Gillies v Eastlake
[2014] NSWSC 611
•30 May 2014
Supreme Court
New South Wales
Medium Neutral Citation: Gillies v Eastlake [2014] NSWSC 611 Hearing dates: 26/02/2014 Decision date: 30 May 2014 Jurisdiction: Common Law Before: Garling J Decision: (1) Statement of Claim filed 9 December 2013 be, and hereby is, summarily dismissed.
(2) Notice of Motion filed by defendants on 22 January 2014 is otherwise dismissed.
(3) Notice of Motion filed by the plaintiff on 28 January 2014 is dismissed.
(4) Order the plaintiff to pay the defendants' costs of the whole proceedings including the Notices of Motion.
Catchwords: PROCEDURE - civil - summary disposal - dismissal - three causes of action - Uniform Civil Procedure Rules 2005; r 13.4 - frivolous and vexatious proceedings - discretionary exercise - whether reasonable cause of action - whether abuse of process
PROCEDURE - civil - summary disposal - dismissal - expiration of limitation period - Limitation Act 1969 - whether extension of time could be granted
PROCEDURE - civil - summary disposal - dismissal - bankruptcy - discharged bankrupt - whether causes of action vested in the Official Trustee
PROCEDURE - civil - summary disposal - dismissed - Statement of Claim bad in form - Uniform Civil Procedure Rules 2005; r 14.28Legislation Cited: Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005
Limitation Act 1969
Uniform Civil Procedures Rules 2005Cases Cited: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Burton v Bairnsdale Shire [1908] HCA 57; (1908) 7 CLR 76
Cummings v Claremont Petroleum NL [1996] HCA 19; (1996) 185 CLR 124
Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62
Fancourt v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Giles v The Commonwealth of Australia [2014] NSWSC 83
Gye v McIntyre [1991] HCA 60; (1991) 171 CLR 609
Nyssen v Minerva Centre Ltd (1940) 57 WN (NSW) 112
Pridmore v Magenta Nominees Pty Ltd [1999] FCA 152; (1999) 161 ALR 458
Rogers v Asset Loan Co Pty Ltd [2006] FCA 434
Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 18
Stone v ACE-IRM Insurance Broking Pty Ltd [2003] QCA 218; [2004] 1 Qd R 173
Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514Category: Principal judgment Parties: Darrin Michael Gillies (P)
Lisa Leanne Eastlake (D1)
Malcolm Terry Coombes (D2)Representation: Counsel:
In person (P)
R Brook (D1 & D2)
Solicitors:
In person (P)
Newcastle Legal (D1 & D2)
File Number(s): 2013/370090
Judgment
On 9 December 2013, Darrin Michael Gillies, the plaintiff, commenced proceedings by a Statement of Claim in which he claimed the following relief:
"1. The plaintiff claims $4 M in damages in respect to the unlawful caveats registered against the plaintiff's properties by the first defendant.
2. The plaintiff claims $15,000 in respect of the Court order made in favour of the plaintiff on 19 November 2005.
3. The claim is one for damages to the plaintiff for the false allegations which triggered the unlawful police prosecution that was brought against the plaintiff by the first and second defendants and, ultimately, for the unsuccessful prosecutions terminated in favour of the plaintiff as pleaded here within.
4. Aggravated damages.
5. Exemplary damages.
6. General damages.
7. Interest.
8. Costs."
The first defendant was named as Lisa Leanne Eastlake. It appears from the Statement of Claim, that the plaintiff alleges that he and the first defendant were in an intimate relationship for a period of 19 months up to February 2004.
The second defendant is named as Malcolm Terry Coombes. The plaintiff alleges that Mr Coombes assaulted him on 28 April 2004, as a consequence of which the plaintiff was arrested, charged with a number of offences, and held in custody for a period of seven days. Mr Coombes is the father of Ms Eastlake.
On 15 September 2004, the plaintiff was acquitted of these charges, and seemingly brings these proceedings against Mr Coombes for unlawful arrest, physical assault and damages.
On 22 January 2014, the solicitor for both of the defendants, filed a Notice of Motion in the proceedings in which the following orders were sought:
"1. That the proceedings be dismissed pursuant to r 13.14.
2. The plaintiff is [to] pay the defendants' costs of the proceedings on an indemnity basis.
3. The plaintiff is not [to] recommence proceedings on any claim against the defendants or either of them without the prior leave of the Court."
On 28 January 2014, a Notice of Motion was filed by the plaintiff in which he sought the following relief:
"1. An order for discretionary exclusion of time limit for actions for defamation or malicious falsehood pursuant to s 32A(2)(a) of the Limitation Act 1969.
2. An order for the extension of the limitation period pursuant to s 55(3)(a) of the Limitation Act 1969.
3. An order for the extension of the limitation period pursuant to s 56D of the Limitation Act 1969.
4. An order for the first defendant to pay the plaintiff to $15,000, plus interest pursuant to s 17(1) of the Limitation Act 1969.
5. An order leave of the Court pursuant to r 19.1 of the Uniform Civil Procedure Rules 2005 to allow the plaintiff to amend his Statement of Claim filed in the Supreme Court on 9 December 2013."
The hearing of the two Notices of Motion came before me on 26 February 2014.
The parties agreed that it was appropriate for the Court to hear the defendants' Motion for summary judgment first, and proceed to determine it.
Applicable Legislation
The defendants' Motion seeks an order under r 13.4 of the Uniform Civil Procedures Rules 2005 ("UCPR"). That rule is in the following form:
13.4 Frivolous and vexatious proceedings
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
(c) the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2) The court may receive evidence on the hearing of an application for an order under subrule (1).
Any order under r 13.4 of the UCPR involves the exercise of discretion. The legal principles which guide the exercise of such discretion and decision making are well settled. I will refer to those principles shortly.
However, in addition to those principles, when exercising any power given to the Court under the UCPR, the Court is obliged to further the overriding purpose which is set out in s 56 of the Civil Procedure Act 2005. That overriding purpose obliges the Court to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
Legal Principles
Generally speaking, summary dismissal of proceedings is inappropriate unless the Court is satisfied that a plaintiff's claim or claims fall within the description of being so obviously untenable that the claim or claims cannot possibly succeed. The principal authorities, by which I am bound, which compel me to this conclusion are as follows:
Over 100 years ago, in the High Court of Australia, O'Connor J in Burton v Bairnsdale Shire [1908] HCA 57; (1908) 7 CLR 76 at 92 said:
"Prima facie every litigant has a right to have matters of law as well of fact decided according to the ordinary rules of procedure which give him full time and opportunity for the presentation of his case to the ordinary tribunals, and the inherent jurisdiction of the Court to protect its process from abuse by depriving a litigant of these rights and summarily disposing an action as frivolous and vexatious in point of will never be exercised unless the plaintiff's claim is so obviously untenable that it cannot possibly succeed."
Over 60 years ago, in the High Court of Australia, Dixon J said in Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at [13]:
"The application is really made in the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. 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."
Over 40 years ago, in the High Court of Australia, Barwick CJ said in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at [8]:
"... the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion.
...
... 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 ... is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument' ...".
Over 25 years ago, the High Court of Australia said in Fancourt v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87 at [27]:
"The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried."
Over 10 years ago, in the High Court of Australia, Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 at [57]:
"Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way."
Most recently, in the High Court of Australia, French CJ and Gummow J in Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 said at [24]:
"The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. ..."
In proceeding to consider the evidence, and the submissions made by the parties, it will be necessary to bear these principles in mind.
The Statement of Claim
I have earlier set out the relief sought by the Statement of Claim. It is necessary now to examine the Statement of Claim to seek to identify what the causes of action are upon which the claim is brought.
The Statement of Claim has been drafted by the plaintiff himself. The plaintiff has appeared for himself before me on the argument. I make due allowance for the fact that the pleading has not been drafted by a legal practitioner.
The claim by the plaintiff against the first defendant seems to have a number of different causes of action.
The first cause of action is a claim for malicious prosecution of the plaintiff by Director of Public Prosecutions upon complaints made by the first defendant to police of sexual assault. The plaintiff pleads that the sexual assault allegations, which occurred on 11 October 2004, and secondly on 21 January 2005, were false and that, as a consequence of these false allegations, the prosecutions against him were malicious and in a way which means that the first defendant is legally liable to him for damages.
With respect to these two allegations of sexual assault, the plaintiff pleads that the first allegation, which was said to relate to events on 20 January 2003, resulted in him being arrested on 11 October 2004, and charged. He was held in custody until 13 October 2004, when he was granted bail. Having been committed for trial in December 2004, his trial on these offences commenced on 25 May 2005 in the District Court of NSW, and terminated on 3 June 2005, when the jury returned a verdict of not guilty on all charges.
With respect to the second allegation, which is said to be false, the plaintiff pleads that he was arrested on 21 January 2005, and held for some hours before being granted bail by the Belmont Local Court. He pleads that on 20 April 2005, the prosecution terminated in his favour when the charges were withdrawn, and were not proceeded upon.
It will be convenient to refer to these allegations as the malicious prosecution claim.
The second cause of action which the plaintiff makes against the first defendant, relates to an allegation that caveats lodged by her with respect to real property, were unlawful and have caused him financial loss and damage, resulting in a claim for $4 M in damages.
The plaintiff pleads that on 7 July 2004, the first defendant registered two caveats, which he alleges were unlawful, in respect of two properties at Margaret Street, Warners Bay in NSW.
The plaintiff pleads that, at that time, he was engaged in a number of property development projects, which were interrupted by the lodging of the two caveats. This allegation seems to depend upon the proposition that in order to fully complete the property development projects, the plaintiff needed to borrow $12 M, but the existence of the caveats prevented the plaintiff from borrowing that sum of money and, accordingly, he was unable to complete those projects which were underway, and unable to commence those prospective projects. He pleads that by reason of the caveats, he was made bankrupt and suffered the loss of an extensive asset base which he pleads as being approximately $19 M in value.
The plaintiff was made bankrupt by a debtor's petition on 3 November 2006. He was discharged on 4 November 2009 by the effect of law.
It will be convenient to refer to this pleaded claim as the caveat damages claim.
The final cause of action that appears to be pleaded is a claim for $15,000 in respect of a court order for costs made in favour of the plaintiff on 19 November 2005. The present Statement of Claim alleges that civil proceedings were commenced in the District Court at Newcastle, with respect to a claim by the first defendant against the plaintiff that she was owed $100,000. That claim was commenced by a Statement of Claim filed on 31 August 2004. On 12 October 2004, the plaintiff filed a Notice of Grounds of Defence.
Ultimately, in August 2005, the first defendant discontinued her claim in the Newcastle District Court. On 19 October 2005, Gibson DCJ made an order that she was to pay Mr Gillies' party/party costs of the Newcastle District Court proceedings. It will be convenient to refer to this cause of action as the costs order claim.
Based upon that order, the plaintiff claims the sum of $15,000.
As against the second defendant Mr Coombes, the plaintiff simply makes a claim for damages for physical assault, wrongful imprisonment, and malicious prosecution arising out of events which are said to have occurred on 28 April 2004. The plaintiff alleges that on 10 May 2004, he was arrested and charged with a series of criminal charges, and was held without bail until 17 May 2004. He alleges that on 15 September 2004, the Local Court dismissed the charges.
Based upon these allegations, the plaintiff claims damages from the second defendant. It will be convenient to refer to this cause of action as the assault claim.
Evidence
The first defendant, Ms Eastlake, has affirmed an affidavit, which was read on the proceedings. It was filed on 22 January 2014. Ms Eastlake was not cross-examined. I accept her evidence.
Ms Eastlake deposes to the fact that she did not make any complaint to the police about the sexual assaults with which the plaintiff was charged. She says that she came to be interviewed by the police in August 2004, as a consequence of some videotapes that had been discovered at the plaintiff's premises during the execution of a search warrant by police. She says that as a consequence of the finding of the videotapes, she was interviewed by the police about her former relationship with the plaintiff. She says that it was on the basis of the police investigations that the plaintiff was charged criminally. She notes that, after a trial involving numerous witnesses, the plaintiff was acquitted of those charges by the jury. She finally records with respect to those matters of sexual assault that she was paid a significant sum of money by way of victim's compensation.
She sets out some facts concerning an apprehended violence order which she obtained from the Newcastle Local Court in July 2003, and also in December 2004, protecting her from the plaintiff. I am quite unable to see what relevance these paragraphs of her affidavit have to the proceedings, nor the material which is annexed in support of them.
Finally, she asserts in her affidavit that the plaintiff has instituted the present proceedings to renew his intimidation and harassment of her, both psychology and financially. She notes that it is almost 10 years since their relationship terminated.
The solicitor for both defendants, Mr Robert Brook, has sworn two affidavits. The first was filed on 20 January 2014, and the second on 10 February 2014. The first of the two affidavits annexes an email sent by Mr Brook, the solicitor for the defendants, to Mr Gillies. Mr Brook deposes to the fact that the matters set out in the email are true and correct.
The email that was sent on 20 January 2014, draws attention to the fact that each of the causes of action referred to in the Statement of Claim are statute barred. It asserts that each of cause of action is more than eight years old, and that the relevant limitation period for each cause of action is six years.
It also challenges the motivation of the plaintiff in bringing the proceedings.
Finally, it draws attention to the fact that the form of the Statement of Claim is deficient, and it would be liable to be struck out pursuant to r 14.28 of the UCPR.
The second affidavit, amongst other things, annexes a further email from Mr Brook to the plaintiff. Mr Brook draws attention to the fact that Mr Gillies was made bankrupt on 3 November 2006, and that the causes of action upon which he sues included claims for debts which crystallised in 2005, and which all vested in his Trustee in Bankruptcy upon the making of a sequestration order, and that accordingly, any proceedings based upon such causes of action are an abuse of process.
The email also draws attention to the fact that some of the orders sought in Mr Gillies' Motion are not available to the Court to grant, and are generally not appropriate.
That affidavit also, by annexing relevant search material, establishes that the National Personal Insolvency Index records Mr Gillies as having been made bankrupt on his own petition on 3 November 2006, on which date a Statement of Affairs was filed. It notes that the bankruptcy ended on 4 November 2009, and that he has been discharged from that status as a consequence of law. It notes that his Trustee was the Official Trustee in Bankruptcy.
Mr Gillies filed an affidavit sworn 24 January 2014. This affidavit, in paragraphs 3 to 7, makes a series of allegations about the character of each of the first and second defendants, and their propensity for engaging in criminal conduct. None of these assertions are in admissible form. None are backed up by admissible evidence and, in any event, are irrelevant to the issues which the Court is required to consider.
The affidavit provided little, if any, material relevant to the issues before the Court.
Submissions of the Defendants
The defendants submit that, having regard to the contents of the pleading, all of the elements necessary to establish the malicious prosecution claim and the damages claim, had concluded by no later than 3 June 2005. The defendants submit that it follows that the limitation period fixed by s 14 of the Limitation Act 1969 of six years, had expired well prior to the commencement of the proceedings.
The defendants submit that it is not open to the Court to extend time with respect to any of these causes of action, and accordingly these claims are an abuse of process.
With respect to the plaintiff's costs order claim, the defendants note that there has been no order made which specifies a specific sum of money, there has been no agreement reached with respect to the sum of money owed by way of costs and, there has been no certificate of assessment issued which quantifies the costs. Accordingly, they submit that there is simply no basis upon which the plaintiff is entitled to make any claim with respect to this sum of money, and that these proceedings must be an abuse of process, and should be dismissed.
With respect to the assault claim against the second defendant, the defendants submit that all of the essential elements had concluded by, and thus the cause of action had been crystallised by, 15 September 2004. Consistently with earlier submissions, the defendants rely upon the expiration of the six year limitation period well prior to the commencement of proceedings as providing a sufficient basis for an order for summary dismissal.
Plaintiff's Submissions
The plaintiff initially made oral submissions on 26 February 2014. Subsequently, pursuant to a further direction of the Court, the plaintiff was permitted to place further written submissions before the Court.
In his oral submissions on 26 February 2014, the plaintiff submitted that an answer, which was available to him, with respect to the expiration of the period of six years fixed by s 14 of the Limitation Act, was the provisions of s 55 of the Limitation Act, which he submitted allowed for an extension of the limitation period, such that his claims were not out of time when filed.
Section 55(1) of the Limitation Act is in the following form:
"55 Fraud and deceit
(1) Subject to subsection (3) where:
(a) there is a cause of action based on fraud or deceit, or
(b) a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed,
the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment.
... "
That section relates to a cause of action based on fraud or deceit, or else circumstances where, relevantly, the cause of action has been fraudulently concealed.
The plaintiff submitted that in substance the causes of action pleaded by him were based on fraud or deceit. He did not make any submission that the causes of action had been fraudulently concealed.
In dealing with the caveat damages claim, the plaintiff noted that the caveats were filed on 7 July 2004 and were withdrawn on 6 July 2005. He submitted that as a matter of fact there was no basis for those caveats and, accordingly, he was entitled to bring the cause of action, claiming damages.
It is fair to say that the plaintiff's oral submissions moved seamlessly between assertions of fact which were not part of the evidence, allegations which formed no part of the Statement of Claim or the evidence, and general argument. It was not always easy to discern whether what the plaintiff was saying fell into any one of these categories, or perhaps more than one.
When responding further to the allegation that the limitation period had expired, the plaintiff informed the Court, without objection or demur from the solicitor for the defendants, that as a consequence of being convicted by a jury on a charge of sexual assault without consent, which related to a person entirely different from either of the defendants, the plaintiff had received a sentence of imprisonment which had resulted in his being in custody up until 9 November 2011. He relied upon this to argue that it was not practically possible for him to commence proceedings whilst he was in custody.
On 11 March 2014, the plaintiff filed further written submissions which essentially consisted of nine pages of unsupported assertions, reference to facts which formed no part of the Statement of Claim and were generally not relevant to the issues before the Court. The submissions included extracts of documents relating to attempts to obtain evidence in his criminal proceedings which resulted in his conviction, and a number of other matters which, to say the least, are unfocussed assertions, about irrelevant matters.
The plaintiff's written submissions conclude with these paragraphs:
"It is submitted that all of the above evidence put to a properly instructed jury in respect to the unlawful lodgement of the caveats filed against the plaintiff's properties by the first defendant, and that action culminated in the plaintiff being forced into declaring bankruptcy, together with the claim of malicious prosecutions in respect to both the first and second defendants, would inadvertently find in favour of the plaintiff.
It is submitted that it is just and reasonable in the interests of justice for this matter to be heard at a final trial of real prospects of success and the plaintiff points to a decision in Bowden v State NSW [2014] NSWSC 87 and McDonald v Grech; Bank of Western Australia Ltd v McDonald [2012] NSWSC 717."
Accompanying these nine pages was a significant number of annexures. These additional pages were not formally tendered, and appeared to be largely intended to substantiate some of the factual allegations made in the Statement of Claim.
In addition, and importantly, the documents included copies of the "unlawful" caveats which were in identical form, apparently lodged by the first defendant. The caveats each claimed an equitable interest in the land specified in the caveat by virtue of the fact that the caveator, Ms Eastlake, and the registered proprietor, Mr Gillies, had entered into a written agreement regarding the provision of funds for the development of the land. It is apparent, and I would infer, that the signature of the first defendant is witnessed by a solicitor in practice in Newcastle.
As well, Mr Gillies has included a copy of a 12 page Deed of Loan between a company called RL Double D Holdings Pty Ltd ("RL"), a company of which he is said to be the sole director and secretary, which involves a loan by Provident Capital Ltd to RL of $3.5 M on 8 April 2004. The Deed of Loan requires the provision to Provident Capital Ltd by Mr Gillies of a mortgage over his interest in the properties which were the subject of the caveats.
For the purposes of the determination of these motions, it is appropriate that I should regard this document and the two caveats as being tendered by the plaintiff and as being admitted into evidence.
The balance of the documents are unnecessary to be admitted because they do not advance the assertions of fact contained in the pleading, or address any issue raised by the motions. They are irrelevant, and ought not to be admitted.
Of importance, the Certificates of Title of the two properties the subject of the caveats, were not tendered. I am therefore entirely unaware of whether the mortgages given by Mr Gillies to Provident Capital Ltd, in return for the loan of $3.5 M to RL, were registered prior to the lodging of each of the caveats by Ms Eastlake. As well, it is entirely unclear to me how, or why, the lodging of each of those caveats, even if the Court was to accept the assertion that there was no proper basis for them, led to any loss or damage, or any harm of the kind which Mr Gillies seems to assert.
Before proceeding to consider the submissions, and arrive at an appropriate decision, it is necessary in light of the submissions from the defendants with respect to the bankruptcy of the plaintiff in 2006, to examine what the effect and consequences of that bankruptcy are on the claims brought by the plaintiff in his Statement of Claim.
Effect of Bankruptcy
The evidence clearly establishes that, as a consequence for his own Debtor's Petition, Mr Gillies became bankrupt when he submitted a Statement of Affairs on 3 November 2006.
The relevant legislation which gives rise to the consequences of the plaintiff having become bankrupt is the Bankruptcy Act 1966 (Cth).
As a matter of general principle, the Bankruptcy Act aims to ensure that when a person becomes bankrupt, all of their property that exists at that time, vests in their Trustee. That general principle is given statutory effect in s 58 of the Bankruptcy Act, which is in the following terms:
"Vesting of property upon bankruptcy--general rule
(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and
(b) after-acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
(2) Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.
(3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:
(a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.
(4) After a debtor has become a bankrupt, distress for rent shall not be levied or proceeded with against the property of the bankrupt, whether or not the bankrupt is a tenant of the landlord by whom the distress is sought to be levied.
(5) Nothing in this section affects the right of a secured creditor to realize or otherwise deal with his or her security.
(5A) Nothing in this section shall be taken to prevent a creditor from enforcing any remedy against a bankrupt, or against any property of a bankrupt that is not vested in the trustee of the bankrupt, in respect of any liability of the bankrupt under:
(a) a maintenance agreement; or
(b) a maintenance order;
whether entered into or made, as the case may be, before or after the commencement of this subsection.
(6) In this section, after-acquired property, in relation to a bankrupt, means property that is acquired by, or devolves on, the bankrupt on or after the date of the bankruptcy, being property that is divisible amongst the creditors of the bankrupt."
Section 116 of the Bankruptcy Act identifies the types of property which may be, or else is excluded from being, divisible amongst creditors as a part of the bankrupt's estate. Not all of the provisions of s 116 are relevant. In relevant terms, s 116 of the Bankruptcy Act provides:
"(a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy, before his or her discharge;"
but divisible property does not include:
"(g) any right of the bankrupt to recover damages or compensation:
(i) for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; or
(ii) in respect of the death of the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt;
and any damages or compensation recovered by the bankrupt (whether before or after he or she has become a bankrupt) in respect of such an injury or wrong or the death of such a person."
Choses in action are defined by s 5(1) of the Bankruptcy Act as being property. They are caught by s 58 of the Bankruptcy Act.
The definition of "property" in s 5 of the Bankruptcy Act is wide enough to include choses in action and the effect of ss 116 and 58 is to vest in the Trustee forthwith, all such rights of action when a debtor becomes bankrupt: see Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 133. It is clear that a chose in action to enforce an equitable right is property within the meaning of the Bankruptcy Act: see Pridmore v Magenta Nominees Pty Ltd [1999] FCA 152; (1999) 161 ALR 458. An action for damages arising out of fraudulent misrepresentations was divisible property of a bankrupt: Nyssen v Minerva Centre Ltd (1940) 57 WN (NSW) 112. However, the right to bring an action in tort for an injury to the person, character or feelings of a bankrupt does not pass to the Trustee, as s 116 2(g) makes clear
Once a cause of action has vested in the Trustee, a bankrupt has no right to institute proceedings in respect of that cause of action: Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [42]-[52], [54]-[57].
After discharge from bankruptcy, a bankrupt can bring such proceedings (or continue them if they have been commenced) providing that he has the permission of the Trustee. The permission of the Trustee is given generally pursuant to an assignment of the cause of action which had vested in the Trustee, providing that any such assignment is valid: see Stone v Ace-IRM Insurance Broking Pty Ltd [2003] QCA 218; [2004] 1 Qd R 173 at [19]-[30]. .
A possible exception to this approach is to be found in s 129AA of the Bankruptcy Act which makes provision for certain property to revest in a bankrupt. It has no application here because, both at the date of the commencement of proceedings and at the date of this judgment, the revesting time provided for in the section has not yet arrived. As well, there has been no evidence put before the Court, which would enable the Court to be satisfied that the property, the subject of the Statement of Claim, is property which is available to revest in accordance with s 129AA.
An order for costs, or for damages to be assessed, which exists as at the date of bankruptcy, although it has not been crystallised by an assessment of the actual sum for damages or the amount of costs, is nevertheless property for the purposes of the Bankruptcy Act: see Gye v McIntyre [1991] HCA 60; (1991) 171 CLR 609. It was there held that a judgment for damages which had not yet been quantified or assessed was entitled to be set off pursuant to the provisions of the Bankruptcy Act. It is implicit in that decision that such a set off would not have been allowed if the claim for damages had not been property within the meaning of the Bankruptcy Act.
Discernment
Against the background of these provisions and authorities, it is necessary to consider each of the matters raised.
Costs Order
Insofar as there is a claim for $15,000 by way of a sum claimed to be due by reason of the costs order made by Gibson DCJ in the District Court at Newcastle in October 2005, the plaintiff has no present cause of action.
He has no cause of action, upon which he is capable of suing, for these two reasons:
(a) the order for costs provided that the costs to be paid were "as agreed or assessed". There has been no agreement as to the amount of costs and the plaintiff accepts that there has been no certificate of assessment issued with respect to those orders for costs at any time. Accordingly, the quantified sum of $15,000 is not presently due and owing, and no cause of action of action exists presently with respect to any claim for that sum;
(b) as well, the plaintiff's bankruptcy, coming as it did in 2006 and after the costs order was made by the District Court, has the effect that the plaintiff's entitlement to any costs pursuant to that order constitutes property which vested in the Trustee at the date of bankruptcy. The plaintiff does not have any entitlement presently to bring proceedings with respect to such a debt, even if it had been, by now, quantified, because the property no longer belongs to him. He has not taken any assignment of the property, and the entire title to the monies which were due has vested, and remains vested, in his bankruptcy Trustee.
The claim on this cause of action cannot possibly succeed, and its inclusion in a Statement of Claim and maintenance by the plaintiff constitutes an abuse of process of the Court.
This cause of action should be dismissed.
Caveat Damages Claim
The second cause of action is one in which the plaintiff claims $4 M by reason of what he claims to be "illegal" caveats lodged by the first defendant on the title to two properties at Warners Bay. The caveats were lodged in 2004 and removed in mid-2005. If they did cause a loss as is alleged, any such loss must have accrued at a point in time which is no later than a time immediately prior to the removal of the caveat. This occurred in mid-July 2005. Accordingly, any right to damages, assuming such a right existed, accrued in mid-2005.
All of the facts about the existence of the caveats, and their allegedly deleterious effect, were known to the plaintiff at that point in time. From those facts, the plaintiff accepted either that the first defendant had a legitimate right to lodge the caveat, or he did not. It is apparent from the terms of his pleading that the plaintiff must have formed the view that the first defendant had no right to lodge the caveats, and that the caveats were invalid or else illegal.
In those circumstances, any action needed to be brought no later than the expiry of six years from the middle of 2005. No action was brought in that time. There is no provision in the Limitation Act 1969, for the extension of time with respect to an action such as the caveat damages claim, as there is with respect to claims for damages for personal injury.
In my opinion, where a claim is pleaded, and it is obvious that it is a claim in respect of which the limitation period has expired, and there is no room for any argument or submission that reliance on the expiration of the limitation period has been waived, then the conduct of such a cause of action would amount to an abuse of the court's process. In effect, a plaintiff would be pursuing a claim which he knew was bound to fail. This is the position with respect to this cause of action. It ought be summarily dismissed on that basis.
Any action for damages for wrongful lodging of the two caveats which affected real property, which was owned by the plaintiff, was a cause of action which vested in the Trustee in Bankruptcy.
For the same reasons as those which I have described above with respect to the Costs Orders claim, the plaintiff has no entitlement to bring this claim. There is no pleading that the Trustee in Bankruptcy has assigned to the plaintiff this cause of action, and no evidence to suggest that this has ever occurred, in any less formal way.
It follows that even if, and there is no evidence to substantiate this, the plaintiff's claim that the caveats were "illegal", then he is both out of time and barred by his bankruptcy from bringing action.
In those circumstances, he has no reasonable cause of action and, insofar as his Statement of Claim pleads such a cause of action based upon this claim, it is an abuse of process and must be dismissed.
Malicious Prosecution Claim
The third cause of action upon which the plaintiff sues is for damages against the first defendant, for wrongful arrest, false imprisonment and malicious prosecution.
As the plaintiff accepted, the criminal proceedings arising from any complaint for which the first defendant may have been responsible were complete by 3 June 2005. The limitation periods under s 14 of the Limitation Act with respect to this cause of action in tort, expired six years after that point in time. It follows that no later than 4 June 2011, this cause of action upon which in the plaintiff relies had expired.
The plaintiff seemingly accepts that this is so, and seeks in his submissions to draw attention to, and rely upon the provisions of s 55 of the Limitation Act 1969 to demonstrate that the limitation period has expired.
I have earlier set out that section. An action for wrongful arrest, false imprisonment and malicious prosecution is an action in tort. It is not a cause of action based on fraud or deceit. There is no element of the cause of action which involves either fraud or deceit.
On the contrary, the cause of action is based upon facts and matters which are clear, and entirely public, namely, a complaint by a person, here said to be the first defendant, to police or, alternatively, the transmission of information by a person such as the first defendant to the police, together with a statement of their belief as to whether or not a crime had occurred; action by the police which depends upon and arises from that person's statement, evidence or information; an arrest, imprisonment and prosecution of an individual, which ultimately terminates in that individual's favour; and a conclusion that such conduct is wrongful in law. As well, it must be concluded, insofar as the prosecution is concerned, that the prosecution was malicious and was not based upon a reasonable belief, even if that belief turns out to be wrongful.
The mere acquittal of an individual after a jury trial or, alternatively, the mere termination of proceedings by a prosecutor without indictment or proceeding fully upon an indictment, does not automatically mean that the prosecution has been brought maliciously, nor that the tort has been proved. On the contrary, the fact that proceedings terminate in favour of a person is simply one element of proof of the tort.
On any view, the limitation period had expired prior to the commencement of the proceedings in this Court with respect to this cause of action. Section 55 of the Limitation Act has no application to this cause of action because it is not based on fraud or deceit, and it is not pleaded or suggested, or even submitted, that the cause of action was fraudulently concealed from the plaintiff.
On the contrary, it seems to be the plaintiff's case here, that at all times he knew that the complaint made against him was untrue, that he was not guilty of the charges and that he had been wrongly charged. As well, it is not in doubt that the plaintiff knew precisely who, he alleges had made the relevant complaints.
Accordingly, it is unnecessary to call attention to, or else rely upon the infelicities of the pleading including how the plaintiff makes a link between a complaint lodged by either the first defendant, and the actions of the relevant police officers in arresting him, and the decisions made by the relevant officers either of the police or of the office of the Director of Public Prosecutions, to proceed with a prosecution against him.
This cause of action is out of time. No extension of the limitation period is available. No party suggested that, by reference to the terms of the Limitation Act, the plaintiff was under any disability for any period of time sufficient to cause the limitation period to be extended from June 2011 through to December 2013, when the Statement of Claim was filed. Nor was it suggested, and there was no evidence, that there was any period of disability which might remotely approach a period such as this.
Although relied upon by the first defendant, it is unnecessary to determine whether or not the chose in action arising from these causes of action vested in the Trustee in Bankruptcy.
I have concluded that the proceedings on this cause of action are plainly an abuse of process, and ought to be summarily dismissed.
Assault Damages Claim
The claim by the plaintiff is for damages consequential upon an assault upon him by the second defendant, which the plaintiff alleges occurred on 28 April 2004.
The plaintiff claims that as a consequence of the events of 29 April 2004, he was wrongly arrested and charged with a number of offences. He spent seven days in custody and was ultimately acquitted of the charges on 15 September 2004.
Accordingly, if a cause of action exists, it must have crystallised no later than 15 September 2004, and proceedings were required to be commenced by 16 September 2010. The plaintiff's proceedings were commenced in December 2013, which is more than three years after the expiration of the last of the possible limitation periods.
For the same reasons, as I have expressed with respect to the malicious prosecution claim against the first defendant, the bringing and maintenance of this claim is an abuse of process and it must be dismissed.
Limitation Period
It is not in every case that a claim which is filed outside the limitation period will be summarily dismissed as an abuse of process. As the High Court of Australia has said in Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at [31], unless a case is very clear, it is undesirable that the limitation questions be determined in the course of interlocutory proceedings.
But the limitation issue there in question was a factually complex one. And, in some cases of personal injury, the question will be similarly factually complex, and unsuitable to be relied upon as a basis for summary dismissal, particularly if there is any doubt whether a defendant proposes to rely upon the expiration of the limitation period as precluding a successful action.
As well, if a pleading claiming damages for personal injury, also seeks an extension of the limitation period as well as the principal relief, complex questions may arise as to whether the Court should hear the extension question before a final hearing of all issues: see Giles v The Commonwealth of Australia [2014] NSWSC 83.
However, the circumstances here are such as to warrant the orders. The limitation period has obviously expired. The relevant facts were all known to the plaintiff at or about the time when the causes of action crystallised. No claim is made for an extension of the limitation period for those causes of action in which a claim for damage for personal injury is made, by reference to Divisions 3 and 4 of Part 3 of the Limitation Act 1969.
The only basis upon which the plaintiff relies to circumvent the effect of the limitation period is s 55 of the Limitation Act which is clearly inappropriate to apply to the pleading here.
Ordinarily, the Court confronted by a litigant in person, who has drafted his own pleading, may consider that a further opportunity should be given to enable consideration to be given to claiming relief involving an extension of the limitation period, particularly if the litigant is not put on notice of any reliance by the defendant on the limitation period.
But here, the reliance by the defendants on the limitation period was made plain at an early stage. The plaintiff was in a position to, and did make, submissions about its effect. A further opportunity was extended to the plaintiff to put in submissions in writing after the conclusion of the oral hearing.
There is no basis in light of the clear facts which exist in this case, and in furtherance of the overriding purpose of the Civil Procedure Act was, to refrain from granting the relief which the defendants seek.
The Form of the Statement of Claim
If I be wrong in my conclusions that the proceedings as presently pleaded are an abuse of process in respect of each cause of action, then in accordance with the provisions of r 14.28 of the UCPR, I would have struck out the plaintiff's Statement of Claim because it does not adequately plead, in accordance with the UCPR, each cause of action and the facts, matters and circumstances upon which it is said the cause of action arises.
However, in light of my earlier conclusion with respect to summary dismissal, there is no purpose to be served by making an order under r 14.28 of the UCPR.
Plaintiff's Notice of Motion of 24 January 2014
It is to be recalled that the plaintiff filed a Notice of Motion on 28 January 2014. The first order seeks an extension of the time limit for action pursuant to the provisions of the Limitation Act 1980.
There is no Limitation Act 1980 which exists with respect to causes of action arising in NSW, pleaded in a court in NSW, and litigated in a court of NSW. The only Limitation Act 1980 that appears to exist, is that passed by the Parliament of the United Kingdom. It has no application to statements of claim filed in this Court upon causes of action which are said to have arisen in NSW where damage occurs in NSW.
There is no basis for making any order of the kind sought in the first order of the Notice of Motion.
Orders 2 and 3 in the plaintiff's Notice of Motion, seek orders for the extension of the limitation period pursuant to the Limitation Act 1969, either by virtue of s 55(3)(a) or, alternatively, by reference to s 56D. For reasons which appear earlier with respect to the plaintiff's Notice of Motion for summary judgment, the provisions of s 55 of the Limitation Act are not relevant to these proceedings.
It would be inappropriate in those circumstances, for the Court to make any extension of the limitation period pursuant to s 55(3)(a) of the Limitation Act.
Curiously, the plaintiff also relies upon the provisions of s 56D of the Limitation Act, in order to seek an extension of the limitation period.
Section 56D relates to a provision which permits a court to extend a limitation period, even though the period has already expired, where application is sought under the provisions of s 56A of the Limitation Act 1969. The extension of a limitation period permitted by that section relates only to causes of action for defamation. There is no cause of action pleaded here for defamation. These provisions have no application whatsoever.
The fourth order sought in the plaintiff's Notice of Motion is a claim for the payment of $15,000 which relates to the Court order for costs. I have already expressed the view that there is no basis upon which that order can be presently obtained, and an action for that order is an abuse of process. As the result of discussion, engaged in orally during the course of oral submission on 26 February 2014, the plaintiff announced that he did not press for this order in his Notice of Motion.
Because the plaintiff does not press for the order, and because such an order would not be available, insofar as the Notice of Motion seeks this relief, it will be dismissed.
The final order is a claim for an order that the plaintiff be entitled to amend his Statement of Claim.
Had I not been satisfied that the Statement of Claim was an abuse of process and ought be summarily dismissed then, as I have indicated, I would have struck out the Statement of Claim pursuant to r 14.28 of the UCPR.
That would have allowed the plaintiff to bring proceedings, claiming leave to file an amended Statement of Claim. But, in order so to do, he would have needed to produce a version of the proposed pleading which he sought leave to file.
At no time has the plaintiff produced a proposed pleading by which his present Statement of Claim is to be amended.
It is not appropriate to grant this order for two reasons, namely:
(a) the original Statement of Claim is to be summarily dismissed as an abuse of process; and
(b) at no time has the plaintiff produced a proposed pleading in respect of which leave to amend is sought.
It follows that since none of the relief sought in this Motion is appropriate to be granted, the Notice of Motion should be dismissed.
Summary
I have concluded that the proceedings brought by the plaintiff for the reasons which I have expressed, constitute an abuse of process and therefore ought be summarily dismissed in accordance with the provisions of r 13.4 of the UCPR.
It follows that the Notice of Motion of the first defendant's, insofar as it seeks summary dismissal should be upheld and the Notice of Motion of the plaintiff insofar as it seeks the variety of orders there should be dismissed.
Costs
Costs ought follow the event.
The defendants seek costs on an indemnity basis. That is based upon correspondence with the plaintiff, setting out why the plaintiff's claim could not succeed and why it ought be summarily dismissed.
However, no formal offer with respect to the Statement of Claim was made. No orders were proposed which the plaintiff could have accepted. The plaintiff, as I have said above, represents himself and may not have fully understood the ramifications of continuing to proceed with his arguments.
In those circumstances, I am not prepared to make an order that the costs be assessed on an indemnity basis. However, it is appropriate that the plaintiff pay the defendants' costs of the whole of the proceedings including the hearings on the Notices of Motion.
Finally, the defendants seek an order that the plaintiff is not to recommence proceedings on any claim against the defendants or either of them without the prior leave of the Court.
There is no basis for that order at this stage.
Orders
I make the following orders:
(1) Statement of Claim filed 9 December 2013 be, and hereby is, summarily dismissed.
(2) Notice of Motion filed by defendants on 22 January 2014 is otherwise dismissed.
(3) Notice of Motion filed by the plaintiff on 28 January 2014 is dismissed.
(4) Order the plaintiff to pay the defendants' costs of the whole proceedings including the Notices of Motion.
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Decision last updated: 30 May 2014
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