Dart v Norwich Union Life Australia Ltd

[2001] FCA 1227

FEDERAL COURT OF AUSTRALIA

Dart v Norwich Union Life Australia Ltd [2001] FCA 1227

PRACTICE & PROCEDURE – application to strike out – no reasonable cause of action disclosed – abuse of process – frivolous or vexatious – applicants given opportunity to replead

Federal Court Rules, O 9 r 7, O 11 r 16, O 20 r 2

General Steel Industries Inc v Commissioner for Railways (N.S.W.) & Ors (1964) 112 CLR 125 applied
National Mutual v Citibank (1995) 132 ALR 514 cited
Hunter v Chief Constable of West Midlands Police [1982] AC 529 cited
Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 cited
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 cited
Mystic Crystal Franchises (Australia) Pty Ltd & Ors v Vynotas Pty Ltd & Ors (Unreported SCQLD, 780/98, 29 September 1998, per de Jersey CJ) referred to
Mystic Crystal Franchises (Australia) Ptry Ltd & Ors v Vynotas Pty Ltd & Ors (Unreported SCQLD, 369/99, 28 February 2000 per de Jersey CJ) referred to
Dart v Norwich Union Life Australia Ltd [2000] FCA 1362 referred to

SYDNEY RONALD DART and ORS v NORWICH UNION LIFE AUSTRALIA LTD (ACN 006 783 295) and ORS

Q 67 of 2000

SPENDER J
BRISBANE
4 SEPTEMBER 2001

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 67 OF 2000

BETWEEN:

SYDNEY RONALD DART
FIRST APPLICANT

SHIRLEY NORMA DART
SECOND APPLICANT

FREDERICK WILLIAM DART
THIRD APPLICANT

AND:

NORWICH UNION LIFE AUSTRALIA LTD
(ACN 006 783 295)
FIRST RESPONDENT

VYNOTAS PTY LTD
(ACN 007 093 601)
SECOND RESPONDENT

JONES LANG LASSALLE (QLD) PTY LTD
(ACN 010 411 140)
THIRD RESPONDENT

ROBERTS, LEU & NORTH (A FIRM)
FOURTH RESPONDENT

JUDGE:

SPENDER J

DATE OF ORDER:

4 SEPTEMBER 2001

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.On the motions filed on behalf of the first and second respondents, the third respondent, and the fourth respondent, the statement of claim filed 9 October 2000 be struck out.

2.The proceedings Q 67 of 2000 be dismissed.

3.The applicants pay the respondents’ costs of their respective motions, to be taxed if not agreed.

4.The applicants pay the costs of the proceedings of each of the respondents, to be taxed if not agreed.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 67 OF 2000

BETWEEN:

SYDNEY RONALD DART
FIRST APPLICANT

SHIRLEY NORMA DART
SECOND APPLICANT

FREDERICK WILLIAM DART
THIRD APPLICANT

AND:

NORWICH UNION LIFE AUSTRALIA LTD
(ACN 006 783 295)
FIRST RESPONDENT

VYNOTAS PTY LTD
(ACN 007 093 601)
SECOND RESPONDENT

JONES LANG LASSALLE (QLD) PTY LTD
(ACN 010 411 140)
THIRD RESPONDENT

ROBERTS, LEU & NORTH (A FIRM)
FOURTH RESPONDENT

JUDGE:	SPENDER J
DATE:	4 SEPTEMBER 2001
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. These are three notices of motion filed on behalf of the first and second respondents, the third respondent and the fourth respondent, each of which seeks orders pursuant to O 9 r 7 of the Federal Court Rules that the originating process be set aside; alternatively, orders pursuant to O 11 r 16(a) that the statement of claim filed on 9 October 2000 be struck out as disclosing no, or no reasonable, cause of action, or pursuant to O 11 r 16(b) as having a tendency to prejudice, embarrass and/or delay the proceedings, or pursuant to O 11 r 16(c) as constituting an abuse of process.  In a further alternative, each of the respondents seeks orders pursuant to O 20 r 2(1)(a) that the proceedings be stayed and/or dismissed on the grounds that no reasonable cause of action is disclosed; or pursuant to O 20 r 2(1)(b) as being frivolous and/or vexatious; or pursuant to O 20 r 2(1)(c) as being an abuse of process.  Each of the respondents seeks orders that the three applicants pay the costs of the relevant respondent of and incidental to the notice of motion and of and incidental to the proceedings, to be taxed if not otherwise agreed.

2. The present notices of motion are yet further chapters in a long-running saga of litigation involving Mystic Crystals Franchises (Australia) Pty Ltd, Mr Sydney Dart, his wife Shirley Dart and his son Frederick Dart in various combinations and capacities, concerning the leasing and operation of a shop in the Willows Shopping Centre near Townsville.  The respondents include the owner of the property leased to the company, Mystic Crystal Franchises (Australia) Pty Ltd on 20 October 1994, as well as the solicitors for the owner of the shopping centre, and the third respondent as the property consultant involved.

3. The present statement of claim is the latest in a long line of attempted formulations of claims involving the operation of the business in the shopping centre.  It was filed pursuant to orders which I made after the hearing of other notices of motion which had been filed seeking the same relief as sought in the present notices of motion, but in respect of the last but one formulation of the statement of claim in the Federal Court proceedings.  For reasons which I gave on 19 September 2000 (and in respect of which it will be necessary to refer in some detail later) the Court ordered that the amended statement of claim filed by the applicants on 28 August 2000 be struck out, the applicants have leave to replead by filing a further amended statement of claim within 21 days, and the respondents on that motion to pay the costs of and incidental to the motion of the first and second respondents (who were the applicants on that motion), those costs to be taxed if not agreed.

4. The present notices of motion are concerned with the adequacy of the claims of the applicants formulated in the statement of claim filed 9 October 2000.  That statement of claim has some 156 paragraphs and covers 40 pages. 

5. It is important to recognise at the outset that the Court’s power to order summary dismissal of a proceeding is a power that must be exercised with exceptional caution: General Steel Industries Inc v Commissioner for Railways (N.S.W.) & Ors (1964) 112 CLR 125 at 129 per Barwick CJ. The Chief Justice said:

   “It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action – if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal – is clearly demonstrated.”

   And later:

   “Dixon J (as he then was) sums up a number of authorities in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 where he says [at 91]: ‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury.  The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious.  But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’

   Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings [at 84], in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.  On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim.  Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”

6. After considering the arguments advanced in that case, Barwick CJ struck out the whole of the plaintiff’s statement of claim and dismissed the plaintiff’s action with costs.  The Chief Justice held that, as the plaintiff’s lack of a cause of action was demonstrably clear, it was proper to exercise summarily the jurisdiction conferred by the Rules of the High Court to dismiss the action.  

7. In National Mutual v Citibank (1995) 132 ALR 514, Lindgren J dealt at 528 with the legal principles in relation to summary dismissal and striking out. His Honour said at 529:

   “In Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (13 September 1994, Fed C, unreported) Beaumont J quoted with approval the following summary of the general principles governing strike-out applications (at 24, from the editorial note at (1992) 66 ALJ 47 on Lonrho plc v Tebbitt, The Times, 24 September 1991):

   (1)A ‘reasonable cause of action’ means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185.

   (2)The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238.

   (3)Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455.

   (4)It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.

   (5)Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W & H Trade Marks [1986] AC 368.

   For recent House of Lords authority for proposition (3) above see Lonrho plc v Fayed [1992] AC 448 (HL) at 469 (Lord Bridge, with whom all other members of the House agreed).

   I accept that this statement summarises some of the general principles applicable.”

8. As to the allegation that the present proceedings constitute an abuse of process, it was said in Hunter v Chief Constable of West Midlands Police [1982] AC 529 at 541 per Diplock LJ with whom Russell, Keith, Roskill and Brandon LJJ agreed:

   “The abuse …is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.”

9. French J noted in Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279 that:

   “An attempt to litigate in the court a dispute or issue which has been resolved in earlier litigation in this or another court or tribunal may also, according to circumstances, constitute an abuse of process even if not attracting the doctrines of res judicata or issue estoppel.”

10. Another important aspect of the present notices of motion is the fact that the applicants have no legal representation.  That circumstance is a factor which I have taken into account in respect of the difficulties of the applicants in the formulation of their case in its various manifestations.   It was that concern which prompted me to make the order on 19 September 2000 permitting repleading, with the suggestions contained in the reasons I gave for those orders on that day.  In that context, the observations in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536 per Kirby P (as he then was), Hope and Samuels JJA agreeing, are pertinent:

    “Persons unfamiliar with the rules of pleading and the technicalities which surround the drafting of a statement of claim in adequate and permissible legal form are inevitably, if unrepresented, at a disadvantage.  Courts should approach the peremptory termination of the litigation with special care to ensure that …there is no viable cause of action which, with appropriate amendment of the pleading and a little assistance from the court, could be put into proper form.  If this can be done, the court should avoid the summary termination of the proceedings for this will prevent the Court from examining any merits of the case …”  (Emphasis added).

11. With those matters firmly in mind, I turn to a consideration of the latest statement of claim.  That pleading has to be considered in the light of the history of the litigation between the parties. 

12. From the latest statement of claim the following claimed events set out in paras [13] – [19] herein occurred:

13. At some unspecified time there was an oral agreement between Mr and Mrs Dart and their son that each would be equal partners in a retail business “Mystic Crystals”.  By about 1993 the family retail business “Mystic Crystals” had become well known and was demonstrating better than average growth in the vicinity of 30 per cent per annum.  A company Mystic Crystals Franchises (Australia) Pty Ltd (the company) was incorporated. 

14. Other material before the Court indicates that Mrs Dart and Frederick Dart were the shareholders and directors of that company.   Paragraph 85 of the latest statement of claim indicates that Mr Dart, “on 22 September 1997, was not and never had been either a director or shareholder of  the applicant’s company Mystic Crystals Franchises (Australia) Pty Ltd”.

15. On 20 October 1994 a deed of agreement for lease was entered into between the company and the first respondent, and the business commenced trading on 18 November 1994. 

16. The central claim of the latest statement of claim is that:

    “The applicants … have a right to make claims for events occurring from 13 March 1995 on the grounds that the Third Respondent as leasing agent and manager of the First Respondent and Second Respondent assigned the lease of shop 28 Willow Shoppingtown to the applicants on 13 March 1995 as detailed at paragraphs 47 through to 50 herein.”

17. It is said that prior to the execution of the lease, in June and July of 1994, the third respondent by one Sylvester represented that 80,000 customers per week were visiting the shopping centre while reconstruction was being carried out, and that 150,000 could be expected when reconstruction was completed.  A deed of settlement was executed between the first respondent and the company and the second and third applicants.  Subsequent to the hearing of the notices of motion, Mr Dart forwarded material seeking to amplify the circumstances in which that deed of settlement was executed, but for the purposes of disposition of the notices of motion, that material is not relevant.

18. On 22 September 1997 the third respondent, through one Caljouw, had a meeting with the first and third applicants, and it is said that a “new agreement” came into existence which was perfected on 6 October 1997.  On 24 September the tenants at Willow Shopping Town were advised that door counts had been electronically enhanced since 18 November 1994.  On 20 July 1998 the fourth respondents served a statutory demand on “the applicants’ company”.   On 3 August 1998 there was a letter to the fourth respondent from the applicants advising of the agreement said to have been made on 20 September 1997.   On 20 December 1998 the third respondent re-entered possession of Shop 28 at Willow Shopping Town.  On 30 April the fourth respondent, acting for the first and second respondents, applied to the Supreme Court for a winding up order against the applicants’ company for failure to comply with the statutory demand.  A liquidator was appointed on 21 July 1999 to the company.

19. It is necessary to detail at some length the history of the litigation in the Supreme Court of Queensland, the Court of Appeal and the High Court of Australia, and the litigation in the Federal Court. 

20. In two proceedings initiated in the Supreme Court in Townsville, each of the present four respondents were defendants: proceedings 780/98 which was commenced on 23 October 1998 and proceedings 369/99 commenced on 12 May 1999.  In the first of those proceedings, the sole plaintiff was the company.  Cullinane J made an order winding up the company on 21 July 1999.  On 11 March 1999 Muir J refused the company leave to join the present three applicants as plaintiffs, or various other proposed defendants to those proceedings.  Muir J ordered that the proceedings be stayed against the first and second respondents in these proceedings until the company provided $40,000 security for the costs of those defendants.  That security has not been paid.  Subsequently, the company purported to file and serve an amended statement of claim joining the present three applicants as plaintiffs.  The first and second respondents in these proceedings then made an application to the Supreme Court that the proceedings be struck out as an abuse of process.  On 29 September 1999 de Jersey CJ heard this and other applications.  He ordered that the first proceedings be struck out and that all proceedings in the action be stayed until further order.  The company sought to appeal the orders made by Justice Muir on 11 March 1999, out of time.  The Court of Appeal extended the time to file and serve an appeal from the orders of Muir J, but provided that if such appeal was filed the company provide security for costs of $10,000 by 15 July 1999.  No such security has been provided.  The company subsequently applied for special leave to appeal to the High Court from the orders of the Court of Appeal.  On 22 June 2000 McHugh and Gummow JJ dismissed the application for special leave.

21. In the second of the proceedings in the Supreme Court there were four plaintiffs: the company and the present three applicants.   The present four respondents were the four defendants to that Supreme Court proceeding.  Again, the first and second defendants sought that an amended statement of claim in that second proceeding be struck out.  On 29 September 1999 de Jersey CJ ordered that the second Supreme Court proceedings be stayed, insofar as they were proceedings of the company.  His Honour ordered that the statement of claim and amended statement of claim be struck out, and that any further statement of claim on behalf of the present applicants in these Federal Court proceedings be filed within 28 days.  A subsequent statement of claim was filed in the name of the present three applicants.  The first, second and fourth respondents again sought that that statement of claim be struck out.  The further strike out applications came before de Jersey CJ on 28 February 2000, and he ordered that the statement of claim be struck out and that the proceedings be struck out against all defendants except the third.

22. De Jersey CJ in his reasons for judgment of 29 September 1999 in the first Supreme Court proceedings number 369/99 said:

    “Mr Dart has sought my approval to his pursuing these proceedings, as necessary, as applicant and respondent on behalf of the company, Mystic Crystals Franchises Australia Proprietary Limited, which is in liquidation. The liquidators are aware of the proceedings but have refused to authorise Mr Dart’s appearing for the company. The special circumstance which Mr Dart invokes to warrant the grant of approval under section 471(1)(d), centres about the desirability of challenging rulings made by Mr Justice Muir refusing to set statutory demands which led, eventually, to the liquidation of the company. There was an appeal to the Court of Appeal against those orders of Mr Justice Muir. That was, however, struck out because of the company’s failure to lodge security for costs as ordered in the sum of $18,000. I consider that any pursuit of that particular point now would be inconsistent with the regime established by the Court of Appeal. In other words, Mr Dart’s personal wish to re-ventilate the issues about the validity of the statutory demands, issues on which Mr Justice Muir found against the company where an appeal against Mr Justice Muir’s order was struck out because of the failure to put up the security, cannot be a sufficient circumstance to warrant the grant of approval under section 471A(1)(d) of the Corporations Law.”

1. The “statutory demands which led, eventually, to the liquidation of the company” were demands for rent unpaid by the company pursuant to the lease between it and the first respondent.

2. The Chief Justice indicated to Mr Dart:

   “You may appear, of course, for yourself and for your wife and son.”

3. Of the amended statement of claim in action 780/99, de Jersey CJ said:

   “It appears to me that we have an amended statement of claim in action  780 which the liquidator is not interested in and which joins parties without the leave of the Court being yourself, your wife and son.  I think the amended statement of claim should be struck out as an abuse of process.  I make that order.”

4. De Jersey ordered:

   “Action 369 is stayed so far as it constitutes a proceeding brought in the name of the first plaintiff. 

   I order that the statement of claim and the amended statement of claim in 369 be struck out.”

5. The Chief Justice ordered that both proceedings 780 and proceedings 369 in so far as they involved any claim by the company against the fourth defendant in the Supreme Court proceedings be struck out, and directed Mr Dart that any statement of claim on behalf of the second, third and fourth plaintiffs in action 369 of 1999 be delivered within 28 days.  

6. On 28 February 2000 Mr Dart, his wife and son, being the second, third and fourth plaintiffs, sought an order that de Jersey CJ disqualify himself and disqualify “the courts of Queensland” from any further involvement in disputes between the parties.  The ground for the application was said to be a reasonable apprehension of bias.  De Jersey CJ said:

   “The matter comes before the Court today as the latest segment of long-standing litigation which regrettably has never led to the determination of the issue Mr Dart relies upon.  There have been a number of hearings before many Judges over a lengthy period.  The matter has not proceeded to a substantive determination essentially because of the plaintiffs’ inability to plead their case in proper form.”

7. His Honour said that an objective observer would not entertain any reasonable apprehension of bias.  His Honour said:

   “An objective observer would note that the matter of substance has not been determined, first, because it has not been properly formulated and, second, because it has not been put before the Court in a manner which is consistent with the rules which regulate the conduct of litigation.”

8. His Honour then dealt with the application by the first and second defendants for an order that the statement of claim which had been filed and served on 26 October 1999 be struck out.   His Honour noted that that statement of claim was delivered following an order authorising its delivery which the Chief Justice had made a month earlier.  The earlier statement of claim had the problem of a lack of definition of the claims being pursued by the natural person plaintiffs, and that was the basis on which the preceding statement of claim was struck out.  His Honour continued:

   “As asserted by the first and second defendants now, the new statement of claim exhibits the following relevant deficiencies: It does not distinguish in a particular way between the claims of the individual members of the Dart family; it has not distinguished in a particular way between their respective causes of action; it has not particularised the specific basis of any cause of action said to accrue to the individual members of the Dart family and it has not specified the damages which they respectively claim relating them in an appropriate way to the other elements of the causes of action upon which they would rely.

   Mr Humphries, the solicitor for those defendants, has provided helpfully a comprehensive comparison between the new pleading and the one previously struck out, in paragraph 4 of his affidavit affirmed on 15 February 2000.  Mr Dart has accepted the factual accuracy of that paragraph in which Mr Humphries has carefully provided that analysis.

   I find that the basis now advanced by the defendants for the striking out of this further amended statement of claim has been established. … On the application of those defendants, I order that the statement of claim filed and served on 26 October 1999 be struck out as not disclosing any reasonable cause of action.
   …”

9. The Chief Justice later said:

   “Mr Moon [Counsel for the first and second defendant] has sought an order that the action be struck out.  It does seem rationally to follow that the action should be struck out in light of Mr Dart’s concession before me here today that the Dart family has done its best to plead the matter and cannot do any better. 

   Having struck out that statement of claim, it seems to me it would be inappropriate for me to countenance the continuance of the action.”

10. His Honour ordered that the action be struck out as against first and second  defendants, and also ordered the striking out of the action as against the fourth defendant:

    “For reasons I just expressed with relation to the first and second defendants’ application, … it is appropriate that I order that the recent statement of claim be struck out …as against the fourth defendant …”

11. Concerning the notices of motion to strike out the second latest of the statements of claim in the Federal Court, which was the subject of judgment on 19 September 2000, the applicants on those motions presented a comparison of the most recent statement of claim delivered in the second proceedings in the Supreme Court with the application and statement of claim in the Federal Court.  It was contended then by them that:

    “For all intents and purposes they are essentially identical as submitted by the first and second respondents”

    and it was submitted by the fourth respondent that the amended statement of claim most recently filed prior to that strike-out application was:

    “virtually identical or substantially the same as four earlier statements of claim (in both Supreme Court proceedings) …all of which have been struck out.”

12. The third respondent agreed at that hearing with the comparison by the first and second respondents.

13. In my reasons for judgment of 19 September 2000, I briefly recited the history of the Supreme Court proceedings, and at par [15] – [18]  said:

    “15.    Apart from one possible cause of action which may have arisen out of events said to have occurred on 22 September 1997, the present statement of claim attempts to replicate the causes of action which were the subject of his Honour the Chief Justice’s strike out order on 28 February this year in the second Supreme Court proceedings.  The causes of action, apart from that one possible exception, are substantially similar to the causes of action which the plaintiffs in the second Supreme Court action sought to prosecute, and for the reasons which moved the Chief Justice to strike out the statement of claim based on those causes of action, it seems to me that the present statement of claim cannot be supported.  In essence, any causes of action based on misrepresentation, and in particular misrepresentations concerning the concealment of the true foot traffic in the Willows Shopping Centre, are causes of action which the company may have had, but are not causes of action which the personal applicants have.

    16.      Nonetheless, it seems to me that there is a possible cause of action (which may or may not also have a federal aspect) which can be imperfectly gleaned from, in particular, paragraphs 77 to 101 and 127 of the present amended statement of claim.

    17.      In essence what is suggested is that on 22 September 1997 a new agreement was entered into on behalf of the first respondent and one or more of the three applicants concerning occupation of the shop in which the business was being conducted; that agreement extended to undertakings concerning arrears of rent; the applicants, or some of them, acquired possession of the shop premises; and in breach of that agreement and in contravention of s 51AC of the Trade Practices Act the third respondent, acting for the first and second respondent, trespassed on the shop premises, removed stock in trade, fixtures and fittings, destroyed the retail business that was the property of the applicants and converted by removal, damage, destruction and misappropriation shop fixtures and fittings, stock in trade, business records, goods and chattels that were the property of the applicants.

    18.      While there is a failure to particularise the damage which each applicant is claimed to have suffered, there seems to me to be a basis on which, given liberty to replead, a cause or causes of action associated with those events might be pleaded by the applicants.  I therefore give the applicants leave to replead, within 21 days of today, a further amended statement of claim.  That statement of claim should be approached as a fresh document, and it should be limited to the cause or causes of action that the personal applicants have, arising out of the claimed events of 22 September 1997 and later dealings.”

14. As par [17] of those reasons indicate, the cause of action which might be able to be pleaded was the allegation of a new agreement on 22 September 1997 which had the effect of the applicants, or some of them, acquiring possession of the shop premises, and that in breach of the agreement and contrary to s 51AC of the Trade Practices Act, the third respondent acting for the first and second respondent trespassed on those premises and caused loss and damage of the kind to which reference was there made. 

15. The latest statement of claim does not adopt the directions or suggestions that I made on 19 September last year.  What it does do, in paragraph 2 of that statement of claim, is contend that the applicants have a right to make claims for events that occurred from 13 March 1995, it being alleged that the third respondent as leasing agent and manager of the first and second respondents assigned the lease of Shop 28 to the applicants on that day. 

16. It is one thing to allege that an agent of the lessor might strike a new agreement with the present applicants which had the effect of varying or novating the pre-existing lease arrangements between the company and the lessor.  Any such contention might face real evidentiary difficulties, in particular in this case because clause 5.1 of the lease provided:

    “5.1  Assignment by Lessee

    The Lessee may not assign its rights under this deed.”

17. It is quite another thing, however, to contend, as the applicants do in their latest statement of claim, that the events that occurred in about March 1995 had the effect of assigning the lease so that the company was no longer the lessee, but the three natural persons the present applicants, were.  The basis for this central contention on behalf of the applicants appears from par 49 of the latest statement of claim:

    “49.To ground their claim that the lease was assigned to them on 13 March 1995 the applicants’ [sic] will rely on:

    (i)Cheque No.371005 dated 13 March 1995, drawn on the bank account of the retail business  ‘Mystic Crystals’ (Account 3923 41022 held at the ANZ bank 114 Hugh Street, Garbutt, Queensland, 4815) in the sum of $3318.60 offered to the Third Respondent to pay rent and outgoings in relation to shop 28 Willows Shoppingtown.

    (ii)A letter dated 13 March 1995 that accompanied the cheque referred to at paragraph 49(i).

    (iii)Cheque butts of the bank account of the retail business ‘Mystic Crystals’ (Account 3923 41022 held at the ANZ bank 114 Hugh Street, Garbutt, Queensland, 4815) dating from 13 March 1995 through to 1998.

    (iv)Bank statements of the bank account of the retail business ‘Mystic Crystals’ (Account 3923 41022 held at the ANZ bank 114 Hugh Street, Garbutt, Queensland, 4815 dating from March 1995 through to 1998.

    50.       The Third Respondent:

    (a)Accepted the cheque referred to at paragraph 49 (i) herein.

    (b)Promptly presented the cheque for payment.

    (c)Did not reply to the letter referred to at paragraph 49 (ii) herein.

    (d)Thereafter accepted payments for rent and outgoings from the retail business ‘Mystic Crystals’.

    51.       The applicants will rely on these facts to ground claims that:

    (a)The Third Respondent, agent of the First Respondent and Second Respondent created a ‘Legal Relationship’ between the partners of the retail business ‘Mystic Crystals’ and the First Respondent and Second Respondent.

    (b)The partners of the retail business ‘Mystic Crystals’ assumed all obligations of the lease on 13 March 1995 in lieu of ‘Mystic Crystals Franchises (Australia) Pty Ltd’.

    (c)The partners of the retail business ‘Mystic Crystals’ became the legal tenants of shop 28 Willows Shoppingtown with effect 13 March 1995.”

18. In my opinion the facts pleaded are incapable of supporting the conclusion that the three applicants “became the legal tenants of Shop 28 Willows Shoppingtown with effect 13 March 1995.”

19. It will be recalled that the winding up order was based on the non-payment of rental by the company.

20. In the course of submissions on the present strike-out applications, Mr Dart drew attention to the observation in my reasons of 19 September 2000:

    “In essence, what is suggested is, amongst other things, the applicants or some of them acquired possession.  What is suggested is that on 22 September a new agreement was entered into.  That agreement extended to undertakings concerning arrears of rent.  The applicants or some of them acquired possession of the shop premises.”

21. Those observations were a summary of what had been pleaded in pars 77 to 101 of the earlier statement of claim that was the subject of those strike-out applications.  Mr Dart said:

    “…It was those words that prompted me to revisit the files right back to day one to determine exactly when we did acquire possession of the premises.”

22. That review, said Mr Dart:

    “revealed that there was, in fact, an effective assignment of the lease as early as 13 March 1995.”

23. Mr Dart contends that the payment of the amount of rental from the Magic Crystals account and a request made to the landlord to allow the proprietors of the retail business to assume all obligations for the lease, which request was never replied to, constitutes an assignment of the lease.  I said to Mr Dart:

    “So you say that sending the cheque with that letter and having no response meant that the proprietors of the retail business, Magic Crystals, became the lessees.”

    To which Mr Dart replied:

    “It would seem by their silence, your Honour, that they effectively assigned the lease.  They accepted the proposition that was put to them in that letter, that the retailers – the proprietors of the retail business, Mr Crystals, assume all obligations for the lease.”

24. As to the agreement of 22 September, I put to Mr Dart:

    “You say that on 22 September 1997 the agreement was that you were still the tenants, you had been the tenants, and continue to be the tenants, but that you were only obliged to pay $100 at most or nothing if things were bad.”

    To which Mr Dart replied:

    “Yes, your Honour, absolutely.”  

25. The claims of the natural applicants depend on the contention pleaded on their behalf that they became tenants from 13 March 1995 based on the matters to which I have referred.  That contention is untenable.

26. Apart from this one aspect of the matter, the grounds on which I struck out the second last statement of claim remain.  Apart from the basis presently propounded, and which in my opinion has no prospects of success, there has been no genuine attempt to distinguish and particularise between the individual members of the Dart family, nor to distinguish and particularise between specific causes of action which might accrue to individual members of them, nor the basis on which those specific causes of action are said to accrue.  There has been no real attempt to identify against which specific respondents any cause of action may lie, and the bases of which any such action has not been pleaded.  This applies particularly to the pleading as against the fourth respondent.  There has been no real attempt to identify, with any degree of specificity, the damage which any individual member of the Dart family claims to have suffered as a consequence of whatever the causes of action that person may have against any individual respondent.

27. I am satisfied that as against each of the four respondents the proceedings disclose no reasonable cause of action, are frivolous and/or vexatious, and constitute an abuse of process of the Court.  In all the circumstances and, in particular, the number of occasions on which opportunity to plead a proper cause of action against the respondents has been extended, I would order that as against each respondent the statement of claim filed 9 October 2000 be struck out, and further that proceedings Q 67 of 2000 in the Federal Court be dismissed.

28. The applicant should pay the respondents’ costs of their respective motions, to be taxed if not agreed, and should also pay the costs of the proceedings against those respondents, to be taxed if not agreed.

I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

Associate:

Dated:            4 September 2001

The First Applicant appeared in person and on behalf of the 2nd and 3rd Applicants
Counsel for the 1st & 2nd Respondents:	Mr Anthony Moon
Solicitor for the 1st & 2nd Respondents:	Connolly Suthers
Counsel for the 3rd Respondent	Mr Bernard Porter
Solicitor for the 3rd Respondent	Flower & Hart
Counsel for the 4th Respondent	Mr Roger Traves
Solicitor for the 4th Respondent	Brian Bartley & Associates
Date of Hearing:	20 November 2000
Date of Judgment:	4 September 2001