Badcock v Channel Seven Adelaide P/L & Ors - [2006] SADC 7

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
BADCOCK v CHANNEL SEVEN ADELAIDE P/L & ORS
Judgment of His Honour Judge Clayton
8 February 2006
PROCEDURE
APPEAL FROM DISTRICT COURT MASTER - PLEADINGS
Appeal from a District Court Master who ordered that the action be struck out pursuant to rule 3.01.
HELD: In the absence of a separate interlocutory application which specifically invoked rule 3.01 and stated the basis of the application, the master should not have dismissed the action pursuant to that rule. Also the order striking out the action pursuant to rule 3.01 should not have been made at a directions hearing under rule 55.11, but required an application under rule 67.01. Appeal allowed.
District Court Rules 3.01, 46.18, 46.20, 55.11, 55.12, 67.01 and 97.01; District Court Practice Direction No 2, referred to.
Kadeh v Gill (2000) 211 LSJS 88 at 93; Chapman v ABC (2000) 77 SASR 181 at 185; Badcock v Channel Seven Adelaide Pty Ltd & Ors unreported judgment of Judge Lee delivered 22 April 2005; O'Brien Lovrinov Crafter Pty Ltd v Corradini & Anor [1999] SASC 159, considered.

BADCOCK v CHANNEL SEVEN ADELAIDE P/L & ORS
[2006] SADC 7

By Notice of Appeal dated 14 September 2004 Mr Badcock (“the plaintiff”) appealed against a decision of a master dated 17 August 2004. By a second notice dated 22 September 2004 he appealed against an order of a master dated 31 August 2004. The two notices raise the same issues.
On 17 August 2004 there was a directions hearing at which the master heard argument and reserved his decision. The decision of the master was delivered on 31 August 2004 when reasons for decision were posted to the parties. Because no order was made on 17 August 2004 the Notice of Appeal dated 14 September 2004 is otiose. The appeal is concerned with the orders made on 31 August 2004. In order to put those orders and the appeal into perspective it is necessary to have regard to the history of the matter.
The action was commenced on 5 May 2003. The plaintiff is self-represented and the appeal centred around his inability to file a satisfactory statement of claim.
The action arises out of a television programme which was broadcast by the first defendant on 5 May 1997 and promotions for the programme broadcast between 2 and 5 May 1997 inclusive. The other defendants are employees of the first defendant who participated in the programme.
I will not attempt a complete catalogue of the extensive allegations that have been made by the plaintiff, but the first edition of the statement of claim contained wide ranging complaints about the entry of the second defendant onto business premises under the control of the plaintiff to film, a verbal assault, misleading the public and false claims. Paragraphs 105 to 109 of the statement of claim contain particulars of negligence.
In the latest draft edition of the statement of claim the plaintiff has complained that images and words published were defamatory of the plaintiff. The words and images are not set out in that edition, although they did appear in an earlier statement of claim.
The reasons for the decisions of the master itemise numerous ways in which the successive editions of the statement of claim are defective. Despite the detailed observations of the master the plaintiff has been incapable of producing a satisfactory statement of claim.
On 8 August 2003 the defendants applied for orders that the statement of claim be struck out and judgment entered for the defendants, or in the alternative an order that specified paragraphs of the statement of claim be struck out. The application was brought pursuant to rule 46.18 of the District Court Rules which provides that a pleading may be struck out for reasons which are specified including the failure to disclose a cause of action or non-compliance with the rules.
After hearing argument on 29 October and 15 December 2003 the master delivered reasons on 19 December 2003. After referring to rule 46.18, the master observed that in relation to that rule the court will strike out a cause of action, as opposed to a pleading, where it is clear that as pleaded the action is devoid of merit. He referred to Kadeh v Gill[1] and Chapman v ABC[2]. In the latter case Lander J observed that while rule 46.18 does not in its terms provide for an order dismissing the plaintiff’s proceedings or causes of action, such an order could be made, although the defendant’s application should state the nature of the order sought unambiguously. Lander J said:
While the defendant in this case sought the striking out of the plaintiffs’ statement of claim the affidavit in support shows that the defendant was in some respects seeking the dismissal of the plaintiffs’ causes of action.
There must be no misunderstanding as to what the defendant is seeking on any application, under r 46.18. The plaintiffs are entitled to know whether the defendant is seeking dismissal of the action or the striking out of some or all of the plaintiffs’ statement of claim. Moreover, the Court must also know exactly what relief the defendant seeks because the test which is to be applied will vary according to the relief which is sought. If the defendant is seeking the dismissal of the proceedings then the Court will apply the principles in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125.
It would be rarely the case that the proceedings themselves would be struck out if an application was made out under r 46.18(b), (c) or (d). Usually if the pleading does not comply with the rules of pleading or if the pleading had a tendency to cause prejudice, embarrassment or delay or it was scandalous, frivolous or vexatious the pleading or that part of the pleading would be struck out, but the plaintiff would be given leave to either replead his or her case in whole or in part. An order might be made to strike out the proceedings themselves if there was a continuing failure to comply with the rules as to pleadings or the plaintiffs insisted on maintaining a pleading which had a tendency to cause prejudice, embarrassment or delay or which was scandalous, frivolous or vexatious, but that would be a rare occurrence. It is more likely to be the case that a court might reach the conclusion that the parties’ proceedings ought to be dismissed in addition to striking out the pleadings for either of the reasons in r 46.18(a) or (e). If the Court was satisfied that a pleading disclosed no reasonable cause of action and none was maintainable it would, in those circumstances, strike out the statement of claim, and the proceedings. So also if the Court believed its processes were being abused it might strike out the proceedings themselves.
[1] (2000) 211 LSJS 88 at 93
[2] (2000) 77 SASR 181 at 185
The master decided that the pleading of negligence was both defective and incapable of being cured because no duty of care was alleged. He refused leave to the plaintiff to plead that cause of action in any amended repleading. As to the case in defamation he found that a reasonable cause of action in defamation was not pleaded and that there were no words or statements or defamatory imputations pleaded. As to the matters which the plaintiff alleged to be false or misleading the master said the allegations were meaningless because they did not identify words or statements of and concerning the plaintiff or imputations defamatory of him and no claim in misleading or deceptive conduct has been pleaded. The master said:
Each case must depend on its own facts, but it is apparent that tolerance will be suggested to litigants who can demonstrate that they have an arguable cause of action notwithstanding defects in their pleadings although there will inevitably be a time when no further opportunity should be given.
The master said that while there were extensive defects in the statement of claim it may be possible to plead a cause of action in defamation. He said for the plaintiff to make out a cause of action in defamation it would be necessary for him to plead any words or statements which he contends are defamatory and any defamatory imputations which he says arise. The master said that the plaintiff would also need to plead and disclose any causative link between the claim and any loss that he asserts.
The master’s formal order on 19 December 2003 was that the statement of claim be struck out and that the plaintiff be at liberty to file and serve a further statement of claim on or before 30 January 2004 subject to the matters and qualifications which were referred to in his reasons. The matter was adjourned to a directions hearing on Monday, 8 March 2004.
By 8 March 2004 the plaintiff had filed a further statement of claim.
At the directions hearing on 8 March 2004 the plaintiff made application to join another company, Seven Network Limited. It is unnecessary to consider that application for the purpose of this appeal although the plaintiff’s application became intertwined with the matters which give rise to the appeal.
Following argument on 8 March 2004 the master posted reasons to the parties on 13 April 2004. He declined an application by the defendants to have the claim struck out on the basis of the plaintiff’s bankruptcy. The master found that the further amended statement of claim was so defective that it should be struck out in its entirety. He provided detailed examples of the deficiencies in the pleading. The master noted that the plaintiff alleged that he had been defamed by the defendants and that arguably he might make out that allegation at a trial. The master said:
Although each case must depend on its own facts ... the courts have adapted a somewhat tolerant attitude to litigants who can demonstrate that they have an arguable cause of action notwithstanding defects in their pleadings, although there will inevitably be a time when no further opportunities should be given.
The courts are likely to allow a claim to remain if a cause of action can be pleaded by amendment - Kadeh v Gill (2000) 211 LSJS 88.
I have decided to give the plaintiff a final opportunity to replead his claim. However if on a third attempt he fails properly to articulate his case, it is likely that he will be refused any further indulgences and his claim will be struck out in its entirety. I am mindful of the continuing prejudice caused to the defendants as referred to above.
The formal order was that the statement of claim be struck out. The master said “if the plaintiff wishes to pursue this action, or to join another party, he is at liberty to lodge and serve, but not file, a proposed further amended Statement of Claim on or before 14 May 2004”. A directions hearing was fixed for Wednesday, 26 May 2004.
The events which followed are disclosed in reasons of the master posted to the parties on 1 July 2004. At the directions hearing on 26 May 2004 the plaintiff had “tabled and served” a further statement of claim. In the reasons posted on 1 July 2004 the master said:
I have expressed concern concerning the repeated failures of the plaintiff to articulate a cause of action and have indicated that at some stage the matter might reach the point at which the whole action should be dismissed by reason of the failure of the plaintiff to properly formulate a claim.
The reasons set out the submissions by counsel for the defendants as to the defects in the new statement of claim. The master wrote:
In reply, Mr Hassan [counsel for the defendants] referred to DCR 3.01 which gave the Court power to dismiss an action at any time. He said that the action bordered on the vexatious and the plaintiff’s request for an adjournment to further consider his position and to confer with the defendants, was inappropriate as it was not the function of the defendants to assist the plaintiff in the formulation of his claim.
I set out that paragraph, as it seems to be the first reference to rule 3.01. Up until that time the defendants’ application had been based on rule 46.18.
The master was not satisfied that the new edition of the statement of claim was satisfactory. He identified deficiencies. The master said:
Notwithstanding firstly that I have refused to the plaintiff his application to file and serve the document tabled by him, and secondly, the observations I made in paragraph 50 of my Reasons dated 13 April 2004, I have, with considerable hesitation, decided not to strike out the whole action.... As I indicated earlier, the courts have adopted a somewhat tolerant attitude to litigants who demonstrate that they have an arguable cause of action notwithstanding defects in their pleadings, although there will inevitably come a time when no further opportunity shall be given.
The master mentioned again that it was conceivable the plaintiff might make out a cause of action in defamation and said he was prepared to offer him a further opportunity to do so. However, he said:
The plaintiff must now appreciate that the indulgences which have been offered to him by the Court are nearing an end, and he should take particular care in drafting his further pleading to ensure that it complies with the rules and case law.
On that occasion the formal order was that the plaintiff’s application to amend be refused. The master said that if the plaintiff wished to pursue the action and to join Seven Network Limited, he was at liberty to lodge and serve, but not file, a proposed further amended statement of claim reflecting such proposed joinder on or before Friday, 6 August 2004. The reasons for decision conclude with the statement:
I fix a directions hearing for Tuesday 17 August 2004 at 9.30 am, when I will further consider the matter.
I have set out that part of the order verbatim because it is relevant to the grounds of appeal.
The observations of the master in the reasons made it clear that the plaintiff was required to produce a satisfactory statement of claim and that one matter under consideration was whether the master should strike out the whole action. The separate reasons of the master dated 19 December 2003, 13 April 2004 and 1 July 2004 all indicated clearly that the plaintiff could not expect unlimited opportunities to file a statement of claim.
On 17 August 2004 the directions hearing took place. The plaintiff told the master that he had not been able to “totally complete a further amended statement of claim”. The transcript of proceedings indicates that the plaintiff told the master that he was in the course of finalising a further statement of claim. The transcript also reveals the plaintiff had been endeavouring, perhaps inappropriately, to obtain some feedback from the other side.
The plaintiff said nothing to indicate that he did not intend proceeding with the action. While it is difficult to divine precisely what the plaintiff did put to the master, he said:
Therefore we were seeking from your Honour some guidance or direction in having put forward a third one that is not acceptable to the other side, then perhaps some directions as to what the other side may do to perhaps more fully air their position.
During the course of the hearing the plaintiff:
·Announced that he was in the course of preparing a statement of claim.
·Said the reason for the hold up was “resources and health issues”.
·When asked by the master how long he wanted to correct any problems said he had made his best attempt with the resources at hand - inferring that further time may not assist.
·Provided an explanation as to why the words complained of were not set out in the current edition of the statement of claim, although they had been set out in earlier editions.
Counsel for the defendants addressed the court as to the default of the plaintiff to that time and submitted “that this really does now fall within the ambit of the power that the court possesses pursuant to r 3 of the District Court Rules, to dismiss the action”. I set out that submission verbatim, because it should have indicated to the plaintiff the nature of the order that the defendants were seeking. It also confirmed that the defendants were proceeding under rule 3. Counsel referred to authorities and submitted that even if the action were dismissed, that would not prevent Mr Badcock from reinstating a claim in the future.
The position of the plaintiff is illustrated by his statement to the master that “it’s a little bit frustrating when no matter what statement of claim is put forward, there is an objection made irrespective of the content, and more specifically in a lot of cases”. The plaintiff was looking, inappropriately, to the court and his opponents for assistance.
As evidenced by the following dialogue, the master specifically sought the plaintiff’s response to the “strike out” application:
MASTER:What do you say as to the defendants’ submission that I should strike out your claim now and that would not have the effect, based on the Rogers decision, of stopping you from issuing a proceeding when you are ready, what do you say as to that course? ....
MR BADCOCK: No, no, no, we are not - we would like this matter clearly dealt with, in fact the damages are continuing and I and members associated with me, family members are suffering. We need this matter dealt with, badly.
That should be interpreted as an indication that the plaintiff wished to pursue the action. Despite the express invitation the plaintiff never addressed the master’s invitation to respond to the application to strike out the action. At the conclusion of the hearing on 17 August 2004 the master reserved his judgment.
In reasons delivered on 31 August 2004 the master set out the history of the matter and the submissions that had been put to him. He referred to District Court Rule 3.01 and noted that notwithstanding the deficiencies of the plaintiff’s pleadings he had failed to lodge a proposed further statement of claim or to put before the court a concrete proposal. The master said:
I have, therefore, reluctantly come to the conclusion that the plaintiff should not be permitted any further indulgence and that his claim should be struck out upon the basis that he has been unable to articulate a cause of action against the defendants and no further opportunity should be given to him.
I note in passing that in his reasons dated 19 December 2003 it may be possible for the plaintiff to plead a cause of action in defamation.
As I have mentioned, in the reasons posted on 1 July 2004 the master had fixed a directions hearing for 17 August 2004. That seems to be the only notice that the plaintiff had as to the purpose of the hearing.
Rule 55.11 provides that on an application for directions the court may give directions with respect to pleadings, more explicit pleadings under 46.20, a stay of proceedings, or the striking out of any pleading. The powers of the court under rule 55.11 do not include the striking out of the action itself. Rule 55.12 provides that a final interlocutory judgment can be entered in default of filing a notice of address for service or defence, but it does not deal with the failure to lodge a statement of claim.
Rule 67.01 deals with those applications which cannot properly be dealt with at directions hearings. The applications under that rule are heard in chambers and in practice it would be difficult to distinguish between the form and procedure of a directions hearing under rule 55.11 and an application under rule 67.01.
District Court Practice Direction No 2 suggests that a separate interlocutory application is necessary if the order sought may not be made at a directions hearing, but the practice direction makes no distinction as to the procedure at the hearing.

I find that in so far as the defendants were applying to strike out the action under rule 3.01, a separate interlocutory application was necessary because the order sought could not be made at a directions hearing.
The appellant’s grounds of appeal include the following:
2.The hearing of the proceedings on 17^th. August 2004 was a Directions Hearing at which the plaintiff believed the status of the applications of the parties and the further conduct of the proceedings and direction of the court was to be sought and heard.
....
5.The plaintiff has been and is currently disadvantaged by diminished health and resources.
6.The plaintiff was genuinely confused as to a prior order to serve but not file an Amended Statement of Claim
7.The Defendants and the Honourable court relied upon and the affidavit material of the defendants presented to the court and the plaintiff at the time of the Directions Hearing on 17^th .August’04.
....
9.The plaintiff has not had the opportunity to be heard on the on District Court Rules 2.01., 3.01(a) and 3.01(b).
10.As at the Directions Hearing of the matter on 17^th .August’04, the plaintiff was seeking clarification of prior orders and the prior written reasons of His Honour Master Norman prior to being in a position to be able to finalise a further Amended Statement of Claim.
Those grounds raise the question of whether the plaintiff misunderstood the nature of the proceedings before the master on 17 August 2004.
In his reasons of 1 July 2004, when the master ordered that a directions hearing be fixed for 17 August 2004, no specific reference was made to an application under rule 3.01. The master’s reasons referred, by reference to a paragraph number of the reasons dated 13 April 2004, to the possibility that the claim would be struck out and stated that the master had decided not to strike out the whole action at that time, but there was no express indication in the order that the hearing had been adjourned 17 August 2004 to hear argument on an application under rule 3.01 to strike out the plaintiff’s claim. Notice of the rule under which the defendants’ application was made was important because the plaintiff needed to be informed of the criteria he was required to address.
On the hearing of the appeal the plaintiff addressed the court at length and elaborated on written submissions which extended to 142 paragraphs.
In paragraph 118 of the written submissions the plaintiff said he was “genuinely confused as to what was required in view of the conduct of the respondents and the prior events included in these submissions”. In paragraph 119 of the written submissions he said that as an unrepresented party he was seeking further directions at the directions hearing on 17 August 2004. Paragraph 132 lists thirteen specific complaints. I do not necessarily accept any of the submissions, but the submissions do illustrate confusion and uncertainty on the part of the plaintiff.
For the sake of completeness, I digress to mention that the determination of the appeal was delayed whilst the defendants applied for security for the costs of the appeal. The plaintiff is bankrupt. The application for security for costs was heard and dismissed by His Honour Judge Lee who said:
It will be apparent from what I have said that this is not a case of proceedings which disclose no cause of action known to the law, or of proceedings which cannot by amendment be made to disclose such a cause of action, in terms of the first part of rule 3.01. Presumably the Master concluded that the appellant’s unsuccessful efforts at making his pleadings comply with the Rules were, in the end, vexatious or an abuse of process, in terms of the second part of rule 3.01. Yet to strike out a statement of claim in its entirety and to require an unrepresented litigant to file a statement of claim that complies with the Rules may, in some cases, lead inevitably to the eventual dismissal of his claim, even though he has demonstrated that he has a cause of action known to the law. It is at least arguable that the appellant’s case is a case of that kind. He is impecunious, and does not have access to legal aid. If, as he asserts, he has made a genuine effort to comply with the Rules, then it would seem that his lack of pleading skills has brought him undone.
Judge Lee also said:
In the case before me, it is at least arguable that the more appropriate and just approach to the second statement of claim would have been to sieve (to use Perry J’s word) through the document for the purpose of leaving intact such of the paragraphs as disclosed a cause of action in defamation. Indeed, in his reasons with respect to the first and second statements of claim, the Master identified numerous paragraphs that he said should be struck out. It is important to emphasise that the dismissal of proceedings under rule 3.01, in contrast to the striking out of pleadings under rule 46.18, can only be founded upon, either the absence in proceedings of a cause of action that is disclosed or could by amendment be disclosed, or proceedings which are frivolous, vexatious or an abuse of the process of the court.
I adopt with respect those views of Judge Lee.
In the reasons dated 31 August 2004 the master indicated that he was proceeding under rule 3.01, but did not specify which limb of the rule he relied upon. The stated reason for the order which was made by the master was that the plaintiff had “been unable to articulate a cause of action against the defendants”.
The underlying factual basis for the order seems to be that the plaintiff had failed to comply with the master’s orders in his reasons posted on 1 July 2004 “to lodge and serve, but not file, a proposed further amended statement of claim.... on or before Friday, 6 August 2004”.
The question which I must determine is whether the master was correct to strike out the action at a directions hearing.
Rule 97.01 of the District Court Rules dictates that this appeal is by way of rehearing. I am required to exercise the discretion afresh.
While paragraph 1 of the application dated 8 August 2003 did indicate that the defendants were seeking judgment, the defendants did not continue to rely upon that application. At the hearing on 26 May 2004 counsel for the defendants referred in his reply to rule 3.01. During the course of argument there were references to the claim being struck out and the primary focus of the reasons of 1 July 2004 was on whether the claim should be struck out. On that occasion the master offered the plaintiff a further opportunity to make out a cause of action in defamation, but the plaintiff did not avail himself of the opportunity.
The matters, which I have mentioned, were capable of making the plaintiff aware of the fact that the defendants had progressed from the written application pursuant to rule 46.18 dated 8 August 2003 to an oral application to strike out the claim pursuant to rule 3.01.
On 17 August 2004 the plaintiff did not have the new statement of claim that was required and appeared to lack direction. Mr Badcock told the master that he was in the course of finalising a further draft. His reason for not having done that earlier was “resources and health issues”. He was incapable of articulating how long he required to “correct any problems”. The discussion between the master and the plaintiff suggests that the plaintiff did not comprehend that he was required to defend an application to strike out his claim.
Counsel for the defendants, in his address, did advert to the consequence of the action being dismissed, but Mr Badcock cannot have appreciated the significance of the statement. After hearing from both parties the master specifically directed the attention of Mr Badcock to the submission and invited him to address the submission that he should strike out the claim. I have already set out the dialogue that occurred. At the least, the comments of Mr Badcock evidenced uncertainty as to what he was required to do. Notwithstanding the very clear invitation of the master he never addressed the possibility that his action might be struck out.
In my opinion an analysis of the transcript does confirm that the plaintiff was in a state of uncertainty. The defendants were proceeding under rule 3.01, but did not specify with clarity which limb or limbs of that rule they relied upon.
Judge Lee had presumed that the master had concluded that the appellant’s unsuccessful efforts at making his pleadings comply with the rules were in the end vexatious or an abuse of process in terms of the second part of rule 3.01. Judge Lee also said that it may have been appropriate to sieve through the second statement of claim for the purpose of leaving intact such paragraphs as disclose a clause of action.
The defendants’ application under rule 46.18 underwent a transmogrification into an application under rule 3.01 during the course of counsel’s reply to the master on 26 May 2004. I am sure that the defendants’ representatives were in no doubt as to the nature of the order that they were seeking on 17 August 2004 and that the master understood the nature of their application. The master had already given extensive reasons detailing deficiencies in the statement of claim and had repeatedly warned the plaintiff that the indulgences which had been offered to him were nearing an end. The master’s conclusion (paragraph 34) that the plaintiff should not be permitted any further indulgence was understandable.
Despite the unambiguous warnings by the master I am not satisfied that the plaintiff understood that he was confronted by a strike out application based on rule 3.01 or that he understood which particular limb of that rule he was required to address. The argument before the master never descended to a specific consideration of which of the criteria in rule 3.01 had been breached.
In my opinion the plaintiff should have been given clear notice by a separate application in writing that the defendants were proceeding pursuant to rule 3.01, including an indication of which of the specific limbs of rule 3.01 were to be invoked. If the defendants had complied with Practice Direction No 2, the plaintiff would have received such notice. If the defendants were proceeding other than pursuant to rule 3.01 the plaintiff should have been given clear written notice of the rule pursuant to which the application was made. As I have mentioned, rule 3.01 was only introduced by a side wind during the course of counsel’s address in a reply on 26 May 2004.
While the earlier written reasons of the master had referred to the possibility that the action might be struck out, the plaintiff should have been told specifically that the hearing on 17 August 2004 was an application to strike out his claim rather than a directions hearing. The remarks of Lander J in Chapman v ABC (supra) with respect to rule 46.18 should apply with equal force to rule 3.01. The plaintiff should not have been left in any doubt as to which rule the defendants were proceeding under because different criteria were to be applied depending on which rule was invoked, nor should he have been left in any doubt about the nature of the hearing on 17 August 2004.
The plaintiff’s continuing failure to produce a statement of claim may have placed him at risk and may have provided a basis for striking out the action, but it should have been made clear to the plaintiff that the hearing on 17 August 2004 was not simply a directions hearing but that an application would be made to strike out the action. The plaintiff should have been given clear notice of the purpose of the hearing on 17 August 2004, the rule which the defendants were proceeding under and the precise way in which it was alleged that the rule was infringed.
In my opinion, the plaintiff has made out grounds 2, 6, 9 and 10 of his Notice of Appeal, notwithstanding many indulgences granted by the master and his specific invitation to the plaintiff to address to strike out the claim. The rules required more.
I allow the appeal and set aside the order made by the learned master on 31 August 2004.
Ex Tempore Reasons
Wednesday, 8 February 2006 at 10.10am
BADCOCK v CHANNEL SEVEN ADELAIDE PTY LTD and ORS
The matter was called on today because on thinking about the matter after reserving my judgment, I wished to hear further argument on one or two matters from the defendants. The matters which troubled me were addressed by Ms Charlesworth today.
If I can just mention some random matters. First, Mr Badcock was provided with the master’s reasons which advised that a directions hearing had been set down for 17 August 2004. The reasons which I refer to were those which were given on 1 July 2004. On 10 August 2004, the solicitors for the defendants wrote to Mr Badcock. They noted that as at the time of writing he had failed to serve a proposed amended statement of claim prior to 6 August 2004 or at all. The letter said:
We have written to you on numerous occasions in the past indicating the need for you to comply with the orders of the Court notwithstanding your status as an unrepresented litigant. Your failure to comply with the deadlines imposed by the Court are not acceptable and continue to prejudice our clients.
We note that the directions hearing in this matter is set down for 17 August 2004. Could you please serve us with your proposed Amended Statement of Claim forthwith. If you do not intend to file such Statement of Claim and wish to discontinue your action, we invite you to contact the writer at your earliest convenience.
What that letter did not do was to advise that the defendants proposed to proceed pursuant to rule 3.01, that the defendants intended to apply to strike out the action or the precise grounds upon which the strike out action was to be made.
There is no doubt that Mr Badcock was at risk; he should have brought forward a statement of claim. However his default should not have hung over his head like the sword of Damocles in such a way as to allow the defendants to pursue a strike out application without giving precise notice of the rule under which the application was made and the basis for the application.
I turn to discuss rule 3.01. The rule provides:
The Court may at any time dismiss proceedings which disclose no cause of action known to the law or can not by amendment be made to disclose such a cause of action, or which are frivolous, vexatious or an abuse of the process of the Court and may at any time grant a stay or proceedings where the justice of the case so requires.
Ms Charlesworth submitted that the expression “where the justice of the case so requires” applies to all of the criteria set out in the rule. That is, that the expression does not apply only to the power to grant a stay of proceedings. I do not accept that interpretation; in my opinion the words “where the justice of the case so requires” apply only to the power to grant a stay of proceedings and not the power to dismiss proceedings.
In order to obtain an order that proceedings be dismissed the applicant must satisfy one of the stated criteria, that is that the proceedings disclose no cause of action known to the law or cannot by amendment be made to disclose such a cause of action or are frivolous, vexatious or an abuse of process. As to the first criterion, I interpret rule 3.01 where it refers to proceedings which disclose no cause of action known to the law or cannot by amendment be made to disclose such a cause of action to establish one criterion, not two.
The master in reasons dated 19 December 2003 and 1 July 2004, had expressed the view that it may be possible for the plaintiff to plead a cause of action in defamation. Ms Charlesworth submitted that I should hear the matter afresh. To the extent that I may be required to rehear the matter afresh, I would reach the conclusion stated by the master, that is, I would find that the statement of claim may by amendment be made to disclose a cause of action. I would therefore find that the first criterion described in rule 3.01 had not been satisfied.
Ms Charlesworth submitted that the master had dispensed with the requirement for a separate application invoking rule 3.01. She acknowledged that there was no written application which invoked rule 3.01. The master did not make an express order dispensing with the requirement of an application which invoked rule 3.01. I do not accept the argument that the master dispensed with the requirement by implication.
I was referred to the decision of Martin J in O’Brien Lovrinov Crafter Pty Ltd v Corradini & Anor[3], in particular paragraph 18 of his Honour’s reasons where he held that a District Court Judge had fallen into error in not treating the matter as a rehearing in which he was free to exercise his own discretion.
[3] [1999] SASC 159
If this matter is to be treated as a rehearing, I would exercise my discretion against making an order of the kind made by the master. There was no written application which invoked rule 3.01. The plaintiff had no notice of the specific limb of rule 3.01 which was relied upon and more importantly, the plaintiff had been advised that the hearing was a directions hearing. He was not advised that the hearing of this appeal was to become an application under rule 67.01 to strike out the action.
Ms Charlesworth submitted that the appeal itself should constitute notice of rule 3.01. I do not accept that argument. I think a specific notice should be given and a specific hearing should be fixed at which the application can be argued and Mr Badcock afforded an opportunity to answer the specific grounds upon which the application is based. To treat the hearing of this appeal as an application pursuant to rule 3.01 would have the effect of ambushing Mr Badcock.
Accordingly, I reject the application which was made orally because, in my opinion, a fresh application is required and it is not appropriate for a strike out application to be raised at this stage of an appeal.
Finally, can I say that Mr Badcock is seriously in default. It is not for me to say what the consequences of his default may be, but I do wish to point out that he is at risk and unless he remedies that default an order of the type sought by the defendants will be inevitable.
In addition to the oral remarks which I have made this morning, I publish the draft reason which I have prepared in advance.
The order of the court is that the appeal will be allowed. The order made by the learned master on 31 August will be set aside. There will be no order as to costs. It is now up to the parties to pursue the matter as they may be advised.