Gould v Day

[2002] NSWSC 492

CITATION:	Gould v Day & Anor [2002] NSWSC 492
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20542/00
HEARING DATE(S):	13 March, 15 March, 24 May, 31 May 2002
JUDGMENT DATE:	3 June 2002
PARTIES :	Stephen George Gould (1st Plaintiff) Halisa-NSW Partnership (2nd Plaintiff) Halisa Internal (3rd Plaintiff) EAIM Project Partners (4th Plaintiff) OICY2KRAMP Project Partners (5th Plaintiff) Julian Day (1st Defendant) Alan Manly (2nd Defendant)
JUDGMENT OF:	Studdert J

COUNSEL :	In person (1st Plaintiff) In person (1st Defendant) In person (2nd Defendant)
SOLICITORS:
LEGISLATION CITED:	Bankruptcy Act
CASES CITED:	Faulkner v Bluett (1981) 52 FLR 115 Griffiths v Civil Aviation (1996) 67 FCR 301
DECISION:	See para 28

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

STUDDERT J

Monday 3 June 2002

20542/00 STEPHEN GEORGE GOULD & ORS v JULIAN DAY & ORS

JUDGMENT

1 HIS HONOUR: The Court has before it in these proceedings a notice of motion seeking the following orders:

“1. That the first plaintiff be disallowed to continue this matter as he is a bankrupt and the matter vests in the Official Trustee.
2. That the matter be struck out.
3. In the alternative, that the first plaintiff pay security for costs of $20,000.”

2 This matter was before me on 13 March 2002 and on that occasion I granted an adjournment having indicated what I perceived to be deficiencies in the statement of claim. Those deficiencies, whilst not stated exhaustively, were identified in broad terms, but I then indicated I would allow the plaintiff an opportunity to argue, if he sought to do so, that the statement of claim did not offend the Rules of Court. I also identified other matters in reasons published on 15 March 2002 which ought to be addressed on the adjourned date. I granted the plaintiff the adjournment on 15 March 2002, and set out deficiencies in the statement of claim in my reasons published on that date acknowledging the plaintiff’s disadvantage as an unrepresented litigant. That was a disadvantage shared by the defendants.

3 On 15 March 2002 the matter was fixed for further hearing on 24 May 2002 to afford to the plaintiff an opportunity to address those matters raised in my judgment of 15 March.

4 Following 15 March three affidavits were filed on 5 April 2002, 22 April 2002 and 30 April 2002 but the plaintiff did not appear on 24 May 2002 and I adjourned the matter until 31 May 2002, directing that the plaintiff be notified of the adjourned date. The plaintiff did appear on 31 May 2002 and sought to explain the non-appearance on 24 May by an affidavit. The plaintiff’s explanation was that he was waiting to be informed of a hearing date. That explanation is unacceptable because the date which was set for 24 May was set in his presence and in the presence of the defendants, who did appear on 24 May last.

5 Be that as it may, what occurred on 31 May was that Mr Gould sought a further adjournment with a view to seeing a solicitor, with whom he said he had an appointment next Wednesday. Mr Gould produced an affidavit, not previously filed, headed “On Going Harrassment Plaintiff and OIC Members”. Much of his affidavit is couched in inadmissible language, and in my assessment contained no evidence such as warranted the further adjournment sought by the plaintiff. The plaintiff has had sufficient opportunity to address the deficiencies in the statement of claim, and considering not only the interests of the plaintiff but, as I must, the interests of the defendants as well, I considered no further adjournment ought be granted, and I declined the plaintiff’s application. When doing so I indicated that I would state reasons for the decision I had reached that the statement of claim should be struck out, with such reasons to be delivered at 9.15 am on Monday 3 June 2002. I now publish my reasons for the conclusions that I have reached in this matter and for the orders that follow.

6 The further affidavits sought to be relied upon by the plaintiff of 5 April 2002, 22 April 2002 and 30 April 2002 are not appropriate as to form and are replete with assertions made in inadmissible form. I do not find them to be of significant assistance to the plaintiff.

7 I turn now to the problems in the statement of claim as pleaded.

8 So far in referring to the plaintiff I have been referring to the first plaintiff named in the statement of claim, Stephen George Gould. Other parties have been identified as plaintiffs in the statement of claim but as indicated on 15 March one of the deficiencies in the pleading is a failure to identify the plaintiffs. That failure has not been addressed in relation to either the second, third, fourth or fifth plaintiffs named in the statement of claim. That is the first problem which I identify.

9 Part 15 of the Rules imposes strict requirements for pleading and it is encumbent upon the plaintiff to identify in the pleading the nature of the cause of action or the causes of action relied upon. The pleader is required by Pt 15 to state in precise terms the material facts on which reliance is placed. The whole purpose of a statement of claim is to clearly state the case that must be met so as to give the opposing party or parties a proper opportunity to answer that case. Proper pleading is vital. Part 15 r 26 empowers the court to strike out a statement of claim where it:

“(a) discloses no reasonable cause of action;
(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
(c) is otherwise an abuse of the process of the court.”

10 In my opinion, Pt 15 r 26 is enlivened here because this pleading does not disclose a reasonable cause of action and has a tendency to cause prejudice and embarrassment because of the difficulty which its form presents in identifying what is the case which the first plaintiff is seeking to make out.

11 In the paragraph identified as paragraph G of the statement of claim, the first plaintiff seeks damages “for himself for:

(1) loss of immediate income;
(2) damage to reputation;
(3) loss of income from time spent prosecuting and defending malicious litigation;
(4) loss of income through intellectual property royalty.”

Thereafter there are particulars provided of allegations of “abuse of process.”

12 The pleading does not, to my mind, alert the reader to the nature of the cause of action which the plaintiff wishes to pursue and it fails to state facts material to any such action as required by Pt 15 r 7. Having considered the further affidavits mentioned above, the nature of any claim the first plaintiff wishes to pursue here is made no clearer. One document referred to in the affidavit of 5 April 2002, and the Court’s attention had been drawn to this same document on the earlier hearing, purports to be a copy of a letter written by the first defendant to a Member of Parliament and it contains assertions which may be regarded as defamatory of the first plaintiff. Of course it would not be appropriate for me to make a specific finding to that effect at the present time on the present application and I do not address the question as to whether, if the first defendant did defame the first plaintiff in that letter, there would be available to him any defences. That could only be considered against the background of appropriate pleading and at the time of a full hearing.

13 When the matter was before me on 13 March however the first plaintiff indicated that his action was not an action for defamation. I add that the pleading was certainly inadequate to support a claim for damages for the tort of defamation. A pleading in relation to such a claim in tort enlivens the provisions of Pt 46 of the Rules of Court and the requirements of those Rules have not been addressed.

14 Elsewhere, in the affidavit of 5 April 2002, the first plaintiff asserts the existence of documents that “confirm malicious prosecution”. If what the plaintiff was intending to launch in his statement of claim was a claim for damages for malicious prosecution, then the pleading was certainly inadequate to support such a claim.

15 I indicated on the last occasion that I would treat one of the bases for the strike out application as being that the provisions of Pt 13 r 5 were enlivened. There is, of course, a distinction between an order made under Pt 13 r 5 and an order made under Pt 15 r 26 since the latter is based upon defective pleadings and the discretionary power conferred by Pt 13 is more broadly based. Part 13 confers a power to dismiss proceedings altogether. I have decided that I should act pursuant to Pt 15 r 26 in all the circumstances of this case.

16 The defendants submit that the proceedings should be dismissed because the first plaintiff is a bankrupt. The Court was informed that a sequestration order was made against the first plaintiff on 7 September 1999. In consequence under s 116(1) of the Bankruptcy Act

“all property that belonged to, or was vested in, [him] at the commencement of the bankruptcy, or has been acquired or is acquired by him…, or has devolved or devolves on him…, after the commencement of the bankruptcy and before his…discharge…is property divisible among the creditors of the bankrupt.”

17 This means then that property vested in the first plaintiff as at 7 September 1999 and property which has been acquired or has devolved upon him since the bankruptcy is property divisible amongst the creditors. There is before the Court a letter written for the Official Receiver which was addressed to the defendants and which reads:

“STEPHEN GOULD – NSW4120/0/3(A70)
I refer to your letter dated 3 October 2001 regarding the NSW Supreme Court matter 20542 of 2000 in which the bankrupt and others are the plaintiffs and you are the defendants.
Please be advised that to the extent that the right of action, if any, vests in the Official Trustee in Bankruptcy, the Official Trustee elects to discontinue same.”

18 Each of the defendants relies upon the above letter as a deemed abandonment of any cause of action the first plaintiff may have, for the purposes of s 60(3) of the Bankruptcy Act.

19 The decision reflected in the above letter however does not prevent the first plaintiff from pursuing any cause of action contemplated by s 116(2)(g) of the Bankruptcy Act. That provides:

“(2) Subsection (1) does not extend to the following property:
……………
(g) any right of the bankrupt to recover damages or compensation:
(i) for personal injury or wrong done to the bankrupt…
and any damages or compensation recovered by the bankrupt (whether before or after he… became a bankrupt) in respect of such an injury or wrong…”

20 Do the provisions of s 116(2)(g) preserve for the first plaintiff a right to pursue the cause of action he has in contemplation? Is his action one “for personal injury or wrong done to him”? The meaning of those words has been considered in Faulkner v Bluett (1981) 52 FLR 115 and in Griffiths v Civil Aviation (1996) 67 FCR 301.

21 For present purposes, I propose only to refer specifically to Faulkner v Bluett. In this case Lockhart J considered the ambit of s 116(2)(g) when considering rights of action generally pass to the trustee of a bankrupt’s estate:

“Although rights of action generally pass to the trustee of a bankrupt’s estate, exceptions have been created by decisions of the courts, including the following: a right of action for slander, Ex parte Vine; Re Wilson (1878) 8 Ch. D. 364; for seduction of a servant, Howard v. Crowther (1841) 8 M. & W. 601; 151 E.R. 1179; for trespass to land or goods in the plaintiff’s actual possession, at least where the only substantial damage is for the annoyance and personal inconvenience to him, Clarke v Calvet (1819) 8 Taunt. 742; 129 E.R. 573 and Rose v Buckett [1901] 2 K.B. 449; for breach after bankruptcy of a contract for personal service made before bankruptcy, Bailey v Thurston & Co. Ltd. [1903] 1 K.B. 137; for personal injuries arising out of certain breaches of contract such as a contract of marriage, Drake v Beckham (1843) 11 M. & W. 315; 152 E.R. 823.”

22 His Honour went on to refer to the embodiment of common law principles of bankruptcy to be found in the above cases in the bankruptcy legislation in Australia. In Faulkner the claim being pursued was one arising from negligent advices or misrepresentation. His Honour categorised the right of action as being “directly related to [the plaintiff’s] property or her estate” (at p 122) and therefore concluded that her claim did not answer the description of a right to recover damages or compensation for personal injury or wrong.

23 However, it would seem to me, consistently with his Honour’s review of the authorities, that had the first plaintiff’s claim been a claim for damages for personal injury or had the claim been a claim for defamation, s 116(2)(g) would have applied, in which event any right of action and any damages recoverable in such action would not have been vested in the Official Trustee.

24 This consideration of Faulkner underlines the importance of proper pleading in this case because it would not be appropriate for the first plaintiff to pursue any claim unless it be a claim “for personal injury or wrong done” to him. It is simply not possible to determine, as the matter has been pleaded, whether s 116(2)(g) is enlivened.

25 A further deficiency which I indicate about the present proceedings is that even if there was proper identification of the other plaintiffs joined, it is difficult to see how any one of those additional plaintiffs could possibly have a cause of action arising from the defamation of the first plaintiff, if that be the nature of the plaintiffs’ claim, or the malicious prosecution of the first plaintiff, if that be the nature of the plaintiffs’ claim.

26 With all the above considerations in mind, I conclude that this statement of claim cannot be allowed to remain on foot and that it is so flawed that it ought to be struck out. In these circumstances it is unnecessary to consider the alternative claim for security for costs.

27 This statement of claim is to be struck out under Pt 15 r 26 because of the deficiencies in the pleading which I have addressed and the order I make is to be distinguished from an order under Pt 13 r 5, dismissing an action. If, indeed, there is a viable cause of action available to the plaintiff against either defendant, the order now made will not prevent the plaintiff from pursuing it in a statement of claim which complies with the Rules of Court.

28 The formal orders of the Court are as follows:

1. That the statement of claim be struck out;

2. The first plaintiff is to pay the defendants’ costs of this motion.

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Last Modified: 06/03/2002