Eliezer v The Owners - Strata Plan No 51682 & Ors

[2017] NSWSC 278

Supreme Court

New South Wales

Medium Neutral Citation:	Eliezer v The Owners – Strata Plan No 51682 & Ors [2017] NSWSC 278
Hearing dates:	15 March 2017
Decision date:	22 March 2017
Jurisdiction:	Common Law
Before:	N Adams J
Decision:	(1) The plaintiff is refused leave to join Joseph Eliezer as a second plaintiff in these proceedings. (2) The plaintiff is refused leave to file either the amended statement of claim dated 11 August 2016 or the amended statement of claim dated 29 September 2016. (3) The plaintiff is to pay the defendants’ costs of the motion. (4) Should the plaintiff wish to file any further amended statement of claim, she must do so by filing and serving a notice of motion seeking the Court’s leave on or before 3 May 2017. (5) Leave is granted for any such Motion to be returnable before the Court on 17 May 2017. (6) Any application by the defendants to have the proceedings summarily dismissed is to be by way of notice of motion returnable on 17 May 2017. (7) I stand the proceedings over for further directions before the Common Law Registrar at 9am on 17 May 2017.
Catchwords:	PRACTICE AND PROCEDURE – application for leave to join plaintiff’s husband as second plaintiff – where reason for addition of second plaintiff said to be largely practical – proposed second plaintiff has no cause of action in tort – leave refused   PRACTICE AND PROCEDURE – application for leave to file amended statement of claim – where Registrar granted leave to amend extant statement claim on a limited basis – amended statement of claim subsequently filed exceeded limitations of that grant of leave – where proposed amended statement of claim fails to plead all elements of causes of action – leave refused
Legislation Cited:	Civil Procedure Act 2005 (NSW) Strata Schemes Management Act 1996 (NSW), s 80 Strata Schemes Management Act 2015 (NSW) Uniform Civil Procedure Rules 2005 (NSW), rr 4.10(4), 6.19, 7.36
Cases Cited:	A v State of New South Wales (2007) 230 CLR 500; [2007] HCA 10 Banque Commerciale SA en liquidation v Akhil Holdings (1990) 169 CLR 279; [1990] HCA 11 Bendigo and Adelaide Bank Ltd v Chowdury [2012] NSWSC 592 Clarke v State of New South Wales (No.4) [2015] NSWSC 1054 Gregory v Portsmouth City Council [2000] 1 AC 419 Howard Smith & Co Ltd (1911) 13 CLR 35; [1911] HCA 46 Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd [2010] NSWDC 232 Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135 Little v Law Institute of Victoria and Ors (No 3) [1990] VR 257 Queensland Court of Appeal in Beach Club Port Douglas Pty Ltd v Page [2005] QCA The Trustees of the Property of John Daniel Cummins, A Bankrupt v Cummins (2006) 227 CLR 278; [2006] HCA 6 Willers v Joyce and Anor [2016] UKSC 43 Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34
Category:	Procedural and other rulings
Parties:	Supriya Eliezer (Plaintiff) The Owners – Strata Plan No 51682 (First Defendant) Australian Property Managers Pty Ltd (Second Defendant) Peter Woodbury (Third Defendant) Frances Li (Fourth Defendant) Wanglang Yang (Fifth Defendant) Meimei Xie (Sixth Defendant) Zhisheng Duan (Seventh Defendant) Wei Li Yu (Eighth Defendant) Xin Wang (Ninth Defendant) Ping Kwan Lo (Tenth Defendant) Leng Lin Leong (Eleventh Defendant)
Representation:	Counsel: Mr J Eliezer, husband of the plaintiff (Plaintiff) Mr M Klooster (First Defendant) Ms S Jadhav, solicitor (Second, Third and Fourth Defendants) Mr Krstic, solicitor (Fifth and Sixth Defendants) Mr D Lamb, solicitor (Seventh, Eighth, Tenth and Eleventh Defendants) Mr G Li (Ninth Defendant)   Solicitors: Ms S Eliezer (Plaintiff) Jemmeson & Fisher Solicitors & Accountants (Second, Third and Fourth Defendants) Colin Biggers & Paisley Pty Limited (Fifth and Sixth Defendants) Gilbert M. Johnstone & Co (First, Seventh, Eighth, Tenth and Eleventh Defendants) Jing Sun Sun Lawyers (Ninth Defendant)
File Number(s):	2015/00123687
Publication restriction:	Nil

Judgment

1. On 27 April 2015, the plaintiff commenced proceedings against the eleven defendants by way of statement of claim (“SOC”) alleging, inter alia, malicious prosecution, collateral abuse of process, and fraud. The proceedings have arisen as a result of a dispute among lot owners in a strata scheme in West Ryde. The plaintiff is a lot owner in the strata scheme. She is a solicitor who is representing herself in these proceedings. The first defendant is the Owners Corporation of the strata scheme. The second defendant is the strata manager. The third and fourth defendants are employees of the strata manager. The remaining defendants are the other lot owners. The proceedings have had a troubled history.

2. By notice of motion filed on 9 December 2016, the plaintiff seeks orders that she be granted leave to join her husband, Joseph Eliezer, as a second plaintiff in these proceedings pursuant to r 6.19(1) and 6.19(2) of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) and that leave also be granted to file either the amended statement of claim (“ASOC”) dated 11 August 2016 or the ASOC dated 29 September 2017.

3. The defendants oppose the orders sought.

4. The hearing of the motion came before me on 15 March 2017. The plaintiff did not appear at the hearing. Her husband, Joseph Eliezer, appeared on her behalf and informed the Court that he is also a solicitor. He produced an authority from his wife to the effect that she wished him to appear on her behalf at the motion. Mr Eliezer informed the court that the plaintiff was not present due to “a combination of personal circumstances”. He referred to her being bullied by another practitioner on a previous occasion and stated that, “…it is reaching a point where it is somewhat difficult for her to manage without support”. None of the other parties objected to Mr Eliezer’s appearing for the plaintiff on the motion.

5. Mr Klooster of counsel appeared for the first defendant, Ms Jadhav appeared for the second third and fourth defendants, Mr Krstic appeared for the fifth and sixth defendants, Mr Lamb appeared for the seventh, eighth, tenth and eleventh defendants and Mr Li appeared for the ninth defendant.

6. Mr Eliezer relied upon the affidavit of the plaintiff sworn 9 December 2016. He also relied upon written submissions.

7. No evidence was filed on behalf of the defendants. Both Mr Klooster and Ms Jadhav filed written submissions.

8. The following background is taken from the plaintiff’s affidavit and annexures, the submissions and the pleadings.

Background

9. The plaintiff is the sole lot owner of a unit in a strata scheme in West Ryde. Between 2009 and 2013, there was a dispute between the plaintiff, the Owners Corporation and other lot owners. The plaintiff felt that the Owners Corporation was not acting in the best interests of all of the lot owners by, in effect, favouring certain lot owners. She brought unsuccessful proceedings for adjudication by a Strata Schemes Adjudicator of the New South Wales Civil and Administrative Tribunal (“NCAT”). She alleges that commencing proceedings before the Adjudicator, for no personal benefit, caused her loss. She subsequently decided that she should not have to pay her strata levies due to this “economic loss”.

10. On 18 July 2013, the fourth defendant commenced legal action against the plaintiff in the Small Claims Division of the Local Court on behalf of the first defendant for recovery of the strata levies owed. The plaintiff subsequently filed a cross-claim and defence. On 6 February 2014, the plaintiff was ordered by an assessor in the Small Claims Division to pay the amount owed. On 28 February 2014, she appealed to the District Court from the decision of the assessor on a ground of denial of procedural unfairness; namely, that she had been refused an adjournment on the day of the hearing.

11. It appears that on 18 December 2014 Elkaim DCJ made orders in the terms of consent orders filed to the effect that, among other things, the appeal would be allowed, the order of the assessor set aside, and the matter remitted to the Local Court for determination of the claim and cross-claim. As part of the settlement, the plaintiff agreed to pay the strata levies owed. The consent orders reflected that the Owners Corporation would hold a General Meeting in January 2015 in relation to the waiver of the costs and interest that the plaintiff owed by virtue of s 80 of the Strata Scheme Management Act 1996 (NSW) (“the s 80 costs”). Section 80 of that Act is in these terms:

“80 How does an owners corporation recover unpaid contributions and interest?

(1) An owners corporation may recover as a debt a contribution not paid at the end of one month after it becomes due and payable, together with any interest payable and the expenses of the owners corporation incurred in recovering those amounts.

(2) Interest paid or recovered forms part of the fund to which the relevant contribution belongs.”

12. (It is to be noted that that Act has been repealed and replaced by the Strata Schemes Management Act 2015 (NSW), which commenced on 30 November 2016).

13. On 23 January 2015, at a meeting of the Owners Corporation, the amount of s 80 costs was (incorrectly) agreed to be $17,108.32 and the amount of interest $1,140.43. The Owners Corporation decided that the s 80 costs would not be waived and the matter was relisted in the Local Court for determination of the costs issue.

14. The plaintiff sent a Calderbank letter to the defendants on 24 April 2015, which included an offer said to expire on that date. Also on 24 April 2015, the plaintiff filed a SOC in this Court commencing the present proceedings.

15. The matter was next before the Local Court for resolution of the s 80 costs issue on 27 April 2015. It had to be adjourned on that day because of the proceedings brought in this Court. On that day, the plaintiff was advised by the solicitor for the Owners Corporation that the correct figure for the s 80 costs as at 27 April 2015 was in fact $7,540.69, with interest of $629.99.

16. On 13 August 2015, the plaintiff made application to this Court to stay the Local Court proceedings pending the determination of these proceedings. Button J ultimately made the orders sought by consent. His Honour ordered that the plaintiff pays the defendants’ costs of that application.

The statement of claim

17. The SOC filed on 27 April 2015 sets out in some detail the history of the plaintiff’s complaints concerning the management of the strata scheme and the procedural history of the proceedings in the Local Court. The plaintiff alleges that, from 2009 onwards, there were “malicious and oppressive” actions taken against her using strata processes.

18. The causes of action pleaded in the SOC are malicious prosecution, abuse of process, fraud, “fraud on minority and civil conspiracy” and “aiding and abetting”.

19. The particulars provided in support of the allegation of malicious prosecution are that the fourth defendant commenced the Local Court proceedings with the objective of bankrupting the plaintiff. It is alleged that the other lot owners supported the action. The plaintiff claims that the defendants brought the proceedings to damage the plaintiff’s standing in the Owners Corporation, that they had no reasonable or probable cause in bankruptcy, and that the fourth defendant unreasonably refused to participate in mediation. The particulars provided in relation to the allegation of abuse of process are in similar terms.

20. The allegation of fraud is that the fourth and fifth defendants “used strata levies to feed the revenues of various small businesses in return for commissions”, that the third and fourth defendants’ conduct in relation to common property amounts to a “scam”, and that the fourth and fifth defendants’ conduct in relation to the s 80 expenses also amounts to a “scam”.

21. The particulars provided in relation to the “fraud on minority and civil conspiracy” are that the majority is said to have assisted the second defendant to engage in conduct that amounted to equitable fraud, which is why the plaintiff commenced proceedings before NCAT. As part of these particulars it is alleged that “the Tribunal adopted a narrow procedural approach not touching on evidence that the plaintiff’s substantive rights have been affected.” It is contended that the defendants “colluded and conspired with the strata manager to extinguish the plaintiff’s rights” and that the defendants “engaged in unlawful conduct” by aiding and abetting the others. The aiding and abetting claim is that the fifth to eleventh defendants had notice of the other issues and aided and abetted the torts of malicious prosecution, abuse of process, fraud and civil conspiracy.

Procedural history

22. On 31 July 2015 there was a directions hearing in relation to this matter before the Common Law Registrar. The Local Court proceedings were stayed on 13 August 2015. There were further directions hearings before the Registrar on 14 September 2015, 26 October 2015, 29 February 2016, 19 May 2016 and 16 June 2016.

23. Correspondence annexed to the plaintiff’s affidavit between the solicitor for the fifth and sixth defendants and the plaintiff shows that the plaintiff accepted that any allegations of fraud as against the fifth defendant would be withdrawn as the addition of the fifth defendant in that part of the claim alleging fraud was a typographical error.

24. There was a further directions hearing before the Registrar on 11 August 2016. The Registrar made a number of orders that day, including an order by consent that plaintiff was “…to file and serve Amended Statement of Claim by 25 August 2016”. A dispute has arisen between the parties as to precisely what this order contemplated. The recollection of all legal representatives present that day, except the plaintiff, was that leave was only granted on the limited basis that the plaintiff would amend the statement of claim to remove the allegation of fraud. (Mr Klooster has an additional recollection of stating to the Registrar that day that the plaintiff should be given the opportunity to plead her case properly).

25. The plaintiff contends that the effect of the order on 11 August 2016 was that she was permitted to make any amendments to the SOC that she wished.

26. On 25 August 2016, the plaintiff filed and served an ASOC (“the 25 August ASOC”).

27. On 15 September 2016, there was a further directions hearing before the Registrar. The plaintiff did not attend on that occasion. The Registrar ordered that the 25 August ASOC not be accepted by the Court under r 4.10(4) of the UCPR, which provides that the court may refuse to accept a document for filing even if it has already been physically accepted for filing in the Registry. The Registrar then ordered that any proposed ASOC be served on all of the defendants by 29 September 2016.

28. On 29 September 2016 the plaintiff filed another ASOC (“the 29 September ASOC”). It was in identical terms to the earlier ASOC.

29. At the next directions hearing before the Registrar on 7 October 2016, there was again no appearance by the plaintiff. The Registrar ordered that the plaintiff be in a position on the next occasion, if necessary, to show cause why the proceedings should not be dismissed. The matter was stood over until 9 December 2016.

30. On 9 December 2016, the matter came before Schmidt J in her Honour’s capacity as Duty Judge. Her Honour gave the plaintiff leave to file the present notice of motion and affidavit in support and to approach the Registry to obtain a hearing date. The hearing of the motion was listed on 15 March 2017.

The proposed amended statement of claim

31. Although the notice of motion seeks leave to file either the 25 August ASOC or the 29 September ASOC, they are in fact in identical terms. The allegations of fraud have been removed and the pleading is confined to malicious prosecution, abuse of process and a cause of action described as “unfair unjust and oppressive”. During the hearing of the motion, Mr Eliezer agreed that the only two causes of action with which the plaintiff now wishes to proceed are the torts of malicious prosecution and collateral abuse of process.

32. It is alleged in the ASOC that the institution of the Local Court proceedings was “unfair, unjust and oppressive” in the circumstances applicable at that time; that the Executive Committee of the first defendant acted in bad faith by repeatedly approving and acting with a conflict of interest; that the Executive Committee of the first defendant engaged in unnecessary escalation of quarterly strata levies; that the Executive Committee of the first defendant acted in bad faith by failing to respond to legitimate concerns of the plaintiffs; and that the conduct of the strata manager employed by the second defendant contributed to reinforce the dispute between the plaintiffs and the majority owners. It is further pleaded that, as a result of that conduct, the plaintiff was forced to undertake work that was the responsibility of the first and second defendants and, as a result, the plaintiff suffered harm and loss.

33. It is further pleaded that the fifth to eleventh defendants profited from the plaintiff’s actions since 2009 and that the fourth defendant, after taking over as strata manager, aggravated the dispute. It is further contended that the fourth defendant engaged in a prolonged dishonest “cover-up” of the issues and that the plaintiff experienced a loss of trust in the first and fourth defendants.

34. The basis for alleging that the Local Court proceedings were commenced in an “unfair, unjust and oppressive” manner is particularised as the fourth defendant’s making no meaningful attempt to secure payment prior to commencing legal action, failing to justify the legal action at the time it was initiated and, acting in bad faith by using the legislation as a means of entrapment. The plaintiff claims that the legal action for debt recovery was unnecessary and that the defendants denied the plaintiff a forum for legitimate concerns. It is further contended that the defendants acted unconscionably and took advantage of the vulnerability of the plaintiff, being in the minority. It is further contended that the second, third and fourth defendants acted dishonestly by maintaining the action.

35. The particulars of the allegation of malicious prosecution are that the defendants colluded to bring the Local Court proceedings in circumstances where they could not have had a subjective belief that debt recovery was warranted. Furthermore, the proceedings are said to have been commenced maliciously because the first defendant and other defendants failed to mediate with the plaintiff concerning the strata levy debt.

36. It is further added, in respect of the abuse of process claim, that the Local Court proceedings were commenced for an ulterior and improper purpose, namely the “self-preservation” of the fourth defendant. It is alleged that the action “victimised” the plaintiff.

Submissions on behalf of the plaintiff

37. Mr Eliezer advanced two submissions as to why he should be added as a plaintiff in these proceedings.

38. First, he submitted that he and his wife wished that he be added as a plaintiff because she is appearing for herself in the litigation and, if they are both plaintiffs, he will be able to attend court on the occasions when his wife is unable. He explained that the plaintiff was bullied by an unknown legal practitioner (who is no longer involved in the matter) last year who is said to have told the plaintiff that she should have “withdrawn the case a long time ago”. In those circumstances, the plaintiff does not always feel able to attend court. In a similar vein, Mr Eliezer explained that the plaintiff has a child “…whose needs have to be attended to, and sometime it is the situation where it is too overwhelming for her to juggle all these responsibilities”. He submitted that “…we are putting in place this arrangement that either one of us would be able to pursue, be present.”

39. Mr Eliezer conceded that the plaintiff is the only person on the title of the property and the only defendant in the Local Court proceedings, but submitted that both he and his wife have an interest in the property. He submitted that, “…when you talk about substantive rights and torts it appears to apply to anyone who has an interest in the property.” He submitted that, “…if the reputation of one would be damaged it is going to impact on the other and if one suffers property loss it is going to affect the other as well.”

37. It is asserted in the plaintiff’s written submissions that husbands and wives “tend to mix their financial affairs” and both usually contribute to the purchase price of the matrimonial home. Therefore, each has an interest in the property regardless of whose name is on the title.

38. He relied upon the decision of the High Court in The Trustees of the Property of John Daniel Cummins, A Bankrupt v Cummins (2006) 227 CLR 278; [2006] HCA 6, where, it was submitted, the High Court held that husbands and wives owned properties jointly and equally regardless of the financial contribution they have made. He submitted that the consequence of this decision is that the fact that he does not have legal title to the property is not relevant to the exercise of his substantive rights.

39. Mr Eliezer’s primary submission as to why leave should be granted to file the ASOC is that the Registrar already made such an order on 11 August 2016.

40. Mr Eliezer conceded that the plaintiff had in fact paid the levies due and that the only remaining dispute concerned the payment of s 80 costs. He confirmed that it is the application for the s 80 costs in the Local Court that is the “motivation really for us to pursue this action”. He submitted that, although the Local Court proceedings have not terminated, the s 80 expenses were unreasonably incurred. This satisfies the requirements for proceedings brought for malicious prosecution.

41. With respect to the element of malicious prosecution that requires determination of the impugned proceedings in favour of the plaintiff, the plaintiff submitted in written submissions that the District Court proceedings were unfavourable to the defendants because they were denied s 80 costs on appeal due to late service of an affidavit and also because they were ordered to mediate, which they had refused to do until that point.

42. As for the elements of malicious prosecution, the plaintiff relied upon the District Court decision of Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd [2010] NSWDC 232. He stated that that decision “…should serve as the starting point in the present proceeding rather than having to investigate from scratch what the law is in this regard.”

43. During his oral submissions, Mr Eliezer stated that, “There are a number of issues with the original statement of claim. It doesn’t plead all the elements…some of the orders required have not been included.”

44. Ultimately, the plaintiff submitted that the defendants had failed to identify proper grounds for the refusal of the amendments.

Submissions on behalf of the defendants

Submissions on behalf of the first defendant

48. Mr Klooster of counsel submitted on behalf of the first defendant that the Court would not grant leave for Joseph Eliezer to be added as a second plaintiff in these proceedings because no recognisable cause of action is identified with respect to the claim purportedly brought by him.

49. As for the application for leave to file the ASOC, it was submitted that the proposed amendments are so futile that they would be struck out if they appeared in the original pleading.

50. Mr Klooster pointed out that the precise scope of the consent order made before the Registrar on 11 August 2016 does not matter because the Registrar subsequently rejected the filing of the ASOC.

51. In his written submissions, Mr Klooster analysed the proposed ASOC and noted that it fails to identify the cause of action upon which the plaintiff relies under the heading “unfair, unjust and oppressive”, including whether it be in contract, tort or combination thereof.

52. Further, he submitted that the cause of action for malicious prosecution as pleaded has two insurmountable problems. The first concerns whether the law in Australia in relation to the tort of malicious prosecution extends to civil proceedings. The second is that, even if the tort might extend to civil proceedings, the proceedings upon which the plaintiff relies did not terminate in favour of the plaintiff. This is an essential element of the cause of action. On that basis, the cause of action is not sustainable.

53. It was further submitted that the tort of collateral abuse of process is inadequately pleaded. The plaintiff has to prove not only that the defendants used the court process for an improper purpose, but also that the defendants engaged in some other act or threat distinct from the insitution of the proceeding itself, in furtherance of that purpose: see Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146 (“Maxwell-Smith”) at [54] per Barrett JA. It was submitted that no factual matters are articulated in the proposed pleading to establish the second of these requirements. In circumstances where the Local Court proceedings were brought to recover outstanding levies, it is difficult to see how those proceedings could be characterised as being improper.

54. It was submitted that the plaintiff had failed to comply with the requirements of Part 14 of the UCPR and that the proposed pleading is manifestly deficient and liable to be struck out.

Submissions on behalf of the second, third and fourth defendants

55. Ms Jadhav, solicitor, appeared on behalf of the second, third and fourth defendants. She largely relied upon her written submissions. She indicated that her recollection of what occurred before the Registrar on 11 August 2016 was the same as that of Mr Krstic, in that the Registrar granted the plaintiff leave to amend the SOC to remove the allegations of fraud.

Submission on behalf of the fifth and sixth defendants

56. Mr Krstic stated that he expressly recalls asking the Registrar on 11 August 2016 to permit the plaintiff to amend the SOC so that the allegation of fraud against the fifth defendant could be removed.

57. He otherwise had nothing further to add to the submissions already made.

Submissions on behalf of the eighth, tenth and eleventh defendants

58. Mr Lamb submitted that, when the plaintiff brought the ex parte stay application before Button J, she gave an undertaking that she would not seek to amend her pleadings. Subsequently, the SOC was permitted to be amended in a limited respect because of the issue raised by Mr Krstic with respect to the allegation of fraud made against the fifth defendant. He submitted that the narrow grant of leave to amend the pleadings is consistent with the history of the matter.

Submissions on behalf of the ninth defendant

59. Mr Li’s recollection was that Mr Krstic raised the allegation of fraud against the fifth defendant at the mention on 11 August 2016, which led to the Registrar’s making of an order granting leave to amend the SOC. He otherwise had nothing further to add.

Consideration

Leave to join Mr Eliezer as second plaintiff

60. I turn first to consider the plaintiff’s application to have her husband Joseph Eliezer added as a second plaintiff. Rule 6.19(1)(a) of the UCPR provides, inter alia, that two or more persons may be joined as plaintiffs if separate proceedings by each of them would give rise to a common question of law or fact, and the relief claimed arises out of the same transaction. Rule 6.19(1) (b) provides that a plaintiff may be joined if the court gives leave for that person to be joined. Rule 6.19(2) provides that leave may be granted either before or after the originating process has been filed.

61. The court will only grant leave for a person to be joined as a plaintiff if that person has a cause of action. No cause of action that could be brought by Mr Eliezer is identified in the material before me. Significantly, there is no reference to him in any of the pleadings. The only reference to him in the material before me is in the plaintiff’s affidavit, where she states that her husband was present when an unknown solicitor was aggressive to her at a directions hearing in this Court in 2015. That is clearly not relevant to any cause of action that her husband might have in this Court based upon the Local Court proceedings.

62. The submissions made by Mr Eliezer in support of him being added as a plaintiff go no higher that an assertion that he has some form of equitable interest in the property and thus also has an interest in the proceedings. The only causes of action pleaded are malicious prosecution and collateral abuse of process, which both turn on the commencement of proceedings in the Local Court. It is difficult to see how any person other than a party to those proceedings would have any of the causes of action as currently pleaded.

63. The decision of the High Court in The Trustees of the Property of John Daniel Cummins, A Bankrupt v Cummins is of no assistance on this issue. That case concerns the application of the equitable doctrine of resulting trusts in circumstances where a husband and wife make unequal contributions to the purchase of property and subsequently hold as joint tenants. It is not to the point whether or not the defendant may have an equitable interest in the property with respect to the accrual of causes of action in tort.

64. In his submissions before me, Mr Eliezer frankly stated that the reasons he and his wife wish that he be joined as a plaintiff in these proceedings are that she feels bullied and that she is not always able to attend court due to other responsibilities. If he were added as a plaintiff, he would be able to appear on some occasions. That is not an appropriate basis upon which to join a person as a plaintiff.

65. It seems to me that the plaintiff has confused the question of her representation with the question of who should be a plaintiff in these proceedings. I am not satisfied that the plaintiff has established that it is appropriate for me to grant leave for her husband to be joined as a plaintiff and accordingly such leave is refused.

Leave to file an amended statement of claim

66. There are limits to the court’s general discretion to grant leave to a party to file an amended pleading, including that the proposed amendment must comply with the UCPR and the Civil Procedure Act 2005 (NSW) (“the CPA”), disclose a reasonable cause of action and not be liable to be struck out

67. The relevant principles in relation to the requirement for proper pleadings are well established and were summarised by Garling J in Clarke v State of New South Wales (No 4) [2015] NSWSC 1054 at [36] – [42]:

“36. The function of pleadings is to state with sufficient clarity the case that must be met by a defendant. In this way, pleadings serve to define the issues for decision and ensure the basic requirements of procedural fairness, namely that a party should have the opportunity to meet a case against him or her: Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286, 296, 302-3. As well, the issues defined in the pleadings provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance: Dare v Pulham [1982] HCA 70; (1982)148 CLR 658 at 664.

37 Proper pleading is of fundamental importance in assisting courts to achieve the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: s 56 Civil Procedure Act; McGuirk v The University of NSW [2009] NSWSC 1424 at [24] per Johnson J.

38 As Hodgson JA (with whom Mason P and Handley JA agreed) said in Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135 at 142-143:

"The requirement for a pleading to state material facts which is to be found in the Rules includes the cause or causes of action which are relied upon. Materiality of facts means how those facts are material to a cause of action."

39. Bongiorno J said in Gunns Ltd v Marr [2005] VSC 251 at 57, in a passage with which, if I may say with respect, I entirely agree:

"Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly."

40. As his Honour went on to say,

"A pleading is embarrassing where it is unintelligible, ambiguous, vague or too general."

41. In Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393 at [18], Tamberlin J dealt with the concept of embarrassment, with respect to a pleading, in this way:

"Embarrassment in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense. ..."

42. As Bryson J recognised, a pleading may be embarrassing if the material facts alleged are couched in expressions which leave difficulties or doubts about recognising or piecing together what is referred to: Northam v Favelle Favco Holdings Pty Ltd (Bryson J, 7 March 1995, unreported)”.

68. The plaintiff’s submission that the Registrar granted leave to the plaintiff on 11 August 2016 to file the proposed ASOC cannot be accepted. It is contrary to what the other legal representatives present that day assert occurred in any event. The Registrar subsequently rejected the ASOC under r 4.10(4) of the UCPR. That sub-rule states that the court, and officers of the court, may reject documents that have already been filed. It has been exercised to reject documents that contain a “fatal and obvious deficiency”: Bendigo and Adelaide Bank Ltd v Chowdury [2012] NSWSC 592 per Johnson J at [12]. It is to be inferred that the Registrar rejected the ASOC in this matter because the amendments were inconsistent with his order. However, it is not necessary for me to determine upon which basis the document was rejected. The fact remains that it is not to the point now to rely upon the Registrar’s order as the basis for filing an ASOC in identical terms.

69. The plaintiff’s secondary position was that leave should be granted to file the ASOC because the amendments are necessary to identify the real issues in the proceedings, as required by the CPA.

70. It is clear from the correspondence attached to the plaintiff’s affidavit and the submissions advanced on her behalf that she does not accept the difficulties with the pleading highlighted by Mr Klooster in his written submissions, nor those raised by Ms Jadhav.

71. During oral submissions, Mr Eliezer indicated that the causes of action are confined to malicious prosecution and collateral abuse of process. It is to be presumed that the plaintiff does not rely upon paragraphs 19A-19C of the proposed ASOC (which particularise a cause of action of “unfair, unjust and oppressive”). The plaintiff has failed to identify the cause of action that is being pursued under this heading. Paragraph 19A alleges that the defendants engaged in conduct that was “unfair, unjust and oppressive”. Phrases including “conflict of interest”, “bad faith” and “loss of trust” are used, but there is a complete failure to identify whether the cause of action is in contract or tort, or a combination of both.

72. Paragraph 19B contains allegations of unconscionability and “dishonesty”. The only factual matter to which that paragraph refers is the institution of the Local Court proceedings by the first defendant for the recovery of strata levies. Paragraph 19C refers to the fifth to eleventh defendants’ having actual or constructive knowledge, but the cause of action that is said to require the knowledge is not discernible. Paragraph 19D alleges that the s 80 costs incurred by the first defendant in the Local Court proceedings were unreasonable.

73. It is not the function of this Court to settle parties’ pleadings. My role is confined to ensuring that the pleadings conform to the rules and fulfil the functions for which they exist: Banque Commerciale SA en liquidation v Akhil Holdings (1990) 169 CLR 279; [1990] HCA 11.

74. With this principle in mind, it is pertinent to note the elements of the tort of malicious prosecution. Any statement of claim alleging malicious prosecution must plead those elements. In A v State of New South Wales (2007) 230 CLR 500; [2007] HCA 10, the High Court (Gleeson CJ, Gummow, Kirby, Hayne Heyne, Heydon and Crennan JJ) stated at 502-503 [1]:

“For a plaintiff to succeed in an action for damages for malicious prosecution the plaintiff must establish:

(1) that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant;

(2) that the proceedings terminated in favour of the plaintiff;

(3) that the defendant, in initiating or maintaining the proceedings acted maliciously; and

(4) that the defendant acted without reasonable and probable cause.”

75. As was pointed out by counsel for the first defendant, there are at least two difficulties with the way in which the plaintiff’s cause of action for malicious prosecution is pleaded. The first of these is that it is not settled law in Australia whether the tort of malicious prosecution extends to civil actions. In Little v Law Institute of Victoria and Ors(No 3) [1990] VR 257, the Victorian Court of Appeal permitted a claim of malicious prosecution in relation to civil proceedings to proceed to trial. In the decision of the Queensland Court of Appeal in Beach Club Port Douglas Pty Ltd v Page [2005] QCA 475, McPherson JA commented at [14] that an action for damages for malicious prosecution is restricted to criminal proceedings. His Honour cited the English decision in Gregory v Portsmouth City Council [2000] 1 AC 419. However, it is to be noted that the Supreme Court of the United Kingdom recently held by majority that the tort of malicious prosecution extends to civil proceedings: Willers v Joyce and Anor [2016] UKSC 43.

76. It is not necessary, in order to dispose of this interlocutory application, to determine whether the tort of malicious prosecution extends to the commencement of civil proceedings. The plaintiff faces an even more significant hurdle. Even if it was held that the tort of malicious prosecution extends to civil proceedings (which is far from clear), the proceedings upon which the plaintiff relies were not terminated in her favour. That is an essential element of the cause of action. It is problematic for the plaintiff’s claim for malicious prosecution, to say the least, that the Local Court proceedings have not as yet been finalised and, significantly, that they have been settled in part in favour of the first defendant.

77. It seems to me that, even taking into account the limited material before me on this interlocutory application, the cause of action brought by the plaintiff for malicious prosecution cannot succeed.

78. Turning finally to consider the remaining cause of action for collateral abuse of process, that claim is particularised in Paragraphs 33A to 33C of the ASOC. The Court of Appeal (Beazley P, McColl and Barrett JJA) recently considered the history and elements of the tort of collateral abuse of process in Maxwell-Smith. In that case, the plaintiff commenced proceedings in the District Court, alleging that the defendants had committed an abuse of process in causing bankruptcy notices to issue against the plaintiffs for the purpose of recovering a debt.

79. Justice Barrett traced the history of the tort since the decision in Grainger v Hill (1838) 4 Bing (NC) 212; 132 ER 769, which was the first to recognise the tort of collateral abuse of process. His Honour summarised the “instructive” facts of that case at [33] – [34] and at [36] quoted from the judgment of Bosanquet J concerning the difference between an action for malicious prosecution and an action for abuse of process as follows:

“Bosanquet J said (at ER 774) that the action was not one of malicious arrest or prosecution, or for maliciously doing that which the law allows to be done – rather, “the process was enforced for an ulterior purpose; to obtain property by duress to which the Defendant had no right”. The action was “not for maliciously putting process in force, but for maliciously abusing the process of the Court”; and “the register was illegally obtained by duress, under an abuse of the process of the Court”.”

80. The High Court recognised the tort of abuse of process in Howard Smith & Co Ltd (1911) 13 CLR 35; [1911] HCA 46.

81. The elements of the tort of collateral abuse of process are that there be proceedings, whether civil or criminal, commenced for an improper collateral purpose and that there be some “overt or extraneous act” committed in furtherance of the improper purpose that is distinct from the proceedings themselves: per Barrett JA in Maxwell-Smith at [43], [54], citing Deane J in Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34.

82. Although, unlike proceedings brought for malicious prosecution, there is no requirement that the proceedings the subject of a claim of collateral abuse of process be finalised before proceedings in tort may be commenced, the ASOC is nonetheless inadequately pleaded. Putting to one side whether on the material before me the plaintiff could ever succeed in such an action, I am satisfied at this stage that the pleadings are insufficient to permit the defendants to defend such a claim. There is simply no material to show that the defendants perpetrated another act or threat in addition simply to commencing the proceedings.

83. I am satisfied that leave should not be granted to the plaintiff to file the ASOC.

84. I have had regard to the relevant case management principles in the CPA. The material before me discloses that the plaintiff does not accept the deficiencies with the proposed pleading identified for her in correspondence and submissions. The plaintiff has had two opportunities to plead her case and has been unable to do so. Mr Eliezer informed me that an adjournment was obtained after the matter was before Button J to enable the plaintiff to obtain representation, but the solicitor engaged was unable to assist due to the complexity of the matter.

Referral to the Pro Bono Panel?

85. The court may order that a litigant be referred to the Registrar for referral to a barrister or solicitor on the Pro Bono Panel for legal assistance under r 7.36(1) of the UCPR. The Pro Bono Scheme is designed to facilitate the provision of legal assistance to litigants who are otherwise unable to obtain assistance where it is in the interests of administration of justice to do so. In determining whether it is in the interests of the administration of justice to make such an order, the court may take into account the means of the litigant, the capacity of the litigant to obtain legal assistance outside the scheme, the nature and complexity of the proceedings and any other matter that the court considers appropriate.

86. The court may not refer a litigant for assistance under r 7.36(1) if the litigant has obtained assistance under a previous referral in the last three years: r 7.36(2A). I was informed that that had not occurred in this case.

87. I have had regard to the nature and complexity of the proceedings including the fact that there are eleven defendants in this matter. The proceedings were commenced nearly two years ago but have not reached the stage where any of the defendants have been provided with sufficient particulars of the claim to file a defence. The plaintiff is unrepresented and a previous attempt to obtain legal representation was unsuccessful.

88. In the plaintiff’s affidavit filed in support of this motion she describes how her earning capacity and that of her husband have been “decimated” because of the ongoing Local Court proceedings and strata scheme dispute. She describes that her area is “art” and her husband is “involved in music”. She states that she has been unable to grow her business and it continues to suffer as a result of the action taken in the Local Court. She further states that her husband has been forced to abandon all of his projects and has ceased to perform music. It would appear that neither the plaintiff nor her husband currently practise as solicitors.

89. I enquired of Mr Eliezer whether, if I were to refer the plaintiff to the Pro Bono Panel, she would accept legal advice provided to her under that scheme. It is of some concern that Mr Eliezer’s response was that:

“…it all depends on the solicitor on that day whether that advice would be helpful. I can’t know for sure at this stage whether the advice we would get would be helpful, but if that exists then certainly we should use it if it would help particularise the claim in a better way and move the case forward.”

90. I invited the parties to put before the Court their position as to whether it would be appropriate for me to make an order referring the plaintiff to the Pro Bono Panel. No party made any submission contrary to that course.

91. I have carefully considered the question of whether it is in the interests of the administration of justice that the plaintiff be referred to the Pro Bono Panel. I have had regard to the fact that the scheme is a scarce resource and referrals should only be made in appropriate cases. There was inadequate evidence before me as to the capacity of the plaintiff to obtain her own representation and I am not satisfied that she would take any advice afforded to her in any event. Having regard to all of these considerations, I do not propose to make such a referral in this case

Conclusion

92. I do not propose to grant the plaintiff leave to file an ASOC. Rather, should the plaintiff wish to file an ASOC that properly discloses a cause of action, she should do so by way of notice of motion seeking the leave of the court.

93. As I indicated to the parties at the hearing of the motion, should any of the defendants wish to make application for summary dismissal of this matter, that application should proceed by way of notice of motion to be heard together with any application to file an ASOC.

ORDERS

94. I make the following orders:

1. The plaintiff is refused leave to join Joseph Eliezer as a second plaintiff in these proceedings.

2. The plaintiff is refused leave to file either the amended statement of claim dated 11 August 2016 or the amended statement of claim dated 29 September 2016.

3. The plaintiff is to pay the defendants’ costs of the motion.

4. Should the plaintiff wish to file any further amended statement of claim, she must do so by filing and serving a notice of motion seeking the Court’s leave on or before 3 May 2017.

5. Leave is granted for any such motion to be returnable before the Court on 17 May 2017.

6. Any application by the defendants to have the proceedings summarily dismissed is to be by way of notice of motion returnable on 17 May 2017.

7. I stand the proceedings over for further directions before the Common Law Registrar at 9am on 17 May 2017.

Decision last updated: 22 March 2017