VCAT Act 1998 - S.75 - application to strike out proceedings - failure by applicants to particularise their claim - considerations relevant to dismissing a proceeding - proceeding dismissed

Worldwide Enterprises Pty Ltd ( ACN: 083 154 741) & Morris Goodman

Worldwide Enterprises Pty Ltd & Anor v Westpac Banking Corporation (Civil Claims) [2010] VCAT 1125

1. The proceeding is dismissed pursuant to section 75 (1) (a) of the Victorian Civil and Administrative Tribunal Act 1998.
2. Liberty is granted to the respondent limited to the question of any application it may choose to make for its costs, with notice in writing that such an application is to be made by 4 p.m. on 16 July 2010.

1. The first applicant ("Worldwide") is a company which, among other things, was the importer of food products which it on sold to its clients amongst which were supermarkets.
2. The second applicant (" Mr Goodman") is a director of the first applicant. He is the operative director of Worldwide.
3. The application before me is made pursuant to sections 75 and 77 of the Victorian Civil and Administrative Tribunal Act ("the Act").
4. Mr Goodman appeared in person. He also announced an appearance on behalf of the first applicant. Mr Nichol of counsel appeared for Westpac.

1. The applicants claim comprises:
   • An application to Civil Claims List dated 3 June 2008 with an attachment bearing the same date ("the application").
   • An extrapolation of the basis of the claim dated 24 November 2008 comprising eight numbered pages and a further five unnumbered pages headed "Background" ("the particulars of claim").
2. Essentially Mr Nicoll submitted that the claim made by Worldwide and Mr Goodman are incomprehensible.
3. Mr Goodman on the other hand submitted that he is a litigant in person without any legal training and has done his best to draft the documents, which he was adamant, were not only comprehensible, but that Westpac was acutely aware of the nature of his claim and that it was a sham for it to deny its level of awareness of it.
4. Ultimately the application made by Westpac focused upon the claim and the particulars of claim and what they disclosed.

1. Section 75(1) (a) and (b) invest the tribunal with a discretion to order summary dismissal or striking out all or any part of the proceeding if the tribunal is of the opinion that the proceeding, or all or any part of it, is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process.
2. Subsection (5) provides that whether or not an application is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process is a question of law.
3. The authorities disclose the following principles which are relevant to this application:
   • The onus is on the respondent to establish that the discretion should be exercised in its favour to either summarily dismiss or strike out all or any part of the proceeding.
   • In the discharging of that onus the respondent must establish that there is no real question to be tried or where the tribunal is satisfied that the proceeding is undoubtedly hopeless, obviously unsustainable in fact or in law or bound to fail.[1]
   • The standard which the respondent must achieve in the discharge of the onus has been variously described as requiring the exercise of great care, it being "clear" that there was no question to be tried;[2] that "great caution" should be exercised by the tribunal in determining whether there is no real question to be tried;[3] that such an application is "a serious matter" and the onus is "a heavy one";[4] that the tribunal should be satisfied that it is "very clear indeed" that the claim is hopeless, unsustainable and bound to fail,[5] and that the onus is a "high one".[6]
   • The tribunal is obliged to proceed on the assumption that the applicants will be able to prove each fact alleged in their claim.[7]
   • The application is interlocutory in nature. The tribunal, therefore, should not proceed to entertain an application pursuant to section 75 unless the applicants indicate that the whole of their case is contained in the material which they have put before the tribunal.[8]
   • If the application is based upon the applicants defective formulation of the claim, then the tribunal must consider that the tribunal is not a court of pleading. A failure to particularise a claim does not of itself give foundation to a finding that the proceeding is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process.[9]

1. The claim makes a number of very serious and broad allegations, but fails to particularise the allegations. The allegations include:
   • That bank officials acted incompetently, dishonestly, negligently and unconscionably in dealings with its customer.
   • Unauthorised wrongful payment in breach of trading conditions struck between the applicants and the respondent.
   • Intentional undervaluing of collateral of the applicants driven by a motive to place a financial squeeze upon the applicants and prevent the expansion of the first applicant's business.
   • Unconscionable conduct in relation to the use by the respondent of an adverse exchange rate which resulted in a loss of profit to the applicants.
   • Loss of $150,000 at the least in lost custom.
   • Loss of profits of $500,000.
2. Member S Liden made orders on 24 September 2008 at a directions hearing which must have demonstrated to Worldwide and Mr Goodman what particulars were required. The specific orders are as follows:

"2 (i) A chronological history of the Applicant's relationship with the Respondent, including the date upon which it entered into a business relationship with the Respondent and the dates, and copies, any written agreement between the Applicant and the Respondent; and

(ii) an explanation of the legal basis of the claim; and

(iii) a list of a specific acts or omissions on the part of the Respondent which the Applicant intends to rely upon in support of the claim, including details of the dates on which such acts or omissions are alleged to have occurred, the names and position of the person or persons involved and an explanation of why and how those act to remissions support the claim; and

(iv) A description of the specific components or items upon which the total amount claimed as loss or damage has been calculated on the amount of each such component or item."

1. Mr Goodman drafted particulars pursuant to that order dated 24 November 2008.[10] However, the particulars do not follow the very helpful formula ordered by Member S Liden.
2. Instead Mr Goodman prepared a chronology in paragraph 7 of the particulars of claim which contains a reference to dates upon which specific events occurred comprising some 45 events.
3. The chronology is wholly inadequate. It merely identifies the date when an event is said to have an occurred, and most often with an associated description of what occurred on that date which is both cryptic and difficult to determine where the event and its associated description fits in with the broader allegations made in the claim.
4. In paragraph 8 Mr Goodman sought to explain the legal basis of the claim. It is also wholly inadequate. It merely identifies sections of the Fair Trading Act 1999 and the Trade Practices Act 1974 which have allegedly been contravened by Westpac.
5. What must firstly be observed is that the Tribunal has no jurisdiction to entertain a claim under the Trade Practices Act 1974. In any event Mr Goodman abandoned any claim under that Act.
6. Secondly, no attempt was made to match the facts in the chronology with particular sections of the Fair Trading Act 1999 followed by a statement particularising the nature and the extent of the contravention of sections of that Act.
7. In paragraph 9 Mr Goodman particularised specific acts or omissions on the part of Westpac. All that can be said about the narrative which followed is that it is discursive and does not identify specific acts or omissions by matching the same with sections of the Fair Trading Act 1999 followed by a statement particularising the nature and extent of the contravention of the section of that Act.
8. In paragraph 10 Mr Goodman particularised the claim for loss and damage. Again no attempt was made to match the alleged loss and damage with any of the facts in the chronology and contraventions of sections of the Fair Trading Act 1999. The allegations are simply bald allegations referring to dates upon which orders were made, the cost to Worldwide and the net profit that Worldwide expected to make when the goods were on sold to a supermarket.
9. The remaining five pages are headed "background". Like the particulars of specific acts or omissions in paragraph 9 it suffers from being discursive and fails to identify the very defects which I have observed are present in the preceding paragraphs of the particulars of claim. It does not add anything materially to Mr Goodman's attempt to comply with the order.
10. Furthermore, Mr Goodman was in receipt of the outline of Westpac's submissions dated 24 December 2009 relevant to its application pursuant to sections 75 and 77.
11. If Mr Goodman required a reminder of where the defects lay in the claim and the particulars of claim the outline of submissions did that in a very direct and compelling way.
12. Despite the order and the outline of Westpac submissions, Mr Goodman failed to take heed of the very serious attack which was to be made upon the claim and the particulars of claim.
13. At the commencement of the application Mr Nichol opened the application and referred to the order and the outline of submissions. He submitted that if Mr Goodman intended to expand upon the claim and the particulars of claim by reference to evidence, then Mr Goodman should give evidence so that it could be tested.
14. I reminded Mr Goodman of the submission made by Mr Nichol. And on other occasions during the hearing. When I did so it became very clear to me that Mr Goodman relied upon the claim and the particulars of claim, and what he described as Westpac's knowledge of his claim. He evinced no intention to supplement the claim and the particulars of claim by evidence.
15. I am mindful that the application is not a full hearing of the proceeding, and therefore, I was concerned to understand from Mr Goodman whether the material put to me by way of the claim and the particulars of claim comprised the whole of his case, or whether there was other evidence which they could call to support their claim.
16. Despite the opening made by Mr Nichol and my reminders to Mr Goodman he nonetheless pressed ahead and was adamant that the claim and the particulars of claim were a full answer to the application. I took his submission in that regard on face value and operated on the basis that he expected me to determine the application solely on the basis of the claim and the particulars of claim.

1. In Barbon v West Homes Australia Pty Ltd[11] Ashley JA made the following the very relevant observation regarding the necessity for a party to particularise a claim brought in the tribunal:

"I would not want it thought from moment, because the tribunal is not a court of pleading, and because of the Act encourages a degree of informality in proceedings, that Rafferty's Rules should prevail. They should not. Any party, perhaps particularly a party facing a long, drawn out hearing on the tribunal-and I note in this case an estimate that the Tribunal hearing would extend to some nine weeks-is well entitled to know what case it must meet before the hearing commences. That is not to say that the case must be outlined with exquisite particularity. It is not to say that a defendant is entitled to evidence rather than particularisation. Nonetheless a defendant is entitled to expect that a claim will be laid out with a degree of specificity such that, if it is obvious that the claimant seeks to pursue a claim which is untenable, that can be the subject of an application before trial; such that, moreover, if adequate particularisation is not provided, the matter will be clear to the tribunal on application by an aggrieved party."[12]

1. Mr Nichol submitted that from the volume of the material which Mr Goodman has produced he has not clearly laid out any claim with any degree of specificity.

1. Mr Nichol submitted that I should dismiss the proceeding on the basis that it frivolous, vexatious, misconceived or lacking in substance and is otherwise an abuse of process.
2. The claim standing alone has not laid out the claim of Worldwide and Mr Goodman with any degree of specificity. All that can be said of the claim is that it makes broad allegations without any particulars.
3. The claim and the particulars of claim require Westpac to tease out what might amount to an allegation of fact supporting an allegation that a section of the Fair Trading Act 1999 has been contravened, and that the allegations of loss are in some way connected to any one of the many allegations of contravention of that Act made by Worldwide and Mr Goodman.
4. A claim must be formulated sufficiently for each component of the claim to be clearly laid out so that the respondent to the application can lay out whether it admits or denies any part of the application, and in that way the real issues which arise for consideration can be ventilated before the Tribunal.

1. On the basis of the foregoing analysis of the proceeding I have reached the conclusion that it is a lacking in substance.
2. Therefore, I think it is unnecessary for me to determine whether it is also frivolous, vexatious, misconceived and an abuse of process.
3. However, for the sake of completeness and to deal with the submission made by Mr Nichol that the proceeding is frivolous, vexatious, misconceived, lacking in substance and an abuse of process I only wish to make the following observations.
4. It may be that the proceeding is also frivolous because of its lack of substance. It may also be that because it lacks substance it is likewise misconceived.
5. A fair deal of time was taken up by Mr Nichol that the manner in which Worldwide and Mr Goodman has prosecuted the proceeding amounts to vexation, and the pursuit of Westpac through the Tribunal is an abuse of process.
6. It occurs to me that there are elements of frivolousness, vexation, misconception and abuse of process in the way in which Worldwide and Mr Goodman have chosen to prosecute the proceeding.
7. It seems to me to be unnecessary to go beyond the primary finding I have made that the proceeding lacks substance. Such a finding is sufficient for me to summarily dismiss or strike out the proceeding.
8. In the end I am persuaded that I should dismiss the proceeding. In short my reasons for reaching that conclusion are that neither Worldwide nor Mr Goodman seem to have any interest in complying with the order of Member S Liden. It was an eminently sensible and helpful order. Had they done so then the substance of their claim might have surfaced.
9. I will reserve liberty to apply to Westpac relevant to the application it may choose to make for its costs of the proceeding.
10. Considering the order that I have made it is unnecessary for me to consider the other application made by Westpac pursuant to section 77 (1) to strike out the proceeding and refer it to the Supreme Court.

[1] Fancourt v Mercantile Credits Pty Ltd [1983] HCA 25; (1983) 154 CLR 87 at 99; Lay v Alliswell Pty Ltd (2001 VSC 385 at paragraph 14; State Electricity Commission of Victoria v Rabel [1998] 1 VR 102, and Forrester v AIMS Corporation [2004] VSC 506

[3] Taitapanui v HIA Insurances Services Pty Ltd [2002] VCAT at paragraph 8

[4] Burke v Victoria [2002] VCAT 1397 at paragraph 3

[5] Arrow International Australia Pty Ltd v Indevelco Pty Ltd [2005] VCAT 306

[6] Zaparenko v Perpetual Trustees Victoria Ltd [2006] VCAT 2147 at paragraph 11

[7] Klona v Cummins Engine Co Pty Ltd [2002] VCAT 733

[8] State Electricity Commission of Victoria v Rabel (supra)

[9] Barbon v West Homes Australia Pty Ltd [2001] VSC 405 at paragraph 16-17

[10] The particulars are not dated. Mr Nichol submitted that they were either lodged or served on 24 November 2008. Mr Goodman did not disagree that for identification purposes of the particular should be identified as being provided on 24 November 2008

[11] [2001] VSC 405