Blueprint Property and Finance Pty Ltd v J D Holdings Pty Ltd
[2002] NSWSC 174
•1 February 2002
CITATION: Blueprint Property and Finance Pty Ltd v J D Holdings Pty Ltd & ors [2002] NSWSC 174 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 2289/01 HEARING DATE(S): Friday, 1 February 2002 JUDGMENT DATE: 1 February 2002 PARTIES :
Blueprint Property and Finance Pty Limited - formerly known as Saxby Bridge Property and Finance Limited (Plaintiff)
J D Holdings Pty Limited (First Defendant)
John Davies (Second Defendant)
Peter Smirneos (Third Defendant)
Harris Marcelo Gomez (Fourth Defendant)
JUDGMENT OF: Master McLaughlin
COUNSEL : Vegas (Plaintiff)
T. Blackburn (Defendant, applicant)SOLICITORS: Philip Densham White (Plaintiff)
Goldsmiths Lawyers (Defendants 1-3)
Ebsworth & Ebsworth (Fourth Defendant)LEGISLATION CITED: Fair Trading Act 1987
Trade Practices Act 1974CASES CITED: Concrete Constructions v Nelson (1990) 169 CLR at 594
Fasold v Roberts (1997) ATPR 41-561
General Steel Industries Inc v The Commissioner for Railways (1964) 112 CLR 125
York v Lucas (1985) 158 CLR 661DECISION: 1. Order as in paragraph 1 in the notice of motion filed by the Fourth Defendant on 18 September 2001.; 2. Order that the Plaintiffs pay the costs of the Fourth Defendant of the aforesaid notice of motion and of the proceedings, such costs to be on the party and party basis.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
MASTER McLAUGHLIN
Friday, 1 February 2002
2289/01 BLUEPRINT PROPERTY & FINANCE PTY LIMITED – FORMERLY KNOWN AS SAXBY BRIDGE PROPERTY & FINANCE PTY LIMITED & ANOR -V- J.D. HOLDINGS PTY LIMITED & ORS
JUDGMENT
1 MASTER: There is presently before the Court a notice of motion filed by the fourth defendant, Harris Marcelo Gomez, trading as Lyon Law Firm, dated 18 September 2001.
2 By that notice of motion the fourth defendant seeks substantively orders in the following terms:
2. Alternatively, paragraphs 25, 26, 29, 30 and 31 of the statement of claim be struck out pursuant to Part 15 rule 26 of the Supreme Court Rules.
1. The claim against the fourth defendant be dismissed pursuant to Part 13 rule 5 of the Supreme Court Rules;
3 The substantive proceedings were instituted by statement of claim filed on 23 April 2001. There were two plaintiffs named in that statement of claim, being Saxby Bridge Property & Finance Pty Limited and Saxby Bridge Corporate Finance Pty Limited.
4 The defendants named in the statement of claim were J.D. Holdings Pty Limited as first defendant, John Davies as second defendant, Peter Stirneos as third defendant and Harris Marcelo Gomez as fourth defendant.
5 Subsequently there was on 9 November 2001 filed an amended statement of claim. Apart from amendments of a more significant nature, the amended statement of claim reflected the fact that the names of the plaintiffs had, since the inception of the proceedings, changed to Blueprint Property & Finance Pty Limited and BPCF Pty Limited respectively.
6 The plaintiffs by the amended statement of claim seek to plead against the first defendant and against the second and third defendants, who were directors and officers of the first defendant, matters arising out of a contractual relationship between the plaintiffs, and in particular the first plaintiff, and the first defendant, concerning the construction of home units at 30 Kings Cross Road, Kings Cross.
7 The contractual relationship between the first plaintiff, which was the project manager, and the first defendant, which was the developer, in respect to the construction of those home units, also involved a service provider, H.G.& R Finance Limited, the service being provided by that latter entity being essentially of a financial nature.
8 The relationship between the first plaintiff and the first defendant appears to have encountered some difficulties. On 2 November 2000 the fourth defendant in his professional capacity as a solicitor, trading as Lyon Law Firm, wrote on behalf of the first defendant a letter addressed to the first plaintiff concerning an alleged breach of contract between the first plaintiff and the first defendant.
9 The letter commences with the following statement:
- “We confirm that we act for the above and refer to your project management of the property development at 30-32 Kings Cross Road, Kings Cross. Our client inter alia, now claim the following:”
10 There are then set forth five numbered paragraphs. The letter continues:
- “Our client has instructed us to put you on immediate notice of the following:”
11 There are then set forth a number of further paragraphs, including the following:
(b) Our client requires that the mortgagee’s solicitor, in Melbourne, retain the cheque made payable to you in the sum of $13 000.”“(a) Our client now terminates any and/or project management and brokerage agreements between them and you;
12 The letter concludes with the sentence:
- “Please further note that a copy of this letter has been forwarded to the mortgagee’s solicitors in Melbourne.”
13 The fourth defendant, also on 2 November 2000, sent a letter to Herbert Geer & Rundle, lawyers, in Melbourne which commenced with the statement:
- “We refer to the above and, in accordance with our client’s instructions, we now enclose our letter forwarded to Saxby, the project manager, dated 2 November 2000, for your information.”
14 The letter continued:
- “Please note that our client has now terminated its entire relationship with Saxby. As you will note that there is now a dispute between the respective parties and consequently Saxby’s entitlement to payment, we are instructed to request that you obtain any cheque, or cheques, that may be payable to Saxby and not to release same until further notice.”
15 It is those two items of correspondence (being the letter written by the fourth defendant in his professional capacity as solicitor for the first defendant to the first plaintiff and being the letter written by the fourth defendant in his professional capacity as solicitor for the first defendant to a firm of solicitors in Melbourne enclosing a copy of the letter which he had written to the first plaintiff) which are the subject of the asserted cause of action alleged by the plaintiffs against the fourth defendant in the present proceedings.
16 The complaint against the fourth defendant is contained in paragraphs 25, 26, 27, 30, 31, 32 and 34 of the amended statement of claim. Essentially the cause of action asserted against the fourth defendant by the plaintiffs is grounded upon alleged breaches of the Trade Practices Act 1974 and the Fair Trading Act 1987.
17 It will be appreciated that since the fourth defendant is a natural person, he cannot be subject to the provisions of section 62 of the Trade Practices Act, which relates to corporations, although he is subject to the provisions of section 75B of that statute relating to the aiding, abetting, procuring or being knowingly concerned in, or a party to the contravention of section 52 of the Trade Practices Act.
18 The complaint asserted against the fourth defendant is also grounded upon an alleged contravention of section 42 of the Fair Trading Act.
19 It must, at the outset, be recognised that the fourth defendant, in writing the letters the subject of the proceedings brought against him, was acting in his professional capacity as a solicitor for the first defendant, that the letters were of the nature of what might be described as letters of demand or letters giving notice, which are very commonly addressed by solicitor for one party in a commercial dispute to either the party on the other side of the commercial dispute or the solicitor for that party, and that, on their face, those letters were written upon the express instructions of the client.
20 There is nothing in any way out of the ordinary in the fact or the form of the letter which on 2 November 2000 the fourth defendant sent to the first plaintiff on the express instructions given to the fourth defendant by the first defendant.
21 Since, upon those instructions, there was a dispute between the fourth defendant’s client and the first defendant, the fourth defendant thereupon, again upon instructions from his client, sent to the provider of finance in the contractual relationship between the first defendant and the first plaintiff notice of that dispute and a request to that finance provider that it should not release to the other party to the dispute, the first plaintiff, the cheque which, had the dispute not arisen, would apparently have been dispatched by it to the first plaintiff.
22 The fourth defendant relies firstly upon the provisions of the Supreme Court Rules with respect to summary dismissal of the proceedings, and submits that in the circumstances contemplated by Part 13 rule 5 there is no reasonable cause of action disclosed against the fourth defendant, that the proceedings against him are frivolous or vexatious or are an abuse of the process of the Court, and that the Court should order that the proceedings against the fourth defendant be dismissed.
23 In respect to the circumstances where it is submitted that no reasonable cause of action is disclosed, there is an abundance of authority referring to the stringency of the test which must be applied. But I would, for present purposes, confine myself to the decision of the High Court of Australia in General Steel Industries Inc v The Commissioner for Railways (1964) 112 CLR 125, in particular the judgment of Barwick CJ.
24 It will be appreciated that the complaint made against the fourth defendant is that what he did which attracted the provisions of the Trade Practices Act of the Commonwealth and the Fair Trading Act of New South Wales, was done in trade or commerce.
25 Uninstructed by authority - and I am told by Counsel that there is no express authority on this particular point - it seems to me that professional communications by a solicitor, either directly with a party on the other side in a dispute or with a solicitor acting for another party involved in a dispute, cannot be regarded as being conducted in trade or commerce.
26 I have been referred to the decision in Butt v Tingey (unreported, 28 May 1993) a decision of the Full Court of the Federal Court of Australia, constituted by Davey, Neeves and Beazley JJ. Whilst the Court in that case considered that it was possible that the communication by the client to the solicitor might well be regarded as being a communication in trade and in commerce, that decision did not hold that communications between the solicitor and another party, or between the solicitor and another solicitor, were conducted in trade or commerce.
27 For completeness, I would also record that reference has been made during the course of argument to the decision of the High Court of Australia in Concrete Constructions v Nelson (1990) 169 CLR at 594 and to the decision of Sackville J in Fasold v Roberts (1997) ATPR 41-561 concerning whether or not conduct can be regarded as being conduct in trade or commerce.
28 To the extent that the complaint against the fourth defendant is grounded upon his liability under section 75B of the Trade Practices Act, any such liability must, consonant with the decision of the High Court of Australia in York v Lucas (1985) 158 CLR 661, be grounded upon actual knowledge by the fourth defendant of the falsity of the representations asserted to have been made by the first defendant in contravention of section 52 of the Act.
29 It should also be recognised that the communication from the fourth defendant to the solicitors in Melbourne was a communication which took place in the State of Victoria.
30 Although the matter has not been the subject of full submissions before me at the present hearing, I have very grave doubts as to whether the provisions of the New South Wales Fair Trading Act extend to a communication which took place in another State.
31 It is all very well for it to be suggested on behalf of the plaintiffs that there is a statute of the State of Victoria of effect similar or equivalent to that of the New South Wales Fair Trading Act. But that is not the cause of action upon which the plaintiffs rely. The plaintiffs rely upon a contravention by the fourth defendant of section 42 of the New South Wales statute.
32 But it seems to me that those matters are, if not subsidiary to, at least somewhat peripheral to what I regard as the essence of the asserted cause of action by the plaintiffs against the fourth defendant and the grounds upon which the fourth defendant seeks the summary dismissal of the proceedings against him.
33 The basis upon which the claim is brought by the plaintiffs against the fourth defendant is essentially that the fourth defendant was acting in a professional capacity for a party to a commercial dispute and that the matters which are set forth in the letters which the fourth defendant wrote to the first plaintiff and to the solicitors for the finance provider in Melbourne were not true.
34 The fourth defendant is a member of the legal profession. He is subject to professional standards enforced not only by his professional association but by the Supreme Court of New South Wales and he is subject to the Legal Profession Act 1987 of this State.
35 If a solicitor in the position of the fourth defendant were precluded from writing upon instructions of his client letters of the nature which have given rise to the claim against him in the present proceedings, it would seem to me to be well nigh impossible for a solicitor to conduct his legal practice.
36 He certainly would not be enabled to represent a client in a commercial dispute of the nature which appears to have arisen between the first plaintiff and the first defendant.
37 I am entirely satisfied that no reasonable cause of action is disclosed against the fourth defendant.
38 That conclusion, of itself, is sufficient to dispose of the present application. But, it seems to me also that the conduct of the plaintiffs in naming the solicitor as a defendant can be regarded at least as vexatious and possibly as frivolous, and that there may well be substance in the submission on behalf of the fourth defendant that the proceedings against him are an abuse of the process of the Court.
39 In the light of the conclusions which I have just expressed, the consequence of which will be that I will proceed to an order that the proceedings against the fourth defendant be dismissed, it is unnecessary for me to deal with the alternative relief sought by the fourth defendant in the notice of motion. That is relief by way of an order for the striking out of specific paragraphs of the amended statement of claim (which was referred to in the notice of motion as the statement of claim, that being the consequence of the notice of motion having been filed earlier than the amended statement of claim).
40 It is appropriate however that I should record that it has been conceded on behalf of the plaintiffs that the pleading could have been somewhat clearer in respect to the various paragraphs which are the specific subject of complaint by the fourth defendant.
41 I consider, that in a number of instances the pleading does not set forth with clarity what it is that is being asserted against the fourth defendant.
42 Moreover, it will be appreciated that a number of the matters set forth in the letters which are the subject of the complaint by the plaintiffs against the fourth defendant do not constitute, as they are alleged in the pleadings so to constitute, representations, but are statements intended to have a legal or practical consequence, for example, by giving notice the termination of the contract, and by requiring that no further payment be made to the first plaintiff.
43 Had I not already reached the conclusion that the fourth defendant is entitled under the provisions of Part 13 rule 5 to have the proceedings against him dismissed, I would accede to the application of the fourth defendant to have the specific paragraphs of the amended statement of claim referred to in paragraph 2 of his notice of motion struck out, pursuant to the provisions of Part 15 rule 26 of the Supreme Court Rules.
44 I make the following orders:
(2). I order that the plaintiffs pay the costs of the fourth defendant of the aforesaid notice of motion and of the proceedings, such costs to be on the party and party basis.
(1). I make an order as in paragraph 1 in the notice of motion filed by the fourth defendant on 18 September 2001.
45 The exhibits may be returned.
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