Bar-Mordecai v Australasian Medical Insurance Ltd; Bar-Mordecai v United Medical Protection Ltd and 2 Ors

[2005] NSWSC 407

CITATION:	Bar-Mordecai v Australasian Medical Insurance Ltd; Bar-Mordecai v United Medical Protection Ltd & 2 Ors [2005] NSWSC 407
HEARING DATE(S):	6 April 2005, 8 April 2005
JUDGMENT DATE :	29 April 2005
JUDGMENT OF:	Simpson J
DECISION:	(i) proceeding numbered 20280/2002: leave to continue the appeal is refused; (ii) proceeding numbered 20325/2003: leave to continue the appeal is refused

CATCHWORDS:	appeal against decision of a Master - leave to continue the appeal - vexatious litigant - prima facie ground for proceedings - abuse of process
LEGISLATION CITED:	Corporations Act 2001 (Cth) s471B, s472(2) Fair Trading Act 1987 (NSW) s42, s44(k), s53 Family Provision Act 1982 (NSW) Insurance Contract Act 1984 (Cth) s13, s37 Insurance (Agents and Brokers) Act 1984 (Cth) s11 Medical Indemnity Act 2002 (Cth) Medical Practice Act 1992 (NSW) s36, s37 Poisons and Therapeutic Goods Act 1966 (NSW) Supreme Court Act 1970 (NSW) s75A, s84 Supreme Court Rules Pt 11 r 8, Pt 13 r 5, Pt 15 r 26 Trade Practices Act 1974 (Cth) s51AA, s51AB, s52, s53k, s58
CASES CITED:	Attorney-General v Bar-Mordecai [2005] NSWSC 142, 25 February 2005 Bar-Mordecai v AMIL [2003] NSWSC 774, 26 August 2003 Bar-Mordecai v Hillston [2004] NSWCA 65, 17 March 2004 Bar-Mordecai v UMP of NSW [2004] NSWSC 878, 24 September 2004 Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11, 8 April 1999 General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; 112 CLR 125 Hillston v Bar-Mordecai [2003] NSWSC 89, 28 February 2003 Vagrand Pty Ltd (in liquidation) v Fielding & Ors (1993) 41 FCR 550
PARTIES:	20280/2002 - Michael Jacob Bar-Mordecai - Plaintiff Australasian Medical Insurance Ltd - Defendant 20325/2003 - Michael Jacob Bar-Mordecai - Plaintiff United Medical Protection of NSW - 1st Defendant Australasian Medical Insurance Limited - 2nd Defendant United Medical Protection - 3rd Defendant
FILE NUMBER(S):	SC 20280/02; 20325/03
COUNSEL:	SD Kalfas - Defendants RC Titterton - Attorney-General of NSW (appearing as amicus curial in relation to issues concerning plaintiff having been declared a vexatious litigant)
SOLICITORS:	(Plaintiff appeared in person) DI Brown - Defendants

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Friday 29 April 2005

20280/02 Michael Bar-Mordecai v Australasian Medical Insurance Ltd
20325/03 Michael Bar-Mordecai v United Medical Protection Ltd & 2 Ors

JUDGMENT

1 HER HONOUR: These two proceedings were, by agreement, heard together. In each case the principal proceeding is an appeal to this Division against a decision of Master Harrison given, respectively, on 26 August 2003 (Bar-Mordecai v AMIL [2003] NSWSC 774) and 24 September 2004 (Bar-Mordecai v UMP of NSW [2004] NSWSC 878).

2 The first, and principal, question for present determination in each case is whether the plaintiff, Mr Michael Jacob Bar-Mordecai, should be granted leave to continue to prosecute the appeal.

3 The plaintiff acknowledged that he is not entitled to pursue either appeal unless he is granted leave to do so. That is because, on 25 February 2005, at the instance of the Attorney-General of NSW, Patten AJ made orders, pursuant to s84 of the Supreme Court Act 1970, which included the following order:

“2. Any legal proceedings instituted by Michael Jacob Bar-Mordecai, in any court before the date of this order, shall not be continued by him without the leave of this Court.”
( Attorney-General v Bar-Mordecai [2005] NSWSC 142)

background

4 A great deal of factual material found its way into evidence. From a variety of sources, the following may be discerned as the background to the proceedings.

5 Until September 2000 the plaintiff was a medical practitioner, in general practice. In 1979 he became the treating general practitioner of a patient, Mr Jack Hillston. Subsequently he also came to treat Mr Hillston’s wife, Mrs Eveline Hillston. Mr Hillston died in August 1983. The plaintiff continued to treat Mrs Hillston. Very shortly after Mr Hillston’s death, the plaintiff and Mrs Hillston began a sexual relationship. The plaintiff moved into Mrs Hillston’s home and they lived together in the same house until her death in June 1994. The plaintiff was a beneficiary of Mrs Hillston’s will. He continued to treat her. On her death he certified the cause of her death.

6 On 1 May 1994 the plaintiff became a member of an organisation then known as the NSW Medical Defence Union Ltd (“MDU”). In what appears to be a promotional booklet or pamphlet, presumably designed to inform and recruit new members, the MDU described itself as a:

“ ... medical defence organisation (MDO) ... that provides national and international protection to its members against legal action arising from incidents occurring in the course of their medical practice ...”

It outlined benefits of membership, including:

“ Payment for legal costs relating to claims.
Payment for damages awarded to the plaintiff arising from a claim.
Unique in-house expertise including an in-house legal department and fully qualified medical practitioner to handle your medico-legal concerns personally ...” (bold in original)

7 Despite what some might have thought to have been its appearance, MDU was not an insurance company, and did not provide to its members any policy of insurance. Access to the benefits it promoted was governed by its Memorandum and Articles of Association, which, relevantly, conferred an absolute discretion on the Board of Directors to make the benefits available to any member who applied.

8 In the middle of 1997 MDU merged with other medical defence organisations, to become United Medical Protection Limited (“UMP”). Upon the merger the plaintiff became a member of UMP. It may be taken that UMP assumed the obligations of MDU. It may also be taken that assistance available to members of UMP was of the same discretionary kind that had applied to MDU. The plaintiff retained this membership until 31 December 1998, when he was excluded due to non-payment of his annual membership subscription. Until the beginning of 1996 access to benefits continued to be within the absolute discretion of the Board. In 1996, 1997 and 1998 Australasian Medical Insurance Limited (“AMIL”), a subsidiary of UMP, issued the plaintiff with policies of insurance, each operative for one year. Each was a “claims made and notified” policy, providing indemnity, subject to the terms and conditions of the policy, for claims made and notified during the period of insurance specified.

9 The policies did not provide indemnity or cover in relation to events which occurred outside the period of insurance. Members were offered a choice of two policies designed to cover them against any claims relating to events outside the period of insurance. The plaintiff did not avail himself of either option.

10 Following Mrs Hillston’s death, the plaintiff became engaged in an extensive and complex array of litigation. The full extent of the litigation is not entirely clear on the evidence, and need not be pursued. It is sufficient to observe that it included proceedings in the Equity Division of this Court concerning gifts made to the plaintiff by Mrs Hillston before her death, which the administrator of her estate sought to have set aside as having been secured by undue influence exerted over her by the plaintiff; a claim made by the plaintiff under the Family Provision Act 1982, based upon his assertion that he and Mrs Hillston had lived together in a de facto relationship within the meaning of that Act; and an application by the plaintiff for the setting aside of letters of administration granted to a relative of Mr Hillston’s. There were also proceedings before Einstein J sitting in the Probate Division brought by the plaintiff seeking letters of administration on intestacy.

11 Significant as these proceedings were, the most significant proceeding arose out of two complaints brought by the Health Care Complaints Commission (“the HCCC”) on 2 September 1998 in the Medical Tribunal of NSW, asserting that, in a variety of respects, the plaintiff had been guilty of professional misconduct and unsatisfactory professional conduct within the meaning of ss36 and 37 of the Medical Practice Act 1992. The essence of the main complaint was that the plaintiff had provided medical treatment and care to Mrs Hillston while in a personal and sexual relationship with her; that, while treating her, he had obtained financial advantage from her; that he had destroyed or suppressed a will made by her in 1989; that he had administered morphine to her, and that he had (in circumstances where he was treating Mrs Hillston, was potentially a beneficiary of her estate and was engaged in a personal relationship with her) inappropriately certified the cause of her death; that he had lied on oath in written and oral testimony in certain proceedings in this Court; and that he had failed to maintain a drug register as required by the provisions of the Poisons Act 1966. All of this conduct was alleged to have occurred between August 1983 and 25 June 1994. The second complaint was generally seen to have been less serious and involved allegations that the plaintiff had failed to maintain the confidentiality of two patients. This was said to have occurred in April 1995.

12 By letter to UMP dated 27 October 1998 the plaintiff sought legal representation in relation to the hearing of the complaints. On 11 December 1998 UMP resolved to contribute up to $5,000 towards the plaintiff’s costs, and up to $5,000 towards any costs of the HCCC for which he may have been held liable. The main reasons for this decision appear to have been to do with the dates of the events the subject of the complaints, relative to the dates during which the plaintiff was a member of MDU or UMP, or held a policy issued by AMIL. The plaintiff was a member of MDU/UMP from 1 May 1994 until 31 December 1998, and held policies issued by AMIL in 1996, 1997 and 1998. However, these policies did not provide cover for events that occurred outside the period of insurance. The period alleged in the first complaint spans from August 1983 to 25 June 1994, only a tiny proportion of which was within the period of the plaintiff’s membership of MDU, and none of which was covered by the period of insurance with AMIL. UMP acknowledged that the allegations the subject of the second complaint were said to have occurred during the plaintiff’s period of membership, but considered that, given their relative insignificance, it was unlikely that, alone, they would have resulted in referral to the Medical Tribunal.

13 The plaintiff appeared unrepresented in the Medical Tribunal, which, in a judgment delivered on 6 September 2000, ultimately made findings of fact adverse to him, and ordered that he be de-registered as a medical practitioner and that he not be eligible to reapply for registration until after the expiration of seven years from that date. It also ordered that he pay the HCCC’s costs, which the plaintiff said amounted to $205,000.

14 The plaintiff appealed to the Court of Appeal. On 15 February 2001 he wrote to UMP asking that it pay those costs awarded against him which were referable to events postdating 1 May 1994, and fund his appeal. UMP declined to do either. The plaintiff appeared on the appeal, again unrepresented. On 28 May 2002 his appeal was dismissed.

15 The Equity proceedings were heard by Bryson J (as his Honour then was) between September and November 2002. The plaintiff again appeared unrepresented. Judgment was delivered on 28 February 2003 (Hillston v Bar-Mordecai [2003] NSWSC 89).

16 At first instance, the plaintiff was wholly unsuccessful. Bryson J held that the gifts made to him by Mrs Hillston had been made as the result of his undue influence and set them aside; he rejected the plaintiff’s claim to have been in a de facto relationship with Mrs Hillston, and accordingly dismissed the claim under the Family Provisions Act; and he rejected the application to set aside the letters of administration. On appeal, the finding rejecting the claim that the plaintiff and Mrs Hillston had entered a de facto relationship was reversed (Bar-Mordecai v Hillston [2004] NSWCA 65). The appeal was otherwise dismissed.

17 It is out of these events that the plaintiff commenced the two proceedings which gave rise to the judgments against which he now wishes to appeal. It will be necessary to deal with each individually.

proceeding number 20280/2002

18 This proceeding was commenced by statement of claim filed on 28 June 2002. The statement of claim was amended on 24 February 2003. Each version of the statement of claim named “United Medical Protection” as the defendant. (The correct title of the entity formerly commonly known as “United Medical Protection” was “United Medical Protection Ltd”.) At the commencement of the hearing before Master Harrison on 28 July 2003 the plaintiff sought and, with the concurrence of counsel appearing for the defendant, was granted, leave to substitute AMIL as the defendant. Although a notice of appearance had been filed on behalf of UMP, a search of the file does not yield any evidence of a notice of appearance having been filed on behalf of AMIL. Nevertheless, counsel who had previously appeared for UMP continued to appear, now representing AMIL. All involved proceeded on the basis that the leave that had previously been sought to proceed against UMP was also necessary if the plaintiff were to proceed against AMIL. I shall accordingly take the same course.

19 The original statement of claim can be put to one side. It is the amended statement of claim to which recourse must be had in order to identify the claim the plaintiff sought to make against UMP. It is apparent that the amended statement of claim was drafted by a person (presumably the plaintiff himself) without legal training, and there are real problems in its construction. However, a reasonably liberal reading of the document would suggest that the case the plaintiff wishes to pursue is along the following lines. (I stress that what follows in this and the next paragraphs represents my attempt to distil what the plaintiff seeks to establish. Much of it is in dispute and the outline below should not be read as containing any findings of fact, or any determination of any legal issue. In some cases, the facts which the plaintiff would, it seems, wish to prove may only be read into the statement of claim with the help of sympathetic intuition or extrapolation of other written material.) It is not clear to me whether the case the plaintiff then wished to make against AMIL is identical with that originally pleaded against UMP. The best I can do is to attempt to interpret the amended statement of claim.

20 UMP (and, presumably, its predecessor MDU) was at all material times a medical indemnity insurer. The plaintiff’s membership, firstly of MDU, and then of UMP, constituted a contract of insurance pursuant to which the organisation was obliged to provide the plaintiff with legal assistance in the event of “patient litigation”. UMP’s failure or refusal to provide the plaintiff with legal assistance in relation to the Probate, Equity and Medical Tribunal proceedings amounted to a breach of its contractual obligations to him. As a consequence of the breach, the plaintiff appeared unrepresented in all proceedings, and in the subsequent appeals. The adverse results came about because of the plaintiff’s lack of legal training and his inability to present his case in a skilled way. Had he been legally represented, as he was entitled, pursuant to his contract of insurance, to be, both the court and the Medical Tribunal would have come to different results. (At the time of pleading, it seems that judgment in the Equity proceeding was reserved. No doubt the plaintiff would wish to amend to plead that the adverse results in that proceedings was also a consequence of his appearing unrepresented, and thus of UMP’s default under the asserted contract of insurance.)

21 The plaintiff also pleads that UMP owed him a duty of care which it failed to discharge.

22 As a result of the breach of its contractual obligations by UMP, and its negligence (presumably in the manner in which it exercised its discretion in relation to the requests for funding – see below) the plaintiff suffered injury, loss and damage. This included economic loss (loss of livelihood, loss of property) and personal injury (depression and attempted suicide).

23 The foregoing represents the most generous possible construction of parts of the amended statement of claim, stripped of irrelevancies, and identifies those conventional causes of action which can, after diligent exploration, be discerned in the plaintiff’s pleading. There are, in addition, other assertions which are more difficult to categorise. For example, in paragraphs 32 and 33 the plaintiff pleads:

“32. The Medical Tribunal made provisions for the Australian press to publish unsustainable and derogatory allegations that Mr Joseph SC, of counsel for the Health Care Complaints Commission had made in his opening address that caused the plaintiff great pain, loss of prestige, and suffering.
33. The plaintiff claims that the allegations made in the media were unproved, but the adverse publicity of the allegations has irreparably damaged the plaintiff’s reputation.” (underlining in original)

24 Just how this finds its way into a pleading nominating UMP (or AMIL) as the only defendant is a mystery. It cannot conceivably be a proper pleading against UMP. Nor can it be a proper pleading against AMIL.

25 Further, in paragraphs 45 to 48, the plaintiff asserts, inter alia, that UMP failed properly to consider relevant aspects of his claim for legal assistance, or to assess his claim, or to respond to correspondence, or to give adequate consideration to the economic implications to him of a refusal to provide legal representation. It may – possibly – be inferred that these assertions are intended to form some part of the plaintiff’s claims against UMP (AMIL) in negligence, but their import is far from clear.

26 The statement of claim was met by a notice of motion filed on behalf of UMP on 18 July 2002. UMP sought an order, pursuant to SCR Pt 11 r 8, that the statement of claim be set aside.

27 SCR Pt 11 r 8 relevantly provides:

“8(1) The Court may, on application made by a defendant to any originating process on notice of motion filed within the time fixed by subrule (2), by order:
(a) set aside the originating process, ...”

28 The basis for the application was that, at the time the statement of claim was filed, UMP was subject to an order for provisional liquidation made by this Court on 3 May 2002, pursuant to s472(2) of the Corporations Act 2001. S471B of the Corporations Act provides that no proceedings may be commenced or continued against a company subject to provisional liquidation except with the leave of the court and in accordance with any terms the court imposes. No such leave had been sought or obtained by the plaintiff prior to the commencement of the proceedings. The evidence does not disclose whether or not AMIL was also subject to an order for provisional liquidation, or was relevantly affected, in its capacity to be sued, by the order made in relation to UMP. Since the proceeding before Master Harrison appears to have been conducted on the basis that leave was necessary, I shall make the same assumption.

29 Accordingly, by notice of motion filed on 2 August 2002, the plaintiff sought the necessary leave. The grant of leave was opposed on behalf of UMP (and, subsequently, AMIL), essentially (as I understand it) on the basis that the amended statement of claim did not disclose a viable course of action and that, accordingly, a grant of leave to proceed would be futile, and its defence would unnecessarily, at the expense of creditors, eat into what resources remained in the UMP’s (AMIL’s) hands.

30 On 26 August 2003 Master Harrison refused leave and dismissed the plaintiff’s notice of motion. It is these orders that are the subject of the appeal to this Division.

31 Master Harrison correctly set out the principles upon which leave pursuant to s471B will be granted. In essence, it is necessary that an applicant establish that the case sought to be made:

“ ... has a solid foundation and gives rise to a serious dispute”:

Vagrand Pty Ltd (in liquidation) v Fielding & Ors (1993) 41 FCR 550.

32 The test is not to be confused as the obverse of that imposed where summary disposal is sought. This is for good reason. As is well known, summary disposal of a claim may be granted only in a clear case after the application of the relevant tests, various formulations of which are set out in General SteelIndustries Inc v Commissioner for Railways [1964] HCA 69; 112 CLR 125, at 129.

33 In the interests of protecting what are, ex-hypothesii, the limited resources of the company in provisional liquidation or liquidation, a party resisting an application for leave under s471B need not go so far as to show that the case is manifestly groundless, or hopeless. It is, in my opinion, open to a court dealing with an application under s471B to embark upon some consideration of the weight of the evidence available to be adduced in support of the substantive claim. Unless that consideration shows that the claim has some real prospects of success, leave should not be granted. What I have just said should not be interpreted as casting any onus upon the company resisting the application for leave; the onus remains upon the party seeking leave.

34 Master Harrison undertook that exercise. She drew a distinction between the Equity and Probate proceedings on the one hand, and the Medical Tribunal proceedings on the other. As to the former, she held that it was common ground that the plaintiff had never requested legal assistance from UMP in either of those proceedings, and concluded therefore that there could not have been any breach of contract in UMP’s failure to provide legal representation. This, alone, was sufficient to justify the refusal of leave in relation to those causes of action. In effect, the Master found that neither claim had “a solid foundation” or gave rise to a serious dispute; alternatively, she found that neither claim had any prospect of success. Although she did not expressly say so, it is clear that the reasoning applied also to the pleading of negligence in respect of those issues.

35 Master Harrison then turned to the portions of the pleading concerned with the plaintiff’s application for legal assistance in respect of the Medical Tribunal proceedings. Ultimately, she expressly held that his claims had no solid foundation and did not give rise to a serious dispute. Accordingly, she refused leave to file the amended statement of claim in that respect also.

36 In coming to this view Master Harrison made reference to the discretionary nature of the provision of assistance by UMP with respect to the plaintiff’s membership of MDU and UMP. She set out at length the resolutions of the Board made in respect of the plaintiff’s application for assistance. She also referred, again at length, to written guidelines which had been formulated for the purpose of exercising the discretion. She recognised that the guidelines were not absolute and considered that they should be used “on a rebuttable presumption basis”. She held that, by reason of the provisions of the Articles, and the resolution, any inconsistent provisions in the guidelines were overridden.

37 Master Harrison did not attempt to distil the plaintiff’s pleadings into the possible causes of action he might be thought to have wished to plead. In my opinion, she was not obliged to do so. Her task, in undertaking the s417B exercise, was to determine whether the facts alleged gave rise to a serious dispute, or whether the claims made, so far as they could be discerned from the pleading, had a solid foundation – sufficient to warrant permitting the plaintiff to proceed against a company in provisional liquidation. It was also necessary that the facts pleaded, if proved, be capable of establishing a viable cause of action at law. In my opinion, Master Harrison’s finding that none of the various causes of action that the plaintiff might be perceived to have wished to pursue had any solid foundation or identified any serious dispute is correct. Had the Master gone further and examined the pleading in more detail, she could only have come to the same view, for an additional reason. The pleading, as it is presently framed, could not be allowed to stand. That is, had the plaintiff filed the pleading by right, it would inevitably have been the subject of a successful application for summary disposal on the principles discussed below.

38 Master Harrison accordingly refused leave to commence the proceeding against the defendant in respect of those causes of action.

* * *

39 I commenced these reasons by noting that the principal issues for present determination are whether leave should be granted to the plaintiff to proceed with either appeal. Such leave is required as a result of the orders made pursuant to s84 of the Supreme Court Act.

40 By subs(4) of s84, the Court is not to give leave:

“... unless the Court is satisfied that the proceedings are not an abuse of process and that there is prima facie ground for the proceedings.”

41 It was the plaintiff’s contention that a fundamental consideration in determining whether leave in this case should be granted is whether the appeal has any reasonable prospects of success. So much was not disputed on behalf of the defendant. It is, in my view, plainly correct. (That does not necessarily mean that other considerations will not be relevant.) The plaintiff made extensive submissions going, essentially, to the substance of his appeals.

42 In proceedings numbered 20280/2002 the operative notice of appeal is a document entitled “Further Amended Notice of Appeal from a Master”, filed on 29 July 2004. I do not propose to set out the entirety of the grounds of appeal filed. A sample will suffice. The grounds include the following:

“1. The Master erred in not relying on the Insurance Contract Act 1984 to establish:
(i) that there was a contract of insurance between the Plaintiff and the Respondent (sic) subject to the provisions of this Act ... ;
(ii) that in reliance on the reputations of NSWMDU the Plaintiff believed that NSWMDU had provided him with insurance cover through its subsidiary AMIL and that it would provide him with legal representation and legal advice;
(iii) that by virtue of the nature of the relationship with its members NSWMDU and, subsequently, UMP were trustees for their members, including the plaintiff, pursuant to a constructive trust, and that NSWMDU, UMP and AMIL breached that constructive trust;
(iv) that as trustees, the NSWMDU and UMP were in a fiduciary relationship with their members ... ;
(v) ... ;
(vi) ... ;
(vii) ...
2. The Master erred in not relying on the Insurance (Agents and Brokers) Act 1984 and section 11 thereof that AMIL is liable for and bound by the conduct of and representations made by the NSWMDU to the plaintiff in 1994.
...
...
8. The Master erred in not relying on the Insurance Contracts Act 1984 and sections 14 and 37 thereof, that were relied on, in the plaintiff’s pleading but that the Master should have been mindful of in reaching her findings.
...
15. The Master erred in not finding that NSWMDU, UMP and AMIL breached s52 of the Trade Practices Act 1974 and s42, 44(k) and 53 of the Fair Trading Act (NSW) 1987.
16. The Master erred in not finding that NSWMDU, and UMP in trade or commerce engaged in conduct which, in all the circumstances, was unconscionable in breach of ss51AA and 51AB of the Trade Practices Act 1984.
17. The Master erred in not finding that NSWMDU, and UMP have breached s53(k) and 58 of the Trade Practices Act 1974 .
18. The Master erred in not finding that the plaintiff is entitled to be indemnified for his losses pursuant to the Medical Indemnity Act (Cth) 2002 .
19. The Master erred in not finding that NSWMDU and UMP were estopped from denying liability to provide benefits and services to the plaintiff and from relying on any discretion or limitation to deny liability to provide those benefits and services.
20. The Master erred in no (sic) finding that NSWMDU and UMP mislead (sic) the plaintiff.
...”

43 There was no pleading in the amended statement of claim raising the Insurance Contracts Act, the Insurance (Agents and Brokers) Act, the Fair Trading Act or the Trade Practices Act. Recourse to the transcript of the proceedings before the Master discloses that no mention of any of those Acts was made by the plaintiff during the course of argument. That, alone, would be sufficient to show that the proposed appeal has no prospect of success.

44 Further, the grounds I have extracted illustrate the plaintiff’s fundamental misunderstanding of the nature of those proceedings before the Master. The grounds – and there are others to the same effect which I have not reproduced – all focus on findings the plaintiff would seek in final hearing. They do not remotely address the question of whether leave should have been given to the plaintiff to proceed. Nor can any of them be tweaked so as to resemble an arguable ground of appeal.

45 The task of the Master was not to make findings in respect of the proposed litigation, but merely to determine whether, in the circumstances, that litigation should be permitted to proceed. None of the these grounds is remotely arguable. That is so, even if they are construed, again generously to the plaintiff, as intended to raise a serious dispute.

46 An appeal to this Division from a Master is a somewhat curious creature. It is governed by s75A of the Supreme Court Act 1970. By subs(5) the appeal is by way of rehearing. By subs(7) the Court may receive further evidence, although, by subs(8), this is limited, where the appeal is from a judgment after a hearing on the merits, to receiving further evidence “on special grounds”. Parties are not permitted to rely on matters that were not raised at the hearing, at least where the failure to raise the point may have affected the outcome: Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11.

47 By ground 21 the plaintiff seeks to challenge a finding of fact made by the Master, that he had made no request for legal assistance in relation to the Equity and Probate litigations. Ordinarily, an appellate court will not interfere with the primary court’s findings of fact. This, however, is subject to a variety of limitations and exceptions. Although a good deal of leeway was given to the plaintiff in the conduct for the application for leave (pursuant to s84(4) of the Supreme Court Act) he did not produce or refer to any evidence to establish that the Master was indeed in error in the findings of fact she made. This ground, therefore, could not succeed. The final ground pleaded, ground 21, is that the Master erred in finding that the plaintiff’s claim had no solid foundation and did not give rise to a serious dispute. It may be that this is a legitimately pleaded ground of appeal, but its terms are general, and it is dependent upon specification of where the asserted error lies. The only specification of such error is contained in the pleaded grounds which preceded the articulation of ground 21, all of which suffer from the defects I have identified.

48 Accordingly, I am satisfied that the plaintiff’s proposed appeal in matter number 20280/2002 has no prospects of success. Leave should not be given, pursuant to s84(4) of the Supreme Court Act, for him to continue this appeal.

proceedings number 20325/2003

49 This proceeding was commenced by statement of claim filed on 20 November 2003. An amended statement of claim was filed on 21 January 2004, and a further amended statement of claim (“the FASC”) on 2 March 2004. It is the latest of these statements of claim that is the operative pleading. The FASC names “United Medical Protection of New South Wales Limited (formerly NSW Medical Defence Union Ltd)”, “Australian Medical Insurance Ltd (AMIL)” and “United Medical Protection Ltd” as defendants.

50 By the date of filing this statement of claim UMP was no longer in provisional liquidation. Leave to commence the proceeding was not required.

51 This proceeding was founded, essentially, upon the same facts and circumstances as the earlier proceeding, but, by the time the FASC was filed, was formulated rather differently and very much more ambitiously. The plaintiff sought no less than 18 orders and declarations including, for example:

“1. A declaration that there is a constructive trust between NSW MDU, UMP and the plaintiff.
8. A declaration that NSW MDU and UMP be estopped from denying liability to provide benefits and services to the plaintiff and from relying on any discretion or limitation to deny liability to provide those benefits and services.
9. A declaration that the NSW MDU mislead (sic) the plaintiff.”

52 A very liberal analysis of the FASC, doing the utmost fairness to the plaintiff, suggests that he seeks to plead a case along the following lines. I will begin with an account of the facts asserted, so far as I can draw them from the FASC. (Again, it is necessary to stress that what appear to be statements of fact in what follows represent only facts alleged by the plaintiff in the FASC. They should not be taken as acceptance of the allegations.) In becoming a member of the MDU in May 1994 the plaintiff relied upon certain representations made to him by persons for whose statements and representations MDU is responsible. These included representations concerning the benefits and services offered by membership of the MDU. (There appears to be no express pleading that the representations were false, but it may be assumed that this was the intention of the pleader. Nor is there any express pleading that the allegedly false representations were fraudulently made, and it is not clear whether that was the intention of the pleader.) Although the benefits of membership were entirely within the discretion of the MDU, the plaintiff was never advised of any such limitation, and believed that he had the benefit of full insurance cover. He was not, until 1996, given a copy of any policy document, membership booklet or schedule identifying the terms and conditions of such insurance cover as he had.

53 In 1995 and 1998 the plaintiff was involved in proceedings in the Equity and Probate Divisions of this Court and orally sought assistance from MDU and, subsequently, from UMP. This assistance was refused.

54 On 2 September 1998, the HCCC lodged in the Medical Tribunal two complaints against the plaintiff. These generally concerned his relationship with and treatment of Mrs Hillston, with whom the plaintiff claimed to have been living in a de facto relationship. On receipt of the complaints the plaintiff, pursuant to what he believed to be his policy of insurance, applied to the MDU (probably UMP) for legal advice and representation. His request was refused. Later, UMP offered a sum of $5000 towards his legal expenses, and a further $5000 towards any of the HCCC’s costs for which the plaintiff became liable. These amounts were inadequate to enable him properly to defend himself. (There is no pleading that the Medical Tribunal complaints resulted in the plaintiff’s deregistration, but that that was the result is not in dispute. Nor is there any pleading that the Equity and Probate proceedings were decided adversely to him, but, again, for present purposes, that may be assumed to have been intended.)

55 In 2001 the plaintiff twice sought assistance from UMP and AMIL for the purpose of appealing to the Court of Appeal against the Medical Tribunal decision. On each occasion this was refused.

56 It is impossible clearly to discern the causes of action the plaintiff seeks to plead. Again, applying the most generous interpretation to the FASC, it may be thought that the plaintiff wishes to plead that the following legal consequences arise from the asserted facts:

(i) MDU and UMP are trustees for their members, pursuant to a constructive trust, and acted in breach of their obligations under the trust;

(ii) MDU and UMP are, accordingly, in a fiduciary relationship with their members, and are required to act in the best interests of their members;

(iii) MDU acted as the plaintiff’s agent in obtaining, on his behalf, insurance with AMIL, or, alternatively, as AMIL’s agent for the purpose of arranging insurance policies; MDU was thus, for the purposes of the Insurance Contracts Act 1984 (Cth) , an agent of AMIL, and subject to the provisions of that Act;

(iv) AMIL is bound by and liable for (false) representations made by the MDU;

(v) MDU, UMP and/or AMIL were obliged, pursuant to the contract of insurance, to provide the plaintiff with legal advice and representation in respect of the Medical Tribunal proceedings, and in respect of the Probate and Equity proceedings, and in respect of his proposed appeal to the Court of Appeal against the Medical Tribunal decision;

(vi) each defendant was under, and in breach of, a duty of good faith to the plaintiff;

(vii) by reason of their failure to advise the plaintiff of the absolute discretion to provide legal advice or representation given to the MDU and UMP by their memoranda and articles of association, these defendants are not entitled to rely upon the discretion as a basis for refusal to provide such advice and representation;

(viii) MDU and UMP owed the plaintiff a duty of care, and acted in breach of that duty;

(ix) the MDU and UMP acted in breach of s52 of the Trade Practices Act 1974 and s42 of the Fair Trading Act 1987(NSW).

57 It will be seen that this pleading contains some echoes of what appears in the amended notice of appeal in the previous proceedings. It is not, however, any more clear in identifying what case the plaintiff seeks to make. For example, there is nothing in the FASC that pleads any breach of any particular provision of the Insurance Contracts Act. There is nothing that identifies any causes of action brought under that Act.

58 By notice of motion filed on 19 December 2003 UMP sought orders, pursuant to SCR Pt 13 r 5 and/or SCR Pt 15 r 26. Those rules relevantly provide as follows:

“5 Frivolity etc

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a) no reasonable cause of action is disclosed,
(b) the proceedings are frivolous or vexatious, or
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) The Court may receive evidence on the hearing of an application for an order under subrule (1).”


“26 Embarrassment etc

(1) Where a pleading:

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading,
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c) is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleading be struck out. cf RSC (Rev) 1965, O 18, r 19 (1).

(2) The Court may receive evidence on the hearing of an application for an order under subrule (1).”

59 Alternatively, UMP sought an order that the plaintiff provide security for costs in sum of $50,000. The notice of motion came before Master Harrison on 11 and 12 August 2004.

60 An order for summary disposal will only be made in a very clear case: General Steel (see above).

61 Master Harrison dismissed the statement of claim. She held:

- that the claims in negligence and breach of contract were “futile”;

- that the claims based on the Insurance Contracts Act 1984 were “hopeless”;

- that the claims based upon the Trade Practices Act and the Fair Trading Act were “hopeless”;

- that the claim of a constructive trust and its breach was “doomed to failure”;

- that “the issue of whether in 1994 and 1995 the plaintiff obtained a policy of insurance or an entitlement to make a claim for indemnity subject to discretion was false and misleading, is hopeless and should not be permitted to go to trial.”

62 The plaintiff has filed a notice of appeal from this decision. On this occasion the grounds pleaded number 46. As with the previous matter, leave to continue with this appeal will only be granted if the appeal is shown to have some reasonable prospects of success.

63 The first ground is pleaded as follows:

“The Master erred in relying on incorrect documentation, namely the amended statement of claim instead of the further amended statement of claim.”

64 It is true that, throughout the judgment, Master Harrison referred to the amended statement of claim. Indeed, although the final judgment contains an order that:

“the further amended statement of claim is dismissed.”

I was told that, at the time of the initial delivery of the judgment, the word “further” did not appear in the order, but that Master Harrison recognised the error and stated that she would correct it. In my opinion the references to the amended statement of claim as distinct from the FASC should not be taken as an indicator that Master Harrison was working from the wrong document. However, I have taken the precaution of checking the documents against each other. The amendments in the FASC are clearly identified by vertical lines in the right hand margin, and a highlighted type face. Even if, contrary to my finding, the Master did in fact work from the amended statement of claim, that could not have made any difference to the result. The outcome would, inevitably, have been the same.

65 Another ground of appeal is framed as follows:

“9. ... the Master erred in failing to find that policy of insurance was implied in accordance with the Insurance Contracts Act 1984 by virtue of the plaintiff’s payment of valuable consideration to the defendant ... specifically for medical insurance.” (emphasis in original)

66 This ground as pleaded again demonstrates a misunderstanding of the role of the court when the discretions conferred by SCR Pt 13 r 5 and Pt 15 r 26 are invoked. A number of other challenges are made to findings of fact made by the Master.

67 Just as it is exceedingly difficult to discern from the FASC the claim the plaintiff seeks to make in the proceedings, so it is difficult, if not impossible, to discern the basis on which he would appeal against that decision. There is no pleaded ground of appeal which makes any sense at all. The appeal has no prospects of success. There is no prima facie ground for the appeal. It is an abuse of process. Accordingly, s84(4) requires that leave to continue the appeal be refused.

68 The orders I make are:

(i) proceeding numbered 20280/2002:
leave to continue the appeal is refused;


(ii) proceeding numbered 20325/2003:
leave to continue the appeal is refused.

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