Attala v YWAM Surrey Hills Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PROPERTY LIST

S ECI 2022 04803

BETWEEN:

FR SAMEH SADEK (MARK) ATTALA	Plaintiff
v
YWAM SURREY HILLS LTD (ACN 633 581 049) & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Gobbo AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 February 2024
DATE OF JUDGMENT:	24 May 2024
CASE MAY BE CITED AS:	Attala v YWAM Surrey Hills Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2024] VSC 268

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PRACTICE AND PROCEDURE – Summary judgment – Defendant seeks summary dismissal of plaintiff’s claim – Whether plaintiff has real prospect of success on his claim – Plaintiff’s claim has no real prospect of success – Civil Procedure Act 2010 (Vic),ss 62 and 63 – Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd(2013) 42 VR 27 – Hausman v Abigroup Contractors Pty Ltd(2009) 29 VR 213 – Padella Pty Ltd v Elliott [2018] VSC 301 – Israfoods (2006) Ltd v J & D Consortium Pty Ltd [2019] VSC 323 – Silver Chef Rentals Pty Ltd v MakongAustralia Pty Ltd [2019] VSC 703 – Bendigo and Adelaide Bank Limited v Grahame [2020] VSC 86 – Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/First Defendant by Counterclaim	Mr D V Aghion, KC, with Mr P R Miller of counsel	Madison Marcus Law Firm
For the Defendants/Plaintiffs by Counterclaim	Mr S Rubenstein of counsel	Wotton & Kearney
No appearance for the Second Defendant by Counterclaim

TABLE OF CONTENTS

The application................................................................................................................................... 1

Background......................................................................................................................................... 1

Relevant provisions and principles................................................................................................ 3

Summary judgment...................................................................................................................... 3
Strike out........................................................................................................................................ 8

Non-contentious factual matters................................................................................................... 11

Plaintiff’s claims in the proceeding.............................................................................................. 15

Defendants’ defences to the proceeding..................................................................................... 16

Plaintiff’s contentions..................................................................................................................... 17

Defendants’ contentions................................................................................................................. 22

Analysis and contentions............................................................................................................... 29

Discovery, interrogatories and subpoenas.............................................................................. 30
Attribution of knowledge.......................................................................................................... 36
Aggregation of knowledge........................................................................................................ 39
Silence or non-disclosure........................................................................................................... 44

Disposition........................................................................................................................................ 45

HER HONOUR:

The application

By summons filed on 20 October 2023 (‘Application’) the first and second defendants (‘defendants’) seek summary judgment against the plaintiff pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’) and Order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) on the writ and statement of claim filed on 22 November 2022 (‘SOC’). Alternatively, the defendants seek orders pursuant to Order 23.02 of the Rules that paragraphs 13, 18, 19, 30 and 36 of the SOC be struck out or amended.[1]
[1]The relief sought in respect of caveat number AW096830D on the land described in certificate of title volume 9897 folio 474 otherwise known as 1 Kent Road, Surry Hills in the State of Victoria and caveat number AW096823A on the land described in certificate of title volume 9891 folio 432 otherwise known as 24 Durham Road, Surry Hills in the State of Victoria was not pursued. Those matters were resolved by agreement prior to the hearing of the Application.

Background

The claims made by the plaintiff in the SOC relate to a contract for the sale of two adjacent properties entered between the defendants, as vendors, and the plaintiff, as purchaser, on 15 December 2020 (‘Contract of Sale’). The relevant properties are:

(a) 1 Kent Road, Surry Hills in the State of Victoria, being the land more particularly described in certificate of title volume 9897 folio 474 (‘Kent Road Property’); and

(b) 24 Durham Road, Surry Hills in the State of Victoria, being the land more particularly described in certificate of title volume 9891 folio 432 (‘Durham Road Property’),

(collectively the ‘Properties’).

The plaintiff, Fr Attala, is a priest in the Coptic Orthodox Church. The essence of the plaintiff’s claim is that prior entering into the Contract of Sale to purchase the Properties, the defendants had knowledge of historical allegations of abuse of children in the care of the Sisters of St Joseph at the St Jospeh’s Home for Boys (‘Home for Boys’) that had operated at the Properties from around 1893 to 1981. The plaintiff contends that had that information been disclosed to him, he would not have entered into the Contract of Sale for the purchase of the Properties. The plaintiff further contends that the defendants failed to disclose material information and/or engaged in misleading and deceptive conduct. The plaintiff seeks a declaration that the Contract of Sale is void ab initio, and that it should be set aside by the Court. At the core of his contention is that the defendants knew of the historical allegations of child abuse at the Properties before entering into the Contract of Sale.

Conversely, the position of the defendants is that they did not know of the historical allegations of child abuse at the Home for Boys prior to the matter being raised by the plaintiff on 19 April 2022. On this basis, they contend that the plaintiff cannot succeed in his claim. The defendants say that an essential element of the claim – knowledge on the part of the defendants – does not exist. Accordingly, they submit that the plaintiff’s claim has no real prospect of success. Alternatively, the defendants contend that the plaintiff has failed to properly plead and particularise the alleged knowledge, such that the pleading does not disclose a cause of action and may embarrass the fair trial of the matter.

In support of the Application, the defendants rely on the following material:

(a) affidavit of John Mark Silas Brokenshire (‘Mr Brokenshire’) sworn on 19 October 2023 and exhibit JMSB-1;

(b) affidavit of Jared Paul Hoover (‘Mr Hoover’) sworn on 20 October 2023 and exhibit JPH-1;

(c) affidavit of Jennifer May Rentsch (‘Ms Rentsch’) sworn on 20 October 2023 and exhibit JMR-1;

(d) affidavit of Kenneth Neil Mulligan (‘Mr Mulligan’) sworn on 20 October 2023 and exhibit KNM-1;

(e) affidavit of Peter David Bremner ('Mr Bremner’) affirmed on 20 October 2023 and exhibit PDB-1;

(f) affidavit of Stephen Martin Aherne (‘Mr Aherne’) sworn on 20 October 2023 and exhibit SMA-1;

(g) affidavit of Thomas Charles Hallas (‘Mr Hallas’) sworn on 20 October 2023 and exhibit TCH-1;

(h) affidavit of Nicholas John Matthews (‘Mr Matthews’) sworn on 20 October 2023 and exhibit NJM-1;[2] and

(i) written outline of submissions filed on 18 December 2023.

[2]In his written submissions, the plaintiff contended that not all of the five directors of the defendants had filed and sworn affidavits in support of the Application. Mr Matthews, it was said, had not done so. When the matter came on for hearing, the plaintiff conceded that Mr Mathews had sworn and filed an affidavit in support of the Application.

The plaintiff opposes the Application and relies on the following material:

(a) affidavit of Cristian Fuenzalida, solicitor, sworn on 16 February 2024 and exhibit CF-01; and

(b) written outline of submissions filed on 16 February 2024.

There was no appearance for the second defendant by counterclaim.

Relevant provisions and principles
Summary judgment

The requirements which must be satisfied in order to obtain summary judgment are well-known. They were summarised by Matthews JR (as her Honour then was) in Padella Pty Ltd v Elliott,[3] adopted by Sloss J in Israfoods (2006) Ltd v J & D Consortium Pty Ltd[4] and further detailed by Sloss J in Silver Chef Rentals Pty Ltd v Makong Australia Pty Ltd[5] and in Bendigo and Adelaide Bank Limited v Grahame.[6]
[3][2018] VSC 301.
[4][2019] VSC 323, [41].
[5][2019] VSC 703, [49]-[60].
[6][2020] VSC 86, [22]-[38] (‘BABL’).

A defendant making an application under s 62 of the CPA must follow the procedure in Part 3 of Order 22 of the Rules.[7] Rule 22.16 of the Rules provides that a defendant shall make an application for summary judgment under s 62 of the CPA, and r 22.17 of the Rules provides that the application is to be made by summons. Pursuant to r 22.18 of the Rules, affidavit material is admissible on the application and may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted. Pursuant to r 22.19 of the Rules, a plaintiff may show cause against an application by affidavit or otherwise to the satisfaction of the Court.
[7]Supreme Court (General Civil Procedure) Rules 2015 (Vic) pt 3 ord 22 rr 22.16-22.23 sets out the procedure for applications by a defendant.

Section 63 of the CPA provides that, subject to s 64 of the CPA, the Court may give summary judgment in a civil proceeding ‘if satisfied’ that a claim has ‘no real prospect of success’.

Section 64 of the CPA provides that:

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

Section 65 of the CPA provides that the summary judgment provisions of the CPA are in addition to and do not derogate from any powers a Court has under the Rules in relation to the summary disposal of any civil proceeding. The ability to stay or dismiss a proceeding is also a feature of the Court’s inherent jurisdiction to prevent the abuse of its processes.[8]
[8]Burton v Shire of Bairnsdale(1908) 7 CLR 76, 92 (Isaacs J).

The test for summary judgment was explained by the Court of Appeal in the oft-cited case Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[9] There, the Court of Appeal set out the relevant test to be applied in determining an application for summary judgment made under ss 61 and 63 of the CPA, as follows:

(a)the test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in [General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125];
(c)it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success; and
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[10]

[9](2013) 42 VR 27, 40 [35] (Warren CJ and Nettle JA).

[10]Ibid (Warren CJ and Nettle JA, Neave JA agreeing in part at 42 [40]-[42]).

The issue for the Court is whether the plaintiff has a ‘real’ as opposed to a ‘fanciful’ chance of success noting that the power to terminate proceedings summarily should be exercised with caution and should not be exercised unless it is clear that there is no real question to be tried.

In Hausman v Abigroup Contractors Pty Ltd (‘Hausman’),[11] the Court of Appeal considered the interaction between rr 22.04 and 22.05 of the Rules, and in respect of an affidavit in support, stated that what ‘must be verified are the facts necessary to establish a good cause of action’.[12] Once the plaintiff has established the elements of its cause of action, the defendant must satisfy the Court that there is some question to be tried or some other reason to go to trial. This involves addressing the plaintiff’s claim and stating ‘clearly and concisely what the defence is, and identify the facts relied upon in support of that defence’.[13] Adopting the analysis in Hausman, it is difficult to see how a plaintiff or defendant could obtain, or resist an application for, summary judgment without supplying an affidavit of the kind required by rr 22.04 or 22.05 of the Rules or rr 22.18 and 22.19 of the Rules (as they case may be) or fashioned according to the nature of the case.[14] The principles from Hausman remain good law since the advent of the CPA.[15]
[11](2009) 29 VR 213 (‘Hausman’).
[12]Ibid, 225 [60].
[13]Ibid, 225-226 [62]-[65].
[14]Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd & Ors[2012] VSC 163, [9] (Bell J).
[15]BABL (n 6), [33].

When considering the equivalent test for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) (‘FCA Act’), Gilmour J in Nyoni v Chee Koon Hee (No 4)[16] considered that the test requires the Court to consider whether there is a ‘real issue of law and fact to be tried’ and that if a dispute centres on questions of fact the Court must decide whether the opposing party has evidence ‘of sufficient quality and weight to be able to succeed at trial’.[17]
[16][2013] FCA 948.
[17]Ibid, [14].

Further, in Pathmanathan v Healthscope Operations Pty Ltd[18] Steward J[19] identified the following principles relevant to determination of an application for summary judgment under s 31A of the FCA Act:
[18][2020] FCA 65 (‘Pathmanathan’).
[19]In his Honour’s capacity as a Justice of the Federal Court of Australia and prior to his appointment to the High Court of Australia.

(1)the legislative purpose [of s 31A] is to strengthen “the powers of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases”: Second Reading Speech of the Migration Litigation Reform Bill 2005 (Cth);
(2)the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success …;
(3)assessment of whether a proceeding or part of a proceeding has no reasonable prospect of success will necessarily require: (i) identification of the cause of action pleaded; (ii) identification of the pleaded facts said to give rise to that cause of action; (iii) a review of the evidence (if any) tendered in support of the claim for judgment; (iv) identification of the defence pleaded; (v) identification of any facts which are said to give rise to the defence; and (vi) a review of the evidence (if any) tendered in defence of the claim …;
(4)once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion …;
(5)summary disposition of a proceeding is authorised on a variety of bases. It will, for example and without limitation, be appropriate in a case: (i) in which the pleadings disclose no reasonable cause of action and their deficiency is incurable; (ii) in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and in any case which might be propounded by permissible amendment; or (iii) that is “frivolous or vexatious as an abuse of process” …;
(6)the determination of a summary dismissal application does not require a mini-trial based upon incomplete evidence to decide whether a proceeding is likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial …;
(7)an application for summary dismissal is likely to succeed if the moving party is able to demonstrate that the applicant’s success in the proceeding relies upon a question of fact that can be truly described as ‘fanciful, trifling, implausible, improbable, tenuous or one that is contradicted by all the available documents or other materials’ …[20]

[20]Pathmanathan (n 18), [8]; referring to the decision of Gordon J in Zippo Manufacturing Co v Jaxlawn Pty Ltd [2011] FCA 1125, [20].

Section 7(1) of the CPA sets out its overarching purpose, which is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. As to compliance with the CPA, the timely, cost-effective and efficient conduct of civil litigation takes into account wider public interest than those of the parties to the dispute. Section 8 of the CPA requires that the Court must ‘seek to give effect to the overarching purpose in the exercise of any of its powers’ and s 9 of the CPA provides that when making any order or giving any direction in a civil proceeding, the Court is to further the overarching purpose by having regard to the objects specified in subsection (1), being:

(a) the just determination of the civil proceeding;
(b)the public interest in the early settlement of disputes by agreement between parties;

(c)       the efficient conduct of the business of the court;
(d)      the efficient use of judicial and administrative resources;
(e)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i)        the fair and just determination of the real issues in dispute; and
(ii)       the preparation of the case for trial;

(f) the timely determination of the civil proceeding;
(g) dealing with a civil proceeding in a manner proportionate to—

(i) the complexity or importance of the issues in dispute; and
(ii) the amount in dispute.

Strike out

Rule 23.02 of the Rules provides:

Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading—
(a)       does not disclose a cause of action or defence;
(b)       is scandalous, frivolous or vexatious;
(c)       may prejudice, embarrass or delay the fair trial of the proceeding; or
(d)       is otherwise an abuse of the process of the Court—
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

The parties were in agreement as to the legal principles which apply to an application under r 23.02 of the Rules, with the plaintiff agreeing that the principles were accurately recorded in the defendants’ written submissions, the relevant parts of which are extracted below:

If only part of the pleading is objectionable and is severable from the rest, that part only may be struck out.[21] If the part is not conveniently severable, or if the pleading as a whole is defective, the court may strike it out entirely.[22]
[21]SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) [2011] VSC 492.
[22]Faruqi v Latham [2018] FCA 1328, [98]; Wheelahan v City of Casey (No 12) [2013] VSC 316, [25] (‘Wheelahan’).
In Vo v Nguyen,[23] Derham AsJ determined that the objection under r 23.02 is to the manner of expression of the claim or defence in the pleading. His Honour noted that the words ‘frivolous or vexatious’ in combination have traditionally been used to describe a wide variety of circumstances in which a claim is found to be groundless or lacking a legal basis or merit.[24] His Honour further noted that a pleading is ‘embarrassing’ when it places the opposite party in a position that it does not know what is alleged against it.[25] Thus, a pleading that is unintelligible, or vague or ambiguous or is too general is embarrassing.[26]
[23][2013] VSC 304, [31].
[24]Ibid, [35].
[25]Ibid, [36].
[26]Ibid.
The principles in respect of r 23.02 are well-established and are outlined by J Dixon J in Wheelahan v City of Casey (No 12)[27] at [25]. Of particular relevance to the current circumstances, his Honour stated:
[27]Wheelahan (n 22).
(h)it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;

…
(l)particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement — namely, to fill in the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried.

Affidavit material is not admissible on an application under r 23.02.[28]

[28]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 23.04(2).

In Manderson M & F Consulting (A Firm) v Incitec Pivot Ltd,[29] the Court of Appeal considered the distinction between an application for summary judgment and an application under Order 23 of the Rules:

The authorities reviewed by Croft J in JBS Southern Aust v Westcity Group Holdings [2011] VSC 476, which disclosed the underlying rationale for s 63 of the [Civil Procedure Act 2010], make it clear that an inquiry as to whether a case has ‘no real prospects of success’ involves considerations extending beyond an analysis of the sufficiency of the statement of claim to plead a cause of action. The new power under s 63 is not one to be exercised by reference only to the sufficiency of the pleading.[30]

[29](2011) 35 VR 98.

[30]Ibid, 107 [32] (Redlich JA and Judd AJA).

An application under r 23.02 of the Rules requires the Court to look only at the sufficiency of the pleading. No affidavit material can be used in support of the application.[31] However, in an application under s 62 of the CPA, the Court is required to consider the merits of the proceeding.
[31]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 23.04(2).

In addition to those parts of the decision in Wheelahan v City of Casey (No 12) (‘Wheelahan’)[32] referred to by the parties and extracted at paragraph 20 above, I note the following further principles identified by Dixon J which are relevant to this Application (citations omitted):

…
(o) the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown; and
(p) if the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.[33]

[32]Wheelahan (n 22).

[33]Ibid, [25].

In Babcock & Brown DIF III Global Co-Investment Fund, LP v Babcock & Brown International Pty Ltd (No 2) (‘Babcock & Brown (No 2)’),[34] Hargrave J referred to aspects of the principles set out in Wheelahan and added the following observation:

To this summary, I would add that the Court should consider the pleading under a challenge as a whole and adopt a partial case management approach to pleading objections, rather than accepting technical objections when the true nature of the case to be met is clear from reading the pleading as a whole and there is no embarrassment to filing a responsive pleading. Such an approach accords with the discretionary nature of the power to strike out and with the overarching purpose under the Civil Procedure Act. However, in cases alleging dishonesty or fraud, precise pleadings with full particulars are required.[35]

[34][2017] VSC 556.

[35]Ibid, [15].

The principles set out in Wheelahan and Babcock & Brown (No 2) were recently endorsed by the Court of Appeal in Uber Australia Pty Ltd v Andrianakis,[36] where the Court held that in considering pleading objections on the ground that the pleading is embarrassing, the Court should stand back and consider the pleading as a whole and in that light ask: does the case alleged give clear notice of the case to be met at trial?
[36](2020) 386 ALR 331, 344-345 [35]–[37], 349-350 [50]–[52] (Niall, Hargrave and Emerton JJA).

In BFJ Capital Pty Ltd v Financial Ombudsman Service Limited (in liq),[37] Elliott J said the following on applications to strike out (citations omitted):

The legal principles that apply to strike out applications are also without controversy.
The court may order that the whole or part of a pleading be struck out if, relevantly, a statement of claim: does not disclose a cause of action; is scandalous, frivolous or vexatious; may prejudice, embarrass or delay the fair trial of the proceeding; or is otherwise an abuse of the process of the court. Unlike an application under r 23.01, an application under r 23.02 seeks no more than a striking out or an amendment, rather than judgment ordered summarily.
The elements of an adequate pleading are straightforward. A pleading must comprise a coherent narrative of material facts which set out and frame the elements of a cause of action. It must be pleaded with sufficient clarity, must not be unintelligible, ambiguous or vague and must not raise allegations that are offensive. Where particulars are relied upon, they ought not be used to “fill material gaps” or “cure a bad statement of claim”. Ultimately, the purpose of a proper pleading is to allow, in the interests of fairness, the opposite party to know what is alleged. Where a pleading is deficient in any of these respects, an application striking out the pleading may be warranted.
A strike out application, therefore, is distinct from an application for summary judgment in that it is an objection to the manner of expression of the pleading, as opposed to the prospects of the cause of action or defence itself. Again, care must be exercised when ordering that a pleading be struck out.[38]

[37][2019] VSC 71.

[38]Ibid, [32]-[35].

A pleading that would not survive a summary judgment application will be struck out, for to allow it to go forward would be futile.[39] The effect of striking out a statement of claim if no right to re-plead is granted brings the proceeding to a peremptory end.[40] The Court will not make an order unless it is clear on the pleading, or from extrinsic evidence, that the claim is unsustainable in fact or in law and that no proper amendment of the pleading can raise a good cause of action or defence.[41]
[39]Caason Investments Pty Ltd v Cao (2015) 236 FCR 322, 327 [21] (Gilmour and Foster JJ).
[40]Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 90–91 (Dixon J).
[41]Annesley v Westpac Banking Corporation [2016] VSC 323 cited in JB Asset Management & Anor v LBA Capital & Ors [2023] VSC 183, [32] (M Osborne J) (‘JB Asset Management’).

Non-contentious factual matters

There were a number of factual matters not in dispute between the parties.

On 1 January 1985, Youth with a Misson Melb Inc (‘YWAM Melbourne’), an unincorporated entity, was established.[42] On 25 February 2020, YWAM Melbourne’s business name was registered.[43] Mr Hoover is the organisational representative of YWAM Melbourne.[44] In addition, Mr Hoover is recorded as being the treasurer, Ms Rentsch is recorded as being a committee member and Mr Mulligan is recorded as being the president.[45]
[42]Affidavit of Cristian Fuenzalida sworn 16 February 2024, Exhibit CF-04 (‘Fuenzalida Affidavit’).
[43]Ibid, Exhibit CF-03.
[44]Ibid.
[45]Ibid.

On 20 May 2019, the first defendant, YWAM Surrey Hills Ltd (‘YWAM Surrey Hills’) was registered.[46] Its directors are Mr Aherne, Mr Brokenshire, Mr Hoover, Mr Matthews and Mr Mulligan.[47]
[46]Ibid, Exhibit CF-02.
[47]Ibid.

On 20 May 2019, the second defendant, YWAM Durham Ltd (‘YWAM Durham’) was also registered.[48] Its directors are Mr Aherne, Mr Brokenshire, Mr Hoover, Mr Matthews and Mr Mulligan.[49]
[48]Ibid, Exhibit CF-01.
[49]Ibid.

YWAM Melbourne owned the Properties until:

(a) 30 March 2020, when YWAM Surrey Hills, became the sole proprietor of the Kent Road Property; and

(b) 8 May 2020, when YWAM Durham became the sole proprietor of the Durham Road Property.

The Kent Road Property and the Durham Road Property are adjacent properties, with a land area of approximately 9,147 m². The Properties contain historical buildings used as the Home for Boys established by the Sisters of St Joseph in approximately 1890.

In about September or October 2020, the defendants advertised the Properties for sale.

Between September 2020 and December 2020, the plaintiff entered into negotiations for the purchase of the Properties.

On 15 December 2020, the plaintiff, as purchaser, and the defendants, as vendors, entered into the Contract of Sale for the purchase of the Properties for $27.3 million, with settlement to occur by 4 December 2022.

Between December 2020 and March 2021, the plaintiff paid the following instalments towards the deposit of $2.2 million under the Contract of Sale (‘Deposit’):

(a) $100,000.00 on 16 December 2020;

(b) $100,000.00 on 17 December 2020;

(c) $110,000.00 on 12 January 2021;

(d) $390,000.00 on 13 January 2021;

(e) $100,000.00 on 9 February 2021;

(f) $300,000.00 on 10 February 2021;

(g) $280,000.00 on 26 February 2021; and

(h) $157,000.00 on 1 March 2021.

Special Condition 18.5(a) of the Contract of Sale required the Deposit to be paid in full by 9 February 2021. As at 17 March 2021, $663,000.00 of the Deposit was outstanding (‘Outstanding Amount’). On 17 March 2021, the defendants served a default notice on the plaintiff demanding payment of the Outstanding Amount, plus interest and costs (‘First Default Notice’). The plaintiff purported to remedy the First Default Notice by paying the Outstanding Amount. Interest and costs were not paid but were not pursued by the defendants.

Pursuant to Special Condition 18.5(b) of the Contract of Sale, the balance of the purchase price was payable in the following instalments:

(a) $3.26 million on or before 4 December 2021 (‘First Instalment’); and

(b) a final payment of $21.840 million at settlement.

On 8 December 2021, the defendants issued the plaintiff with a second default notice, on the basis of his failure to pay the First Instalment (‘Second Default Notice’).

General Condition 35.4(a) of the Contract of Sale provided that the deposit up to 10 percent (whether paid or not) and the First Instalment (if then paid) would be forfeited to the vendor as the vendor’s absolute property, if the Contract of Sale was ended by a default notice given by the vendor due to extended settlement terms, and the loss of opportunity afforded to the vendor between the day of sale and the date the Contract of Sale is ended.

On 28 January 2022, the defendants terminated the Contract of Sale on the basis of the plaintiff’s failure to comply with the requirements of the Second Default Notice.

On 19 April 2022, 11 weeks after the termination of the Contract of Sale, the plaintiff wrote to the defendants advising that he had become aware of historical allegations of child abuse and degrading treatment of children in the care of the Sisters of St Joseph at the Home for Boys (‘Abuse Allegations’).

On 28 June 2022, by letter to the plaintiff’s solicitor, the defendants advised that they were not aware of the Abuse Allegations, were not the owner of the Properties in 1925-1967 and did not make any submissions to the Royal Commission.

On 22 November 2022, this proceeding was commenced. Part of the relief sought in the proceeding is the return of the Deposit which has been paid. The plaintiff relies on Clause 35.3 of the Contract of Sale which provides that if the Contract of Sale ended by a default notice given by the plaintiff, then the plaintiff must be repaid any money paid under the Contract of Sale, plus interest and reasonable costs, and those amounts become a charge on the Properties. There was no evidence before me that the plaintiff issued a default notice.

On 30 June 2023, the defendants sought further and better particulars of the SOC. Those particulars were provided by the plaintiff on 4 August 2023.

On 22 August 2023, the defendants filed their defence and counterclaim in response to the SOC.

Plaintiff’s claims in the proceeding

The plaintiff makes four key claims in the proceeding.

First, he says that during the course of the negotiations for the sale of the Properties, he communicated to Mr Bremner of Colliers International (real estate agents for the defendants) that he intended to use the Properties to establish a mission centre in connection with the Coptic Orthodox Church, a boarding house, a registered training organisation to train missionaries in connection with the Coptic Orthodox Church and a kindergarten (‘Intended Purposes’).

Second, he says that prior to September 2020, the Abuse Allegations existed which he contends were identified from the following four matters:

(a) public and confidential submissions to the Inquiry into Children in Institutional Care conducted by the Commonwealth Senate Community Affairs References Committee in about 2004 (‘Senate Inquiry’);[50]
[50]Statement of Claim, [6].

(b) a submission made by the Care Leavers Australia Network to the Victorian Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations in about 2013 (‘Victorian Inquiry’);[51]

(c) a submission made by the Ballarat Child Sexual Abuse Survivors’ Group to the Commonwealth Royal Commission into Institutional Responses to Child Sexual Abuse (‘Royal Commission’) in about 2014;[52] and

(d) an article published in the Ballarat Courier on 23 May 2014 entitled ‘Child Sex Abuse Victims Name 17 Institutions for Royal Commission Submission’, regarding the submission made by the Ballarat Child Sexual Abuse Survivors’ Group to the Royal Commission (‘Ballarat Courier Article’).[53]

[51]Ibid, [8].

[52]Ibid, [10].

[53]Ibid, [11].

Third, he says that the defendants had actual or implied knowledge of the four matters set out at paragraph 50 and therefore of the Abuse Allegations because at the time that the Senate Inquiry, Victorian Inquiry and the Royal Commission were being conducted, an affiliated or related entity, YWAM Melbourne, was the registered proprietor of the Properties.[54]
[54]Ibid, [13] and the particulars thereto.

Fourth, he contends that in circumstances where the defendants knew about the Intended Purposes and knew about but omitted to disclose the Abuse Allegations,[55] the plaintiff is entitled to rescission of the Contract of Sale[56] and recovery of the Deposit paid, plus interest and costs,[57] on the basis of:
[55]Ibid, [17]-[19].
[56]Ibid, [27(b)].
[57]Ibid, [27(c)- (d)]. The damages the plaintiff contends to be entitled to are said to be a charge on the Properties under cl 35.3 of the Contract of Sale; Prayer for Relief, B.

(a) misrepresentation;[58] and/or

(b) failure to disclose a material fact in contravention of s 12(d) of the Sale of Land Act 1962 (Vic) (‘SLA’);[59] and/or

(c) misleading and deceptive conduct by omission, in contravention of s 18 of the Australian Consumer Law (‘ACL’). The plaintiff seeks orders under ss 236 and 237 of the ACL declaring the Contract of Sale void, and for damages.[60]

[58]Statement of Claim, [20], [27(a)]; Prayer for Relief, A.

[59]Statement of Claim, [29]-[30].

[60]Ibid, [35]-[36].

Defendants’ defences to the proceeding

By their defence filed on 22 August 2023, the defendants’ defence may be summarised as follows:

(a) the defendants deny having knowledge of any of the four matters set out at paragraph 50 above or the Abuse Allegations at any material time;[61]
[61]Defence and Counterclaim, [13].

(b) the defendants deny being aware of the Intended Purposes at any material time;[62]
[62]Ibid, [16].

(c) the defendants terminated the Contract of Sale by way of notice dated 28 January 2022 as a result of the plaintiff’s failure to remedy the Second Default Notice and pay the First Instalment due pursuant to the Contract of Sale; and

(d) in circumstances where the defendants had no knowledge about the Intended Purposes nor the Abuse Allegations, the plaintiff is not entitled to rescission of the Contract of Sale. The defendants deny that they:

(i) made any misrepresentation to the plaintiff about the Properties; and/or

(ii) failed to disclose a material fact in contravention of s 12(d) of the SLA; and/or

(iii) engaged in misleading and deceptive conduct by omission, in contravention of s 18 of the ACL.

Plaintiff’s contentions

Before me, the plaintiff conceded that the Application before me came down to quite a tight proposition - accepting that that the plaintiff cannot prove actual knowledge by the defendants of the Abuse Allegations, whether he should be permitted to continue the proceeding, or at the very least, until discovery, to allow him to exercise the Court processes to ascertain what may be within the sole repository of the defendants as to that knowledge. That, it was said, was the sole question for determination.[63]
[63]Transcript of Proceedings (22 February 2024) 45.27-46.3.

Further, the plaintiff, by his submissions:

(a) agreed that in order to succeed, he must establish as a matter of fact that the defendants knew of the Abuse Allegations (being the matters pleaded at paragraphs 6, 8, 10 and 11 of the SOC); and

(b) submitted that contrary to the position advanced by the defendants, he has a real – as distinct from fanciful - prospect of establishing at trial that the defendants knew of the Abuse Allegations.

In support of his submissions, and in opposition to the Application, five matters were raised by the plaintiff.[64]
[64]Ibid, 47.10-47.13.

First, the plaintiff contends there needs to be discovery and subpoenas to ascertain the extent of the defendants' knowledge.[65] The plaintiff submits that as the defendants have not made discovery of relevant documents, neither the plaintiff nor the Court have had the opportunity to obtain documentation and other evidence that could support or contradict the evidence given by the directors of the defendants who have, in affidavits, denied knowledge of the Abuse Allegations. The plaintiff says that this is an important point, given the question of whether the defendants had knowledge of the Abuse Allegations is a disputed fact.
[65]Ibid, 47.14-47.16.

Second, whilst the plaintiff concedes that, at trial, he will carry the onus of proving that the defendants had actual knowledge of the Abuse Allegations,[66] he again submits that the knowledge of the defendants is a disputed fact. Although all five directors of YWAM Surrey Hills and YWAM Durham have deposed that they did not know of the Abuse Allegations,[67] the plaintiff does not accept that evidence and submits that he is entitled to test it at trial,[68] after the usual processes of discovery, interrogatories and subpoenas have taken place.
[66]Ibid, 57.4-57.7.
[67]Plaintiff’s written outline of submissions filed on 16 February 2024, [32], [35] (‘Plaintiff’s Submissions’).
[68]Transcript of Proceedings (22 February 2024) 47.23-47.25.

Third, the plaintiff submits that the defendants’ evidence is incomplete,[69] with the plaintiff identifying the following examples in oral argument before me:
[69]Ibid, 48.8-48.9.

(a) there is no reference to the staff of the defendants, if any, their roles, seniority with the company, and their knowledge;

(b) there is no reference to inquiries within the defendants having been made. The usual nomenclature of having made inquiries is not present;

(c) there is no reference to review of ‘company documents’; and

(d) there is no reference to the practical and day-to-day links between YWAM Melbourne and the defendants, which would inform that knowledge or lack of it.

In his written submissions, the plaintiff also made the point that no other person in the corporate group, including executive officers and other managers, have made any affidavit denying knowledge of the Abuse Allegations. It was submitted that even if I were to accept (contrary to the submissions above) that five directors lacked the requisite knowledge, the affidavit evidence does not establish that the defendants lacked that knowledge.

To this end, the plaintiff in his written submissions and before me contended there was an air of unreality about the content of the affidavits filed on behalf of the defendants in support of the Application.[70] Specifically, the plaintiff points to the following:
[70]Ibid, 49.23-49.27; 50.27-50.29.

(a) according to the defendants, they knew of the Senate Inquiry and the Royal Commission, were in the business of providing religious programs to young people, and owned premises which had previously operated as a boys’ home. However, the affidavits are silent as to whether they knew that the Properties were previously operated as a boys’ home – that is they do not deny it;[71]

(b) despite this, and on their evidence, the defendants somehow missed the fact that the Abuse Allegations were reported to the Senate Inquiry, the Victorian Inquiry and the Royal Commission, and published in a regional newspaper;[72] and

(c) the plaintiff challenges what he says are bare assertions of lack of knowledge.[73]

[71]Plaintiff’s Submissions, [33]; Transcript of Proceedings (22 February 2024) 50.12-50.23.

[72]Ibid.

[73]Plaintiff’s Submissions, [33].

Fourth, the plaintiff says that he has a proper basis to allege that the defendants knew of the Abuse Allegations. In this respect, YWAM Melbourne, a related entity of the defendants, was the registered proprietor of the Properties during the time that the Royal Commission and the Senate Inquiry were on foot. The three entities share common officers.[74] The plaintiff submits that the Royal Commission and the Senate Inquiry were notorious, and well known at the time.[75] He says that the Abuse Allegations were reported in the Ballarat Courier on 23 May 2014. He notes that, as per the defence, information regarding the Abuse Allegations was ‘publicly available’.[76]
[74]Ibid, [34].
[75]Ibid.
[76]Defence and Counterclaim, [57].

Fifth, whilst the plaintiff conceded that the case was necessarily inferential at the present time, and that at trial he will be required to make the evidentiary link between the public nature of the Abuse Allegations and the knowledge of the defendants, he says that the claim has a proper basis now.[77] He further accepts that he will require the assistance of the compulsive processes of the Court to make that evidentiary link.[78] But he says that presently, he draws the evidentiary inference now based on the information presently available to him, and it is a proper inference to draw. There is, he contends, a proper basis to allege that YWAM Melbourne, and its related entities, YWAM Surrey Hills and YWAM Durham, had knowledge of the Abuse Allegations.
[77]Transcript of Proceedings (22 February 2024) 50.30-51.7.
[78]Ibid, 45.27-46.3.

For the above reasons, the plaintiff submits that summary judgment should not be entered.

For related reasons, the plaintiff’s submission as to the strike out application is that the allegation of knowledge in the SOC is properly pleaded, and paragraphs 13, 18, 19, 30 and 36 should not be struck out.

Paragraph 13 of the SOC pleads that “YWAM Surrey Hills and YWAM Durham had knowledge of the matters alleged in paragraphs 5 to 12 above.”

The particulars to paragraph 13 of the SOC allege that:

The knowledge of YWAM Surrey Hills and YWAM Durham is actual or alternatively is to be implied.
At all material times until 30 March 2020, Youth With A Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Kent Road. At all material times until 8 May 2020, Youth With A Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Durham Road. Youth With a Mission (Melbourne) Inc was the registered proprietor of Kent Road and Durham Road at the time of the Inquiry into Children in Institutional Care, Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations and the Royal Commission.
By reason of the particulars given above, YWAM Surrey Hills had actual or alternatively implied knowledge of the matters alleged.
Further and better particulars may be provided following discovery or the issue of subpoenas or interrogatories in the proceeding.

It was submitted that the allegations of knowledge in the SOC (at paragraphs 13, 18, 19, 30 and 36) are properly pleaded. The plaintiff has alleged that the defendants had actual knowledge of the Abuse Allegations, or alternatively that the knowledge can be implied from the facts and circumstances. The implication of knowledge, as a process of inferential reasoning, is a finding of actual knowledge on the balance of probabilities. The plaintiff does not allege that the defendants’ knowledge is to be construed or imputed. In this respect, the plaintiff does not allege that the defendants have knowledge that is imputed to them by reason of YWAM Melbourne’s knowledge of the Abuse Allegations.

Defendants’ contentions

The defendants’ position is that:

(a) YWAM Surrey Hills and YWAM Durham and their directors:

(iv) were aware generally of the Senate Inquiry but not any specific allegations raised in respect of the Properties.[79] They were not aware that the Senate Inquiry had received public and confidential submissions referring to children at the Home for Boys;[80]
[79]Affidavit of Jared Paul Hoover sworn 20 October 2023, [35] (‘Hoover Affidavit’).
[80]Ibid.

(v) were aware generally of the Victorian Inquiry but not of any specific issues raised in respect of the Properties.[81] They were not aware that the Victorian Inquiry had received a submission from the Care Leavers Australia Network that contained allegations of abuse and degrading treatment of children at the Home for Boys;[82]
[81]Ibid.
[82]Ibid.

(vi) were aware of the Royal Commission but not that it had received a submission from the Ballarat Child Sexual Abuse Survivors’ Group that contained allegations of abuse of children at the Home for Boys;[83]
[83]Ibid.

(vii) never read the Ballarat Courier Article and were unaware that it had published such a report;[84] and

(viii) had no knowledge of the Abuse Allegations until they received the plaintiff’s 19 April 2022 letter.[85]

[84]Ibid.

[85]Ibid; Affidavit of Jennifer May Rentsch sworn 20 October 2023, [7] (‘Rentsch Affidavit’); Affidavit of Kenneth Neil Mulligan sworn 20 October 2023, [7]; Affidavit of Stephen Martin Aherne sworn 20 October 2023, [7]; Affidavit of Thomas Charles Hallas sworn 20 October 2023, [7] (‘Hallas Affidavit’); Affidavit of Nicholas John Matthews sworn 20 October 2023, [7] (‘Matthews Affidavit’); Affidavit of John Mark Silas Brokenshire sworn 19 October 2023, [7].

Additionally, Mr Bremner of Colliers International:

(a) did not meet or have any contact with the plaintiff prior to the Contract of Sale being signed;[86]

(b) first met the plaintiff in about February or March 2021 at his church in Orrong Road, Armadale to discuss payment of the Deposit, which the plaintiff had failed to pay;[87] and

(c) did not know about the Abuse Allegations at any time prior to the plaintiff executing the Contract of Sale.

[86]Affidavit of Mr Bremner affirmed 20 October 2023, [13.1].

[87]Ibid, [13.2].

In order to understand the defendants’ position, and before turning to the defendants’ evidence it is necessary to set out the dramatis personae.

At all relevant times, the boards of YWAM Surrey Hills and YWAM Durham were comprised of:

(a) Mr Aherne, who has served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 20 May 2019. Mr Aherne was also involved with Youth With A Mission (‘YWAM’) since 1976 and presently holds a managerial role with YWAM. He was also the founding director of YWAM Melbourne. Mr Aherne is the only director of YWAM Surrey Hills and YWAM Durham who was also a director of YWAM Melbourne;

(b) Mr Mulligan, who has served as a volunteer managing director of YWAM Surrey Hills and YWAM Durham since around 20 May 2019. Mr Mulligan also served as the president of YWAM Melbourne since around 30 September 2019 and has volunteered with YWAM since 1983;

(c) Mr Hoover, who has served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 20 May 2019. Mr Hoover has also served in a voluntary position as treasurer of YWAM since around 30 September 2019;

(d) Mr Brokenshire, who has served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 20 May 2019. Mr Brokenshire is also the provost of the University of the Nations, an international training institution affiliated with YWAM;

(e) Mr Hallas, who has served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 14 May 2020.[88] Mr Hallas has also been a full time volunteer with YWAM since 1969;

(f) Ms Rentsch, who has served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 14 May 2020.[89] Ms Rentsch has also been a full time volunteer with YWAM since 2005; and

(g) Mr Matthews, who served as a volunteer director of YWAM Surrey Hills and YWAM Durham since around 14 May 2019 to 15 October 2022.[90] Mr Matthews has also been a volunteer with YWAM since 1997.

[88]In the Hallas Affidavit, Mr Hallas deposes to having served as a volunteer director of the defendants since around 14 May 2020. Mr Hallas does not appear on the Australian Securities and Investments Commission Current & Historical Organisation Extract (‘ASIC Search’) of either defendant, Fuenzalida Affidavit, Exhibit CF-01 and Exhibit CF-02.

[89]In the Rentsch Affidavit, Ms Rentsch deposes to having served as a volunteer director of the defendants since around 14 May 2020. Ms Rentsch does not appear on the ASIC Search of either defendant, Fuenzalida Affidavit, Exhibit CF-01 and Exhibit CF-02.

[90]In the Matthews Affidavit, Mr Matthews deposes to having served as a volunteer director of the defendants since around 14 May 2019 to 15 October 2022. In the ASIC Search for each defendant, Mr Matthews is listed as a current director having been appointed on 20 May 2019, Fuenzalida Affidavit, Exhibit CF-01 and Exhibit CF-02.

The defendants’ uncontested evidence may be summarised as follows:

(a) YWAM Melbourne had no involvement with the order of the Sisters of St Joseph or the operation of the Home for Boys which operated at the Properties between 1893 and 1981;[91]
[91]Hoover Affidavit, [15].

(b) YWAM Melbourne’s first engagement with the Properties was in around 1985 when YWAM Melbourne became aware of a public marketing campaign for the sale by tender of the Properties.[92] Through this process, YWAM Melbourne acquired the Kent Road Property from the Sisters of St Joseph.[93] Around the same time, the Presbyterian School of St Andrews acquired the Durham Road Property from the Sisters of St Joseph. In or around 1989, YWAM Melbourne acquired the Durham Road Property from the Presbyterian School of St Andrews;[94]
[92]Ibid, [13].
[93]Ibid, [14].
[94]Ibid, [12].

(c) by 8 May 2020, the Properties were transferred from YWAM Melbourne to the defendants respectively as part of a broader restructuring process;[95]

(d) by about 28 May 2020, the defendants, through their respective boards, resolved to sell the Properties;[96] and

(e) at all relevant times, the defendants boards were comprised of Mr Hoover, Ms Rentsch, Mr Mulligan, Mr Aherne, Mr Brokenshire, Mr Hallas and Mr Matthews. Each member of the board has sworn an affidavit and denied knowledge of the Abuse Allegations. None have been cross examined.[97]

[95]Ibid, [17].

[96]Ibid, [18].

[97]Ibid, [20].

By their outline of submission, the defendants assert that in order to succeed in establishing his claim, the plaintiff must establish as a matter of fact that the defendants had knowledge of the matters pleaded at the following paragraphs of the SOC:

(a) [6], namely the substance of the submission included in Appendix 6 to the Report by the Community Affairs References Committee to the Senate Inquiry;

(b) [8], namely the substance of the submission from Care Leavers Australia Network to the Victorian Inquiry;

(c) [10], namely the substance of the submission from the Ballarat Sexual Abuse Survivors’ Group to the Royal Commission; and

(d) [11], namely the substance of the Ballarat Courier Article.

These are the underlying factual matters that the plaintiff contends make up the defendants’ knowledge of the Abuse Allegations. This was not disputed by the plaintiff.

Further, the plaintiff must also establish that the matters allegedly known by YWAM Melbourne, being an ‘affiliated or related entity’ of the defendants, were also known to each of YWAM Surrey Hills and YWAM Durham before they entered into the Contract of Sale (noting that the defendants were not the registered proprietors of the Properties at the time that matters referred to in paragraphs 74(a) to 74(d) above took place).

The defendants in their written outline contend that it is important to note that the plaintiff’s case is entirely dependent upon the plaintiff establishing that:

(a) YWAM Melbourne and, in turn, the defendants knew of the matters referred to in paragraphs 74(a) to 74(d) above and failed to disclose those matters to the plaintiff before entering into the Contract of Sale (the misrepresentation[98] and failure to disclose a material fact[99] causes of action); or

(b) YWAM Melbourne and, in turn, the defendants knew of the matters referred to in paragraphs 74(a) to 74(d) above, and the defendants knew of the Intended Purposes and failed to disclose those matters in circumstances where it was reasonable to expect them to do so (thereby engaging in misleading and deceptive conduct by omission).[100]

[98]Statement of Claim, [19], [20], [27], [28].

[99]Ibid, [29]–[34].

[100]Plaintiff’s Submissions, [13].

The defendants say that they did not know of the matters referred to in paragraphs 74(a) to 74(d) above and that the plaintiff’s claims that they:

(a) falsely represented that they were not aware of the Abuse Allegations by not informing the plaintiff of the Abuse Allegations; and

(b) knowingly concealed the Abuse Allegations with the intention of inducing the plaintiff to purchase the Properties

are not sustainable. As such, the defendants submit that it must follow that the plaintiff’s claims have no reasonable prospect of success.

Further, the defendants contend that the plaintiff’s allegations are not sustainable in principle and on the evidence as:

(a) there is no basis in law to fix YWAM Melbourne with knowledge of the Alleged Abuse;

(b) even if YWAM Melbourne had such knowledge as alleged (which is denied), there is no basis to attribute such knowledge to the defendants;

(c) the unchallenged evidence is that the defendants (and its directors and agent Mr Bremner) did not have knowledge of the Abuse Allegations prior to execution of the Contract of Sale; and

(d) the unchallenged evidence is that Mr Bremner did not meet or have contact with the plaintiff prior to execution of the Contract of Sale.

Dealing with each submission in turn, the defendants contend that there is no basis in law to fix YWAM Melbourne with knowledge of the Abuse Allegations simply because it was the registered proprietor of the Properties at the time of the Senate Inquiry, Victorian Inquiry, Royal Commission and the Ballarat Courier Article. The defendants contend that the plaintiff does not allege, and could not do so on the facts before me, that YWAM Melbourne was the registered proprietor of the Properties at the time that the Home for Boys operated on the Properties. Further, the plaintiff does not allege that YWAM Melbourne participated in, or was aware of, the submissions that were made to the Senate Inquiry, Victorian Inquiry or Royal Commission. The essence of the plaintiff’s allegation is, according to the defendants’ submissions, that a registered proprietor knows, or should know, everything that is said about their property in any forum during the time that they are the registered proprietor. The defendants say that there is no support at law for the proposition that actual or inferred knowledge arises simply by the fact of registration of real property.

Further, it was submitted that even if YWAM Melbourne had such knowledge as alleged (which is denied), the plaintiff has not pleaded or put on any evidence as to how it says YWAM Melbourne’s knowledge is attributable to the defendants. The defendants are separate legal entities to YWAM Melbourne. The defendants submit that the mere fact that they are ‘affiliated or related entities’ does not establish common knowledge, common control or common liability between companies.[101]
[101]See Clarke & Ors v Great Southern Finance Pty Ltd (in liq) & Ors (2010) 243 FLR 451, 462-463 [29] (‘Clarke’).

Additionally, the defendants submit that for knowledge acquired in the capacity as a director of company A to be imputed to company B, generally the relevant director must be under a duty to company A to communicate the knowledge to company B and be under a duty to company B to receive the knowledge.[102] Without more, the fact that two companies may be related by having common directors does not result in the knowledge of one company being attributed to the other.[103]
[102]JB Asset Management (n 41).
[103]Ibid.

As to the alleged Intended Purposes, the unchallenged evidence is that the defendants, their directors and Mr Bremner did not know about any of the matters set out in paragraphs 49 to 50 above and/or the Abuse Allegations prior to the execution of the Contract of Sale. The defendants did not have any involvement with the Home for Boys. They acquired the Properties from YWAM Melbourne, which was not involved in the operation of the Home for Boys. Neither YWAM Surrey Hills or YWAM Durham, nor their directors, were aware of submissions in relation to the Abuse Allegations received by the Senate Inquiry, Victorian Inquiry and Royal Commission, nor have they read the Ballarat Courier Article or were aware of its contents. There is positive evidence adduced by the defendants of their lack of knowledge. There is no contrary evidence adduced by the plaintiff. In short, the defendants submit that the plaintiff has not identified a real contest of fact about the knowledge of the defendants. In the circumstances, it was submitted that he has no real prospect of success of his claim.

The defendants also point to Mr Bremner’s unchallenged evidence which includes a statement that he did not meet or have any contact with the plaintiff prior to the Contract of Sale being executed. By extension, the defendants say that the plaintiff could not have told Mr Bremner about the Intended Purposes before execution of the Contract of Sale, particularly not at a site inspection of the Properties in September 2020. Fr Attala did not swear an affidavit to respond to Mr Bremner. The plaintiff does not allege that he communicated the Intended Purposes to the defendants in any other way.

Accordingly, the defendants submit that the plaintiff has no real prospect of establishing that the defendants knew of the Abuse Allegations or Intended Purposes prior to execution of the Contract of Sale. As knowledge is fundamental to establishing misrepresentation, contravention of s 12(d) of the SLA and misleading and deceptive conduct, the defendants submit that the plaintiff’s claims have no real prospect of success, and the Court should give judgment to the defendants. Such an outcome was said to be consistent with the overarching purpose of the CPA.

Analysis and contentions

The defendants put the issue of whether they knew of the Abuse Allegations in issue for the purpose of the Application. It is the key issue for summary determination or strike out.

In answer, the plaintiff accepts that the case he brings is necessarily inferential at the present stage, and that he will have to go further at trial based upon information he says he will extract from the defendants,[104] after using the processes of the Court such as discovery, subpoenas and interrogatories.
[104]Transcript of Proceedings (22 February 2024) 51.2-51.7.

There are, in my opinion, a number of significant difficulties with the position the plaintiff now seeks to advance.

Discovery, interrogatories and subpoenas

The plaintiff has been on notice of the defendants position since at least 28 June 2022 when the defendants sent a letter to the plaintiff’s solicitor advising that they had no knowledge of the Abuse Allegations.[105] Despite that, no application for preliminary discovery was made. Rather, this proceeding was commenced in November 2022. In answer to that point, the plaintiff’s senior counsel informed me that the proceeding was commenced in response to a lapsing notice on a caveat whereby the plaintiff had a 30 day period in which to substantiate the caveat by the commencement of the proceeding. Accepting that submission, I note that the proceeding was not commenced until 22 November 2022 in circumstances where the plaintiff had been on notice of the defendants’ position for five months. There was, in my opinion, ample time for the plaintiff to make a preliminary discovery application.
[105]Hoover Affidavit, Exhibit JPH-1 page 100-101.

Thereafter, there has been no request made by the plaintiff for the critical documents under s 26 of the CPA.[106] Additionally, there has been no request for specific discovery. Notwithstanding this, the plaintiff says he should be given an opportunity to obtain discovery.
[106]Transcript of Proceedings (22 February 2024) 59.2-59.5.

To the extent there was a suggestion that there ought to be general discovery, it must be borne in mind that discovery is only to be made of documents which are directly relevant to matters in issue in the proceeding, and that is determined by reference to the pleadings. Section 55(1) of the CPA gives the Court an overriding discretion to ‘make any order or give any directions in relation to discovery that it considers necessary or appropriate’. As set out in VolunteerFire Brigades Victoria Inc v County Fire Authority,[107] demands for discovery of documents which are peripheral to the central issues cannot be entertained. The Court is obliged to focus on the central issues as best it can be determined at this point in the litigation. Any discovery order would be directed to finding the most efficient, effective and economical management of the discovery exercise bearing in mind the nature and complexity of the trial.[108] Concepts of wide ranging ‘train of inquiry’ discovery under the Peruvian Guano test[109] have been consigned to the dustbin.[110]
[107][2016] VSC 573, [34] (J Forrest J).
[108]Liesfield v SPI Electricity Pty Ltd (Ruling No 1)(2013) 43 VR 493, 500 [25] (J Forrest J).
[109]Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company(1882) 48 LT 22.
[110]Ibid, [33].

In circumstances where:

(a) the Home for Boys was operated at the Properties between 1893 and 1981;

(b) YWAM Melbourne had no involvement with the Sisters of St Joseph or the operation of the Home for Boys;

(c) the first engagement YWAM Melbourne had with the Properties was through a public marketing campaign in around 1985 for the sale of the Properties by tender which occurred after the Home for Boys had ceased operating;

(d) only the Kent Street Property was acquired by YWAM Melbourne from the Sisters of St Joseph in around 1985;

(e) the Durham Road Property was acquired by YWAM Melbourne in 1989 from the Presbyterian School of St Andrews who had in turn purchased it from the Sisters of St Joesph in around 1985;

(f) the Properties, which are the subject of this proceeding, were not owned by the defendants at the time of the Senate Inquiry in 2004, the Victorian Inquiry in 2013, the Royal Commission in 2014, or the Ballarat Courier Article in 2014, and indeed, at the time of each of those events, those defendant companies did not exist;

(g) the Properties were only transferred to the defendants in around May 2020;

(h) the directors of the defendants each say on oath that they did not have knowledge of the Abuse Allegations; and

(i) the only ‘common connection’[111] between the defendants and YWAM Melbourne is Mr Aherne, whose evidence as to his knowledge of the Abuse Allegations, or lack of it as the case is, was unchallenged,

it is difficult to conceive of what documents might actually be discoverable by the defendants, noting that the ‘train of inquiry’ standard is no longer the applicable test. The plaintiff has not identified, in any correspondence, or in the oral submissions before me, the categories of documents he seeks by way of discovery from the defendants, or the type of material he expects to receive.[112] Moreover, the plaintiff has not gone on oath to address this point or say what it is he expects to see that would undermine the sworn and unchallenged position put by the directors of the defendants.

[111]Transcript of Proceedings (22 February 2024) 57.19-57.23.

[112]Ibid, 27.7-27.21; 58.30-59.9.

As to subpoenas, the plaintiff has been at liberty to issue a subpoena pursuant to Order 42A of the Rules since the proceeding commenced. He was able to issue such a subpoena in respect of this Application. He has not done so. He has only identified in the broadest sense that he intends to subpoena YWAM Melbourne and the Sisters of St Joseph,[113] with the intention of seeking any material pertaining to the sale and conveyance of the Properties and what may or may not have been known and disclosed at that point in time.[114] When pressed, the plaintiff’s senior counsel properly conceded that despite having had an opportunity issue subpoenas, none had been issued.[115]
[113]Ibid, 58.17-58.29.
[114]Ibid.
[115]Ibid, 58.30-59.1.

As to interrogatories, the primary difficulty that the plaintiff faces is that all relevant directors of the defendants have sworn affidavits in respect of the Application and the key issues, namely their knowledge of the Abuse Allegations and the alleged Intended Purposes. There was no request to cross examine any of them. The purpose interrogatories would serve in the circumstances of this case, where the plaintiff has had an opportunity to seek leave to cross examine every director and has chosen not to is, at best, opaque. The plaintiff says in his submissions that he does not believe the directors and wishes to cross examine them at trial. Why that opportunity was not taken at the hearing of the Application was not addressed.

There has been no evidence filed by Fr Attala in response to the Application. The defendants contend, and I accept, that they have established a prima facie case. In those circumstances, the authorities[116] make it clear that the burden shifts to the party resisting the application, here the plaintiff, to put on evidence to assuage the Court or address why the application should not succeed. The plaintiff has not done so. The plaintiff did not file any evidence in response to the defendants’ affidavit material. He did not deny, rebut, raise any dispute or contrary matters to the evidence presented by the defendants. The only affidavit filed on behalf of the plaintiff was that of his solicitor, Mr Cristian Fuenzalida, whose affidavit merely exhibited the extracts maintained by the Australian Securities and Investments Commission for each of YWAM Surrey Hills, YWAM Durham and YWAM Melbourne.
[116]Hausman (n 11), [53], [62]-[66]; BABL (n 6), [33].

In answer to this point, the plaintiff says that the onus has not yet shifted because the defendants’ evidence is incomplete.[117] In the alternate, the plaintiff submits that if the burden has shifted then he is not in a position to meet his answering onus without discovery and the testing of evidence.[118]
[117]Transcript of Proceedings (22 February 2024) 57.5-57.8.
[118]Ibid, 57.8-57.14.

The plaintiff relied on the decision in Wickstead v Browne[119] (‘Wickstead’) which is authority for the proposition that:

(a) where the facts are peculiarly within a defendant’s knowledge, the plaintiff’s claim should not be summarily dismissed because of gaps in the plaintiff’s case if the necessary evidence might be obtained as a result of discovery or interrogatories; and

(b) one of a number of defendants cannot be entitled to summary dismissal because of deficiencies in the plaintiff’s case because, if the matter proceeds to trial, such deficiencies may be filled by evidence in the case of other defendants.

[119](1992) 30 NSWLR 1, 11-12.

In Wickstead, the New South Wales Court of Appeal said:

The respondent submitted that the appellants had failed to adduce any evidence or any admissible evidence on a number of issues and that the appeals should therefore be dismissed. Again it seems to us that those submissions misconceived the nature of the court’s jurisdiction to dismiss summarily a plaintiff’s action. By launching such an application a defendant undertakes the burden of establishing that there is no triable issue. On such an application the defendant bears the onus of proof and where the facts are peculiarly within the defendant’s knowledge the plaintiff’s action should not be dismissed because of gaps in the case if the necessary evidence might be obtained as a result of discovery or interrogatories.[120]

[120]Ibid, 11.

The plaintiff further relied on the decision of Elliott J in Stubbings v Jams 2 Pty Ltd (‘Stubbings’).[121] Stubbings concerned the use of independent legal and accounting advice certificates in the context of asset based lending. Mr Stubbings owned two properties and wished to purchase a third. At the time he was unemployed and was without regular income. Mr Stubbings used his company, Victorian Boat Clinic Pty Ltd to enter into an asset based loan with Jams 2 Pty Ltd and two other lenders. Mr Stubbings saw an independent lawyer and accountant who provided independent legal and financial advice certificates. In setting aside the mortgages and loan agreements, Elliott J, having embarked on an assessment of matters relevant to the exercise of the Court’s discretion,[122] found that Mr Stubbings was under a ‘special disadvantage’ due to his unemployment, absence of income to service the loans and poor financial literacy.
[121](2017) 53 VR 420.
[122]Ibid, 436-438 [42]-[44].

Of relevance to this Application, the plaintiffs contend, is Elliott J’s conclusion that there was a real prospect of success on the mortgagor’s defence finding that the matter should go to trial as a matter of discretion under s 64(b) of the CPA. In Stubbings, his Honour held:

A final point on the exercise of the Court’s discretion. A court ought to act with particular caution when it is required, under the relevant statutory provisions, to consider ‘all the circumstances’, and where, despite a substantial body of affidavit evidence filed by the Mortgagees, there are serious issues that have remained unexplained, and where the application was made a time when there had been no discovery in the proceeding.[123]

[123]Ibid, 438 [45].

Conversely, the defendants say that the assessment undertaken by Elliott J of the factors relevant to the exercise of the discretion is instructive. Unlike in Stubbings, the defendants say that there are no serious issues that have remained unexplained in the evidence before me, notwithstanding that discovery is yet to be made. They say each director has given unchallenged evidence of their lack of knowledge of the Abuse Allegations.

Before me, the plaintiff also relied on the decision of Attiwill J in Ormond Supermarket Pty Ltd v Sarar Australia and NZ Pty Ltd & Anor[124] who, in considering a summary dismissal application, permitted the matter to proceed to trial where there had not yet been discovery. Attiwill J considered that there were serious issues that remained unanswered on the evidence before him.[125] Again, the defendants submit that the extensive and painstaking assessment undertaken by Attiwill J of the factual underpinnings in the case[126] is distinguishable from the matter before me where they submit that there is not, unlike in the authorities relied upon by the plaintiff, a contest on the evidence.
[124][2022] VSC 278.
[125]Ibid, [122].
[126]Ibid, [81]–[93].

In oral submissions the plaintiff contended that no further evidence or particulars could have be given, and that is why no affidavit had been filed by Fr Attala.[127] Respectfully, that is not a complete answer. The defendants submitted that Fr Attala did not need to file an extensive or detailed affidavit, but he ought to have provided some material or factual basis for the Court to be able to say that from this, the case is not hopeless. I accept that submission. At its highest, the ‘serious issues that remain unanswered’ on the evidence before me, and in respect of which the plaintiff submits require the completion of interlocutory processes, are those identified by the plaintiff’s senior counsel at paragraph 59 above. These issues do not, in my view, in the context of the factual matrix of this case and the sworn evidence, rise to the level of ‘serious issues’.
[127]Transcript of Proceedings (22 February 2024) 47.7-47.10.

The first point to observe is that whilst the plaintiff complains of the defendants’ evidence he did not file any evidence in response or seek to cross examine.

Attribution of knowledge

There is then a further, and more telling issue, which is the position contended for by the plaintiff where he seeks to attribute, to the defendants, the alleged knowledge of YWAM Melbourne of the Abuse Allegations.

The pleading is in the following terms:

At all material times, YWAM Surrey Hills and YWAM Durham had knowledge of the matters pleaded at paragraphs 5 to 12 above [being the Abuse Allegations].
PARTICULARS

The knowledge of YWAM Surrey Hills and YWAM Durham is actual or alternatively to be implied.
At all material times until 30 March 2020, Youth With A Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Kent Road. At all material times until 8 May 2020, Youth With A Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Durham Road. Youth With a Mission (Melbourne) Inc was the registered proprietor of Kent Road and Durham Road at the time of the Inquiry into Children in Institutional Care, Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations and the Royal Commission.
By reason of the particulars given above, YWAM Surrey Hills had actual or alternatively implied knowledge of the matters alleged.

Pleadings of knowledge must be supported by proper particulars.[128] Where an allegation refers to the knowledge of a party, it is necessary to particularise what was known, how it became known, who held the knowledge and what facts would any inference be drawn.[129] The only ‘common connection’ between YWAM Melbourne and the defendants is Mr Aherne. Mr Aherne’s unchallenged evidence is that he did not know of the Abuse Allegations.
[128] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 13.10(3)(b).
[129]Valentini (a pseudonym) v Trustees of the Marist Brothers [2022] VSC 550, [78]. See also Montclare v Metlife Insurance Ltd (2009) 29 VR 20, 23 [9].

It is trite law that an individual may be regarded as the directing mind and will of a company such that the state of knowledge of the individual may be imputed to the company not because he/she is an agent of the company but because the individual may, in particular circumstances, be regarded as the company.[130] The defendants do not dispute this proposition but submit that there is no evidence to infer that any of the directors of YWAM Surry Hills or YWAM Durham had, as at the date of entry into the Contract of Sale, knowledge of the Abuse Allegations.[131]
[130]El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685, 695.
[131]Defendants’ written outline of submissions filed on 18 December 2023, [21].

The plaintiff’s senior counsel in submission sought to answer this point by suggesting that ‘senior officers’, such as someone within the hierarchy who has the seniority, responsibility, and knowledge that goes with it, may be relevant as if they had knowledge of the Abuse Allegations that may raise an issue of whether or not their knowledge comes within the knowledge of the defendants.[132] The plaintiff submitted before me that it is the linkages between the defendants and YWAM Melbourne, and the limitation on the evidence, and the common connection of Mr Aherne between YWAM Melbourne and the defendants that warrants a proper inquiry on the pleaded claim such that the plaintiff can investigate those links.[133] The plaintiff says that there is sufficient affiliation and relationship between the entities for him to inquire as to the interconnection between the commonality of documentation and the like.[134] I do not accept this submission.
[132]Transcript of Proceedings (22 February 2024) 48.20-48.26.
[133]Ibid, 57.24-57.26.
[134]Ibid, 57.26-57.29.

In JB Asset Management & Anor v LBA Capital & Ors,[135] M Osborne J held (citations omitted):

Where the company’s state of mind is relevant, then the company can be taken to acquire knowledge through two categories of natural persons. The first applies where the state of mind is that of a person who constitutes the company’s directing mind and will constitute it in relation to the particular transaction in question. The second applies in the case of directors, employees and other agents whose knowledge may be considered to be the knowledge of the company, where those persons have authority to receive and communicate relevant information to the company.
Cases where the knowledge is that of a director who is a director of two companies involved in the same transaction require special consideration. Where the relevant director is in control of the two companies, each company will know what the other knows, because they have the same directing mind and will. Where the director is only one of a number of directors of two companies and where the director acquires information in the course of acting for company A, the knowledge will not automatically be imputed to company B. That will be the case even where they are involved in a mutual transaction. Generally, for the knowledge acquired in the capacity as a director of company A to be imputed to company B, the relevant director must be under a duty to company A to communicate the knowledge to company B and be under a duty to company B to receive the knowledge.
Without more, the fact that two companies have common directors does not result in the knowledge of one company being attributed to the other company.[136]

[135]JB Asset Management (n 41).

[136]Ibid, [79]-[81].

None of these nuances are pleaded in the SOC. The relevant acts of identified individuals which are relied upon as constituting the acts or omissions of YWAM Melbourne, and in turn the defendants, have not been set out.

The defendants submitted before me that the plaintiff has not pleaded or put on any evidence as to how it says YWAM Melbourne’s alleged knowledge is attributable to the defendants. They contend that the mere fact that YWAM Surrey Hills and YWAM Durham are ‘affiliated or related entities’ does not establish common knowledge, common control or common liability between companies.[137] I accept that submission. It was not suggested that there was any person in existence who might, for example, be an employee, who is so closely or relevantly connected with YWAM Melbourne and who knew of the Abuse Allegations, that their state of mind could be treated as the state of mind of either of YWAM Surry Hills or YWAM Durham.
[137]Clarke (n 101), 462-463 [29].

Aggregation of knowledge

Additionally, to the extent that the plaintiff might seek to aggregate the number of persons who have alleged knowledge of the Abuse Allegations, there is little historical support for a concept of aggregation of knowledge and there is ‘scant support in England and Australia for a doctrine which permits attribution to a corporation of an aggregate of the knowledge of various different agents.’[138]
[138]Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 (Edelman J), 441 [80] (Besanko J) and 438 [67] (Allsop CJ) (‘Kojic’). Allsop CJ agreed with Edelman J on this point (at 429 [31], 437 [62], 438 [65]); as did Besanko J (at 440 [78]).

In Westpac Banking Corporation v Bell Group (in liq) (No 3) (‘Bell Group’),[139] Drummond AJA (with whom Lee J agreed on this point at [1100]) interpreted Krakowski v Eurolynx Properties Ltd (‘Krakowski’)[140] as a case ‘in which knowledge held by separate employees and agents of a company was aggregated to enable a finding that the company had a fraudulent state of mind not held by any individual employee;’ and understood the High Court to have justified this approach because the various officers, employees and external agents ‘had responsibility to act for the company in different aspects of the one transaction.’[141]
[139](2012) 44 WAR 1 (‘Bell Group’).
[140]Krakowskiv Eurolynx Properties Ltd (1995) 183 CLR 563.
[141]Bell Group (n 139), 396-397 [2183]-[2184].

Edelman J, then sitting in the Full Court of the Federal Court, took the view in Commonwealth Bank of Australia v Kojic[142] that the Bell Group decision on this point was plainly wrong for multiple reasons, including that (contrary to the understanding in Bell Group), the High Court did not aggregate the knowledge of the three relevant agents in Krakowski; rather, the High Court considered that the lack of fraudulent knowledge on the part of the agent that made the false representation did not dispose of the matter, as two other agents of the impugned company possessed the relevant knowledge that amounted to fraudulent intention.[143]
[142]Kojic (n 138), 457 [149] (Edelman J).
[143]Ibid, 452 [125] (Edelman J).

The practical issue for the plaintiff is that he needs to demonstrate that YWAM Melbourne had actual knowledge of the Abuse Allegations and that there was an obligation to pass that information on to the defendants. Consistent with this, the plaintiff then needs to establish that a director or someone within a senior or managerial role within YWAM Surrey Hills and YWAM Durham had some piece of information that the company can put together. The SOC does not properly plead such allegations.

In the present case, the plaintiff at its highest, seeks to attribute the requisite knowledge of the Abuse Allegations to the defendants based on the primary rules of attribution for knowledge where:

(a) the unknown persons who might have the alleged knowledge have not yet been identified; and

(b) where it is said those unknown persons may become known through the compulsory processes of the Court, which the plaintiff has, to date, not sought to engage.

This is, in my opinion, far removed hypothesising and conjecture, particularly in light of the unchallenged sworn evidence of the directors of the defendants, and Mr Aherne, a director of YWAM Melbourne, the only identifiable common connection between YWAM Melbourne and the defendant companies.

In Elevate NSW Pty Ltd v Canada Bay Private Hospital Pty Ltd,[144] Griffiths J considered, in the context of an application to set aside a creditors statutory demand, the issue of knowledge where the plaintiff seeking to set aside the demand alleged an offsetting claim for misleading and deceptive conduct arising from the defendant’s alleged failure to disclose the absence of an occupation certificate. In that matter, the plaintiff submitted that it had a legitimate expectation that the lower ground floor did have an occupation certificate or was otherwise in a suitable condition to maintain and obtain the relevant medical licence necessary to operate the sleep laboratory business. The plaintiff argued that the defendant’s silence, or failure to disclose that the lower ground floor did not have an occupation certificate, in circumstances where the plaintiff had a legitimate expectation that this would be disclosed to it, amounted to misleading or deceptive conduct citing, inter alia,Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd[145] and Henjo Investments Pty Limited v Collins Marrickville Pty Limited (No 1).[146] Relevantly, for the purpose of this Application, Griffiths J held:

The fundamental difficulty with the plaintiff’s claim, however it is framed, is that the evidence does not establish that the defendant knew that there was no Occupation Certificate in respect of the lower ground floor or that the lower ground floor did not satisfy the requirements necessary to obtain an Occupation Certificate.
Ms Campbell, who appeared for the plaintiff, accepted the evidence did not establish any knowledge on the defendant’s part, but submitted that that was irrelevant to the enquiry under s 18. She submitted several times in oral argument that, for the plaintiff to succeed on this matter, the Court would have to (and should) accept the legal proposition that a plaintiff can establish misleading or deceptive conduct by silence, even if the person making the representation by silence is unaware and has no knowledge of the information being withheld. Ms Campbell submitted that this was because intention and the alleged contravener’s state of mind are irrelevant for this cause of action..
Those submissions are rejected. They raise significant problems at a level of principle and are flatly inconsistent with binding authority, including Henjo at 557 per Lockhart J (with whom Burchett and Foster JJ agreed) and BMW Australia at [21] per French CJ and Kiefel J. Whether or not an alleged contravener has knowledge of a particular fact which the aggrieved party says ought to have been disclosed but was not is a necessary aspect of the circumstances and context in which the characterisation of the impugned conduct in commercial dealings is to be undertaken (see, for example, BMW Australia at [20] per French CJ and Kiefel J and Henjo at 555 per Lockhart J). To accept the proposition advanced by the plaintiff would give s 18 an expanded operation well beyond the limits identified by the High Court (see BMW Australia at [21] per French CJ and Kiefel J).
In support of her submission that it is irrelevant whether the defendant had knowledge that there was no Occupation Certificate, the plaintiff relied upon a passage in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 223 per Stephen J. In particular, it was stated by the plaintiff that intent and the state of mind of the person making the representation is not relevant. There is nothing at 223 of Hornsby Building which supports that submission. Ms Campbell may have had in mind Stephen J’s statements elsewhere in that case to the effect that nothing turns upon the intent of the alleged contravener for the purposes of s 52(1) of the Trade Practices Act 1974 (Cth) (see, for example, Hornsby Building at 228). Without doubt this principle is correct but nothing said by Stephen J suggests that, in a case based on silence giving rise to a representation, the knowledge or otherwise of the alleged contravener of the fact or matter which has not been disclosed is irrelevant.
Thus, while it is true that an intention to mislead or deceive is not an essential element for the cause of action under s 18 of the ACL, a representation based on silence necessarily focusses attention on whether the impugned conduct of its nature constitutes misleading or deceptive conduct and knowledge or absence of knowledge of the undisclosed matter by the alleged contravener will be relevant.
For those reasons, the claim based on misleading or deceptive conduct does not meet the low threshold required to be an offsetting claim under s 459H.[147]

[144](2019) 138 ACSR 186 (‘Elevate NSW’).

[145](2010) 241 CLR 357, 369-371 [18]-[23].

[146](1988) 39 FCR 546.

[147]Elevate NSW (n 144), 202-203 [86]-[91].

Respectfully, I adopt the analysis of Griffths J.

The plaintiff’s claim relies on an alleged breach of s 12 of the SLA. That section requires an intentional statement to induce someone. This differs from a false and misleading conduct claim where intention is, in the main, not relevant. For the plaintiff to succeed he must demonstrate the making of a false statement. That is how the case is pleaded at paragraphs 29 to 30 of the SOC.

The difficulty for the plaintiff is this: all of the directors of the defendants have deposed to the fact that they did not know of the Abuse Allegations. The only ‘common connection’ adopting the words of the plaintiff’s senior counsel was Mr Aherne. He similarly deposed that he did not know of the Abuse Allegations.

The plaintiff had an opportunity to seek to challenge the evidence of the directors of YWAM Melbourne and the defendants. He did not do so. Mr Hoover’s unchallenged evidence was that he was delegated with the authority to undertake the sale process and coordinate with the real estate agent, Mr Bremner. The other person who was given that authority to undertake the sale process was the managing director, Mr Mulligan, whose evidence is also unchallenged. Neither Mr Hoover or Mr Mulligan knew of the Abuse Allegations.

Against this point, senior counsel for the plaintiff contended that the defendants’ affidavit material was incomplete because it did not, for example, contain references to the practical day to day links between the various entities and whether there were common staff or common files. In my view that submission is, in the context of the evidence, lacks substance.

The plaintiff’s pleaded claim is to the effect that because of:

(a) the substance of the submission included in Appendix 6 to the Report by the Community Affairs References Committee to the Senate Inquiry made in around 2004 by parties other than YWAM Melbourne and the defendants (who did not exist at the time);

(b) the substance of the submission from Care Leavers Australia Network to the Victorian Inquiry in around 2013 by parties other than YWAM Melbourne and the defendants (who did not exist at the time);

(c) the substance of the submission from the Ballarat Sexual Abuse Survivors’ Group to the Royal Commission made in around 2014 by parties other than YWAM Melbourne and the defendants (who did not exist at the time); and

(d) the substance of the Ballarat Courier Article published in May 2014,

YWAM Melbourne had actual knowledge of the Abuse Allegations, and because they are related entities, that knowledge flowed to the defendants. The plaintiff does not identify any particular director of YWAM Melbourne and say that they had a responsibility to pass their alleged knowledge of the Abuse Allegations on to the defendants.

The uncontroverted evidence is that YWAM Melbourne did not have actual knowledge of the Abuse Allegations. Mr Ahern’s evidence is that he did not know of the Abuse Allegations. Mr Hoover and Mr Mulligan depose to the fact that they did not know of the Abuse Allegations and they were empowered to conduct the sale of the Properties on behalf of the defendants. Critically considering the pleaded claim and defence, and the evidence before me, I am unable to conclude that the plaintiff’s claim has any reasonable prospect of success.

Silence or non-disclosure

In the alternate, the plaintiff’s claim is based on silence or non-disclosure. That is, that the Abuse Allegations were known by YWAM Surrey Hills and YWAM Durham and ought to have been disclosed because of the alleged communication of the Intended Purposes and communications between the plaintiff and Mr Bremner.

As Black CJ explained in Demagogue Pty Ltd v Ramensky:[148]

Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of “mere silence” or a duty of disclosure can divert attention from that primary question. Although “mere silence” is a convenient way of describing some fact situations, there is in truth no such thing as “mere silence” because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.[149]

[148](1992) 39 FCR 31.

[149]Ibid, 32.

The position of Mr Bremner is entirely unchallenged. His evidence was that he did not meet the plaintiff until after the Contract of Sale was signed. There was no request to cross examine Mr Bremner and no challenge whatsoever to his evidence. Accordingly, I am unable to accept that the alternate claim of the plaintiff has any real prospect of success.

Disposition

The case the plaintiff seeks to prosecute involves questions of attribution of knowledge from one corporate entity to two others of:

(a) historical events dating back to a time prior to 1981 when the Home for Boys was operated at the Properties; and

(b) subsequent submissions made to various inquiries dating back to 2004, in the case of the Senate Inquiry, 2013 in the case of the Victorian Inquiry and 2014 in the case of the Royal Commission.

The unchallenged evidence before me is that none of the directors of YWAM Surrey Hills or YWAM Durham had knowledge of the Abuse Allegations. Neither of the defendant entities existed at the time the Home for Boys was operated. Further, the defendants did not exist at the time of the Senate Inquiry, the Victorian Inquiry, the Royal Commission or the Ballarat Courier Article. At its highest, the directors of YWAM Surrey Hills and YWAM Durham say that they were generally aware of the Senate Inquiry and the Victorian Inquiry but were not aware of submissions being made by unrelated parties in respect of the Home for Boys. In relation to the Royal Commission, the defendants say that whilst they were aware of Commission, they were not aware of a submission having been made by an unrelated party that contained allegations of child abuse at the Home for Boys. None of the defendants’ directors read the Ballarat Courier Article or were aware that it had been published. Their unchallenged evidence is that they did not know of the Abuse Allegations until they received the plaintiff’s letter dated 19 April 2022. Further, YWAM Melbourne did not make any submissions to Senate Inquiry, the Victorian Inquiry, the Royal Commission or the Ballarat Courier Article. Mr Aherne’s unchallenged evidence is that he did not know of the Abuse Allegations until 19 April 2022.

In the circumstances, I consider the plaintiff’s suggestion that discovery, subpoenas or interrogatories might yield some evidence by which the he can establish actual knowledge of the Abuse Allegations by the defendants to be fanciful at best.

Having regard to the cause of action pleaded, the facts that are said to give rise to the plaintiff’s claim, the defence and evidence filed by the defendants and the absence of evidence on behalf of the plaintiff, I am not satisfied that there is a real question of law or fact that should be decided at trial. In my opinion, the plaintiff’s claim is improbable, tenuous and one that is contradicted by all the available evidence. There is nothing that sensibly suggests that the plaintiff’s position will be improved by discovery, subpoenas or interrogatories given the nature of the plaintiff’s claim and the evidence before me.

Accordingly, summary judgment will be given for the defendants. I direct the parties to confer as to an appropriate form of order to give effect to these reasons. In the event the parties are unable to reach agreement, the matter will be listed for a brief further hearing and the parties will be required to set out their respective positions in short written submissions, including in respect of costs.

SCHEDULE OF PARTIES

S ECI 2022 04803
BETWEEN:
FR SAMEH SADEK (MARK) ATTALA	Plaintiff/First Defendant by Counterclaim
- v -
YWAM SURREY HILLS LTD (ACN 633 581 049)	First Defendant/First Plaintiff by Counterclaim
YWAM DURHAM LTD (ACN 633 581 352)	Second Defendant/Second Plaintiff by Counterclaim
THE REGISTRAR OF TITLES	Second Defendant by Counterclaim

[2024] VSC 268

24 May 2024