Weston v Indigo Shire Council & Ors [2003] VSCA 134

Court of Appeal (Vic)|2003-09-12|Before: BUCHANAN and CHERNOV, JJ.A.

Practice and procedure - Pleading - Striking out - Pleaded facts incapable of establishing a cause of action - Summary judgment for defendant.

The appellant and his wife owned land near Rutherglen on which the appellant raised sheep, crops and walnut trees. In 1989, the appellant and his wife brought a claim against the first-named respondent pursuant to Drainage of Land Act in the Administrative Appeals Tribunal ("the Tribunal"), alleging that by constructing a cut off drain near their land the first-named respondent had increased the flow of water on to the land.

The second-named respondent acted as the first-named respondent's solicitor in connection with the proceeding. The third-named respondent, a consulting engineer, prepared a report on the flow of water on to the appellant's land caused by the work carried out by the first-named respondent. The report was admitted in evidence before the Tribunal. The fourth-named respondent, the Shire engineer, gave oral evidence to the Tribunal on the same subject matter.

On 14 June 1991, the Tribunal dismissed the claim and ordered the appellant and his wife to pay the costs of the proceeding. The appellant sought and was refused leave to appeal from the Tribunal's decision in 1992 and 1998 and sought leave to appeal to the High Court, also unsuccessfully.

On 13 December 1991, the appellant and his wife made an application to the Tribunal seeking an order that the first-named respondent pay the costs of the appellant and his wife of the first Tribunal determination. The Tribunal dismissed the application with costs. Again, the appellant and his wife sought leave to appeal from the Tribunal determination. In an affidavit in support of the application the appellant deposed that the evidence led on behalf of the first-named respondent in the first Tribunal proceeding was false and perjured. The application for leave to appeal was refused. A further application to the Supreme Court for leave to appeal and an application to the High Court for leave to appeal were refused.

On 4 September 1992, the appellant and his wife made a third application to the Tribunal seeking to set aside the first Tribunal determination. The application was dismissed with costs. Soon afterwards, the applicant and his wife made a fourth application to the Tribunal seeking orders against the first-named respondent pursuant to the Water Act 1989 and the Planning Appeals Act 1980 in respect of drainage and other works carried out by the first-named respondent in February 1992. That application, too, was dismissed with costs.

On 12 March 1993, the first-named respondent brought proceedings in the County Court to recover the costs awarded to it by the four Tribunal determinations. The appellant counterclaimed for damages for personal injury, business losses and damage to property said to have been caused by the work the subject matter of the fourth application in the Tribunal. The first-named respondent recovered summary judgment for $94,722.63 together with $6,607.18 for interest. After a great deal of skirmishing, including applications by the appellant for leave to appeal to the Supreme Court and the High Court, certain paragraphs of the counterclaim were struck out. The remainder of the counterclaim was dismissed on 21 February 2002 after a trial.

The present proceeding was commenced by writ dated 11 January 2000. The statement of claim originally endorsed on the writ has been amended. The appellant now alleges that in 1994 he discovered that the evidence of the third and fourth-named respondents called on behalf of the first-named respondent in the first Tribunal proceeding was false and that the first, second, third and fourth-named respondents put the evidence forward knowing that it was false. When the County Court judgment for the amount of the costs was obtained, the first and second-named respondents are alleged to have known that the costs orders had been obtained by false evidence. The amended statement of claim alleges that the second-named respondent in his capacity as the first-named respondent's solicitor made false statements, failed to discover relevant documents and acted dishonestly in prosecuting proceedings against the appellant. The appellant claims that the third and fourth-named respondents breached a duty of care owed to him and acted fraudulently in making a false report to the first-named respondent and in advising the first-named respondent that it could discharge water on to the appellant's land.

In order to pay the amount of the County Court judgment recovered by the first-named respondent the appellant borrowed money and mortgaged his land to secure the loan. The appellant was unable to repay the loan, and the mortgagees sold the land in the exercise of their power of sale under the mortgage. The sixth-named respondent acted as the real estate agent of the mortgagees. In his amended statement of claim the appellant alleges that the sixth-named respondent, knowing that the land could best be sold in separate lots, advised another to buy the land and re-sell it as separate lots. It is alleged that the sixth-named respondent gave the advice in order to deprive the appellant of a higher price for his land.

The prayer for relief in the amended statement of claim is as follows;

"AND THE PLAINTIFF CLAIMS: 1. The judgment in proceeding County Court No. 930819 made and given on 30th September 1993 be set aside. 2. That all moneys paid to the first and second defendants that result from the proceedings referred to above be repaid to the plaintiff. 3. Damages as set out in paragraph 20. 4. Personal injury damages specified in paragraph 20A. 6. Interest. 7. Costs."

The first, second and fourth-named respondents applied for judgment pursuant to Rule 23.01 or to strike out the statement of claim pursuant to Rule 23.02. The sixth-named respondent applied for like relief and also applied for summary judgment pursuant to Rule 23.03. The sixth-named respondent's summons was supported by four affidavits deposing to facts which were not controverted by the appellant. A Master ordered that the proceedings against the first, second, fourth and sixth-named respondents be dismissed.

The appellant appealed from the dismissal of the proceedings to a judge of the trial Court. Her Honour dismissed the appeal as against the first, second and third-named respondents, saying:

"Paragraphs 1 and 2 of the prayer for relief in the further amended statement of claim in effect seek a re-trial of the County Court proceeding No. 93/0819. Paragraphs 3 and 4 seek damages in respect of loss and damage and personal injury claimed to derive from the judgment in that proceeding and paragraphs 5 and 6 seek interest and costs. Section 10 of the Supreme Court Act provides that the Court of Appeal has jurisdiction to hear all applications for new trials. Mr Moore for the first and fourth defendants and Mr Anastassiou for the second defendant submitted that in the statement of claim the plaintiff seeks relief against their clients, that is, a re-trial of the County Court proceeding which is beyond the jurisdiction of the Trial Division of this Court to grant. Having considered the matter I accept that submission ...."

Her Honour also dismissed the appeal against the dismissal of the action against the sixth-named respondent. She said:

"I think it is sufficient to say that for the reasons set out in paragraph 16 of Mr Osborne's written submissions, that is the mortgagee doesn't owe the mortgagor a duty of the kind alleged by the plaintiff and performance of that alleged duty would have involved a contravention of the agent's contractual obligation for the principal, bearing in mind the duty of the principal to have regard to the interests of the mortgagor in terms of Colonial Mutual v. Pendlebury but no further than that. It's appropriate that the summons be dismissed, that's the summons of 7 June in so far as it relates to the sixth defendant."

Although the third-named respondent did not appear before the judge, she exercised the power conferred upon her by s.30 of the Supreme Court Act 1986 and ordered that the proceeding against the third-named respondent be dismissed.

In my opinion, there was jurisdiction in the Supreme Court to entertain the appellant's claims against the first, second, third and fourth-named respondents in a proceeding commenced by writ. The appellant's prayer for relief sought only to set aside the County Court judgment, the repayment of the judgment sum, damages, interest and costs. It was appropriate to proceed by way of writ to set aside the judgment on the ground that it was obtained by fraud.[1] The appellant did not require or seek a re-trial of the County Court action which had been brought by the first-named respondent. While the claim to set aside the County Court judgment and the appellant's claim for damages arising from acts and omissions alleged to have occurred in the course of the proceeding in the Tribunal may have involved canvassing facts in dispute in the proceeding in the Tribunal, the appellant did not seek a re-trial of the proceeding in the Tribunal or the proceeding in the County Court. The fact that the appellant claimed that loss and damage was sustained by him as a result of the judgment which he impugned would not have resulted in a re-trial of the action.

Accordingly, in my opinion, the appeal should not have been dismissed on the basis that the Trial Division of the Court lacked jurisdiction to entertain it. The first, second and fourth-named respondents, however, contend that the judge's decision can be justified on the ground that the further amended statement of claim discloses no cause of action against them.

The paragraph which lies at the heart of the further amended statement of claim alleges that the first, second, third and fourth-named respondents "made the said representations fraudulently and either well knowing the same were false, or reckless and not caring whether they were true or false." I take "the said representations" to be the evidence which was given by the third and fourth-named respondents to the Tribunal and which is alleged to be the basis for the Tribunal's decision.

The particulars supporting the allegation of fraud are that the third-named respondent expressed hostility to the appellant at a meeting in 1987, that the third-named respondent carried out works that increased the flow of water on to the appellant's land, that the first and second-named respondents failed to discover relevant documents, that in 1993 the second-named respondent acknowledged that drainage problems were caused by the defective construction of the drain and that in 1993 the first and fourth-named respondents ascertained that the drain had not been constructed in accordance with the specifications prepared for it and could not carry a flow of water of five cubic metres per second. The appellant has alleged that the first and second-named respondents "fraudulently failed to give discovery" of the original plans and specifications of the drain, a letter stating that the work on the drain was completed at the estimated cost and plans for remedial works carried out on the drain. There are no facts alleged to constitute the fraud and the description of the documents does not disclose fraud.

The particulars, if proved, are incapable of establishing the allegation of fraud. The appellant's pleaded case, at its highest, is that the first, second and fourth-named respondents knew that the drain had not been constructed in accordance with the specifications prepared for it, and the first and second-named respondents failed to discover all relevant documents in the first proceeding in the Tribunal. Those facts fall short of establishing that when judgment was obtained in the County Court the respondents knew that the evidence on which the Tribunal's determination was based was false.

The allegation that the first, second and fourth-named respondents obtained the County Court judgment knowing that the Tribunal determination was based on false evidence is central to most of the claims made against these respondents. The appellant has alleged other causes of action besides fraudulently obtaining judgment, but those causes of action for the most part depend upon the respondents' knowledge that the Tribunal's determination was flawed by its dependence on false evidence. The claim in negligence against the third and fourth-named respondents is contained in what appears to be a throw-away line alleging that they "advised the first (respondent) that it could discharge water on to the [appellant's] property without an easement." Assuming for present purposes the existence of a duty of care, I do not think that the facts pleaded by the appellant are capable of establishing a breach of the duty. Further, the only loss and damage pleaded in the statement of claim is alleged to be the result of the judgment said to have been obtained by fraud, not any flooding.

In my opinion, the further amended statement of claim fails to disclose any cause of action against the first, second or fourth-named respondents.

The case pleaded by the appellant against the sixth-named respondent is that the sixth-named respondent acted for the mortgagees in connection with the sale of the appellant's land. It is alleged that the sixth-named respondent owed a duty of care to the appellant and knew that the appellant's land could be sold as separate lots at a higher price than could be obtained if the land was sold in one parcel. The statement of claim alleged:

"In breach of that duty of care the sixth defendant advised another party to buy the plaintiff's property as a whole and re-sell the property as separate pieces because the fifth [defendant] wished to buy a part of it."

The appellant alleged that the effect of the sixth-named respondent's advice was to deprive the mortgagees and the appellant of the benefit of a higher price for the land.

The sixth-named respondent deposed in an affidavit that was before the Master and the judge that he advised the mortgagees to sell the appellant's land in lots, but the mortgagees decided to sell the land in one lot and instructed the sixth-named respondent to sell the land in that manner. An affidavit by one of the mortgagees corroborated the sixth-named respondent's account. There was no material in opposition to the affidavits filed on behalf of the sixth-named respondent, and in the light of the facts thus established, the appellant's claim against the sixth-named respondent cannot be maintained.

For the foregoing reasons, I am of the opinion that the statement of claim does not disclose a cause of action against the first, second, third or fourth-named respondents and that by reason of the uncontroverted facts the claim against the

sixth-named respondent is "absolutely hopeless"[2] or "bound to fail"[3]. Although the third-named respondent has not applied to strike out the statement of claim or to dismiss the proceeding, his position is no different from the position of the first, second and fourth-named respondent. In my opinion, the action should not limp along against the third-named respondent alone. It should be stayed pursuant to the provisions of s.30 of the Supreme Court Act.

I agree that, for the reasons given by Buchanan, J.A., the appeal should be dismissed.

[1] See Hip Foong Hong v. H. Heotia & Co. [1918] A.C. 888 at 894; Cicic v. Snowy Mountains Hydro-Electric Authority [1964-65] N.S.W.R. 178; McDonald v. McDonald [1965] HCA 45; (1965) 113 C.L.R. 529 at 533; Monroe Schneider Associates (Inc) v. No. 1 Raberem Pty. Ltd. [No.2] [1992] FCA 367; (1992) 109 A.L.R. 137 at 141.

[2] Dey v. Victorian Railways Commissioners [1949] HCA 1; (1948) 78 C.L.R. 62 at 9-1 per Dixon, J.

[3] Coles Myer Ltd. v. Bowman [1995] VICSC 219; [1996] 1 V.R. 457 at 459 per Charles, J.A.

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Judgment (35 paragraphs)

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