JOHNSON J: By Notices of Motion filed in these proceedings, a number of Defendants seek the striking out of an Amended Statement of Claim filed by the Plaintiffs on 24 March 2011, and an order dismissing the proceedings for want of prosecution. 2By Notice of Motion filed 9 May 2011, what I will describe as "the New South Wales Government Parties" (the Second, Third and Sixth Defendants), seek such relief. By Notice of Motion filed 11 May 2011, what I will describe as "the Westpac Party" (First Defendant) also seeks such relief. 3Mr Hutchings, counsel for the New South Wales Government Parties, has informed the Court that the Fifth Defendant supports the application although the Fifth Defendant has not filed any Notice of Motion. The Fifth Defendant is described as "Principal and Company Director/s of Novocastrian Locksmiths" . It seems that the Fourth Defendant (described as "Principal and Licensee The Hunter Group (NSW) Pty Ltd" ) is not participating in the proceedings.

Applicable Legal Principles 15It is necessary to refer to legal principles applicable to applications of the type made by the Defendants. 16Relevant principles concerning pleadings were summarised in McGuirk v University of New South Wales [2009] NSWSC 1424 at [21]-[29]: "21 The function of pleadings is to state with sufficient clarity the case that must be met by a defendant. In this way, pleadings serve to define the issues for decision and ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her: Banque Commerciale SA En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286, 296, 302-3. The issues defined in the pleadings provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance: Dare v Pulham [1982] 148 CLR 658 at 664; Banque Commerciale at 296. 22 In Perpetual Trustees Victoria Limited v Dunlop [2009] VSC 331, Forrest J observed at [24] that the rules of pleading are 'the servants of the interests of justice', with those interests demanding that a party have every opportunity to plead out an arguable case against other parties, but that those other parties have, at an early point in the proceedings, the opportunity to be properly appraised of the case against them. 23 Pleadings provide the structure upon which interlocutory processes, such as discovery, are governed and they constitute the record of the matters which the Court has resolved and become relevant if, in any subsequent proceedings, any party claims issue estoppel or res judicata: Australian Competition and Consumer Commission v Fox Symes & Associates Pty Limited [2005] FCA 1071 at [100]-[103]. 24 Proper pleading is of fundamental importance in assisting Courts to achieve the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: s.56 Civil Procedure Act 2005. 25 Where application is made by a party for leave to amend pleadings, the Court should have regard to considerations of case management, cost and delay: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 at [111]-[112]; (2009) 83 ALJR 951. Of course, the present application is made by the Plaintiff at an early stage in the proceedings. A hearing is not imminent. Nevertheless, the orderly progress of litigation requires the Court to apply the letter and spirit of the Civil Procedure Act 2005, in accordance with contemporary principles identified in Aon, in determining an application such as this. 26 The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and the duty in civil proceedings to assist the Court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute: Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited & Ors [2008] NSWCA 243 at 161. The need for clarity, precision and openness as part of this co-operation has been emphasised in the context of ambush or surprise: White v Overland [2001] FCA 1333 at [4]. 27 For a Statement of Claim to comply with the rules of Court, a party should plead, in a summary form, a statement of the material facts upon which the party relies, but not the evidence by which those facts are to be proved: Rule 14.7 UCPR. In doing so, the pleadings should be as brief as the nature of the case admits: Rule 14.8 UCPR. 28 In Kirby v Sanderson Motors Pty Limited (2001) 54 NSWLR 135, Hodgson JA (Mason P and Handley JA agreeing) said at 142-143 [20]-[21], with respect to the requirement for a pleading to state material facts: 'It might appear that these rules [the Supreme Court Rules] do not require that causes of action be stated in pleadings; the requirement is to have a statement of material facts, and indeed to have only such a statement. However, in my opinion - 'Material' means material to the claim, that is, to the cause or causes of action which are relied on. (2) The requirement of a statement of material facts does not exclude the allegation of legal categories, such as duty of care, fiduciary duty, trust and contract. (3) The general requirement to avoid surprise means that material facts must be stated in such a way that the defendant can understand the materiality of the facts, that is, how they are material to a cause of action. Accordingly, even on the basis of these rules which are common to the District Court and the Supreme Court, I do not take cases such as Konskier as establishing that there is a danger of surprise, which arises particularly where there is lack of precision and clarity in the pleading, it may well be appropriate to require a Plaintiff, either in a statement of claim or in particulars, to explicitly relate the facts it pleads to specific causes of action.' 29 In Gunns Limited v Marr [2005] VSC 251, Bongiorno J observed at [57]: 'Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly'." 17A significant feature on the present applications is the justifiable submission of the Defendants that the Amended Statement of Claim is embarrassing in the legal sense. The concept of embarrassment was considered in McGuirk v University of New South Wales at [30]-[35]: "30 A pleading is embarrassing where it is 'unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him': Meckiff v Simpson [1968] VR 62 at 70; Gunns Limited v Marr at [14]-[15]. 31 In Shelton v National Roads & Motorists Association Limited [2004] FCA 1393 at [18], Tamberlin J explained the concept of 'embarrassment' with respect to pleadings: 'Embarrassment in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense. This is not an exhaustive list of situations in which a pleading may be embarrassing: see Bartlett v Swan Television & Radio Broadcasters Pty Ltd (1995) ATPR 41-434.' 32 A pleading may be embarrassing even though it contains allegations of material facts sufficient to constitute a cause of action, if the material facts alleged are couched in expressions which leave difficulties or doubts about recognising or piecing together what is referred to: Northam v Favelle Favco Holdings Pty Limited (Bryson J, 7 March 1995, BC9504276 at 5-6). 33 Although the pleading of a conclusion may, in some circumstances constitute a material fact, nevertheless, the pleading will be embarrassing if allegations are made at such a level of generality that the defendant does not know in advance the case it has to meet: Charlie Carter Pty Limited v Shop Distributive and Allied Employees Association (1987) 13 FCR 413 at 417-418. In such a case, the appropriate remedy is to strike out the pleading rather than to order the provision of particulars, as it is not the function of particulars to take the place of the necessary averments in a pleading: Trade Practices Commission v David Jones (Australia) Pty Limited (1985) 7 FCR 109 at 112-114. 34 Rule 14.28 UCPR provides that pleadings that involve non-compliance are liable to be struck out as an embarrassment. However, generally the Courts recognise that a wide range of discretionary considerations arise where there is a failure to comply with the technical requirements of the pleading rules: Beach Petroleum NL v Johnson (1991) 105 ALR 456 at 466. In many instances, the appropriate order may be to strike out the offending pleading, but grant leave to amend: Rubenstein v Truth & Sportsman Limited [1960] VR 473 at 476; H 1976 Nominees Pty Limited v Galli (1979) 30 ALR 181 at 186. 35 It is not the function of the Court to draw or settle a party's pleading. The Court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. Objectionable matter that is so mingled with other matter may lead to the conclusion that the pleading as a whole would tend to embarrass the fair trial of the action ought be struck out: Turner v Bulletin Newspapers Co Pty Limited (1974) 131 CLR 69 at 72, 87-88, 97-98; Gunns Limited v Marr at [57]-[58]; Fleet v Royal Society for the Prevention of Cruelty to Animals NSW and Ors [2005] NSWSC 926 at [55]." 18There is a claim for dismissal of the proceedings for want of prosecution under Rule 12 .7 UCPR. It has been observed that such an order is an exceptional one and that the power should not be lightly exercised: Fleet v State of New South Wales [2009] NSWSC 75 at [15]. On the other hand, the Court should exercise that power if there is a proper basis for it, and will bear in mind the requirements of all litigants to comply with obligations under the Civil Procedure Act 2005 and the UCPR. I have had regard as well to the decision of Campbell J (as his Honour then was) in Szczygiel v Peeku Holdings [2006] NSWSC 73 at [7]-[13].

The Amended Statement of Claim 19With those principles in mind, I now turn to the Amended Statement of Claim. 20At the outset, I observe that the pleading is beset with defects of a variety of types. It is clear that an order ought be made striking it out. 21I will refer to a number of the defects that lead me to this conclusion. I note, of course, that this is not the first attempt at a pleading in this matter. The Amended Statement of Claim post dates the correspondence from the solicitors for the Defendants to the Plaintiffs, and was prepared after the matter had been before Davies J on a number of occasions. 22Firstly, the Amended Statement of Claim is said to contain a claim in tort for trespass to land, trespass to goods, assault, battery, conversion and false imprisonment. The nature of the claim however is confined to a claim for declaratory relief under s.75 Supreme Court Act 1970 . 23Mr Udowenko, in his submissions today, has referred repeatedly to the terms of s.75 to the effect that no further claim is required and that a claim for declaratory relief can suffice, and that accordingly there is no difficulty with this part of the claim. I do not agree. 24Davies J raised with Mr Udowenko on 9 May 2011 the problems with a claim of this type and the written submissions of Mr Hutchings articulate the problem. 25This is said to be a claim in tort. As I understand it, the claim is said to arise out of events which took place in November 2008, when a writ of possession was executed at a property at Vacy in the State of New South Wales. As I understand it, it is said that a number of persons involved in the execution of the writ of possession passed over certain land (over which it is said they were not entitled to pass) for the purposes of executing the writ. This may put somewhat crudely the nature of the claim, but the Amended Statement of Claim does not necessarily allow a clearer understanding of what is said to be the subject of the proceedings. 26It is said, however, to be a claim in tort. A claim in tort based solely on a claim for declaratory relief, seeking bare declarations, constitutes a fundamental problem with the claim. 27It is not for me to tell the Plaintiffs how they might amend the claim. I have to deal with the pleading on its face. In my view, the claim is confusing. A Defendant faced with a claim for a bare declaration, where the claim is one in tort, is entitled to say this is not a way in which a claim of that sort ought to be pleaded in accordance with the relevant Rules. That is the first area of deficiency. 28A second deficiency is that, amongst the relief claimed is the following (paragraph (b)): "The Plaintiffs seek Declaration/Judgment/Order pursuant to Section 21 of the Federal Court of Australia Act 1976 (Cwlth) ". 29These are proceedings in the Supreme Court of New South Wales and not the Federal Court of Australia. This claim is misconceived, confusing and embarrassing in the legal sense. 30The third area of deficiency relates to the parties. The First Defendant is variously described in different ways in the Amended Statement of Claim. To describe it as the "Westpac Party" is a simplification of what is contained in the document. 31According to the front page of the Amended Statement of Claim, the First Defendant is "Company Executive Officer and Board of Directors, formerly St George Bank Limited [then an ACN number] , a Division of Westpac Banking Corporation [then another ACN number] " . 32At page 8 of the Amended Statement of Claim, the First Defendant is described as "Chief Executive Officer from 14 March 2002, to 11 March 2010, and Board of Directors, formerly St George Bank Limited [then an ACN number] a Division of Westpac Banking Corporation [then another ACN number] ". 33At page 11, there is a description of the First Defendant that appears to accord with that on page 1. 34The solicitors for the Westpac Party have repeatedly drawn to the attention of the Plaintiffs the legal position concerning the status of the St George Bank, and now the Westpac Banking Corporation, and legitimate complaints are made about this. A simple solution was proposed in the letters from Kemp Strang, but that solution has been ignored by the Plaintiffs. 35Amongst the legal problems created from the confusing content of this description is an identification of who exactly is being sued. If individuals are sued, such as the "Company Executive Officer" or, as described elsewhere, the "Chief Executive Officer from 14 March 2002 to 11 March 2010" , and the Board of Directors, it is necessary to identify what exactly it is that those persons, as a Defendant or Defendants, are said to be liable for. 36Again, it is not the role of the Court to tell the Plaintiffs how to draw their claim. The simple fact is that the correspondence from Kemp Strang has provided them with the simple answer to this for some time. On the face of it, and perhaps demonstrating a measure of inflexibility in the Plaintiffs' approach to this litigation, this tortuous and confusing description of the First Defendant has been maintained. 37It is, in my view, a fundamental defect. It is not an answer to this to say one can just look at some of these words used, and that those words describe the Westpac Banking Corporation. 38Commencement of proceedings in this Court require the precision and clarity stated in the Civil Procedure Act 2005 and the UCPR. The Plaintiffs are subject to a statutory obligation to comply with the Rules of Court. The description of the First Defendant constitutes a further fundamental defect. 39The position becomes even more confusing when the Court moves to the New South Wales Government Parties. After the description of the First Defendant, at page 1 of the Amended Statement of Claim, the document states with respect to the other Defendants "No fewer than six (6) and/or yet to be determined" . 40At page 8 of the document, the Second Defendant is described in a formula (which I will not read in full because of its length) which commences "The Queen's Most Excellent Majesty, Elizabeth The Second" , and then continues with various other descriptions and titles of Her Majesty and then states: "Her Majesty's Department of Justice and the Hon John Hatzistergos, Attorney-General of the State of New South Wales" and "Sheriff Officers" , and there are 10 names followed by the words "of the State of New South Wales" and then an ACN number, followed by the words "Second Defendant" . 41As the correspondence from the Crown Solicitor's Office makes clear, the Crown Proceedings Act 1988 and the Law Reform (Vicarious Liability) Act 1998 provide for a relatively straightforward mechanism, when one is suing entities relating to the State of New South Wales. It is no compliance with the Rules of Court, to have a long and convoluted description, followed by 10 names, followed by the words "the State of New South Wales" and then to say that it is "the State of New South Wales" which is being sued. 42A similar position applies to the Third Defendant, described as "Andrew Scipioni [sic] , Commissioner of Police Service of New South Wales, and Police Officers" ; with four names being given there, "of the State of New South Wales" , and then an ACN number. 43The Sixth Defendant is described as "Chief Executive, Ambulance Service of New South Wales and Two (2) Officers assisting of the State of New South Wales" , and then an ACN number. 44At pages 11 and 12, there are shorter and different descriptions of these parties. 45The Crown Solicitor's Office raised repeatedly with the Plaintiffs in correspondence the convoluted description of positions, authorities and persons, and proposed that these parties ought be described in the contemporary way in which claims against the State are brought. That advice was ignored by the Plaintiffs. 46I do not accept the submission that the addition of the words "of the State of New South Wales" under each of those descriptions overcomes the problem. 47There are other parts of the Amended Statement of Claim to which reference should be made. The document does not spell out the terms of any declaration that is sought. The document contains a number of broad assertions. 48Factual allegations of trespass to land are made, persons are said to be "accomplices" . Reference is made to the writ of possession. At one point (paragraph 4), reference is made to the "Commonwealth of Australia Constitution Act 1900 (United Kingdom)" . This seems to have no possible relevance to the claim. There are then generalised assertions (at paragraph 5) that on at least three occasions, certain things happened. 49At paragraph 7, there is a claim that the police were told at various points that they could not trespass and some 10 decisions of United Kingdom or Australian Courts are shown, apparently as a type of list of authorities. The purpose of having a list of cases in a pleading is not made clear. At paragraph 8, there is a suggestion that on 21 November 2008, "no fewer than twenty-odd male persons" wilfully committed the offence of trespass. 50Then, at paragraph 10, there is a statement which I will set out: "Horrified by the ordeal and traumatised by the rape upon her Family, to a stage which left the Second Plaintiff in a state of shock, with clothing ripped from her chest, vomiting and distraught by the swearing and the yelling men rampaging throughout her home, with her Sons having been imprisoned in the Police van and forbidden to leave peacefully, which did amount to a total restraint of the liberty of her Sons, and disallowed to make any telephone calls, was forcefully man-handled ... then transported by ambulance from her home of twenty-two (22) years and hospitalised for nineteen (19) days". 51That paragraph is sitting in the claim for declaratory relief. It is, in the legal sense as described earlier, embarrassing. 52There is then a reference to an event on 6 November 2008, and then a claim for interlocutory relief, which I put to one side. 53I have to say that the Amended Statement of Claim is a very good example of a pleading which offends nearly all the principles of pleadings to which I have referred. The only course is to make an order striking it out. 54The fact that the Fourth Defendant has not joined the application, does not mean that the pleading should stand as against the Fourth Defendant. The entire pleading ought be struck out and I will, in due course, make that order. 55Other submissions were made by Mr Hutchings and by Mr Newton, counsel for the Westpac Party, all of which have considerable force. I do not propose in this judgment to go through and make a determination with respect to each and every argument that was put. It is sufficient to observe that the written submissions of Mr Hutchings and Mr Newton describe accurately the deficiencies in this profoundly flawed pleading, and the oral submissions have reinforced that position.

Dismissal for Want of Prosecution? 56It is submitted for the Defendants that what has happened already is such that, even though only 11 months have passed since the proceedings were commenced, the Court should form the view that the proceedings ought be dismissed for want of prosecution. 57What is put is that there have been issues raised in correspondence, and when the proceedings were before Davies J, which provided opportunities to the Plaintiffs to consider, and reconsider, the pleadings. Finally, the version of the amended pleading pressed by the Plaintiffs is profoundly defective. The Defendants submit that to give the Plaintiffs another opportunity to seek to recast this claim will lead to a continuation of what has happened already. 58In effect, the submission is that the Plaintiffs are indissolubly wedded to a formulation of their case. Despite what was raised with them in correspondence and by a Judge of this Court, and in written submissions advanced for the purpose of today's hearing, there is a fixed and immovable view as to how the Plaintiffs' case should be framed, so that further delay will merely see more of the same and more costs run up with an inevitable result. 59The step of dismissing a claim for want of prosecution is an exceptional one. The fact that these proceedings are less than a year old does not mean that the proceedings are not vulnerable to such an order. One looks at the reality of what has happened since August 2010, and more accurately what has not happened, to form a view as to whether the Court should exercise this exceptional power, even at this point. 60In the end, I have formed the view that, despite the unpromising history of the litigation, I should bear in mind that today is the first time there has been a judicial determination with respect to the pleadings. Davies J has been attempting to point out to the Plaintiffs, in a patient and constructive way, what the problems are with their pleadings. So far, the Plaintiffs have not taken notice, at least in the sense of dealing with the problems about which I have now formally made findings, and will shortly make orders. 61Mr Udowenko submits that the Plaintiffs should be given an opportunity to replead, and that will be done bearing in mind the Court's ruling. He states that there is the prospect of legal advice being taken. 62The nature of the claim involves a claim for trespass. I do not think it is appropriate to shut the Plaintiffs out finally at this time by making an order dismissing the proceedings. 63However, I make it entirely clear that the Court cannot and will not stand by and allow variations on the current theme to be advanced, which continue to fail to comply with the requirements of pleading. The obligations on the Court under the Civil Procedure Act 2005 means that my duty is to ensure compliance with that Act and the UCPR. 64The interests of justice do not mean that open-ended opportunities will be given to the Plaintiffs to frame their claim in a manner that does not comply with the relevant Rules. 65The Court will determine what will happen in due course. However, I am not presently persuaded that an order of dismissal of the proceedings for want of prosecution is appropriate. 66In Fleet v Royal Society for the Prevention of Cruelty to Animals NSW [2005] NSWSC 926, I made the following observation at [67]: "... If Dr Fleet proceeds to file a further pleading which is beset by the pleading deficiencies of the Amended Statement of Claim, he faces the prospect that his ability to further litigate this matter may be restricted. In Turner , Jacobs J at 97-98 referred to a statement of Bacon VC in Cashin v Cradock (1876) 3 ChD 376 at 377, which has application to this case: 'It is not for me to point out to the plaintiff how he might frame his statement of claim if he has any cause of complaint against the defendants. If he does not take advice, he must run the risk of acting upon his own judgment'." 67The observations made by Bacon VC in 1876 apply equally to the Plaintiffs in this case. 68If Mr Udowenko continues to take the view that the Plaintiffs' pleading ought be drawn in a way that does not comply with the UCPR, then the outstanding application to dismiss the proceedings for want of prosecution may fairly and squarely arise. 69Mr Udowenko has asked for 28 days to file and serve an amended pleading. I will allow that period of time. 70The course which I propose to take will be to make an order pursuant to paragraph 4 of the New South Wales Government Parties' Notice of Motion filed 9 May 2011 and pursuant to paragraph 3 of the Westpac Party's Notice of Motion filed 11 May 2011, striking out the Amended Statement of Claim pursuant to Rule 14.28 UCPR. 71I propose to stand over the claim for dismissal for want of prosecution to a future date before me. I will hear the parties on further orders, including costs.

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Udowenko and Ors v Chief Executive Officer and Board of Directors of St George Bank - A Division of Westpac Banking Corporation and Ors

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