Wijayaweera v Saint Gobain Abrasives Pty Ltd

JUDGES: GRAY, EDMONDS AND ROBERTSON JJ DATE: 6 SEPTEMBER 2012 PLACE: MELBOURNE

The orders made 1 At the conclusion of the hearing of this appeal on 10 August 2012, we made orders dismissing the appellant's interlocutory applications, dismissing the appeal and ordering the appellant to pay the respondents' costs in the fixed sum of $4,000. We reserved our reasons for judgment. These are those reasons.

The nature and history of the proceeding at first instance 2 On 12 September 2011, the appellant commenced a proceeding in the Court against five respondents, a corporation and four natural persons. By his application, he sought damages of 5 million dollars from the corporation and $750,000 from each of the four other respondents. The fifth respondent was never served. In the statement of claim accompanying the application, the appellant alleged that he was employed as Financial Controller by another corporation, which no longer exists, but the business of which he alleged was "taken over" by the first respondent, from February to December 2006. He alleged contraventions of ss 180-184 of the Corporations Act 2001 (Cth) by the four individual respondents as directors of the former corporation, for which he said that the first respondent is vicariously liable. Those sections deal with duties of directors and other officers of corporations. The statement of claim consisted only of 14 paragraphs, with no particulars. In it, the appellant asserted that he had been prevailed upon to be involved in, and to give approval for, transactions that lacked propriety. He alleged that, because of this, after he resigned his employment, he had been placed under constant surveillance and mental health treatment had been forced upon him. 3 The proceeding was listed for directions on 22 November 2011. The primary judge declined to deal with a submission on behalf of three of the respondents that the proceeding should be struck out, which those respondents' solicitor had foreshadowed to the appellant by letter dated 18 November 2011. Her Honour made orders removing the third respondent as a party and setting out a timetable for the management of the proceeding. That timetable included a requirement that the remaining respondents file and serve a defence by 29 November 2011, that the appellant file and serve affidavits and written submissions by 25 January 2012, and that the proceeding be listed for hearing on 13 February 2012. 4 The first, second and fourth respondents filed their defence on 29 November 2011. They admitted the existence of the former company, that the second and fourth respondents were directors of it, and that the appellant was employed by it from 23 January to 8 December 2006. They denied each other allegation and, in relation to each, took objection that the statement of claim failed to plead any material fact that was a constituent element of a cause of action against any of them, and contained scandalous allegations unsupported by any fact. They contended that most of the statement of claim should be struck out as embarrassing and vexatious. 5 On 5 January 2012, the appellant attempted to file an application for interlocutory orders. He sought to extend the time for filing his documents and submissions; to vacate the trial date until "early April 2012 or later"; to add two additional parties; and to be allowed to vary the statement of claim, or to submit a new statement of claim, to deal with the proposed additional parties "and other matters including capacity and role of Applicant and interrelated companies in the Saint Gobain group." The appellant sought to have this application dealt with urgently, but a registrar referred it to the primary judge's chambers, to be dealt with in the ordinary course. 6 The proceeding came on for trial on 13 February 2012, as scheduled. The appellant applied for an adjournment of the trial, to enable him to file an amended statement of claim. The primary judge ordered that: 1. The application to amend the statement of claim is dismissed. 2. The application for an adjournment of the hearing is dismissed. It is convenient to refer to this order as "Order One", a designation applied by the primary judge. 7 Her Honour gave reasons for Order One. Those reasons are published as Wijayaweera v St Gobain Abrasives Ltd [2012] FCA 97. At [6], her Honour pointed out that, despite the defects in the statement of claim being brought to the attention of the appellant at the first directions hearing, in the defence and by correspondence and other communications between the appellant and the solicitor for the respondents, and despite not being allowed to apply on an urgent basis on 5 January 2012, the appellant had not yet formulated a proposed amended statement of claim. At [7], her Honour said that the appellant proposed to include in his amended statement of claim allegations of racial and other discrimination, but had not had an application to the Australian Human Rights Commission determined under s 46PO of the Australian Human Rights Commission Act 1986 (Cth), which was a prerequisite to bringing a proceeding in the Court. Her Honour then dealt with the application for an adjournment, summarising the reasons advanced by the appellant at [8] and the opposing arguments of the respondents at [9]. The principal reason for refusing the adjournment, stated at [10], appears to have been that the appellant had been well aware of the timetable directions her Honour had given, and had complied with them by filing 21 affidavits by 25 January 2012. 8 The primary judge then conducted the trial of the proceeding. As appears from the reasons for judgment she gave at the conclusion, published as Wijayaweera v St Gobain Abrasives Ltd (No 2) [2012] FCA 98, the trial was completed swiftly. At [6], her Honour referred to the 21 affidavits, all sworn by the appellant, filed between 10 and 25 January 2012, and an earlier affidavit, also sworn by the appellant, filed on 21 November 2011. At [7], her Honour said: The respondents submitted that the affidavits are inadmissible. I agree. The contents of the affidavits are substantially irrelevant. They contain serious allegations which are largely hearsay and unsubstantiated. The material is scandalous and vexatious. The affidavits, taken at their highest, that is by reference to the material that is admissible, do not support the allegations in the statement of claim. At [8], her Honour rejected a submission that the affidavits and the statement of claim should be removed from the Court file. Instead, she determined that the affidavits and the statement of claim would be sealed on the Court file and not disclosed to any person without further order. 9 The primary judge then dealt with an application by the respondents that the Court should entertain a submission that there was no case to answer, and dismiss the proceeding, without the respondents being required to elect whether or not to call evidence. At [10], her Honour quoted a summary of the relevant principles from the judgment of Perry J in Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54 at 68-69, and referred to other authorities. At [11], her Honour held that the case fell within the two categories to which Perry J had referred in which no election was required. Her Honour said: Given the length of the hearing (less than one day), the serious and unsubstantiated nature of the allegations, the saving of Court time and expense and the fatal flaws in the [appellant's] pleaded claim, the respondents will not be required to elect. At [13], her Honour referred again to the absence of admissible evidence to support any of the pleaded allegations and said, "The application by the [appellant] is hopeless and must fail." 10 Her Honour's final orders were: 1. The statement of claim and the affidavits sworn by the applicant be sealed on the Court file and not be disclosed to any person without further order of the Court. 2. The application is dismissed. 3. The Applicant pay the First, Second and Fourth Respondents' costs of and incidental to the application fixed in the sum of $4,000. It is convenient to refer to these orders as "Order Two", also a designation applied by the primary judge.

The interlocutory applications filed in the appeal 11 The appellant filed three interlocutory applications in the appeal. The first, filed on 16 April 2012, sought orders in the nature of injunctions, directed to bringing about the end of the alleged surveillance of the appellant, and requiring the respondents to explain the reasons for conducting that surveillance. This application was not pursued. In any event, it raised no issue relevant to any of the grounds of appeal. 12 The second interlocutory application was filed on 19 July 2012. The appellant sought to rely on further evidence that would have expanded the case beyond what was before the primary judge. He also sought an adjournment "for preparing submissions" and leave to increase his outline of submissions beyond 10 pages, to accommodate a proposed statement of claim that he said should have been before the primary judge. In our view, the appellant had had sufficient time to prepare submissions. He placed before the Court lengthy written submissions. The appellant referred in his oral submissions to other difficulties in preparing his appeal, but we were not persuaded that those matters constrained him in prosecuting his appeal. 13 Similarly, we saw no basis for acceding to the application that leave be given to increase the submission to beyond 10 pages to accommodate a proposed statement of claim. We had read the written submissions filed by the parties. The appellant's written material in support of his appeal far exceeded 10 pages. We did not accept as a statement of claim a document forwarded to the Court the day before the hearing of the appeal, because the appellant said it was by way of background and because it was not a document which had been before, or had been foreshadowed before, the primary judge. 14 The third interlocutory application was filed on 27 July 2012. The appellant sought the release of all the sealed affidavits, apparently so that they could be included in the appeal book. We considered that that material did not go to any of the grounds of the appeal. In particular, there was no ground of appeal that challenged the primary judge's conclusions at [7] of her second reasons for judgment that the material before her was substantially irrelevant, contained serious allegations that were largely hearsay and unsubstantiated, contained material that was scandalous and vexatious, and did not support the allegations in the statement of claim. 15 For these reasons, we dismissed the interlocutory applications.

The grounds of appeal 16 By his notice of appeal filed on 27 February 2012, the appellant appealed "from the whole of the judgment and all of the orders of the Federal Court given on 13 February 2012 at Melbourne". We took it that the appellant wished to appeal from both Order One and Order Two. Both paragraphs of Order One were interlocutory orders and could only be the subject of an appeal if leave to appeal were granted. Because Order Two was made, however, and the appellant seeks to appeal from Order Two, leave is not required. In general, any interlocutory order which affects the final result can be challenged in an appeal against final judgment: Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22 (2002) 209 CLR 478 at [8]. It may be that the order in para 1 of Order Two was also an interlocutory order, which would have required leave to appeal, but no ground of appeal was directed to that order. 17 There were eight grounds of appeal. The first two were not concerned with any issue determined by the primary judge. Grounds 3, 4, 5, 6 and 7 appeared to be directed to Order One. Only ground 8 sought to impugn Order Two directly. 18 Grounds 1 and 2 appeared to concern allegations of bias on the part of the primary judge. There was no substance to these grounds. They alleged bias because of a suggested association of the primary judge with a university that was not a party to the proceeding, and not otherwise mentioned, except that the appellant told us he had communicated with the primary judge's staff to the effect that he was involved in some controversy with that university and had invited her Honour to disqualify herself from hearing his case on that basis. There was no foundation for alleging bias, or an apprehension of bias, on the part of the primary judge. 19 Ground 3 seemed to involve a complaint that, when the proceeding had been listed for directions on 22 November 2011, another matter involving the appellant had also been listed for directions at the same time. The appellant appeared to be suggesting that he had been confused by having to deal with the two cases on the same day, and that this was a reason for his failure to provide a draft amended statement of claim to support his application for an adjournment of the trial on 13 February 2012. That suggestion cannot be maintained. The appellant was well aware of the content of the orders made on 22 November 2011. As the primary judge found at [10] of her first reasons for judgment, he had complied with those orders by filing 21 affidavits before the final date fixed for the filing of affidavits. 20 Ground 4 stated that the orders of the Court were not communicated officially to the present appellant and by the time he discovered the official orders of the Court it was too late to submit a fresh statement of claim without the Court's leave. 21 There were several reasons why this ground could not succeed. The appellant was present in court at the directions hearing on 22 November 2011, when the directions were given. As we have said in [19] above, he had filed and served affidavits in compliance with the directions. He attempted unsuccessfully to file his interlocutory application on 5 January 2012, which was in part an application for leave to file and serve an amended statement of claim. As the primary judge found at [6] of her first reasons for judgment, the appellant had been made aware on numerous occasions of the defects in his statement of claim. He had had ample opportunity to formulate a fresh statement of claim, to remedy those defects if he could. The primary judge had also taken into account what the appellant had said his proposed statement of claim would cover, when she referred at [7] of her first reasons for judgment to his inability to pursue his allegations of discrimination. 22 Grounds 5, 6 and 7 seemed to involve complaints of lack of notice to the appellant that he needed to submit a proposed new statement of claim. This misstates what occurred. The primary judge quite properly wished to understand what a proposed amended pleading might contain, in order to assess the merits of the adjournment application. Her Honour relied on the absence of any formulated proposal as a reason for refusing the appellant's application to adjourn the trial. The appellant was not denied the chance to submit a proposal as to how he might amend his pleading. The respondents had made consistent attempts to draw the appellant's attention to the deficiencies in his statement of claim, in correspondence, at the directions hearing on 22 November 2011 and in their defence. It should have been obvious to the appellant from an early stage of the proceeding that he had to give attention to how he might reformulate his statement of claim, so as to overcome the objections to it. There was no error in the primary judge proceeding as she did. 23 Ground 8 sought to impugn Order Two on the basis that the primary judge erred in upholding the respondents' submission that the Court should entertain a submission that they had no case to answer, and dismiss the proceeding, without the respondents being required to elect whether to call evidence, on the basis that the appellant's evidence could not sustain a finding against them. The appellant contended that the principles her Honour derived from Residues Treatment were not relevant, because the appellant was not allowed to present a fresh statement of claim, which he said would have supported the allegations in the affidavit material. This argument misunderstands the basis upon which the primary judge proceeded. 24 The primary judge held that the respondents were not required to make an election whether to call or not to call evidence on the basis of the matters set out at [11] of her second reasons for judgment. As well as finding that the case fell within the first two categories referred to in Residues Treatment, her Honour relied on the length of the hearing, the serious and unsubstantiated nature of the allegations, the saving of Court time and expense, and the fatal flaws in the appellant's pleaded claim. There was no error in her Honour exercising her discretion in the way she did, on the basis of those considerations. Having dealt with that procedural aspect of the case, her Honour dismissed the appellant's substantive application because there was no admissible evidence to support any of the pleaded allegations, and the application was hopeless and bound to fail. 25 To the extent that the appellant submitted he was not on notice that his case might be determined on 13 February 2012, we reject that contention as baseless. The proceeding was listed for final hearing on that day. Order Two was made at the conclusion of the trial. No further notice was necessary. 26 We also rejected as baseless the appellant's contention that the primary judge did not have regard to the entirety of the material on which the appellant relied. 27 We saw no error in either the reasoning or the conclusion of the primary judge. 28 In oral submissions, the appellant referred also to other matters that did not fall within the grounds of appeal. He attempted to make submissions to the effect that, according to the rules of evidence, some of the affidavits he filed, or some parts of them, were admissible. These submissions could not be entertained in the absence of a ground of appeal directed to challenging the primary judge's conclusions at [7] and [13] of her second reasons for judgment (see [8] and [9] above). In any event, merely to show that some parts of the appellant's material might have been admissible on a technical basis would not overcome the problem that the primary judge rejected the appellant's evidence on four separate bases. Her Honour determined that the material was substantially irrelevant. She described it as containing serious allegations that were largely hearsay and unsubstantiated, which we take to mean that there were assertions unsubstantiated by reference to source material or facts that were themselves the subject of evidence. She described it as scandalous and vexatious. Most importantly, she said that the material, taken at its highest, did not support the allegations in the statement of claim. These were findings that went beyond technical inadmissibility and dealt with substance. For them to be challenged in this appeal, it would have been necessary for the appellant to formulate grounds of appeal dealing with the challenges, to give the respondents fair notice of the case they had to meet on appeal. This was not done. 29 For those reasons we dismissed the appeal.

Costs 30 In their written outline of submissions, the respondents sought an order that the appellant pay their costs of the appeal, assessed on an indemnity basis. Those costs were said to have been estimated to be in the order of $8,000-$10,000. When pressed on the issue in oral submissions, counsel for the respondents said they would accept the same costs order as was made at first instance, when costs were fixed in the sum of $4,000. We were satisfied that this was an appropriate course to take, having regard to the fact that the respondents undertook responsibility for preparing the appeal papers, and to the fact that they were required to respond to the lengthy and diffuse written submissions of the appellant. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Gray, Edmonds and Robertson.