Abraham v Jasrika Pty Limited

[2008] NSWSC 405

CITATION:	ABRAHAM & Ors v JASRIKA PTY LIMITED & Ors [2008] NSWSC 405 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	22 April 2008
JUDGMENT DATE :	2 May 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Simpson J
DECISION:	1. The Further Amended Statement of Claim is struck out; 2. The plaintiffs are to pay the defendants’ costs of the application; 3. The defendants’ Notice of Motion filed on 16 April 2008 is stood over.
CATCHWORDS:	PRACTICE AND PROCEDURE - DEFAMATION - Notice of motion seeking summary dismissal of proceedings - whether frivolous or vexatious - whether pleading discloses reasonable cause of action - alternatively order striking out pleading - whether defamation claim statute barred - whether the plaintiffs have cause of action able to be properly formulated - repeated failure by the plaintiffs to provide proper particulars - failure to particularise special damage or malice in pleading injurious falsehood - expense and oppression to defendants - further amended statement of claim struck out - notice of motion stood over
LEGISLATION CITED:	Fair Trading Act [1987] Defamation Act 2005 Trade Practices Act 1974 (Commonwealth) Limitation Act
CASES CITED:	General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125
PARTIES:	Yael Abraham (First Plaintiff) Assetnet Holdings Pty Ltd (Second Plaintiff) Jasrinka Pty Ltd - First Defendant Norman Bruce Berry - Second Defendant James Kerr (Third Defendant)
FILE NUMBER(S):	SC 020258/2007
COUNSEL:	B Goldsmith (Plaintiffs) M Richardson (Defendants)
SOLICITORS:	Goldsmiths Lawyers (Plaintiffs) Deacons (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Simpson J

2 May 2008

020258/2007 Yael ABRAHAM & Anor v JASRIKA PTY LIMITED and Ors

JUDGMENT

1 SIMPSON J: By Notice of Motion filed on 16 April 2008 the three defendants seek an order that the proceedings be dismissed as frivolous and vexatious and/or as disclosing no reasonable cause of action. The proceedings were commenced by a Statement of Claim filed on 30 July 2007. An Amended Statement of Claim was filed on 20 February 2008 and a Further Amended Statement of Claim (“the FASC”) on 16 April 2008. The Statement of Claim named two plaintiffs and four defendants; the Amended Statement of Claim named the same two plaintiffs, and three of the original four defendants, as does the FASC.

2 UCPR 13.4(1) permits orders of the kind sought where:

· the proceedings are frivolous or vexatious, or

· no reasonable cause of action is disclosed, or

· the proceedings are an abuse of process of the Court.

3 The Rule confers a discretion. The discretion may be exercised to dismiss the proceedings generally or in relation to any part of the claim.

4 The defendants invoke both the first and second bases for the order. They assert that the proceedings are frivolous or vexatious and/or that they disclose no reasonable cause of action. It will be necessary to explain the basis on which these assertions are made. Essentially, they claim that the FASC is defective and that, having regard to the history of the proceedings, the plaintiffs ought not be given any further opportunity to remedy the defects. Accordingly, counsel for the defendants declined an invitation to adopt some lesser position, such as seeking specific orders concerning rectification of the asserted defects. He did, however, adopt a “fall back” position seeking, as an alternative to summary dismissal, an order striking out the FASC. This, presumably was in reliance on UCPR 14.28, which permits the Court to order that the whole or any part of a pleading be struck out where:

· it discloses no reasonable cause of action; or

· has a tendency to cause prejudice, embarrassment or delay in the proceedings; or

· is otherwise an abuse of the process of the Court.

5 That the discretion summarily to dismiss proceedings is to be exercised sparingly and only in a clear case is well established; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125, where the various tests propounded are set out.

6 Mr Goldsmith, solicitor, who appeared for the plaintiff, adopted a similarly resolute position to that taken on behalf of the defendants. While acknowledging some defects in the pleading, he declined to make any application for leave to amend. He resisted the defendants’ application, arguing that no proper basis for summary dismissal has been established.

7 With those preliminaries, it is necessary to spell out, in some detail, the history of the proceedings.

History

8 The Statement of Claim was filed on 30 July 2007. It named Yael Abraham as the first plaintiff and Assetnet Holdings Pty Limited as second plaintiff. It named four defendants: Jasrika Pty Limited, Bruce Berry, James Kerr and “Greenvale Trust”.

9 It is evident that the Statement of Claim was filed by the plaintiffs acting on their own behalves, no doubt through the agency of the first plaintiff, without, apparently, legal advice or representation.

10 The Statement of Claim purported to plead causes of action in “Injurious Falsehood”, for “Breaches of the Fair Trading Act [1987]”, and “Defamation of Character’. In respect of the last, it provided what was described as “Details of Publication”. It will be necessary to return to the “details” so provided.

11 On 9 October 2007, in accordance with directions given by Nicholas J, solicitors acting for the defendants filed and served a Notice of Objections to the Statement of Claim. The objections stated included (but were not limited to):

· a complaint that, to the extent that the claim in defamation was based upon identified publications (which was itself the subject of another objection), no publication made any mention of the second plaintiff and no particulars of identification were given;

· a complaint that, contrary to UCPR 15.20, no particulars establishing the entitlement of the second plaintiff to sue (having regard to the provisions of the Defamation Act 2005, s 9), were provided;

· numerous complaints concerning the manner of pleading the imputations alleged to have been conveyed;

· complaints concerning the absence of adequate particularisation of malice, falsity and special damage in relation to the injurious falsehood claim;

· complaints concerning the absence of particularisation of falsity and damage in respect of the Fair Trading Act claim.

12 A directions hearing was listed for 10 December 2007, but the plaintiffs failed to appear. On 13 December 2007 orders were made, including an order that the plaintiffs file an Amended Statement of Claim by 6 February 2008. This was not done until 18 February 2008. The Amended Statement of Claim also appears to have been prepared, not by a qualified lawyer but probably by the first plaintiff, although some of the language would suggest the behind the scenes hand of a legal practitioner. This document named the same two plaintiffs, but only the first, second, and third of the defendants previously named. The Amended Statement of Claim purported to plead causes of action in “Injurious Falsehood”, “Breaches of the Fair Trading Act”, and “Defamation of Character”.

13 Under the heading “Injurious Falsehood” and in narrative form, the Amended Statement of Claim pleaded that, during various ranges of dates in 2005 and, in a few cases in 2006 or 2007, either the third defendant or the second defendant or the second and third defendants together had, on numerous occasions, made communications concerning the first plaintiff to named individuals. No less than 15 such communications were pleaded.

14 Under the heading “Defamation of Character” the Amended Statement of Claim pleaded that, on two occasions, each in 2006, the second and third defendants had published, to named individuals, certain imputations that defamed either or both plaintiffs.

15 On 20 February 2008 solicitors for the defendant notified objections to the Amended Statement of Claim. The objections were numerous and plainly had some validity because, on the same day, Nicholas J ordered that the Amended Statement of Claim be struck out. His Honour gave leave to the plaintiffs to file a FASC by 12 March 2008.

16 On 18 March 2008 Messrs Goldsmiths Lawyers advised the defendants’ solicitors that they had received instructions to act for the plaintiffs. On 19 March 2008, by consent, the time for filing the FASC was extended to 7 April 2008. The FASC was served on 11 April 2008. The same three defendants are named but, on this occasion, the first defendant is identified as “Jasrika Pty Ltd as trustee for the Greenvale Trust”.

17 After making some preliminary averments, the FASC pleads causes of action in defamation, injurious falsehood, misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and breaches of s 42 of the Fair Trading Act.

18 The defamation claim asserts the publication of five separate oral publications that defamed “one or both of the plaintiffs” by the second defendant (two publications) and the third defendant (three publications). The dates of the publications alleged are specified as December 2006, August 2006, September 2006, and two in November 2006. Five individuals are named as the recipients of the oral publications. By reason of the dates of the alleged publications, the claims in defamation are governed by the Defamation Act 2005.

19 The injurious falsehood claim asserts another five publications or representations, in substantially similar terms to those the subject of the defamation claims, but on dates in February or July 2005. All are attributed to the third defendant. The individuals to whom the publications are alleged to have been made are named, only one of them being also named as a recipient of the publications said to have been defamatory.

20 Also to be noted at this point is the pleading concerning the first plaintiff, Jasrika Pty Limited. There is no assertion of defamation or injurious falsehood made against the first defendant, which is expressly pleaded to have been the trustee for “Greenvale Trust”, and to have carried on business under the name of “Burton of Bowral”, “inter alia, as estate agents”. Also averred against the first defendant (in para 7) is that it:

“is vicariously liable for the acts of the second and third defendant … “

21 Under the heading “Misleading and Deceptive Conduct” the FASC alleges that the first defendant:

“ … engaged in conduct in breach of s 52 of the [Trade Practices] Act.”

The publication against the second and third defendants under the defamation and injurious falsehood claims are said also to contribute to misleading and deceptive conduct and the breaches of the Fair TradingAct .

22 In particulars subscribed to this paragraph it is asserted that:

“the first defendant is vicariously liable for the acts of the second and third defendants and/or is liable for such acts by virtue of s 84(2) of the [Trade Practices] Act.”

23 On 14 April 2008 the defendants’ solicitors served a Notice of Objections to the FASC. On 16 April 2008 the defendants’ solicitors filed the Notice of Motion the subject of the present judgment.

24 The argument advanced in support of the Notice of Motion was essentially based upon the same complaints about the FASC that were notified in the Notice of Objections.

25 The objections to the FASC, on the basis of which the defendants now seek summary dismissal, come under the following general headings:

· Limitation Act 1969 - This complaint concerns only the claim in defamation: (it is the defendants’ contention that each claim in defamation is statute barred);

· the absence of any pleading to the effect that the second plaintiff (which is not named in any of the matters complained of) could have been identified;

· the absence of any pleading of factual matters that would create liability in the first defendant;

· deficiencies in pleading the injurious falsehood claim, being failure adequately to particularise special damage or malice;

· deficiencies in the pleading of the claim so far as it is set out in para 36, which is in the following terms:

“36. Furthermore, the defendants engaged in conduct that was misleading and/or deceptive and/or likely to mislead and/or deceive in that they represented the first plaintiff was under investigation by the Office of Fair Trading (‘the OFT’) when the OFT had found on 2 April 2007 that there was no evidence to suggest disciplinary action against the first plaintiff and following a complaint to the OFT by the defendants on 16 February 2005. Further particulars of the representations will be provided to the defendants.”

26 I will deal with the various objections in turn.

1. Limitation Act


Are the claims in defamation statute barred?

S 14B of the Limitation Act prescribes a limitation period of one year for the commencement of claims in defamation. As I have indicated above, the defamatory publications alleged in the FASC are said to have been made in various months (no more specific date is pleaded) between August and December 2006.

27 The competing positions of the parties are these:

Counsel for the defendants argued that these publications were pleaded for the first time in the FASC (filed 16 April 2008). If that is correct, then those claims are, prima facie, statute barred. Mr Goldsmith for the plaintiffs, however, contended that they are, in reality, the same publications as were the subject matter of the Statement of Claim filed in July 2007. If this is so, then they are within time.

28 The dispute requires analysis of the successive pleadings in defamation.

29 The Statement of Claim was plainly deficient for a number of reasons. However, under the heading “Details of Publication”, the following alleged publications were pleaded (all attributed to the third defendant):

“she is dishonest and should not have a real estate license”
“she is in the business of putting offers to vendors which are nonexistent”
“she acted improperly while in my employment”
“she is being investigated by the Office of Fair Trading”
“she should not be trusted and you ought not to do business with her”
“the town of Bowral does not need an agenst (sic) like her”
“she is dangerous”

All publications were pleaded to have been made between August and December 2006.

30 It is unnecessary to examine the allegations of defamation made in the Amended Statement of Claim. They appear to concern different publications on dates in 2007, and to different recipients, and the language of the communications bears little if any relation to the language of the communications alleged in either the Statement of Claim or the FASC. The Amended Statement of Claim identifies many individual recipients of what was alleged to have been communicated which did not appear in the Statement of Claim and has not been replicated in the FASC.

31 In the FASC, what is alleged to have been communicated by the first and/or second defendants was set out in Schedules lettered “A” to “E”. The communications alleged were:

(A)

“If I were you, I wouldn’t do business with Yael Abraham. She acted unethically when she worked for us and I had to let her go. She did such things as put offers that did not exist, falsified a signature on a listing arrangement and other things. She is dishonest and does not have a current license at present. This town is better off without her.”
(B)
“Yael no longer works for us. She was dismissed for unethical and improper conduct. No-one will employ her in town. I cannot give you her details.”
(C)
“If I were you, I wouldn’t do business with Yael Abraham. She acted unethically when she worked for us and I had to let her go. She did such things as put offers that did not exist, falsified a signature on a listing arrangement and other things. She is dishonest and does not have a current license at present. This town is better off without her.”
(D)
“Yael Abraham is not to be trusted. She is being investigated by the authorities. She has been disqualified and cannot sell real estate. She acted improperly. We let her go; she did many questionable things while employed by us.”
(E)
“Yael Abraham is not to be trusted. She is being investigated by the authorities. She has been disqualified and cannot sell real estate. She acted improperly. We let her go; she did many questionable things while employed by us.”

32 As I have said above, and as is apparent from the history I have outlined, the Statement of Claim was plainly, and in many respects, defective and inadequate. However, the point for present determination is whether, properly construed, it amounted to a pleading of the defamatory publications now alleged in the FASC. On examination, a significant correlation is revealed in the substance of what was pleaded in the Statement of Claim and what is more specifically pleaded in the FASC. The dates on which the communications are alleged to have been made are essentially identical, although not very specific, particularly in the Statement of Claim. A principal point of difference is that in the Statement of Claim all publications are attributed to the third defendant. No allegation is made against the second defendant; in the FASC three of the publications are attributed to the second defendant and two to the third defendant.

33 I have come to the view that this is not a matter of great significance, given the inadequacy of the original pleading. In my opinion in determining whether a claim has been made within time, a liberal approach should be taken. The marked overlap between the substance of what was pleaded in the Statement of Claim and the substance of what is pleaded in the FASC, together with the coincidence of dates on which the publications are alleged to have been made, persuades me that what is now pleaded in the FASC is an amended version of what was pleaded in the Statement of Claim.

34 Accordingly, I am satisfied that the claim in defamation is not statute barred and the proceedings should not be dismissed for that reason.

2. The Second Plaintiff

35 The complaint made in relation to the pleading concerning the second plaintiff is simple and can be dealt with briefly. It concerns the claim in defamation. In none of the publications pleaded is the second plaintiff mentioned. Accordingly, if it is to sue in defamation, it is necessary that it plead facts and circumstances which, if proved, would establish that some recipient or recipients of the communications would have identified it. No such particulars are pleaded.

36 Ordinarily, it would be a simple matter to grant leave to the second plaintiff to remedy this defect by subscribing appropriate particulars to the FASC. However, the position is not so simple. Precisely the same objection was taken both to the Statement of Claim and the Amended Statement of Claim. That has had no effect in procuring an appropriate pleading.

37 While some latitude might be permitted to a plaintiff who is not legally represented, it is not to be overlooked that when the plaintiffs’ present solicitors became involved, they had the advantage of, at least, the objections to the Amended Statement of Claim. That much is clear from the correspondence.

38 A further defect is one that has already been mentioned; it is that by reason of s 9 of the Defamation Act, only corporations which are non-profit organisations, or which have fewer than ten employees (and are not related to another corporation) may bring proceedings for defamation. By UCPR 15.20, a corporate plaintiff bringing proceedings in defamation is required to particularise facts and circumstances relied upon to establish that it is not, by s 9, precluded from doing so. Not only are no such particulars to be found in the FASC, they did not appear in the Statement of Claim or the Amended Statement of Claim. This was also brought to the attention of the plaintiffs in the objections to the Statement of Claim and the Amended Statement of Claim and has yielded no better results than the complaints concerning identification.

39 The repeated failure on the part of the plaintiffs to provide appropriate particulars, despite specific attention being drawn to the deficiencies, is capable of giving rise to an inference that such particulars cannot be given. This would suggest that no proper cause of action is available to be pleaded on the part of the second plaintiff. Certainly, as presently framed, the FASC does not disclose a cause of action in relation to the claim made by the second plaintiff. Indeed, it seems to me, so much was acknowledged by Mr Goldsmith in his response to the objections by the defendants. However, Mr Goldsmith expressly reserved his final position in that respect.

40 Alone, these defects would not, at this stage (bearing in mind the timing of the plaintiffs’ legal representation) be sufficient to warrant summary dismissal. It remains to be seen whether, taken in conjunction with any other successful objections, they would justify that severe action.

3. The First Defendant

41 I have set out above the pleadings so far as the first defendant is concerned. There is no adequate pleading of facts and circumstances which would give rise to “vicarious liability” in it. This matter has, on two previous occasions, also been drawn to the attention of the plaintiffs. It falls into the same category as the objections concerning the pleading in respect of the second plaintiff.

4. Failure to particularise falsity, special damage and malice (injurious falsehood claim)

42 There is little to say about these objections. They are well taken. The FASC is deficient in the respects alleged.

5. Para 36 of FASC

43 I have set out in full para 36. It is incomprehensible. It is not a pleading to which the defendants could be expected to respond.

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44 The deficiencies I have identified are various. Moreover, they have been repeated, notwithstanding all proper efforts made on behalf of the defendants to achieve rectification. The first question is whether they are such as to warrant an inference that the proceedings are frivolous and/or vexatious; the second whether they are such as to warrant an inference that the pleadings do not disclose a cause of action; and the third, if the answer to any of the preceding questions is in the affirmative, is whether the discretion of the Court ought to be exercised so as to bring the proceedings to summary termination.

45 As I have indicated above, the FASC as presently framed does not disclose a reasonable cause of action. It is, however, relevant to consider whether it is such as to permit an inference that either plaintiff has or both plaintiffs have a cause of action which has not yet been, (but could be) properly formulated; and, if so, whether the plaintiffs ought to be given yet another opportunity to bring the pleadings into order.

46 If I am not satisfied that either plaintiff has a reasonable cause of action, then, axiomatically, the proceedings are frivolous and/or vexatious and ought to be terminated. However, it is not only that circumstance that would permit an inference that the proceedings are frivolous and/or vexatious; that inference could also be drawn in the event that I concluded that, notwithstanding reasonable opportunities afforded to the plaintiffs, they cannot or will not formulate the pleadings in a way which would enable the matter to proceed.

47 Also relevant to the discretionary consideration is the question of expense and oppression to the defendants. There was no specific evidence as to hardship; however, the history I have recounted makes clear that the defendants have incurred considerable cost and expense since July 2007, with no apparent progress. The FASC asserts that the second and third defendants are in business as real estate agents. It is reasonable to infer that the proceedings at least constitute an unwelcome and unnecessary distraction to the conduct of the business. Those circumstances must be balanced against the rights of the plaintiffs to bring proceedings, if they have a valid cause of action.

48 It is not appropriate for the Court to indulge one litigant at the expense of another or others. Every indulgence extended to a recalcitrant party comes at a corresponding cost to the opposite party. It is unlikely that orders that the defendants be compensated for their costs will have any effect. In my opinion, the Court ought be alive to the damage caused to parties engaged in litigation with opposing parties who decline to comply with their obligations.

49 I have come to the view that the defendants are entitled to relief. The question that has exercised my mind is whether that relief ought to be the drastic and final relief of summary dismissal, or the somewhat less drastic, and not necessarily final, relief of striking out the FASC. Whereas summary dismissal would bring the proceedings to an end with no further opportunities allowed to the plaintiffs to pursue the claims they perceive they have, striking out would leave open to them the opportunity to make a further application for leave to file yet another version of the Statement of Claim. Such leave would be unlikely to be granted unless the plaintiffs were able to support the application with a viable pleading, free of the defects identified. In other words, it would allow the plaintiffs one last opportunity to pursue the claims, but only on the condition that a properly pleaded Statement of Claim can be produced. That, I have concluded, is the preferable course. While I am satisfied that the FASC discloses no reasonable cause of action, I am not able to be satisfied with the requisite degree of comfort, that there exists no reasonable cause of action, nor that the proceedings themselves are frivolous or vexatious. I will not therefore at this stage, summarily dismiss the proceedings; but nor will I dismiss the defendants’ Notice of Motion. I will make an intermediate order, striking out the FASC, but preserving the defendants’ position, leaving open the possibilities of the renewal of the application, should an acceptable Statement of Claim not be forthcoming.

50 The orders I make are:-

1. The Further Amended Statement of Claim is struck out;

2. the plaintiffs are to pay the defendants’ costs of the application;

3. the defendants’ Notice of Motion filed on 16 April 2008 is stood over.

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10/12/2008 - Alteration to year date on body of Judgment - Paragraph(s) 0